Category Archives: Systems thinking

Building a Great Software Development Team

twitter screen shot of the quoted conversation

Elliot: I worked with some of the best programmers I’ve ever known at the tiny, obscure ASEE

Adam Solove: Why do you think that happened? They hired for passion, rather than experience?

If I had to pick one thing, passion would likely be it but really it is a complex assortment of things. Passion for the right things, based on what we aimed to be, mattered a great deal. That took the form of being passionate about the user experience, being passionate about good software development practices, being passionate about good software itself, being passionate about treating each other with respect, being passionate about learning and improving.

I think there were several other important factors, such as: the skill to turn a passion for good software into actual good software. This required intelligence, interest and knowledge about software development but didn’t require specific experience (computer science degree, 2 years of Ruby on Rails development, certification or any such thing). Hiring based on experience is a big mistake. In my opinion hiring based on capability and potential (which is based partially on experience) is wise.

Another factor is that we had people (those first few hires were critical) that were really knowledgable about programing good software and that became a self reinforcing process. The gaps one person’s ability and knowledge could be filled by someone else helping them understand and get better.

The expectation was that we found great solutions. If we didn’t we kept looking and asked each other for help (another factor in creating a great team). We didn’t just accept that we were confident the solution wasn’t very good but couldn’t find any better options so I guess this is the best we can do.

We were interested enough in good results that we would push for better options instead of just accepting something that was kind of ok. This shouldn’t be such a big deal; but in practice it is huge. So many places just end up avoiding conflict to the extent that it is a huge detriment to results.

Without confidence, honest debate about ideas is suppressed as people are constantly taking things personally instead of trying to find the best ideas (and if doing so means my idea is criticized that is ok). Our group was great at this. It is something I find it a bit silly to say a workplace was “great” at but in most places I find the fear of someone being concerned stifles discussion to an unbelievable extent.

This is also one of many areas where the culture within the team was self reinforcing. As new people came on they understood this practice. They saw it in practice. They could see it was about finding good ideas and if their idea was attacked they didn’t take it nearly as personally as most people do in most places. I sought to understand if people we looked at hiring would be comfortable in such an environment.

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A Good Management System is Robust and Continually Improving

imagine various people working within it, somehow swapping out gears and cogs without the clock stopping or slowing down even a little.

This is a fairly good quote on a good management system. Some people might not like the mechanistic model – comparing an organization to a clock, and I agree that isn’t the right model, but even so it is a good quote.

The quote, from a story about the San Antonio Spurs captures what should happen with a good management system. Things just keep running well as inevitable changes take place (and keep getting better in the case of a management system).

A good management system doesn’t rely on heroic efforts to save the day. The organization is designed to success. It is robust. It will succeed with all the variation thrown at it by the outside world. A good management system takes advantage of the contributions people offer, but it is not perform poorly when others are relied on.

A well run organization has graceful degradation (when one component fails or one person is missing the performance doesn’t suffer, bad results are avoided).

With software for example, a decently created web sites may use javascript to enhance the user experience but if javascript is unavailable the site works fine (just missing some neat features that are nice but don’t prevent users from getting what they need). Poorly designed software has critical dependencies on conditions that cannot be guaranteed to be present for end users and the software just fails to work when those conditions are not met. Ungraceful degradation is too common in software. It is also too common in our management systems.

An organization succeeds because of the efforts of many great people. But the management system has to be created for an organization to prosper as what we all know will happen, happens: people will leave and need to be replaced. And the people that stay will need to adjust to new conditions inside the organization and in response to external forces. A good management system is constantly improving performance, innovating, increasing the robustness of systems and increasing the capability of people.

Related: Bad Weather is Part of the Transportation SystemHow to Sustain Long Term Enterprise ExcellencePerformance dependent on specific individuals is not robust and not capable of continuous high quality performanceEuropean Blackout: Human Error-Not

Your Purpose Must Be About You

Guest post by Jurgen Appelo

I’m a writer. It’s the one thing that I intend to do for the rest of my life. That means, when I focus on writing, I cannot focus on knitting. Somebody else will have to do the knitting, so I can focus on the writing. And maybe later, I can trade my wonderful book for someone’s beautiful sweater. This concept applies to all other professionals too. Everyone is entangled in a web of economic dependencies, and therefore, the purpose you choose for yourself should somehow generate value for the others around you. Or else nobody will give you a knitted sweater.

