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International Journal of Lean Six Sigma

Emerald Article: Lean Six Sigma, creativity, and innovation


Roger W. Hoerl, Martha M. Gardner

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To cite this document: Roger W. Hoerl, Martha M. Gardner, (2010),"Lean Six Sigma, creativity, and innovation", International
Journal of Lean Six Sigma, Vol. 1 Iss: 1 pp. 30 - 38
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IJLSS
1,1 Lean Six Sigma, creativity,
and innovation
Roger W. Hoerl and Martha M. Gardner
30 GE Global Research, Niskayuna, New York, USA

Abstract
Purpose – Creativity and innovation have recently emerged as the latest focus of the popular
business media, replacing established approaches, such as Lean Six Sigma (LSS). Some have gone so
far as to suggest that LSS inhibits organizations from being creative and innovating. This paper aims
to dig beneath the surface of the media reports to examine what creativity and innovation actually are,
and how they relate to LSS.
Design/methodology/approach – The paper reviews current literature on creativity and
innovation, and based on extensive experience implementing LSS, compare and contrast the
approaches, searching for common ground.
Findings – Not surprisingly, the paper finds that the terms creativity and innovation are typically
not well defined in the media, and are used more as “buzzwords.” In reality, it argues, LSS clearly
stimulates creativity. However, it is not the best method for identifying ideas for breakthrough
innovation. Therefore, to have a holistic improvement system, organizations must combine LSS with
other methods and approaches that are better suited to breakthrough innovation. It suggests one such
approach: via a practical healthcare example, it contrasts this approach with a singular focus on
disruptive innovation, which is too often recommended as a panacea in the media.
Practical implications – The findings suggest that organizations should develop holistic
improvement approaches that are not based on one methodology, no matter how good that
methodology is. The paper provides practical guidance as to how such a holistic approach should be
constructed, and identify the critical role that LSS plays in this approach. LSS will clearly still be
needed.
Originality/value – The paper provides a balanced viewpoint on continuous improvement and
innovation, avoiding a position of advocacy of one versus the other. This proper context should help
organizations properly integrate both into a broader improvement system.
Keywords Continuous improvement, Health services, Six sigma, Innovation, United States of America
Paper type Viewpoint

Introduction
All one has to do is look at any recent issue of The Harvard Business Review to realize
that innovation is a major focus in the business world these days. Although different
folks have different definitions of innovation, there is no doubt that it is the hot topic of
the day. Many conferences and meetings are being held to uncover the secrets behind
successful innovation. New innovation processes are being defined and this, of course,
leads to many questions, such as how to integrate these new processes into current
processes used for new product development, such as design for Six Sigma (DFSS), or
whether there should be brand new processes. Some discussion has even speculated
International Journal of Lean Six that folks who are good at Lean Six Sigma (LSS) may not be good at innovation and
Sigma vice versa. The authors believe that if LSS is viewed as rigorous application of the
Vol. 1 No. 1, 2010
pp. 30-38 scientific method, then innovation does not need to be an either/or discussion, but
q Emerald Group Publishing Limited rather a discussion about what is best for the specific problem or question at hand.
2040-4166
DOI 10.1108/20401461011033149 To probe this further, we first give an honest assessment of LSS, followed by
a discussion of the differences between creativity and innovation, and then our view on LSS, creativity,
the role of LSS Sigma as it relates to both of these topics. Finally, we provide a specific and innovation
example of what happens with a myopic focus on innovation – the case of the US
healthcare system.

