Posted on April 30, 2008  Comments (1)

The Deming Institute is sponsoring, How to Create Unethical, Ineffective Organizations That Go Out of Business, 12-14 May, 2008 in Colorado Springs, Colorado. Kelly Allan and John Hunter will be presenting the seminar. Please let me know if you sign up.

Related: Deming on Management – Curious Cat Management Improvement Calendar – Deming Seminar and Conference – Deming Companies

Posted on April 29, 2008  Comments (1)

This is the 1,000th post to the Curious Cat Management Improvement Blog. Here are some highlights:

• Post number 2: Dangers of Forgetting the Proxy Nature of Data – “We use data to act as a proxy for some results of the system. Often people forget that the desired end result is not for the number to be improved but for the situation to be improved.”
• Most viewed post: Eliminate Slogans – management by slogan is not an effective management strategy

Information Technology: Toyota IT Overview – “customizing the code, to its business processes, and not the other way around.”

• Manufacturing: Top 10 Manufacturing Countries – Manufacturing Jobs Data by Country
• Health Care: Going Lean in Health Care – USA Healthcare System Costs 16% of GDP ($2.0 trillion or $6,697 per person in 2005) – Drug Prices in the USA – Change Health Care
• The Purpose of an Organization quoting Dr. Deming: “The aim proposed here for any organization is for everybody to gain – stockholders, employees, suppliers, customers, community, the environment – over the long term.”
• Process Improvement: Better and Different – Process Improvement and Innovation Go Together – PDSA Cycle: “One slow turn is much less effective then using it as intended to quickly test and adapt and test and adapt…”
• What to do: Write it Down – Visible Data – Lean Thinking and Management – Use Books to Ignite Improvement – Management is Prediction – Standardized Work Instructions – Find the Root Cause Instead of the Person to Blame – Design of experiments – Performance without Appraisal – Bring Me Problems Even if you Don’t have the Solutions – Stop Demotivating Me! – Don’t Empower – Respect for People – Most Meetings are Muda – Managing the Supplier Relationship
• Commentary: Obscene CEO Pay – Management Excellence – Management Advice Failures – Data Can’t Lie – New Rules for Management? No! – Be Careful What You Measure – Tilting at Ludicrous CEO Pay
• Why blog? The Importance of Management Improvement – Bad Management Results in Layoffs

Posted on April 28, 2008  Comments (1)

The Baldrige National Quality Award winners for 2007 are:

• PRO-TEC Coating, Leipsic, Ohio (small business)
• Mercy Health System, Janesville, Wisconsin (health care)
• Sharp HealthCare, San Diego, California (health care)
• City of Coral Springs, Coral Springs, Fla. (nonprofit)
• U.S. Army Armament Research, Development and Engineering Center (ARDEC), Picatinny Arsenal, N.J. (nonprofit)

President Bush met with winners for the first time since 2000, I believe (photo from Coral Springs web site). He did in private this year in the Oval Office. The Baldridge award had more prestige in the management community 10 years ago. In my opinion the award has failed to attract the best managed companies to apply.

When you purport to recognize the highest level of management excellence you should understand that leaving out those companies that are widely seen as excellent calls into question the credibility of the award. I can understand the challenge in convincing many potential applicants to apply. I would say that is the same challenge companies have that want to convince potential customers their solution is what the customer should purchase.

ARDEC provides a public version of their application (some details removed) that is interesting. ARDEC received the President’s Award Quality in 2000. From 1998 to 2002 the President’s Quality Award recognized management excellence in the federal government based on a Baldrige-style system (it was then switched from Baldrige-style to generic “excellence”).

