Deming: There is No True Value
Posted on November 5, 2009 Comments (8)
There is no true value of anything: data has meaning based on the operational definition used to calculate the data.
Walter Shewhart’s Statistical Method from the Viewpoint of Quality Control, forward by W. Edwards Deming:
Dr. Deming’s ideas on the theory of knowledge are the least understood and least seen in other management systems. The importance of understanding what data does, and does not tell you, is at least somewhat acknowledged in other management system but is often not found much in the actual practice of management. The execution often glosses over the importance of actually understanding statistics versus using formulas. Just using formulas is dangerous. It may be inconvenient but learning about the traps we can fall into in using data is important.
How often do you see the operational definition used to calculate the data you see with the data you are provided?
via: Shewhart, Deming and Data by Malcolm Chisholm
Statistical Learning as the Ultimate Agile Development Tool by Peter Norvig
Posted on November 5, 2009 Comments (1)
Interesting lecture on Statistical Learning as the Ultimate Agile Development Tool by Peter Norvig. The webcast is likely to be of interest to a fairly small segment of readers of this blog. But for geeks it may be interesting. He looks at the advantages of machine learning versus hand programming every case (for example spelling correction).
Google translate does a very good job (for computer based translation) based on machine learning. You can translate any of the pages on this blog into over 30 languages using Google translate (using the widget in the right column).
Related: Mistakes in Experimental Design and Interpretation – Does the Data Deluge Make the Scientific Method Obsolete? – Website Data – An Introduction to Deming’s Management Ideas by Peter Scholtes (webcast)
Management Improvement Carnival #80
Posted on November 3, 2009 Comments (0)
- A New Strategy for the Kaizen Blitz from Lean Homebuilding – on PDCA, kaizen, with lots of good comments
- To Err is Human…To Error Proof is Divine from Ankit Patel – fundamentals of error proofing from a new lean blogger
- Difference Between Inspect and Adapt and PDCA from Al Shalloway – yes, PDCA works even in non-deterministic systems
- Is the Answer Right There in Front of You? from Lean Laboratory – a great example and reminder on digging deeper into a problem
- Eliminating Tunnel Vision from Lean Builder – on using voice of the customer to eliminate missing the big picture
Russell L. Ackoff: 1919 -2009
Posted on October 31, 2009 Comments (4)
We lost another of the absolutely best minds in management history, this week. Somehow, many managers, do not know of Russell Ackoff’s ideas. I find that amazing. Dr. Ackoff is one of two management thinkers that any manager, that is serious about improving management results in their organization, must study (the other is Dr. Deming).
The Curious Cat management library includes many articles by Russell Ackoff. Transformation and Redesign at the White House Communications Agency by March Laree Jacques is a great articles exploring adopting his ideas.
Like many management greats he had no limit to the great ideas he put forth. He believed in the value of people and the importance of social systems. He is well known his ideas on systems thinking and specifically human systems. He understood to create effective management structures the human element must be at the heart of the system. He firmly believed in respect for people and his management ideas built on providing the opportunity for people to flourish.
We lost another great management mind. But by reading Ackoff’s books and articles and learning from him we can continue the improvements he brought to management during his life. His ideas will continue to provide those that adopt them great success for a long long time. And the management community will continue to build on his work and that of others to help managers improve their organizations.
Educators, on the other hand, encourage and even try to inspire progressive deviations from what they have said. Their objective is not to remove the need for further learning, as is the guru’s, but to initiate it
Those words also describe Russell Ackoff perfectly. He inspired those he worked with to adapt and transform his ideas as they worked to improve their organizations. Take this opportunity to learn more about his ideas, you will not be disappointed.
Related: Russell L. Ackoff, Management Consultant & Systems Thinker, 1919 -2009 – Ackoff, Idealized Design and Bell Labs – Quotes By Dr. Russell L. Ackoff – Dr. Russell Ackoff Webcast on Systems Thinking – From Mechanistic to Social Systemic Thinking – Traffic Congestion and a Non-Solution – Write it Down to Improve Learning – Designing a New Organization – Ackoff’s New Book: Management f-Laws – The Importance of Management Improvement
Worker Retention at Zappos
Posted on October 29, 2009 Comments (2)
Tony Hsieh, chief executive of Zappos, spoke at a recent y-combinator event (two great organizations we have mentioned before).
