Posted on June 28, 2007  Comments (4)

Google Gadgets are small tools and toys that integrate with iGoogle. Google is funding developers to work on creating gadgets through Google Gadget Ventures. Great idea. They offer:

1. Grants of $5,000 to those who’ve built gadgets we’d like to see developed further. You’re eligible to apply for a grant if you’ve developed a gadget that’s in our Google gadgets directory and gets at least 250,000 weekly page views. To apply, you must submit a one-page proposal detailing how you’d use the grant to improve your gadget.
2. Seed investments of $100,000 to developers who’d like to build a business around the Google gadgets platform. Only Google Gadget Venture grant recipients are eligible for this type of funding. Submitting a business plan detailing how you plan to build a viable business around the gadgets platform is a required part of the seed investment application process.

Google continue to make good moves to manage in a new world. With this program they are not investing in creating an infrastructure to develop software, support software, hire staff… Instead they get to tap the drive and capabilities of those developers working on products which increase the value of iGoogle through small cash incentives. Previously they offered Google Gadget Awards. They also fund Google summer code – to support software developers creating open source software and reducing computer waste (where they didn’t stop with improving the servers they use but to making a broader impact on society). They really do a great job of leveraging their efforts well.

Related: Google Innovation and Entrepreneurship – Google Custom Management Improvement Search Engine – Experiment Quickly and Often – Innovate or Avoid Risk

Posted on June 27, 2007  Comments (0)

Deep Thinkers Need Not Apply: How To Get Ahead In the Modern Business World:

Something to be very careful of in managing people. I find that who says something is most often more important in predicting how people will react than what is said. As I have tested this myself I have learned how biased people are by who is talking and have taken care to try and correct such judgments that I make (I know I don’t do it all the time but I try to especially for important things).

I haven’t managed to have that reaction yet Ok, maybe I am not suppose to wish that people would use poor reasoning to listen to me but I am in favor of any reason that makes them listen

Related: Management is Prediction – Problems Caused by Performance Appraisal – posts related to psychology – Curious Cat Management Improvement Jobs

Posted on June 24, 2007  Comments (0)

Nice short interview of Professor of Emergency Medicine, Matthew Cooke, on lean health care in the UK (via the lean blog). He mentions that applying lean thinking to health care gets rid of wasted time for patient, eliminates errors (by reducing opportunities for error) and staff spends more of their time on direct patient care.

Related: articles on improving the management of health care – Going Lean in Health Care – Documentary of improving hospitals – Simple Solutions That Work – non-value added steps

Posted on June 23, 2007  Comments (3)

Toyota Boosts Executives’ Bonuses on Record Earnings:

Toyota’s 32 top executives received just over $12 million in salaries in the 12 months ended March. Lets see Toyota made something like $13,000,000,000 in profits. With the top 32 executives getting about $20,000,000 that is .15% of earnings. Even if there are some other benefits not included in the total that .15% figure for the top 32 executives doesn’t really compare to ludicrous pay of many CEOs in the USA. They are in a different paradigm than the others. I think their paradigm is much more effective (and the pay is the symptom of that system). I’ll take the executives of Toyota over the overpaid executives any time.

Related: More on Obscene CEO Pay – Excessive Executive Pay – addition to the seven deadly diseases – 12 Stocks for 10 Years Update – Jun 2007 (Toyota up 69%)

Posted on June 22, 2007  Comments (2)

Former Ford President responds to the Wall Street Journal with At Ford, Quality Was Our Motto in the 1980s:

Posted on June 21, 2007  Comments (1)

I ran across a specific example of standard policy that I found amusing (related to the post earlier today on Why Isn’t Work Standard). Like the authors, I can’t really see a reason for why you would want a policy that no more than two prepaid cell phones can be purchased. But if it is important, couldn’t you design a much better system to assure this policy was followed. And, at the very least, let customers hear your reasoning (so make an accurate explanation part of the standard work instruction stopping the sale of more than 2) behind such a restraint on their options. Doing so wouldn’t really help solve the problem (if they want more phones) but it seems it would be better customer service not to make up stuff like claiming it is the law – which is what happens when you tell people to do things without explaining why. Why Wal-Mart Will Refuse to Sell You Prepaid Cell Phones:

Later, the post author explains the answer he receives after calling Walmart headquarters and being directed to the District manager – “the only person that could quote policy.” The person that answers says the district manager is busy but she can answer, there is no policy that only the district manager can quote policy:

