In, The Seven Habits of Highly Effective People, Steven Covey discusses the circle of control, circle of influence and circle of concern. This provides a good framework from which to view issues as you look for improvement strategies.

Within your circle of control you have much more autonomy and have less need to win others over to your plan. However, in practice, even here, you benefit from winning over those who are involved (for example you are their boss).

Our circle of concern covers those things we worry about. Often, we believe because we worry we should find solutions. Problems that fall into this category (but outside our circle of influence) however often prove difficult to tackle. And often people don’t understand why they get frustrated in this case. You can save your energy for more productive activities by seeing some things are outside your influence and avoid wasting your energy on them.

A problem with this, I see in practice however, is that if you are creative many things that people think are beyond their influence are not. With some imagination you can find ways to have influence. Good ideas are powerful. And often that is all that is needed for influence is offering a good idea.

Understanding to what extent an issue is within your control or influence can help a great deal in determining good strategies. Where you have a good chance to influence the process you can focus on strategies that may require much more of your participation to be successfully adopted. As you have less influence such a strategy is likely a poor one.

You should remember, that there is a temporal component to your circle of influence. On some current issue, I may have a very low chance of success for getting the organization to adopt an improvement I think is best. But certain actions can build the understanding that will allow me later to have more influence. This can even be completely separate from how people normally think of circle of influence. By building an organization that moves toward data based decision making and therefore reduces HiPPO (Highest Paid Person’s Opinion) decision making I increase my ability to influence decision making in the future.

Long term thinking is a very powerful, and much under-practiced, strategy. Your influence within an organization is limited today but has great potential to expand, if you act wisely.

Thinking about the extent a current issue falls within your sphere of influence is important it determining the best strategies. But the most valuable insight is to understand how import your sphere of influence is. It determines what strategies you can pursue. And building your sphere of influence should be part of your decision making process.

By taking the long view you can put yourself in good positions to have influence on decisions. There are many ways to do this. My preferred method is fairly boring. Prove yourself to be valuable and you will gain influence. Help people solve their problems. They will be inclined to listen to your ideas. Provide people useful management tools and help them apply them successfully. Help get people, that you know are good, opportunities to succeed. Often this gains you two allies (the person you helped gain the opportunity for and the person that was looking for someone to step in). Work hard and deliver what is important. It isn’t some secret sauce for quick success but if you make those around you successful you grow your circle of influence.

Related: How to Improve – Helping Employees Improve – Operational Excellence – Management Advice Failures – Management Improvement

Slogans mainly are bad. But like most things they can be used in ways that help or hurt. The main problem is when they substitute for a method to achieve the aim (most of the time). If the slogan serves like a mission statement to focus people on something useful to focus on and it is one minor part of a system to achieve a result it can be fine and even useful.

The issue, to me, is not so much that slogans are innately horrible. It is that, in practice, slogan are used in harmful ways most often (especially outside of sports). They tend to substitute for system improvement. The main work of shifting psychology (we do expect to win now, we do expect a focus on reducing bugs in our code…) after years of creating a different culture has to be in changing methods, priorities, values… Slogans, if done right, can be a way of focusing on the change. Or they can be a real reminder of values. But the slogan only provides value as part of a system confirming the aim they emphasis.

Unfortunately, they also to be used as a way to focus criticisms on individuals. Don’t you know/care that our slogan says zero defects? Can’t you read? Jeez, I even put up a huge poster with our slogan saying zero defects and you can’t even do what it says in this beautiful poster? Well, I will give you a bad performance review now, you can’t say you don’t have that coming after you failed to do what our slogan told you to do.

A slogan by itself has negative value. Take any wonderful slogan and move it somewhere else it will do more harm than good. As a minor part of a system though it can tap into how we people think and act (psychology) and provide value. Be careful though, it is much easier to do harm with slogans than to provide value.

If the slogan emphasizes what is being practiced every day, it can be a helpful reinforcer. If it conflicts with what is done every day it breeds cynicism and shows disrespect for people. This which is a huge problem. And managers have to know it is very easy for people to see the lack of cloths on the emperor slogan. Dilbert does a great job showing the risks of using slogans. Those you are targeting the slogan to are more likely to think like Dilbert than the they are to think like the pointy haired boss (and if you are the one pushing the slogan that means you are well on your way to being the phb – so be careful).

Slogans clearly fall under Deming’s understanding psychology area of management. To use them effectively you need to make sure the value provided, exceeds the cost and risk. I see no better way to evaluate slogans than through the lens of Deming’s system of management, interdependent components of: psychology, systems thinking, understanding variation and theory of knowledge. If the slogan is not supported by they system of management in place it will do harm.

