Blog posts on leadership

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

• 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.

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• 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.

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• 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.

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• More on Overpaid CEO’s

  As Drucker, Buffet and many others have said CEO overpayment is bad for companies, workers and shareholders. Even when they are fired they often take away tens of millions of dollars. Absolutely ridiculous. I sure hope the bubble of CEO pay bursts soon – the only suitable comparison this century is the internet stock bubble. But every year it just gets worse. I would add overpaying CEO’s to Deming’s seven deadly diseases of western management.

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• Circle of Influence

  You should remember, that there is a temporal component to your circle of influence. On some current issue, I may have a very low chance of success for getting the organization to adopt an improvement I think is best. But certain actions can build the understanding that will allow me later to have more influence. This can even be completely separate from how people normally think of circle of influence. By building an organization that moves toward data based decision making and therefore reduces HiPPO (Highest Paid Person’s Opinion) decision making I increase my ability to influence decision making in the future.

  Long term thinking is a very powerful, and much under-practiced, strategy. Your influence within an organization is limited today but has great potential to expand, if you act wisely.

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• Doing the Wrong Things Righter

  Most of our current problems are, he [Russell Ackoff] says, the result of policymakers and managers busting a gut to do the wrong thing right.

  I agree with the very big problem of ignoring the overall system and seeking to improve what really should be completely rethought and changed.  However, I am a bit skeptical of the idea of it being better to do the right thing poorly than it is to do the wrong thing well. 

  I realize "It is far better to do the right thing wrong than to do the wrong thing right." as Russell Ackoff has said, is a catchy quote.  But certainly the truth is that it depends on the system and how wrong or right a thing is and the action is.  Sometimes it is far better to do the wrong thing fairly well (to increase the overall benefit to the system) than to do the right thing poorly (and create huge problems in the rest of the system).  So sure pay attention to the concept of thinking about whether the best course of action is to completely change what you are doing instead of improving how you are doing it.  But don't pretend it is really is better to do the right things wrong - it depends.  Sometimes sure that is true, other times it isn't.

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• Turning The PDSA Cycle Rapidly (Iteration)

  One point he made was that he often finds that organizations fail to properly “turn” the PDSA cycle (by running through it 5-15 times quickly and instead to one huge run through the PDSA cycle). One slow turn is much less effective then using it as intended to quickly test and adapt and test and adapt…

  In my experience people have difficulty articulating a theory to test (which limits the learning that can be gained). He offered a strategy to help with this: write down the key outcome that is desired. Then list the main drivers that impact that outcome. Then list design changes for each outcome to be tested with the PDSA cycle. 

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• Creating and Sustaining Great Management Systems

  It is hard enough to create and sustain great management systems without adding more challenges to achieving success. When the management system results in having credit for each success fought over (to allocate credit to whoever convinces others they deserve the credit) it is much harder.

  This is one of the many ways Performance appraisals schemes (where people have to claim responsibility for successes in order to get more cash) create problems.

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• Amazon Innovation

  In my view Amazon is doing some very interesting innovation...

  I continue to believe they have a good shot at doing so going forward (and their core business is doing very well I think). Innovation often involves taking risks. Bezos is willing to do so and willing to pursue his beliefs even if many question those beliefs. That means he has the potential to truly innovate, and also means he has to potential to fail dramatically.

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• Sub-optimize a Part to Optimize the Whole

  ...choosing to sub optimize a part to optimize the whole. One of management’s roles is to determine when to trade a loss to one part of the system for the sake of the overall system. One of the big losses for software development is interruptions which distract developers.

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• Customer Focus at Ritz Carlton and Home Depot

  Ritz-Carlton’s motto is “We are ladies and gentlemen serving ladies and gentlemen.” And they actually turn those words into reality. They are not platitudes with no action. The system is guided toward achieving that vision.

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• Why Extrinsic Motivation Fails

  Lean thinkers understand this idea as respect for people. Dr. Deming talked about joy in work.Douglas McGregor talked about theory x and theory y thinking. All of these perspectives incorporate an understanding of workplace systems and human psychology. Extrinsic motivation is easy but not effective. It is really just abdicating management and using extrinsic motivation in place of management. The alternative requires managers to actually manage. This is challenging but the correct choice to make.

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• Toyota Homes

  I still am surprised Toyota isn’t doing more with mass transit but they obviously know more than me. Toyota partner robots are a good strategic vision in my opinion.

  ...

  Could Toyota’s efforts beyond automobiles create problems over the long term? Yes. But Toyota’s solid management system is built with the knowledge that change is inevitable (Toyota’s Early History – Toyota was a loom maker before moving into the automobile industry). If Toyota wants to prosper in the future it needs to contoinue to grow and adapt and take risks.

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• Design Your Organization to Serve Customers Well

  Around all these processes is potential information. And you can either use it or not use it. And in most places just waste it.
  …
  There is valuable information just running down the drain. If you have everybody turned on and looking at process and saying how can we make them work better, you need to get some information, you need to get some data. That is the way you actually solve problems.

  William Hunter in seminar, Quality is a Journey to Excellence

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• Encourage Improvement Action by Everyone

  Centralizing decision making is not an effective way to manage organizations. Organizations need to encourage improvement by everybody in the organization. We need to create a system where that is encouraged and supported.

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  Without an understanding of systems and interactions sometimes changes are made without an understanding of the consequences those changes. The beer game is a good example of one way this can cause problems (people don’t always understand all the consequences of their actions). To be clear I agree with setting up systems that allow people to make improvements in the workplace. Just be cautious to avoid tampering.

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