Posted on March 13, 2012  Comments (1)

For years I have believed the massively unjust executive compensation packages have been doing great harm to American businesses. As an investor, one of the big risks that has to be evaluated is how much of the business profits executives will divert to their personal bank accounts. And investors also have to worry about the risks executives take to reach huge incentives which then greatly damage your investment.

In 2007, I added two of my own deadly diseases to Dr. Deming’s list. These deadly diseases have emerged since Dr. Deming created the list of 7 deadly diseases (which started out at 5 deadly diseases- he added 2 more later). Excessive executive compensation is one of those new deadly diseases. Our outdated and harmful laws, regulation and tolerated behavior relating to patents, copyright and “intellectual property” is the other.

The Incentive Bubble by Mihir Desai, Harvard Business Review

A very important point to consider in calculating “excess” returns is an understanding of variation. This core component of Dr. Deming’s management system is not understood by most executives today and leads to mis-assigning credit and blame. In addition, an appreciation of systems thinking shows the fallacy of assigning individual causal credit or blame when in reality much of the result is systemic in nature (result of the system with little ability to sensibly assign individual cause – not that those wishing to have huge transfers of corporate wealth deposited in their bank account won’t pay lots of money to people that will create fancy formulas to try and justify such payments).

Well said. From a Deming management perspective I see the huge problems created by the deadly disease of unjustly outsized executive compensation. And as an investor I see great risk in executives destroying investment returns as they try and extract hugely excessive amounts of the profits the organization makes to their personal treasuries.

Related: Taking What You Don’t Deserve, CEO Style – Obscene CEO Pay, 2005 data – Executives Again Treating Corporate Treasuries as Their Money – “Too often, executive compensation in the U.S. is ridiculously out of line with performance” Warren Buffett – Leverage, Complex Deals and Mania – The soaring executive pay in the 1990′s turned Drucker into a leading critic of unjust pay (and those levels were tiny compared to what executives are taking from treasuries today) – No Excessive Senior Executive Pay at Toyota – Brooks Brother Bureaucrats – Losses Covered Up to Protect Bonuses

Posted on March 11, 2012  Comments (0)

Monkey at the Singapore Zoo by John Hunter

The Curious Cat Management blog carnival highlights recent management blog posts 3 times each month. The posts generally focus on the areas I have focused on in the Curious Cat Management Guide since 1996 (Deming, innovation, lean manufacturing, customer focus, process improvement…).

• Reflections on the 100th Birthday of Taiichi Ohno by Masaaki Imai – “Taiichi Ohno always placed respect for the worker first in his approach to kaizen. His focus was always on the customer, both external and internal”
• A Lean Leader strengthens the business by developing people through coaching process improvement at the gemba by Jeff Liker – “Thinking of a leader as a teacher and coach, as managing from the gemba, believing deeply that people are the only appreciating assets of the company, believing in the value of intentionally creating a common culture and being a role model of that culture, and that the adaptiveness of the business to meet the challenges of the environment comes from how people are developed all the way down to the worker is quite different than the leader as the captain of the ship steering it cleverly through brilliant personal insights.”
• Inspiration Stimulates Productivity and Engagement by Nicole Radziwill – “I’d also like to propose that engagement is a symptom – a consequence of feeling good and having a high quality consciousness! Let’s work on the root causes, and focus less on the symptoms.”
• Kanban Networks Exerciseby Yuval Yeret – “The exercise brought to life the complexity of the organization’s network but highlighted how a Kanban system can simplify its operation as well as drive towards improvement. There were several A-Ha moments of understanding how Limited WIP would solve systemic problems currently haunting the organization.”

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Posted on March 8, 2012  Comments (4)

Yishan Wong is the new CEO at Reddit, an excellent social media site I have written about previously. In looking at his background I found some interesting articles he wrote on engineering management based on his experience at Facebook engineering.

He starts with “make hiring your number one priority, always.” To me this is a specific knowledge worker issue. Hiring is always important but the importance in knowledge worker settings (especially when there is quite a bit of poaching good people going on) is elevated. The system thinking affects are obvious from his article including: “Succesfully hiring the best people at all levels means that down the road, your internal promotion pipeline is strong.” This is especially important given his emphasis on promotion from within – of course he wasn’t hired from within for the CEO job at Reddit .

