Curious Cat Travels: Olympic and Mt. St. Helens

Posted on July 31, 2005  Comments (0)

Topic: Travel

I have posted pictures from my recent trip to the Pacific Northwest: Olympic National Park photos and Mount Saint Helens National Volcanic Monument photos.
Previous travelogues include: Rocky Mountain National Park, Yellowstone National Park, Paris and Egypt.

Bezos on Lean Thinking

Posted on July 29, 2005  Comments (1)

Topic: Management Improvement and Investing

10 Questions for Jeff Bezos, time.com via Lean Manufacturing Blog

Time: Here’s a question you probably hear all the time: read any good books lately?
Bezos: [Laughs.] I read a book recently about Toyota’s lean production methodology, which is very interesting

Jeff Bezos is the founder and CEO of Amazon.com. He really understand many quality management ideas: customer focus, long term thinking, process improvement, innovation. He also understands finance much better than most. I believe that knowledge is a large part of the reason he is not intimidated into going along with the short term thinking prevalent on Wall Street (as so many CEO’s are). His huge ownership interest in Amazon and his decision to raise large amounts of cash for Amazon (by issuing bonds) during the tech boom, don’t hurt either.

Amazon was one of the 10 companies selected in the 10 stocks for 10 years post. I created a Marketocracy portfolio to track that long term portfolio. The rules, at the time (for a Marketocracy portfolio), required more diversification so I added several stocks to the portfolio. I added positions in YHOO, MSFT, EMF, WMT, and BP. You can track the results of the Sleep Well portfolio.

You can also view results of another portfolio I have managed, through marketocracy, for several years: the Darvamore Fund. This fund is much more aggressive using the ideas of Darvas and Livermore as well as core positions that are selected for long term appreciation. Since the inception, in 2000, it has a annual rate of return 6.55% (655 basis points) higher than the S&P 500 index, as of today.

Peter F. Drucker Award for Nonprofit Innovation

Posted on July 28, 2005  Comments (0)

Topic: Management Improvement

Peter F. Drucker Award for Nonprofit Innovation:

““The purpose of the Peter F. Drucker Award for Nonprofit Innovation is to find the innovators, whether small or large, to recognize and celebrate their example, and to inspire others.””
Peter F. Drucker

In the years ahead, America’s nonprofits will become even more important. As government retrenches, Americans will look increasingly to the nonprofits to tackle the problems of a fast-changing society. These challenges will demand innovation — in services, and in nonprofit management. The purpose of the annual Peter F. Drucker Award for Nonprofit Innovation is to find the innovators, whether small or large; to recognize and celebrate their example; and, to inspire others.

Applications must be complete and received by the Drucker School no later than August 12, 2005. Read the details on eligibility and how to apply

Estate Tax Repeal

Posted on July 28, 2005  Comments (2)

Topic: –

The estate tax is the most capitalist tax that exists. Capitalism, which some seem to think is based on people inheriting assets from their relatives, is not. Capitalism is based on the concept that each person gets to receive rewards for their work.

Long before Adam Smith, noble rich passed on their wealth to their heirs. It was not Capitalist then and it is not Capitalist now.

Unfortunately many seem to have skipped economics in school and accepted the claim that Capitalism is about protecting the rich. They seem to believe it is a tenant of Capitalism that those that have the gold make the rules. That is in fact a risk that Capitalists must protect the economy from, not something Capitalist approve of. Those who believe in the wealth being passed from those who earn it to those who they like, believe not in Capitalism but in the state not taxing the idle rich but instead taxing those who don’t have millions given to them. While many have come to believe that such idiocy is Capitalist, it is not. People should read the Wealth of Nations by Adam Smith to get a much clearer idea of what Capitalism is about than those in Washington DC have.
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Stretching Agile to fit CMMI Level 3

Posted on July 27, 2005  Comments (2)

Topic: Management Improvement

Stretching Agile to fit CMMI Level 3 by David J. Anderson.

