Tesco Pauses USA Expansion
Posted on March 31, 2008 Comments (1)
Pausing for reath at fresh & easy (Tesco’s USA stores)
However, after opening our first 50, we planned to have a 3 month break from openings, and other than a couple more in Phoenix, we’re taking it (albeit, in our usual fashion, with 59 stores already open).
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We’ve learnt a huge amount about running the operation, and talked to thousands of customers about what they like about fresh&easy, and where they’d like us to improve. So we’ve given ourselves a little bit of time to kick the tires, smooth out any wrinkles, and make some improvements that customers have asked for. Of course, improving the operation and the shopping trip is what we do every day.
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But the next 3 months will allow us to accelerate this process, before we restart what’s been described as an opening program on steroids.
There have been some rumors in the blogosphere and regular press that the stores are not living up to expectations. Tesco denies this but it is hard to tell if this is typical public relations where disappointments are seen as something to deceive the public about, or the truth. Pausing to access and adjust makes all the sense in the world.
In fact it would seem to me to be the preferred method before 50 are in place. However I can see there might be reasons to expand rapidly too. I think if it were up to me I would try to PDSA with fewer stores first, and then expand but I don’t really know the business so…
It is a bit scary that the Fresh and Easy blog references Tony Robbins on continual improvement rather than Deming or Ohno or Womack or someone part of the lean thinking community.
Related: Lean Provision at Tesco – Tesco in the USA – What Innovation Means to Tesco – Lean Retailing – 10 Stocks for 10 Years Update
Coopers Rock State Forest
Posted on March 29, 2008 Comments (1)
See more photos of my visit last year to Coopers Rock State Forest in West Virginia. The day before I visited Rocky Gap State Park in Maryland. Photos by John Hunter.
Related: Nature Recreation Declining – Mason Neck State Park, Virginia – Shaker Village of Pleasant Hill, Kentucky
Deming’s 14 Points (for software development)
Posted on March 28, 2008 Comments (0)
Deming’s 14 points (for software development) by Jamie Dinkelacker (Geo/Maps Engineering Program Manager at Google Inc. Focus on lean principles and agile practices for software development):
Below are Deming’s 14 points accompanied by commentary related to software development.
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Design quality in, don’t use inspection to find errors. Mistake proof the system.
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In a fearful environment, workers do not operate in the organization’s best interest; instead their energies are by necessity focused on self-protection.
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Mistakes typically come from bad systems not bad workers. Don’t exhort people to work harder or smarter; instead create a more intelligent workflow and system tailored tot he essential nature of software development as human collaboration (not just coordination) such that people can excel.
A good read. Also a good blog on management improvement ideas and software development (though not very active). See my Deming on Management resource where I try to explain what Dr. Deming actually said and meant and dispel some misconceptions.
Related: Dr. Deming’s 14 Points – Deming’s Ideas at Markey’s Audio Visual – Lean, Toyota and Deming for Software Development – Google: Ten Golden Rules
Tags: agile management,Deming,Google,IT,Software Development
How Downsizing is Handled When Management Respects People
Posted on March 27, 2008 Comments (0)
Three Amazing PHP/MySQL/Perl Developers Now Available – Posting on Craigslist. The url will expire so I included everything but the contact info below (follow the link for contact info).
Yesterday I had to do one of the more difficult things — lay off three of my good friends, all of whom are talented and professional developers.
I’m posting here today in hopes that someone out in the world is looking for some seasoned talent, people who can get things done for you. I will personally recommend all three of these guys, and I’ll detail below each of them. If you are interested, I’m including my phone number. I’ll take your contact information and give it to the person(s) you are interested in, and you can take it from there.
Here goes.