An honest assessment of LSS


Six Sigma practitioners will have to admit that part of the reason for LSS becoming 31
“out of fashion” in the popular media is that it was frequently oversold in the first
place. So even though it was – and continues to be – tremendously successful, it failed
to live up to these unrealistic expectations. Too often Six Sigma was utilized “instead”
of ISO 9000, the Malcolm Baldrige Criteria, and even routine quality systems. Some
exuberant proponents positioned Six Sigma as a holistic quality system in itself,
antiquating other approaches and methodologies. One of the authors (Hoerl) debated
this point with the Six Sigma Leader of a large multi-national corporation at an
American Society for Quality (ASQ) Master Black Belt (MBB) event. The Quality
Leader stated that all improvement work would be done via Six Sigma at their
company. Hoerl asked whether Six Sigma would be used to pave a dirt parking lot, and
the answer was yes. Surely, one does not need the rigor of an LSS project to pave a
parking lot! Who are we kidding?
In reality, LSS has not been a cure-all for all problems in corporations; hence many
have discarded it in favor of innovation, or other more recent fads. Leaders who lack
vision and conviction will always be looking for the latest fad or bandwagon to join,
however, so this phenomenon should be neither surprising nor disturbing. Stronger
leaders with vision and conviction will likely look a bit closer before throwing out such
an effective improvement methodology. It should be clear that with billions of dollars
of documented savings from individual companies, including General Electric and
Bank of America, Six Sigma has proven to be the most effective process improvement
method in history. In our opinion, it still is. Detractors simply cannot explain away the
tangible improvement results. By combining lean enterprise approaches with Six
Sigma projects, the breadth of application has expanded even further.
Of course, any method or approach will be particularly applicable for some
problems and less applicable to others. Snee and Hoerl (2007) provide one view of
the “sweet spot” of problems for which lean and Six Sigma are most applicable. They
note that Six Sigma, particularly the define-measure-analyze-improve-control (DMAIC)
process, is most effective when used for improvement projects intended to drive
processes towards process entitlement, in situations where the solution to the problem
is unknown. For example, we may wish to close our financial books in five days, as we
see other companies similar to ours doing, but how to reduce the cycle time from the
current 15 days to only five is not obvious. We believe such improvement is possible
(within entitlement), but how to achieve this improvement is not known.
Conversely, DMAIC is not the best method for improving process entitlement, that
is, taking the process beyond its design capabilities. Fortunately, DFSS often is
appropriate in such cases. Similarly, Six Sigma is not the best method for
implementing known solutions – such as paving the parking lot! It is not the best
method for routine problem solving – returning an out-of-control process back to its
normal state. It can be used for routine problems, but other methods will typically
arrive at the same solution faster, such as statistical process control, possibly combined
IJLSS with team brainstorming and other basic tools for team problem solving (Brassard and
1,1 Ritter, 1994).
Lean tends to work best with “solution known” problems, where we realize that we
are not operating to best practices, and need to implement them. Examples include
single-piece flow, line of sight, or eliminating non-value adding steps in the process.
Lean therefore often enables us to make rapid improvements with minimal data
32 collection. Combining Six Sigma and lean as an LSS initiative enables organizations to
benefit from both types of improvement, depending on the nature of the problem.
Adding a serious DFSS initiative to the mix adds the ability to improve entitlement by
designing new products, services, and processes. These form a powerful improvement
combination.
It should be obvious that none of these methods, DFSS included, are good methods
for developing business strategy, identifying the key changes occurring in the external
environment, or developing ideas for potential new products and services. They each
cultivate and utilize creativity, but are not the best approach to identifying
opportunities to innovate at the business level. As we explain later, the best results
occur when innovation is done in conjunction with these approaches, rather than
instead of them.
Given the above points, and stealing liberally from the financial markets media, we
might say that the decline of LSS as a popular business fad is more of a “correction”
than a long-term decrease in value. That is, the media is bringing LSS back to its
rightful place as the best-known process improvement methodology, down from an
unrealistic expectation that it be a business panacea. It is therefore important that we
properly place each of these improvement approaches, including innovation, within the
context of an overall improvement system.