“We now provide mentorship and training so employees can join at the entry level and, over a period of five to seven years, have the opportunity and training to become senior leaders in the company,” he said. “Constant growth is what will keep them in the company for a very long time.”
Hsieh said he wants Zappos to have a higher purpose than just driving profits and that if employees buy into it, it is easier to have great customer service and for employees to want to stay at the company. He’s outlined that in core values that the company uses to guide itself.
“For your employees, if you can inspire them through your vision, that’s not just about profits or being number one in the market,” Hsieh said. “I like to say the best businesses are the ones that figure out how to combine profits, passion and purpose and the vision and culture to do that.”
Great stuff. I must admit I would not find spending $700 million on an internet shoe and apparel retailer was a great idea for Amazon if it were not Zappos. I am happy to own a small portion of Zappos with such inspired leadership. The contrast in the respect for people Hsieh shows and so many other unethical CEO’s is amazing and inspiring. We need more such leadership examples to follow.
Communicating with the Visual Display of Data
Posted on October 26, 2009 Comments (1)
Anscombe’s quartet: all four sets are identical when examined statistically, but vary considerably when graphed. Image via Wikipedia.
Anscombe’s quartet comprises four datasets that have identical simple statistical properties, yet are revealed to be very different when inspected graphically. Each dataset consists of eleven (x,y) points. They were constructed in 1973 by the statistician F.J. Anscombe to demonstrate the importance of graphing data before analyzing it, and of the effect of outliers on the statistical properties of a dataset.
Of course we also have to be careful of drawing incorrect conclusions from visual displays.
For all four datasets:
|Mean of each x variable||9.0|
|Variance of each x variable||10.0|
|Mean of each y variable||7.5|
|Variance of each y variable||3.75|
|Correlation between each x and y variable||0.816|
|Linear regression line||y = 3 + 0.5x|
Edward Tufte uses the quartet to emphasize the importance of looking at one’s data before analyzing it in the first page of the first chapter of his book, The Visual Display of Quantitative Information.
Management Improvement Carnival #79
Posted on October 22, 2009 Comments (1)
Mark Graban is hosting Management Improvement Carnival #79 on the lean blog, highlights include:
- A Natural Match (Deborah Dolezal, Lean Healthcare Grand Rounds): “As a healthcare worker and an implementer of lean, I am often struck by the similarity of the human body and the lean methodologies.”
- Kaizen Corner — for lack of a battery (Paul Levy, Running a Hospital): “The idea is to keep asking why (the 5 why’s) until they discover the root cause, which is defined as that level of understanding that will permit development of a countermeasure that will prevent the problem from occurring again.”
- Put Down That Tool (Jamie Flinchbaugh): “Use the simplest tool possible. When you start to use tools that are more complicated than they need to be, we add unnecessary waste and bureaucracy to the process of improvement.”
- How NUMMI Changed Its Culture (John Shook, Lean.org): “What I learned was most powerful at NUMMI was to start with the behaviors, with what we do.”
Managing to Test Result Instead of Customer Value
Posted on October 19, 2009 Comments (7)
Computer hardware and software creators use benchmarks as one tool to compare the performance of alternative products. At times this can be very useful. You can learn what software of hardware is faster and that may be a very valuable factor. However, any measure is determined by the operational definitions used in collecting the measure. And if people have incentives to improve the measured number they often will do just that (improving the measure) rather than improving the system (the measure is meant to serve as a proxy for some function of that system).
Information technology people actually understand this much better than most mangers (who also rely on measures for many things like return on equity, profit growth, productivity of various plants…) – so actually I find they are not nearly as fooled by measures compared to managers. On Reddit there is an interesting discussion on coding the product to provide good benchmark results [in this context benchmarking has to do with measured results on standard performance tests – not TQM style benchmarking). The technical details in this case don’t matter so much to my point, which is just that when people treat the measure as the true value instead of a proxy for the true value it is risky.
Technology companies compete fiercely and claiming the software or hardware is faster is one big area of competition. And the comment on Reddit is claiming one competitor changed some code only to get a better measure (that provides no benefit to customers). The problem with such actions, is they provide no actual value: all they do is make the measure less meaningful as a proxy.
Now it is also perfectly understandable why it would be done – when you are focused on improving the number, it might well be easier to distort the system to provide a better number (used by to measure performance) instead of actual improve the performance. It is easy to see why a company would do this if they want to have marketing claim their products are the fastest.