I highly recommend reading this article. My work happens to straddle both the management improvement and software development areas that this article covers. But, if you are interested in either area, this article offers some great material. And if you are interested in both, you are in for a treat.

At Microsoft, we’ve adopted the teachings of W. Edwards Deming and stretched our MSF for Agile Software Development method to fit the requirements for CMMI Level 3. The resultant MSF for CMMI Process Improvement is a highly iterative, adaptive planning method, light on documentation, and heavily automated through tooling.

Capability Maturity Model Integration (CMMI) is the process developed by the Software Engineering Institute (at Carnegie Mellon) that was heavily influenced by Quality Management. When I first ran across it (then called Capacity Maturity Model) in the mid 1990′s, as I remember, I was struck that the model did a better job of integrating Quality Management ideas than most programs specifically calling themselves Quality programs.
Read more

Online Lean Manufacturing Tutorials

Posted on July 27, 2005  Comments (0)

Tutorials on Lean Production / Lean Manufacturing from the Defense Acquisition University. The site includes five short online videos by James Womack. The site provides a nice introduction to lean ideas.

Mr. John Shook… “Lean Manufacturing is a manufacturing philosophy which shortens the time between the customer order and the product build/shipment by eliminating sources of waste.”
…
Key lean principles are:
…
- Waste minimization by removing all non-value added activities making the most efficient use of scarce resources (capital, people, space), just-in-time inventory, eliminating any safety nets.

- Continuous improvement (reducing costs, improving quality, increasing productivity) through dynamic process of change, simultaneous and integrated product/process development, rapid cycle time and time-to-market, openness and information sharing.

…

- Long-term relationships between suppliers and primary producers (assemblers, system integrators) through collaborative risk-sharing, cost-sharing and information-sharing arrangements.

Design of Experiments Articles

Posted on July 25, 2005  Comments (0)

We have added several Design of Experiments articles to the Curious Cat Management Improvement Library recently, including:

  • DOE It Yourself by Mark J. Anderson, A list of Design of Experiments excercizes that can be done in a classroom setting or as home by students with short explanations and links to documents online wtih more details.

Vice President Presents Baldrige Awards

Posted on July 23, 2005  Comments (1)

Vice President Presents Baldrige Awards, press release from NIST (July 20, 2005).

The 2004 Baldrige Award for Quality recipients (links to case studeis):

The Bama Companies, Tulsa, Oklahoma (manufacturing category)

In its endless quest for improvement, Bama uses a battery of advanced strategies and tools, including the Bama Quality Management System, based on the quality improvement philosophies of W. Edwards Deming and the company’s own performance excellence model. The Bama Excellence System provides a framework for all decision-making. A Principle Centered Bama Culture, based on tenets developed by Stephen Covey, provides a context for creating and measuring excellence. Using Six Sigma methodologies since 2000, Bama has dramatically improved processes throughout the company. Total savings from Six Sigma improvements equates to over $17 million since 2001.

Texas Nameplate Company, Inc., Dallas, Texas (small business category) They also won an award in 1998.

Technology and training have led to dramatic improvements in production. Between 1998 and 2004, the incidence of product nonconformity with specifications, as a percentage of sales, dropped from 1.4 percent to about 0.5 percent, significantly lower than the Industry Week median (2 percent). In that same period, TNC reduced its quote response time from 6 hours to less than 2 hours, and it trimmed the length of its production cycle from 14 days to under 8 days.

Kenneth W. Monfort College of Business, Greeley, Colorado (education category)

MCB continually evaluates its performance and incorporates those evaluations into its short- and long-term planning cycles. The process includes use of Key Performance Indicators

Robert Wood Johnson University Hospital Hamilton, Hamilton, New Jersey (health care category)

Also with a focus on Excellence Through Service, the leadership team works within a system that links all management functions—from planning and implementing policies, new technologies, and new facilities through ongoing cycles of evaluation and improvement—with unhindered communications at all levels. Each Executive Management Team member, including the CEO, holds daily briefings that are designed to share key information with the staff and to answer questions. As a result, over the past four years, employee satisfaction with hospital leadership has
improved to almost 100 percent.
…
RWJ Hamilton has reduced its rates of mortality, hospital-acquired infections, and medication errors to among the lowest in the nation.

