Variation can be Good for You

“Reduce Variation!”  For years Six Sigma and the Reductionists have drilled this mantra into the minds of Corporate Process Improvement people.  The idea makes sense if you are manufacturing bars of soap, you want your soap to be consistent, and your mass manufacturing process to predictable.  

But does it make sense for knowledge work?  What about Creative work? When you eliminate variation you also limit the possibilities.  When we ask them to come up with new ideas and solutions, why are we asking them to use a repeatable process?

In Don Reinertsen’s seminal work “The Principles of Product Development Flow” he writes that variability can be either good or bad depending on the economic payoff.  In simpler terms, take a risk if there’s more upside reward than downside loss.

Applying this to manufacturing, a small variation in quality can have a big economic loss, while a small investment in reducing variation is likely to have a larger payoff.  In terms of product design hower, Reinertsen states that small investment in product design can have a big payoff in product success.

What about Agile Organizations?  I often hear organizations tell me “We need to get everyone doing the same Agile around here!”  In this case, there’s a lot of variation. The potential downside of variation is pretty small, a little confusion in initial communications between teams and maybe some aligning of the processes.  The upside, on the other hand, can be huge. If I have 100 different teams doing Agile 100 different ways, I have 100 opportunities for one of those teams to find a breakthrough solution, either in their work or in their way of working.  If all the teams are forced to work the same way, they will have ZERO opportunity to find a better way of working.

How much variation is there in your team? Let us know!