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The Achilles’ Heel of Agile

Posted on December 14, 2010  Comments (3)

Guest post by Jurgen Appelo

When I wrote this, I was working in a big open office space in the Van Nelle Factory in Rotterdam (see photo). About 100 people work in an office that was the first of its kind in Europe, when it was built in 1929. And more than 80 years later, architecture lovers from all over the world still come to admire it, take pictures, and make drawings. I sometimes waved at them.

photo of open office style at Van Nelle Office
Van Nelle office, reprinted by permission of Stephan Meijer

A big open office space has advantages and disadvantages. Advantages are flexibility and easy communication. The main disadvantage is that it is a shared resource for all who work there. Climate, sound, and light are hard to manage in a space like that, and the optimal configuration for the whole is never optimal for all. But our office manager did the best she could in trying to maximize pleasant working conditions, while maintaining tight rules to keep things under control. A shared open office is not the ideal environment to give people full responsibility over their own working space.

Self-organization is usually promoted in agile software development. But when shared resources are not managed by a central authority, self-organization often results in the Tragedy of the Commons. The name refers to a situation in which multiple self-organizing systems, all acting in their own self-interest, overexploit a shared limited resource, even when they all know it is not in anyone’s interest for this to happen. The impact that humanity has on CO2 levels in the air, trees in the forests, and fish in the sea, is right now the most debated and intensively researched case of the Tragedy of the Commons. Organizations also have shared resources, like budgets, office space, and system administrators. We could see them as the business-equivalent of the air we breathe, the landscape we change, and the fish we eat.

Research indicates that four ingredients (called the four I’s) are needed for sustainability of shared resources [Van Vugt 2009:42]:

  • Institutions [managers] who work on building trusting relationships between competing systems [teams] in order to increase acceptance of common rules;
  • Information that increases understanding of the physical and social environment, in order to reduce uncertainty (because uncertainty results in bias towards self-interest);
  • Identity, or a need for a social “belonging” that encompasses all participants, to improve and broaden one’s sense of community and reduce competition between teams;
  • Incentives that address the need to improve oneself, while punishing overuse and rewarding responsible use.

Research shows that it is imperative that there is some form of management (or governance) to protect these shared resources by working on these four I’s. (I realize that most modern day governments are not setting a good example of how to do that.) In the case of shared resources, whether it concerns money, space, or system administrators, someone outside of the development teams must keep an eye on long-term sustainability instead of short-term gains by individual teams.

The Tragedy of the Commons is the Achilles’ heel of Agile. It takes management to protect that heel, in order to prevent teams from depleting resources, and crippling the organization.

This article is an adaptation from Management 3.0: Leading Agile Developers, Developing Agile Leaders, by Jurgen Appelo. The book will be published by Addison-Wesley, in Mike Cohn’s Signature Series.

Related: Embrace Diversity, Erase Uniformity – management 3.0 – agile software development books – VW Phaeton assembly plant

Building Adoption of Management Improvement Ideas in Your Organization

Posted on December 8, 2010  Comments (5)

Continuation of How to Get a New Management Strategy, Tool or Concept Adopted

Target something that actually provides a good story. It often helps if there have been failures in attempts to solve a problem in the past. That makes the new success more impressive. Something that is relate-able to the audience you are trying to win over is also useful. Even if senior management cares about an issue, if the solution is so technical they are completely baffled, they will be happy with a solution but they won’t be as excited about expanding the strategy you are trying to encourage when they can understand the process that lead to a solution.

Favor efforts that will help you build organizational capacity to do more of what you want going forward (adopt lean thinking, use design of experiments…). Some of this is about building expertise in the organization. It is also about building your circle of influence. Growing your ability to influence how the organization grows will help you encourage the improvements you believe in.

It is very helpful to show connections between individual efforts. Often you build using various tools: in several instances using PDSA cycle to guide improvement, in others mistake-proofing to cement improvement, in another adopting one piece flow to make problems visible and encourage improvement, in another assuring the respect for people to build the right culture for improvement, and in another using an understanding of variation to make evidence based decision rather than jumping to faulty conclusions with limited information. These management tools, concepts, methods and ideas any many more, are used together for a reason. They support each other. So it is very helpful if you tie them together. As you start adding new tools, ideas and concepts to the management system show how they support each other. Individual tools can help. But the gains they offer are minor compared to the gains possible with a systemic change of management.