Developer #1
I’ve worked with Developer #1 since 2005. He’s worked for Fortune 500 companies and small startups. His strengths are conceptualizing and implementing complex systems using PHP and MySQL. These systems are not limited to the web, however the web is where most of his work has been for the last few years. During his employment with me, he:
* Designed a complex billing system, complete with audit trails
* Developed a site-wide internationalization system, allowing us to easily translate any phrase on the system to a different language
* Designed and successfully implemented several difficult projects based on half-way decent specifications documents (my fault)
Related: People are Our Most Important Asset – Bad Management Results in Layoffs – Hiring the Right People – Severance Plans to Respect People – Curious Cat Management Improvement Jobs
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Tags: jobs,management,Software Development
Losses Covered Up to Protect Bonuses
Posted on March 24, 2008 Comments (5)
Does it surprise you to learn traders would cover up losses to protect bonuses? It shouldn’t, it happens over and over. Would it surprise you that almost any bonus (or quota) scheme increases the odds that the data will be doctored to meet the goals? It shouldn’t. Intelligent measures to make such doctoring difficult can help reduce the practice. But it is a likely risk of any such goal. As we have quoted Brian Joiner as saying: there are: “3 ways to improve the figures: distort the data, distort the system and improve the system. Improving the system is the most difficult.” So it is no shock that distorting the data is often the tacit people use (especially when the rewards are great or the punishment for missing is severe).
Of course the people that take unethical or illegal action are responsible for their actions. But managers that set up poor systems and then get poor results should not be surprised. You mainly read about the exciting distortion of data – but there is much more such distortion that doesn’t seem interesting enough for the press.
Traders at top investment bank ‘covered up losses to protect their bonuses in £1.4 bn scam’
Shares in the bank, which is based in Zurich, tumbled 7.5 per cent yesterday. Credit Suisse admitted it had discovered intentional “pricing errors” by a small number of traders involved in complex investments linked to the mortgage market.
Related: Problems with Bonuses – Be Careful What You Measure – Measuring and Managing Performance in Organizations – Another Quota Failure Example
Unconscionable Executive Pay
Posted on March 19, 2008 Comments (6)
WaMu: Skip customers; save the execs
The board decided in February to use different performance yardsticks that could make it look like Killinger and other top executives were doing great jobs — and all but ensure them millions of dollars in bonuses for 2008. Those huge losses piling up because of subprime loans and foreclosures? At bonus time, the bank will ignore them.
The behavior of executives that take what they have no right to in unjustifiable pay schemes continues to be a disgrace. Thankfully more people are shedding light on the unconscionable behavior. Excessive executive pay is both a sign of awful ethics and a driver of bad management action. I add two new diseases of western management to Dr. Deming’s 7 deadly diseases; massively overpaid executives is one.
Related: Tilting at Ludicrous CEO Pay – Obscene CEO Pay – “Too often, executive compensation in the U.S. is ridiculously out of line with performance” Warren Buffett
Drug Price Crisis
Posted on March 18, 2008 Comments (3)
In 2005 I posted about some of the problems with drug pricing. It is nice to find at least a couple of people at MIT that want to have MIT focus research on the public good instead of private profit. As I have mentioned too many universities now act like they are for-profit drug or research companies. That is wrong. Drug companies can do so, institutions with purported higher purposes should not be driven to place advancing science below profiting the institution.
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Following the utility model, Finkelstein and Temin propose establishing an independent, public, non-profit Drug Development Corporation (DDC), which would act as an intermediary between the two new industry segments — just as the electric grid acts as an intermediary between energy generators and distributors.
The DDC also would serve as a mechanism for prioritizing drugs for development, noted Finkelstein. “It is a two-level program in which scientists and other experts would recommend to decision-makers which kinds of drugs to fund the most. This would insulate development decisions from the political winds,” he said.
I see their idea as one worth trying. Lets see how it works. Their book: Reasonable Rx – Solving the Drug Price Crisis by Stan Finkelstein and Peter Temin
Related: USA Spent $2.1 Trillion on Health Care in 2006 – Measuring the Health of Nations – Antibiotics Too Often Prescribed for Sinus Woes – $600 Million for Basic Biomedical Research – articles on improving the health care system
Tags: commentary,economy,Health care,Science
NCAA Basketball Challenge 2008
Posted on March 17, 2008 Comments (0)
Once again I have created a group on the ESPN NCAA Basketball Tournament Challenge for curiouscat college basketball fans. To participate, go to the curiouscat ESPN group and make your picks.
This year we also have a second challenge, using sportsline, that rewards picking upsets. So those that enjoy the tournament please join the fun. The password for this one is cat
Go Badgers and Go Davidson,
Management Improvement Carnival #31
Posted on March 14, 2008 Comments (0)
Please submit your favorite management posts to the carnival. Read the previous management carnivals.