In response to: Are Slogans Always Bad or Can They Inspire?

Related: Deming on eliminating slogans and motivational posters – Eliminate Slogans – Toyota Targets 50% Reduction in Maintenance Waste – posts on psychology – How to Improve – Stop Demotivating Employees

Gipsie B. Ranney has a great new article – The Trouble with Incentives: They Work

She sums it up very well:

Find more articles on management improvement in the Curious Cat Management Improvement Library, including: An Interim Report on Motivation in the Workplace by Gipsie Ranney, Remembering NUMMI by Gipsie Ranney and Improving Problem Solving by Ian Bradbury and Gipsie Ranney.

When you can’t prevent arbitrary targets and rewards based on meeting them the strategy I attempt to put in place is figure out how the system will be distorted in order to meet those targets and then put in measures that will discourage such distortions. It isn’t perfect but can help prevent some of the worst distortions (and degradation of system-wide performance they cause).

Related: Righter Incentivization – The Defect Black Market – Dr. Deming on the problems with managing with targets (and incentives based on them) – Extrinsic Incentives Kill Creativity

This is an interesting video on Deming and American management (by the BBC in 1992): Prophet Unheard. It includes some nice old footage of Deming in Japan. The importance of respect for people is clear and the video also touches on the idea the danger of relying on data (when you do not understand variation and that many important matters and unmeasurable). The video features many snippets of Dr. Deming speaking and includes Don Peterson, Ford CEO; Clare Crawford Mason, If Japan Can, Why Can’t We producer; and Myron Tribus.

Related: Dr. Deming Webcast on the 5 Deadly Diseases – Red Bead Experiment Webcast – Performance without Appraisal – management webcasts

Part two of the documentary explores the Deming Prize, understanding data and the PDSA cycle:
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The more you pay for your hotel room the more likely they will charge to provide decent WiFi in your room. Whether a company tries to rip you off with exorbitant prices, or lousy service, is just a function of their lack of respect for customers. Obviously it is cheap to provide decent WiFi (as staying at numerous cheap hotels shows – nearly all offer WiFi completely free).

Most expensive hotels show they do not respect their customers. Some actually do rise to the level of a typical budget, and cheaper, hotels and motels so it isn’t all expensive hotels that fail to meet this low standard. The management of those hotels come from the same school of management thought that produces our bankers.

Jeff Bezos captures one difference between poor managers (prevalent in many spreadsheet focused managers) and lean manufacturing managers with the quote: “There are two kinds of companies, those that work to try to charge more and those that work to charge less.”

Thoughts on: Hotel WiFi Should Be a Right, Not a Luxury

Related: Making Life Difficult for Customers – Verizon Provides Lousy Service = Dog Bites Man – Is Poor Service the Industry Standard?

Robert Lloyd, PhD From the IHI Open School’s, presents a nice overview of the PDSA Cycle (plan-do-study-act). The webcast includes an example of using PDSA to improve the discharge process for a hospital.

As I have said many times the keys to success are to turn the PDSA cycle rapidly, predict the results in advance, and analyze the results to continually improve. the Improvement Handbook is an excellent resource.

The IHI Open School is a great resource and exactly the type of thing organizations with a mission to improve performance should be doing. Provide resources online that are easy for people to access and then apply in their organization. See more management webcasts.

Related: Tom Nolan on PDSA – Saving Lives: US Health Care Improvement – 5 Million Lives Campaign

Some things about what people do also have their roots in psychology. Deming had an understanding of psychology as one of 4 areas in his system of management. A huge factor in what people do is based on what they are used to doing – habits. It is often difficult for people to change – not necessarily because they don’t want to, or the alternative is more difficult or they think it is unwise. It is difficult just because they are in the habit of doing something else.

William James explored the power of habits – The Laws of Habit

Often I favor convincing people why certain actions are best and then they can chose to take those actions. But you can also get people in the habit of the actions you seek to encourage and then let the power of habit work. For health, I think this, often is a good strategy.

But it also is done in many ways that culture is established in an organization. You enforce that meetings must have an agenda. Then it becomes a habit. You enforce that decisions are based on data. Then it becomes a habit. You enforce that the work area must be clean. Then it becomes a habit.

Two ways you can notice that things are becoming a habit:

1) when people bring “work” ideas to their personal life – Visual Management and Self-Reliance, Laundry Kaizen.