This all makes perfect sense to complexity scientists, who have known for a while that complex adaptive systems find a global optimum through local optimizations and interdependencies. (At Home in the Universe by Stuart Kauffman) The parts in a complex system all try to optimize performance for themselves, but their efforts depend on the dependencies imposed on them by the parts around them. With a mix of competition and collaboration, the parts interact with each other without any focus on a global purpose. Nevertheless, the end result is often an optimized system. Biologists call it an ecosystem. Economists call it an economy. I call it common sense.

Putting the “Why” in Your Mission Statement

Most management scholars and experts have ignored the insights from the complexity sciences (or are unaware of them) and some have suggested goals for teams, and purposes for businesses, that are too narrow. There are many corporate mission statements in the world expressing ideas such as, “Make money for shareholders”, “Put customers first”, and “Achieve superior financial results” (The Leader’s Guide to Radical Management by Stephen Denning). In each of these cases, the purpose of the organization is (too) narrowly defined as providing value to one type of client or stakeholder.

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More Evidence of the Damage Done by Kleptocrat CEO Pay

I have been writing about the problems of overpaid executives that has lately become so bad that verbiage understand the nature of the problem. Today I see many CEO’s are acting as kleptocrats do – taking food out of others mouths to build their castles. The damage done to everyone else involved is of no concern. Both groups love bankers that flood them with cash for new and larger castles at the expense of the futures of their company (or country).

This paper does a very good job of providing more evidence of the damage done by these kleptocrat CEOs and their apologists.

Are Top Executives Paid Enough? An Evidence-Based Review by Philippe Jacquart and J. Scott Armstrong

Our review of the evidence found that the notion that higher pay leads to the selection of better executives is undermined by the prevalence of poor recruiting methods. Moreover, higher pay fails to promote better performance. Instead, it undermines the intrinsic motivation of executives, inhibits their learning, leads them to ignore other stakeholders, and discourages them from considering the long-term effects of their decisions on stakeholders. Relating incentive payments to executives’ actions in an effective manner is not possible. Incentives also encourage unethical behaviour. Organizations would benefit from using validated methods to hire top executives, reducing compensation, eliminating incentive plans, and strengthening stockholder governance related to the hiring and compensation of executives.

Many of the problems with the poor thinking around executive pay stem from the failure to grasp ideas Dr. Deming wrote about decades ago.

Executives are often evaluated on the basis of the success or failure of the business units for which they are responsible. In practice, many internal and external factors influence outcomes for firms, and assessing the role played by a given executive is not possible. For example, should a manager get credit for a firm’s success when the economy is booming or blame for the firm’s losses during a recession? When answering such questions, evaluators are biased toward ignoring contextual factors and overly attributing outcomes to leaders. This bias was illustrated in a laboratory experiment in which groups of participants had to solve a coordination task. In the experiment, group size varied, and participants could perceive that the task was harder when the group was larger. Despite this, participants credited group leaders for the success of small groups and blamed them for the failure of large groups (Weber et al. 2001).

The quote from their paper show a failure to understand variation (attributing variation to those near the variation at the time – good marks when the variation is good, bad marks when it is bad). And a failure to understand the organization as a system (the results of any subsystem are greatly influenced by the whole system and the conditions outside the system (the economy, the macro-economic conditions for the industry…). And a failure to understand the theory of knowledge: people should know our brains leap to causation explanations when the evidence doesn’t support it. Then confirmation bias and psychology lead us to accept the data that supports our biases.

Nonexperimental studies also find that increases in CEO compensation occur following increases in firm performance that result from factors beyond the CEO’s control—CEOs are paid for being lucky. For example, CEOs in the oil industry were compensated for increased profits resulting from fluctuations in the price of crude oil—a factor beyond their control (Bertrand and Mullainathan 2001).