Of course as a Deming management advocate I appreciate his article stating process should be implemented by those who do the work. I do strongly disagree with his seeming desire for unformed processes. I strongly believe making processes clear and consistent is critical as is an effective culture of continual improvement.

He further writes: “All external management hires must be able to write code and show a high level of technical proficiency, up to and including the head of the technical department. If the company is a technology company, this should also include the CEO.” I disagree with this idea. I do agree it is preferable. My belief is that one reason (there are many others) we have done so poorly at improving management over the years is we treat it as the promotion path for technical experts (programers, accountants, production, sales…). They often end up focused not on the management of the system but mucking around in details others should take care of. I do believe in the value of a long history of dealing with the company. It is very valuable to know how to write excellent code, I just don’t see that as the top requirement.

Related: Learn to Code to Help Your Career – Productivity Improvement for Entrepreneurs (and Everybody Else Really) – Involve IT Staff in Business Process Improvement – The Myth of the Genius Programmer – Management sub-reddit

Posted on March 6, 2012  Comments (4)

The PDSA improvement cycle was created by Walter Shewhart where Dr. Deming learned about it. An improvement process is now part of many management improvement methods (A3 for lean manufacturing, DMAIC for six sigma and many other modifications). They are fairly similar in many ways. The PDSA cycle (Plan, Do, Study, Act) has a few key pieces that are either absent in most others processes of greatly de-emphasized which is why I prefer it (A3 is my second favorite).

The PDSA cycle is a learning cycle based on experiments. When using the PDSA cycle prediction of the results are important. This is important for several reasons but most notably due to an understanding of the theory of knowledge. We will learn much more if we write down our prediction. Otherwise we often just think (after the fact); yeah that is pretty much what I expected (even if it wasn’t). Also we often fail to think specifically enough at the start to even have a prediction. Forcing yourself to make a prediction gets you to think more carefully up front and can help you set better experiments.

An organization using PDSA well will turn the PDSA cycle several times on any topic and do so quickly. In a 3 month period turning it 5 times might be good. Often those organizations that struggle will only turn it once (if they are lucky and even reach the study stage). The biggest reason for effective PDSA cycles taking a bit longer is wanting more data than 2 weeks provides. Still it is better to turn it several times will less data – allowing yourself to learn and adjust than taking one long turn.

The plan stage may well take 80% (or even more) of the effort on the first turn of the PDSA cycle in a new series. The Do stage may well take 80% of of the time – it usually doesn’t take much effort (to just collect a bit of extra data) but it may take time for that data to be ready to collect. In the 2nd, 3rd… turns of the PDSA cycle the Plan stage often takes very little time. Basically you are just adjusting a bit from the first time and then moving forward to gather more data. Occasionally you may learn you missed some very important ideas up front; then the plan stage may again take some time (normally if you radically change your plans).

Remember to think of Do as doing-the-experiment. If you are “doing” a bunch of work (not running an experiment and collecting data) that probably isn’t “do” in the PDSA sense.

Study should not take much time. The plan should have already have laid out what data is important and an expectation of what results will be achieved and provide a good idea on next steps. Only if you are surprised (or in the not very common case that you really have no idea what should come next until you experiment) will the study phase take long.

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Posted on March 1, 2012  Comments (0)

David Kasprzak is hosting Management Improvement Blog Carnival #159 on My Flexible Pencil. Highlights from this edition include:

• 3 Ways to Go Agile in Your Workplace in the New Year
• Managing Your Logistics as You Grow Your Business
• Raising awareness of ROWE [Results Only Work Environment] and Lean
• Necessary and Valuable are not the same

Make sure you check out the full carnival post on My Flexible Pencil.

Posted on February 22, 2012  Comments (2)

I believe there are big benefits to knowing how to code (programing, software development). What is possible for your organization is often significantly impacted by understanding how to properly use software (and create it, coding, when needed). The lack of understanding of software is a significant problem not just for those wanting a job coding (that are available for those with the right skills) but also for those making decisions about what the organization should do.

The profound ignorance (meant not in a pejorative way but in the descriptive way) of software is a significant problem for managers today. The critical role of software in our organizations is only growing. And the importance of understanding software (which coding provides in a way no other learning does) is only increasing. My guess is a decade or two or three from now a understanding of coding will not be nearly as critical for managers. I am just guessing the nature of coding will be significantly changed and not understanding the details needed to code will not be as critical as it is today. Maybe I am wrong about the importance of understanding coding fading over time (it is more a feeling than a chain of logic I can clearly explain easily).