2009 Deming Prize
Posted on October 16, 2009 Comments (4)
Organizations receiving the Deming Prize since 2000 by country (prior to that almost all winners were from Japan):
The 2009 Deming Prize for Individuals went to Dr. Hiroshi Osada, Professor, Graduate School of Innovation Management, Tokyo Institute of Technology. Previous recipients include: Kaoru Ishikawa, Genichi Taguchi, Shoichiro Toyoda, Hitoshi Kume and Noriaki Kano.
The 2009 Deming Distinguished Service Award for Dissemination and Promotion went to Gregory H. Watson, Chairman and Managing Partner, Business Excellence Solutions
Management Improvement Carnival #78
Posted on October 10, 2009 Comments (1)
- Journey from Agile To Lean by Kenji Hiranabe – “Agile is a connector between business and software engineering…. From the business perspective, IT or software development is just one activity in the value stream of a company.”
- Planning Managerial Capacity by Dan Markovitz – “While it’s very easy to take on more projects and responsibilities, it’s *stopping* work that’s critical to getting out of the office and meetings, and into the gemba where the learning happens.”
- The Problem With Planning by Kelly Waters – “Rather than a detailed plan, I prefer to see a strong vision, a strategy, goals, and a roadmap (high level outline plan). The tactics to achieve this, for example the precise features and all the tasks to deliver them, can vary along the way and are best not articulated up-front.”
- Enterprise Methods: Stop Tampering with the System of People by Marc Hersch – “Give everyone the job of systematically improving methods constantly so that all can experience joy and pride in workmanship.”
- Lean thinker Paul O’Neill by Jamie Flinchbaugh – “to understand why you have a problem, you must understand the process or the means. Bad systems beat good people – manage the system.”
- Innovation Is as Innovation Does? by Mark Graban – “More than rewarding “experimentation” (which is necessary for ‘kaizen’ or continuous improvement), does your organization manage to not punish ‘failure?’”
- How to Be Lean in a Batch Production Industry by Jon Miller – “Engage people. This is really a basic condition for whatever lean and continuous improvement system you apply within a process industry. If you do nothing else, do this.”
- Production Planning: What is it, and why should I care? by Connor Shea – “Establish a set time (weekly?) to go through Production Planning steps and to implement countermeasures when necessary. Creating a set time will ensure it becomes a regular part of your role and isn’t slowly displaced by the tyranny of the urgent.”
- Level 5 Leadership by Ron Pereira – “be humble while holding fast to the path you feel is best for the organization no matter how difficult it may be”
Management Improvement Carnival #77
Posted on October 1, 2009 Comments (2)
- A lesson in strategy, taught by a Cat by Mark Hurst – “Without direction, we’re presenting our flipcharts and our powerpoints to the Cheshire Cat. And he just griiiiiiins.”
- Respect for People, Underutilized People, and Waste by Pete Abilla – “Worldview and Values matter – those dictate the behaviors of everybody in the company. When ‘tools’ don’t work, that is because the values don’t support the ‘tools’. Focus on Worldview and Behavior – then the rest will follow.”
- Top Ten Things Programmers Hate About Agile by Damon Poole – “If you want Agile to succeed, you need to point out, and be sincere about it, that Agile will affect the whole organization, management included.”
- AT&T, I’m Begging You to Take My Money! by Kevin Meyer – “I’ve had automatic bill pay for three years so every payment was on time, with the iPhone being one of their more expensive plans… But she couldn’t authorize the credit for me to get a FREE phone.”
- Why is asking “why” so important? by Tracey Richardson – “the next time you are at the GEMBA remember a few of these rules to effectively getting to root cause and past a symptom. This will not only help your team members but effect cost and productivity as well.”
- The Importance of Going to the Gemba by Tim McMahon – “You can’t solve problems at your desk. Going to the Gemba is a great way to get the entire team involved in identifying and solving problems. It is grounded in fact finding using actual conditions from the actual workers who perform the work”
- Genchi Genbutsu on the Retail Floor Jon Miller – “The facts that will transform our businesses don’t come from the boardrooms but from the floor (sales, production, hospital, etc.). We need to go see how customers are actually using our products and services in order to improve. Often there are unexpected differences between the design of the product, service or process and how customers use them.”
- After Lehman: How Innovation Thrives In a Crisis by Scott D. Anthony – “Today, a company that enters the S&P 500 index will stay on it for less than 20 years… Increasingly, companies that buck the trend and last 30 or more years will do so only by mastering the ability to perpetually transform themselves.”
