Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs - Ex-Toyota Manager Consulting with Porsche in 1994
While respect for people is an important part of the Toyota Production System, the practice of former Toyota managers were often the "tough love" variety. Today, many people are often too timid, in my opinion, to call out things that need to be improved for fear of making someone uncomfortable. Where that balance properly lies though is based on the culture of the organization (and what needs to be done - occasionally there is a need to "shake people up" in order to make change take place more effectively). continue reading: Ex-Toyota Manager Consulting with Porsche in 1994 - How Google Works
Google was driven from the beginning by engineers that sought to do what was best. Since those engineers were the founders of the company and still run the company Google has been able to keep the focus not on what is accepted as conventional wisdom but what actually works best. Google understands when you experiment things might not work out. Google’s solution is to experiement quickly and fail early (turn the pdsa cycle quickly). That is something every organization can apply. continue reading: How Google Works - Origins of the Toyota Production System
Our focus should be on improving our understanding of management. It seems to me the discussion has been beneficial thus far. I would also admit that this is probably of interest to a small sub set of those interested in lean manufacturing. That is fine. I do believe there is no benefit for discussions to degrade into negative attacks but when the discussion is mainly sharing views, information and ways of looking at the historical record I find it can be very interesting. continue reading: Origins of the Toyota Production System - Supplier Development Article
- Quality and Innovation
I really don’t understand how people can talk about innovation as if it were some new discovery. Yes I understand we can bring a different focus to innovation. We can reconfigure management structures to encourage and support innovation. That is good. And new ideas are being developed, but the innovation fad is silly. And accepting the notion that this innovation stuff is some new idea will make managers less effective than if they understand the past.
New Economics by W. Edwards Deming, published in 1992, page 7:
Does the customer invent new product of service? The customer generates nothing. No customer asked for electric lights… No customer asked for photography… No customer asked for an automobile… No customer asked for an integrated circuit.
Innovation has long been important to those interested in management improvement. continue reading: Quality and Innovation - 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! - Usability Failures
I guess if you operationally define “nothing wrong” as a failure to work as the manufacturer intended that would be true. But is that what really matters? What is the number of defects that should be counted?
The design of the phone is broken if 63% of the returns work as intended and customers still think they are broken. You might argue that the instructions are bad, but really shouldn’t people just be able to use the phone if it is designed well? continue reading: Usability Failures - IT Outsourcing to India Slowing (2006)
Outsourcing IT makes a lot of sense but it is complex to do well. The first rush of outsourcing was just an attempt to save money by moving work to sites where the workers could be paid less. This is classic economics and the economic theory has worked well. Capitalists moved work to where the competitive advantage was. The economic reaction was what you would expect – Indian IT wages raised drastically and other costs of doing business have continued to rise (much higher turnover as the opportunities that workers had expanded they jump from one job to another). continue reading: IT Outsourcing to India Slowing (2006) - Profound Podcast with John Hunter, Part Two
In this podcast I discussed my thoughts on management improvement, Deming, respect for people, systems thinking and more.
continue reading: Profound Podcast with John Hunter, Part Two - 2007 has been a difficult year for Toyota
I find the quote “2007 has been a difficult year for Toyota” found in The Dings and Dents of Toyota a bit amusing. Toyota has had some problems as the article notes like product recalls and losing a handful of employees to Ford and Chrysler. They are about even with GM in worldwide sales and posted a profit of nearly $14 Billion (I believe maybe 20 companies have ever earned that much in any year) in the year ending March 2007 and continue to make huge profits this year (Toyota reported their best quarter ever in August). With difficulty like this who needs success:-) continue reading: 2007 has been a difficult year for Toyota - 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 - Expand the View of the System to Find Ways to Improve Results
By expanding the system view and looking at the results of the entire system it is often possible to find improvements that are not possible by only looking at “your” system. These changes can sometimes be more challenging to accomplish as they may require convincing others to make changes. continue reading: Expand the View of the System to Find Ways to Improve Results
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