There are many indirect benefits of learning to code. In the same way that those with an education in engineering do very well in their careers overall, even if they take a path where they are no longer engineers a background in coding prepares you well for your career. Actually, similar to engineering, part of this effect may well be those that can graduate with an engineering degree and those that can be employed for several years as a software developer have skills and abilities that would have made them successful even if they didn’t pass through those experiences (still I think, those experiences to add to their success).

Good programmers have a strong tendency to think in ways that those interested in management improvement need (and, sadly, often lack): systems thinking, customer focus, efficiency focused [good coders often hate wasting their time and naturally despise non-value added steps], a willingness to speak up about things that need to be improved, a desire to make a difference, passion for what they do… If you work along side good programmers these traits will be reinforced every day (this was my favorite part of my last job – working with great programmers that pursued these principles and re-enforced my doing so also). Yes there are also things you might have to temper in dealings with non-coders (being a bit kinder/less-direct about perceived failures, for example). Also some coders can be so engaged they expect an unsustainable commitment from peers (this is one of the great benefits of a good agile software development system – a focus on creating an environment for sustainable development [not expecting unreasonable effort/hours on the part of coders]).

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Posted on February 20, 2012  Comments (0)

The Curious Cat Management Improvement Blog Carnival has been published since 2006. We find great management blog posts and share them with you 3 times a month. We hope you find these post interesting and find some new blogs to start reading. Follow me online: Google+, Twitter, LinkedIn, instant management consulting, and more.

• For complex systems there is no root cause by John Allspaw – “We like to simplify complex problems so we can work on them in a reductionist fashion. We want there to be a single root cause for an accident or an outage, because if we can identify that, we’ve identified the bug that we need to fix.”
• Get Ready to Fall Off the Cliff by Ron Ashkenas – “Managers of successful firms tend to become complacent and even arrogant, assuming that past performance will continue and that the formulas that worked previously will work in the future.”


Ruby Beach, Olympic National Park, Washington, by John Hunter

• Walter Isaacson’s ‘Steve Jobs’ by John Gruber – “Apple is an experience company. That they create both hardware and software is part of creating the entire product experience… [Jobs:] ‘That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.’”
• Use heijunka, don’t reduce takt time by Michel Baudin – “Keeping your work force intact and prepared for the next upturn is just as essential. So you stop using temps, cut all overtime, go on four-day weeks, or three-day weeks, and use the available time to solve nagging engineering problems,
  experiment with new technology, etc.”

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Posted on February 15, 2012  Comments (8)

If less than 1% of companies are successful with Lean, why are we doing it?

Lots of us are not. I would say the efforts I see “fail” are because they don’t do it. They have something they call TQM, six sigma, lean management or whatever and try out 10-30% of it in some half-measures, with big doses of Dilbert’s pointy haired boss methods and then don’t get great results. Wow.

The biggest complaint (with some merit) I see is why is lean/Deming/six sigma… so hard to actually do. If companies constantly fail to do it at all (even when they use the name) isn’t that an issue. Isn’t that a weakness of the “solution.” My answer is: yes. The caveat is, until someone comes up with the management system that both gets the results using Deming’s management ideas can, and is super easy for organizations to actually fully adopt (and have the great success that doing so provides) I know of nothing better than trying to do these things.

Certainly I believe you are much better off attempting to use Deming, lean or six sigma than listen to someone that tells you they have management instant pudding that will give you great results with no effort.

My belief is that a partial success rate is much higher than 1%. While many organization never go beyond slapping a few good tools on a outdated management system those few tools actually have good results. Maybe 50% of the implementations are so lame they have almost no positive results (not even getting improvement worth the time and effort). They could be seen as “failures,” to me. Those that actually have a right to say they are practicing “lean” I would say is a pretty small number but still above 1%?

There is also an advantage to this stuff being hard to do. You really don’t have to invent anything new. If you just have persistence and keep continually improving along the path applying ideas proven over decades from Deming, Ohno, McGregor, Christensen, Drucker, Scholtes, Womack, Roger Hoerl (six sigma)… you have a great advantage over all those organizations that ignored the ideas or made a bit of effort and then gave up.

