Category Archives: Books

The Achilles’ Heel of Agile

Guest post by Jurgen Appelo

When I wrote this, I was working in a big open office space in the Van Nelle Factory in Rotterdam (see photo). About 100 people work in an office that was the first of its kind in Europe, when it was built in 1929. And more than 80 years later, architecture lovers from all over the world still come to admire it, take pictures, and make drawings. I sometimes waved at them.

photo of open office style at Van Nelle Office
Van Nelle office, reprinted by permission of Stephan Meijer

A big open office space has advantages and disadvantages. Advantages are flexibility and easy communication. The main disadvantage is that it is a shared resource for all who work there. Climate, sound, and light are hard to manage in a space like that, and the optimal configuration for the whole is never optimal for all. But our office manager did the best she could in trying to maximize pleasant working conditions, while maintaining tight rules to keep things under control. A shared open office is not the ideal environment to give people full responsibility over their own working space.

Self-organization is usually promoted in agile software development. But when shared resources are not managed by a central authority, self-organization often results in the Tragedy of the Commons. The name refers to a situation in which multiple self-organizing systems, all acting in their own self-interest, overexploit a shared limited resource, even when they all know it is not in anyone’s interest for this to happen. The impact that humanity has on CO2 levels in the air, trees in the forests, and fish in the sea, is right now the most debated and intensively researched case of the Tragedy of the Commons. Organizations also have shared resources, like budgets, office space, and system administrators. We could see them as the business-equivalent of the air we breathe, the landscape we change, and the fish we eat.

Research indicates that four ingredients (called the four I’s) are needed for sustainability of shared resources [Van Vugt 2009:42]:

  • Institutions [managers] who work on building trusting relationships between competing systems [teams] in order to increase acceptance of common rules;
  • Information that increases understanding of the physical and social environment, in order to reduce uncertainty (because uncertainty results in bias towards self-interest);
  • Identity, or a need for a social “belonging” that encompasses all participants, to improve and broaden one’s sense of community and reduce competition between teams;
  • Incentives that address the need to improve oneself, while punishing overuse and rewarding responsible use.

Research shows that it is imperative that there is some form of management (or governance) to protect these shared resources by working on these four I’s. (I realize that most modern day governments are not setting a good example of how to do that.) In the case of shared resources, whether it concerns money, space, or system administrators, someone outside of the development teams must keep an eye on long-term sustainability instead of short-term gains by individual teams.

The Tragedy of the Commons is the Achilles’ heel of Agile. It takes management to protect that heel, in order to prevent teams from depleting resources, and crippling the organization.

This article is an adaptation from Management 3.0: Leading Agile Developers, Developing Agile Leaders, by Jurgen Appelo. The book will be published by Addison-Wesley, in Mike Cohn’s Signature Series.

Related: Embrace Diversity, Erase Uniformitymanagement 3.0agile software development booksVW Phaeton assembly plant

Get Rid of the Performance Review

How Much Do You Hate Performance Reviews? by Bob Sutton

Deming emphasized that forced rankings and other merit ratings that breed internal competition are bad management because they undermine motivation and breed contempt for management among people who, at least at first, were doing good work.

If you want to read the most compelling and complete case against the traditional performance evaluation, however,I suggest that you pre-order UCLA Professor Sam Culbert’s new book Get Rid of the Performance Review. He first made this argument in the Wall Street Journal, but the book digs into this argument in far more detail and offers solutions for managers and companies who want to replace the traditional review — or at least reduce the damage that they do. To help spread the word about the book, and to find out if as many people despise the performance review as Sam (and I) believe, he has — a bit like the ARSE — designed a ten-item test called How Much Do You Hate Performance Reviews? I just took it and scored a 36, which means I really hate them.

Related: The Trouble with Performance Reviews by Jeffrey PfefferDeming and Performance AppraisalPerformance Appraisals, Good Execution is not the Solution?

Mihaly Csikszentmihalyi: Creativity, Fulfillment and Flow

“After a certain basic point, which translates, more or less, to just a few thousand dollars above the minimum poverty level, increases in material well being don’t see to affect how happy people are.”

The speech includes, the first purpose of incorporation at Sony:

To establish a place of work where engineers can feel the joy of technological innovation, be aware of their mission to society, and work to their heart’s content.

Excellent books by Mihaly Csikszentmihalyi:
Flow: The Psychology of Optimal Experience by Mihaly Csikszentmihalyi, 1991. People enter a flow state when they are fully absorbed in activity during which they lose their sense of time and have feelings of great satisfaction.
Good Business: Leadership, Flow, and the Making of Meaning.
Creativity: Flow and the Psychology of Discovery and Invention by Mihaly Csikszentmihalyi, 1997. Drawing on hundreds of interviews with exceptional people, from biologists and physicists to politicians and business leaders to poets and artists, the author uses his famous “flow” theory to explain the creative process.