- Key Measurements in Implementing Andon by Jamie Flinchbaugh – “no measure or indicator will tell you half as much as being on the floor, in the process, observing how people are using the system. You need to test people’s understanding and use of the processes. You need to see the responders methods and capability.”
Five Managerial Fallacies Concerning Layoffs
Posted on September 28, 2009 Comments (2)
Leadership in the post-layoff environment is a helping, not a controlling relationship, and requires reaching out, not closing down and hiding behind a facade of toughness and control. Organizations that have successfully helped employees rebound from the trauma of layoffs have required their managers to learn and apply basic helping skills.
Read the full post, for more good points by David Noer. Obviously when managements failures result in layoffs it is a huge blow to respect for people. It is very challenging to maintain lean thinking or Deming based improvement efforts when layoffs are needed. And if that failure isn’t addressed and explained and details provided on why the leadership failed and what is being done to fix those problems with the management system, the challenges grow.
I am very disappointed in management that resorts to layoffs as the easy solution to their failed leadership. Most of the time layoffs are an indication management does not respect people in any way, no matter what they say. Now, I do believe, it is possible that a company has been failed by past leadership and gotten into a position where layoffs are the right choice, but most companies choose layoffs as just another MBA spreadsheet “management” exercise and those companies pay a heavy price for such poor management.
Credit Card Company Tries Providing Value
Posted on September 23, 2009 Comments (0)
Most credit card issues seem to use business models based on tricking customers into paying high fees. PartnersFirst is focusing on providing value to customers. A Different Kind of Credit-Card Company
Credit-card companies have made billions on affinity cards over the years – but regulators and lawmakers worry that consumers get raw deals. Critics say colleges put their financial interests ahead of those of their students, encouraging them to rack up high-cost debt. “Affinity cards started simply as a product that alumni associations could offer members, but alumni boards realized they could bargain for more cash up front,”
The companies involved in banking and credit cards in the USA have been hostile to customers for quite some time. I have been waiting for someone to decide to provide value to customers and take a fair profit. Hopefully PartnersFirst will continue this model, though I am suspicious, if they succeed they will be bought by another financial firm that is too-big-to-fail in order to once again restrict competition via their standard practice of buying any competitors instead of providing value to customers.
Extrinsic Incentives Kill Creativity
Posted on September 21, 2009 Comments (5)
If you read this blog, you know I believe extrinsic motivation is a poor strategy. This TED webcast Dan Pink discusses studies showing extrinsic rewards failing. This is a great webcast, definitely worth 20 minutes of your time.
- “you’ve got an incentive designed to sharpen thinking and accelerate creativity and it does just the opposite. It dulls thinking and blocks creativity… This has been replicated over and over and over again for nearly 40 years. These contingent motivators, if you do this then you get that, work in some circumstances but in a lot of tasks they actually either don’t work or, often, they do harm.”
- “there is a mismatch between what science knows and what business does“
- “This is a fact.”
What does Dan Pink recommend based on the research? Management should focus on providing workplaces where people have autonomy, mastery and purpose to build on intrinsic motivation.
Management Improvement Carnival #76
Posted on September 20, 2009 Comments (0)
Kevin Meyer is hosting the Management Improvement Carnival #76 on the Evolving Excellence blog, highlights include:
- The World Used to be Flat (Indexed): Question what is accepted as fact, ubiquitous in effect, and practiced by people. Traditional accounting…?
- The Retrospective of Retrospectives (Agile Tips): How large agile teams with multiple sub-teams can effectively implement the Retrospective phase.
- Timeboxing for Creative Professionals (Change Order): Using short, structured sprints to defeat procrastination.
- Standard Work and the Folly of Multitasking (Time Back): Even more data that supports the admittedly counterintuitive notion of single flow sequential work being more efficient that multitasking.
Read more management improvement carnivals
Finding Savings with Six Sigma
Posted on September 19, 2009 Comments (0)
I don’t see any evidence six sigma is making a comeback but magazines like to talk about new ideas rather than just explore what continues. They like to discuss common cause variation as though it were special cause. Six Sigma Makes a Comeback
How sad. Six sigma has always been hampered by a lack of core values (like respect for people, constancy of purpose) and a focus on cost cutting but the direct desire to pursue a deadly disease (short term focus) is sad indication of where some have taken what can be very useful tools.