Another good strategy is picking the right people to involve in an effort. If you are trying to gain support, find those people in the organization that set the tone that others follow (which are not merely those with organizational power due to their job title). It is nice if you can find such people that have generally positive outlooks and like new challenges (this is often the case). If the culture is very toxic you may well have some who are likely to try and discourage hope in others (often because they have been disappointed so many times themselves they have finally decided not to be disappointed again). Often (though not always) you can win these people over.
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Airport Security with Lean Management Principles

Posted on November 16, 2010  Comments (1)

The ‘Israelification’ of airports: High security, little bother

We [Israel] said, ‘We’re not going to do this. You’re going to find a way that will take care of security without touching the efficiency of the airport.”
…
“The whole time, they are looking into your eyes — which is very embarrassing. But this is one of the ways they figure out if you are suspicious or not. It takes 20, 25 seconds,” said Sela. Lines are staggered. People are not allowed to bunch up into inviting targets for a bomber who has gotten this far.

Lean thinking: customer focus, value stream (don’t take actions that destroy the value stream to supposedly meet some other goal), respect for people [this is a much deeper concept than treat employees with respect], evidence based decision making (do what works – “look into your eyes”), invest in your people (Israel’s solution requires people that are good at their job and committed to doing a good job – frankly it requires engaged managers which is another thing missing from our system).

The USA solution if something suspicious is found in bag screening? Evacuate the entire airport terminal. Very poor design (it is hard to over-emphasis how poor this is). It will take time to design fixes into physical space, as it always does in lean thinking. It has been nearly 10 years. Where is the progress?

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A screener at Ben-Gurion has a pair of better options. First, the screening area is surrounded by contoured, blast-proof glass that can contain the detonation of up to 100 kilos of plastic explosive. Only the few dozen people within the screening area need be removed, and only to a point a few metres away.

Second, all the screening areas contain ‘bomb boxes’. If a screener spots a suspect bag, he/she is trained to pick it up and place it in the box, which is blast proof. A bomb squad arrives shortly and wheels the box away for further investigation.

This is a very small simple example of how we can simply stop a problem that would cripple one of your airports,” Sela said.

Lean thinking: design the workspace to the task at hand. Obviously done in one place and not the other. Also it shows the thought behind designing solutions that do not destroy the value stream unlike the approach taken in the USA. And the better solution puts a design in place that gives primacy to safety: the supposed reason for all the effort.
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Good Process Improvement Practices

Posted on November 8, 2010  Comments (2)

Good process improvement practices include:

  • standardized improvement process (pdsa, or whatever)
  • Going to the gemba – improvement is done where the work is done. You must go to the where the action is. Sitting in meeting rooms, or offices, reading reports and making decisions is not the way to improve effectively.
  • evidence based decision making, data guides decision making rather than HiPPO
  • broad participation (those working on the process should be the ones working on improving it and everyone in the organization should be improving their processes)
  • measurable results that are used to measure effectiveness
  • pilot improvement on a small scale, after results are shown to be improvements deploy standardized solutions more broadly
  • visual management
  • Standardized work instructions are used for processes
  • one of the aims of the improvement process should be improving peoples ability to improve over the long term (one outcome of the process should be a better process another should be that people learned and can apply what they learned in future improvements)
  • quality tools should be used, people should be trained on such tools. The tools are essentially standardized methods that have been shown to be effective. And most organization just ignore them and struggle to reinvent methods to achieve results instead of just applying methods already shown to be very effective.
  • the improvements are sustained. Changes are made to the system and they are adopted: this seems obvious but far too often process improvements are really just band-aids that fall off a few weeks later and nothing is done to sustain it.
  • goals, bonuses and extrinsic motivation are not part of the process
  • The improvement process itself should be continually improved

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Work and Life

Posted on November 4, 2010  Comments (1)

I believe in efficiency a great deal (it is a big part of the reason I took to Deming and lean manufacturing – I find waste annoying). Vacation sure can seem inefficient. All these people that could be working, not working. But people are not the same as machines. Time away from work can reinvigorate people. Time away from the day to day work can lead to better performance when people are actually at work. Time to enjoy life is valuable in itself.

The USA has enormous financial wealth. But vacation time in the USA is much less than most other rich countries. I think, by and large, this is a mistake in the USA. It is true part of the reason for the financial wealth in the USA is we chose to work longer hours so we can purchase more material goods. And as a principle I believe in limiting constraints on the market – so that the market can find solutions that people chose.