Verizon seems to be doing a good job keeping poor customer focus as a guiding policy (double trouble at Verizon):
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Posted on June 21, 2007  Comments (4)

Are You Really Asking? by Mark Graban

Good advice. When standard work is not followed by one person then it might be that intervention with that one person is needed (or in some cases it might be that person found a better way and you need to update the standard and figure out why the standard wasn’t updated before – probably a system problem, annoying to follow procedure to get improvement adopted…). Much more often “policy” (which might be similar to standard work – but I think standard work really requires a system that is missing in places where “standard work” is not standard at all) is not followed in general – everyone does their own thing.

Then obviously (at least to someone that understands management) the issue is why does the documented standard work differ from the practice and why is management allowing such a divergence… Fix the system. What needs to be worked on is the failure of the management to create a system where standard work is the way work is done, not blaming everyone for not following the standard in various ways. Often this can be the practice, though not as obvious as stated, for example, when common cause errors are examined as special causes. Instead of looking at all the data, the error in question is examined, hey they didn’t follow x procedure – obviously they are to blame. Ah yeah look a bit more – no one ever follows that procedure (or what crazy system design allows that type of error to be possible): European Blackout: Human Error-Not.

Related: Visual Work Instructions – Find the Root Cause Instead of the Person to Blame – variation description

Posted on June 19, 2007  Comments (2)

Mistakes in Experimental Design and Interpretation

This is an excellent article discussing very common errors in how people use data. We have tendencies that lead us to draw faulty conclusions from data. Given that it is important to understand what common mistakes are made to help us counter the natural tendencies.

Related: Seeing Patterns Where None Exists – Illusions, Optical and Other – Understanding Data – Dangers of Forgetting the Proxy Nature of Data – How to Deal with False Research Findings – descriptive “theory” and normative theory

Posted on June 18, 2007  Comments (7)

One of the beliefs I try and get the organizations I work for to adopt is to truly value excellent people. The costs are challenges of hiring great people, to me, makes it critical to do what you can to keep your exceptional people. I probably haven’t written about this because it can conflict with my advice against performance appraisals. I do actually believe it is possible to know certain people are great and contribute greatly to the success of your organization. I also believe many (a majority) organizations do such a bad job of identifying those people they shouldn’t even try. But if you can identify some people that seem to be positive special causes of success there is a good argument for making sure they are happy.

I don’t believe you should try to pay these special employees fairly. Overpay them. I would much rather waste (10-20% on extra pay) than pay them fairly and make it easier for them to switch to another job. Talk to them and make sure they are doing what they want and making the progress they want. I find (I don’t have enough data to know if this is generally true) that the best people complain the least and so you need to make extra efforts to find out what they might like to see improved.

Don’t focus all of your energy on putting out fires and expect those that keep their areas of responsibility in decent shape without your intervention to just cope on their own. Since many managers adopt this “only dealing with the squeaky wheel” strategy (without saying that is what they do, of course), force yourself to spend time coaching, learning, helping… the most successful – as well as others. I want to have employees delighted (all of them ideally, but at least those that are most critical). As Deming said it is easy for competitors to take away satisfied customers – it is not easy for a competitor to take away delighted customers. The same holds for employees.
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Posted on June 16, 2007  Comments (3)

In my opinion Clayton Christensen offers truly insightful ideas on innovation and management. He presents the rare management advice that is not only good but also new – an incredibly rare combination. The current issue of Business Week includes an interview with him: Clayton Christensen’s Innovation Brain:

While some of Christensen’s ideas are new he also builds on existing ideas. The idea on customer focus being a potential trap was discussed by Deming a great deal. Interesting point on Google, I must agree, though it makes me nervous to think that way: it is easier to mess up success than to fix a mess. I will be interested to read his ideas on the health care system.

Related: Six Keys to Building New Markets by Unleashing Disruptive Innovation – Management Improvement Leaders – articles by Christensen – The Innovators Solution – What Job Does Your Product Do?
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Posted on June 14, 2007  Comments (0)

Please submit your favorite management posts to the carnival.

