Category Archives: Science

Statistical Engineering Links Statistical Thinking, Methods and Tools

In Closing the Gap Roger W. Hoerl and Ronald D. Snee lay out a sensible case for focusing on statistical engineering.

We’re not suggesting that society no longer needs research in new statistical techniques for improvement; it does. The balance needed at this time, however, is perhaps 80% for statistics as an engineering discipline and 20% for statistics as a pure science.

True, though I would put the balance more like 95% engineering, 5% science.

There is a good discussion on LinkedIn:

Davis Balestracci: Unfortunately, we snubbed our noses at the Six Sigma movement…and got our lunch eaten. Ron Snee has been developing this message for the last 20 years (I developed it in four years’ worth of monthly columns for Quality Digest from 2005-2008). BUT…as long as people have a computer, color printer, and a package that does trend lines, academic arguments won’t “convert” anybody.

Recently, we’ve lost our way and evolved into developing “better jackhammers to drive tacks”…and pining for the “good ol’ days” when people listened to us (which they were forced to do because they didn’t have computers, and statistical packages were clunky). Folks, we’d better watch it…or we’re moribund

Was there really a good old days when business listened to statisticians? Of course occasionally they did, but “good old days”? Here is a report from 1986 the theme of which seems to me to be basically how to get statisticians listened to by the people that make the important decisions: The Next 25 Years in Statistics, by Bill Hunter and William Hill. Maybe I do the report a disservice with my understanding of the basic message, but it seems to me to be how to make sure the important contributions of applied statisticians actually get applied in organizations. And it discusses how statisticians need to take action to drive adoption of the ideas because currently (1986) they are too marginalized (not listened to when they should be contributing) in most organizations.
Continue reading

Incentivizing Behavior Doesn’t Improve Results

In the webcast Dan Pink’s shares research results exploring human motivation and ideas on how to manage organization given the scientific research on motivation.

  • “once a task called for even rudimentary cognitive skill a larger reward led to poorer performance”
  • “Pay people enough to take the issue of money off the table. Pay people enough so they are not thinking about money they are thinking about the work.”
  • “3 factors lead to better performance: autonomy, mastery and purpose” [not additional cash rewards]
  • Open source software is created by highly skilled people contributing their time to collaborative projects that are then given away (such as Linux, Ruby, Apache). For large efforts their are often people paid by companies to contribute to the open source software but many people contribute 20-30, and more hours a week for free to such efforts, why? “Challenge, mastery and making a contribution”
  • “When the profit motive becomes unmoored from the purpose motive, bad thing happen. Bad things ethically sometimes, but also bad things like not good stuff, like crappy products, like lame services, like uninspiring places to work… People don’t do great things”
  • “If we start treating people like people… get past this ideology of idea of carrots and sticks and look at the science we can actually build organization and work life that make us better off, but I also think they have the promise to make our world a just a little bit better.”

The ideas presented emphasize respect for people, an understanding of psychology and validating beliefs with data. All of it fits very well with Deming’s ideas on management and the idea I try to explore in this blog. It isn’t easy to adjust your ideas. But the evidence continues to pile up against some outdated management practices. And good managers have to learn and adapt their practices to what is actually effective.

Related: Extrinsic Incentives Kill CreativityThe Trouble with Incentives: They WorkRighter IncentivizationIndividual Bonuses Are Bad Management

Video Overview of the PDSA Cycle

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 PDSASaving Lives: US Health Care Improvement5 Million Lives Campaign

Extrinsic Incentives Kill Creativity

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 IncentivizationWhat’s the Value of a Big Bonus?Dangers of Extrinsic MotivationMotivate or Eliminate De-MotivationGreat Marissa Mayer Webcast on Google Innovation

An Introduction to Deming’s Management Ideas by Peter Scholtes (webcast)

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’ LifeCurious Cat’s Deming on ManagementThe Leader’s HandbookPerformance without Appraisal

YouTube Uses Multivariate Experiment To Improve Sign-ups 15%

Google does a great job of using statistical and engineering principles to improve. It is amazing how slow we are to adopt new ideas but because we are it provides big advantages to companies like Google that use concepts like design of experiments, experimenting quickly and often… while others don’t. Look Inside a 1,024 Recipe Multivariate Experiment

A few weeks ago, we ran one of the largest multivariate experiments ever: a 1,024 recipe experiment on 100% of our US-English homepage. Utilizing Google Website Optimizer, we made small changes to three sections on our homepage (see below), with the goal of increasing the number of people who signed up for an account. The results were impressive: the new page performed 15.7% better than the original, resulting in thousands more sign-ups and personalized views to the homepage every day.

