The BP Gulf Disaster and the Role of Six Sigma

The Quality Council of Alberta(QCA) has long advised its membership against the use of Six Sigma preferring instead to use a more balanced Lean or Lean Six Sigma approach to Continuous Improvement (see: The QCA on Six Sigma and Lean). The BP Gulf disaster is providing good preliminary evidence as to why.

BP’s quality safety record had been characterized by a series of setbacks prior to the March 23, 2005, fire and explosion at BP’s Texas City Refinery in Texas City, Texas. In that event, fifteen workers died and more than 170 others were injured. BP was charged with criminal violations of federal environmental laws and faced numerous lawsuits.

In response to the Texas City refinery event, BP promised to change its ways and establish a continuous improvement culture. Six Sigma was selected as the method. Pivotal Resources, a global Six Sigma consulting company headquartered in California, was contracted by BP to implement the cultural transformation and cut costs. According to Pivotal, they and BP were successful in these efforts. From the Pivotal website:

First three years showed a cumulative financial benefit of $1.3 billion, and over 500% ROI. Ownership of Continuous Improvement is now “embedded” in mainstream businesses, with a global network helping align and coordinate ongoing efforts.

Two things stand out with this claim that have come to characterize Six Sigma efforts generally. First, the emphasis on cost savings. This has been, and remains, a major concern of the QCA. As we stated in The QCA on Six Sigma and Lean: “The almost singular focus on cost savings promoted by Six Sigma practitioners today, is nothing less than a perversion of Bill Smith’s original conception of Six Sigma.” It is equally, a perversion of Deming’s idea of Continuous Improvement. Both Smith and Deming argued that cost reductions should come through improvements to quality. This is the basis of the the Deming Chain Reaction. Improve quality and costs will fall. Six Sigma as practiced today, has turned the Deming Chain Reaction on its head, and transformed Quality & Continuous Improvement into a cost cutting exercise. Equally perverse, cost savings are then cited as evidence of quality gains instead of what they really are, the first signs of decline.

Second, the claim that Continuous Improvement has been embedded in the business. As if developing a cultural transformation could be accomplished in much the same way as one plugs in a toaster. Six Sigma approaches cultural transformation as a project, comprised of a to do list of requisite tasks. Provide belt training to employees, have them engage in some improvement projects and create a Six Sigma project management office. Check all the boxes and the cultural transformation is complete – mission accomplished! As appealing as this is, it is difficult to imagine any seasoned manager taking this instant pudding approach to transformation seriously.

The emphasis on short term financial gain and the simplistic, almost mindless, approach to building a continuous improvement culture, are two characteristics of Six Sigma that seemed to have evolved with Six Sigma’s evolution from a Continuous Improvement methodology, to a branded and packaged product of the consulting industry. It is easy to see why. Both greatly enhance sales appeal. It is hard to argue with the promise of quick profits and an easy, to-do-list approach to cultural transformation.

It is more than a little ironic that Dr. Deming warned against both of these in his classic; Out of the Crisis. He called the focus on short term financial gain one of the Deadly Diseases of management and labelled the instant pudding approach to change first among the Obstacles to real transformation. Six Sigma may well have evolved to the point where it has become a methodology of process decline rather than improvement. This is why the QCA has warned against using Six Sigma as an improvement methodology, does not support its use, and does not support Six Sigma training. (As mentioned, the QCA does support Lean Six Sigma training that is consistent with Deming’s principles. For more on this, again see: The QCA on Six Sigma and Lean)

BP turned to Six Sigma after the Texas City refinery explosion to establish a continuous improvement culture – to help ensure these types of things wouldn’t happen again. The recent and sad events in the Gulf, certainly make the claims of successful transformation by BP and its Six Sigma provider, questionable. As the investigation continues and more information becomes available, it will be instructive to see how Six Sigma’s focus on cost reduction and short term financial gain combined with the instant pudding approach to change may have contributed to the disaster.