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- Creating a Deep Commitment to Delighting Customers
Those organizations that can delight customers today and take the steps today that position the organization to delight customers in the future will prosper and grow. But building and maintaining a management culture that reinforces delighting customers and long term thinking is quite difficult.
Successfully delighting customers requires much more than a wish that customers were delighted with our organization. It requires knowing what your customers want and creating system that can reliably delivering that to customers.
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- Innovation in Organizations
- The Quick Fix
W. Edwards Deming
One trouble with American industry today is that top management supposes that one lecture or one day will do it. “Come, spend a day with us, and do for us what you did for Japan, that we too may be saved.”
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- Technological Innovation and Management
Organizations need to be designed to be robust and to cope well with the increasingly rapid pace of transformative innovation. This again reinforces the importance of management improvement practices that I have been writing about here (on the Curious Cat Management Improvement blog) for more than 10 years. Organizations that do not delight customers, know the jobs to be done that their customers have, focus on the future (long term thinking), understand how to use data, have well designed processes that allow those at the gemba to know what to do and know how to rapidly adjust based on new realities and possibilities are at great risk.
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- Agile Software Development and Deming's Ideas
- Deming and Toyota
I believe Toyota applied Deming’s ideas to create a management system and continued to develop that system to create the Toyota Production System (also known as lean manufacturing).
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- Lean Thinking and Management
I agree that we should acknowledge the paucity of success stories for improving the practice of management. The failures of management are not minor. The problems are large and the successes seem limited. The biggest thing I think we need to learn from this is that improving management is not easy. The concepts may seem simple but most of us can look around and see much more Dilbert Boss behavior than lean thinking behavior. And the gap between those two types of behavior seems to rise as you go “up” the organization chart.
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- The Importance of Critical Thinking and Challenging Assumptions
Critical thinking is important to applying management improvement methods effectively. It is important to know when decisions are based on evidence and when decisions are not based on evidence. It can be fine to base some decisions on principles that are not subject to rational criticism. But it is important to understand the thought process that is taken to make each decision. If we are not clear on the basis (evidence or opinion regardless of evidence) we cannot be as effective in targeting our efforts to evaluate the results and continually improve the processes in our organizations.
Changing the culture to one that values understanding and learning takes time. That process must be done with an understanding of psychology and the challenges of getting people to evaluate decisions. Creating a culture where it is expected that people think about the evidence and are comfortable explaining and defending the reasoning behind decisions is extremely important.
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- Dangers of Forgetting the Proxy Nature of Data
We use data to act as a proxy for some results of the system. Often people forget that the desired end result is not for the number to be improved but for the situation to be improved. We hope, if the measure improves the situation will have improved. But there are many reasons this may not be the case (one number improving at the expense of other parts of the system, the failure of the number to accurately serve as a proxy, distorting numbers, etc.).
I find something I learned from Brian Joiner an excellent summary – which I remember as:
Data (measuring a system) can be improved by
- distorting the system
- distorting the data or
- improving the system (which tends to be more difficult though likely what is desired)
Brian Joiner’s book, 4th Generation Management is a great book for managers.
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- Management Improvement History
I do believe we need to improve our practice of Quality (and to do that we need to understand what happened in the past and why it was not more successful). The idea that Design of Experiments (DoE) was at the core of some Quality Movement to me is not at all accurate.
In my experience only a few Quality professionals today understand what it means and how it should be applied. The idea that it was common place in the 40’s I seriously doubt (though I don’t have first hand knowledge of this). I find it difficult to believe we would have decided to stop using DoE if it was commonly done previously. The understanding I have from those that should know (like George Box and previously my father – Bill Hunter) is that it was not at all common practice and still is not outside of a few industries and even there it is isolated in the domain of a few experts.I do have first hand knowledge of the 80’s and the idea that we did “employee training in problem solving, team activities and just-in-time inventory” well is not even close to accurate. We sent people to training on these things but other than JIT inventory the effectiveness of these efforts were poor (with a few exceptions that really did well).
“Quality” is not being practiced anywhere close to the level with which I am satisfied with in more than a few organizations. We have huge improvements to make in the practice of DoE, SPC, process improvement, having decisions made by the appropriate level (as close to the issue as possible), leadership, teamwork, data based decision making, the use of basically all the Quality tools, systems thinking, transformation…
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- Taguchi Loss Function
In practice, I have seen the concept of the Taguchi Loss Function used quite a bit. I have never actually seen any losses quantified and totaled and shown on a graph. I think focusing specifically on who suffers a loss and what that loss could be, can help. I think actually quantifying the losses to society can be daunting. So, while I see the value in framing the concept that way I think to actually get the losses quantified you are best served by starting with those closest to the process and then adding additional loses to those results.
Second, if you attempt to use the concept to help you manage (as a guide in decision making) the impacts to society are a factor, but, I think the loss to your company, the customer and perhaps the end user are most important. A negative impact to society at large is not going to have the same impact to a decision maker as the same negative impact to the customer. The decision maker will likely be willing to invest more to reduce the loss to a customer than to society at large (and that seems logical and sensible to me).
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- Operational Excellence
Saying the organization is focuses on new principles (partnering, lean, etc.) is not the same as applying those principles with the great success that Toyota does. That difference is huge and is driving many companies to outsource and try to dramatically cut costs. Reducing costs should be the outcome of improving efficiency.
Toyota is successful manufacturing in the USA.
I would agree that many companies don’t understand the critical importance of management excellence. Rather than take the difficult path to lead real change in their organization they focus on simple cost cutting measures (though usually not cutting executive salaries which have grown dramatically and are excessive in the USA compared to the rest of the world). That won’t work.
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- Price Discrimination in the Internet Age
The argument that you need to cripple products by geographic area to cope with currency fluctuations is false. It might be that a company wants to practice Price Discrimination to charge more where they can get more and less where they can get less. In the view of such a company, the internet, and other factors, have made it increasingly easy for people to buy in the low cost region and resell the items in the region where the company wants to charge higher prices. If you want to keep practicing price descrimination as a company you have to erect barriers to the free trade of your products by your customers.
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- Theory of Knowledge
When managing many fail to predict when attempting to test improvement ideas through what should be experiments (often they are just changes without verification the change produced a desired effect, any learning or study of the results of the change). Without prediction learning is much less (if there is any at all) than it would be with such prediction.
With, even a fairly simple understanding of the theory of knowledge the effectiveness of management improvement efforts are greatly increased. This topic is difficult for most to understand, I recommend reading chapter four of the New Economics.
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- Control Charts in Health Care
The point of using a control chart, and many of the management improvement tools, are to improve the efficiency and effectiveness of resources spent improving. The trick is not really to improve (that is pretty easy) the trick is to improve quickly and effectively (and in a competitive marketplace to improve more quickly than competitors). Where improvement resources are targeted is critical. In deciding which improvement options to explore it is important to understand the impact on the outcome (in this case the health of the patient).
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