Tag Archives: management system

Improving Management with Tools and Knowledge

Too often today I hear people disparaging management tools/concepts (PDSA cycle, mistake proofing, flowcharts, design of experiments, gemba…). The frequently voiced notion is that tools are being applied and not helping improve management in the organization.

But it seems to me using these tools re-enforce the best practices of management improvement. Yes, ignoring the underlying principles (while applying tools and concepts) drastically limits how successful an organization will be in improving management practices (and limits the results the organization will achieve). But using the tools is not the problem. Using the tools is a necessary but not sufficient part of the process to improve.

What is needed is to use the tools with engaged people that are continually learning and adjusting the management system based on their increase understanding of the organization as a system. Using management tools effectively (if you are unsure of what those tools are, read the posts on this blog discussing many management improvement tools) supports gaining insight into the underlying management improvement principles.

It is important to understand there are fundamental concepts that connect and reinforce each other. And those organizations that are successful are using management tools and continually building their understanding of the underlying principles.

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Cater to Customers Desires to Achieve Customer Delight

Customer delight requires understanding your customers needs and desires. Often even your customers don’t understand these well. Businesses that have a deep appreciation for what their customers, and potential customers, desire and that create systems to deliver solutions that delight those customers benefit greatly from that effort.

To build a sustainable enterprise you must provide value customers will appreciate.

Your customers do not have one unified set of desires. Some customers may want as good an experience as is possible and if that costs substantially more they are happy to pay. Others want to pay the least possible while having an acceptable experience.

Singapore Airlines can cater to creating a great experience. And even within that system they can segment the offering a bit and create coach class, business class and first class. They seek to provide a great experience for everyone but have extra space and amenities offered for higher classes of service for those wanting that given the cost.

Southwest Airlines can cater to providing a friendly and inexpensive experience while passing on providing certain amenities. Southwest understands that they are creating a system to deliver value to customers that appreciate a no frills environment that still treats them with respect. treat customers honestly and with respect.

Aligning what is delivered with what is marketed is also important and something Southwest does well. Other airlines market as if they will provide what Singapore Airlines does and provides a miserable experience instead. I think it helps provide Southwest focus in marketing and operations seeing how badly many of their competitors frustrate customers continually in very visible ways.

To delight customers determine what they desire based on a deep understanding of them. Make sure you understand what they act on not just what they say.

Even if you determine what they want is to spend as little as possible don’t try to trick them with false claims about low prices. The most despised companies all seem to do this (cable TV companies, airlines, mobile phone plans, some contractors…). Essentially they play bait and switch except they don’t even offer the choice to decline once they provide the real price. They just slap on extra fees after they sold you with promises of the cheaper cost.

Instead cater to meet the importance of low price but still treat customers with respect. Yes, you might cut some corners a bit so customers have to wait longer for support or don’t have as much hand holding as they could get for a higher price. But there are many things that can be done with well designed systems to provide very good service while keeping costs low. In fact often better service can be provided at lower costs because systems designed well include less waste and create fewer problems. Those problems are costly to solve and damaging to customers.

Your customers will not have monolithic desires. A big factor in the success of providing solutions that delight customers. Sometimes that means creating product and services that delight people with a wide range of expectations. Other times it means delivering different solutions to delight the different audiences.

My mechanic is trustworthy and less expensive than my other options. He also lacks many of the amenities others might desire. But for me I am delighted with his service. I am happy to drive 30 minutes to get service from him, passing by many other options. I trust him to know what to do and act in my best interest while charging a fair price.

My dentist is very good and expensive. He doesn’t accept insurance (if you have insurance you can submit the bills yourself but his office doesn’t get involved). He does all the dental work himself, including cleaning (which is rare in my experience – often the simple tasks are assigned to others). Assistants deal with scheduling and billing. His market is to provide great service to those customers willing to pay. This is not a strategy that would work for most dentists I don’t think, but it works very well for him and his delighted customers (like me). The customers willing to pay for this level of service is limited but if you delight enough people who are willing to pay you create a sustainable business.

Knowing what your customers want and creating systems to deliver that to them is how to build a great business. It sounds easy but few businesses really do know what their customers want. And even fewer focus on delighting them by continually improving the value they offer.

