At 138 years old, General Electric is, to put it delicately, a mature company. So its desire to sip from the fountain of youth by embracing lean startup principles, as described in the Wall Street Journal, is understandable. Elephants can dance, IBM's Lou Gerstner assured us more than a decade ago. Who better than lean startup guru Eric Ries to teach GE to hit the quan?
Ries is, at first glance, very different from the quality gurus who presided--either physically or in spirit--over GE in the last century. In the 1950s William Edwards Deming taught the Japanese to compete on product design, manufacturing and testing. His process inspired Six Sigma, a set of perfection-aiming practices developed by Motorola and adapted by GE partly to compete with the Japanese powerhouse that Deming helped create. Earlier, Armand V. Feigenbaum had developed the related concept of Total Quality Management while at GE.
GE describes Six Sigma as "a highly disciplined process that helps us focus on developing and delivering near-perfect products and services." Make no mistake: Lean startup is also a disciplined process, one that embraces experimentation, rapid prototyping, and constant learning from customer feedback. (GE's version of the lean startup--developed in conjunction with Ries--is called FastWorks.)
It is possible to interpret the changes at General Electric as the triumph of lean startup principles over Six Sigma. (Lean startup is not the same as lean manufacturing, the Toyota methodology with which Six Sigma is sometimes paired.) Six Sigma, after all, strives for perfection. Lean embraces failure. Six Sigma is more formal; lean more improvisational. Six Sigma emphasizes accuracy; lean, speed. Six Sigma requires planning. Lean thrives on the pivot.
But that's too simple. You can't draw an apples-to-apples comparison between lean startup principles, which were developed for companies still-wet-behind-the-ears; and Six Sigma, which targets manufacturing and general execution at corporations. (There is also a design component to Six Sigma.) Part of what lean startups must do as they scale is to erect processes that squeeze out variability and enhance predictability, the goal of Six Sigma. Graying Gargantuas like GE are under pressure to wax more entrepreneurial in how they think and act. The newly experimental culture at GE, as described in the WSJ article, may produce faster, smarter innovation.
Perhaps more important than the differences are the elements that lean startups and Six Sigma have in common. Both prioritize product attributes that matter most to customers. Both rely on empowered employees. Both eschew wasted time and energy. And both emphasize testing, albeit with different approaches.
Six Sigma has taken it on the chin in recent years, with wide attention paid to project failures. In 2013, Geoff Nicholson, the so-called father of Post-it notes, blamed Six Sigma for killing innovation at 3M, according to ZDNet. And in an interview with Wired, Elon Musk warned that at big companies, process can become a substitute for thinking--a comment some critics extrapolated to include Six Sigma.
So sure, GE should absolutely apply lean startup principles to development and throughout its culture. But this is still a company that competes by producing and distributing large numbers of often technically complex products. Leaders should keep Eric Ries on their bedside tables. And they should slide W. Edwards Deming in next to him.