New Toyota CEO’s Views

Posted on July 22, 2005  Comments (6)

The Man Driving Toyota from Business Week:

Toyota has grown in the past few years, but [there's a risk] that a belief that the current status is satisfactory creeps into the minds of employees. That’s what I’m worried about.

We should never be satisfied with the current status. In each division, function, or region, we still have numerous problems to cope with. We need to identify each one of those tasks or problems and fully recognize them and pursue the causes. This needs to be done by all the people working for Toyota.

I think, this echoes my recent comment on post, Is Quality Foolproof? (unfortunately the link is broken, so I removed it. Luckily I posted my comments here so they are not gone), on the Vision Thing blog:
Read more

Agile Management

Posted on July 19, 2005  Comments (4)

David Anderson publishes the Agile Management Blog, wrote the Agile Management for Software Engineering: Applying the Theory of Constraints for Business Results, and works for Microsoft. Robert Scoble, technical evangelist, also with Microsoft, has posted an online video interview with David Anderson on Microsoft’s Chanel 9 online.

Quote by David Anderson, from the video: “My work focuses on applying the teachings of two management science gurus, one is Eli Goldratt and the other is W. Edwards Deming“.

Take a look at the video and also the Agile Management Blog for all sorts of great posts on software development and management topics. Such as:

Trust is Essential to Agile:

Agile software development brought the idea of trust to the forefront. When there is trust, there is less waste, less extra work, less verification, less auditing, less paperwork, less meetings, less finger pointing, less blame-storming. Building trust between the engineering group and the customers is the first goal for any agile manager. Equally building trust with and amongst the engineering team is also essential.

No More Quality Initiatives

That’s why in MSF for CMMI(R) Process Improvement, I’ve included daily standup meetings to surface issues and monitor and manage risks, eliminate special cause variation and make it everyone’s business to do so. That’s why we’re dropping conformance to plan and conformance to specification in favor of conformance to process and focus on variation reduction. That’s why we’re encouraging a bottom up, empowered team, consensus model. That allows decentralized decisions to be made quickly. The way to institutionalize continuous improvement across an organization is to make it everyone’s business, every day!

The video and blog post provide great ideas on how to apply Deming and Goldratt’s ideas from someone who is applying them to improve the performance of the organization.

Managing for Creativity

Posted on July 17, 2005  Comments (0)

Managing for Creativity by Richard Florida and Jim Goodnight, July-August 2005 issue of Harvard Business Review.

Over many years, the leaders of SAS Institute have distilled a set of principles for getting peak performance from creative people. Among them: Value the work over the tools, reward excellence with challenges, and minimize hassles.
…
Based in Cary, North Carolina, SAS has been in the top 20 of Fortune’s 100 Best Companies to Work For list every year it’s been published. The employee turnover rate hovers between 3% and 5%, compared with the industry average of nearly 20%.
…
since the pioneering work of Frederick Herzberg, managers have known that learning and being challenged motivate workers more than money or fear of disciplinarian bosses. What’s different about SAS is that it goes to uncommon lengths to find the right intrinsic motivator for each group of employees.

Much management knowledge is not put into practice. I do not agree “managers have known that learning and being challenged motivate workers more than money or fear of disciplinarian bosses.” Maybe good managers know this, but I would wager a vast majority of managers believe the opposite.

Scobleizer on David Anderson

Posted on July 17, 2005  Comments (0)

Scobleizer, one of the most popular blogs (say in the top 50 most read), posted recently about David Anderson. Robert Scoble is a Microsoft employee with the title, technical evangelist. David Anderson is also a Microsoft employee working on Agile Management for software development. David incorporates a good deal of Deming’s ideas, lean thinking, theory of constraints, etc. in posts to his Agile Management Blog:

I interviewed David Anderson this evening. This guy is inspiring. He writes the Agile Management blog. He’s working with teams here at Microsoft to get us to improve our software development process and is getting radical results. More when I get the video done.

