Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs - The Exciting Life of Industrial Statisticians
All of this provides great new opportunities for industrial statisticians to serve as statistical leaders-a term popularized by the late and great Ed Deming (see Hahn and Hoerl, 1998). Statistical leaders engage principally in leveraging statistical concepts and thinking (see Hoerl, Hooper, Jacobs and Lucas , 1993), and focus their activities on mentoring and supporting the most business-vital and technically challenging problems dealing with getting the right data, and converting such data into actionable information.
continue reading: The Exciting Life of Industrial Statisticians - New Rules for Management? No!
“New” rule: “The customer is king.”
Yes. GE would have said the same thing. Shareholders rule as the old rule? Yeah they still seem to. Few companies today, 10 years ago, 50 years ago… understand that there are many stakeholders – all of which the organization should benefit: customers, stock holders, suppliers, workers, the community… I see no evidence there has been any shift in thinking.
“New” rule: “Look out, not in.”
What kind of rule is that? It is pretty obvious you need to do both. I find it incredible the amount of time that is taken trying to show “new” ideas that amount to absolutely nothing. See comments on: Fast Company Interview: Jeff Immelt. continue reading: New Rules for Management? No! - Marissa Mayer Webcast on Google Innovation
- Motivation is Most Often Misguided
- Another Quota Failure Example
However, as I was to learn from Dr Deming, this was judging performance using arbitrary goals, which fostered short-term thinking – the only thing they cared about was: Did I make my quota this week? Misguided focus. The focus was not at all on the customer. The focus was: How much money can I make off this customer?
…
It created a lot of internal conflict. What type of internal conflict? Well, the salespeople hated having new salespeople hired on the floor, because they felt like it would cut into their commission…
Also, judging performance using arbitrary goals fostered a giant amount of fudging of the figures.
Jim McIngvale, CEO Gallery Furniture and author of Always Think Big. continue reading: Another Quota Failure Example - What Is Muda?
And the biggest waste of all is the underutilization of people’s talents. If you just learn to ask people for their ideas and get them to participate in creative problem-solving activities, you will be amazed at what people can do.
Norman Bodek
I agree: "Two resources, largely untapped in American organizations, are potential information and employee creativity. Managing Our Way to Economic Success, William G. Hunter, 1987. Also "The greatest waste in America is failure to use the ability of people." W. Edwards Deming, Out of the Crisis, 1982. continue reading: What Is Muda? - Interviews with Innovators
The very first thought in my mind was, “I think I signed a document that everything I design belongs to Hewlett-Packard.” Even just on my own time, I thought that they deserved it first. And I wanted Hewlett-Packard to build this. I loved my division. I was going to work there for life. It was the calculator division; it was the right division to move into this kind of a computer.
I went to management, and I had three levels of bosses above me in a room and a couple of other engineers, and I presented the ideas and told them what we could do at what price and how it would work. They were intrigued by it, but they couldn’t justify it as a Hewlett-Packard product for some good reasons. Hewlett-Packard couldn’t do a simple project, which was really what was interesting.
Steve Wozniak, on what became Apple. continue reading: Interviews with Innovators - Distorting the System or the Data is Easier Than Improving the System
3 ways to improve the figures: distort the data, distort the system and improve the system. Improving the system is the most difficult.
When people mistake the data proxy for the thing to improve they focus on improvement of how the data looks not of the system. That is the wrong strategy. The correct strategy is to focus on improving the system and as a way of verifying results you then look at measures. But you must always remember those measures are not the end they are an attempt to measure the end you are trying to achieve. continue reading: Distorting the System or the Data is Easier Than Improving the System - Ackoff, Idealized Design and Bell Labs
“Doesn’t it strike you as odd,” he said, “that the three most important contributions this laboratory has ever made to telephonic communications were made before any of you were born? What have you been doing?” he asked. “I’ll tell you,” he said. “You have been improving the parts of the system taken separately, but you have not significantly improved the system as a whole. The deficiency,” he said, “is not yours but mine. We’ve had the wrong research-and-development strategy. We’ve been focusing on improving parts of the system rather than focusing on the system as a whole. As a result, we have been improving the parts, but not the whole.
We have got to restart by focusing on designing the whole and then designing parts that fit it rather than vice versa.
continue reading: Ackoff, Idealized Design and Bell Labs - Gladwell (and Drucker) on Pensions
The most influential management theorist of the twentieth century was Peter Drucker, who, in 1950, wrote an extraordinarily prescient article for Harper’s entitled “The Mirage of Pensions.” It ought to be reprinted for every steelworker, airline mechanic, and autoworker who is worried about his retirement. Drucker simply couldn’t see how the pension plans on the table at companies like G.M. could ever work.
Pension plans did work well for a short period of time. But recently they (along with the attached retiree health care) are one of the big problems facing large old companies: like GM. Gladwell talks about the dependency ratio for an economy and the dependency ratio of companies. Worsening dependency ratios can cause pension plans to kill companies (if they are not funded when the obligation is incurred) – as the company is forced to pay for more and more retirees with fewer and fewer workers. continue reading: Gladwell (and Drucker) on Pensions - Toyota IT Overview
IT solutions should support your processes not dictate them. I am a big fan of avoiding inflexible, proprietary (off the shelf) software. I am willing to spend money on in house developers to create customized IT solutions that support the business processes instead of IT solutions that dictate business processes. continue reading: Toyota IT Overview - Going lean Brings Long-term Payoffs
The early successes provide resources to invest in making large more fundamental changes to the organization. Those successes also help convince people these lean ideas have merit. Dilbert does a good job of illustrating how many workers feel about the latest words spoken by their management. Without visible success expecting employees to believe the new management practices is unwise. continue reading: Going lean Brings Long-term Payoffs - Excessive CEO Pay
CEO’s that take such unethical large pay today are the robber barons of today and will deserve the judgement of history for the actions they take (I would imagine they are perfectly happy to take the money now and worry about opinions later). And those that approve such pay also deserve sharp criticism. continue reading: Excessive CEO Pay - Improving on Previous Attempts to Adopt Management Improvement Methods
There is a big difference between needing to improve on previous attempts to adopt management improvement methods and needing to find new methods. Most of what is needed it to actually apply the good ideas that have been around for decades. And yes, sure try and find some new great ideas but where the focus should really be is on the hard work of execution not looking for some magic pill to solve the difficult task of managing well. continue reading: Improving on Previous Attempts to Adopt Management Improvement Methods - Why Pay Taxes or be Honest
We keep getting these continuing examples that are so distressing: Enron, Worldom, Tyco, Accenture, HP… It is so disappointing that such behavior is mainly excused (until finally the evidence presented is so damning that most stop defending the specific case in question).
Yet so much of what is unethical is barely questioned. If we don’t question things that are this bad, then those who insist on being as devious as they can without being called on it will just practice worse and worse behavior. We have to do a much better job of not tolerating such unethical behavior. continue reading: Why Pay Taxes or be Honest
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