• Outrageously Good Customer Service by Steven Levitt – “I would trade it all for a few more instances in which the airline does something out of the ordinary to get me home faster to see my wife and kids.”
• Reflections on the Role of Technology in the Lean Workplace by Richard Tucker – “Observe the actual people, doing actual work, in the actual workplace. Second, Kaizen the process before implementing an IT solution.”
• Heijunka in the Front Office by Ron Pereira – “One of the easiest ways to accomplish this is by using a heijunka wheel as shown in the picture above. In the wheel we can place the work, normally in folders, to be done in the slots in a leveled and balanced manner.”
• You’re Not Developing Your People by Norman Bodek – “Your problem is that you are not focusing on developing people. You are very happy to have people continue to do those “boring,” repetitive jobs. Develop people to learn and build new skills every day. Challenge people to find and eliminate waste every single day. Let people learn from their own creative ideas.”
• Complexity Creep by Peter Abilla – “[Institutionalize] simplicity. Amazon has become very, very good at this. In their product development approach, internally dubbed as ‘working backwards’, a focus on the customer weaves simplicity throughout the product development process.”
• Excessive CEO Pay Disrespects Employees by Mark Graban – “The leaders aren’t showing respect for their employees. That’s where the cycle starts. No wonder so many employees are cynical and start looking out for themselves instead of doing what’s right for the company.”

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Posted on June 13, 2007  Comments (0)

‘Disillusioned’ surgeon quits UK:

Giving awards can serve to highlight the behavior leadership want to encourage (especially when trying to encourage new behavior the leader often has to make it visible what they value). Taking 6 months for someone to show up and then nothing happening really sends a message on what is valued. Shows of support only are valuable if backed up with actual support. When someone would ask Dr. Deming, I tried to get my organization to do what they should but I did x and y and z… but I can’t make any progress what should I do. He often said: quit. Go work for an organization that will do the right thing. This Doctor adopted that strategy. By the way if you actually go the the article you will see the Doctor says:

Hmm, well I don’t agree with that at all. Oh well, that is the challenge of looking at management ideas in practice, I often see good points mixed in with things I don’t agree with. Via: Doctor who cut waiting times to zero quits – NHS shocker

Related: Change Health Care – UK National Health System Management – Fixing the Health Care System from the Inside – Problems with Bonuses

Posted on June 11, 2007  Comments (8)

I continue to tilt at the robber barron CEO pay packages. Hopefully, at some point, the people approving these obscene pay packages can be shamed into stopping or replaced by people with some sense of decency. I was taught in the days of robber barrons the business world was seen as an amoral place (morality did not belong in this area of human endeavor) but that over time society decided that in fact morality did apply there. It is hard to reconcile that with the behavior of CEOs and board approving ludicrous pay packages. See previous post on the purpose of organizations. Half of S&P 500 CEOs Topped $8.3 Million

Very good question. I would say they are intentionally trying and confuse the issue. Even as they spout defenses for such unjustifiably pay packages they know the pay is not defensible and so try to confuse the issue with byzantine explanations. Lets look at the CEO pay versus total earnings for several companies:

Data via: Best-paid CEOS (only those with fiscal years ending after December 15th – more pay data) – for 2006 according to an Associated Press analysis that covered nearly 400 of the nation’s 500 biggest public companies and Google Finance. I realize this chart could be improved by spending more time (especially looking out over several years for both pay and earnings…) but this is what I could do relatively quickly.
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Posted on June 10, 2007  Comments (0)

I posted this to our science and engineering blog last week: Awesome Cat Cam. It doesn’t really have anything to do with management: I suppose I could make a case for creativity… but basically it is just really cool (it also illustrates some good product design and testing points). CatCam by Juergen Perthold – this great project involved taking a digital camera and some additional equipment to create a camera that his cat wore around his neck which took pictures every 3 minutes. The pictures are great. The cat got photos of several other cats and seemed to like spending time under cars. You can now order your own CatCam.