Related: The Customer is the Purpose of Our Work (2012)
Customer Focus with a Deming Perspective (2013)the most important customer focus is on the end users (2012)What Job Does Your Product Do? (2007)What one thing could we do better? (2006)

Unpacking the Components of Hard Work to Design Better Work Conditions

Effort is grossly underrated by Jamie Flinchbaugh:

There is a common phrase of “work smarter, not harder.” I get the appeal of that. Effort without clarity, efficiency, and effectiveness, has severe limits. Working smart is essential. But does that mean working hard has no value? No, effort is grossly underrated.

I believe we should aspire to work smarter and harder. Neither is sufficient, both are required…

My father used to convince himself working smarter should be the main focus and then he would return from Japan and say yes working smarter is important but they also just work harder. Then he would revert to moving to a primary focus to working smarter, then return of Japan and repeat. It took maybe 3 trips to have it sink into his consciousness that it really was both.

I am slower than my father to accept the necessity of hard work 🙂 I still think we could reduce the hours of work if we worked smarter and the processes were improved to eliminate wasted time and we worked hard for fewer hours. To some extent some agile software development efforts have shown this by changing the system of work and including as part of that a commitment to long term sustainable pace of work (no overwork).

I think if people define work as hard as a large number of hours then that can be reduced. If they define hard as putting forth their best efforts (in a smart and effective way) continually for the hours they put in then I can’t see reducing hard work as a goal. The hard work of doing the challenging things when they are important cannot be abdicated. If anything that is one of the most important methods to reduce the hours of work needed – doing the things that often people avoid because it will be difficult, upset people, make people uncomfortable, upset the way things are done…

farmers tilling a rice field with a machete and a tractor

Tilling a rice field in Bali. See more of my photos from Indonesia.

“Hard work” is often code for “work I despise doing.” If you create a system where people take pride and joy in their work the same time spent working is not nearly as “hard.” If they are proud of what they accomplish a difficult task is often rewarding, and not seen as working “harder.” As is so often the case “hard work” is really packing together numerous ideas in one phrase.

  • long hours
  • difficult tasks (physically, emotionally or intellectually)
  • unrewarding work
  • unpleasant tasks
  • inflexible work (It is a “hard job” if it prevents you from for example, seeing your child’s basketball game. If you were able to see the game and finish up 2 hours of work after they went to bed that is less hard.)
  • difficult work environment (whether that is due to the stress level, physical demands, or other things – like a boss that is difficult to work for)

I think you can reduce many of these parts of hard work by creating a better system of work in the organization. But to do so you increase the need for focused effort on what is important. The key to me is designing a management system in which the effort required by work is the effort you want to give and the amount of unproductive, unrewarding and unpleasant work is reduced. Creating such a management system is not easy; it requires hard work, and it requires working smarter.

Related: Dream More, Work LessSigns You Have a Great Job … or NotRespect People by Creating a Climate for Joy in Work

Continually Improving Using a Focus on Delighting Customers

ASQ asked the ASQ influential voices to respond to this question: What is the best way to ensure quality and customer integration grow together?

When I first got involved in the quality field that name (quality) seemed to vague for me. And different people and organizations seemed to have vastly different meanings in mind for efforts they all grouped under the heading of quality. What I came up with to capture what I was interested in was customer focused continuous improvement. Continual is actually a better word than continuous for what I had in mind, I now know.

But that phrase has held up in my mind (unfortunately it is a bit long and so isn’t ideal either). Focusing on continually improving with a deep understanding of customer needs and the marketplace will do you well. Customer integration is required in the customer focused continual improvement framework I have discussed on this blog and in my book: Management Matters: Building Enterprise Capability.

Beach with reclining chairs and thatched toped umbrella looking into the ocean with small boats in the view

Wonderful beach near Hoi An, Vietnam where you can order food and drinks in peace. See more photos by John Hunter.

Accepting that as a wise course of action leaves the question of how to continual improve with an integrated deep focus on customers. These shouldn’t be two isolated activities. And even to continually improve without worrying about customers requires viewing the organization as a system is critical in my view (which further enhances integrating the customer into the organization’s DNA). As anyone reading this blog knows my beliefs build on the work of W. Edwards Deming, so appreciating the importance of a systemic view is to be expected.

A deep appreciation for the long term needs of your customers and potential customers should guide where in the system to continually improve. And my belief on how to continual improve is to create and continually improving management system with principles of experimentation (with the necessary understanding of what conclusion can be drawn from results and what cannot), an understanding of the organization as a system and respect for people as principles to be guided by to achieve continual improvement.

