Category Archives: Management Articles

How to Accelerate Quality Management Practices

For world quality month, Paul Borawski selected the topic of accelerating quality for discussion by ASQ’s Influential Voices. He specifically asks: what can we do to accelerate the rate of adoption of quality?

As far as what ASQ can do I have the same thought I have had for 10 years. ASQ can make the articles and reports that members contributed available openly over the internet. ASQ currently greatly restricts the sharing and adoption of quality ideas by placing that content behind paywalls.

I do not support restricting access to material on how to spread the adoption of quality. That is a mistake. It has been a mistake for over a decade and should have been changed long ago. Positive action should be taken to demonstrate the words about promoting the adoption of quality methods are more than just empty words. I have discussed my thoughts on associations and journals failing to adapt to the internet occasionally: ASQ has a long way to go in promoting quality, Science Journal Publishers Stay Stupid, Science Commons: Making Scientific Research Re-useful.

What can quality management professionals do?

I certainly do not believe people should be publishing good quality management content to publishers who hide the content behind paywalls. I would encourage those publishing quality management content to do it in an open manner and not using publications that are closed (paywall, registration wall or any form of a wall restriction the sharing of ideas). Tell the closed publishers you will publish with them once they demonstrate their commitment to open access.

Also continuing to learn and apply the best management ideas are the keys for making a difference. People like Dr. Deming and Dr. Ackoff continued to learn well into their 80s. Their thirst for knowledge and ways to improve drove continually improvement. Following this example will be a great step. And at the same time continue to apply these ideas. There are often lots of challenges to actually getting our organizations to improve. What is needed is more leaders to push for continual improvement.

Organizations often have lots of innertia behind outdated practices. Encouraging the adoption of quality management practices often requires a great deal of effort to get the defenders of the status quo to allow improvement to take place. It takes a great deal of perseverance. The biggest barrier to improvement is innertia.

Related: Increase Your Circle of InfluenceLearn Lean by Doing LeanGrowing the Adoption of Management Improvement Ideas in Your Organization

The Theory of Knowledge in Deming’s Management System: How Do We Know What We Know?

I contributed an article to the Process Excellence Network’s Deming Files that was published yesterday: How Do We Know What We Know?. I took on the task of explaining the theory of knowledge, as one article in a four part series looking at the four components of Dr. Deming’s System of Profound Knowledge.

The other 3 articles are:

I hope you enjoy all 4 articles. Every two weeks a new article is published by the Deming Files exploring Dr. Deming’s ideas on management. The articles provide a nice dose of views on applying Deming’s ideas today. The network also has series on Drucker ideas and articles on many other management topics (six sigma, lean, etc.).

Related: Deming on Management2009 post: How do we Know What we KnowData Doesn’t Lie, We Can Draw Incorrect Conclusions from DataCorrelation is Not Causation

Finding Great Management Articles, Posts and Resources

Reddit is a web site that ranks web pages by user votes. The site uses an algorithm that has a very large timeliness factor. So top ranked links move down the list fairly quickly. This results in a nice site to look at to find links others have found interesting recently.

I created a management sub-reddit (a distinct topic-focused-area on the management improvement topics covered in this blog) in 2008. The sub-reddit seems to be about ready to reach a critical mass, so I am making a push to get those interested in management and specifically Deming, lean management, agile software development, six sigma and the things I normally write about on this blog to participate.

If you sign up you can not only vote on the links displayed but add new links (that then will be voted on by others). I think Reddit does a very good job of using social aspects of the internet to provide recommendations that are worthwhile (I have used the site for years).

The management subreddit depends on the community of users to voice their opinions. And I have an interest in having the community form around the management ideas I value (see my other blog posts for what that is). So I encourage you to give it a try and vote on links you enjoy and add new articles, web sites, blog posts… The benefit of this subreddit will grow as we grow the number of participants and if it develops a shared culture of value.

Related: Creating the Management Sub-Reddit (2008)John Hunter’s social site links (Reddit, Kiva, LinkedIn)Dell, Reddit and Customer Focus – Curious Cat Management Improvement LibraryManagement Improvement Blog Carnival

More Reasons to Avoid Layoffs

Lay Off the Layoffs by Jeffrey Pfeffer

As its former head of human resources once told me: “If people are your most important assets, why would you get rid of them?”

In fact, there is a growing body of academic research suggesting that firms incur big costs when they cut workers. Some of these costs are obvious, such as the direct costs of severance and outplacement, and some are intuitive, such as the toll on morale and productivity as anxiety (“Will I be next?”) infects remaining workers.

research paints a fairly consistent picture: layoffs don’t work. And for good reason. In Responsible Restructuring, University of Colorado professor Wayne Cascio lists the direct and indirect costs of layoffs: severance pay; paying out accrued vacation and sick pay; outplacement costs; higher unemployment-insurance taxes; the cost of rehiring employees when business improves; low morale and risk-averse survivors; potential lawsuits, sabotage, or even workplace violence from aggrieved employees or former employees; loss of institutional memory and knowledge; diminished trust in management; and reduced productivity.