Related: Extrinsic Incentives Kill Creativityposts on psychology Interviews with InnovatorsInnovation StrategyThe Purpose of an OrganizationFlow

Bogus Theories, Bad for Business

The Wall Street Journal has a book review of The Management Myth by Matthew Stewart. The book flushes out the ideas Matthew Stewert explored in a previous article in the Atlantic about the failure of management to mature as a discipline.

Mr. Stewart quotes Bruce Henderson, the founder of the ­Boston Consulting Group, who describes consulting as “the most improbable business on earth” and who goes on to ask: “Can you think of anything less ­improbable [sic] than taking the world’s most ­successful firms, leaders in their businesses, and ­hiring people just fresh out of school and telling them how to run their ­businesses, and they are willing to pay ­millions of dollars for their ­advice?”

I’m not sure about the book, I have not read it but that is a great statement. And I firmly believe managers need to become experts at managing and by and large they have quite a long way to go. Dr. Deming talked about how we “know” what we know in the aspect of his management called the theory of knowledge (which is not included in any other management philosophy I have seen). That area (with interactions in other areas) explores why people often believe what is not so. And management seems to have a surplus of beliefs that are not based on sound theories.

Read this good article I have mentioned before on this topic by Carlie and Christensen: The Cycles of Theory Building in Management Research.

Related: Righter IncentivizationAnother Quota Failure ExampleManagement Advice FailuresWhy Extrinsic Motivation FailsInnovation StrategyDoes the Data Deluge Make the Scientific Method Obsolete?Data Based BlatheringDoing the Wrong Things RighterHarvard’s Masters of the Apocalypse
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In-N-Out Burger’s Six Secrets for Success

image of In-N-Out Burger book cover

In-N-Out Burger’s six secrets for out-and-out success

Listen to Your Customers — One of the company’s mottos is “Our customer is everything.” Applying that belief led to the company policy of preparing burgers just the way customers asked for them. Some of the customer favorites became popular and were eventually adopted as the restaurant chain’s “secret menu.” By listening to their customers, In-N-Out created menu choices other stores couldn’t duplicate.

Treat Employees Well — The Snyders always held their employees in high esteem, paying them higher wages than competitors and calling them associates to make them feel more connected to the franchise.

“They believed in sharing their success with their employees,” says Perman, noting that In-N-Out associates make $10 an hour working part-time and starting store managers make $100,000, plus bonuses tied to store performance. The company benefits package is also generous. Such treatment engenders loyalty from workers.

“They have the lowest turnover rate in the fast food industry, which is notorious for turnover,” says Perman. “They say that the average manager’s tenure is 14 years, but they have managers who have been there 30 or 40 years.”

Keep Things Simple and Consistent

The fundamental idea of respecting people is something most executives seem to have no interest in. Treating employees as the critical partners in organizational success is just something that doesn’t leap out at you based on the actions of most managers, unfortunately. And that poor management damages the performance of the organization.

Read more about In-N-Out Burger management practices in Stacy Perman’s new book In-N-Out Burger: A Behind-the-Counter Look at the Fast-Food Chain That Breaks All the Rules.

Related: Respect for Workers at In-N-Out Burger (Nov 2006)Building a Great WorkforceAnother Year of CEO’s Taking Hugely Excessive PayRespect for People, Understanding PsychologyPeople are Our Most Important Asset

Jeff Bezos Spends a Week Working in Amazon’s Kentucky Distribution Center

Photo of Jeff Bezos, Amazon CEOPhoto of Jeff Bezos during the 2005 O’Reilly Emerging Technology Conference by James Duncan.

Jeff Bezos, Amazon CEO, is working for a week in Amazon’s Kentucky distribution center. I hope, and based on his past, I believe, that he is going to the gemba (Genchi Genbutsu) to learn more about how Amazon operates. That would be great.

He worked on wall street and understands the fake constraints they attempt to put companies (you must focus on short term profits, you must focus on pleasing wall street analysts not customers…). He understood the importance of managing cash flow and the unimportance of short term profits. And he understands the importance of customer focus. He understands lean thinking. We need more CEO’s like him.

Amazon CEO comes to Lexington

“Thanks so much for your interest in speaking with our CEO Jeff Bezos,” said spokeswoman Patty Smith. “Unfortunately, I’m not going to be able to arrange any interviews or photos this week while he is in Lexington.

“He is there to work,” Smith said, “and, unfortunately, we are just not scheduling any interviews while he is in town.”

Local Amazon employees say Bezos is working in the warehouse with the company’s hourly employees to see what they do and hear their comments about their work. Most CEOs would benefit from spending a few days on the shop floor.