2) you find yourself in a new environment where the habit is not practiced and you are uncomfortable. You go to a new organization and 5s is not being practiced and you feel uncomfortable. You go to meetings without agendas and they seem to wander and waste time and you can’t imagine why they don’t use an agenda and follow it.

When the ideas have reached the level of habits you have changed. I think with health issues this is the understanding people should have. How do I change things so people adopt good habits. Then you have to find strategies that effectively move people to adopt those habits.

The strategy is based on the idea that adopting the habit can be easier than convincing someone to change with the power of pure logic. But it is also important as habit are adopted to explain the reasoning on why the habits are important. By understanding the role those habits play in successful health, for example, a person knows how to adapt to changing circumstances. And they know what are the key factors that should remain as methods are adapted over time. Explaining why 5s is valuable is important even beyond the habit.

If you get someone to behave in a certain way to get some incentive you rarely get the change in psychology. They don’t adopt a new habit. They do something to get what you offer. They will continue to do it if the incentive is offered. If not, they stop. Does Rewarding Children Backfire?

In response to: In search of metrics

Related: Flaws in Understanding Psychology Lead to Flawed Management – Respect for People, Understanding Psychology – Information Technology and Business Process Support – Punished by Rewards? A Conversation with Alfie Kohn

Henry Mintzberg, wrote an excellent article for the Wall Street Journal today, No More Executive Bonuses!

It is an great article on bad pay systems that let a few top executives (and their hand picked board members) in many companies to loot the treasury of the company. I have written about this problem many times, including: CEOs Plundering Corporate Coffers – Excessive Executive Pay (2005) – Narcissistic Cadre of Senior Executives – The Best Leadership Is Good Management – Another Year of CEO’s Taking Hugely Excessive Pay – More on Obscene CEO Pay – More on Failed Executives

There are executives that don’t act like corrupt dictators looting their country, unfortunately they are less common than those that act like looters. And they all seem to have built cultures that taking respect for people is more important that feeding a few bloated egos. Akio Toyoda’s Message Shows Real Leadership, Tony Hsieh, the Zappo’s CEO – Warren Buffett – Honda has Never had Layoffs and has been Profitable Every Year

The obscene pay is not just a matter of people taking a tens of millions of dollars they don’t deserve. Companies whole management systems are distorted in ways that lead the company to risk all the other stakeholders future for the potential gain of a few senior executives.

Photo of sunset in Mount Rainier National Park by John Hunter

• Cease Mass Inspection for Quality – “Deming point 3 is ‘Cease dependence on inspection to achieve quality.’ Eliminate the need for inspection on a mass basis by building quality into the product in the first place.”
• Lean Management – most organizations will not seriously consider changing the current management thought process without drastic threat (bankruptcy) or numerous successful improvements that give credibility to the new management ideas…
• Using Design of Experiments – While the adoption of DoE is still growing slowly, an increasing number of organizations are using DoE to improve. In the past most companies (in most industries anyway) did not have to compete with others that were using DoE to improve…
• Saving for Retirement – Savings for retirement is difficult mainly because of our trouble planning for the long term, it is not at all a complex problem. The fable of the ant and the grasshopper illustrates this point very simply and it is really that simple…
• Six Sigma and Bad Management, is not Really Six Sigma – if you read the work of Roger Hoerl, Soren Bisgaard, Forrest Breyfogle III… and learn and apply what they talk about as Six Sigma you will definitely have to address bad management practices…
• Deming and Toyota – I believe Toyota applied Deming’s ideas to create a management system and continued to develop that system to create the Toyota Production System)…
• No More Lean Excuses – Within a couple minutes the service person had picked up a Canon A700 and explained how to open the door for batteries. I happen to think the instructions, and design, could be much better but..

Related: Curious Cat Investment Blog – Retirement posts – Deming Companies

Webcast introduction to lean manufacturing by Ron Pereira. This is a great 9 minute introduction to the topic, for those not familiar with lean thinking. It sets the context for lean thinking and provides some history on how lean manufacturing has developed. Get videos on learning about lean from the Gemba Academy.

Related: Oranges, Pebbles, and Sand – Dr. Russell Ackoff Webcast on Systems Thinking – An Introduction to Deming’s Management Ideas by Peter Scholtes – Eric Schmidt on Management at Google – Management Webcasts – Workplace Management by Taiichi Ohno

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

Related: How We Know What We Know – Pragmatism and Management Knowledge – Measuring and Managing Performance in Organizations – Dangers of Forgetting the Proxy Nature of Data

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.

Earlier this year we lost Peter Scholtes, another management leader and friend of Russell Ackoff. Russell wrote the forward to Peter’s Leader’s Handbook.