There are some difficulties with a free market approach to leave. First, in truth there is not much of a free market. Granted the government isn’t saying you have to offer only 2 or 3 or 4 weeks or leave. But try to negotiate with most employers in the USA for additional leave. You will find many have policies that they say won’t let them negotiate. So employees often have little choice about the amount of leave they can take with a job (even if they are willing to trade off salary).

There are several reasons for the lack of vacation time in the USA. One of the big reasons is the broken health care system. Health care costs are so huge, that the per hour costs of health care are very high. Companies don’t want fewer productive hours when the high health care costs are going to be the same for the year no matter if the work year is 1,600; 2,000; or 2,200 hours. Having 15% fewer employees for the same number of work hours that is a huge savings so companies have a big incentive to make hours worked per employee as high as possible.

Related: Vacation: Systems Thinking – Medieval Peasants had More Vacation Time – Dream More, Work Less – Too much stuff – photos from some of my time off
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Respect People: Trust Them to Use good Judgment

Posted on October 28, 2010  Comments (2)

Nordstrom’s employee handbook used to be presented on a single 5 x 8 card:

Welcome to Nordstrom
We’re glad to have you with our Company. Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them. So our employee handbook is very simple.

We have only one rule: Use good judgment in all situations.

Please feel free to ask your department manager, store manager, or division general manager any question at any time.

That is no longer the case, however, as they have become more like everyone else. Simple ideas like this only work within the right context. Taking such ideas and applying them to an organization that isn’t ready will backfire. But if you build a culture where trust, respect, customer service and responsibility are encouraged lots of rules just get in the way of people doing their best. If you can’t trust employees to do their jobs, the problem is with the system you have that results in that, not the people you can’t trust.

Related: Trust Employees to Do What is Right – Hire People You Can Trust to Do Their Job – We are ladies and gentlemen serving ladies and gentlemen – Flaws in Understanding Psychology Lead to Flawed Management – Build an Environment Where Intrinsic Motivation Flourishes

A Theory of a System for Educators and Managers

Posted on October 25, 2010  Comments (3)

Excerpts from The Deming Library Volume XXI, Dr. W. Edwards Deming, Dr. Russell Ackoff and David Langford demonstrate that educators can begin a quality transformation by developing an understanding of the properties and powers of systems-oriented thinking. You can order the entire video, as well as the rest of The Deming Library.

Great stuff! If you enjoy this blog (the Curious Cat Management Improvement Blog), you definitely should watch this webcast. This video has some great insight into education, learning and systems thinking. It also provides a good explanation of systems thinking compared to analysis. Dr. Ackoff: “You cannot explain the behavior of a system by analysis.” “The performance of the whole is never the sum of the performance of the parts taken separately: but it’s the product of their interactions. Therefore, the basic managerial idea introduced by systems thinking is that to manage a system effectively you must focus on the interactions of the parts rather than their behavior taken separately.”

Dr. Deming: “You may reduce defects to zero and go out of business.”

Dr. Ackoff: “Most discussion of education assume that the best way to learn a subject is to have it taught to you. That’s nonsense… Teaching is a wonderful way to learn. Therefore if we want people to learn we have to make them teach.” If you want more on this see David Langford’s work which provides great advice on how to improve learning and education.

Related: Dr. Deming Webcast on the 5 Deadly Diseases – An Introduction to Deming’s Management Ideas by Peter Scholtes – How to Manage What You Can’t Measure – Marissa Mayer Webcast on Google Innovation – Traffic Congestion and a Non-Solution

Build an Environment Where Intrinsic Motivation Flourishes

Posted on August 8, 2010  Comments (8)

50 years after Douglas McGregor’s classic, The Human Side of Enterprise, too many managers still have not learned that using extrinsic motivation is not an effective way to manage complex human systems (organizations). The issue is important to me because their is a huge amount of poor management based on this thinking (focused on how people need to be fixed/motivated) instead of fixing what management really needs to fix.

You can succeed as a manager, and progress in your career, by viewing your role as helping people do their jobs well. As McGregor shows workers want to do a good job. He termed managing with this understanding theory y; and theory x is the idea that people should be motivated with carrots and sticks because they are not going to do work otherwise. Organizations have often so systemically de-motivated people they seem to have lost that desire. What you need to focus on is not motivating them with cheap tricks. Instead focus on eliminating the factors that de-motivate them.

Often simplistic motivation is seen as a replacement for fixing management performance (improving the management systems…). Instead managers should focus on eliminating the sources of de-motivation in the workplace. If you need hints, Dilbert does a good job of showing you what management does that de-motivates.