Sometimes I have some challenging ideas, or crazy like some other people would say. This time I thought about our cat who is the whole day out, returning sometimes hungry sometimes not, sometimes with traces of fights, sometimes he stay also the night out. When he finally returns, I wonder where he was and what he did during his day. This brought me to the idea to equip the cat with a camera. The plan was to put a little camera around his neck which takes every few minutes a picture. After he is returning, the camera would show his day.
…
For the second try I used the plastic package of a child toy (Kinderueberraschung), put a stone in it for loading it with some weight and attached it again to the cat collar. This time the part returned – dirty and scratched outside, water inside. What the hell is the cat doing !? This raised the requirements for the camera protective housing a lot
…
Big moment no. 1: attach the collar with the camera to the cat. The reaction was not very happy but finally accepted. Reality check passed

Related: The Cat and a Black Bear – Automatic Cat Feeder – The sub-$1,000 UAV Project

Posted on June 7, 2007  Comments (4)

Employee performance: Continuous, constructive feedback yields results:

Exactly right. As I have discussed I don’t believe in the annual performance rating (Performance Appraisals – Is Good Execution the Solution? – Performance Appraisal Problems…) so I would just skip the grade. The correct strategy, communicate and coach continually. Have defined process that are clear to everyone. Have clear expectations for what people are suppose to do and have methods to make problems visible so they can be addressed.

Related: Performance without Appraisal – posts on performance management – Ritz Carlton and Home Depot – Customer Focus at the Ritz
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Posted on June 6, 2007  Comments (0)

Continuous Improvement, an article from the Label and Narrow Web trade magazine (“for the narrow web segment of converting and printing”), is an article with some nice anecdotes of successfully applying lean thinking.

via: Lean Printing – a new lean blog

Related: It’s Easy Being Lean – Wisconsin Manufacturing – lean manufacturing articles – Transforming With Lean
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Posted on June 3, 2007  Comments (17)

In response to Is Laying People off Really Anti-Lean?:

Layoffs are a failure of management. If the company has not been executing a long term strategy to respect people and manage the system to continually improve, manage for the long term, working with suppliers… it might be they have created an impossibly failed organization that cannot succeed in its current form. And so yes it might be possible that layoffs are required.

It is very easy to jump to layoffs as the “answer” though. While it is possible to construct a situation in which they make sense that such a hypothetical situation it rarely is the case that an organization is committed to lean and then makes layoffs. Instead they just think the same old way and mention the word lean since they see others doing it and layoff sounds like it is lean to someone that doesn’t know the first thing about lean thinking.

I would not see, “a focus on improving operating income above all else” as a lean way of thinking. Improving that is one focus among many that are needed to achieve long term success.

Does that mean a organization doing a great job of managing in a truly lean way may not find itself in a position where layoffs are necessary? No. Failing to predict and execute may have consequences and those may include layoffs. In your example things are confused a bit by separating the responsibility of getting into the mess from what to do next. Definitely, riding out a few poor quarters would be preferable. I have absolutely no question about that.
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Posted on June 1, 2007  Comments (0)

Please submit your favorite management posts to the carnival.

• Employee Driven Improvement at Southwest by Mark Graban – “It’s not called Lean, nor does it reference Toyota, but it sounds like Lean. It’s always nice to see management taking that approach with employees, since most of the airline industry seems to treat employees like a cost, rather than an asset (or real human beings).”
• SPESA Trip Report by Kathleen Fasanella – “I keep saying over and over till I’m blue in the face that lean manufacturing is the way to go, especially if you’re a small company. This system set up will pay for itself quickly”
• eBay and Toyota: Respect for People by Peter Abilla – “The eBay Values are not just rote statements and the behaviors are not just empty slogans, but they are truly practiced by the people at eBay”
• Differing Perspectives On Suppliers by Kevin Meyer – “You can bash your suppliers into submission, losing more than a few of them along the way, or you can develop true long-term partnerships that benefit everyone in the supply chain.”
• How fear of failure destroys success by Adrian Savage – “The constant covering up of the smallest blemishes. The wild finger-pointing as everyone tries to shift the blame for the inevitable cock-ups and messes onto someone else…. The lying, cheating, falsification of data, and hiding of problems—until they become crises that defy being hidden any longer.”

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Posted on June 1, 2007  Comments (1)

Here is another of those articles that promotes the idea that oversimplifies six sigma and then declares that mindset is outdated because innovation is needed nowadays – Six Sigma: So Yesterday?.

Previously I have addressed this mindset in New Rules for Management? No!, Has Six Sigma been a failure?, Managing Innovation and Fast Company Interview: Jeff Immelt:

Yes execution of six sigma often focused too much on cost reduction, optimizing short term projects (which resulted in sub-optimizing the entire system), ranking and rating employees… But innovation is not harmed by a good six sigma program – in fact a good six sigma effort a decade ago understood the importance of innovation perfectly well.