Quality practices of experimentation directed at continually improving management practices and internal processes need to be completely integrated with the efforts to continual improve customer delight. Those efforts should be one process and therefore they automatically grow together.

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Integrating Technical and Human Management Systems

ASQ has asked the Influential Voices on quality management to look at the question of integrating technical quality and human management systems. How do different systems—technical or human—work together? How should they work together?

My view is that the management system must integrate these facets together. A common problem that companies face is that they bring in technical tools (such as control charts, PDSA improvement cycle, design of experiments, kanban, etc.) without an appreciation for the organization as a system. Part of understanding the organization as a system is understanding psychology within this context (as W. Edwards Deming discussed frequently and emphasized in his management system).

To try and implement quality tools without addressing the systemic barriers (due to the management system and specifically the human component of that system) is a path to very limited success. The failure to address how the organization’s existing management system drives behaviors that are often counter to the professed aims of the organization greatly reduces the ability to use technical tools to improve.

If the organization rewards those in one silo (say purchasing) based on savings they make in cutting the cost of supplies it will be very difficult for the organization to optimize the system as a whole. If the purchasing department gets bonuses and promotions by cutting costs that is where they will focus and the total costs to the organization are not going to be their focus. Attempts to create ever more complex extrinsic incentives to make sure the incentives don’t leave to sub-optimization are rarely effective. They can avoid the most obvious sub-optimization but rarely lead to anything close to actually optimizing the overall system.

image of the cover of Managmenet Matters by John Hunter

Management Matters by John Hunter

It is critical to create an integrated system that focuses on letting people use their brains to continually improve the organization. This process doesn’t lend itself to easy recipes for success. It requires thoughtful application of good management improvement ideas based on the current capabilities of the organization and the short, medium and long term priorities the organization is willing to commit to.

There are principles that must be present:

  • a commitment to treating everyone in the organization as a valuable partner
  • allowing those closest to issues to figure out how to deal with them (and to provide them the tools, training and management system necessary to do so effectively) – see the last point
  • a commitment to continual improvement, learning and experimentation
  • providing everyone the tools (often, this means mental tools as much as physical tools or even quality tools such as a control chart). By mental tools, I mean the ability to use the quality tools and concepts. This often requires training and coaching in addition to a management system that allows it. Each of these is often a problem that is not adequately addressed in most organizations.
  • an understanding of what data is and is not telling us.

An integrated management system with an appreciation for the importance of people centered management is the only way to get the true benefit of the technical tools available.

I have discussed the various offshoots of the ideas discussed here and delved into more details in many previous posts and in my book – Management Matters: Building Enterprise Capability. An article, by my father, also addresses this area very well, while explaining how to capture and improve using two resources, largely untapped in American organizations, are potential information and employee creativity. It is only by engaging the minds of everyone that the tools of “technical” quality will result in even a decent fraction of the benefit they potentially can provide if used well.

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Transform the Management System by Experimenting, Iterating and Adopting Standard Work

In this short video, Dr. John Toussaint describes how ThedaCare applied leadership standard work to create a successful management transformation. The changes to the management system were tested by applying standard work for all positions in 2 parts of the organization (including all senior management positions) and learning and adapting and then spreading the new methods to the rest of the organization.

Changes to the management system require the same testing and piloting of changes on a small scale as other process changes. Experiment by going an inch wide and a mile deep, iterate over PDSA cycles, and once we have a solution that works adopt it widely (the A in PDSA).

Related: Systemic Workplace ExperimentsTransforming a Management System, A Case Study From the Madison Wisconsin Police DepartmentTransformation and Redesign at the White House Communications AgencyCulture Change Requires That Leaders Change Their BehaviorStandard Work InstructionsHow To Create a Continual Improvement Culture

What to Do To Create a Continual Improvement Culture

This month the ASQ Influential Voices discussion explores what to do and avoid in order to create a performance culture? James Lawther shared his ideas on what not to do to get things started.

I have discussed steps to take in order to build a culture of continual improvement in numerous posts over the years (see related links below). What it boils down to is building a system that supports that culture. Your culture is the result not your aim.

David Heinemeier Hansson put it well recently in his essay, CEO’s are the last to know:

But the bottom line is that culture is what culture does. Culture isn’t what you intend it to be. It’s not what you hope or aspire for it to be. It’s what you do.

