Blog posts on organization as a system

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

• The Customer Knows Best?

  Some management ideas are pretty easy and straight forward. But many management practices require knowledge and judgment to apply them successfully. Easy solutions may be desired, but, often you must choose between easy and effective (hint, I suggest effective is the better target).

  Listening to customers is important but it is not sufficient.

  ...

  People could assume the numbers at Enron proved what Enron was doing was correct. But it did not prove that. Until we start to evaluate data more accurately we will continue to mistakenly see proof where it does not exist.

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• Problems Caused by Performance Appraisal

  People are increasingly challenging the notion that we just have to live with performance appraisal systems. As usually, I will make my suggestion that chapter 9 of the Leader’s Handbook offers great material on performing without appraisal (and the rest of the book is great too).

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• Forget Targets

  While targets and goals can distract from improvement some guidance is useful. Systems thinking is important when using targets. As is an understanding of psychology (given the tendency to manage to what is measured the system can often be distorted to achieve a target). See more in: dangers of forgetting proxy nature of data.

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• Better and Different

  The answer, as I see it, is to be better and different (when necessary).

  ...

  if you have to choose one, just being better will work most of the time. The problem is (using an example from Deming, page 9 New Economics) when, for example, carburetors are eliminated by innovation (fuel injectors) no matter how well you make them you are out of business.

  Often people mistake Deming’s ideas as only about being better. He stressed not only continual improvement (Kaizen, incremental improvement, SPC) but also innovation. He stressed innovation both in the normal sense of innovating new products for customers and also innovation in managing the organization.

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• Lean Beyond the Factory Floor

  Experts (in TQM, Deming’s idea’s, Six Sigma, BPR, Lean…) always stress the importance of involving not just others (when talking to management) but their (managers) work too. But fairly consistently management adopts improvement ideas mostly for others, not for their own work.   As organizations apply management improvement ideas on some portion of the work the talk of going beyond “factory floor” improvements becomes more common as improvements are seen where it is applied.

  Fast Cycle Change in Knowledge-Based Organizations by Ian Hau and Ford Calhoun, Jun 1997 is a good example of lean thinking, eliminating waste… outside the factory floor.

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• Kleptocrat CEOs and Their Apologists

  CEOs, and their cronies, were well paid decades ago. As their greed about their pay got to be unethical Peter Drucker started to speak out against their ethical failures. As those abuses became more extreme he increased his objections.

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  I want a CEO that is paid well and seeks their reward not by taking from the corporate treasury but by providing great jobs, customer happiness and an improved society.

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• Companies in Need of Customer Focus

  My brother has suggested several times I should arrange for companies to pay me to point out their weaknesses (and suggest improvements). I wish I could get them to do so.

  Often 1 interaction with their customer service is enough to provide examples of several systemic weaknesses in how customers are treated.

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• More on Obscene CEO Pay

  Unfortunately this reverse robin hood (steal from the workers, stock holder, customers…) and give to the CEO tale continues. Hopefully someday soon we can at least turn the momentum in the right direction (stopping these incredibly excessive “pay” packages). Even then it will take quite a deal of reducing these ridiculous “pay” packages to reach some sense of decency.

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• Employee Ownership

  I have always liked the idea of employee ownership. To me this can be a great help in creating a system where employees, owners, customers, suppliers work together. Alone an Employee Stock Ownership Plan (ESOP) does little. But as part of a system of management it is something I think can be beneficial.

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• Trust: Respect for People

  Management then vowed that this (layoffs in 1950) would be the first and last time such an event would come to pass at Toyota, and, in a gesture of respect to former employees, Kiichiro resigned from his position as president of the company.

  A bit different than laying off tens of thousands of workers and then taking huge bonuses [the broken link was removed]. And in case you don’t know, I think Toyota’s approach is more honorable and what should be aimed for (I wouldn’t say the president always should resign but it should be a significant admission of failure).

  Does this mean no workers ever come into conflict with Toyota management? No. But Toyota’s respect for workers is qualitatively different than that of most companies.

  Related: Bad Management Results in Layoffs

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• CEO Flight Attendant

  This getting out and seeing work in action is exposed a great deal, including a lean management concept, Genchi Genbutsu – to go to see the problem in situ (not just reading a report about it).

  The success of many management practices is more a matter of how the practice is done than if it is done. Also the success depends on the rest of the management system. Practices cannot just be copied. But you can learn from what others find useful and figure out how that idea would work within your organization.

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• Learning from Customers

  Create a management system focused on continual improvement that is engaged in seeking out customer feedback and continually improving the value provided to customers.

  Most organizations do the opposite of this. They make put many barriers in the way of customers speaking to anyone that will listen. They put systems in place to discourage feedback from customers.

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• Supplier Development Article

  people are scared to talk about any other aims than profit. Deming didn’t have such a problem. Toyota doesn’t have such a problem.Google doesn’t have such a problem [the broken link was removed].

  Others need to learn that there are multiple aims for organizations not just profits but providing good jobs, serving customers, aiding community… Learn from the leaders – talking as though the only purpose of the organization is to make profit is counterproductive.

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• 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).

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• 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