Blog posts on culture

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

• Excessive Executive Pay

  The excesses are so great now they will either force companies to:

  1. take huge risks to justify such pay and then go bankrupt when such risks fail (and some will succeed making it appear, to some, that the pay was deserved rather than just the random chance of taking a large risk and getting lucky).
  2. make it impossible to compete with companies that don’t allow such excesses and slowly go out of business to those companies that don’t act so irresponsibly
  3. hope that competitors adopt your bad practice of excessive pay (this does have potential as most people are corrupted by power, even across cultural boundaries). However, my expectation is the competitive forces of capitalism going forward are going to make such a hope unrealistic. People will see the opportunity provided by such poor management and compete with them.

  As long as the pay packages were merely large, and didn’t effect the ability of a company to prosper that could continue (slicing up the benefits between the stakeholders is not an exact science). The excesses recently have become so obscene as to become unsustainable.

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• Steve Jobs on Quality, Business and Joseph Juran

  The importance of customer focus is obvious at the companies Jobs led. It wasn’t a weak, mere claim of concern for the customer, it was a deep passionate drive to delight customers.

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• Fear Remains a Toyota Motivator

  First, don’t let the title fool you, this is not an indication Toyota is going against Deming’s obligation of management to “Drive out fear and build trust so that everyone can work effectively”.

  ...

  Rather than being drawn to improve it is most often stated as being scared that if we don’t we will have to pay for failing to improve. Thus the reference to fear.

  continue reading: Fear Remains a Toyota Motivator
• Google: Ten Golden Rules (2005)

  The suits inside Google don’t fare much better than the outside pros. Several current and former insiders say there’s a caste system, in which business types are second-class citizens to Google’s valued code jockeys. They argue that it could prove to be a big challenge in the future as Google seeks to maintain its growth.

  Google really is doing things differently. One way you see it is that some of those used to being the most powerful players complain that they don’t get respect at Google, at Google the engineers rule. Um, maybe they shouldn’t complain too loud, maybe the reason Google is doing better is they focus on the Gemba (where value is added to the customer).

  continue reading: Google: Ten Golden Rules (2005)
• The 70 Percent Solution

  Google CEO Eric Schmidt:

  We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses, ones related to the core businesses in some interesting way. Examples of that would be Google News, Google Earth, and Google Local. And then 10 percent of our time should be on things that are truly new. An example there would be the Wi-Fi initiative.

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• Drug Price Crisis

  It is nice to find at least a couple of people at MIT that want to have MIT focus research on the public good instead of private profit. As I have mentioned too many universities now act like they are for-profit drug or research companies. That is wrong. Drug companies can do so, institutions with purported higher purposes should not be driven to place advancing science below profiting the institution.

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• Goofy but Widespread Thinking

  I can’t really understand why people seem unwilling to do the simple known things to improve performance. But there does seem to be the attitude that we need to find secret or fantastic new ideas in order to improve.
  
  People seem to think: “I can't just read some idea in a book published 30 years ago and improve. If it were that easy everyone would be doing it.” Well it isn’t quite that easy but it is close.

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• Change is not Improvement

  We trained hard… but it seemed that every time we were beginning to form up into teams we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion; inefficiency, and demoralization.

  These lines, from the Satyricon of Petronius written 2,000 years ago…*

  * Unfortunately it seems this quote is not actually his.

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• People: Team Members or Costs

  Both Toyota and GM seek to use technology to improve but Toyota sees the technology as useful to help people to be more efficient, eliminate menial repetitive tasks, eliminate tasks that cause injury… and it seems to me GM saw technology as a way to eliminate people. The action showed a company that viewed people as a cost to be eliminated. GM did not act as though people were their “most important assets” as we so often hear, but see so little evidence of in the action of companies.

  
  Toyota does try to reduce overall costs (including labor costs) by continually improving and making cars more and more efficiently (so they can produce cars using fewer hours of labor in the future than they need today). Trying to become more efficient by engaging everyone in the effort is a part of the system of management at Toyota. The current Toyota employees are an important part of the system and are not viewed as a cost to eliminate. 

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• A Company’s Purpose is to be Useful to Society

  (Toyota President, Katsuaki Watanabe) eschews the normal management mantra of shareholder value above all. A company’s purpose, Watanabe insists, is to be useful to society.

  Which, of course, echoes W. Edwards Deming's words on the purpose of a business.

  continue reading: A Company’s Purpose is to be Useful to Society
• Lean Manufacturing Success

  Not only is this a nice story but it is one small example of the good people working at GM and Ford. The problem is not the individual workers it is management. It is too bad that those companies, that did take great strides in the 1980 and early 1990s to improve (starting with Deming’s Management ideas) let those efforts fade away.

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• Dell Falls Short

  Don’t give management a free pass just because they cave in to short term thinking. Management should know better and has a responsibility to do better. It is predictable that if management fails to setup an effective management system that they will fall victim to short term thinking. Still that doesn’t mean they are not responsible for making decisions. They are the managers of the company not some analyst on Wall Street.

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• Lean National Health System

  This is an example of focusing on improving the system which will then result in improved measures (cost savings for example). This systems approach contrasts with cutting costs by cutting every budget by 5% across the board which often fails. Without improvements in the system reducing budgets just reduces capability.

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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
• More on Obscene CEO Pay

  Unfortunately this reverse robin hood (steal from the workers, stock holder, customers…) and give to the CEO tale continues. Hopefully someday soon we can at least turn the momentum in the right direction (stopping these incredibly excessive “pay” packages). Even then it will take quite a deal of reducing these ridiculous “pay” packages to reach some sense of decency.

  continue reading: More on Obscene CEO Pay