You see this just looking at the money heaped onto executives (in addition to the already huge payments taken) in industries whenever those industries (not individual companies, the entire industry) have macro-economic windfalls.

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Poor Results Should be Addressed by Improving the System Not Blaming Individuals

My response to: Where is the Deming study that asserts most errors are in organization or process?

There is no such study, it is based on Dr. Deming’s experience as I discuss in 94% Belongs to the System (improve the system, don’t blame the people in the system).

“I should estimate that in my experience most troubles and most possibilities for improvement add up to the proportions something like this: 94% belongs to the system (responsibility of management), 6% special.”

Page 315 of Out of the Crisis by W. Edwards Deming

Getting hung up on the figure 94% is a mistake. His point was that you improve performance going forward by improving the system not blaming people. His two books provide background and the thought process involved behind why we are failing to manage better. Changing the people, while leaving the system in place, most often doesn’t help.

Variation does confuse people sometimes. The same mistake as say yelling at someone any time results are really bad. Most likely results will get better. Not because yelling helps but essentially regression to the mean. So you can move people out after really bad results and things get better. Of course, most of the time they would have gotten better if you left the people there (and did nothing or yelled).

Even when the person did totally mess up, why did the system allow that? Why did the system put that person in a place where they were not qualified? Answering and fixing these types of questions would help improve the system and the results going forward.

Yes, occasionally the answer might be that Joel was hired sensibly, managed and coached sensibly but he just became a complete jerk and won’t respond to coaching and this is only his fault. But normally that won’t be the case, even when the person seems nearly totally to blame (and that isn’t even a very common situation) normally there are obvious weaknesses in the system that put them in the place to fail and will likely put anyone else in the same place in the future.

Related: Firing Workers Isn’t Fixing ProblemsPeople: Team Members or CostsCreate a System That Lets People Take Pride in Their WorkFind the Root Cause Instead of the Person to Blame

Bad Weather is Part of the Transportation System

The job of managers is to create a robust system that delivers value to customers. A system that fails constantly (fails during the continual variation the system faces) is a failed system. Bad weather is part of the variation airlines face. Any management system has to cope with the variation that it faces. The management system must be designed and managed so that the organization successfully delivers value to customers under the conditions the organization will face.

The air travel system in the USA is a disgrace for so many reasons it is hard to catalogue them all. One, of many, is how fragile the system is; causing massive (nation-wide) customer harm multiple times a year due to weather. Weather is sometimes bad. If your organization fails when there is bad weather, fix that problem (make your system robust in the face of bad weather), because you are not going to be able to fix the weather to let your un-robust system be effective as it is.

Instead airlines only response seems to be to get their friends in government to approve anti-competitive mergers to eliminate competition and allow failed organizations to become even larger and harm even more people. Airlines should design robust systems that work in the environment they will face (which they don’t do now).

Their planes don’t fall out the sky when they face bad weather. The engineers behind designing planes have made them very robust. Pilots have been trained to handle variation they will face. And yes, the system has been designed with adjustments to avoid flying into conditions that are risky.

The safety of the air transportation system is very good. The management of airlines in most every other aspect is pitiful, and has been for decades.

The managers running the airlines have done amazingly bad job of creating robust organizations capable of delivering given the variation they know they will face (weather, mechanical problems, IT problems, etc.) for decades. Poor management is the cause of these failures that result in harm to customers. Weather is not the cause. Poor management, over decades, resulting in incredible fragile systems that constantly punish customers is the responsibility of the airlines. And they have done an incredibly bad job at creating a robust system to deliver value to customers.

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How to Sustain Long Term Enterprise Excellence

This month Paul Borawski asked ASQ’s Influential Voices to explore sustaining excellence for the long term.

There are several keys to pulling sustained long term excellence. Unfortunately, experience shows that it is much easier to explain what is needed than to build a management system that delivers these practices over the long term. The forces pulling an organization off target often lead organization astray.