Related: 2005 Baldrige Award – Vice President Presents Baldrige Awards (2004) – Problems with Lean Manufacturing Awards – 2007 Shingo Prize for Excellence in Manufacturing – Management excellence in government – Deming Prize 2007

Posted on April 24, 2008  Comments (2)

What’s driving Toyota Canada’s success? – CIO reveals all

An article well worth reading. Related: Toyota IT Overview – Lessons from Toyota’s IT Strategy – Good Customer Service Example at Toyota – Software Supporting Processes Not the Other Way Around

Posted on April 22, 2008  Comments (1)

Guest post by Ron Kingen (originally posted to the Deming Electronic Network)

Several weeks ago someone in the DEN list ask what did Dr. Deming recommend about this issue, well I ask that very question of Dr. Deming back in the 80′s when I had the good fortune to work with him. I had expressed my concern to Dr. Deming about several of his fourteen points that I either didn’t understand completely or did not fit with my experience and/or education. Dr. Deming suggested we talk about it over dinner – during the subsequent dinner discussion Dr. Deming made several points relative to performance improvement (not appraisal):

1. Hire good people – one of the most critical decisions we all make.
2. Train and educate them – even if they come from the best universities and are at the top of their class.
3. Coach them, constantly, don’t wait for an annual appraisal to correct an issue or behavior.
4. It is the system that must be improved to ensure people work to their potential.
5. Recognize your top performers, but money isn’t the best method of recognition, in fact, it can be counterproductive.
6. Work with your low performers to understand their issues and difficulties; give them support and assistance. If they can’t improve and are truly performance outliers , don’t keep them, they will affect the over system.

The advice seemed valid, but I told him my company insisted we do performance appraisals. He laughed, he suggested I change the system; but Dr. Deming knew I worked for General Motors and that wouldn’t be easy. So he recommended I become a rebel and change my part of the system; which I did try. At the time I worked for one of the most progressive divisions within GM and was fortunate to work with many talented GM people and several well know and recognized experts, but I was convinced the best system change option was to leave GM.
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Posted on April 21, 2008  Comments (3)

David Heinemeier Hansson Talk at Startup School 2008 (Paul Graham‘s Y-combinator school). It is helpful to appreciate the importance of some simple ideas. Working on web focused businesses people often get carried away with the huge potential and sometimes lose touch with reality. While the ideas are more obvious when looking at web related business their is plenty here for many companies (the second half might be more helpful for many).

In this talk David does a great job of explaining how 37 signals has chosen to work. They are not concerned with becoming large. They focus on doing what they want to do – creating great software solutions (see: Systemic Workplace Experiments). And on making money to allow them to stay in business.

Some tidbits of advice: create great applications, charge people money, make a profit. Yes to those outside the web world this might seem obvious… He discusses a very similar idea to the idea of 1,000 true fans. He mentions to bring in a $1 million, all you need is 2,000 customers paying $40/month. 37 Signals has done well focusing on small business. Don’t be in such a hurry.

Related: Why is 37signals so arrogant? – Complicating Simplicity – Joy in Software Development – Great Marissa Mayer Webcast on Google Innovation

Posted on April 18, 2008  Comments (6)

The Defect Black Market

Well, this doesn’t sound very well thought out. Bonuses often distort behavior. Dr. Deming was not against such targets and bonuses because he thought they would not result in bugs being fixed: Dr. Deming on the problems with targets or goals. It is a question of how that will happen. The system being distorted is the most likely result of any such system.

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Posted on April 17, 2008  Comments (1)

Another former Toyota USA leader is talking a leading role at another company. Gary Convis from Toyota retired last year.

Related: articles by Gary Convis – Toyota Management Speech by Gary Convis – Toyota Management Develops the New Camry – Quality Conversation with Gary Convis – Jim Press, Toyota N. American President, Moves to Chrysler

Dana Holding Corporation Names Gary L. Convis Chief Executive Officer

Dana Holding Corporation (NYSE: DAN) emerged from bankruptcy recently and today announced that it has named Gary L. Convis, 65, to the post of Chief Executive Officer. Convis was appointed to Dana’s new Board of Directors in January 2008 after retiring from Toyota Motor Corporation, where he had spent more than 20 years culminating in his role as Chairman of Toyota Motor Manufacturing, Kentucky.

“We are delighted to welcome Gary as Chief Executive Officer,” said Dana Executive Chairman John Devine, who had served as the company’s acting CEO since January. “Gary is widely respected as one of the leading experts in lean manufacturing and management systems, including the Toyota Production System. Along with his strong leadership and global industry experience, we believe he is an ideal choice as our new Chief Executive.”