To succeed as a manager assume people wish to do a good job. If employees are not performing some task well, the manager needs to figure out what is wrong with the system that leads to this outcome (not what is wrong with the employees). When a manger views the problem as one of motivating workers that puts the problem within the worker. They need to be changed. That is the wrong strategy, most of the time. Instead you will have much more success if you seek to improve the system to improve performance.

I believe there is often a burden to overcome. As people have their intrinsic motivation crushed time after time day after day, week after week, year after year they try to protect themselves by shutting off their hope to achieve intrinsic motivation at work. You may have to show you really are serious before they will open up again. You have to make real changes and do so consistently that shows respect for people. The intrinsic motivation is a strong force and a few earlier adopters will quickly come along in all but the most broken organizations. You can build on that success (eliminating more and more de-motivation) to grow intrinsic motivation in more and more people.
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Stop Starting and Start Finishing – Jason Yip

Posted on August 5, 2010  Comments (1)

Jason Yip explores the value of reducing work in process and reducing context switching costs to optimize throughput. By designing processes to work on projects serially instead of in parallel we reduce context switching, and other costs, of multitasking.

Related: Multi-Tasking: Why Projects Take so Long – The Importance of Making Problems Visible – One piece flow (continuous flow) – Kanban

How to Manage What You Can’t Measure

Posted on August 4, 2010  Comments (7)

In Out of the Crisis, page 121, Dr. Deming wrote:

the most important figures that one needs for management are unknown or unknowable (Lloyd S. Nelson, director of statistical methods for the Nashua corporation), but successful management must nevertheless take account of them.

So what do you do then? I am a strong advocate of Deming’s ideas on management. I see understanding system thinking, psychology, the theory of knowledge and variation as the tools to use when you can’t get precise measures (or when you can).

Even if you can’t measure exactly what you want, you can learn about the area with related data. You are not able to measure the exact benefit of a happy customer but you can get measures that give you evidence of the value and even magnitude. And you can get measures of the costs of dis-satisfied customers. I just mention this to be clear getting data is very useful and most organizations need to focus on gathering sensible data and using it well.

Without precise measure though you have to use judgment. Judgment will often be better with an understanding of theory and repeated attempts to test those theories and learn. Understanding variation can be used even if you don’t have control charts and data. Over-reaction to special causes is very common. Even without data, this idea can be used to guide your thoughts.

The danger is that we mistake measures for the thing itself. Measures are a proxy and we need to understand the limitation of the data we use. The main point Deming was making was we can’t just pretend the data we have tells us everything we need to know. We need to think. We need to understand that the data is useful but the limitations need to be remembered.

Human systems involve people. To manage human systems you need to learn about psychology. Paying attention to what research can show about motivation, fear, trust, etc. is important and valuable. It aids management decisions when you can’t get the exact data that you would like. If people are unhappy you can see it. You may also be able to measure aspects of this (increased sick leave, increased turnover…). If people are unhappy they often will not be as pleasant to interact with as people who are happy. You can make judgments about the problems created by internal systems that rob people of joy in work and prevent them from helping customers.

For me the key is to use the Deming’s management system to guide action when you can’t get clear data. We should keep trying to find measures that will help. In my experience even though there are many instances where we can get definite data on exactly what we want we fail to get data that would help guide actions a great deal). Then we need to understand the limitations of the data we can gather. And then we need to continually improve and continually learn.

When you have clear data, Deming’s ideas are also valuable. But when the data is lacking it is even more important to take a systemic approach to making management decisions. Falling back into using the numbers you can get to drive decision making is a recipe for trouble.

LinkedIn discussion on the topic

Related: Manage what you can’t measure – Statistical Engineering Links Statistical Thinking, Methods and Tools – outcome measures

Delighting Customers

Posted on July 26, 2010  Comments (1)

If you have customers that see you as adequate you will keep customers based on inertia.

But you have several big problems awaiting you. Those trying to win your customers business only have to overcome inertia – which can be very low hurdle (saving a small bit of money, some minor additional feature). If your customers are delighted they won’t leave (by and large) without significant reasons to.

Also your attempts to increase price are very likely to lead to increased customer losses (than if customers are delighted). Delighted customers are willing to pay a premium which helps profits enormously (Apple has done this quite well).

Delighted customers will refer others to you – great free marketing.

Satisfied customers leave you very little leeway for error. If you cause satisfied customers some problem (which granted, hopefully you won’t but if you do) they are not likely to be forgiving. If they are delighted they may well stay even if you have a delay, provide less than stellar customer service for some request…

There are many ways to attempt to delight customers. One of the simplest powerful tools is to ask a very simple question: What Could we do Better?