Each of these concepts have great deal more behind them than one post can explain. I provide some direct links below, and from those there are many more links to more valuable information on the topics. I also believe my book provides valuable additional material on the subject – Management Matters: Building Enterprise Capability. Sustained long term excellence is the focus of the book. A system that consistently provides excellent performance is a result of building enterprise capability over the long term.

Related: Distorting the System, Distorting the Data or Improving the SystemSustaining and Growing the Adoption of Enterprise Excellence Ideas in Your OrganizationManaging to Test Result Instead of Customer ValueGood Process Improvement PracticesChange is not ImprovementManaging Our Way to Economic Success Two Untapped Resources by William G. HunterSoftware Process and Measurement Podcast With John HunterCustomer Focus by Everyone

What is the Explanation Going to be if This Attempt Fails?

Occasionally during my career I have been surprised by new insights. One of the things I found remarkable was how quickly I thought up a new explanation for what could have caused a problem when the previously expressed explanation was proven wrong. After awhile I stopped finding it remarkable and found it remarkable how long it took me to figure out that this happened.

I discovered this as I programmed software applications. You constantly have code fail to run as you expect and so get plenty of instances to learn the behavior I described above. While I probably added to my opportunities to learn by being a less than stellar coder I also learned that even stellar coders constantly have to iterate through the process of creating code and seeing if it works, figuring out why it didn’t and trying again.

The remarkable thing is how easily I could come up with an new explanation. Often nearly immediately upon what I expected to work failing to do so. And one of the wonderful things about software code is often you can then make the change in 10 minutes and a few minutes later see if it worked (I am guessing my brain kept puzzling over the ideas involved and was ready with a new idea when I was surprised by failure).

When I struggled a bit to find an initial explanation I found myself thinking, “this has to be it” often because of two self reinforcing factors.

First, I couldn’t think of anything else that would explain it. Sometimes you will think right away of 4 possible issues that could cause this problem. But, when I struggled to find any and then finally came up with an idea it feels like if there was another possibility I should have thought of it while struggling to figure out what I finally settled on.

Second, the idea often seems to explain exactly what happened, and it often feels like “of course it didn’t work, what was I thinking I need to do x.” This often turns out to be true, doing x solves the problem and you move on. But a remarkable percentage of the time, say even just 10%, it doesn’t. And then I would find myself almost immediately thinking, of course I need to do y. Even when 10 seconds ago I was convinced there was no other possibility.

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Leadership and Management

I don’t think the attempts to separate leadership and management are useful. I read plenty of things that are variations on Peter Drucker’s:

“Management is doing things right; leadership is doing the right things.”

A manager that is not concerned about doing the right things is a lousy manager. And a leader that doesn’t care about doing things right is a lousy leader.

Another theme of this contrasting type quote says some version of:

“Managers care about efficiency and leaders care about effectiveness”

A manager who doesn’t strive to be effective is also a lousy manager. It is also odd to suppose the detached leader (the type that lets the manager deal with the mundane while they dream), one that doesn’t concern themselves with customer focus, value chains, going to the gemba really has a clue about effectiveness. The idea seems mainly to view a manager is a cog looking at some tiny process and making it efficient without understanding the organization as a system or value chains or customer focus.

I think, the main problem is all of the attempts to contrast leaders and managers. Much of the time people are saying managers don’t do things they certainly should be doing.

The desire to express how leadership traits can be used by those without organizational authority are useful. Discussion of how certain traits can be seen as within the domain of leadership I suppose may be useful (it can help our minds see how various traits and practices combine to help get results – and we can categorize these under “leadership”).

Leaders that are primarily “big thinkers” and motivators without a clue about how to actually do the things they advocate (the model of “managers” deal with the implementation with blinders to the system while “leaders” are “above the fray”) is not useful in my opinion. It does note a somewhat common practice (in organizations today) but not one that is wise. Separating leadership from the gemba is not wise. Separating leadership from a deep understanding of customers is not wise. Separating leadership from how the organization actually works is not wise.

Plenty of others seem to disagree with my opinion though, there are many articles, blog posts, podcasts, talks… on separating leadership from management.