While we could have hypothesized which elements result in greater conversions (for example, the color red is more eye-catching), multivariate testing reveals and proves the combinatorial impact of different configurations. Running tests like this also help guide our design process: instead of relying on our own ideas and intuition, you have a big part in steering us in the right direction. In fact, we plan on incorporating many of these elements in future evolutions of our homepage.

via: @hexawiseMy brother has created a software application to provide much better test coverage with far fewer tests using the same factorial designed experiments ideas my father worked with decades ago (and yet still far to few people use).

Related: Combinatorial Testing for SoftwareStatistics for ExperimentersGoogle’s Website Optimizer allows for multivariate testing of your website.Using Design of Experiments

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
Continue reading

Toyota Develops Thought-controlled Wheelchair

Toyota has developed a thought-controlled wheelchair (along with Japanese government research institute, RIKEN, and Genesis Research Institute). Honda has also developed a system that allows a person to control a robot through thoughts. Both companies continue to invest in innovation and science and engineering. The story of a bad economy and bad sales for a year or two is what you read in most newspapers. In my opinion the more important story is why Toyota and Honda will be dominant companies 20 years from now. And that story is based on their superior management and focus on long term success instead of short term quarterly results.

Yes Toyota can improve their performance, based on the last few years. Does management understand what they need to do? I think so. Does management understand that the system needs to be improved rather than the numbers on the spreadsheets of various managers have to be made better? I think so. Do I think most companies today, with bad results, understand the difference between bad numbers on spreadsheets that are used to judge various managers and a system that needs to be improved? No.

I do not believe the bad earnings for the last year for Toyota are indicative of a failed system. The results do show a weakness in the Toyota system that allowed them to perform this poorly during this credit crisis. The risk to Toyota’s future is that they become too focused on short term results, mistakenly thinking the problem to be fixed in the bad quarterly results recently. They need to focus on improving the system for the long term. And the recent experience likely shows some areas that need to be improved. But in no way do the fundamental tenants of the management system need to be changed. For many other companies today, changing fundamental aspects of their management is what is needed.

Related: Toyota as HomebuilderHonda’s Robolegs Help People WalkHonda has Never had Layoffs and has been Profitable Every YearToyota’s Partner RobotNUMMI, and GM’s Failure to Manage EffectivelyToyota iUnitInvest in New Management Methods Not a Failing Company by William Hunter, 1986
Continue reading

Dr. Russell Ackoff Webcast on Systems Thinking

Dr. Ackoff is one of two management thinkers that any manager, that is serious about improving management results in their organization, should study (the other is Dr. Deming). There are plenty of others that are also great resources. From part 2 of his talk: “Why-questions, about objects called systems, cannot be answered by the use of analysis… The product of explanation is understanding… The product of analysis is how things work, never why they work the way they do. Explanations always lie outside the system, never inside it.”

Synthesis (thinking about systems) involves 3 steps: 1) what is this system of which this is a part of; 2) understanding the behavior of the containing whole; 3) identify the role of function of the system in question within the containing system. Every system is defined by its role in the larger system.

Related: posts on Russ Ackoff’s ideasAckoff’s New Book: Management f-LawsWrite Down PredictionsKnowledge Management – Management is Prediction

How to Create a Control Chart for Seasonal or Trending Data

Lynda Finn, President of Statistical Insight, has written an article on how to create a control chart for seasonal or trending data (where there is an underlying structural variation in the data). Essentially you need to account for the structural variation to create the control limits for the control chart. She also provides a Minitab project file. Both are available for download from the Curious Cat Management Improvement Library.

Related: Control Charts in Health CareCommon Cause VariationManaging with Control ChartsMeasurement and Data CollectionFourth Generation Management