Line Extensions, Lean Six Sigma, and Getting Beyond the Status Quo

When you’re a teenager driving a two-tone (not counting the rust) ’64 Ford Fairlane salvaged from a front-end collision and your friend has a hot ’67 SS Chevelle (the SS stood for Super Sport) with a 400 horsepower 396 cubic inch engine, you’ll do whatever you can to your car to increase the cool factor since you’re not going to win any race. So, I put spacers in the rear springs to raise the back end up a little. I had a genuine simulation leather steering wheel cover. I painted the wheels black so the rusted chrome hubcaps stood out just a little more. And, of course, I installed two rear speakers so I could crank up the volume on my monotone AM radio. The result? I was still driving a slow, bland ’64 Ford Fairlane and my friend had a hot SS Chevelle.

Most business leaders haven’t figured it out or are too timid to admit it because the alternative is too scary for them. The key to success, industry-leading results, and winning the race is not going to be found in making minor improvements to their existing product portfolio (i.e., line extensions) or manufacturing processes (i.e., lean six sigma). It’s going to take something less conservative… disruptive, in fact.

IRI identified around 1500 new CPG products in their 2012 Pacesetters report. But that’s vastly underreporting product changes in the industry. If you count changes to existing SKUs, like new and improved versions of the same thing (you know, like adding a genuine simulation leather steering wheel cover), the number of changes are in the tens of thousands.

Same goes for lean six sigma. It takes hundreds, if not thousands, of continuous improvement projects in one company just to maintain the status quo, offset inflation, or make a few minor improvements to the cost structure. Unlike E2E™ or some other value chain disruptive innovation technique, lean six sigma isn’t even designed to make the jump to industry leadership. It’s incremental improvement. Sort of like painting the wheels black so the rusted chrome hubcaps stand out a little more.

Don’t get me wrong. I’m not saying new product line extensions and lean six sigma are a waste of time. I think they’re essential to maintain the status quo. Just like my ’64 Ford Fairlane needed a skilled auto mechanic (me) to keep it running, so business needs new product line extensions and lean six sigma to keep them running. The occasional tune-up, dress-up, or paint job can help businesses stay competitive. Sort of. That is until someone comes along with a new strategy and a meaningful way to leapfrog the competition; like a better way to develop new products, or a significant change in the value chain. Until someone comes along that’s not satisfied with the status quo. Someone that builds a new model to win the race. Someone that isn’t satisfied with just dressing up the ’64 Ford Fairlane.