As bad as the effects of layoffs are on companies and the economy, perhaps the biggest damage is done to the people themselves. Here the consequences are, not surprisingly, devastating. Layoffs literally kill people. In the United States, when you lose your job, you lose your health insurance, unless you can afford to temporarily maintain it under the pricey COBRA provisions. Studies consistently show a connection between not having health insurance and individual mortality rates.

Related: Five Managerial Fallacies Concerning Layoffs – Honda has Never had Layoffs and has been Profitable Every YearThe Trouble with Performance Reviews by Jeffrey PfefferCutting Hours Instead of PeopleFiring Workers Isn’t Fixing Problems

The Trouble with Incentives: They Work

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

I have wondered whether the escalation of pay, perks and parachutes for CEOs actually tends to attract individuals who are primarily extrinsically motivated, rather than individuals who are seriously interested in creating value. Several recent examples appear to be consistent with this view.

An important issue with regard to incentives is possible effects on teamwork and cooperation. If the incentive system is set up as a zero-sum game, then for me to win, you have to lose. This is a very effective way to ensure that there is little or no teamwork or cooperation. Interactions between individuals and groups are likely to become negative, to the detriment of the organization as a whole. When incentives are based on narrow functional objectives, achieving those objectives may guarantee that the system as a whole will be suboptimized.

the Mayo Clinic, “which is among the highest-quality, lowest-cost healthcare systems in the country.” He reports that “decades ago Mayo recognized that the first thing it needed to do was eliminate the financial barriers. It pooled all the money the doctors and the hospital system received and began paying everyone a salary, so that the doctors’ goal in patient care couldn’t be increasing their income. Mayo promoted leaders who focused first on what was best for patients, and then on how to make this financially possible.” He goes on to say, “the core tenet of the Mayo Clinic is ‘The needs of the patient come first’ – not the convenience of the doctors, not their revenues. The doctors and nurses, and even the janitors, sat in meetings almost weekly, working on ideas to make the service and the care better, not to get more money out of patients.”

Could it be that physicians, insurers, drug companies, and patients are simply acting rational to the system? The players are incentivized to behave as they do. The system delivers what it is designed to deliver.

She sums it up very well:

There may be cases in which incentives work only as intended, but I suspect they are relatively rare. The trouble is that we are usually dealing with complex systems (people and organizations) that may behave not at all like our myths would predict. The best policy may be to avoid incentives altogether and focus instead on creating systems in which intrinsic motivation, cooperation, ethical behavior, trust, creativity, and joy in work can flourish.

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 IncentivizationThe Defect Black MarketDr. Deming on the problems with managing with targets (and incentives based on them)Extrinsic Incentives Kill Creativity

Finding Savings with Six Sigma

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

Unlike in the 1990s, when such executives as General Electric’s Jack Welch embraced Six Sigma with missionary zeal, consultants say today’s converts generally are looking for a fast way to save money.

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.

Still, Six Sigma is finding new life, especially in retail. Target (TGT) claims more than $100 million in savings over the past six years from the program. Mike Fisher, Best Buy’s (BBY) senior director of Lean Six Sigma, says projects like streamlining appliance installation have helped the company save up to $20 million in some cases. “Without a doubt, it put us in a better position to muscle through the recession by getting all of those inefficiencies out,” says Fisher.

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.

Related: Quality and InnovationSix Sigma Much More than Common SenseProcess Improvement and Innovation

The Best Leadership Is Good Management

The Best Leadership Is Good Management by Henry Mintzberg

Let me suggest that you should, because what we’ve been calling a financial crisis is actually one of management. Corporate America has had too much of fancy leadership disconnected from plain old management.

How did this happen? It became fashionable some years ago to separate “leaders” from “managers”—you know, distinguishing those who “do the right things” from those who “do things right.” It sounds good. But think about how this separation works in practice. U.S. businesses now have too many leaders who are detached from the messy process of managing. So they don’t know what’s going on.

We’re overled and undermanaged. As someone who teaches, writes, and advises about management, I hear stories about this every day: about CEOs who don’t manage so much as deem—pronouncing performance targets, for instance, that are supposed to be met by whoever is doing the real managing.

Instead of distinguishing leaders from managers, we should encourage all managers to be leaders. And we should define “leadership” as management practiced well.

Very well said. I have never been comfortable with the attempts to separate leadership from managing. Normally the tone is that leadership is what matters and managing is just then carrying out what leaders have determined and allowed.

I understand why we focus some areas of management as in the area of leadership: it is hard to understand the whole all at once. We can make sense of things more easily by breaking them down (analysis) and speaking of aspects as within the realm of leadership is part of this. We can discuss certain traits as leadership-related. And we can discuss the difference between leadership and power based on position: so leaders within an organization separate from those with authority shown on the organizational chart. But I do not see management and leadership as separate things.

