Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs - Fast Company Interview: Jeff Immelt
My guess would be that what lead to this quote is not a lack of understanding that managers need the same qualities today they needed 10 years ago but the compulsion to feed the media frenzy for some incredible new insight. It just isn’t sexy to say “we need the same leadership qualities we needed in the past.” Deming stressed the importance of these “new” qualities he states more than 50 years ago and I think most decent managers have know you need to “know why we’re doing them”
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Customer focus and innovation would also be at the top of the list of important issues and were 10 years ago and will be 20 years from now. What is important for management does not change much.
occasionally innovation is so dramatic it drastically changes the practice of management, two examples:
1) the use of information technology
2) the whole quality movement [Deming’s ideas, SPC, Toyota/Lean, Six Sigma… continue reading: Fast Company Interview: Jeff Immelt - W. Edwards Deming’s Seven Deadly Diseases
Seven Deadly Diseases
- Lack of constancy of purpose
- Emphasis on short term profits (Overreaction to short term variation is harmful to long term success. With such focus on relatively unimportant short term results focus on constancy of purpose is next to impossible.)
- Evaluation of performance, merit rating or annual review (see: Performance Without Appraisal: What to do Instead of Performance Appraisals by Peter Scholtes).
- Mobility of top management (too much turnover causes numerous problems)
- Managing by use of visible figures, with little of no consideration of figures that are unknown or unknowable.
continue reading: W. Edwards Deming’s Seven Deadly Diseases - How Toyota Turns Workers Into Problem Solvers
This idea is simple. Creating an environment where this is actual the way things are, not just the way things are said to be, is difficult. That is why I believe so strongly in Deming’s management philosophy. The organization must be viewed as a whole. Benefits can be gained by adopting some concepts in a piecemeal manner. However, many benefits accrue only when the positive interactions between Toyota Production System (TPS – Lean) concepts occur (as systems thinking would predict). continue reading: How Toyota Turns Workers Into Problem Solvers - Performance Without Appraisal
The comments on the mini-microsoft blog shows performance appraisal continues to be an emotional topic. People on opposite sides of the debate are very passionate.
I admit it took me longer to accept Dr. Deming’s thoughts on performance appraisal than other ideas (and that is even with Peter Scholtes being a friend which gave me the opportunity to discuss the idea with him). So I understand it is not an easy concept to accept. continue reading: Performance Without Appraisal - Managing the Supplier Relationship, at Ford and Elsewhere
Ford said they were committed to the Deming philosophy in the 1980’s and 1990’s. Donald Petersen, former CEO of Ford Motor Company, was one of those included in the Deming Library Tapes.
Nothing has changed from 1990 to today [October 2005] that explains why Ford saying they are going to deal with suppliers differently now should work any better then such statements 15 years ago. Until they acknowledge what problems in their management system have caused them to fail to use sensible management practices that have been well know for decades I see no reason to believe their claims that they will behave differently this time. continue reading: Managing the Supplier Relationship, at Ford and Elsewhere - Statistical Techniques for Quality
As six sigma has taken the business world by storm in the past 15 years, many organizations have focused on acquiring and implementing the DMAIC methodology with performance benchmarks defined by “sigma levels”. However, after perhaps proclaiming the “six sigma organization” label for the company, it is important for the business leaders to look beyond immediate concerns, i.e. those issues embodied in black belt projects, and adopt holistic and forward-looking perspectives in seriously advancing organizational interests.
continue reading: Statistical Techniques for Quality - Measuring and Managing Performance in Organizations
measure [parameter] in the hopes of improving [goal]
When dysfunction occurs, the values of [parameter] go up comfortingly, but the values of [goal] get worse. Dysfunction often occurs. continue reading: Measuring and Managing Performance in Organizations - Management Improvement in Healthcare
Health care (and especially M.D.s) have always been seen as among the most difficult environment to introduce new management principles (universities are another). It was surprising to me since so much of management improvement is largely about using the scientific method, but it seems to be a reality. It seems these highly educated people are used to having huge freedom to act as they wish, and seem to resist participating in a system to improve rather than doing as they wish.
To improving results in health care I strongly recommend looking at the work of the Institute for Healthcare Improvement. continue reading: Management Improvement in Healthcare - Toyota Engineers a New Plant: the Living Kind
Toyota’s vision:
First, making things that benefit both people and the world as a whole.
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Second, as a member of society, we must fulfill our responsibilities to all stakeholders. We must provide to customers cleaner, safer, and more attractive products with excellent value. To shareholders, we must enhance share value through long-term and stable growth by increasing profits and paying appropriate dividends. With business partners, we must engage in fair business based on a spirit of mutual benefit.
To our employees, we must provide a workplace where they can work with pride based on mutual trust and responsibility between labor and management, and respect for people.
continue reading: Toyota Engineers a New Plant: the Living Kind - Marketing in a Lean Company
- Management Training Program
So I said to the Toyota executive, “You’ve only got two or three suppliers per category, and you never take bids. How do you know you aren’t being ripped off?” So this guy, who was around 60, gives me an incredibly frosty look and says, “Because I know everything.” Everything? “That’s my job,” he says.
Reading “Because I know everything” brings to mind an arrogant blowhard to many in America (I think). Probably because most who would say that, are arrogant blowhards. But when someone has worked (a Toyota executive or a baker) for 40+ years in the same area those words can have quite a different meaning than a 31 year old MBA working in his third industry. Managing with constancy of purpose and long term thinking can make a big difference. continue reading: Management Training Program - Management Pioneer Peter Drucker 1909 – 2005
The present people in organizations are still stuck in the 19th-century model of the organization. When big business first emerged throughout the industrial world around 1870, it did not emerge out of the small businesses of 1850 — it emerged independently. The only model available, the most successful organization of the 19th century, was the Prussian Army…
The Prussians succeeded because they had created an organization. They were the first ones to use modern technology effectively, which in those days meant railroad and telegraph. Business copied the command and control structure of the Prussian army, in which rank equaled authority. We are now evolving toward structures in which rank means responsibility but not authority. And in which your job is not to command but to persuade.
continue reading: Management Pioneer Peter Drucker 1909 – 2005 - The Economist on Drucker
In the late 1990s he turned into one of America’s leading critics of soaring executive pay, warning that “in the next economic downturn, there will be an outbreak of bitterness and contempt for the super-corporate chieftains who pay themselves millions.”
continue reading: The Economist on Drucker - Superior Customer Experiences Start with Respect for Employees
Oakley found that there is a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance. Employee satisfaction is a key antecedent to employee engagement. He also found that organizations with engaged employees have customers who use their products more, and increased customer usage leads to higher levels of customer satisfaction.
This is not a zero-sum game. Good managers grow the pie so all the stakeholders can get more benefit (customers, investors, employees…). continue reading: Superior Customer Experiences Start with Respect for Employees - Toyota Manufacturing Powerhouse
Unusual among automakers, “they don’t hide a lot,” Coventry said. “It’s like going to the Super Bowl and having the opposite side throw their playbook on the table. It’s as if they feel they can still beat you on the field.”
Toyota has greatly advanced management practice worldwide through their actions.
In a reflection of Toyota’s team-oriented approach, its executive pay is paltry by U.S. standards. Analyst Ron Tadross at Banc of America Securities estimates the total annual compensation of Toyota’s CEO at under $1 million – about as much as a vice president at GM or Ford Motor Co. makes in a good year.
The executive pay crisis in America is a symptom of the failure of American management to understand their role. Executives are part of the system and have acted shamefully in allowing obscene pay for a few while claiming they must force others to suffer (due to “the market”). continue reading: Toyota Manufacturing Powerhouse
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