“I am honored by the Board’s confidence in me to lead Dana,” Convis said. “I’m also eager to join with our people in establishing world-class manufacturing systems and returning this great company to the leadership ranks of the global automotive supply industry.”
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Posted on April 16, 2008  Comments (7)

PBS presents a very nice overview of the heath care systems in Japan, United Kingdom, Germany, Taiwan and Switzerland in: Sick Around the World. It is a just a surface view of the overall system but even so does a good job of providing more understanding of the options available to fix the failed system in the USA. The US system costs over 50% more than others and has worse outcome measures than the alternatives (and leaves many without any coverage). And while the alternatives are not perfect the defenders of the status quo make claims about the alternatives are not accurate.

Table combines data from my previous post, International Health Care System Performance, and the PBS website:

Switzerland, spending 11.6% of GDP on health care, is the 2nd most expensive in the world.

Related: USA Spent $2.1 Trillion on Health Care in 2006 – Measuring the Health of Nations (USA ranks 19th of 19 nations studied) – Drug Prices in the USA – USA Health Care Costs 16% of GDP (2006) – Deadly Diseases of Western Management – 5 Million Lives Campaign

Posted on April 15, 2008  Comments (0)

Shaun Sayers is hosting Management Improvement Carnival #33 on the Capable blog, some of the highlights include

• Lean and six sigma at Amazon (by Peter Abilla) a tiny peek inside the quality philosophy of this highly successful but intensely secretive corporate beast
• Thinking outside the wooden pallet (by Mark Wroblewski) a critical examination of the role traditional materials management methods on efficiency and work flow
• Lean six sigma for health care (by Sue Kozlowski) a short and timely guide to implementation of the methodology in the health care profession
• System design – make the right thing also the easiest thing (by Shaun Sayers) an examination of some key behavioural criteria for making system compliance much more likely

Read past management carnivals.

Categories: Carnival, Management
Tags: Amazon,Carnival,management,Six sigma


Making a Difference

Posted on April 13, 2008  Comments (4)

Kiva provides loans through partners (operating in the countries) to the entrepreneurs. Those partners do charge the entrepreneurs interest (to fund the operations of the lending partner). Kiva pays the principle back to you but does not pay interest. And if the entrepreneur defaults then you do not get your capital paid back (in other words you lose the money you loaned).

They do an excellent job of using the internet to allow people like me to feel connected to people we can help. And in so doing, they do an excellent job of implementing their strategy (providing funds for micro-loans) to achieve their goal (to alleviate poverty). “Kiva’s mission is to connect people through lending for the sake of alleviating poverty.”

Today I added $450 to my loan portfolio with Kiva and donated another $100 to Kiva. I added 5 loans in: Tanzania (2 loans), Uganda, Paraguay and Ecuador.

I am happy with the success of the Curious Cat blogs but I do have one item I wish would improve. I wish more Curious Cat readers would take advantage of Kiva. If you lend through Kiva, please add a comment with a link to your Kiva page and I will add you to our list of Curious Cat Kiva Contributors.

The Kiva web site includes all sorts of data on the partners making the loans (the capital at risk is provided by Kiva donors but a local organization services the loans…). For example, see the profile for Tujijenge Tanzania Ltd. This shows for example the Amount Repaid Vs Expected Rate (100% for this partner – no defaults or delinquency). The rates for all Kiva loans are 3.75% delinquent and .12% defaulted. They also show the Average Interest Rate Borrower Pays To Kiva Field Partner (which is 24% in this example) and the Average Local Money Lender Interest Rate (which is 60%).

One of things I really hope to see is some research on the results Kiva is producing. What kind of changes are these loans bringing about: specifically looking at Kiva. And also looking at various factors such as the interest rate and whether targeting my lending to those with lower average rates results in greater benefit. There is a great deal of unknown and unknowable numbers involved but some data would be interesting as well as analysis even without numbers of results.

Related: Using Capitalism to Make the World Better – Frontline Explores Kiva in Uganda – Providing a Helping Hand via Kiva – Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts – Microfinance research links

Categories: Economics, Fun, Respect
Tags: Data,Economics,entrepreneur


Toyota Building Second Plant in India

Posted on April 11, 2008  Comments (1)

Toyota is investing $350 million in a second Indian manufacturing plant. The plant is focused on producing vehicles for the local market – as the Toyota Production System suggests that production be close to the market.