Innovation and creativity


In the recent hype over innovation, authors seem to be using the words “innovation”
and “creativity” interchangeably. This is unfortunate, because the two terms have very
different meanings, although they are related. A positive exception is Bisgaard (2008),
who defines his terms very carefully. Innovation can be defined as “the introduction of
new things or methods” (Random House, 1981). As Bisgaard (2008) explains,
innovation can be either incremental innovation – making modest enhancements to an
existing product or service, or radical, “disruptive” innovation – delivering something
totally new to the marketplace. For example, Google is an example of a disruptive
innovation. Tata’s $2,500 automobile, which it released in India in early 2008, and the
iPod are other examples. Federal Express, when it introduced overnight mail delivery
years ago, was also clearly innovative in a radical way, as no other overnight mail
delivery service existed at the time, and many thought such a service would be
impossible to implement. While most of the media attention today is focused on radical
innovation, it is important to remember that incremental innovation can also be
lucrative. Both are necessary for long-term business success.
Creativity, on the other hand, refers to the ability to create. The word “create” can be
defined as “to evolve from one’s own thought or imagination” (Random House, 1981).
Far from being rare, creativity is critically important in virtually all aspects of
business, since the environment is dynamic, and new problems and opportunities occur
each day. For example, a flight attendant may need creativity to deal with an
intoxicated or unruly passenger, even though the service itself – providing services on LSS, creativity,
flights, is an old one. Fortunately, everyone is blessed with a degree of creativity, and innovation
although some people certainly are blessed with more than others. The key point is that
creativity is a critical, and fortunately common human trait, and is routinely applied in
business everyday. It is clearly not restricted to development of innovative products.
What does this discussion have to do with LSS? First of all, it is relevant in
responding to the frequent assertion by detractors that LSS stifles creativity (Hindo, 33
2007). This claim typically goes along the following lines: since LSS has a sequence of
steps to be followed, DMAIC for example, and employs rigorous, analytical methods,
it leads to people blindly following a rigid process, and turning off their brains. Such an
argument may make sense to someone who has never conducted an LSS project, but to
those who have, it is hard to take seriously. LSS defines an approach, but of course
does not dictate the specific progression of the project, or dictate the unique mix of
tools to be used, which of course needs to be problem-specific. Considerable creativity
is needed to think through how to approach each phase of DMAIC, to select the specific
tools, and how to interpret the statistical results. In fact, neither of the authors has ever
been involved in an LSS project that did not require significant creativity to complete
successfully. It is hard to imagine doing so when Six Sigma is specifically designed to
solve problems with unknown solutions. So while poor management may stifle
creativity, LSS Sigma certainly does not. Our colleague John DeLuca perhaps best
articulated this point when he described Six Sigma as “what a good scientist would
have always wanted to do, but his boss would not let him.”
Montgomery and Woodall (2008) come to a similar conclusion when they note: “The
DMAIC structure encourages creative thinking about the problem and its solution
within the definition of the original product, process, or service.” As noted above, how
can someone solve an unsolved problem without using creativity? This would seem to
be an oxymoron. To provide more specifics about the role of creativity, Montgomery
and Woodall go on to point out:
In the Improve step, they [the project team] turn to creative thinking about the specific
changes that can be made in the process and other things that can be done to have the desired
impact on the process performance.
It must also be kept in mind that, as noted earlier, LSS is primarily a methodology for
improving existing processes. While it can certainly identify opportunities for
incremental innovation, it is not designed to develop the best ideas for radically new
products and services, that is, it is not a good process for disruptive innovation. Despite
the claims of the exuberant proponents, it never was, and never will be. Even DFSS,
which is a very effective methodology for taking an innovative idea through design to
commercialization, does not come up with these ideas in the first place, or decide which
such ideas to pursue. These decisions are inputs to the DFSS process. So this is one
point that the detractors have made accurately; LSS is not the path to disruptive
innovation. However, once we have innovative ideas, and have made the business
decision to pursue them in a prioritized fashion, we would like to design and
commercialize them in an effective manner, and then deliver the resulting products or
services to customers efficiently. So just as LSS is not a “stand alone” system, neither is
innovation. Innovation is desperately needed, but cannot be pursued instead of
efficiency and effectiveness.
IJLSS The role of LSS in creativity and innovation
1,1 One approach to applying LSS throughout the innovation and product
commercialization process is shown in Figure 1, which has been updated from an
earlier diagram from Xu et al. (2006). For a business to continually have a new product
and service pipeline, there must be a constant focus on opportunity identification and
idea creation. This process is typically iterative and the business should be flexible
34 enough to allow new ideas to flow in a dynamic fashion. Methods to collect and screen
ideas and compare them to business opportunities are the focus of many marketing
organizations, and demands integration of commercial and technology resources.
Fundamentally, the organization must decide where it should compete (the strategic
perspective) and how it will win (the tactical perspective).
Once ideas have been identified and prioritized, they move into conceptual design.
This phase of the process has become even more important as timelines and resources
shrink, and systems become more complex. DFSS begins here. The focus should be on
answering the feasibility question as quickly as possible, to weed out concepts that are
not likely to meet basic critical to quality requirements (CTQs), both from a customer
perspective and from an internal business perspective. Formal conceptual design
methods, such as theory of inventive problem solving (TRIZ) (Altshuller, 1992), can be
quite useful in helping the team identify the key problems that need to be solved and
then constructing multiple alternative solutions to the identified problems. Formal risk
analysis also should be initiated in this conceptual design stage, as well as the
intellectual property strategy.
DFSS is still going on in full force at the product development phase. The team
focuses on retiring risks and determining estimated capability of the product with