Related: Engage in Improving the Management System – Rethinking or Moving Beyond Deming Often Just Means Applying More of What Dr. Deming Actually Said – Management Advice Failures – Management Improvement Flavors – Has Six Sigma Been a Success?

Posted on February 13, 2012  Comments (1)

As I mentioned previously, I will be posting on a topics raised by Paul Borawski, CEO, ASQ as part of ASQ Influential Voices. This month Paul’s post, New Bloggers, STEM & More, looks at the development of future engineers.

I have discussed this issue often, on one of my other blogs: Curious Cat Science and Engineering blog: Encouraging Curiosity in Kids, Passion for Mechanical Engineering (StoryCorps), Illusion of Explanatory Depth, Teaching Through Tinkering.

They are several critical paths to address in building our pipeline of future scientists and engineers. First we need to encourage kids to explore these areas. In my opinion, we currently do a pretty good job, sadly, of discouraging kids as much as we can. So reducing those barriers is key, then we need to actually build ways that help kids. We actually do have many good efforts in place to encourage kids to explore their natural curiosity (follow that link for tons of great organization: FIRST, Project Lead The Way, Engineering is Elementary, The Infinity Project etc.). This helps balance out the discouraging of students that our normal classrooms do. But the pool of kids we reach with these efforts now is far too small. And many are so turned off by our traditionally science education that no matter how much they enjoy outside science and engineering projects they are not willing to pursue science and engineering in school.

The next big area is undergraduate and graduate education. At this point we do a good job, for those willing to put up with the current model of education, which is not designed to encourage those who are interested. It is basically up to weed out any students not willing to put up with the current painful model of higher education for science and engineering. The system seems designed to wean out those who are not sufficiently willing to put up with the difficulties they are asked to face. If the only people that would benefit from science and engineering education are those that are willing to deal with the current system, then it might be fine. But I believe we have turned away hundreds of thousands of people that would have done great things with what they learned. I believe those that will not put themselves through the current system can offer great value. We will gain great benefits if we create a system that is designed to maximize the benefits to students.

There are good ideas for how to improve. But they are challenging. And we are not doing nearly enough experimenting to find good new models of engineering education. Some of my previous posts on science and engineering education: How the Practice and Instruction of Engineering Must Change – Webcast: Engineering Education in the 21st Century by William Wulf (National Academy of Engineering President), Improving Engineering Education (Olin College of Engineering Experiment), Reforming Engineering Education, Carnegie Foundation Calls for Overhaul of Engineering Education.

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Posted on February 10, 2012  Comments (0)

The Curious Cat management blog carnival is published 3 times a month with hand picked recent management blog posts. I also collect management improvement articles for the Curious Cat Management Articles site; you can subscribe via RSS for new article additions.

• Maximize Test Coverage Efficiency And Minimize the Number of Tests Needed by John Hunter – “The steeper the slope the more efficient your test plan is. If you repeat the same tests of pairs and triples and… while not taking advantage of the chance to test, untested pairs and triples you will have to create and run far more test than if you intelligently create a test plan.”
• Listen to Your Community, But Don’t Let Them Tell You What to Do by Jeff Atwood – “Community feedback is great, but it should never be used as a crutch, a substitute for thinking deeply about what you’re building and why. Always try to identify what the underlying needs are, and come up with a sensible roadmap.”
• You must balance the principle of ‘build to takt’ with the principle of ‘heijunka,’ and the principle of ‘respect for people.’ by Jeff Liker – “By keeping some planned inventory, and using it in the right way, you can achieve a more leveled schedule, heijunka, which in the early TPS models was the foundation of TPS. Building to takt, pull, balancing the workload, and protecting the jobs of team members is not possible without heijunka.”
• Toyota University Lean Video – This video shows one of the lean training simulations developed by the experts at Toyota. As you can see, the game uses toy car manufacturing (what a surprise!) to illustrate pull production.
• The Apple Voice by Zach Holman – “Mechanically, The Apple Voice is characterized by short, declarative sentences that are informally and personally delivered to you with a hint of smugness.

  Our most amazing iPhone yet. 10,000 songs in your pocket. We think you’ll like it.