In order to create a culture that enhances your effort to continually improve you must crate systems that move things in that direction. Part of that system will be the continual assessment of how your organization is falling short of your desired culture. This requires honest assessment of the current state. And it requires those in leadership to design systems to get a clear picture on what is really happening in their organization.

As I said on Twitter in relation to that article leaders need to understand danger of “losing touch” and take steps to counter that risk. Often the explanation for why something happened (a process producing a failure, a leader not being aware of the real culture…) is an explanation of what the system needs to be designed to address.

wall mosaic with tree, animals and people

Mosaic on an outside wall of a temple at Wat Xieng Thong in Luang Prabang, Laos. By John Hunter.

In many organization CEOs are not aware of what is going on. This is a weakness that must be addressed systemically. Many of the better management methods proposed by W. Edwards Deming address this issue. CEOs are given a false picture when they focus on results instead of the management system. CEOs are given a false picture when they crate a climate of fear. CEOs are given a false picture in organizations focused on achieving bonuses instead of continual improvement.

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Visual Management and Mistake-Proofing for Prescription Pills

Good ideas often just require some sensible thought to think of an improved approach. Management concepts can help guide such thinking, such as mistake-proofing and visual management.

To apply visual management requires giving a bit of thought to how to make visually obvious what is important for people to know. Mistake proofing is often really mistake-making-more-difficult (for some reason this term of mine hasn’t caught on).

prescription pills packaged together

Image from PillPack, they provide a service to deliver packages based on your prescriptions.

I believe mistake-proofing should put barriers in the process that make a mistake hard. Often what is called mistake-proofing doesn’t really fit that definition. The pill package shown above for example, doesn’t prevent you from continuing past the time on the package (Monday at 8AM) without taking the pills.

To call it mistake-proofing I would like to see something that makes it harder to make the mistake of failing to take the pills: something that blocks progress beyond that time without taking the pills.

Even something as simple as an alert to your smart phone that gets your attention and doesn’t allow the smart phone to be used without indicating you have taken the pills would reach the “mistake-proofing” level in my opinion (for someone that has their phone with them at all times). The Apple Watch could be a good tool to use in this case. Even so those wouldn’t make mistakes impossible (you can say you took the pills even if you didn’t, the phone/watch may lose power…). It would depend on the situation; this smart phone/watch solution is not going to be good for some people.

Another idea is that these pill packages should be tied to the room (in a hospital) and at home if a home care nurse (or even family or others) are responsible for assuring the pills are taken with a big display that perhaps 30 minutes before the pill is due posts a message that says “pills to be taken at 8 AM” and once that time is past it could become more obvious, perhaps after 15 minutes it produces an audio alert. The actual solutions are going to be better from those that know the actual situation than someone like me just thinking up stuff as I type.

But the idea is pretty simple: when you have processes that are important and at risk of failure, design processes with elements to make mistakes hard (and ideas such as mistake-proofing and visual management can help you guide your mind to ways to create better processes).

The entire process needs to be considered. The pill packages are nice, because even in failure modes they provide good feedback: you may still fail to take them at the right time, but you can look at the location where the pill packages are kept and see
if any have a time before right now (in which case you can follow the medical guidance – take the pills right now, contact the doctor, or whatever that advice is). Of course even that isn’t foolproof, you could have put the package into your purse and it is still sitting in their but you forgot.

Still the pill packages seem like a good mistake-making-more-difficult solution. And it seems to me that process has room to make mistakes even more difficult (using a smartphone addition, for example).

Continual improvement requires a continual focus on the process and the end user for ways to increase reliability and value. Each process in question should have engaged people with the proper skills and freedom to act using their knowledge to address weakness in the current process that are most critical.

Failure to take prescriptions as directed in a common problem in health care. Knowing this should make those involved in the process think of how they can use concepts, such as mistake-proofing, to improve the results of the system.

Too often to much focus is on making better pills compared to the effort is put into how to improve results with simple concepts such as visual management and mistake-proofing.

Each small improvement contributes to creating a more robust and effective process. And engaged people should continually access how the containing systems, new processes and new capabilities may allow more small steps to provide value to those relying on your products and services.

