Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs
- No Excessive Senior Executive Pay at Toyota
Toyota’s 32 top executives received just over $12 million in salary. Toyota made something like $13,000,000,000 in profits. With the top 32 executives getting about $20,000,000 that is .15% of earnings. Even if there are some other benefits not included in the total that .15% figure for the top 32 executives doesn’t really compare to ludicrous pay of many CEOs in the USA. Toyota has a different paradigm than the others (they believe in the organization as a system not hero worship practiced by USA companies to justify ludicras executive salaries).
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- Tilting at Ludicrous CEO Pay
I continue to tilt at the robber barron CEO pay packages. Hopefully, at some point, the people approving these obscene pay packages can be shamed into stopping or replaced by people with some sense of decency. I was taught in the days of robber barrons the business world was seen as an amoral place (morality did not belong in this area of human endeavor) but that over time society decided that in fact morality did apply there. It is hard to reconcile that change with the behavior of CEOs and board approving ludicrous pay packages.
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- Continuous, Constructive Feedback
The correct strategy, communicate and coach continually. Have defined process that are clear to everyone. Have clear expectations for what people are suppose to do and have methods to make problems visible so they can be addressed...
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- Bad Management Results in Layoffs
Layoffs are a failure of management. If the company has not been executing a long term strategy to respect people and manage the system to continually improve, manage for the long term, working with suppliers... it might be they have created an impossibly failed organization that cannot succeed in its current form. And so yes it might be possible that layoffs are required.
At exactly what point some layoffs are necessary and how much other stakeholders are squeezed to avoid layoffs is not simple to answer (just as employees are squeezed to avoid suffering by other stakeholders). I think to have any pretense of good management systems while resorting to layoffs management must say what specific failures lead to the situation and what has been done to fix the system so such failures will not re-occur. Those explanations should seem to be among the best applications of 5 why, root cause analysis, systems thinking, planning... that you have seen. Layoffs should be seen as about the most compelling evidence of failed management. Therefore explanations attempting to justify the layoffs have as high a barrier to overcome as any proposed improvement to the organization/system.
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- The Awesome Cat Cam (2007)
This great project (CatCam) involved taking a digital camera and some additional equipment to create a camera that his cat wore around his neck which took pictures every 3 minutes. The pictures are great. The cat got photos of several other cats and seemed to like cars.
This is my favorite home engineering project. The concept is great. The explanation of the technology is great. The adjustment to real life situations is great. The end result (the photos) is great.
After writing this post, I interviewed the engineering behind the CatCam, Juergen Perthold - The Engineer That Made Your Cat a Photographer.
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- Six Sigma Outdated? No.
...execution of six sigma often focused too much on cost reduction, optimizing short term projects (which resulted in sub-optimizing the entire system), ranking and rating employees… But innovation is not harmed by a good six sigma program – in fact a good six sigma effort a decade ago understood the importance of innovation perfectly well.
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- Boston Travel Photos
- Louisville Slugger Uses Deming Management Practices
“You would have thought that in 123 years of making baseball bats we would have figured it all out,” says plant general manager Frank Stewart. “But as you well know, in the business of improvement, you are never there. It’s always, what can I do better? What can I improve today?”
Continual improvement is a critical practice to adopt as a standard practices (more of Deming’s 14 obligations of management). They moved production from a plant in New York to their headquarters in Louisville...
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- Keeping Track of Improvement Opportunities
Often deciding you will not do something (and not waste time and energy on things you won’t ever do) is the biggest step toward focusing on the most important items. Focusing on important, whether urgent or not, tasks often requires avoid seemingly urgent – but in comparison unimportant tasks.
However, I like the idea of keeping a list of items that are pretty low on the priority list for several reasons. Sometimes they can be incorporated in another project without much effort (they are not worth doing on their own but while doing something else it can make sense. With a visible list (wiki technology is good for this) everyone can know what has been thought of and given low priority – they might be sparked by an idea either to give reasons why that should be a higher priority or as in brainstorming to propose another idea… You can look at the list when thinking about a redesign and incorporate whatever might make sense....
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- Predicting Improves Learning
Personally I have found the act of actually making predictions and examining the results incredibly helpful in improving the speed and depth of my learning. You can also learn tendencies for missed predictions (predicting greater improvement, prediction faster adoption of new idea, underestimate additional costs required by new procedures…) and then adjust to make better predictions over time.
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- Be Careful What You Measure
Behavior can be changed by what is measured. The problem with arbitrary numerical targets (to take one measurement related example) is not that attempts to achieve those targets won’t have an affect. They very well may have an affect. However they may not lead to the desired result. When focused on improving a number (which can happen when focused on measures – especially as the focus on those measures is tied to bonuses, favorable treatment…) the focus is not necessarily on on improving the system. Often distorting the system is the result.
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- Learn From Success and Failure
...how the PDSA improvement cycle should be used: results are studied to increase knowledge. If results exceed expectations that should not be a reason to avoid learning. If you only study what results tell you when results are unsatisfactory you can fall into the trap that “you only learn from failure.” I guess many people only learn from failure, since that phrase is so popular, but that method leaves plenty of room for others to learn faster than you thus gaining an advantage (a more effective method of learning). Don’t wait to fail to learn.
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- Information Technology and Management
I see people adopting technology as the end rather than to facilitate. IT solutions should support the organization and help the organization improve performance. The technology should not tie the organizations hands (as it can so easily do when implemented without an understanding of systems thinking, variation, process improvement, sub-optimization, psychology…).
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- Toyota, Lean and Management Consultants
- The Triumph of Lean Production
... Just think about that Toyota’s Georgetown plant (seen by many as one of the best examples of lean manufacturing) stops the line 2,000 a week. Do you think your organizations systems are as well designed as the Georgetown plant? Does your organization stop to examine what needs to be improved with anything approaching that level...
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