Idea generation Usage of business strategy tools to


understand industry, customers,
Opportunity Idea competition, and internal business
identification generation capabilities; idea management system to
collect and nurture an idea to maturity;
Conceptual design session with business to get buy-in

Concept Feasibility
development assessment
Design for Six Sigma (DFSS) methodology
to develop a product right the first time.
Product development Clearly define problems that need to be
solved in the system, solve them, and
Product Prototype and understand the variability in the system
Design
definition test

Product launch

Production
Commercialize
ramp
Lean and DMAIC (Manufacturing
Ongoing operations services)
Figure 1.
The process of innovation Continuous
with LSS roles improvement
respect to the CTQs, recognizing that a key output of this phase is understanding of the LSS, creativity,
variability in the system. Multiple prototypes may be shared with the customer for and innovation
detailed feedback. The overall goal is to ensure quality is designed into the product so
that first time yield and customer acceptance is high.
As teams approach the product launch phase, lean concepts are critical. Being first
to market typically means a higher success rate and higher profits. Eliminating waste
helps an organization gain efficiencies in all aspects of their business processes, 35
especially those that impact the customer. The ease with which customers can do
business with your organization can be just as important as the performance of your
product.
Once organizations successfully launch a product, improvement must still be
emphasized. This is a critical point often overlooked by the media, or others in search
of a next flavor of the month. In every new product or service launch that we are aware
of, there have been some bugs that needed to be addressed to achieve desired
performance. Similarly, if businesses totally divert their attention to the next major
launch, without a balanced emphasis on improving existing products and services, the
new launch will gradually deteriorate in quality and process performance. Conversely,
if organizations rigorously utilize continuous improvement methods, such as LSS, to
implement continuous improvement and incremental innovation, the new product
quality and business results will improve over time, setting the stage for the next
breakthrough innovation.