Six sigma and quality management other efforts can be very useful. But many of the efforts (as many of any management efforts) are executed poorly and do little good and much that is rightly ridiculed.
How ‘Buy American’ Can Hurt U.S. Firms
Posted on September 16, 2009 Comments (2)
Halton Hills, a town of 50,000 people about 25 miles west of Toronto, is one of about a dozen Canadian communities forging ahead with plans to amend their procurement policies to freeze out American companies. “We won’t be taking any products from any country that is discriminating against us,” said Mayor Rick Bonnette.
Aquarius gets a lot of its parts from abroad, particularly from Canada. Such integration became even tighter after the North American Free Trade Agreement in 1994 joined the U.S., Canada and Mexico in a free flow of goods and services.
Trojan Technologies Inc. of Ontario, North America’s dominant maker of ultraviolet disinfection equipment for treating sewage, is a key supplier to Aquarius and other companies. Because of the Buy American provisions, Trojan has had to shift production to a plant in Valencia, Calif., a move that has resulted in delays and additional costs being passed on to customers, said Trojan executive Christian Williamson.
The challenges of trying to legislate market choices such as what products to buy are difficult. It is understandable to want to direct stimulus funds to improving the economy today in the USA. Creating legislation that can cope with interactions and unintended consequences inherent in such attempts is not easy.
An Introduction to Deming’s Management Ideas by Peter Scholtes (webcast)
Posted on September 14, 2009 Comments (1)
An Introduction to Deming’s Management Teaching and Philosophy by Peter Scholtes – webcast from the Annual W. Edwards Deming Institute conference in Madison, Wisconsin, November 9th, 2008. My previous post on this speech: 6 Leadership Competencies.
Next month, the Annual Deming Institute conference will be held at Purdue on Oct 10th, 2009.
Understanding How to Manage Geeks
Posted on September 12, 2009 Comments (5)
The unspoken truth about managing geeks by Jeff Ello
Good IT pros are not anti-bureaucracy, as many observers think. They are anti-stupidity. The difference is both subjective and subtle.
The primary task of any IT group is to teach people how to work. That’s may sound authoritarian, but it’s not. IT’s job at the most fundamental level is to build, maintain and improve frameworks within which to accomplish tasks.
it’s all about respect. If you can identify and cultivate those individuals and processes that earn genuine respect from IT pros, you’ll have a great IT team. Taking an honest interest in helping your IT group help you is probably the smartest business move an organization can make. It also makes for happy, completely non-geek-like geeks.
The article makes very good points. As I have said before software developers expect more of management than most staff do. And I would say software developers are seen as more cynical than most staff because they accurately evaluate management’s failures (and are more willing to speak up about problems).
Pretending software bugs don’t exist doesn’t work. Pretending management bugs don’t exist doesn’t work either, but most are willing to pretend management bugs don’t exit. Programmers often figure bugs should be acknowledged and dealt with, rather than pretending they don’t exist. But they are called cynical when they mention management bugs – which only makes them less confident in the ability of management to preform their responsibilities.
Management Improvement Carnival #75
Posted on September 10, 2009 Comments (0)
- Agile Lessons from a Management Guru by Ahmed Yousuf – “Agile methodologies have a fundamentally different approach to quality – an approach that is inherent in this teaching from Deming. Quality cannot be achieved by testers inspecting work done by developers. Quality can only be achieved if developers, business analysts, architects and testers – all take measures to ensure that it is part of every task they perform.”
- How Resource Constraints Can Set You Free by Matthew E. May – “He envisioned a self-contained, self-sustaining water system complete with a high-capacity water tank and four large spaces for billboard advertising and public service messages. The ad revenue pays for maintenance. Children playing powers it.” (Appropriate technology is something I have always been very interested in, as a child I traveling around with my father (engineer, statistician, professor and management consultant) as he worked on such practical projects. See my Curious Cat Engineering and Science Blog posts on appropriate technology, including both examples in the post – John Hunter).
- ScrumButs Are the Best Part of Scrum by Jurgen Appelo – “Scrum teams are self-organizing complex systems… then you must accept that optimal behavior of a team cannot be predicted. It is impossible to design the process up-front. It must emerge, just like the design of the solution.”
- Whirlpool Evansville Dies the Unnecessary but Expected Death By Kevin Meyer – “Rest in peace Whirlpool of Evansville. With a management team focused on the cost of hands instead of the value of brains we’ll probably be saying the same for Whirlpool as a whole in a few years.”