Dictionaries define accreditation as “Certification of competence in a specified subject or areas of expertise, and of the integrity of an agency, firm, group, or person, awarded by a duly recognized and respected accrediting organization.” While all Six Sigma accrediting bodies aim to make accreditation available to professionals, they come in different forms. There are also several differences between For-Profit and Non-Profit accrediting bodies that impact how each operates. But what are the differences between the two?
Non-Profit Accrediting Bodies
Non-Profit corporations differ from For-Profit companies because their interests are not, and cannot be, based in generating profit. As such, Non-Profits do not distribute their income to corporate shareholders. Revenue must remain within the company to pay for salaries, expenses, and business activities. Non-Profit businesses treat salaries as necessities of operation rather than personal benefits. Excluding volunteers, staff require salaries to work, which in turn ensures the smooth running of the organization. Non-Profit companies are commonly referred to as “Non-Stock companies” as they have no investors or stockholders. The only income Non-Profit companies receive is either from the government, charitable donations, or fees for services provided. Some Non-Profit organizations are also exempt from state tax and employment programs.
Why Non-Profits are Superior
In Six Sigma, Non-Profit accrediting bodies will charge for services such as accreditation for Six Sigma courses. Some accrediting bodies also provide professional training services as well. All proceeds go towards maintaining the standard of services the company offers. In other words, Non-Profit companies exist solely to complete their specified goal. In many ways, Non-Profits are superior to For-Profit accrediting bodies, as they are not concerned with generating profit through financial links to training providers. Therefore, Non-Profits are ultimately far more objective in the criteria they use to certify organizations and individuals.
For-Profit Accrediting Bodies
For-Profit accrediting bodies’ primary purpose is to generate profit from Six Sigma accreditation. Income is distributed to owners and stakeholders of the business. One benefit of For-Profit businesses is that they allow the owner to achieve substantial gains from their enterprise. This allows them to pursue wider interests than Non-Profits. For-Profit companies receive income from investors as well as from services offered. They raise capital by offering investors stock shares in the company.
The services For-Profits offer include Six Sigma accreditation and in-house training. While For-Profit organizations put revenue towards growing and maintaining the business, their interests and responsibilities are farther reaching. For-Profit responsibilities include: paying employee salaries, sustaining and improving products and services, corporate expansion, advertising, and reinvesting in new enterprises. As such, For-Profit Six Sigma accrediting bodies also have a brand image to preserve. Examples of For-Profit organizations include technology companies like Microsoft, Facebook, Apple, and food companies like Coca-Cola and McDonald’s. In layman’s terms, For-Profit organizations’ income goes toward the personal benefit of its individual(s), through salaries, benefits, etc. As such, For-Profit Six Sigma accrediting bodies will use profits to maintain a strong consumer base and value stream and generate more profit.
The Downside of For-Profits
For-Profit organizations also have their downsides. It may not be the case for all Six Sigma and Lean Six Sigma accreditation bodies, but many For-Profit organizations tend to have strong financial links to external training providers. As such, Six Sigma Belts are often short-changed by providers whose focus is on profit motive. This is due to inadequate certification criteria and shorter courses that lack valid projects. In comparison, Non-Profits are far more objective in their criteria, especially when distanced from, and not promoting, any external training organizations.