Related: Great Visual Instruction Example for Taking PillsVisual Management with Brown M&MsQuick Mistake Proofing Ideas for Preventing Date Entry Error

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Practicing Mistake-Promoting Instead of Mistake-Proofing at Apple

Mistake proofing is a wonderful management concept. Design systems not just to be effective when everything goes right but designing them so mistakes are prevented.

I have had several bad customer experiences in the short time I have had my iPad mini. One of the most pitiful is caused by mistake-promoting process design. As the name implies that isn’t a good idea. Mistake-proofing processes is a good practice to strive for; processes that create extra opportunities for failure impacting customers negatively are a bad idea.

My experience below is but one mistake-promoting practice that has caught me in its grips in the short time I have owned my iPad mini. I want to view books on the mini but can’t find any book reader. So I decide, fine I’ll just install the Kindle reader app.

I go to do so (run into additional issues but get through them) and then Apple decides for this free app, on an iPad I just bought with my credit card a week ago, to block me from getting what I need and force me to revalidate my credit card. This is lame enough, but I am used to companies not caring about the customer experience, so fine, what hoops does Apple want to force me through?

But guess what, the unnecessary steps Apple decided to force me through are broken so I can’t just waste my time to make them happy. No. They have created a failure point where they never should have forced the customer in the first place.

So they not only didn’t mistake-proof the process they mistake-promoted the process by creating a unnecessary step that created an error that could have been avoided if they cared about mistake proofing. But instead they use a mistake-promoting process. As a consumer it is annoying enough to cope with the failures companies force me through due to bad management systems that don’t mistake proof processes.

Companies creating extra opportunities to foist mistakes onto customers is really something we shouldn’t have to put up with. And when they then provide lousy and then even incomprehensible “support” such the “change your name” vision Apple decided to provide me now it is time to move on.

After 5 years of buying every computing device from Apple, they have lost my entire good will in one week of mess ups one after the other. I knew the reason I moved to Apple, the exceptional Macbook Air, was no longer the unmatched hardware it once was; but I was satisfied and was willing to pay a huge iPad premium to avoid the typical junk most companies foist on you. But with Apple choosing to make the process as bad as everyone else there isn’t a decent reason to pay them a huge premium.

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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

George Box Articles Available for a Short Time

A collection of George Box articles have been selected for a virtual George Box issue by David M. Steinberg and made available online.

George E. P. Box died in March 2013. He was a remarkably creative scientist and his celebrated professional career in statistics was always at the interface of science and statistics. George Box, J. Stuart Hunter and Cuthbert Daniel were instrumental in launching Technometrics in 1959, with Stu Hunter as the initial editor. Many of his articles were published in the journal. Therefore we think it is especially fitting that Technometrics should host this on-line collection with some of his most memorable and influential articles.

They also include articles from Journal of the American Statistical Association and Quality Engineering. Taylor & Francis is offering these articles freely in honor of George Box until December 31st, 2014. It is very sad that closed science and engineering journals block access to the great work created by scientists and engineers and most often paid for by government (while working for state government universities and with grants organizations like the National Science Foundation[NSF]). At least they are making a minor exception to provide the public (that should be unlimited access to these works) a limited access to these articles this year. These scientists and engineers dedicated their careers to using knowledge to improve society not to hide knowledge from society.

Some of the excellent articles make available for a short time:

The “virtual issue” includes many more articles.

Related: Design of Experiments: The Process of Discovery is IterativeQuotes by George E.P. BoxThe Art of DiscoveryAn Accidental Statistician: The Life and Memories of George E. P. Box

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Interview on PDSA, Deming, Strategy and More

Bill Fox interviewed me and has posted part one of the interview on his web site: Predicting Results in the Planning Stage (sorry, the link has been hijacked to forward to an unrelated page [so obviously I removed the link], I have posted the interview which can now be reached here):

Bill: John, what is your best process improvement strategy or tactic that has worked well for you or your clients?

John: I would say the PDSA improvement cycle and a few key practices in using the PDSA properly like predicting the results in the plan stage—something that a lot of the times people do not do—to determine what would be done based on the results of that prediction.

People discover, especially when they’re new to this stuff, regarding the data that they’re collecting, that maybe even if they got the results they are predicting, they still don’t have enough data to take action. So you figure that even if that number is 30, they would need to know three other things before they make the change. So then, in the plan stage, you can figure that you need to address these other issues, too. At any time that people are collecting data is useful to figure out, for instance: “What do we need to do if the result is 30 or if the result is 3?” And if you don’t have any difference, why are you collecting the data?

