Every organization needs to innovate itself times and again to survive and consistently perform in the competitive environment. Innovation is something new and contrary to established manners or practices. A new idea has to overcome a lot of resistance to become a reality.
Six Sigma focuses on the customer satisfaction that leads to profitability and thus aims at reducing variation. This goes against the principles of innovation. Therefore the relationship between Six Sigma and Innovation is both complementary and opposite to each other.
Comparison between Six Sigma and Innovation is as follows:
(1) Six Sigma drives out the variation from the system, while innovation encourages the diverse thinking.
(2) Six Sigma optimizes the processes and product tradeoffs however innovation relies on breaking the mold so that the tradeoffs are not necessary.
(3) Six Sigma focuses on precision and is basically data driven while innovation leads to the creation of emotional experiences.
(4) The basic aim of the Six Sigma lies in making the organization profitable by increasing the cash flow however the innovation stresses on taking the calculated risks.
Various levels of innovation are as follows:
(1) Customer Interface: Innovation is about generating novel ideas and ways that lead to creation of commercial value. This level exploits the market opportunities through better ways to connect existing capabilities with the existing needs.
(2) Core Strategy: It assist in expanding the market opportunities by connecting the existing capabilities to new needs. It focuses on mission differentiation criteria against competitors.
(3) Strategic Resources: This level expands market opportunities by connecting the new capabilities to existing needs. It includes the core competence, key strategic assets and processes.
(4) Value Network: This level creates new markets by developing new capabilities to meet new needs and it includes the suppliers, partners and coalitions.