ing important problems while they teach others in the company. The publicized success of GE after Jack Welch adopted Six Sigma (to which he devotes a chapter of his book "Winning"), more than a quarter of the FORTUNE 200 followed suit. Yet not all firms were able to find the same magic.

In fact, of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since, according to an analysis by Charles Holland of consulting firm Qualpro http://www.qualproinc.com/ . Critics say tha

A Knowledge@Wharton article based on joint research with the Harvard Business School says now may be the time to re-evaluate the corporate efficacy of process management and tailor them to the right applications. Studies show that misapplied process management can hinder companies and dull innovation. "In the appropriate setting, process management activities can help companies improve efficiency, but the risk is that you misapply these programs, in particular in areas where people are supposed to be innovative," notes Mary Benner–management professor at Wharton.

Process management methodologies focused on continuous improvement such as TQM (the work of Dr. Deming), surfaced in the 1980s in the US after the Japanese adopted it successfully. In 1960 the Emperor of Japan awarded Dr. Deming the Second Order Medal of the Sacred Treasure for his help in transforming Japanese industry. Six Sigma started at Motorola and became popular in the mid-1990s due to GE’s visible efforts. The basic premise is to improve quality to only three defects per million through systematic in processes improvement, and careful statistical measurement of outcomes.

The ISO 9001:2000 international standard specifies requirements for a Quality Management System overseeing the production of a product or service. It is not a standard for ensuring a product or service is of quality; rather, it attests to how well processes work, and how they will be managed and reviewed. Earlier incarnations of the standard were heavily criticized for the internal focus on extensive documentation, but like all things worth doing the standard evolved to the current 2000 much improved version. Continual improvement, leadership involvement, and customer satisfaction are pivotal components of the standard.

Six Sigma is similar to TQM in its focus on techniques for solving problems and using statistical methods to improve processes. But whereas TQM emphasizes employee involvement organization-wide, the Six Sigma approach is to train experts (known as green belts and black belts) who work on solving important problems while they teach others in the company. The publicized success of GE after Jack Welch adopted Six Sigma (to which he devotes a chapter of his book "Winning"), more than a quarter of the FORTUNE 200 followed suit. Yet not all firms were able to find the same magic.

In fact, of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since, according to an analysis by Charles Holland of consulting firm Qualpro http://www.qualproinc.com/ . Critics say that

s Mary Benner–management professor at Wharton.

Process management methodologies focused on continuous improvement such as TQM (the work of Dr. Deming), surfaced in the 1980s in the US after the Japanese adopted it successfully. In 1960 the Emperor of Japan awarded Dr. Deming the Second Order Medal of the Sacred Treasure for his help in transforming Japanese industry. Six Sigma started at Motorola and became popular in the mid-1990s due to GE’s visible efforts. The basic premise is to improve quality to only three defects per million through systematic in processes improvement, and careful statistical measurement of outcomes.

The ISO 9001:2000 international standard specifies requirements for a Quality Management System overseeing the production of a product or service. It is not a standard for ensuring a product or service is of quality; rather, it attests to how well processes work, and how they will be managed and reviewed. Earlier incarnations of the standard were heavily criticized for the internal focus on extensive documentation, but like all things worth doing the standard evolved to the current 2000 much improved version. Continual improvement, leadership involvement, and customer satisfaction are pivotal components of the standard.

Six Sigma is similar to TQM in its focus on techniques for solving problems and using statistical methods to improve processes. But whereas TQM emphasizes employee involvement organization-wide, the Six Sigma approach is to train experts (known as green belts and black belts) who work on solving important problems while they teach others in the company. The publicized success of GE after Jack Welch adopted Six Sigma (to which he devotes a chapter of his book "Winning"), more than a quarter of the FORTUNE 200 followed suit. Yet not all firms were able to find the same magic.

In fact, of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since, according to an analysis by Charles Holland of consulting firm Qualpro http://www.qualproinc.com/ . Critics say tha

defects per million through systematic in processes improvement, and careful statistical measurement of outcomes.

The ISO 9001:2000 international standard specifies requirements for a Quality Management System overseeing the production of a product or service. It is not a standard for ensuring a product or service is of quality; rather, it attests to how well processes work, and how they will be managed and reviewed. Earlier incarnations of the standard were heavily criticized for the internal focus on extensive documentation, but like all things worth doing the standard evolved to the current 2000 much improved version. Continual improvement, leadership involvement, and customer satisfaction are pivotal components of the standard.

Six Sigma is similar to TQM in its focus on techniques for solving problems and using statistical methods to improve processes. But whereas TQM emphasizes employee involvement organization-wide, the Six Sigma approach is to train experts (known as green belts and black belts) who work on solving important problems while they teach others in the company. The publicized success of GE after Jack Welch adopted Six Sigma (to which he devotes a chapter of his book "Winning"), more than a quarter of the FORTUNE 200 followed suit. Yet not all firms were able to find the same magic.

In fact, of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since, according to an analysis by Charles Holland of consulting firm Qualpro http://www.qualproinc.com/ . Critics say tha

documentation, but like all things worth doing the standard evolved to the current 2000 much improved version. Continual improvement, leadership involvement, and customer satisfaction are pivotal components of the standard.

Six Sigma is similar to TQM in its focus on techniques for solving problems and using statistical methods to improve processes. But whereas TQM emphasizes employee involvement organization-wide, the Six Sigma approach is to train experts (known as green belts and black belts) who work on solving important problems while they teach others in the company. The publicized success of GE after Jack Welch adopted Six Sigma (to which he devotes a chapter of his book "Winning"), more than a quarter of the FORTUNE 200 followed suit. Yet not all firms were able to find the same magic.

In fact, of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since, according to an analysis by Charles Holland of consulting firm Qualpro http://www.qualproinc.com/ . Critics say tha

ing important problems while they teach others in the company. The publicized success of GE after Jack Welch adopted Six Sigma (to which he devotes a chapter of his book "Winning"), more than a quarter of the FORTUNE 200 followed suit. Yet not all firms were able to find the same magic.

In fact, of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since, according to an analysis by Charles Holland of consulting firm Qualpro http://www.qualproinc.com/ . Critics say that one of the chief problems of Six Sigma is that it is narrowly designed to fix an existing process, allowing little room for new ideas or an entirely different approach. All that talent–all those best and brightest–were devoted to, say, driving defects down to 3.4 per million and not on coming up with new products or disruptive technologies.

An inward-looking culture can leave firms vulnerable in a business world that is changing at a breakneck pace–whether it's Craigslist stealing classified ads from local newspapers or VoIP threatening to make phone calls virtually free. Innovation is "a meta-stable entity," says Vishva Dixit, Vice President for research of Genentech, who oversees 800 scientists at a company that has created some of the most revolutionary anticancer drugs on the market. "Nothing will kill it faster than trying to manage it, predict it, and put it on a timeline."

No business can afford to focus its energies on its own navel in that environment. "Getting outside is everything," says GE's Immelt (who still deploys Six Sigma). From the day he took over as CEO, he says, he knew the company would need to be "much more forward-facing in the future than we ever were in the past." He explains: "It's not about change. It's about sudden, abrupt, and uncontrollable change. If you're not externally focused in this world, you can really lose your edge."