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Peter Senge on Systems Thinking

People must be willing to challenge their mental models in order to find non-obvious areas of high leverage – which allow significant improvement.

System thinking is a term that is often confusing to people. From my perspective it is important to understand the importance of leverage. Understanding systems lets you find solutions that may not be direct, but provide powerful leverage. Another important point is looking at the organization as a system.

Understanding the interdependence of the aspects of the system/organization/process is also important (and part of seeing the organization as a system). We often don’t consider how changes will impact other areas of the system that are not immediately apparent. This weakness in how we often think today, results in great opportunities to improve by factoring in the impacts that are not as obvious.

As Peter Senge mentions in the video the concept of long term thinking plays a role. Often we are now neglecting or vastly under-appreciating long term impacts (focusing on only the results in the short term) and thus often their are opportunities to improve just by factoring in not just the short term impacts but also placing importance on longer term impacts.

Peter Senge: “Its not about the smartest guys in the room its about what we can do collectively. So the intelligence that matters is the concept of collective intelligence.”

Related: We are Being Ruined by the Best Efforts of People Who are Doing the Wrong ThingHow to Get a New Management Strategy, Tool or Concept AdoptedBuild an Environment Where Intrinsic Motivation Flourishes

Executive Leadership

Senior executives must lead management improvement efforts. When senior executives only give lip service to management efforts the result is normally the same: little happens.

When Dr. Deming was working with companies after the 1980’s NBC white paper, If Japan Can Why Can’t We, he wouldn’t work with companies if the CEO wasn’t attending the meetings and learning how to manage the organization better. Dr. Deming had seen far too many CEOs want improvement but wanted to delegate the effort of getting there. Dr. Deming saw when senior executives delegated improving the management system it didn’t work.

There are a number of problems with senior executives not taking improvement seriously. First, and most common, they don’t really believe it and have no interest in improving practices – they just want to magically get better results without improving how things are done.

Second many senior executives don’t understand what management improvement is about. They think it is something those other people do on the factor floor or in the call center or somewhere. The most important changes will be in the c-suite for organizations that make substantial improvements. But when executives are out of touch (as so many are) in both management practice and how their organization actually works (at the gemba) then improvement efforts are extremely difficult.

If those senior executives are taking part in the improving the management system they will learn and then will be able to help improve the management system. If they are not engaged in actively working PDSA (on their workload) learning about variation, looking at their organization as a system, making changes to the organization given an understanding of respect for people the potential gains are severely limited.

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George Box

I would most likely not exist if it were not for George Box. My father took a course from George while my father was a student at Princeton. George agreed to start the Statistics Department at the University of Wisconsin – Madison, and my father followed him to Madison, to be the first PhD student. Dad graduated, and the next year was a professor there, where he and George remained for the rest of their careers.

George died today, he was born in 1919. He recently completed An Accidental Statistician: The Life and Memories of George E. P. Box which is an excellent book that captures his great ability to tell stories. It is a wonderful read for anyone interested in statistics and management improvement or just great stories of an interesting life.

photo of George EP Box

George Box by Brent Nicastro.

George Box was a fantastic statistician. I am not the person to judge, but from what I have read one of the handful of most important applied statisticians of the last 100 years. His contributions are enormous. Several well know statistical methods are known by his name, including:

George was elected a member of the American Academy of Arts and Sciences in 1974 and a Fellow of the Royal Society in 1979. He also served as president of the American Statistics Association in 1978. George is also an honorary member of ASQ.

George was a very kind, caring and fun person. He was a gifted storyteller and writer. He had the ability to present ideas so they were easy to comprehend and appreciate. While his writing was great, seeing him in person added so much more. Growing up I was able to enjoy his stories often, at our house or his. The last time I was in Madison, my brother and I visited with him and again listened to his marvelous stories about Carl Pearson, Ronald Fisher and so much more. He was one those special people that made you very happy whenever you were near him.