Toyota to invest Rs1,400 crore for “strategic” small car in India

The new plant will have a production capacity of 100,000 units and will become operational by 2010, he added. The company’s current plant has a capacity of 63,000 units a year.

The plant will make the Corolla sedans along with the small cars The company plans to have high level of localisation for the small car by procuring several components and sub-systems from Indian vendors. Primarily the car maker plans to sell the small car in the fast growing domestic market, though some will be exported as well, the company stated.
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The Japan-based automaker said last year that it plans to capture 10 per cent of India’s market. In 2007 Toyota sales accounted for a mere 0.6 per cent of the Indian car market

Related: Manufacturing Takes off in India – Toyota Chairman Comments on India and Thailand – Top 10 Manufacturing Countries 2006 – Indian companies have received as many awards as companies from all other countries combined since 2000 – Toyota to Build New Plant in India to Make Small Cars – TVS Group Director on India – Manufacturing, Economy

Categories: India, Manufacturing, Toyota Production System (TPS)
Tags: Asia,India,Manufacturing,Toyota


Confusing Customer Focus

Posted on April 10, 2008  Comments (4)

Misuse of the “Customer” Concept

“We are told that the airlines are our customers,” FAA inspector Charlambe “Bobby” Boutris said. “But we have a more important customer, the taxpayers” who want government to ensure a safe aviation system.

That’s crazy. The FAA is supposed to be serving and protecting the passengers, not the airlines. This is like a supervisor in a workplace treating their employee as a customer… even in a “servant leadership” environment, that’s not right.

“Customer focus” is good, but only if you properly define customer relationships. I’d prefer the FAA think of me and my fellow travelers as the “customer,” not the airlines.

I agree there are several different customers. This is actually not uncommon outside of government but for government agencies multiple “customers” that might have divergent desires are more frequent. But the “customer” frame of reference I still think has value.

I actually think the problem is the way people choose to interpret the idea. If I buy a car from a dealer they don’t sell it to me for $100. They don’t agree to not tell the government so I can avoid sales tax. They don’t agree to sell me a car that is not legal in the state. Customer service does not mean do what is in the interest of the customer irregardless of laws, regulations, good business practices, etc..

I would say doctors don’t give patients anti-biotics for viral infections (but actually they do). They shouldn’t. When doctors behave irresponsibly and give antibiotics in ways that harm the heath of society, some might try to claim it is because they are giving the patient/customer what they want. That is not a reasonable excuse.
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Categories: Customer focus, Management, Public Sector
Tags: airlines,customer service,government,management


Packaging Improvement

Posted on April 9, 2008  Comments (2)

McDonald’s Branding Makes Food Tastier for Tots

Researchers at Stanford University have found that children tend to rate food that is wrapped up in McDonald’s-branded paper as tasting better than the same food wrapped in plain paper — a finding that suggests that even the youngest consumers are heavily influenced by advertising. The new study was released Monday in the Archives of Pediatric and Adolescent Medicine.

The study had 63 children, aged 3 to 5 years old, tasting five pairs of identical foods and beverages — one in McDonald’s wrapping and the other in unbranded packaging. The researchers then asked them a simple question: “Which one tastes better?” An overwhelming number of the children said the food in the McDonald’s wrapping was tastier.

Oddly enough, this applied even to vegetables and milk. Sixty-one percent of the children in the study preferred the taste of carrots and 54 percent preferred the taste of milk if they were reminded by the packaging that it came from McDonald’s.

This is another reminder that tackling problems directly is not always the best strategy. The packaging doesn’t actually change the taste, but really it is not the taste that is likely a concern but rather the perception of taste. To me this is very similar to the studies on people preferring wine they are told costs more.

Ignore psychology at your peril: in marketing and in management. Deming’s management system include 4 interdependent areas: understanding variation, systems thinking, theory of knowledge and understanding psychology.

Effects of Fast Food Branding on Young Children’s Taste Preferences (I think this is the study referenced in the article though it was published in August 2007 – John).

