Six Sigma is a business management strategy, initially implemented by Motorola as a development of early quality management systems pioneered in Japan. Six Sigma has been lauded for eliminating variation in manufacturing by making such defects statistically predictable. The holy grail of innovation finance is to make innovation predictable however the application of Six Sigma to innovation enterprise has yet to be demonstrated.
Since innovation is literally defined as a deviation from what is “normal”, the application of Six Sigma directly to knowledge assets is thought to improve incremental innovation at the expense of sweeping “Blue Sky” innovation.
However, Six Sigma is wise in defining a process failure as anything that fails to meet customer expectations. Suppose that we can express customer expectations for knowledge asset as a financial process. As with any asset, the customer is willing to pay for knowledge assets as a function of supply and demand; a higher price for a higher demand asset and a lower price for a lower demand asset. The rational customer expectation is to pay no more or no less that what the market price of the knowledge asset really is. Therefore, we can define the deviation from a market expectation as a process failure.
Are Market Expectations Revealed In Conversations?
Today markets are representative of conversations about anyone, anything and everything. Within these conversations lies a goldmine of market intelligence. Vetting the conversations is the “six sigma” pathway to hearing the markets expectations. However, sorting through the chatter and finding a new inventory of knowledge that leads to innovation> This will be the next “wave” of advancement that will create market leaders who will use the “knowledge inventory” of conversations to create new markets. Given this progression there is a need to begin indexing “the inventory of conversations” and subsequently creating a new “knowledge inventory”.
The following tables demonstrate a knowledge inventory based on the Amazon.com taxonomy for books in publication and sale in the vertical axis. The numbers in parenthesis represents the number of titles in each category but suppose they represented the number of people who claimed to have such knowledge.
The Horizontal Axis represents the quality of the knowledge that the person claims. According to statistical sampling principles we would expect a bell curve related to proficiency. We defined proficiency as one of ‘6 Sigmas’ or in semantic form as learning, practicing, sharing, application, integration and research. Each Box represents a knowledge asset. Where there are about 180 to choose from, to combine, and diversify.
Having the right conversation with the right person is a constant pursuit of any market. Knowing where to find these conversations and the related people who have initiated them is a “library of conversational topics”. Indexing the conversations into a “knowledge inventory” provides the fastest route to the creation of innovation. Why? Because knowledge used to be contained and constrained due to limited access. Now access is free to anyone and the acceleration of conversational exchanges requires a new index of inventory so we can vet the chatter from the knowledge.
Being able to predict the right people who are having the right conversation and creating new knowledge would fuel new markets. New markets are created by innovation. Finding and gaining knowledge precedes innovation. Indexing information precedes knowledge. We have everything we need to build the knowledge inventory and index it using six sigma methodologies. Who will lead such a transformation?
What say you?