Blog posts on leadership

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

• Toyota, Lean and Management Consultants

  ...Serious attempts will also be frustrating at times and can also fail but most organizations won’t even commit to attempting serious change. Most will just look for some items from current fads to dress up how they have always managed.

  That management consultants will also jump from fad to fad, without conviction, is not news. Deming called them “hacks” in the 1980’s. Bob Sutton’s excellent article calls 90% of management advice crap...

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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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• Illusions – Optical and Other

  Optical illusions provide a simple reminder of how easily we can think we know things that are not so.

  It is important to question what you believe; even when it is as obvious as the A square being darker than the B square. Understanding the ease with which we can reach false conclusions can be a powerful aid in improving management decision making.

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• Warren Buffett’s 2016 Letter to Shareholders

  The fairly simple idea of hiring trustworthy, capable and ethical people and giving them freedom to manage for the long term seems too easy to provide an advantage. But it does. Warren Buffett is very careful to pick people that are more concerned with providing value to customers over the long term than promoting themselves and seeking massive short term rewards for themselves. This simple act of hiring people that are willing to put customers and shareholders before themselves allows your organizations to function in its long term best interest.

  In so many other companies short term incentives destroy value (Warren’s point 4 above). This failure can extend to companies Warren is significantly invested in: such as the long term and deep seeded mismanagement at Wells Fargo due to very poor leadership at that company for years. But in general, Berkshire Hathaway is much better at avoiding these toxic behaviors driven by very poor executive leadership when compared to other companies.

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• The Problem with Targets

  ... Brian Joiner provides another reason why targets are harmful: there are “3 ways to improve the figures: distort the data, distort the system and improve the system. Improving the system is the most difficult.” And so most often targets results in distortion of the data (faulty data) or distortion of the system (meet target by shifting resources and effort from other parts of the system). Both of those actions are harmful to the system.

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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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• Factfulness – An Extremely Valuable Book

  Data is extremely valuable in helping us make decisions and evaluating the effectiveness of policy. However it is critical to be careful. It is very easy to focus on meeting targets that seem sensible – increasing the number of hospital beds – but that lead to less effective policy.

  ...

  The book relentlessly points out the great progress that has been made globally over the last 50 years and how that progress continues today and looks to be set to continue in the future. We have plenty of areas to work on improving but we should be aware of how much progress we have been making. As he points out frequently he has continually seen huge underestimation of the economic conditions in the world today. This book does a great job of presenting the real success we have achieved and the progress we can look forward to in the future.

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• Effective Change Management Strategies and Tactics

  Create systems focused on continual improvement with built in checks for frequent assessment, reflection and adjustment to the changes the organization attempts to make.  This effort should be iterative. 

  Building the capacity of the organization to successfully adopt improvements will directly aid change efforts and also will build confidence that efforts to change are worthwhile and not, as with so many organizations, just busy work.

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• Advice for Managers Who are Just Starting Out

  Read the Leader’s Handbook by Peter Scholtes and use it as a reference to guide your actions on a weekly basis.

  Learn to experiment and iterate quickly. Your main aim should be to manage the management system (which may mean the management practices used within your scope of authority or influence). As you start it will involve a significant amount of managing projects, to demonstrate your ability to deliver results, but that should be used to transition to building a strong management system.

  In conjunction with quick iteration and adoption of improvements your focus should be on coaching people to help them be more effective (among other things on helping them learn how to effectively practice evidenced based decision making and continual improvement).

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• The New Age of Robots and What it Means for Jobs

  Industrial robots are the most advanced application of robots in business today but they are still far from plug and play solutions. They require skilled experts to have them work effectively; but the capabilities and usability have greatly increased over the last 20 years. Respect for people (and all that entails about the management system) is an important part of creating a management system to have the most success integrating robots.

  The ability of us to create technological solutions to accomplish tasks that required people has exploded in the last 20 years and will continue to. Lawyers are finding much of what they do can be done by a computer. Much, doesn’t mean all, obviously. Search and rescue in disaster areas is another task that robots are playing an increasing role in; and the use of robots will likely continue to grow quickly. Technology is taking over many aspects of medical care that were not long ago seen as requiring highly trained and experience medical professionals (reading scans, diagnosing illness…).

  
  I think many of these advances are moving so quickly that we are not properly thinking about the long term future of our organizations. The disruption these changes will take will be difficult to predict and plan for.

  ...

  continue reading: The New Age of Robots and What it Means for Jobs
• Well Managed Companies

  Do your outstanding people think their importance is in getting through another day through hard work and individual expertise. While those qualities are good most important to the success of the organization is improving the system not getting through one day. If those seen as the stars are not improving the system and processes then get them to work doing so.

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• Standardization With a Systems View Allows Creativity to Flourish

  We all benefit from standardization every day. We can plug our devices into a wall outlet and power them. We can get a replacement battery and have it work as expected. We can type on the keyboard without thinking because the keys are the same on each keyboard. We can connect to a new wifi network with our phone or laptop. We can buy a replacement pipe for our sink and install it.

  ...

  One of the objections I hear to adopting standardization is that doing so takes away our ability to be creative. This is not the case. Dr. Deming’s quote does a good job of explaining this. Standardization allows us to create systems that are reliable and effective. Within that system there should be a great deal of flexibility to apply creative ideas.

  
  It is true organizations often impose rigid rules that restrict creativity. If standardization is responsible for part of this result then the process by which standards are created and continually improved needs to be examined. A management system needs to continually improve and part of that is continually evaluating how management concepts (such as standardization) are being applied.

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• Aligning Marketing Vision and Management

  Why do so many companies market one thing and provide something else? I know it might be easier to sell something different than what you offer your customer today. But if you decide to market one vision, why don’t you change your organization to actually offer that?

  ...

  Treating a marketing message as something separate from management is a serious problem. When your marketing message says one thing and your customers get something else that is a problem. I think the message is often based on what the executives wish the company was (and the outsourced marketers think it should be), but it isn’t the customer experience the management system provides.

  If you believe the vision of your marketing then make sure your organization has embraced those principles.

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• Deming on being Destroyed by Best Efforts

  Best efforts are essential. Unfortunately, best efforts, people charging this way and that way without guidance of principles, can do a lot of damage. Think of the chaos that would come if everyone did his best, not knowing what to do.

      W. Edwards Deming

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• The Management System is the Key

  I think too often people (in relation to management ideas) demand that things be made more simple than is possible to adequately understand the systems involved. This of course leads to problems. A huge value provided by people like Russell Ackoff is their ability to help explain what is needed in fairly simple terms. Still understanding how these ideas are being expressed in our management systems and how to apply the concepts to our management systems is still a challenge.

  ...

  I think one of the big differences between the best lean efforts and the others is the increased value placed on deeper understanding and thinking systemically.

  continue reading: The Management System is the Key