Related: Indian researcher shows most people do judge a drink by its container – Marketing in a Lean Company – The Psychology of Too Much Choice – Be Careful What You Measure

Categories: Creativity, Customer focus, Management, Psychology, Science
Tags: marketing,Psychology


Bezos on Internet Boom

Posted on April 8, 2008  Comments (0)

The webcast shows Jeff Bezos, Amazon.com founder and CEO, speaking at TED on the internet boom. He compares the boom to the gold rush highlighting the similarities. But then he compares the internet to the development of industry around electricity. I think he is exactly right on the internet: “there’s more innovation ahead of us than behind us.”

Related: Bezos on Lean Thinking – Amazon Innovation – Amazon’s Amazing Achievement – Innovation Thinking with Christensen – management webcasts

Categories: Innovation, Management, webcast
Tags: Amazon,Bezos,internet,TED,webcast


Management Seminar in May

Posted on April 7, 2008  Comments (1)

The Deming Institute is sponsoring, How to Create Unethical, Ineffective Organizations That Go Out of Business, 12-14 May, 2008 in Colorado Springs, Colorado. Kelly Allan and I will be presenting the seminar. Please let me know if you sign up.

Twenty-seven faulty management and corporate governance practices create most of the problems in any organization. These practices will be identified, and better practices recommended. It will be shown that as better practices are introduced, quality of products and services increases, costs decline, and you create a globally competitive advantage for your organization.

Learn how governance practice leads to the heaviest losses, how inconsistencies between policy and strategy create sub-optimal outcomes, how mismanagement of people leads to unethical and ineffective behavior, and how to overcome these problems. Study the theory and practice of management. Not quality management, not good management, not excellent management, not knowledge management, not risk management, not process management, not performance management, not supply or asset management, not technology management, not time management, not emergency management, just plain management.

Related: Deming on Management – Curious Cat Management Improvement Calendar – Deming Seminar and Conference – Deming Companies

Categories: Career, curiouscat.com, Deming, Education, Management
Tags: Deming,John Hunter,seminar


A Programmers Take on Agile Software Development

Posted on April 6, 2008  Comments (2)

A Case for Agile: Benefits for a Programmer’s Career by Theodore Nguyen-Cao

Through agile development, I’ve been able to deliver working software time and time again. I’ve been exposed to all different aspects of the business. I’ve learn what I like and don’t like to do. I’ve learn what pieces of business I’m interested in and the pieces I don’t care much for. I’ve developed some really good working relationships. I’ve tackled some hard problems. I’ve learned to respond and adapt to the change and turmoil of a startup.

Most importantly, I still feel I’m growing as a developer. I honestly believe the best thing a developer can do in their career is to always be learning. Everything else will follow.

I am also a strong proponent of agile software development. Information Technology projects have a poor success rate. The best method, I have found, to provide better software solutions is agile development (and I find a grounding in management improvement techniques is useful – customer focus, process improvement, systems thinking, understanding variation, data driven management…). My experience is with custom application development (rather than developing Commercial Off The Shelf software – COTS) for which I think agile is a great fit.

Related: Joy in Work for Programmers – Agile Software Development Presentation – Metrics and Software Development – Management Science for Software Engineering – Programmers at Work – Joel Management

Categories: Career, Lean thinking, Management, Process improvement, Software Development
Tags: agile management,Career,programming,Software Development


Manufacturing Employee Shortage in Utah

Posted on April 3, 2008  Comments (0)

Utah scrambling to meet need for technical workers

The state faces challenges in generating necessary interest to fill available manufacturing jobs for what Utah’s governor has called the state’s “Aerospace Hub,” both immediately and in the future, the report said.

The situation continues to worsen, with jobs being created and unemployment remaining low in the state. And as the current work force ages, the supply of skilled workers is diminishing, forcing employers to recruit outside of Utah and sometimes leave Utah altogether, the report said.
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The college’s Lean Manufacturing Center was built from an old warehouse with state funds and $30 million from rocket-booster manufacturer Williams International. Williams provides the college with equipment and mentors to train students with practical, real-world applications, said Lloyd McCaffrey, the Lean Center’s director.