- Lean *is* About Quality, Folks by Mark Graban – “The two ideas are connected — improving flow (in itself) ends up improving quality and improving quality improves flow.”
- Statistical software is not six sigma by Rob Thompson – “With a good understanding of the process at hand, practitioners can solve many problems using statistical software. However, if there’s a lack of process knowledge, it’s hard to be sure of what’s going on in the process, or what the statistical analysis is revealing”
- Key Points for Managing Kaizen Idea Systems by Jon Miller – ” As a rule there should be 1) no suggestion box, 2) a simple suggestion form, and 3) team-based dialog to evaluate ideas.”
- Adjustment or Tampering? by John Dowd – “Deming called it tampering. It is the adjustment of of a stable process after each occurrence; treating every event as though it were special. It makes things worse.” (curious cat: tampering)
- The Importance of Heijunka by Mark Rosenthal – “Production leveling, however, is difficult, and the management has to have the fortitude to do it. Honestly, most don’t. They don’t like to deliberately set the necessary inventory and backlog buffers into place”
- Harmony and Toyota by Ron Pereira – “As we walked along the cat walk we were able to gain a birds eye view of the assembly operation. There was just so much to see… it was overwhelming.”
- A Good Layout is in the Details by Mike Wroblewski – “By focusing the majority of our effort on grasping the situation first, the action of moving was fairly uneventful. No firefighting, no frantic emergencies, no heroics and no customer disappointments.”
Webcast on 2-Bin Systems
Posted on March 11, 2008 Comments (0)
Illustration of how 2-Bin Systems work, by Bill Hanover.
Related: Overall Equipment Effectiveness (OEE) video by Bill Hanover – Messiness is Bad – Drum-Buffer-Rope Example – lean manufacturing resources
Tags: management tools,Manufacturing,training,webcast
Pleasing Customers
Posted on March 10, 2008 Comments (1)
Why is 37signals so arrogant? by Don Norman
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Yes, they are arrogant — and proud of it: “Arrogant is usually something you hurl at somebody as an insult,” Hansson said. “But when I actually looked it up — having an aggravated sense of one’s own importance or abilities’ — I thought, sure.” Park concludes his article by saying “Call it arrogance or idealism, but they would rather fail than adapt. ‘I’m not designing software for other people, ‘Hansson says. ‘I’m designing it for me.’ ” “I’m not designing … for other people.” I think that simple phrase speaks volumes. Thank goodness most companies recognize that this attitude is deadly.
I don’t agree. Not compromising leads to solutions that are unlikely to be all things to all people. But with an intelligent and knowledgeable leader will lead to excellent solutions for those that share desires. Now I don’t think this is the best strategy, especially for growth. But it can be an excellent strategy for startup, innovators and those seeking 1,000 fans.
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Toyota’s Commitment
Posted on March 8, 2008 Comments (4)
From Toyota’s blog, Living Up to Our Commitment
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Because of our oft-stated commitment to standing behind our products, we’re extending the rust-perforation warranty covering these trucks for a period of 15 years from each vehicle’s original date of purchase, with no mileage limitation, for corrosion damage that results in perforation of the vehicle’s frame material. Owners of these Tacomas need not be the original owners. Even if you bought your Tacoma second- or third-hand, it’s covered by this extended warranty.
Once again Toyota shows what it means to go beyond the traditional way of thinking (where often MBA bean-counters and lawyers decide what should be done) instead of someone interested in having the company actually live up to a higher mission. From a previous post on their blog:
Related: Toyota IT Overview – Deming Companies – Reacting to Product Problems – Toyota Management Develops the New Camry – Corporate Blogging – Dell Innovation
Inside Honda’s Brain
Posted on March 7, 2008 Comments (1)
Inside Honda’s brain by Alex Taylor III
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Since 2002 its revenues have grown nearly 40%, to $94.8 billion. Its operating profits, with margins ranging from 7.3% to 9.1%, are among the best in the industry.
