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

• Dilbert and Deming

  Dilbert can show the silliness that is common place in many workplaces, as just that – silly. Point 10 of Deming’s 14 points called on management to eliminate slogans.

  ...

  The text works well for me, but I think Dilbert provides a great service in pointing out the same idea that such slogans are silly and even harmful in a way many others find more accessible.

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• Open Source Management Terms

  I like those encouraging the adoption of statistical tools to improve management but I find the practice of trademarking terms like Six Sigma and MVT a bad way to encourage innovation in the practice of management. While it is nice to see Six Sigma efforts and others use statistical tools (such as design of experiments) I would encourage people to stay with “open source” management terms and remain part of a community looking to improve the practice of management.

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• China and the Sugar Industry Tax Consumers

  ...companies in the United States are the beneficiaries of the current law that lets them collect the benefits of the “protection tax” (on sugar) from the American consumer (and those beneficiaries remember to pass on a share of the benefits to the politicians that provide them the bounty).

  We need to increase the economic literacy of the public so they can effectively participate in the debate over international trade.

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• Google: Good Service not Arbitrage

  Google, to use a internet bubble phrase, is doing a good job monetizing eyeballs. However, that is not arbitrage it is just doing a good job of maximizing revenue and profits. Yes Google is able to make money because they are paid more by advertisers than it costs them to deliver what the advertisers want. But I don’t see how that is more like arbitrage than Toyota selling a car for more than it costs them to make the car.

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• SEC chief quotes Deming

  Security and Exchange Chairman William H. Donaldson:

  This approach will, ultimately, better serve investors, and it will also gradually temper the pressures on some corporate executives to fudge the numbers. It would behoove us all to remember the words of W. Edwards Deming: “People with targets, and jobs dependent on meeting them, will probably meet the targets – even if they have to destroy the enterprise to do it.”

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• Google: Good Service not Arbitrage (2005)

  Google, to use a internet bubble phrase, is doing a good job monetizing eyeballs. However, that is not arbitrage it is just doing a good job of maximizing revenue and profits. Yes Google is able to make money because they are paid more by advertisers than it costs them to deliver what the advertisers want. But I don’t see how that is more like arbitrage than Toyota selling a car for more than it costs them to make the car.

  continue reading: Google: Good Service not Arbitrage (2005)
• Traffic Congestion and a Non-Solution

  For decades traffic congestion has been a problem in American cities and one that has continued to get worse. The typical proposed solution is to increase the number of roads. The theory behind this solution is not normally stated but, I believe, it amounts to: “if we build more roads then the system will have more capacity which has to decrease congestion.” Unfortunately this theory fails to take into account the past data on the increasing capacity of roads “solution.”

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  Ackoff’s solution does require actually changing the system. That is not easy to accomplish. However, if the desire is to reduce congestion the solution is not likely to be to just keep doing what we have been doing (given that it isn’t working). Building more and more capacity doesn’t seem to achieve the desired results.

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• 10 stocks for 10 years

  The 10 stocks I came up with are (closing price on 22 April 2005 – % of portofilo invested):

  • Templeton Dragon Fund (TDF – 16.40 – 16%) – a closed end mutual fund investing in China, Hong Kong, Taiwan, Singapore… This one doesn’t fit the criteria but does a great job of filling out the portfolio in my opinion.
  • Dell (DELL – 36.43 – 12%)
  • Toyota (TM – 72.42 – 12%)
  • Google (GOOG – 215.81 – 12%)
  • Pfizer (PFE – 27.22 – 8%)
  • Amazon (AMZN – 33.04 – 8%) They are only just starting to generate cash but I like their prospects.

  ...

  ["I should have picked Apple instead of Dell but even with that mistake the fund did very well - I did add Apple in 2010" John, Oct 2017]

  continue reading: 10 stocks for 10 years
• Performance without Appraisal

  In the short article Performance Without Appraisal: What to do Instead of Performance Appraisals, Peter wrote:

  Dr. Deming said of Performance Appraisals, “Stop doing them and things will get better.” He was correct. Many organizations, however, wonder what to do instead.

  For those that do require “some alternative” Peter included some good ideas in The Leader’s Handbook(see chapter 9 “Performance without Appraisal pages 293 to 368). This chapter has excellent material for any manager.

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• Who Influences My Management Improvement Thinking?

  Who influences my thinking on Management Improvement:

  • Bill Hunter
  • Peter Scholtes
  • W. Edwards Deming
  • Russel Ackoff
  • George Box
  • Brian Joiner

  ...

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• Statistics for Experimenters – Second Edition

  Complete with applications covering the physical, engineering, biological, and social sciences, Statistics for Experimenters is designed for individuals who must use statistical approaches to conduct an experiment, but do not necessarily have formal training in statistics. Experimenters need only a basic understanding of mathematics to master all the statistical methods presented. This text is an essential reference for all researchers and is a highly recommended course book for undergraduate and graduate students.

  This updates the classic text by George Box, William Hunter (my father) and Stu Hunter.

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• Control Charts in Health Care

  The point of using a control chart, and many of the management improvement tools, are to improve the efficiency and effectiveness of resources spent improving. The trick is not really to improve (that is pretty easy) the trick is to improve quickly and effectively (and in a competitive marketplace to improve more quickly than competitors). Where improvement resources are targeted is critical. In deciding which improvement options to explore it is important to understand the impact on the outcome (in this case the health of the patient).

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• Theory of Knowledge

  When managing many fail to predict when attempting to test improvement ideas through what should be experiments (often they are just changes without verification the change produced a desired effect, any learning or study of the results of the change). Without prediction learning is much less (if there is any at all) than it would be with such prediction.

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  With, even a fairly simple understanding of the theory of knowledge the effectiveness of management improvement efforts are greatly increased. This topic is difficult for most to understand, I recommend reading chapter four of the New Economics. 

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• Designing a New Organization

  Ackoff has done a huge amount of work in idealized design and thinking about the big ideas that can drive dramatic change. His ideas are exceptional. He even offers a plan for modeling the idealized organization and then a plan for how to transform the organization based on practical ideas that are feasible in the real world.

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• Price Discrimination in the Internet Age

  The argument that you need to cripple products by geographic area to cope with currency fluctuations is false. It might be that a company wants to practice Price Discrimination to charge more where they can get more and less where they can get less. In the view of such a company, the internet, and other factors, have made it increasingly easy for people to buy in the low cost region and resell the items in the region where the company wants to charge higher prices. If you want to keep practicing price descrimination as a company you have to erect barriers to the free trade of your products by your customers.

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