Related: What Job Does Your Product Do? – It Just Works – Kano Model of customer satisfaction – customer focus resources

Involve IT Staff in Business Process Improvement

Posted on July 6, 2010  Comments (5)

I started out basically working on management improvement from the start of my career. My makeup (I am never satisfied and figure things should always be better) along with a few traits, experiences and probably even genes made this a natural fit for me. I tend to take the long view and find fire fighting a waste of time. Why fix some symptom, I want to fix the system so that problem doesn’t happen again. My father worked in statistics, engineering and business improvement and as I was growing up I had plenty of experience with process improvement, understanding variation, experimenting, measuring results…

I came into the IT world as I had needs and found the best solution was to write some software to help me accomplish what I wanted to. One thing that better software tools allowed is this type of thing when organizations failed to use technology well, individuals could just do so themselves. Without these tools people had to rely on the organization, but today atrophied IT organizations can often be circumvented. Though the IT organizations often try to avoid this largely by bans (instead of by providing the tools people need), which is not a good sign, in my opinion.

I then spent more and more of my time working with technology but I always retained my focus on improving the management of the organization, with technology playing a supporting role in that effort. That is true even as where I sat changed. And I have become more convinced organizations would be served well by using the information technology staff as business process experts.

At one point I sat in the Office of Secretary of Defense, Quality Management Office where I was able to focus on management improvement and using technology to aid that effort. Then I went to the White House Military Office, Customer Support and Organizational Development office and focused largely on how to using technology to meet the mission. Then I was moved into the White House Military Office, Office of Information Technology Management.

And now I work for the American Society for Engineering Education in the Information Technology department. My role started as partially program management and partially software development and as we have grown and hired more software developers I am now nearly completely a program manager.

I believe technology is a central component of understanding business processes today. But the truth is, many business people don’t have as complete an understanding as I feel they should. Now I believe, most anyone interested in planning their management career needs to develop a facility with technology and specifically how to use software applications to improve performance. You don’t need to be an expert programmer but you need to understand the strengths, weakness, limits of technical solutions. You need to understand how technology can be used (and the risks of options).

At the same time I just don’t think it is likely management everywhere will get a decent understanding of application software development. I also believe that in many cases organizations should do software development in house. This is a issue that certainly can be argued (but I won’t do it here). Basically I don’t think organizations should cram their processes into designs required by off the shelf software. Instead I believe they should design processes optimal for their organization and using off the shelf software often does the opposite (forces the process decisions around what software someone decided to buy). There is plenty of use for off the shelf software that doesn’t force you to make your processes fit into them (and sometimes even if it does that is the business decision that has to be made – I just think far too often organizations look at short term costs and not the overall best solutions for the system).
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Southwest Not Delta or United

Posted on June 14, 2010  Comments (1)

One of the posts highlighted in the last post was one example of how Southwest behaves. It wasn’t a one time thing. It was a common result of the system Southwest has in place where they treat customers like human beings that should be respected (as Southwest does with employees).

Then you have the typical horrible treatment the other airlines practice. Like this example where Delta damages this guys bike and refuses to accept responsibility. That is until they suffered a huge amount of additional ill will over such horrible treatment of James Lawrence, who is participating in 20 half iron mans to raise money to help provide systems to provide water for those in Africa in need of it.

Which is similar to when United broke the guitar of this guy, except United I guess figured more bad publicity really doesn’t matter given that it seems to basically be their business plan. On the bright side if you do a good job of complaining you can actually do well. But thousands of people (probably tens or hundreds of thousands) suffer the results of systems destine to provide horrible service.

Systems of people function in repeatably ways. Based on the horrible service airlines provide you can be almost certain their managers do not treat employees with respect. When organizations treat front line staff as costs that need to be minimized and as unthinking, untrustworthy problems they will almost certainly pass on the bad treatment to customers.

Related: Airline Managers Disrespect Customers – Customers Get Dissed and Tell – Respect for Employees at Southwest Airlines – Very Bad Customer Service from Discover Card

Classic Management Theories Are Still Relevant

Posted on June 7, 2010  Comments (5)

Good management is good management: it doesn’t matter if someone figured out the good idea 100 years ago or last week.

Are “Classic” Management Theories Still Relevant?

It did make me wonder about the staying power of management models, processes, skills, and conventional wisdom…

There are way too many people in our field that are not true professionals – they don’t do their homework, and rely too much on their own personal experience. They’re the ones who tend to jump from one fad to the next, enthusiastically promoting each one with an almost religious passion.