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The wellspring of Honda’s creative juices is Honda R&D, a wholly owned subsidiary of Honda Motor. Based in Saitama, west of Tokyo, R&D engineers create every product that Honda makes – from lawn mowers to motorcycles and automobiles – and pursue projects like Asimo and Hondajet on the side. Defiantly individualistic, R&D insists on devising its own solutions and shuns outside alliances. On paper it reports to Honda Motor, but it is powerful enough to have produced every CEO since the company was founded in 1948.
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The engineer in Fukui [Honda's president and CEO] cannot help but be intrigued by what his former colleagues are up to, and his office is only a few steps away from Kato’s. But even with the CEO just down the hall, says Kato, “We want to look down the road. We do not want to be influenced by the business.”
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mistakes like the Insight are also the exception. R&D has provided Honda with a long list of engineering firsts that consumers liked, including the motorcycle airbag, the low-polluting four-stroke marine engine, and ultralow-emission cars.
Related: Toyota as Homebuilder – S&P 500 CEOs – More Engineering Graduates – More on Non-Auto Toyota – Asimo Robot, Running and Climbing Stairs – Applied Research – Google Engineering Energy
Systemic Workplace Experiments
Posted on March 6, 2008 Comments (0)
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Last summer we experimented with 4-day work weeks. People should enjoy the weather in the summer. We found that just about the same amount of work gets done in four days vs. five days.
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So recently we’ve instituted a four-day work week as standard. We take Fridays off. We’re around for emergencies, and we still do customer service/support on Fridays, and but other than that work is not required on Fridays.
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We decided that 37signals would help people pay for their passions, interests, or other curiosities. We want our people to experience new things, discover new hobbies, and generally be interesting people. For example, Mark has recently taken up flight lessons. 37signals is helping him pay for those. If someone wants to take cooking lessons, we’ll help pay for those. If someone wants to take a woodworking class, we’ll help pay for that.
Part of the deal is that if 37signals helps you pay, you have to share what you’ve learned with everyone. Not just everyone at 37signals, but everyone who reads our blog. So expect to see some blog posts about these experiences.
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We just ask people to be reasonable with their spending. If there’s a problem, we’ll let the person know. We’d rather trust people to make reasonable spending decisions than assume people will abuse the privilege by default.
Dr. Deming proposed supporting education of any type for employees (point 13 in the 14 points). That is not often done, but 37 signals is not alone in doing this. Great stuff. Create a great environment for people to work in and you can get great things done. Also good old PDSA at work – try things on a small scale and then institute those experiments that succeed on a wider scale.
Related: Google Experiments Quickly and Often – Vacation: Systems Thinking – Getting and Keeping Great Employees – Joy in Work – Complicating Simplicity – Workplace Management
Quotas are Not the Answer
Posted on March 5, 2008 Comments (0)
Rich Sharpe posted to his blog on his recent reading of Dr. Deming – The American Who Taught the Japanese About Quality by Rafael Aguayo in Lean Programming and Dr. Deming. And he posted a response he received from Rafael Aguayo with some good points including:
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But the whole point of this is to bring back intrinsic motivation. People should be coming to work to because they love being there. They love the work, they love the respect and appreciation they get, they love the team environment, they love that the company is looking after them and it is a two way agreement. And in this environment people and teams perform miracles. The quotas and targets become meaningless, which is what they are anyway.
Related: Another Failure Due to Quotas – Targets Distort the System – Goodbye Quarterly Targets – Books on Deming’s management ideas – Making Changes and Taking Risks
Tags: Deming. targets,Psychology,Systems thinking
Management Advice from Warren Buffet
Posted on March 4, 2008 Comments (1)
As usual, Warren Buffett’s letter to shareholders is packed with wisdom. He is best know for his investing genius but his writing provides great thoughts for managers also: Berkshire Hathaway 2007 Letter to Shareholders:
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This deal was done in the way Jay would have liked. We arrived at a price using only Marmon’s financial statements, employing no advisors and engaging in no nit-picking. I knew that the business would be exactly as the Pritzkers represented, and they knew that we would close on the dot, however chaotic financial markets might be. During the past year, many large deals have been renegotiated or killed entirely. With the Pritzkers, as with Berkshire, a deal is a deal.
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Charlie and I look for companies that have a) a business we understand; b) favorable long-term economics; c) able and trustworthy management; and d) a sensible price tag. We like to buy the whole business or, if management is our partner, at least 80%
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A truly great business must have an enduring “moat” that protects excellent returns on invested capital. The dynamics of capitalism guarantee that competitors will repeatedly assault any business “castle” that is earning high returns.