Related: Engineering Innovation for Manufacturing and the Economy – Applied Quality Engineering Education – Wisconsin Manufacturing – Top 10 Manufacturing Countries – Help Wanted: Lean Manufacturing Experts – The Lean MBA – Curious Cat Management Improvement Job Board

Categories: Career, Manufacturing, Public Sector
Tags: economy,jobs,Manufacturing


10x Productivity Difference in Software Development

Posted on April 2, 2008  Comments (4)

10x Software Development

The original study that found huge variations in individual programming productivity was conducted in the late 1960s by Sackman, Erikson, and Grant (1968). They studied professional programmers with an average of 7 years’ experience and found that the ratio of initial coding time between the best and worst programmers was about 20 to 1; the ratio of debugging times over 25 to 1; of program size 5 to 1; and of program execution speed about 10 to 1. They found no relationship between a programmer’s amount of experience and code quality or productivity.
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In years since the original study, the general finding that “There are order-of-magnitude differences among programmers” has been confirmed by many other studies of professional programmers (Curtis 1981, Mills 1983, DeMarco and Lister 1985, Curtis et al. 1986, Card 1987, Boehm and Papaccio 1988, Valett and McGarry 1989, Boehm et al 2000).

I think these orders of magnitude are not present in between people in many jobs. And I think people’s ability to correctly access who are orders of magnitude better is often faulty. But my experience leads me to believe the difference between exceptional software developers and average (not even below average) is very high. High enough that large increases in pay (say tripling would be sensible). Also accommodating their desires is sensible: freedom from dealing with pointy haired bosses and eliminating other such de-motivators.

While salespeople seen as successful can often be rewarded very well, exceptional software developers rarely are. Most managers don’t seem to be able to grasp that software development is a rare field where such orders of magnitude differences are somewhat common (not one in a million, maybe one in a thousand for a random guess). There are other fields where this is true but most for most fields I do not think this is the case.

In many fields interruptions are costly (and multi-taking is wasteful). In software development those interruptions are often much more costly than in other fields. Peopleware: Productive Projects and Teams is an excellent book on managing software development.

Related: People are Our Most Important Asset – Joy in Software Development – Hiring the Right People – Performance without Appraisal – Measuring and Managing Performance in Organizations

Categories: IT, Management, Performance Appraisal, Software Development
Tags: programming


Management Improvement Carnival #32

Posted on April 1, 2008  Comments (0)

Please submit your favorite management posts to the carnival. Read the previous management carnivals.

• The Skipper & First Mate: A Pattern for Continual Progress by Jamie Dinkelacker – “An organization can only depend on individuals in critical chain processes when individuals are fungible — one can quickly take over for another with no interruption of the work flow. Moreover, it implies that there’s a pool of available developers, ready to step in, who themselves aren’t engaged in other priority activities. Software isn’t like that.”
• The evils of mass production by Kathleen Fasanella – “Really, I’d love to get feedback on what you think defines subassemblies and where you think batching is unavoidable. I don’t mean unavoidable in your particular situation, I mean over-all, assuming you had every resource at your disposal.”
• 10 Benefits of One Piece Flow by Ron Pereira – “we are better able to respond to last minutes changes from the customer. And everyone knows, no matter what industry you work in, customers love to change their mind.”
• Ask Why? – but How? by Mark Rosenthal – “Observe and gather information. Formulate possible hypotheses. For each reasonable possibility, determine what information would confirm or refute it… Observe, gather information, experiment. Get answers to those questions.”
• Improving Healthcare Delivery by Studying Toyota by Jon Miller – “As part of this they have taken hundreds of physicians and hospital administrators to Japan to learn kaizen on the shop floor. Their approach was radical surgery in the minds of some, but it has absolutely turned VMMC around in terms of profitability and speed of positive change.”
• If you can’t distort the data, just don’t look at it – “Just yesterday I ran into a baffling extension of distorting the data: if you have data which tells a bad story about your own organization, hide it!…I’m still seething that someone would turn a blind eye to a productivity problem for fear of how it might reflect on them.”

Read more

Categories: Carnival, Management
Tags: blogs,Carnival,management