Blog posts on management

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

• Using Design of Experiments

  Design of Experiments can seem complicated but at the core it is fairly simple and powerful. By applying the proper techniques it allows you to gage the effect of several variables and, very importantly, the interactions of those variables with a small number of experiments (or tests or pilots).

  George Box is a wonderful author (and friend) who can write for mangers who are not knowledgeable about statistics and statisticians. Statistics for Discovery does a good job of explaining how organizations should use experiments to improve.

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• Good Customer Service Example

  Recently I bought a new digital camera, Canon A700. Part of the reason I bought it was I had heard they actually provided customer service – you could call them and they answered and helped (plus they have long practiced good management improvement concepts, in general).

  Well I received my camera and I could not open the battery compartment: which was quite frustrating. I tried following the instructions but I couldn’t get it to open. So I tried calling Canon and I got a person on the phone within 30 seconds (there was system to direct me to the right person but it was as speaking the answer to a couple questions).

  Within a couple minutes the service person (based in Virginia and a Canon employee, as I understand it) had picked up a Canon A700 and explained how to open the door.

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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.

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• Problems with Bonuses

  Commission pay and bonus often set up a conflict between what is in the interest of the company and the employee. They lead to bunching of orders around quarterly quotas, deadlines and competitions. They lead salespeople to think their job is to sell whatever pays them the most not to assist the customer.

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• 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, Reddit and Customer Focus (2006)

  I think most of Dell's users do not notice what Dell is doing, exactly. Reddit readers, however, by and large, do, which is one thing that makes reading Reddit fun. I find Reddit's users can point out, not just problems, but the systemic causes of those problems (so they vote up the links that do exactly this).

  Most customers might not see the chain leading to their frustration but the do know they don't like that the computer is slow and they have to wade through all sorts of software (much of which they don't need or want). I think the author was exactly right that the source of the problem is Dell's monetary incentive is to get paid to add more and more stuff not to give the users what they need.

  ...

  Mainly I think these critical looks at practices are fun reading, but there is also a management issue to understand.  There are many smart people who know how to voice their opinion (and the internet can connect that voice to large numbers of people).   In this day and age, if you think your imperial halo with protect you from the masses you had better hope none of these people get a look at what you offer.  If you are figuratively naked, they will see, and they will shout that fact from the mountain top.

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• Quality and Costs

  Deming explained that increasing quality decreases costs. Page 3 of Out of the Crisis: Improve Quality –> Costs decrease because of less rework, fewer mistakes, fewer delays…

  Like most models this does not explain everything. Achieving some quality desires does cost more. And the article examines how to look at the issue of cost reduction in health care, where the view that higher quality costs more persists to a larger extent than elsewhere. There is significant room in health care for adopting improvement that will improve quality and reduce costs because the systems are so poorly designed they are both increasing costs and decreasing quality over what could be achieved.

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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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• Brainstorming Under Attack

  Brainstorming is about creating an opportunity to bring new ideas the forefront.

  There are other useful tools such as the affinity diagram which can serve as another option (or can serve as a tool to work with the results of brainstorming).

  And Edward DeBono has excellent creativity tools, like his 6 thinking hats. Brainstorming is a useful tool when applied properly but it is only one tool and other tools should be used also.

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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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• Why are you afraid of process?

  Process management is necessary for management improvement. That is true in manufacturing, service, government, research and any other environment. The way process management will be done must be modified to be effective. I believe people react negatively to the concept because they see process as the “rules” such as when the explanation for poor service is given as “that is our policy.” Don’t mix up those excuses with proper process management and improvement strategies.

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• Most Meetings are Muda

  Have the PM email the list of resolved and new action items to all the participants.

  This is an important step missed far too often. Doing so helps make sure that everyone leaving the meeting has the same understanding of what has been decided: in addition to reviewing new assignments I would suggest review all significant decisions made. Far too often, people have very different ideas on what happened in previous meetings.

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• Airline Quality (or Rather, Lack Thereof)

  I flew JetBlue Airways last week. The help at the counter was polite and friendly. While this is only one data point (and hardly a “high bar” to meet) it contrasts with most of my flying experience (in my experience Southwest has a good likelihood of providing good service but few other airlines do). It would be nice if more airlines could be like Southwest...

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• Find the Root Cause Instead of the Person to Blame

  Why did they make that error? Why did the process let them make that error? When you follow the why chain a couple more steps you can find root causes that will allow you to find a much more effective solution. You can then pilot (PDSA) an improvement strategy that doesn’t just amount to “Do a better job Joe” or “that is it Joe we are replacing you with Mary.” Neither of those strategies turns out to be very effective.

  But investigating a bit more to find a root cause can result in finding solutions that improve the performance of all the workers. 

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