Another important piece is the D in Plan, Do, Study, Act. It means “do the experiment”. A lot of times, people get confused into thinking that D means deploy the results or something like that, but thinking of D as ‘doing the experiment’ can be helpful.

A really big key between people that use PDSA successfully and those who don’t is that the ones that do it successfully turn the cycle quickly.

Another response:

Bill: What is the biggest misunderstanding about the Deming Management System you think people have?

John: I would say that there are a couple. The followers that want to pin everything to Deming tend to overlook the complexities and nuances and other things.

The other problem is that some of the critics latch on to a specific quote from Deming, something like a one-sentence long quote, and then they extrapolate from that one sentence-long quote what that means. And the problem is that Deming has lots of these one-sentence quotes that are very memorable and meaningful and useful, but they don’t capture every nuance and they don’t alone capture what it really means (you need to have the background knowledge to understand it completely).

They are sort of trying to oversimplify the message into these sound bites, and I find that frustrating. Because those individual quotes are wonderful, but they are limited to one little quote out of hours of videotape, books, articles, and when you don’t understand the context in which that resides, that’s a problem.

See the full interview for more details and other topics. I think it is worth reading, of course I am a bit biased.

Related: more interviews with John HunterInterviews with John Hunter on his book: Management MattersDeming and Software DevelopmentLean Blog Podcast with John Hunter

Innovative Thinking at Amazon: Paying Employees $5,000 to Quit

Amazon continues to be innovative not just in technology but with management thinking. Jeff Bezos has rejected the dictates espoused most vociferously by Wall Street mouthpieces and MBAs that encourage short term thinking and financial gimmicks which harm the long term success of companies.

Most CEOs and executives are too fearful or foolish to ignore what they are told they must do because Wall Street demands it. CEO’s and boards often ratchet up the poor management thinking by tying big bonuses to financial measures which are much more easily achieved by gaming the system than by improving the company (so companies get the games there boards encouraged through their financial extrinsic motivation focus).

Amazon does many good things focused on making Amazon a stronger company year after year. These innovative management practices seem to largely be due to the thinking of the strong willed founder and CEO: Jeff Bezos. Jeff was smart enough to see the great things being done at Zappos by Tony Hsieh and bought Zappos.

Jeff Bezos has added his letter to shareholders to Warren Buffett’s (for Berkshire Hathaway) as letters worth reading each year. In the latest Amazon letter he includes many worthwhile ideas including:

Career Choice is a program where we pre-pay 95% of tuition for our employees to take courses for in- demand fields, such as airplane mechanic or nursing, regardless of whether the skills are relevant to a career at Amazon. The goal is to enable choice. We know that for some of our fulfillment center employees, Amazon will be a career. For others, Amazon might be a stepping stone on the way to a job somewhere else – a job that may require new skills. If the right training can make the difference, we want to help.

The second program is called Pay to Quit. It was invented by the clever people at Zappos, and the Amazon fulfillment centers have been iterating on it. Pay to Quit is pretty simple. Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. The headline on the offer is “Please Don’t Take This Offer.” We hope they don’t take the offer; we want them to stay. Why do we make this offer? The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.

A third inward innovation is our Virtual Contact Center. It’s an idea we started a few years back and have continued to grow with terrific results. Under this program, employees provide customer service support for Amazon and Kindle customers while working from home. This flexibility is ideal for many employees who, perhaps because they have young children or for another reason, either cannot or prefer not to work outside the home.

The first point reinforces Dr. Deming’s words encouraging companies to do exactly that – pay for education even if it wasn’t related to the work the employee was doing or would do for the company. Still quite rare decades after Deming’s advice.

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Deming and Toyota

In response to Deming Electronic Network message, Deming and Toyota (broken link removed):
“I have read a few of the threads referring to Toyota and their success. I am somewhat familiar with the Toyota Production System (where Lean principles sprouted from), but I have often wondered if Toyota subscribed to all of Deming’s 14 points.

I believe Toyota applied Deming’s ideas to create a management system and continued to develop that system to create the Toyota Production System (also known as lean manufacturing). I believe a convincing argument can be made for Toyota following all 14 points.

An interesting article on Toyota’s web site illustrates their commitment to several of the points, Toyota Special Report: Thinking Production System.
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