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Posted on February 8, 2012  Comments (0)

In agile software development tasks are documented as user stories. Then the level of effort for those stores can be estimated by assigning each story points. The velocity that can be produced in a period (called a sprint, for us 2 weeks) can be estimated. Thus you can predict what can be delivered in the next sprint (which can help business managers make priority decisions).

I have found estimation to be worthwhile. In doing so, we accept there is a great amount of variation but points give a hint to scale. They can help prioritize (if you have 5 things you want but 1 is much harder you may well drop that to the bottom). I have always accepted a great amount of variation in the velocity, worry about the variation I don’t find worthwhile. I do think trying to act as though the velocity is precise can lead to problems. At the same time having a measure of velocity, even accepting understanding variation was present, was useful.

Over time reducing variation (probably largely through better estimation and perhaps a few better tools, reduced technical debt, better documentation, testing…) is helpful and laudable. We made improvement but still lots of variation existed. The biggest help in reducing the measured velocity was breaking down large stories to more manageable sizes. The challenge of estimating user stories, I suspect, has some fairly high variation (even with good system improvements that can help reduce variation).

Large stories just can hide huge variation in what is really required once getting into implementing it.

The way we did estimation (discussing in a sprint planning meeting) did take some time (but not a huge amount). It was agreed by those involved that the time spent was worthwhile. Sometimes we did slip and spend too much time on this, that was an area we had to pay attention to. The discussions were educational and helped provide guidance on how to approach the story. The value of discussions around estimations was probably the biggest surprise I have had in implementing any agile ideas. The value of those discussion was much higher than I imagined (I basically anticipated them just as non-value added time to get the result of an estimate, but they were a source of learning and consensus building).

Related: Assigning Story Points to Bug Fixes – Mistake Proofing the Deployment of Software Code – Checklists in Software Development

These thoughts were prompted by: Story Points Considered Harmful – Or why the future of estimation is really in our past…

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Posted on February 6, 2012  Comments (1)

America’s Dirty War Against Manufacturing

That sentiment should be familiar to students of Deming (it is one of Deming’s 7 deadly diseases). It is sad that this bad management practices, short-term thinking, continues to do harm several decades later. Hopefully we can do better in the next few decades.

The excessive health care costs in the USA, another of Deming’s 7 deadly diseases, has continued to get worse every year since he classified it as one. The damage that the failed health care system in the USA does to the USA is enormous.

Related: Manufacturing Skills Gap or Management Skills Gap? – Manufacturing in the USA, and Why Organizations Often Don’t – Big Failed Three, Meet the Enlightened Eight

Posted on February 2, 2012  Comments (0)

I think the potential for consulting as you need it is great. I actually was looking into creating an application to support the ability to provide this service with someone else; but we just had too many other things going on. I have now made myself available for consulting you pull as you need it through MinuteBox. You can get consulting when you need it for as little time as you need.

So if you are trying to apply the ideas I discuss on this blog and run into issues you would like to get some help with connect with me and you can get some immediate coaching on whatever you are struggling with. I am offering a special rate of $1.99 a minute, for now. The graphic on the right of this post (any post on this blog, actually) will show if I am available right now (as does johnhunter.com). If so, you can connect and get started. If not, you can leave a message and we can arrange a time.

I am featured on MinuteBox with this cool graphic, isn’t it nice

John Hunter feature on Minute Box homepage

One advantage of this model is that those of you following this blog have a good idea of what topics you would like to delve into more deeply with me. If you have any questions on a particular topic you would like answered today or arranging coaching on specific topics over a period of time or help planning a project or someone to bounce your ideas off give this consulting as you need it model a try.

For those of you management consultants reading this blog (I know there are many) you can create your own Minute Box account easily and provide this service also. And even if you are not a consultant if you have advice worth sharing (and I know there are many of you also) you can also set up an account.

Related: John Hunter’s professional life timeline – John Hunter online – John Hunter LinkedIn profile – Top Leadership blogs – Top Management and Leadership blogs – Top Management blog

Posted on February 1, 2012  Comments (0)

The Curious Cat Management blog carnival highlights recent management blog posts 3 times each month. The posts generally focus on the areas I have focused on in the Curious Cat Management Guide since 1996 (Deming, evidence based management, lean manufacturing, agile software development, systems thinking…)

• The Key Questions for a Minimum Viable Product Project by Anthony Panozzo – “What are you trying to learn with this particular MVP?
  What data are you collecting about your experiment?
  What determines the success or failure of the experiment?” [bold added - John]
• Less Process, More Discipline by Charlie Martin – “Without it, you lose everything agile methods promise. The key to agile methods is this: You may have less process, but you must have more discipline.”


