Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs - 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?
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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 - System Imposing Burden on Customers Driven by Pointy Haired Boss
The practice of telling your customer they must save you from horrible management is terrible. Managers designing a system that puts a burden on customers to rescue people from harsh treatment is about as lame as management can be. Definite Dilbert's pointy haired boss level idiocy. continue reading: System Imposing Burden on Customers Driven by Pointy Haired Boss - 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? - Vacation: A Systems Thinking Perspective
Health care insurance costs are high, if you can get 1900 hours of work a year for the health care premium instead of 1500 hours that can add up to a great deal of savings... continue reading: Vacation: A Systems Thinking Perspective - 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 - Dangers of Extrinsic Motivation
Joel Spolsky notes that relying on extrinsic motivation to drive performance is an abdication of management.
Instead of training developers on techniques of writing reliable code, you just absolve yourself of responsibility by paying them if they do. Now every developer has to figure it out on their own.
continue reading: Dangers of Extrinsic Motivation - Competition
Most aspects of Deming’s thinking seemed natural to me from the start. Some ideas have taken longer (it took me awhile to be won over to the harm caused by performance appraisals, for example). Competition is another area that I still struggle with. I have been moved greatly by my experience and the thoughts of people like Alfie Kohn (No Contest: The Case Against Competition).
But I still hold more promise for some aspects of competition and I hold less concern than some about other aspects of competition. Still I agree that there is a good deal to learn about the dangers of competition which often creates havoc within a system. continue reading: Competition
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