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Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs

• Problems Caused by Performance Appraisal

  People are increasingly challenging the notion that we just have to live with performance appraisal systems. As usually, I will make my suggestion that chapter 9 of the Leader’s Handbook offers great material on performing without appraisal (and the rest of the book is great too).

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• The Customer Knows Best?

  Some management ideas are pretty easy and straight forward. But many management practices require knowledge and judgment to apply them successfully. Easy solutions may be desired, but, often you must choose between easy and effective (hint, I suggest effective is the better target).

  Listening to customers is important but it is not sufficient.

  ...

  People could assume the numbers at Enron proved what Enron was doing was correct. But it did not prove that. Until we start to evaluate data more accurately we will continue to mistakenly see proof where it does not exist.

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• Management: Geeks and Deming

  Several of Deming’s 14 obligation of management and 7 deadly diseases are noted in this quote, including: “Remove barriers that rob people of joy in their work” and the disease – “Emphasis on short term profits.” Deming was a physicist so that may explain the similarity of this ideas to geek management culture.

  • “Geeks seek knowledge for it’s own sake” – Deming’s point 13 “Institute a vigorous program of education and self-improvement.” Deming encouraged organizations supporting education of employees – even when unrelated to work in any direct way.
  • “Geeks like to experiment” – many of Deming’s ideas focus on this point, most obviously is the emphasis on PDSA
  • “Geeks openly debate the merits of technical ideas”

  continue reading: Management: Geeks and Deming
• Understanding Data

  Effective use of data is an important part of management improvement. Emphasis is needed on “effective”; data misuse is rampant and creates problems. Use of data by itself is not sufficient.

  To be effective you need to learn to think about not what is printed on the page but what lies behind the numbers you see. The numbers are just proxies for the real situation.

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• Respect for People

  “Ohno was absolutely ruthless, employees and suppliers lived in fear of him.” I would say that while Taiichi Ohno was truly remarkable that doesn’t mean he did everything right.

  ...

  The difference between respect and disrespect is not avoiding avoiding criticism. In fact often if you respect someone you can be much more direct and critical than you can with someone you treat as though they don’t have the ability to listen to hard truths and improve. I think we often have so little respect for people we just avoid dealing with anything touchy because we don’t want to risk they won’t be able to react to the issues raised and will instead just react as if they have been personally attacked.

  It may also be that it is easier to train managers to behave in this way than to effectively deal with though issues. But that is not training them to respect people, it is your organization accepting you don’t respect your people (managers and others) so just train people how to behave in a way that avoids difficult areas.

   

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• Six Sigma and Process Drift

  Quality Quandaries: Six Sigma, Process Drift, Capability Indices, and Feedback Adjustment by George Box and Alberto Luceno. This article is for the more statistically inclined.

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  Feedback adjustment can be dangerous: tampering. In fact, I would say attempting it is likely to be tampering, unless those doing so are careful and knowledgeable. It might be wise to read Box and Luceno’s book on the topic – Statistical Control: By Monitoring and Feedback Adjustment if you are tempted to try.

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• Our Energy Future (2006)

  Huge price increases will provide incentives to those in the market to innovate to find alternative ways to make money by providing usable energy sources. If the market, overall, chooses to look forward over a long period of time, then investment in alternatives will begin in earnest early and prices of oil will slowly rise. And as prices rise slowly new alternatives (including ways of reducing consumption) will slowly come into the market. Those alternatives will slowly substitute for oil as a smooth transition is made.

  If markets actual were efficient and driven by looking far into the future and discounting cash flows to the present this slow and steady model is what would happen. The market can only be efficient if good long term predictions can be reflected in the market.

  continue reading: Our Energy Future (2006)
• Find the Root Cause Instead of the Person to Blame

  Why did they make that error? Why did the process let them make that error? When you follow the why chain a couple more steps you can find root causes that will allow you to find a much more effective solution. You can then pilot (PDSA) an improvement strategy that doesn’t just amount to “Do a better job Joe” or “that is it Joe we are replacing you with Mary.” Neither of those strategies turns out to be very effective.

  But investigating a bit more to find a root cause can result in finding solutions that improve the performance of all the workers. 

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• Airline Quality (or Rather, Lack Thereof)

  I flew JetBlue Airways last week. The help at the counter was polite and friendly. While this is only one data point (and hardly a “high bar” to meet) it contrasts with most of my flying experience (in my experience Southwest has a good likelihood of providing good service but few other airlines do). It would be nice if more airlines could be like Southwest...

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• Most Meetings are Muda

  Have the PM email the list of resolved and new action items to all the participants.

  This is an important step missed far too often. Doing so helps make sure that everyone leaving the meeting has the same understanding of what has been decided: in addition to reviewing new assignments I would suggest review all significant decisions made. Far too often, people have very different ideas on what happened in previous meetings.

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• Why are you afraid of process?

  Process management is necessary for management improvement. That is true in manufacturing, service, government, research and any other environment. The way process management will be done must be modified to be effective. I believe people react negatively to the concept because they see process as the “rules” such as when the explanation for poor service is given as “that is our policy.” Don’t mix up those excuses with proper process management and improvement strategies.

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• Stop Demotivating Employees

  Douglas McGregor explored this topic well in 1960. He explained theory X management (managers believe the workers will do only what they are forced, coerced into doing) and theory Y management (managers believe the workers want to do a good job and the managers job is to help them do so) in his excellent book: The Human Side Of Enterprise.

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• Blogging is Good for You

  Blogs are a valuable tools for individuals (or small firms).  They allow for focused marketing that allows you to make a good impression by sharing your thoughts. Marketing is often one of the most difficult parts of making a successful career as a consultant.

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• Toyota in the US Economy

  From Toyota’s web site: Toyota Manufacturing in the USA: by 2008, Toyota will have the annual capacity to build 1.81 million cars and trucks, 1.44 million engines, and 600,000 automatic transmissions in North America.

  The company’s direct employment in North America is more than 38,000 and direct investment is nearly $16.8 billion with annual purchasing of parts, materials, goods and services from North American suppliers totaling an additional $26 billion.

  [In 2016 Toyota manufactured 2,450,000 vehicles in the USA, Toyota promotes a fake number for employees counting many non-employees, employees of suppliers etc., so you can't view the accurate data on their site in 2017 - in 2006 they did post an honest number].

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• Quality and Costs

  Deming explained that increasing quality decreases costs. Page 3 of Out of the Crisis: Improve Quality –> Costs decrease because of less rework, fewer mistakes, fewer delays…

  Like most models this does not explain everything. Achieving some quality desires does cost more. And the article examines how to look at the issue of cost reduction in health care, where the view that higher quality costs more persists to a larger extent than elsewhere. There is significant room in health care for adopting improvement that will improve quality and reduce costs because the systems are so poorly designed they are both increasing costs and decreasing quality over what could be achieved.

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