Sunset over Andaman, Khao Lak, Thailand. By John Hunter

• Evaluating Executive Performance by Art Smalley – “One interesting thing that I will note that was considered in Toyota in Japan by the HR department when evaluating executives was how their previous departments fared after they had left. If the department continued to improve then this was generally a good sign.”
• The evolution of design to amplify flow by John Hagel – “If we want to remain successful and reap the enormous rewards that can be generated from flows, we must continually seek to refine the designs of the systems that we spend time in to ensure that they are ever more effective in sustaining and amplifying flows.”

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Posted on January 30, 2012  Comments (5)

Deming’s Second Theorem: “We are being ruined by best efforts.”

What did Dr. Deming mean by this?

Another quote by Dr. Deming might give you a clue? “Best efforts will not substitute for knowledge.”

Irwin, the porcupine at the Animal Rescue League Wildlife Center has to work a little harder for his breakfast in this clip. The wildlife center likes to provide animals in captivity puzzles and challenges to keep them interested in their environment so they stuck his breakfast to the bottom of the mug.

Thankfully the baby porcupine in the video doesn’t ruin anything and instead just gives us an enjoyable video. He does spends a great deal of energy putting forth his best efforts, but without a theory Best efforts can often cause damage to the organization when people give their best efforts but are not guided by knowledge of what is useful and what is harmful.

Another Deming Quote: “We are being ruined by the best efforts of people who are doing the wrong thing.” Please share your comments on how organizations are ruined by best efforts.

And I will wrap up the post with another quote from Dr. Deming: “We want best efforts guided by theory.”

Related: quotes by W. Edwards Deming – Deming on being Destroyed by Best Efforts – Righter Incentivization

Posted on January 26, 2012  Comments (0)

I am joining the ASQ Influential Voices project for 2012. The effort started last year when ASQ chose a few people to participate in a group effort to share their thoughts on various topics in quality improvement. I have been asked to join for 2012, along with a couple lean bloggers (Mark Graban and Tim McMahon) and others. Each month the ASQ executive director will post on a topic and I, and the other influential voices participants, will share out thoughts on that topic.

My history with ASQ extends back into my childhood. My father, William Hunter, was the founding chair of the ASQ Statistics division. They now administer the Hunter Award, which recognizes substantial contributions to statistical consulting, education for practitioners, and integration of statistics with other disciplines as well as demonstrated excellence in communication and implementing innovative applied statistical methods.

I joined with a group of people to lead the Public Sector Quality Improvement Network shortly after it was formed. The network aimed to help those in the public sector use quality management principles to improve performance. That group of people was one of the most impressive I have worked with; including Tom Mosgaller, Michael Williamson, Barry Crook, Nathan Strong and others. We decided to join with ASQ: that effort has become the ASQ Government Division. Another outgrowth of those efforts was my Public Sector Continuous Improvement Site, which I continue to run.

The Public Sector Network also connects back to my father; Tom Mosgaller and Michael Williamson worked on the quality efforts in the Madison, Wisconsin (at the City of Madison and the University of Wisconsin – Madison). Michael worked in for Joe Sensenbrenner, and then brought the new management ideas to his roles with university. My father approached the mayor, Joe Sensenbrenner, about applying management improvement ideas at the city. The mayor agreed and my father documented that effort in Dr. Deming’s classic, Out of the Crisis as the first government application of Deming’s management principles. See pages 245-247 of Out of the Crisis and also Joe Sensenbrenner’s classic article in the Harvard Business Review: Quality Comes to City Hall. Peter Scholtes was also part of that initial project at the First Street Garage in Madison, Wisconsin.

Terry Holmes (president of the local labor union), Joe Turner (division foreman) and Bill Hunter (consultant), working on the First Street Garage project. They went and presented to executives at Ford (where Dr. Deming was working) on the cooperation between union and management in the City of Madison project.