However, there’s also a danger of not keeping up with the times and sticking with models or skills that really have outlived their usefulness. At best, you run the risk of coming across as a dinosaur when you explain a management model that was developed in the 1920′s to a group of Millennials. Even worse, you may be relying on models that really don’t apply in today’s world.

Classic management ideas are definitely very valuable today. It is amazing how little use of long known good leadership lessons actually takes place in organizations. You don’t need to discover secrets to improve, just adopt ideas others ignore since they are not new (or whatever justification they use for ignoring them).

One of the main things I have been trying to do with my web sites is to get people to use the already well documented successful management practices.

Bad management ideas are bad: Regardless if they were good ideas 40 years ago, or not. I find bad management practices most often never were good practices so worrying about outdated good practices is not something that merits much time. Just avoid bad practices, don’t worry about when the practices were adopted.

As Dan McCarthy says in his post: “Read and respect the classics and keep up with the latest.”

And if you have to focus on one, focus on the classics. Most of what is new isn’t worthwhile so you will likely spend a lot of time reading about fads that die before you can even try to adopt the ideas into your organizational system. There are good new ideas – read Clayton Christensen, for some good new ideas (even many of those are nearly 10 years old now). Agile software development is another area where good tactics seem new. Mainly agile management offers good ideas on tactics for applying lots of good management ideas (often these ideas are not new), it seems to me.

Related: New or Different? Just Choose Better – Management Advice Failures – New Management Truths Sometimes Started as Heresies – Not New Rules for Management

Interruptions Can Severely Damage Performance

Posted on May 12, 2010  Comments (5)

Interruptions can severely degrade your performance. The type of work you are doing impacts the cost greatly. I have spent some of my time programming web applications. When I am doing that interruptions are huge drain on my performance (for me the costs of interruptions while programming are far higher than any other type of work I have done – many times higher). If the interruption disrupts my flow (an interruption needn’t necessarily disrupt it I found, instant messages may not, while speaking to someone else almost surely would – it is a factor of how much of your brain much shift focus I imagine) it can take a huge amount of time to get back into a high performing state. Other work I do can be interrupted with much less impact. I am easily able to slip back into what I was doing.

For me the main cost of interruptions is the time it takes to get back to where I was before the interruption. And the cost is related to how much focus is needed to address what you are working on. Most programming takes a huge amount of focus.

Another big cost of interruptions is the increased risk of mistakes. When people are distracted and then have to go back to a task, and then are distracted, and then go back and… it is more likely they will miss a step or miss noticing some issue than if they can work without distraction. One tool to help cope for distractions that can’t be designed out are checklists.

Paul Graham addressed the importance of managing the system to provide uninterrupted time very well in, Maker’s Schedule, Manager’s Schedule

One reason programmers dislike meetings so much is that they’re on a different type of schedule from other people. Meetings cost them more
…
Most powerful people are on the manager’s schedule. It’s the schedule of command. But there’s another way of using time that’s common among people who make things, like programmers and writers. They generally prefer to use time in units of half a day at least. You can’t write or program well in units of an hour. That’s barely enough time to get started.

Paul Graham’s article also shows why managers so often fail to adequately address this issue. Manager, by and large, work in an environment where interruptions are the work. I know, much of my time as a program manager is driven by interruptions and is doable even with many interruption every day.

When managing you need to understand how big a cost interruptions have and design systems appropriate to optimize system performance for all parts of the system. The design of the system needs to take into account the costs and benefits of interruptions for those people working on various processes in the system.

Related: Understanding How to Manage Geeks – Explaining Managers to Programmers – What Motivates Programmers? – Joy in Work – Software Development – Programmers Cartoon – Checklists in Software Development

Ignoring Unpleasant Truths is Often Encouraged

Posted on May 4, 2010  Comments (4)

We can’t Handle the Truth

Unfortunately, the proverbial “kill the messenger” is alive and well in American business. People who speak the truth are often labeled as a non-team player, a disrupter, a trouble maker or the current tag of being “not a good fit”.
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It doesn’t take much to see that the truth can get watered down, altered or hidden entirely inside a company, especially as it moves vertically up the ladder. We may believe, at least in the short term, that this is the best way considering the risk, political correctness and social politeness but at what cost?

What I have seen is truth is not valued much. I’m interested in creating improvement. I thought people would be driven by data and possible strategies to improve. But I have found that just isn’t often true.