The hazards of a singular focus on innovation: the US healthcare system


We have acknowledged that LSS, while the best approach we currently know of for
addressing major “solution unknown” problems, is not a holistic business
improvement system. Rather, it needs to be augmented with other methods for such
things as routine problem solving and disruptive innovation, to name just two.
Similarly, it should be kept in mind by those in the media promoting radical innovation
as the next big thing, that it also is not a holistic system for improvement. There are
significant downsides to a singular focus on innovation that have not been adequately
communicated in the literature, in our opinion. Bisgaard (2008) apparently agrees, as he
states: “Focusing solely on breakthrough innovation is a recipe for financial disaster.”
Why is this so?
Focusing solely on disruptive innovation is a recipe for financial disaster for the
same reason that focusing solely on LSS, reengineering, balanced scorecards, or
anything else is a recipe for financial disaster. Long-term business success requires a
balanced approach that plays both defense (problem solving) and offense (innovation).
As the saying goes, you have to be able to walk and chew gum at the same time! As an
obvious example, what should be the next steps once a business has implemented a
disruptive technology or product? Are they going to get the bugs out? Should
businesses continuously improve the new product, or just let it languish while they
focus on their next breakthrough, allowing competition to catch up? Would Federal
Express still be in business if it did not have process excellence, and actually be able to
deliver express mail on time with consistency? They had to innovate to create the
business, but they have to continuously improve their processes to stay in business.
A more disturbing example is that of the US healthcare system. Perhaps more than
any other major segment of the global economy, the US healthcare system is a tragic
IJLSS case-in-point of what happens with a myopic focus on innovation, at the expense of a
1,1 balanced approach that also includes major emphasis on problem-solving and
continuous improvement. When it comes to healthcare innovation, the USA is second
to none globally. Reuters.com (2008) reported that US pharmaceutical companies spent
$59 billion on research in 2007, breaking the all-time record for R&D spending.
According to the paper: “This activity dwarfs the pipelines in other parts of the world,
36 such as Europe and Japan, partly reflecting existing policies in the US that foster
innovation.”
Of course, this is just the R&D spending of pharmaceutical companies. What about
for medical technology, such as new imaging scanners or biotechnology? Based on
studies by the Kaiser Family Foundation (2007), it appears that overall R&D spending
was about $125 billion in 2007, including pharmaceutical research. According to the US
Congressional Budget Office (2008), about half of all growth in health care spending
over the past several decades has been associated with advances in medical
technology. Of course, the USA – and the world – has benefited from the amazing new
technology that this focus on innovation has produced: everything from Viagra, to
rapid, multi-slice CT scans, to artificial limbs. So what’s the problem?
The problem is that there is a dirty little secret hidden beneath the tremendous
innovation success. Somewhere along the way, the US lost sight of the need to solve
basic problems in healthcare and to continuously improve service. The same life that is
saved with radical new technology in the USA is too often lost by preventable blunders
made in the healthcare system. There is data to back up this claim. According to
Science Daily (2008), simple errors cause about 80,000 unnecessary deaths in the USA
each year, and add billions of dollars to healthcare costs. Other sources claim about the
same numbers or higher. These errors include such things as leaving instruments
inside the patient after surgery (oops!), giving patients the wrong medication (or wrong
dosage), and allowing patients to develop bedsores through neglect.
The net result of the narrow focus on innovation is that the USA has the most
innovative healthcare system in the world, and also the most expensive. According to
the World Health Organization (2008), the USA spends more on healthcare per person
than any other nation in the world, and even on a percentage of gross domestic product
basis, it spends more than every country in the United Nations except the Marshall
Islands. However, the USA certainly does not have the best health outcomes. While
healthcare is a complex topic, and we certainly do not claim that lack of emphasis on
process improvement and problem solving is the only issue in the US healthcare
system, the data suggest that the US is doing quite poorly on the fundamentals.
For example, the National Coalition on Health Care (2008) states: “Experts agree
that our healthcare system is riddled with inefficiencies, excess administrative
expenses, inflated prices, poor management, and inappropriate fraud.” The data seem
to back up these claims. In 2000, the World Health Organization (2000) rated the US
healthcare system 37th globally in terms of overall performance, and 72nd by overall
level of health. Life expectancy in the USA is currently 46th in the world (Central
Intelligence Agency, 2008). Given these dismal statistics, why is not the USA spending
more of this $125 billion to make sure it does not leave instruments inside patients, or
to ensure that doctors perform the operation that the patient was actually expecting?
There are a number of dedicated people trying to do just that – see Berwick et al.
(2002), for example, but much more is needed. Just as a more balanced approach
including basic problem solving, continuous improvement projects, and innovation LSS, creativity,
would likely work much better in the US healthcare system, so it is needed in business. and innovation
Otherwise, businesses in the USA will have similar results to its healthcare system.
Given the current dire global economic situation, the world cannot afford for the US
economy to drop to 46th largest.

Summary 37
Innovation appears to be the next business fad promoted by the popular and
professional media, replacing lean and Six Sigma. Part of the reason for the “demise” of
LSS is that it was clearly oversold, and some vocal proponents made promises that LSS
could not keep. Conversely, this reduction in popularity is not due to any conflict
between LSS and creativity, as we have shown that creativity is an integral part of the
DMAIC process. LSS is not the best method for identifying opportunities for disruptive
innovation, however. Innovation, especially disruptive innovation, is critically needed
for businesses to succeed long-term. However, a myopic focus on innovation, without
balancing this need with the need for basic problem-solving and continuous
improvement, is a path towards financial disaster. This last point has been predicted
by Bisgaard (2008), and also demonstrated by the US healthcare system. Organizations
seeking long-term success will need a balanced approach to business improvement that
includes methods for basic problem-solving, approaches to continuous process
improvement, such as LSS, and also systems to identify opportunities for disruptive
innovation.

