Blog posts on organization as a system

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  • The State of Lean Implementation

    Interesting survey by the Lean Enterprise Institute notes the following as the major obstacles to transforming to a lean organization.

    1. Lack of implementation know-how: 48%
    2. Backsliding to the old ways of working: 48%
    3. Middle management resistance: 40%
    4. Traditional cost accounting system doesn’t recognize the value of lean: 38%

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  • More on Overpaid CEO’s

    As Drucker, Buffet and many others have said CEO overpayment is bad for companies, workers and shareholders. Even when they are fired they often take away tens of millions of dollars. Absolutely ridiculous. I sure hope the bubble of CEO pay bursts soon – the only suitable comparison this century is the internet stock bubble. But every year it just gets worse. I would add overpaying CEO’s to Deming’s seven deadly diseases of western management.

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  • Doing the Wrong Things Righter

    Most of our current problems are, he [Russell Ackoff] says, the result of policymakers and managers busting a gut to do the wrong thing right.

    I agree with the very big problem of ignoring the overall system and seeking to improve what really should be completely rethought and changed.  However, I am a bit skeptical of the idea of it being better to do the right thing poorly than it is to do the wrong thing well. 

    I realize "It is far better to do the right thing wrong than to do the wrong thing right." as Russell Ackoff has said, is a catchy quote.  But certainly the truth is that it depends on the system and how wrong or right a thing is and the action is.  Sometimes it is far better to do the wrong thing fairly well (to increase the overall benefit to the system) than to do the right thing poorly (and create huge problems in the rest of the system).  So sure pay attention to the concept of thinking about whether the best course of action is to completely change what you are doing instead of improving how you are doing it.  But don't pretend it is really is better to do the right things wrong - it depends.  Sometimes sure that is true, other times it isn't.

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  • Sub-optimize a Part to Optimize the Whole

    ...choosing to sub optimize a part to optimize the whole. One of management’s roles is to determine when to trade a loss to one part of the system for the sake of the overall system. One of the big losses for software development is interruptions which distract developers.

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  • Customer Focus at Ritz Carlton and Home Depot

    Ritz-Carlton’s motto is “We are ladies and gentlemen serving ladies and gentlemen.” And they actually turn those words into reality. They are not platitudes with no action. The system is guided toward achieving that vision.

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  • How to Improve

    Good management systems are about seeking systemic adoption of the most effective solutions.

    Here is a simple example. Years ago, my boss was frustrated because an award was sent to the Director’s office to be signed and the awardee’s name was spelled wrong (the third time an awardee’s name had been spelled wrong in a short period). After the first attempts my boss suggested these be checked and double checked… Which they already were but…

    I was assisting with efforts to adopt TQM and the time and when she told me the problem and I asked if the names were in the automated spell checker? They were not. I suggested we add them and use the system (automatic spell checking) designed to check for incorrect spelling to do the job. Shift from first looking to blame the worker to first seeing if there is way to improve the system is a simple but very helpful change to make.

    This example is simple but it points to a nearly universal truth: if an improvement amounts to telling people to do their job better (pay attention more, don’t be careless, some useless slogan…) that is not likely to be as effective as improving the process.

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  • Poor Service – Industry Standard?

    I find it very frustrating how poor the service is most everywhere these days. Have you shopped in a Trader Joe’s? The contrast is amazing. I am used to most employees, on the phone, or in person, seeing the customer as a bother.  At Trader Joe’s, in stark contrast, the staff always seems happy to have customers. Which seems like a good indication that management is doing a number of things right.

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  • Performance Appraisals – Is Good Execution the Solution?

    Good execution of performance appraisal is not the solution. More people are realizing that improving how performance appraisal are done is an attempt to do the wrong thing better. If you insist on doing the wrong thing, I suppose you might as well do it better but how about just not doing the wrong thing at all? What should be done? See: Performance Without Appraisal and read chapter 9 of The Leader’s Handbook.

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  • Think Long Term Act Daily

    Thinking long term is not about waiting around. But it is about constancy of purpose. The powerful gains from any management system are not those in the first year. The benefits possible in the 5th year or 10th year… are not possible in first year. The capacity to take advantage of management improvement needs to be developed and it is a multi-year effort (if it is done well – otherwise it will abandoned after the initial hype for the next new fad). The gains should grow and compound over time.

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  • Encourage Improvement Action by Everyone

    Centralizing decision making is not an effective way to manage organizations. Organizations need to encourage improvement by everybody in the organization. We need to create a system where that is encouraged and supported.

    ...

    Without an understanding of systems and interactions sometimes changes are made without an understanding of the consequences those changes. The beer game is a good example of one way this can cause problems (people don’t always understand all the consequences of their actions). To be clear I agree with setting up systems that allow people to make improvements in the workplace. Just be cautious to avoid tampering.

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  • Hiring the Right People

    The job market is an inefficient market. There are many reasons for this including relying on specification (this job requires a BS in Computer Science – no Bill Gates you don’t meet the spec) instead of understanding the system. Insisting on managing by the numbers even when the most important figures are unknown and maybe unknowable. Using HR to find the right person to work in a process they don’t understand (which reinforces the desire to focus on specifications instead of a more nuanced approach). The inflexibility of companies: so if a great person wants to work 32 hours a week – too bad we can’t hire them. And on and on.

    ...

    it seems to me that the visible waste (time and money spent on the hiring process) is seen as the only waste and the much more difficult to see waste of hiring the wrong people is ignored.

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  • Management f-Laws by Russell Ackoff

    We found that we could improve part of a corporation and destroy the whole by improving the part.

    ...

    Russell Ackoff thinks that, imprisoned in centuries of Western education which values only analytic thought, most people cannot do the “synthetic” thinking that sees an organisation as an intermoving whole.

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  • Lean and Theory of Constraints

    I tend to believe the theory of constraints view is helpful but can be misleading since often the interdependencies within the system mean that it is not true that “optimizing non-bottlenecks will introduce waste” (that may be true but is not necessarily true – that is how I see it anyway)...

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  • Metrics and Software Development

    I find looking at outcome measures (to measure overall effectiveness) and process measures (for viewing specific parts of the system “big picture”) the most useful strategy.

    The reason for process measures is not to improve those results alone....

    process measures are helpful in serving as indicators that something is going wrong (or potentially going better than normal). Process measures will change quickly (good ones can be close to real time) thus facilitate immediate remedies and immediate examination of what lead to the problem to aid in avoiding that condition in the future.

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  • The Triumph of Lean Production

    ... Just think about that Toyota’s Georgetown plant (seen by many as one of the best examples of lean manufacturing) stops the line 2,000 a week. Do you think your organizations systems are as well designed as the Georgetown plant? Does your organization stop to examine what needs to be improved with anything approaching that level...

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