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Susan came to Borsheims 25 years ago as a $4-an-hour saleswoman. Though she lacked a managerial background, I did not hesitate to make her CEO in 1994. She’s smart, she loves the business, and she loves her associates. That beats having an MBA degree any time. (An aside: Charlie and I are not big fans of resumes. Instead, we focus on brains, passion and integrity.
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I should emphasize that we do not measure the progress of our investments by what their market prices do during any given year. Rather, we evaluate their performance by the two methods we apply to the businesses we own. The first test is improvement in earnings’ with our making due allowance for industry conditions. The second test, more subjective, is whether their “moats” – a metaphor for the superiorities they possess that make life difficult for their competitors – have widened during the year.
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You will recall that in our catastrophe insurance business, we are always ready to trade increased volatility in reported earnings in the short run for greater gains in net worth in the long run.
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What is no puzzle, however, is why CEOs opt for a high investment assumption: It lets them report higher earnings. And if they are wrong, as I believe they are, the chickens won’t come home to roost until long after they retire.
Related: Buffett’s Letter to Shareholders (from last year) – Buffett’s Shareholder Letter (2006) – Overview of Warren Buffett – Annual Report by Warren Buffett (2005) – Hiring the Right People
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Stupid Bureaucratic Requirement
Posted on March 3, 2008 Comments (0)
Quaker teacher fired for changing loyalty oath
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“I don’t think it was fair at all,” said Kearney-Brown. “All they care about is my name on an unaltered loyalty oath. They don’t care if I meant it, and it didn’t seem connected to the spirit of the oath. Nothing else mattered. My teaching didn’t matter. Nothing.”
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Modifying the oath “is very clearly not permissible,” the university’s attorney, Eunice Chan, said, citing various laws. “It’s an unfortunate situation. If she’d just signed the oath, the campus would have been more than willing to continue her employment.”
Modifying oaths is open to different legal interpretations. Without commenting on the specific situation, a spokesman for state Attorney General Jerry Brown said that “as a general matter, oaths may be modified to conform with individual values.”
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“I honor the Constitution, and I support the Constitution,” she said. “But I want it on record that I defend it nonviolently.”
My take: stupid unthinking government action. First I can’t see what value the signing does at all. But even if you think there is some aim that having everyone sign supports does a Quaker inserting non-violently harm that aim in some way? Is it really unquestioningly doing whatever you are told that is the value that is what is being aimed for? Seems pretty clear to me from even this short article this teacher understands the constitution much better than most people and cares enough to take the values that constitution endorses seriously. While the government looks like they only care about getting their form on file and don’t care at all what the purpose of that form is (the purpose can’t really be just to coerce everyone to sign it, can it?).
To me she is doing a great service to defend that constitution with her actions. Hopefully she can do so and have her job. But standing up for what is right often can leave you worse off personally.
I understand that it is easier to ignore the purpose and just focus on compliance with the rules. But what does it say if your actions show that actually loyalty doesn’t matter and signing something you don’t believe is ok? It just bothers me that this loyalty oath situation puts an emphasis on empty promises above the true intent of the constitution. Devaluing it harms us all in the long term.
Related: The First Amendment – Public Management – Customer Un-focus
Lean Manufacturing Saving Jobs Again
Posted on March 2, 2008 Comments (1)
Lean manufacturing saving jobs
“This is not about a reduction in the workforce, it is about reducing waste in the system,” Cook said. “There is a lot to be gained . . . and it is really just common sense.” The lean manufacturing session got its start in November at a mayor’s roundtable on advanced manufacturing. When the issue of cutting waste arose, Cook volunteered to lead a session and the London Economic Development Corp. organized it.
“This information is not proprietary. If these people take it back to their plants and expand on it, we all gain,” Cook said.
A number of great points, including:
- lean management is about reducing waste not jobs: Creating Jobs – Bad Management Results in Layoffs
the best management ideas are not proprietary – Management Improvement – Management Advice Failures – Open Source Management Ideas
Related: Manufacturing Jobs – Lean Thinking Misconception – Lean Manufacturing Resources
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