Once again his actions indicate he is the type of CEO I want to invest in.

via: Jeff Bezos Works In Kentucky Distribution Center For A Week

Related: Jeff Bezos and Root Cause AnalysisManagement by Walking AroundAmazon InnovationAmazon’s Amazing AchievementLouisville Slugger, Deming PracticesManagement Excellence

Knowledge, Imagination, Innovation and Risk

A consumer can seldom say today what new product or new service would be desirable and useful to him three years from now, or a decade from now. New product and new types of service are generated, not by asking the consumer, but by knowledge, imagination, innovation, risk, trial and error on the part of the producer, backed by enough capital to develop the product or service and to stay in business during the lean months of introduction.

W. Edwards Deming
Page 182, Out of the Crisis
More of Deming on Innovation

Related: Innovation Thinking with Clayton ChristensenEngineering InnovationManaging InnovationGary Hamel on Management Innovation

Statistics for Experimenters in Spanish

book cover of Estadística para Investigadores

Statistics for Experimenters, second edition, by George E. P. Box, J. Stuart Hunter and William G. Hunter (my father) is now available in Spanish.

Read a bit more can find a bit more on the Spanish edition, in Spanish. Estadística para Investigadores Diseño, innovación y descubrimiento Segunda edición.

Statistics for Experimenters – Second Edition:

Catalyzing innovation, problem solving, and discovery, the Second Edition provides experimenters with the scientific and statistical tools needed to maximize the knowledge gained from research data, illustrating how these tools may best be utilized during all stages of the investigative process. The authors’ practical approach starts with a problem that needs to be solved and then examines the appropriate statistical methods of design and analysis.

* Graphical Analysis of Variance
* Computer Analysis of Complex Designs
* Simplification by transformation
* Hands-on experimentation using Response Service Methods
* Further development of robust product and process design using split plot arrangements and minimization of error transmission
* Introduction to Process Control, Forecasting and Time Series

Book available via Editorial Reverte

Related: Statistics for Experimenters ReviewCorrelation is Not CausationStatistics for Experimenters Dataposts on design of experiments

Appropriate Management

Low-Tech, High Impact Innovation

Adopting the perspective of “appropriate technology” is an excellent way to promote and increase innovation. Your solutions don’t have to be high tech, they just have to provide wide benefits – and taking this sometimes counterintuitive approach can be enlightening.

Great post. My father, Dr. William Hunter, did a great deal of work with appropriate technology (he was a chemical engineering, industrial engineering and statistics professor) and in management improvement.

Often the failure to adopt appropriate technology solutions results from a combination of 3 things:

  • Failing to understand the conditions where the solution will be applied. Failing to “go and see” in lean manufacturing terms.
  • Short term thinking, the failure to see the challenges in maintenance, is how short term thinking manifests itself with the inappropriate technology solutions often applied by those siting in Washington DC or Paris. The failure to consider maintenance is also very related to the first point. Appropriate technology solutions are often very simple, less sensitive (less moving parts to break, able to deal with dust, rain…) and more easily repairable (with tools, expertise and spare parts available at the location of use).
  • A desire to use the cool new gadget and ideas.

Thinking about why appropriate technology is so effective, but underutilized can help anyone improve the solutions they adopt. Thankfully the adoption of appropriate technology solutions has been increasing over the last few decades.

I would especially encourage people to stop looking for the newest management book and actually read and adopt and then re-read and… the excellent management books from the last 50 years. Stop chasing some new shiny thing and adopt solutions that are effective – even if they seem boring.
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Conference Calls with Scholtes and Joiner

Pratt & Whitney Rocketdyne’s Enterprise Thinking Network Ongoing Discussion series this month features conference calls with Peter Scholtes (Thursday, September 25th, Noon to 2pm Pacific Time – USA) and Brian Joiner (Friday the 26th, Noon to 2pm Pacific Time – USA). See more details and register online.

Peter’s books (The Team Handbook and The Leader’s Handbook) are thought pieces for Thursday’s conversation with Peter. As a place to begin the conversation with Peter, we might consider the possibility that teamwork and leadership are perhaps even more in our awareness today than when Peter wrote these books. And if you’d like to explore more of Peter’s thinking and writing, see also a variety of articles and letters by and about Peter at his website.

Brian has offered us several Thought Pieces related to his current work. According to Brian, “The thing I am most excited about now is the Transition Towns movement which started in the UK a few years ago. It’s what I will be focusing on once the First Unitarian Society green building is effectively launched.” In addition, the following site gives a brief intro to the Transition Town approach, with much more detail on the Transition approach available in their Primer. Says Brian, “I hope this will be enough to start conversations.”

Both Brian and Peter are from Madison, Wisconsin (where I grew up) and both worked with my father: Bill Hunter. Brian Joiner also wrote Fourth Generation Management and co-authored the Team Handbook with Peter.

Related: Curious Cat Essential Management BooksBrain Joiner on Dr. DemingTotal Quality Leadership vs. Management by Control by Brian L. Joiner and Peter R. Scholtes