Monthly Archives: September 2006

Lean is Harmony

In Mike Wroblewski’s capstone, to his posts on his tour of lean manufacturing in Japan, he states:

My lean manufacturing epiphany is quite simple, LEAN IS HARMONY.

The lean principles are helping us develop and promote harmony by removing barriers, rocks, and conflicts that disrupt flow in our business.

Yes, lean is about eliminating waste and using great lean tools to improve our business but that is all we seem to focus on in the US. Lean principles are much more than that.

He captures the difficulty of truly operating in a lean manner. The tools are useful, but they are not the end. Just using the tools can help move an organization to the point where they are ready to truly examine how to improve. Most often the attempts (just like previous attempts with quality management, six sigma… did) stop short of more than superficial change where a few new tools are used in the same old system. Luckily more an more organization are moving in the right direction.
Continue reading

Meeting Like Google

How to Run a Meeting Like Google, offers good advice like agendas distributed ahead of time, having a note taker…

Instead, she encourages such comments as “The experimentation on the site shows that his design performed 10% better.” This works for Google, because it builds a culture driven by customer feedback data, not the internal politics that pervade so many of today’s corporations.

Also definitely read: Most Meetings are Muda and meeting advice from 37 signals

Related: The Team HandbookGoogle Management MethodsHow Google WorksInnovation at Google

Leaving Quality Behind – Again No

Is PAT Leaving Quality Behind?

The intent of PAT was to advocate a more scientific and methodical approach to product development, scale-up and production. The impact of PAT will be felt in all sectors of the organization, and if applied correctly, will increase granularity in the quality and quantity of data being created throughout the product development lifecycle.

Ok, so in what way is that leaving quality behind? Does this add something to design of experiments, to PDSA, to control charts, to continuous improvement, to quality function deployment

The Improvement Handbook will help people learn what quality improvement is about today (and was about in 1990).

Related: Management Improvement History and Health CareQuality and InnovationManagement Improvement HistoryManagement Advice FailuresSPC: History and Understanding

Continue reading

Excessive CEO Pay

Overpaid CEOs and Underpaid Managers: Fairness and Executive Compensation by James B. Wade, Charles A. O’Reilly, III and Timothy G. Pollock:

We also find evidence suggesting that CEOs serve as a key referent for employees in determining whether their own situation is “fair,” and this influences their reactions to their own compensation. More specifically, we find that when lower-level managers are underpaid relative to the CEO, that is, underpaid more than the CEO or overpaid less, they are more likely to leave the organization.

Essentially if the CEO is extremely overpaid, even if other executives and managers are overpaid (compared to those outside the company) the others feel they are not being treated fairly and turnover increases. Their data is from the 1980’s and they argue (sensibly to me) that the effects may be larger now. We have all seen CEO pay become much more excessive in the last few decades. That fact, convinced Drucker that the issue of unfair CEO pay demanded very strong denunciation from him over the last decade of his life.
Continue reading

Health Insurance Premiums Soar Again

Health insurance premiums continue to soar (Lame Mercury news removed the page so I removed the link):

For the seventh straight year, premiums for employer-based health insurance rose more than twice as fast as overall inflation and wages, an annual survey of employers shows.

This health care crisis continues to dramatically harm the economy yet attempts to deal with the issue remain much too small. Good news is available, for example: Lean Health Care Works and Going Lean in Health Care. Read the full report. Also see more posts on health care management improvement.

Related: Healthcare Costs Spike AgainGladwell (and Drucker) on PensionsPBS Documentary: Improving HospitalsHealth Care: Saving LivesHealthcare improvement articles

Chaos Management (by design) at Google

Chaos by design by Adam Lashinsky:

Sandberg recently committed an error that cost Google several million dollars — “Bad decision, moved too quickly, no controls in place, wasted some money,” is all she’ll say about it — and when she realized the magnitude of her mistake, she walked across the street to inform Larry Page, Google’s co-founder and unofficial thought leader. “God, I feel really bad about this,” Sandberg told Page, who accepted her apology. But as she turned to leave, Page said something that surprised her. “I’m so glad you made this mistake,” he said. “Because I want to run a company where we are moving too quickly and doing too much, not being too cautious and doing too little. If we don’t have any of these mistakes, we’re just not taking enough risk.”

A bit unconventional: and not right for every business. But for Google this makes sense to me, and it has been working well for them. Google hired Shona Brown, as senior vice president for business operations in 2003. In 1998 she authored – Competing on the Edge: Strategy as Structured Chaos.

Related: posts on Google managementposts on innovation10 Stocks for 10 Years Update

Lean Outsourcing

Unfortunately many people think of outsourcing when they think of lean, because they don’t understand lean manufacturing. Lean Manufacturing and Outsourcing by Eric O. Olsen and Mark Zetter (via Lean Outsourcing) looks at outsourcing with an understanding of lean manufacturing.

Related: Toyota Manufactures More ItselfCommunication Failures Impact QualityExcessive Executive Pay – outsource the CEOIT Outsourcing Slowing

Manufacturing Jobs

The article, Manufacturing Lost 3.4 Million Jobs Since 1998, indicates “The increased output should lead to job recovery.” I doubt it. While it is true there is a correlation between output and jobs by far the most significant trend is more manufacturing output and fewer manufacturing jobs everywhere in the world. Like so many articles talking about manufacturing job losses in the USA this one could leave many readers thinking that the USA needs to gain back jobs lost to other countries (while in fact the USA has lost a lower percentage of manufacturing jobs than most all countries – including China – based on the latest data I have seen).

Focusing on manufacturing output and jobs and their importance to the economy makes sense. However, I think people need to update the model they use to set expectations of manufacturing job levels. And given a world in which no countries seem able to do gain manufacturing jobs, it seems more reasonable to expect a continuation of decreased jobs and increased output until that worldwide trend changes. If you want to focus on manufacturing jobs in the USA I think the realistic goals are decreasing the reduction in jobs (by supporting what is still by far the world’s dominant manufacturing economy).
Continue reading

Systemic Thinking

Systemic Thinking by Gary Bartlett provides a nice introduction to systemic thinking compared to analysis. Analysis is very useful however, the strong tendency to focus on only breaking apart systems to analyze components does result in missing insight into improvement opportunities (that can be gained by looking at the system as a whole).

Conventional thinking techniques are fundamentally analytical. Systemic thinking is different – it combines analytical thinking with synthetical thinking.

That tool is synthesis – seeing how things work together. Synthesis is more than putting things back together again after you’ve taken them apart: It’s understanding how things work together.

Analytical thinking enables us to understand the parts of the situation. Synthetical thinking enables us to understand how they work together.

Related: articles by Russell Ackoffblog posts on systems thinking