You can read a bit more about the work in Madison in George Box’s (an ASQ fellow) article – William Hunter: An Innovator and Catalyst for Quality Improvement. And also in: Doing More With Less in the Public Sector: A Progress Report from Madison, Wisconsin by William G. Hunter, Jan O’Neill, and Carol Wallen and Quality in the Community: One City’s Experience by George Box, Laurel Joiner, Sue Rohan and Joseph Sensenbrenner (1989). These documents are all made available by the Center for Quality and Productivity Improvement at the University of Wisconsin – Madison that was founded by George Box and my father.

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Posted on January 23, 2012  Comments (0)

In2In offers some great opportunities for those interested in management improvement. Their conference is excellent. They also offer various conference calls with speakers knowledgeable about Deming and Ackoff’s ideas. These normally take the form of conference call presentations (similar to a podcast) followed by some question and answers. The consistently get remarkable people like, Gerald Suarez, and earlier: Peter Scholtes and Brian Joiner.

Gerald Suarez is kicking off the new InThinking Network monthly webinar series. I worked for Gerald at the White House Military Office. He is one of the best presenters and most knowledgeable experts on Deming and Ackoff’s ideas working today.

Gerald Suarez will present on February 9th on the topic of “Better Thinking About Leadership.” This is a great opportunity and there is no cost to participate. If you participate from outside the USA you can connect via Skype (from the USA you will be given a toll-free number to connect with – or Skpye, if you wish). If you can’t join the call, audio downloads will be available at some later date. Register here. If you can’t make the live event, I strongly recommend listening to the audio download once it is made available.

The format of these sessions is a 90-minute session, each month – from February through November. They are held the second Thursday of the month, from 11:30 AM to 1 PM Pacific Time.

Future sessions that we have to look forward to include:

• Paul Hollingworth will present in March: An Introduction to Systems Thinking
• Graham Rawlinson, in May to explore “Thinking About Thinking”
• Gipsie Ranney, in September: “Cause(s) of Concern,” a session designed to present and advance the understanding of common causes and special causes of variation.

Gerald is currently a professor on the faculty of the University of Maryland’s Robert H. Smith business school and works as a consultant and keynote speaker. Look for him to share his expertise in leadership, which includes 8 years of service in the White House under Presidents Clinton and Bush, as the Director of Presidential Quality — the first such post in the institution’s history.

Related: Transformation and Redesign at the White House Communications Agency – Managing Fear – The aim of leadership is not merely to find and record failures of men

Posted on January 22, 2012  Comments (1)

The Curious Cat management blog carnival is published 3 times a month with hand picked recent management blog posts. I also collect select management improvement articles and blog posts in the Curious Cat management article library. The annual management blog roundup event covered #151 – #154, so this is #155.

• We Don’t Know quote by David York, via Mike Wroblewski-
  We don’t know what the problems are…..that’s why we make them visible.
  We don’t know what the root causes of the problems are….that’s why we ask 5 Whys?
  We don’t know what the evidence is….that’s why we collect data.
  We don’t know what is actually happening….that’s why we observe.
  We don’t know what solutions will succeed….that’s why we experiment.
• Why do we pay sales commissions? by Dan Ostlund, Fog Creek Software – “For us, it’s been a great success, and at least from that perspective it might be time we punch the Theory X, commissions-based sales culture right in the nose. Real redemption might lie in removing the source of the derangement and treating sales people like we treat programmers and other workers that we implicitly trust.”


Axes in Nigeria by William Hunter

• The C-Suite Double Standard by Dan Markovitz – “I started noticing what I call the C-suite double standard: leaders and executives who are ferocious about improving manufacturing processes and eliminating waste, but who passively accept waste in their office operations and individual work.”
• Standard Work Is Like Food – Taste before Seasoning by Mark Hamel – “No doubt, we have heard the Taichii Ohno quote, “Where there is no standard, there can be no kaizen.” Standard work implies that there must be adherence. Without it, it’s more like a standard wish…as fickle as the wind. We can’t sustain improvements and we have little foundation for the next.”
• How to trick yourself into thinking you’re doing lean (and trick others at the same time) by Jamie Flinchbaugh – “Don’t believe you are doing lean just because you’re filling out a template or following an agenda. It’s the thinking that counts.”
• Defying Time: Dr. W. Edwards Deming by John Persico – “the more difficult part of our consulting at PMI was not in teaching statistics or process analysis but in helping to change management attitudes from the old thinking of meeting goals and quotas to the new thinking that went beyond goals and quotas to never ending improvement and innovation.”