References
Altshuller, G. (1992), And Suddenly the Inventor Appeared, Technical Innovation Center,
Worcester, MA.
Berwick, D.M., Godfrey, A.B. and Roessner, J. (2002), Curing Healthcare, Wiley, London.
Bisgaard, S. (2008), “Geared towards innovation”, Quality Progress, September, pp. 20-5.
Brassard, M. and Ritter, D. (1994), The Memory Jogger II, GOAL/QPC, Methuen, MA.
Central Intelligence Agency (2008), Central Intelligence Agency World Factbook, Central
Intelligence Agency, McLean, VA, available at: www.cia.gov/library/publications/
the-world-factbook/
Hindo, B. (2007), “3M’s innovation crisis: how Six Sigma almost smothered its idea culture”,
Business Week, June 11.
Kaiser Family Foundation (2007), Trends in Health Care Costs and Spending, Kaiser Family
Foundation, Menlo Park, CA, September, available at: www.kff.org
Montgomery, D.C. and Woodall, W.H. (2008), “An overview of Six Sigma”, International
Statistics Review, Vol. 76 No. 3, pp. 329-46.
National Coalition on Health Care (2008), Health Insurance Costs, National Coalition on Health
Care, Washington, DC.
Random House (1981), Random House Dictionary of the English Language, Random House,
New York, NY.
Reuters.com (2008), “R&D spending by US biopharmaceutical companies reaches record
$58.8 billion in 2007”, Reuters.com, March 24.
Science Daily (2008), “Medical errors cost US $8.8 billion, result in 238,337 potentially preventable
deaths, study shows”, Science Daily, April 8.
IJLSS Snee, R.D. and Hoerl, R.D. (2007), “Integrating lean and Six Sigma: a holistic approach”, Six Sigma
Forum Magazine, Vol. 6 No. 3, pp. 15-21.
1,1 US Congressional Budget Office (2008), Technological Change and the Growth of Health Care
Spending, US Congressional Budget Office, Washington, DC, January.
World Health Organization (2000), World Health Organization Assesses the World’s Health
System, press release, World Health Organization, Geneva, June 21.
38 World Health Organization (2008), World Health Statistics 2008: Global Health Indicators,
World Health Organization, Geneva.
Xu, K., Sikdar, C. and Gardner, M.M. (2006), “Six Sigma roles in innovation”, paper presented at
the IEEE International Conference on Management of Innovation and Technology,
Singapore.

Further reading
Montgomery, D.C. (2005), Introduction to Statistical Quality Control, 5th ed., Wiley, New York, NY.

About the authors


Roger W. Hoerl leads the Applied Statistics Laboratory at GE Global Research (GEGR), which
supports new product and service development across the GE businesses. He is a Certified MBB,
and previously served as Quality Leader for the GE Corporate Audit Staff. Dr Hoerl has been
named a Fellow of the American Statistical Association and the ASQ, and has been elected to the
International Statistical Institute and the International Academy for Quality. He has received the
Brumbaugh and Hunter Awards, as well as the Shewhart Medal from the ASQ, and the Founders
Award from the American Statistical Association. In 2006, he received the Coolidge Fellowship
from GEGR, honoring one scientist a year from among the four global GE Research and
Development sites for lifetime technical achievement. He used his six-month Coolidge sabbatical
to study the global HIV/AIDS pandemic in collaboration with Presha Neidermeyer of the
University of West Virginia, spending a month traveling through Africa in 2007. Roger W. Hoerl
and Presha Neidermeyer published the major conclusions of their joint research in the book Use
What You Have: Resolving the HIV/AIDS Pandemic, in July 2009. Roger W. Hoerl is the
corresponding author and can be contacted at: hoerl@crd.ge.com
Martha M. Gardner received her PhD in Statistics from North Carolina State University and
joined GEGR upon graduation. Since she joined GEGR, she has spent most of her time focused on
experimental design and analysis. She initially worked with chemists, materials scientists, and
engineers to develop new materials and better understand chemical processes. More recently she
was the project leader of the probabilistic design research effort for GE Aviation, GE Energy, and
GE Healthcare. Martha M. Gardner has been the Global Quality Leader for GEGR since 2004 and
is currently focused on integrating new Conceptual Design methods and approaches using TRIZ
into daily work at GEGR. She also coordinates the GE-wide DFSS and Reliability Councils and is
the Chair of the Quality and Productivity Section of the American Statistical Association. In
2002, she received the GEGR Hull Award for early career research excellence. In 2004, she was
named to The Massachusetts Institute of Technology’s Technology Review “Top 100” list of
young innovators. Martha M. Gardner is a certified DFSS Black Belt, GE Quality Leader, and
MATRIZ Level 3 TRIZ Practitioner. She was named a GEGR Principal Scientist in 2007.

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