So, from my experience, the strategy to improve means not distracting people with many of the truths. Try to fix the system and convince others to fix the system as you can. If some efforts are resisted try to adjust. Sometimes try a different strategy to get improvement. Sometimes I just drop trying to improve that particular thing. There are usually so many options for improvement it isn’t tough to find plenty of others that may be more successfully tackled.

I am someone who find it frustrating that many don’t seem interested in really understanding what the system is producing and where weaknesses exist. But, at least for me, trying to have things work the way I want (where an open exploration of the truth was the focus) isn’t the priority. I have figured it is better to give up on that desire and work within the reality that exists.

I can’t stop myself though from pointing out things far more often than people want. I have no doubt it has annoyed people and gotten me in trouble. But nothing that wasn’t manageable, I just make things a bit more difficult for myself.

One, very visible, sign of people avoiding the truth is if people say very different things in meetings and out of them. It is amazing to me how much less likely anything that could be sen as a complaint or criticism to be voiced in a meeting versus in the hallway. It isn’t so surprising if you understand human psychology (the tendency to blame those who voice a problem). People figure this out and keep their mouth shut. But to their friends they understand they can point out the problems and not be blamed (so in the hallways, you get a much more honest understanding of what people think). This is a bad sign. If your organization trains people to ignore unpleasant truths it makes managing more difficult and results in poorer performance.

Related: The difference between respect and disrespect is not avoiding avoiding criticism – Information Technology and Business Process Support – How to Improve – Find the Root Cause Instead of the Person to Blame – Information Technology and Management – Respect for People, Understanding Psychology – Bring Me Problems, and Solutions if You Have Them – Better Meetings – People are Our Most Important Asset

Nice Non-techinical Control Chart Webcast

Posted on April 28, 2010  Comments (0)

This very brief introduction to control charts by PQ Systems provides a very watchable non-technical overview. Getting people to understand variation is important, and not easy. This video is one more quick reminder for those still trying to incorporate an understanding of variation into their view of the world.

The idea is simple. But actually thinking with an understanding of variation people find difficult, it seems to me. It is very easy to continue to revert to special cause thinking (who did it? is often a sign of special cause thinking) – thinking that results are due to a special (unique) cause, instead of as the result of a system (which includes lots of common causes).

The value I see in this video is as a reminder for all those trying to operate with an understanding of variation. It is also a decent introduction, but much, much more would be needed to get people to understand why this matters and what is needed.

Related: Control Charts in Health Care – How to Create a Control Chart for Seasonal or Trending Data – Measurement and Data Collection – Six Sigma and Common Sense – European Blackout, not Human Error

Aligning Marketing Vision and Management

Posted on March 23, 2010  Comments (3)

Why do so many companies market one thing and provide something else? I know it might be easier to sell something different than what you offer your customer today. But if you decide to market one vision, why don’t you change your organization to actually offer that?

I suspect this is substantially due to the outsourced nature of large marketing efforts. It makes sense to me that when you outsource your marketing message creation it isn’t tied to your management system and the two silos can pursue their own visions.

I would imagine marketers would claim they “partner” yada yada yada (and sometimes it actual seems to happen, but not often). As a consumer it sure looks to me like companies outsource marketing to ad agencies that come up with marketing plans that are not in harmony with the real company at all. I can understand putting a positive spin on things, but so much marketing is just completely at odds with how the company operates.

Treating a marketing message as something separate from management is a serious problem. When your marking message says one thing and your customers get something else that is a problem. I think the message is often based on what the executives wish the company was (and the outsourced marketers think it should be), but it isn’t the customer experience the management system provides.

If you believe the vision of your marketing then make sure your organization has embraced those principles. I think, often, companies would be wise to follow the vision their marketers came up with. But instead they tell customers to expect one thing and manage the organization to provide something else. I just don’t see how that is sensible.