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Posted on January 19, 2012  Comments (1)

Total health expenditures in the USA in 2010 reached $2.6 trillion, $8,402 per person or 17.9% percent of GDP. All these are all time highs. Every year, for decades, health care costs have taken a larger and larger portion of the economic value created in the USA.

In 2009 the USA Spent Record $2.5 Trillion, $8,086 per person 17.6% of GDP on Medical Care.

USA health care spending grew 3.9% in 2010 following an increase of 3.8% in 2009. While those are the two slowest rates of growth in the 51 year history of the National Health Expenditure Accounts, they still outpaced both inflation and GDP growth. So yet again the health system expenses are taking a bigger portion of overall spending. This has been going on so long that the USA spends double what many other rich countries do on healthcare with no better results.

As a result of failing to address this issue for decades the problem is huge and will likely take decades to bring back just to a level where the burden on those in the USA, due to their broken health care system, is equal to the burden of other rich countries. Over 2 decades ago the failure in the health care system reached epidemic proportions but little has been done to deal with the systemic failures. Dr. Deming pointed to excessive health care cost, back then, as one of 7 deadly diseases facing American business. The fact that every year costs have increased more than GDP growth and outcome measures are no better than other rich countries shows the performance has been very poor. The disease is doing even more harm today.

Some good things have been done over the years, most notably by Don Berwick while at the Institute for Healthcare Improvement. He was effectively thrown out of office by the politicians recently. The same politicians that have through decades of such foolish acts contributed more than any other group to the broken health care system that burdens the USA today. In the last 10 years a significant amount of good work has also been done in “lean healthcare”: applying lean thinking to healthcare. But it is similar to the quote that a “bad system will beat a good person.” With all the bad systemic issues the efforts, good as they are, in lean healthcare are mainly improving around the edges. Of course, “around the edges” of a $2.6 Trillion dollar system can still be extremely valuable and important.

Related: USA Heath Care System Needs Reform – USA Spends Record $2.3 trillion ($7,681 Per Person) on Health Care in 2008 – Systemic Health Care Failure: Small Business Coverage – Measuring the Health of Nations – How to improve the health care system performance – Management Improvement in Healthcare – USA Spent $2.2 Trillion, 16.2% of GDP, on Health Care in 2007

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Posted on January 16, 2012  Comments (2)

The following are my comments, which were sparked by question “Trust, but verify. Is this a good example of Profound Knowledge in action?” on the Linked In Deming Institute group.

Trust but verify makes sense to me. I think of verify as process measures to verify the process is producing as it should. By verifying you know when the process is failing and when to look for special causes (when using control chart thinking with an understanding of variation). There are many ways to verify that would be bad. But the idea of trust (respect for people) is not just a feel-good, “be nice to everyone and good things happen”, in Deming’s System of Profound Knowledge.

I see the PDSA improvement cycle as another example of a trust-but-verify idea. You trust the people at the gemba to do the improvement. They predict what will happen. But they verify what does actually happen before they run off standardizing and implementing. I think many of us have seen what happens when the idea of letting those who do the work, improve the process, is adopted without a sensible support system (PDSA, training, systems thinking…). It may actually be better than what was in place, but it isn’t consistent with Deming’s management system to just trust the people without providing methods to improve (and education to help people be most effective). Systems must be in place to provide the best opportunity to succeed. Trusting the people that do the work, is part of it.

I understand there are ways to verify that would be destructive. But I do believe you need process measures to verify systems are working. Just trusting people to do the right thing isn’t wise.

A checklist is another way of “not-trusting.” I think checklists are great. It isn’t that I don’t trust people to try and do the right thing. I just don’t trust people alone, when systems can be designed with verification that improves performance. I hear people complaign that checklists “don’t respect my expertise” or have the attitude that they are “insulting to me as a professional” – you should just trust me.

Sorry, driving out fear (and building trust – one of Deming’s 14 points) is not about catering to every person’s desire. For Deming’s System of Profound Knowledge: respect for people is part of a system that requires understand variation and systems thinking and an understanding of psychology and theory of knowledge. Checklists (and other forms of verification) are not an indication of a lack of trust. They are a a form of process measure (in a way) that has been proven to improve results.

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