I don’t see evidence of the video anywhere. Please let me know if you see it.

Saving Lives: US Health Care Improvement

Posted on July 16, 2005  Comments (9)

Topic: Management Improvement

8 part special report by US News and Word Report on improving the US Health Care system.

Join IHI in an ambitious initiative called the 100K Lives Campaign. Its goal is to save 100,000 hospital patients’ lives by 9 a.m. on June 14, 2006, exactly 18 months from Berwick’s call to arms, by introducing six changes in hospital procedures. Each change addresses a problem, such as deaths from infections following surgery, and presents an arsenal of weapons to fight it, such as tighter timing of antibiotic doses before surgery.

I have long felt the Institute of Healthcare Improvement and Don Berwick were the leaders in health care management improvement. The Breakthrough Series is a great white paper on an excellent improvement methodology IHI developed and use. IHI white paper library.
Read more

Deming and Six Sigma

Posted on July 15, 2005  Comments (1)

The first Curious Cat Management Improvement blog post was on the Six Sigma and Deming Philosophies

Recently the Deming Electronic Network has returned to this topic.

The Quality Advisor web site has an article on this topic: Deming and Six Sigma (broken link so removed):

The Six Sigma process can be seen to offer a parallel to Deming’s Plan-Do-Study-Act Cycle, although Six Sigma brings experimental design and regression analysis to the forefront in the “plan” phase. Six Sigma also emphasizes design as a key function for achieving six sigma performance levels, and devotes attention to planning the design phase of production. Deming, too, emphasized “Plan” in his four-state cycle, promoting the importance of establishing a relationship between desired output and required input as well as necessary production processes.

Perhaps the most striking difference between the approaches is Deming’s focus on the responsibilities of management, outlined in his “The 14 Obligations of Management,” and “The Deadly Diseases.” The Six Sigma approach, by contrast, lays out a more rigid structure of roles and responsibilities throughout an organization, including executive management, a senior champion, deployment champions, project champions, deployment master black belts, project master black belts, project black belts, process owners, and six sigma green belts.

What would Deming do? (link broken so I removed it) by David R. Schwinn

I started thinking that it might be interesting to ask, “What would Deming do (WWDD)?” as it relates to Six Sigma theory and practice…

The site doesn’t provide links form one part to the next so here those links are:

More links broken so I removed them. You know people that manage web sites really shouldn’t waste incoming links by breaking them. I keep hoping finally people will adopt this simple idea that has been well know for more than a decade but still people keep doing it.

Fashion-Incubator on Deming’s Ideas

Posted on July 15, 2005  Comments (0)

Be corrigible:

For example, I was sold on Deming years ago but people still aren’t talking about his ideas. If there were a Nobel prize for manufacturing, Deming should have won it

It is true Deming’s ideas do not get the attention they deserve, in my opinion. However, it is interesting to note the recent BBC radio program on Deming (available online) and Business Week including him in their list of the Top 25: Influential Business Leaders. Our Curious Cat Deming Connections is an attempt to provide quick and easy access to resources on his ideas including many great articles.

The Quality of Lean

Posted on July 15, 2005  Comments (0)

The Quality of Lean post on Evolving Excellence.

Lean has become so popular that companies (especially General Motors) have been snatching up lean experts, especially those with true TPS experience. Toyota itself is having difficulty finding and training appropriate people for their new plants, and in many cases are having to rely on the Lean experts at their component suppliers. This has even led to Toyota outsourcing Lean management for some plants

Management is Prediction

Posted on July 14, 2005  Comments (7)

re: post on prediction on the Deming Electronic Network:

Petter Ogland wrote:

…that intelligence more or less boils down to updating a predictive model of the world. As far as I can see, this is the C.I. Lewis epistemology that Shewhart and Deming based their philosophy upon.

…but is there any kind of operational definition for ‘prediction’ that would explain what Deming means when he uses this word in various contexts?