Related: Marketing in a Lean Company – Packaging Improvement – Customer Service is Important – Confusing Customer Focus – Incredibly Bad Customer Service from Discover Card
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The Trouble with Incentives: They Work

Posted on January 28, 2010  Comments (0)

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

I have wondered whether the escalation of pay, perks and parachutes for CEOs actually tends to attract individuals who are primarily extrinsically motivated, rather than individuals who are seriously interested in creating value. Several recent examples appear to be consistent with this view.
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An important issue with regard to incentives is possible effects on teamwork and cooperation. If the incentive system is set up as a zero-sum game, then for me to win, you have to lose. This is a very effective way to ensure that there is little or no teamwork or cooperation. Interactions between individuals and groups are likely to become negative, to the detriment of the organization as a whole. When incentives are based on narrow functional objectives, achieving those objectives may guarantee that the system as a whole will be suboptimized.
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the Mayo Clinic, “which is among the highest-quality, lowest-cost healthcare systems in the country.” He reports that “decades ago Mayo recognized that the first thing it needed to do was eliminate the financial barriers. It pooled all the money the doctors and the hospital system received and began paying everyone a salary, so that the doctors’ goal in patient care couldn’t be increasing their income. Mayo promoted leaders who focused first on what was best for patients, and then on how to make this financially possible.” He goes on to say, “the core tenet of the Mayo Clinic is ‘The needs of the patient come first’ – not the convenience of the doctors, not their revenues. The doctors and nurses, and even the janitors, sat in meetings almost weekly, working on ideas to make the service and the care better, not to get more money out of patients.”

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

She sums it up very well:

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

Find more articles on management improvement in the Curious Cat Management Improvement Library, including: An Interim Report on Motivation in the Workplace by Gipsie Ranney, Remembering NUMMI by Gipsie Ranney and Improving Problem Solving by Ian Bradbury and Gipsie Ranney.

When you can’t prevent arbitrary targets and rewards based on meeting them the strategy I attempt to put in place is figure out how the system will be distorted in order to meet those targets and then put in measures that will discourage such distortions. It isn’t perfect but can help prevent some of the worst distortions (and degradation of system-wide performance they cause).

Related: Righter Incentivization – The Defect Black Market – Dr. Deming on the problems with managing with targets (and incentives based on them) – Extrinsic Incentives Kill Creativity

The CEO is Only One Person

Posted on December 14, 2009  Comments (5)

The CEO is important but they are only one person. Rarely do they determine the success of a company. The instances where they seem to are so rare as to almost seem like just random luck. I think they can make a difference, but that they make a significant difference rarely. Steve Jobs seems to have made a huge difference to Apple, for example (and Jeffery Bezos at Amazon – note both of these examples are also founders of the company). Jason Zweig has a good article on Why a New CEO Isn’t Always a Panacea

Management is important, which is why Warren Buffett puts such stock in the character of the people who run the companies he invests in. But management isn’t nearly as important as many investors think, which is why Benjamin Graham, Mr. Buffett’s mentor, paid so little attention to it. In fact, Mr. Graham seldom bothered to meet the managers of the companies he invested in, partly because he felt they would tell him only what they wished him to hear and partly because he didn’t want his judgments of business value to be influenced by impressions of personal character.

If you took the CEOs with the best track records and brought them in to run the businesses with the worst performance, how often would those companies become more profitable? According to economist Antoinette Schoar of Massachusetts Institute of Technology’s Sloan School of Management, who has studied the effects of hundreds of management changes, the answer is roughly 60%. That isn’t much better than the flip of a coin.

“Some people,” Prof. Schoar says, “may have this almost blind belief that the manager at the top changes everything. Our results show that managers do matter, but they don’t change everything.”

Since the 1970s, several other studies have measured what happens when companies bring in new bosses. Most of the findings have been consistent: Changes in leadership account for roughly 10% of the variance in corporate profitability on average.
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a company will be much more inclined to replace the CEO after a run of bad losses—and to bring him in from a firm that has been on a hot streak. That leads to an illusion: “You change the CEO,” Dr. Kahneman says, “then performance reverts to the mean, and you attribute the improvement to the new guy.”

Furthermore, the hot profits at the new CEO’s former company are likely to cool off—by regression to the mean alone. When investors see that, they will mistakenly conclude that he is such a good boss that his old firm can’t thrive without him.

The management system is far more important than one person. Jim Press, Toyota N. American President, Moves to Chrysler (don’t expect much – Sept 2007). We are often fooled by randomness (understanding psychology lets you know this truth and factor it into your thinking): Illusions – Optical and Other, Attributing Random Results to a Special Cause, Seeing Patterns Where None Exists.

CEOs like to think they are royalty and take huge amounts of money from the company’s treasury, as a way, they hope, of providing evidence of this false belief. Don’t be fooled.

Jason Zwieg is the editor of the last few issues of the Intelligent Investor where he adds commentary on Benjamin Graham’s classic.

Related: Narcissistic Cadre of Senior Executives – CEO’s Given Lottery Sized Payouts – Diversification not Dazzling in Investing – Tilting at Ludicrous CEO Pay 2007 Edition

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