George Box, Stuart Hunter and Bill Hunter (my father) wrote what has become a classic text for experimenters in scientific and business circles, Statistics for Experimenters. I am biased but I think this is acknowledged as one of (if not the) most important books on design of experiments.

George also wrote other classic books: Time series analysis: Forecasting and control (1979, with Gwilym Jenkins) and Bayesian inference in statistical analysis. (1973, with George C. Tiao).

George Box and Bill Hunter co-founded the Center for Quality and Productivity Improvement at the University of Wisconsin-Madison in 1984. The Center develops, advances and communicates quality improvement methods and ideas.

The Box Medal for Outstanding Contributions to Industrial Statistics recognizes development and the application of statistical methods in European business and industry in his honor.

All models are wrong but some are useful” is likely his most famous quote. More quotes By George Box

A few selected articles and reports by George Box

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Podcast Discussion on Management Matters

I continue to record podcasts as I promote my new book – Management Matters: Building Enterprise Capability. This the second part, of 2, of my podcast with Joe Dager, Business 901: Management Matters to a Curious Cat. The first part featured a discussion of 2 new deadly diseases facing companies.

image of the cover of Managmenet Matters by John Hunter

Management Matters by John Hunter

Listen to this podcast.

Links to more information on some of the topics I mention in the podcast:

More podcasts: Process Excellence Network Podcast with John HunterBusiness 901 Podcast with John Hunter: Deming’s Management Ideas Today (2012)Leanpub Podcast on Management Matters: Building Enterprise Capability

Accept Taking Risks, Don’t Blithely Accept Failure Though

For discussion by ASQ’s Influential Voices this month, Paul Borawski looks at Risk, Failure & Careers in Quality.

There is a bias toward avoiding the possibility of failure by avoiding actions which may lead to failure or even any action at all. This is a problem. The need in so many organizations to avoid failure means wise actions are avoided because there is a risk of failure.

Many times the criticism of such cultures however gets a bit sloppy, in my opinion, and treats the idea of avoiding failure as bad. Reducing the impact of failure is very wise and sensible. We don’t want to sub-optimize the whole system in order to optimize avoiding as much failure as possible. But we don’t want to sub-optimize the whole system by treating failure as a good thing to welcome either.

Part of the problem is sloppy thinking about what failure is. Running an experiment and getting results that are not as positive as you might have hoped is not failure. That is going to happen when run experiments. The reason you run PDSAs on a small scale is to learn. It is to minimize the cost of running the experiments and minimize the impacts of disappointments.

Running an experiment and having results that negatively impact customers or result in costs that were not planned may well be failure. Though even in that case calling it failure may be less than useful. I have often seen that a new process that eliminated 10 problems for customers but added 2 is attacked for the 2 new problems. While those new problems are not good that you have a net gain of 8 fewer problems should be seen as success, I would argue, not failure. However, often this is not the case. And the attitude that any new problem is blamed on those making a change, regardless of the overall system impact does definitely hamper improvement.

As I said in a previous post, Learn by Seeking Knowledge, Not Just from Mistakes:

It isn’t an absence of people making mistakes (including carrying out processes based on faulty theories) that is slowing learning. People are very reluctant to make errors of commission (and errors of commission due to a change is avoided even more). This reluctance obviously makes learning (and improvement) more difficult. And the reluctance is often enhanced by fear created by the management system.

The culture I want to develop is one where systems thinking leads to optimizing the overall system. And to the extent that to do so it is wise to take risks that may include some failures taking risks is good. But we need to also use the long known practices to reduce any costs of adverse results.

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Leanpub Podcast on My Book – Management Matters: Building Enterprise Capability

image of the cover of Managmenet Matters by John Hunter

Management Matters by John Hunter

I recently was interviewed for a podcast by Len Epp with Leanpub: Leanpub Podcast Interview #9: John Hunter. I hope you enjoy the podcast (download the mp3 of the podcast).