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

Tony Hsieh, chief executive of Zappos, spoke at a recent y-combinator event (two great organizations we have mentioned before).

Facebook and Zappos’s Different Views on Worker Retention

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.

Related: Paying New Employees to Quit – Zappos and Amazon Sitting in a Tree… – People are Our Most Important Asset – Building a Great Workforce

The Union Japanese Scientists and Engineers (JUSE) has awarded Niigata Diamond Electric (Japan) and Siam White Cement Company (Thailand) the Deming prize.

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

Related: 2008 Deming Prize: Tata Steel – Deming Prize 2007 – 2006 Deming Prize – 2006 Deming Medal presented to Peter R. Scholtes
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The Top Five Managerial Fallacies Concerning Layoff Survivors by David Noer, author of Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations.

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.

Related: posts on layoffs and reducing staff – Honda has Never had Layoffs and has been Profitable Every Year – Creating Jobs

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.

via: Everything You Think about Pay for Performance Could Be Wrong

Related: Righter Incentivization – What’s the Value of a Big Bonus? – Dangers of Extrinsic Motivation – Motivate or Eliminate De-Motivation – Great Marissa Mayer Webcast on Google Innovation

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.

Related: Peter Scholtes’ Life – Curious Cat’s Deming on Management – The Leader’s Handbook – Performance without Appraisal

Unfortunately I cannot actually use the website to watch more than 5 minutes because the site fails to support linux operating system with their solution for longer videos. Google will only allow 10 minute videos without special permission – YouTube has not replied to my request for over 6 months. Update: Twitvid let me upload the whole video.

The W. Edwards Deming Institute has posted Dr. Deming’s 1984 video on the 5 deadly diseases of western management.

• Lack of constancy of purpose
• Emphasis on short term profits – “creative” accounting, focus on quarterly profits
• Annual Performance Appraisals – management by objective, management by fear
• Mobility of management – [see Toyota for a great example of a company that operates on different principles - where the leadership has been with Toyota for decades]
• Running a company on visible figures alone – many important factors are “unknown and unknowable.”

Dr. Deming added 2 diseases to reach his famous 7 deadly diseases: excessive medical care costs and excessive legal damage awards swelled by lawyers working on contingency fees.

Personally I believe all 7 of those diseases are still prevalent and causing damage. I do think some progress has been made on longer term thinking but far too many organizations still are extremely short term focused. And I would add two new deadly diseases of management: excessive executive compensation and an outdated intellectual property system.

Related: Deming Companies – Purpose of an Organization – Continual Improvement – Creating Jobs – New Management Truths Sometimes Started as Heresies

The system is responsible for 90, 92, 94, 97% of problems – W. Edwards Deming. Fix the system, don’t blame the people. When you seek system fixes you approach situations differently than if you search for people to blame.

By the way, I am often asked about the data supporting Deming’s contention that the system was responsible for 97% of the problems. This statement was not based on a set of data but on Dr. Deming’s decades of experience. And he increased the percentage over time – as he learned more.

Roads that are designed to kill

Is a situation killing 40,000 people in the USA a year a health care issue? It sure seems to me it would be. It probably isn’t a disease management issue though (some might try to say bad roads are a disease but I wouldn’t say that). I think this is one, of many examples, that shows that we have a disease and injury management system not a health care system (in addition to illustrating systems thinking, effective root cause analysis, PDSA, innovation, respect for people…).

Related: Find the Root Cause Instead of the Person to Blame – Traffic Congestion and a Non-Solution – Checklists Save Lives – Saving Lives: US Health Care Improvement – The Economic Benefits of Walkable Communities – SWAT Raid Signs of Systemic Failures – System Improvement to Respond to the Dynamics of Crowd Disasters – The Leading Causes of Death

One of the reasons my organizations switched to Ruby on Rails for software development was the great integration with automated testing. We always wanted to have good test coverage on our software applications (which are web applications – some used only inside our organization) but didn’t actually find the time to do so. Since we adopted Ruby we have been doing much better in this regard. It isn’t just the switch to Ruby, of course, but the switch to Ruby coincided with the beginning of many improvements to our software development practices that have continually improved over the last couple of years.

Here is a post on How to build quality software by an agile, Ruby, lean software developer

via: @benjaminm

Related: Combinatorial Testing for Software – Checklists in Software Development – Software Supporting Processes Not the Other Way Around – Software Development and Business Process Support – Top Blogs for Software Development – Hexawise: more coverage, fewer tests (my brother’s company)