I think your first point is correct, which I see as: learning by predicting, then looking at the result and then adjusting understanding to this new information is very powerful.

I believe Deming’s thoughts about prediction are most effectively put into action using the PDSA cycle. Specifically, you must predict the results in the planning phase (prior to piloting improvements). I find that this is rarely done. I don’t think the form of that prediction is critical (narrative with loose numerical guesses, precise numerical prediction…). The critical issue is making the prediction, then comparing the results to that prediction and then figuring out how your original understanding can be improved based on the new data.
Read more

Fast Company Interview: Jeff Immelt

Posted on July 14, 2005  Comments (6)

Fast Company Interview: Jeff Immelt, CEO, GE.

What makes a growth leader today, and how does that differ from the sort of leader who was effective at GE in the past?

GE has always been a believer in leadership development. When the economy was growing 5% a year, when oil was $14 a barrel, and when the world was at peace, the science of management was all about the how-to. That was the how-to generation. You didn’t have to think about the what. Instead, there were management initiatives such as Six Sigma, which was the how.

So most of management literature, certainly for the past 10 years, was all about the how-to. I think we’re now in the what-and-where generation. Global economies are slow and more volatile. Oil is at $50 a barrel. So this ability to pick markets, growth trends, customers, and to do segmentation — that is management today. We have a generation of people who know how to do process flow charts. We have a generation of people who know how to do quality function deployment and things like that, but don’t necessarily know why we’re doing them. What’s the what and the where? I believe that wholeheartedly. Nothing is completely black and white, but we are in a completely different cycle of what good managers know how to do.

I must say this doesn’t make much sense to me, but I am not the CEO of a huge company so maybe I just don’t understand. I don’t see any reason why managers in the past shouldn’t have had the qualities he seems to be saying are needed now. And I don’t see any reason why the qualities needed now were not needed in the past. This sure seems like a bunch of words saying nothing to me: perhaps I just don’t see the wonderful cloths the emperor has on.
Read more

Managing Fear

Posted on July 12, 2005  Comments (1)

The post, Root Causes of Crunch Mode from the Game Manager blog makes the good point that

Fear and anxiety are known to reduce comprehension and learning ability. W. Edwards Deming made “drive out fear” one of his 14 management changes America needed to make in order to compete with Japan. Fear is a valuable physiological reaction in some situations, but fear make(s) it difficult to think, and thinking is generally superior to fighting in most corporate settings.

A good article on this topic is, Driving Out Fear by Gerald Suarez (who I worked with for several years). There are also 3 videos on this topic by Dr. Suarez, available from Management Wisdom, the producers of the Deming Library tapes. I must admit I didn’t really understand the effects of fear and anxiety on performance until hearing Dr. Suarez speak on the topic many years ago.

From the Driving out Fear article:

Fear erodes joy in work, limits communication, and stifles innovation. Fear fosters short-term thinking as people search to avoid reprisal, perhaps at the expense of others in the system.

Fear also produces questionable data, as people tend to focus on eliminating the threat instead of working to achieve the desired positive outcomes.

See previous post: Targets Distorting the System

John Hunter

Could Toyota Fix GM

Posted on July 10, 2005  Comments (1)

re: Thomas L. Friedman: Save us, O Toyota based on Thomas L. Friedman article in the Herald Tribune Save us, O Toyota where he states:

I have a question: If I am rooting for General Motors to go bankrupt and be bought out by Toyota, does that make me a bad person? It’s not that I want any autoworker to lose his or her job, but I think the only hope for GM’s workers, and maybe even our country, is with Toyota.

The Lean Manufacturing blog post asks: “if Toyota bought or merged with GM, could Toyota “fix” GM?”

Yes, Toyota could fix GM. Even the right leaders and managers, within GM, could fix GM but it is a huge long term job and it would be harder to do it internally because you will have to do it while competing with Toyota. Also they have some difficult issues to deal with since their previous managers did not tihnk of the long term (20-50 years out from the decisions they were making in the 70s though 90s).

I wouldn’t buy GM if I were Toyota, though. Why bother. Read more

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