In the podcast we cover quite a bit of ground quickly, so the details are limited (transcript of the interview). These links provide more details on items I mention in the podcast. They are listed below in the same order as they are raised in the podcast:

The last 15 minutes of the podcast I talk about some details of working with Leanpub; I used Leanpub to publish Management Matters. I recommend Leanpub for other authors. They don’t just have lean in their name, they actual apply lean principles (focusing on the value chain, eliminating complexity, customer focus, etc.) to operating Leanpub. It is extremely easy to get started and publish your book.

Leanpub also offers an excellent royalty plan: authors take home 90% of the revenue minus 50 cents per book. They publish without “digital rights management” crippling purchasers use of the books. Buyers have access to pdf, kindle (mobi) and epub (iPad, nook) format books and get access to all updates to the book. All purchases include a 45 day full money back guaranty.

Related: Business 901 Podcast with John Hunter: Deming’s Management Ideas TodayInterviews for Management Matters: Building Enterprise Capability

Indirect Improvement

Often the improvements that have the largest impact are focused on improving the effectiveness of thought and decision making. Improving the critical thinking in an organization has huge benefits over the long term.

My strategy along the lines of improving critical thinking is not to make that the focus of some new effort. Instead that ability to reason more effectively will be an outcome of things such as: PDSA projects (where people learn that theories must be tested, “solutions” often fail if you bother to look at the results…), understanding variation (using control charts, reading a bit of material on: variation, using data effectively, correlation isn’t causation etc.), using evidenced based management (don’t make decision based on the authority of the person speaking but on the merit that are spoken).

These things often take time. And they support each other. As people start to understand variation the silly discussion of what special causes created the result that is within the expected outcomes for the existing process are eliminated. As people learn what conclusions can, and can’t, be drawn from data the discussions change. The improvements from the process of making decisions is huge.

As people develop a culture of evidence based management if HiPPOs try to push through decision based on authority (based on Highest Paid Person’s Opinion) without supporting evidence those attempts are seen for what they are. This presents a choice where the organization either discourages those starting to practice evidence based decision making (reverting to old school authority based decision making) or the culture strengthens that practice and HiPPO decision making decreases.

Building the critical thinking practices in the organization creates an environment that supports the principles and practices of management improvement. The way to build those critical thinking skills is through the use of quality tools and practices with reminders on principles as projects are being done (so until understanding variation is universal, continually pointing out that general principle with the specific data in the current project).

The gains made through the direct application of the tools and practices are wonderful. But the indirect benefit of the improvement in critical thinking is larger.

Related: Dan’t Can’t LieGrowing the Application of Management Improvement Ideas in Your OrganizationBuild Systems That Allow Quick Action – Don’t Just Try and Run FasterBad Decisions Flow From Failing to Understand Data and Failing to Measure Results of Changes

Using Incentives to Guide Social System Improvements

When confronted with the challenge of managing a social system (or market) I like to find ways to use a few simple rules that will guide the system to find improvements. I favor allowing participants in complex social system to determine how to adapt. So I support, for example, a carbon taxes where the market can decide where it is most effective to invest to reduce carbon use (both to reduce our depletion of the resource and to reduce pollution leading to climate change).

I like to try and keep prescription rules as limited as possible and instead set simple rules that will allow people to make choices. These rules will often allow for people to judge when they need to temper the extremes (in management examples) and in economic situations they often can have costs that escalate as the system is strained (so low pricing if the road is currently not heavily used and increasing the cost to users as congestion increases). The more prescriptive the rules the less ability people have to find creative solutions.

Traffic congestion is a perennial problem with high very costs to society. I very much like congestion pricing. You set a rule that puts increasing costs on those creating an overload on the system (which has costly negative externalities). Then allow people to figure out how to adapt.

The video also provides a very good example of why leadership is important. In Stockholm people were against congestion pricing (70% to 30%). This isn’t surprising they see a new tax that only is a cost. They don’t understand that the system performance is going to improve – the cost will provide a benefit. Leadership is required to push forward when the benefits are not obvious to everyone. Once people saw that congestion was greatly decreased 70% supported congestion pricing.

