Blog posts on organization as a systemPosts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs - Systems Thinking and Management Improvement
A big part of what makes Deming's framework so useful is he was continually learning and adopting new ideas (Senge does a lot of this compared to most people but I can't think of anyone in the Management area that is close to as good as Deming was at this). I do think most Deming folks today would benefit greatly from much more thinking a about the organization as a system. It is often very superficial in my experience (repeating phrases like "we need to break down barriers between departments" or "it is a mistake to optimize the part because it sub-optimizes the whole"). Those ideas are great but you need to manage based on that concept not just say it and move on. continue reading: Systems Thinking and Management Improvement - Transforming Jet-Hot by Viewing the Organization as a System
Jet-Hot integrates Deming’s system view with their own management or operating system. They have made this diagram the central way they operate as a system with common aim and purpose. They use this innovation in their Jet-Hot system and organize all their work with profound knowledge around their business operating system. Jet-Hot has also developed and implemented an application of technology – an operations support system to support their practice and their enterprise throughout their system. They have made this view and diagram actionable and practicable.
... continue reading: Transforming Jet-Hot by Viewing the Organization as a System - Well Managed Companies
Do your outstanding people think their importance is in getting through another day through hard work and individual expertise. While those qualities are good most important to the success of the organization is improving the system not getting through one day. If those seen as the stars are not improving the system and processes then get them to work doing so. continue reading: Well Managed Companies - Applying Quality as a Business Strategy at Hallmark Building Supplies
Hallmark Building Supplies has profit sharing for all and doesn’t do annual performance appraisal. They attempt to let the market dictate pay and take pay out of the performance discussions. To manage performance they seek to “coach while the game is going on” (and mentioned the importance of people being receptive to coaching). Cooperation between sales people has increased since they eliminated commissions.
Everyone is trained on the purpose statement, it is not just something that hangs on the wall. We use it to make decisions on a regular basis.
continue reading: Applying Quality as a Business Strategy at Hallmark Building Supplies - Standardization With a Systems View Allows Creativity to Flourish
 We all benefit from standardization every day. We can plug our devices into a wall outlet and power them. We can get a replacement battery and have it work as expected. We can type on the keyboard without thinking because the keys are the same on each keyboard. We can connect to a new wifi network with our phone or laptop. We can buy a replacement pipe for our sink and install it.
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One of the objections I hear to adopting standardization is that doing so takes away our ability to be creative. This is not the case. Dr. Deming’s quote does a good job of explaining this. Standardization allows us to create systems that are reliable and effective. Within that system there should be a great deal of flexibility to apply creative ideas.
It is true organizations often impose rigid rules that restrict creativity. If standardization is responsible for part of this result then the process by which standards are created and continually improved needs to be examined. A management system needs to continually improve and part of that is continually evaluating how management concepts (such as standardization) are being applied.
continue reading: Standardization With a Systems View Allows Creativity to Flourish - Aligning Marketing Vision and Management
Why do so many companies market one thing and provide something else? I know it might be easier to sell something different than what you offer your customer today. But if you decide to market one vision, why don’t you change your organization to actually offer that?
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Treating a marketing message as something separate from management is a serious problem. When your marketing message says one thing and your customers get something else that is a problem. I think the message is often based on what the executives wish the company was (and the outsourced marketers think it should be), but it isn’t the customer experience the management system provides.
If you believe the vision of your marketing then make sure your organization has embraced those principles. continue reading: Aligning Marketing Vision and Management - Deming on being Destroyed by Best Efforts
Best efforts are essential. Unfortunately, best efforts, people charging this way and that way without guidance of principles, can do a lot of damage. Think of the chaos that would come if everyone did his best, not knowing what to do.
W. Edwards Deming
continue reading: Deming on being Destroyed by Best Efforts - Applying Deming’s Management Ideas at the Great Plains Coca Cola Bottling Company
The difficulty in changing is often mostly about our psychology (not the technical difficulty of operating under changed systems and processes after making adjustments to adapt to take advantage of new opportunities).
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Results matter but within a context of the process. If I double profits by wagering all the cash we can borrow on the roulette wheel that result isn’t a sign that we are doing much better. Using data wisely requires understanding what the data tells you and what it does not tell you. continue reading: Applying Deming’s Management Ideas at the Great Plains Coca Cola Bottling Company - Give People Enough Rope (and the Right Rope) to Succeed
 You want systems that let people take on challenges without too many restrictions but with enough support and training that you don't leave them hanging.
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the ropes should suit their situation. A tightrope over a chasm is fine for a trained acrobat with a balancing pole. It is foolish for someone without the right training or tools. They would be better served with something else - a rope bridge with railings. continue reading: Give People Enough Rope (and the Right Rope) to Succeed - CEO’s Given Lottery Sized Payouts
Today, in the USA, CEOs are basically win the lottery when they start and then either win some more and stay or don’t win and are let go. The lottery performance appraisal aspect Deming talked about (rewarding whoever random variation or macro economic and micro economic trends smiled upon during the period). So if a market (housing, oil, steel, investment banking, microchip, hotel…) is booming why give all the CEO’s in that market huge payoffs? continue reading: CEO’s Given Lottery Sized Payouts - Toyota Execution Not Close to Being Copied
- Shared Principles for Managing People Engaged in Diverse Tasks
 ...I do agree that the system within which people are operating determines how they must be managed. There are definitely features of software development that are significantly different than manufacturing scalpels or basketballs or tables. As there is a difference between a surgical team in an operating room, road construction, mining, editing books, investment banking, manufacturing industrial robots, researching new drugs, manufacturing drugs, teaching in a university, maintaining plane engines, coaching an athletic team...
I see universal principles of management (respect for people, customer focus, continual improvement...) that cross all different human enterprises. How those principles should be manifest in a particular situations depend on the work being done, the management system that is in place, the individual people involved, the specific focus of the effort right now... The way those principles are manifest will look very different in all the varied types of organizations we create and the different work and processes used within those organizations.
... continue reading: Shared Principles for Managing People Engaged in Diverse Tasks - Design the Management System with an Appreciation of Confirmation Bias
 To create strong organizations we must create management systems using an appreciation of psychology. We must understand that people have tendencies that must be addressed by designing a management system built to take advantage of the strengths those people bring and mitigate the risks of the weaknesses (such as confirmation bias) that those people also bring.
One way to do this is to seek out voices in your organization that question and challenge accepted positions... continue reading: Design the Management System with an Appreciation of Confirmation Bias - People are Our Most Important Asset
ideally the organization would be providing all employees excellent coaching opportunities, all employees would be paid more than fairly, all employees would have the opportunity to develop along their desired plan, all employees would have great leadership, all employees would not be subject to continually annoyance of management system failures, all employees could count on the support of the system when needed…
But in organizations that I have worked for we are have not reached that point. So while working to move the organization closer and closer to that goal, I believe making some extra effort to focus on those people that are helping move the organization in that direction. But it is risky if done without an understanding of systems, variation, psychology, etc. Providing extra coaching, advice and attempting to protect people from the management failures you can’t get fixed seem like pretty safe methods. continue reading: People are Our Most Important Asset - Tilting at Ludicrous CEO Pay
I continue to tilt at the robber barron CEO pay packages. Hopefully, at some point, the people approving these obscene pay packages can be shamed into stopping or replaced by people with some sense of decency. I was taught in the days of robber barrons the business world was seen as an amoral place (morality did not belong in this area of human endeavor) but that over time society decided that in fact morality did apply there. It is hard to reconcile that change with the behavior of CEOs and board approving ludicrous pay packages. continue reading: Tilting at Ludicrous CEO Pay
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