Blog posts on systems thinking

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

• New Business Ideas Take Time

  It is much easier to find a measurement of the benefit of eliminating some problem than the benefits of learning and taking more time to think.

  [Also see: How To Create a Continual Improvement Culture, Transform the Management System by Experimenting, Iterating and Adopting Standard Work]

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• Government Lean Six Sigma

  Once the political decision has been made to eradicate polio then that desire can be carried out – and politics really has little impact. Other examples are not as simple. A political decision to eliminate AIDS runs into political controversies in selecting the best strategies to accomplish the goal.

  A desire to eliminate hunger, poverty or homelessness run into differing opinions on how those problems should be addressed. I can’t imagine any politician against the elimination of those problems. However, many politicians will be against various tactics to accomplish those goals.

  Political decisions have management components but arguing about the poor management effectiveness of political decisions is a bit too advanced for our current capability, I believe. It seems silly for a government to subsidize mansions being built in hazardous areas where insurers would not insure construction, but for political reasons it continues. It seems silly to have the political leadership prohibit the government from negotiating lower drug costs from suppliers, but they do.

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• Managing Innovation

  You manage processes such as thinking up a new way to use computer technology differently than you manage a process to manufacture tires. But the idea that you don't manage and improve the process just because the process seems discontinuous is a mistake.

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• Innovation and Research and Development

  Innovation can be related to productivity improvement or it can be completely unrelated. A company could innovate with an ideas like the remote control for televisions (or microlending or air bags). That innovation may not contribute in any way to manufacturing televisions more productively.
  
  Other innovation may be related to improving the productivity alone and add no additional functionality to the customer. Many innovations will provide a combination of both benefits. Both innovation and productivity improvement are important.

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• Eliminating Complexity from Work

  as much as half of the activities of about sixty people had been to set up and take down jobs, expedite, move material, count material, and do other tasks that were unnecessary in the new process.

  Tim Fuller's article discusses how much inneficiency was removed from the process by adopting single piece flow in 1985.  How long did it take for management practice to understand this?  Certainly this understanding wasn't widespred in 2005.  I am not even sure it if it is widely understood and systems have been designed or redesigned with this knowledge in 2017.

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• Excessive Executive Pay

  The excesses are so great now they will either force companies to:

  1. take huge risks to justify such pay and then go bankrupt when such risks fail (and some will succeed making it appear, to some, that the pay was deserved rather than just the random chance of taking a large risk and getting lucky).
  2. make it impossible to compete with companies that don’t allow such excesses and slowly go out of business to those companies that don’t act so irresponsibly
  3. hope that competitors adopt your bad practice of excessive pay (this does have potential as most people are corrupted by power, even across cultural boundaries). However, my expectation is the competitive forces of capitalism going forward are going to make such a hope unrealistic. People will see the opportunity provided by such poor management and compete with them.

  As long as the pay packages were merely large, and didn’t effect the ability of a company to prosper that could continue (slicing up the benefits between the stakeholders is not an exact science). The excesses recently have become so obscene as to become unsustainable.

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• Innovate or "Play it Safe: to Avoid Risk

  There are many reasons why avoiding risks is smart and should be encouraged. But when avoiding risks stifles innovation the risks to the organization are huge.

  Playing it safe isn't always safe. In rapidly changing markets (which are quite common lately) "playing it safe" is often riskier than "taking chances" on new ideas.

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• Management Excellence

  Most management practices cannot be plugged into any organization and work well. That practice must be applied in a sensible way given the organizational system. Learning how lean ideas (or other good ideas) are applied in varying systems can provide insight into how to integrate ideas for organizational improvement from those applying lean practices.

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• The 70 Percent Solution

  Google CEO Eric Schmidt:

  We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses, ones related to the core businesses in some interesting way. Examples of that would be Google News, Google Earth, and Google Local. And then 10 percent of our time should be on things that are truly new. An example there would be the Wi-Fi initiative.

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• Zero Defects

  I do not believe you succeed by declaring your goal to be zero defects. You succeed by creating a culture of never ending improvement, of customer focus, of fact based decision making, of learning, of “empowerment”…

  Part of that improvement is reducing variation, reducing defects, implementing smart new mistake proofing but innovation is too. Effectively zero defects is not really achievable in most cases. Defects are largely a matter of definition. As performance improves expectations will often rise. When you eliminate anything you would have called a defect years ago, standards are higher and things that would not have been called defects are no longer acceptable. At some point the system process advances to such a level where zero defects is possible in some cases but in many (say medical care, air transportation, education, computer software, restaurants, government, management consulting, civil engineering, legal services…) I really think it is basically impossible.

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• Is Made in the USA Back In Vogue? (2006)

  This example provides more evidence of the benefits of "lean manufacturing," though it seems they are getting only a few benefits (reduction of waste, faster resupply of "hot items") and they may well not know about <a href="http://curiouscat.com/management/leanthinking.cfm">lean thinking</a>.  By studying and applying lean ideas they should be able to reduce the 45 day turn-around time.  Perhaps they should read the Fashion Incubator blog...

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• Performance Appraisal Problems

  There are no easy answers, but what it should be about is managing the system to produce the best results. My best advice is to read chapter 9 of The Leader’s Handbook and read the rest of the Leader’s Handbook and other great management improvement books. And manage using the ideas of Deming, Ackoff, Scholtes, McGregor, Ohno… 

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• Visible Data

  Take the time to find the important measures and then don’t keep data hidden in some drawer or computer file out of people’s view and therefore out of mind. Post the important data for everyone to see. Review the data as changes are made and see that the changes had the desired result. 

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• Theory in Practice

  Knowledge is built upon theory… Rational prediction requires theory and builds knowledge through systematic revision and extention of theory based on comparison of prediction with observation.

  W. Edwards Deming, page 102, The New Economics

   

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• Using Design of Experiments

  Design of Experiments can seem complicated but at the core it is fairly simple and powerful. By applying the proper techniques it allows you to gage the effect of several variables and, very importantly, the interactions of those variables with a small number of experiments (or tests or pilots).

  George Box is a wonderful author (and friend) who can write for mangers who are not knowledgeable about statistics and statisticians. Statistics for Discovery does a good job of explaining how organizations should use experiments to improve.

  continue reading: Using Design of Experiments