Jonas Eliasson: “Don’t tell people how to adapt. Nudge them. If you do it correctly – they’ll embrace the change”

Related: The Case for Physically Separated Bike LanesUrban Planning in Northern VirginiaDisregard for People by FedEX and UPS – Systems thinking allowed the engineers to design a solution that wasn’t about enforcing the existing rules more but changing the system so that the causes of the most serious problems are eliminated. – Using Outcome Measures for Prison Management

Special Cause Signal Isn’t Proof A Special Cause Exists

One of my pet peeves is when people say that a point outside the control limits is a special cause. It is not. It is an indication that it likely a special cause exists, and that special cause thinking is the correct strategy to use to seek improvement. But that doesn’t mean there definitely was a special cause – it could be a false signal.

This post relies on an understand of control charts and common and special causes (review these links if you need some additional context).

Similarly, a result that doesn’t signal a special cause (inside the control limits without raising some other flag, say a run of continually increasing points) does not mean a special cause is not present.

The reason control charts are useful is to help us maximize our effectiveness. We are biased toward using special cause thinking when it is not the most effective approach. So the control chart is a good way to keep us focused on common cause thinking for improvement. It is also very useful in flagging when it is time to immediately start using special cause thinking (since timing is key to effective special cause thinking).

However, if there is result that is close to the control limit (but inside – so no special cause is indicated) and the person that works on the process everyday thinks, I noticed x (some special cause) earlier, they should not just ignore that. It very well could be a special cause that, because of other common cause variation, resulted in a data point that didn’t quite reach the special cause signal. Where the dot happened to land (just above or just below the control limit – does not determine if a special cause existed).

The signal is just to help us systemically make the best choice of common cause or special cause thinking. The signal does not define whether a special cause (an assignable cause) exists of not. The control chart tool helps guide us to use the correct type of improvement strategy (common cause or special cause). But it is just a signaling device, it isn’t some arbiter of whether a special cause actually exists.

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Build Systems That Allow Quick Action – Don’t Just Try and Run Faster

This month Paul Borawski (CEO of ASQ) has asked the ASQ Influential Voices to share their thoughts on the cries for “faster, faster, faster” that so often is a refrain heard today.

I have long said that the measure of management improvement isn’t only about improving. It is the speed at which the management system and internal processes are being improved. Improvement is a given. If an organization is not improving every year the odds of long term success is low.

One of the common objections to a need for improvement is that we are doing fine and we are improving (so leave us alone we are already improving). That is better than not doing fine and not improving but it isn’t a reason to be complacent. Managers should be continually pushing the improvement acceleration higher.

The biggest problems I see with a focus on being faster are attempting move faster than the capability of the organization and falling back on working harder as a method to achieve the faster action. Really these are the same issue – working harder is just a tactic to cope with attempting to achieve better results than the system is capable of.

Agile software development has a principle, sustainable development, which is a reaction to the far too common attitude of management to just have software developers work longer and longer hours to meet targets. Any attempt to be faster internally or respond to a faster marketplace should first put the principle of sustainable workload as a requirement. And next build the capability of the enterprise to respond quickly and keep increasing how quickly it can respond effectively.

The well know management improvement concepts, practices and tools will lead an organization to improve that capability reliably, sustainable and continuously.

My new book, Management Matters: Building Enterprise Capability, delves into how to manage an enterprise based on the ideas needed to apply management improvement concepts, practices and tools to achieve results, including, but not limited to, faster.

Related: Process Improvement and InnovationFind the best methods to produce the best results over the long termThink Long Term Act Daily

5s at NASA

NASA did some amazing things culminating with landing on Moon. Much of what they did was doing many small things very well. They used 5s, checklists, gemba thinking, usability, simplicity, testing out on a small scale and much more.

Here are a few photos from the Smithsonian Air and Space museum in Washington DC. I also have some nicer NASA 5s photos from the new Annex near Dulles Airport, but, ironically, I can’t find them.

photo of container labeled with many compartments for NASA

These kits were used by NASA astronauts on the Apollo 11 mission to the moon. Obviously NASA had to have everything that might be needed where it was needed (picking up something from the supply closet in building 2 wasn’t an option).

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