Books by Henry Mintzberg: Managing (2009)Managers Not MBAsThe Rise and Fall of Strategic Planning

Related: Akio Toyoda’s Message Shows Real LeadershipSeven Leadership Leverage PointsIf Your Staff Doesn’t Bring You Problems That is a Bad SignManagement Improvement Leaders
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The Trouble with Performance Reviews by Jeffrey Pfeffer

The Trouble with Performance Reviews by Jeffrey Pfeffer

Managers don’t like giving appraisals, and employees don’t like getting them. Perhaps they’re not liked because both parties suspect what the evidence has proved for decades: Traditional performance appraisals don’t work. But as my colleague and fellow Stanford professor Bob Sutton and I pointed out in our book, Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, belief and conventional wisdom often trump the facts. And when it comes to performance evaluations, companies ranging from HR consulting firms to providers of software that automate the process have a big stake in their continued use.

The most basic problem is that performance appraisals often don’t accurately assess performance. More than two decades ago research done by professor David Schoorman showed that whether or not the supervisor had hired or inherited her employees was a better predictor of evaluation results than actual job performance.

Possibly the biggest issue, however, is that performance appraisals focus managers’ attention on precisely the wrong thing: individual people. As W. Edwards Deming, the father of the quality movement, taught a long time ago, company performance often results more from variations in systems than from the individuals doing the work. One of the reasons Toyota Motor has been so successful for decades—even as leaders have come and gone and the automobile market has changed—is that the fundamentals of the Toyota management system, which emphasizes quality, continuous improvement, and standardized tasks, provide the advantage. By focusing on the presumed deficiencies or strengths of people, individual performance reviews divert attention from the important task of eliminating the systemic causes, such as inferior technology, behind poor performance.

Another good article pointing out the harm of annual performance reviews. As I have said many times managers need to do better. See chapter 9 of the Leader’s Handbook and previous posts: Don’t Use Performance Appraisals – – Deming and Performance AppraisalFind the Root Cause Instead of the Person to BlamePerformance Without Appraisal

Pixar Movie Management Magic

image of Walle - PixarImage of Wall-e, from the Pixar film of the same name.

Pixar’s secrets on display in ‘Up’

“I think it comes down to two basic things: one is that we’re run by artists. … John Lasseter is a film director, as opposed to being from a business school or whatever. He has that side of him as well, but he’s always approaching these things as the same way we are.

“Second, we have some pretty great people that they’ve managed to collect here. This is our 10th film, and every film has just gotten better and better, whether that be in animation or special effects or lighting. And it just all comes together to make for some really fantastic stuff.”

“One of the things that I really love about [Pixar] is that no matter what you do, if you’re a production assistant or a producer or a marketing executive or running the kitchen, everyone here thinks like filmmakers,”

Like, I didn’t work on ‘WALL-E,’ but I feel like it’s mine, you know? And I want that to look great and be great. And then I want that bar to be higher and for us to be challenged.”

Pixar has done a great job of creating the right climate for the business they are in. They make movies and have been very consistently successful. Many of those strategies are useful concepts for everyone. Create a climate that promotes pride in work. Create a climate where everyone sees how they contribute to the end product. Hire people you trust and let them do their jobs. Seek continual improvement. Respect people. Customer Focus. Innovation (for example: Pixar Is Inventing New Math).

By the way, Steve Jobs, Apple co-founder, paid $5 million for Pixar and sold his share for $3,700 million of Disney stock (he is the largest shareholder of Disney – approximately 7%). Pixar Movies include: Toy Story, Monsters Inc. and The Incredibles.

Related: Tilting at Ludicrous CEO Pay 2008 Better and DifferentInnovation Examples

Building a Great Workforce

How P&G Finds and Keeps a Prized Workforce by Roger O. Crockett

“We actually recruit for values,” says Chief Operating Officer Robert McDonald. “If you are not inspired to improve lives, this isn’t the company you want to work for.”

The P&G strategy starts on college campuses. The Cincinnati company dispatches line managers rather than human resource staffers to do much of its recruiting.

For the few who get hired, their work life becomes a career-long development process. At every level, P&G has a different “college” to train individuals, and every department has its own “university.” The general manager’s college, which McDonald leads, holds a week-long school term once a year when there are a handful of newly promoted managers. Further training—there are nearly 50 courses—helps managers with technical writing or financial analysis.

Career education takes place outside the classroom, too. P&G pushes every general manager to log at least one foreign assignment of three to five years. Even high-ranking employees visit the homes of consumers to watch how they cook, clean, and generally live, in a practice dubbed “live it, work it.” Managers also visit retail stores, occasionally even scanning and bagging items at checkout lanes, to learn more about customers.

Going to visit the gemba, the actual place is incredibly important, and far too often ignored by managers today.

The emphasis on life long learning (in practice, not just words) is also very wise. In my experience far to little emphasis is placed on continual improvement of what many companies will say is their most important asset: their people. If you don’t invest in education of your staff that is going to harm your long term success. The investment P&G makes shows a respect for people.

Related: Jeff Bezos Spends a Week Working in Amazon’s Kentucky Distribution CenterWorkplace Management by Taiichi OhnoRespect for People, Understanding PsychologyOhno Circle
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