Yearly Archives: 2006

Starbucks: Respect for Workers and Health Care

Starbucks Corp. CEO Howard Schultz interview on Marketplace

I grew up in Brooklyn, New York. I guess it’s been well documented, many times, in federally subsidized housing known as the projects. My dad never made more than $20,000 a year and I saw first-hand what it was like to kind of live on the other side of the tracks

the company is deeply-rooted in a sensibility and trying to build the company with a conscience primarily, I think, defined by the fact that we did something in 1989 and 1990 that had never been done before, which was creating a program in which we had comprehensive health insurance for all employees including part-timers and created a mechanism for equity in the form of stock options

What about those that believe you should cut spending on employees, since health care, for example, is so expensive?

We’ve created more productive people and created an environment where Starbucks in many places domestically and around the world is the employer of choice and we are able to attract and retain fantastic people because of the culture of the company, which is defined by these benefits. So my argument is simple, it’s which investment do you want to make? An investment in your people or do you want to make an investment in the hidden costs of turnover and retraining your people?

So many companies talk about how people are the companies most important asset, so few act that way.
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Workplace Management by Taiichi Ohno

Workplace Management by Taiichi Ohno, translated by Jon Miller.

This classic work by the founding father of the Toyota Production System returns to print in a new translation. Ohno delivers timeless lessons on how to effectively manage the gemba – actual place or work. He relates stories from across his nearly 40 years of struggle to establish the Toyota Production System as both a mindset and supporting behaviors of constant improvement. In the book’s 37 chapters, Ohno covers a broad range of topics and lays out the fundamental philosophy of kaizen (continuous improvement) that has made Toyota the most successful automobile manufacturer today.

Jon Miller posted excellent items to his blog on each chapter. You may pre-order the book now for delivery in March, 2007.

Related: Gemba Keiei by Taiichi OhnoKaizen the Toyota WayOrigins of the Toyota Production SystemLean terms defined: KaizenCurious Cat Management Improvement Books

How to Improve

My management philosophy is guided by the idea of seeking methods that will be most effective.* There are many ways to improve. Good management systems are about seeking systemic adoption of the most effective solutions. What this amounts to is learning about the ideas of Deming, Ackoff, Ohno, Chirstensen, Scholtes, Womack… and then adopting those ideas. In doing so learning about management tools and concepts as they are applied to your work.

Here is a simple example. Continue reading

10 Stocks for 10 Years Update

In April of 2005 I wrote: 10 stocks for 10 years. At that time I also created a fund through Marketocracy. Thus far the portfolio is up 15.8% annually (versus 15.3% for the S&P 500) – see more below…

I have made minor changes to the fund during the year (less than 4% turnover). As I mentioned in June I would buy Tesco, but Marketocracy does not support it. Google is still doing quite well, up 122% since inception. The second largest gain is for Petro China, up 106% and Toyota is up 67%. Dell is the worst performer down 25% followed by Yahoo down 16%. I am comfortable with the original 10 stocks and don’t have any significant changes I would make to the portfolio now. For the small change I would make now see more…
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Weblog Awards: Best Business Blog Finalist

award button

The Curious Cat Management Improvement Blog is a 2006 Weblog Awards finalist in the Best Business Blog category. 10 blogs from each category are selected as finalists. Voting opened last week and continues through December 15th.

For those visiting from the award site you may want to take a look at our popular posts including: Stop Demotivating EmployeesNew Rules for Management? No!Toyota IT OverviewEliminate SlogansQuality and InnovationManufacturing Jobs data USA and China
And some others: Distort the SystemImproving the 401(k) SystemRighter Performance AppraisalMore on Obscene CEO PayHousing and the EconomyUsability Failures

Management Improvement Carnival #1

There have been a number of great post recently about management improvement:

  • Amazon’s Long Public Haul by Kevin Meyer – “Amazon has now been around a while and has a loyal following. Their culture is apparently deep, at least for the most part. But that does not guarantee long-term success.”
  • Jeff Bezos Risky Bet Isn’t New by Peter Abilla – “Guess what everybody — Bezos’ Risky Bet isn’t new. Amazon has been doing that for years, but they’re just now opening services up to the masses.”
  • How to Put Kaizen into Your Culture by Jon Miller – “The reason we can make our living is because we serve our customers… Improvement is everyone’s job… The current condition is unacceptable, no matter how good we are.”
  • Choices = Headaches by Joel Spolsky – “Inevitably, you are going to think of a long list of intelligent, defensible reasons why each of these options is absolutely, positively essential. Don’t bother. I know.”
  • Two podcast interviews by Mark Graban: Jim Womack on lean in China (podcast) and Norman Bodek on Educating Leadership
  • Using Quality Tools to Identify Root Cause by Jay Marino – “One of the steps of the PDSA cycle is “identifying root cause” and includes several quality tools to help identify the “culprits” in a system including: Cause and Effect Diagram; Relations Diagram; and the 5 Whys.”
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Ritz Carlton and Home Depot

Don MacAskill writes of his great service from Ritz-Carlton and horrible service from Home Depot. Neither result is surprising, see related posts below. On the Ritz:

The next day, Ritz employees were still greeting us in the halls by our name and wishing us “Happy Anniversary”. The bottom line: We felt special. We felt pampered. We felt like the Ladies and Gentlemen of the Ritz-Carlton knew us personally and really cared about making sure we were happy. They’ve earned a customer for life.

Ritz-Carlton’s motto is “We are ladies and gentlemen serving ladies and gentlemen.” And they actually turn those words into reality. They are not platitudes with no action. The system is guided toward achieving that vision.

Worst. Service. Ever: Home Depot & HOMExperts
(which includes videos of NBC investigation of customer service problems):

As the CEO of a company that strives to provide top-notch customer service, this has been incredible to watch. At no time during the process, other than the design and purchasing phase, have we felt taken care of, or even like our satisfaction was even a consideration. I wish I could say that the experience has been highly educational, like my visit to the Ritz-Carlton, but I have to imagine that any human being would realize that this is ludicrously bad customer service. The two companies involved, The Home Depot and their contractors, HOMExperts, must have some serious problems internally.

Related: Customer Focus at the RitzEffective Leadership Strategies are Driven by Total Quality Management (TQM) Principles1999 Ritz Baldrige Application SummaryNot Lean RetailingMore on Obscene CEO Pay

Womack on Lean in China

From the Lean blog another valuable podcast: Lean in China with Jim Womack. He is not impressed with the state of lean in China yet. Lean Enterprise China has been established to aid the adoption of the best management practices in China.

Read articles by Jim Womack

Related: China’s Lean JourneyManufacturing Jobs Data: USA and ChinaToyota in China: Full Speed AheadGlobal Manufacturing Data by Country

Toyota Production System for Sales…

Corporate profile: the Toyota Production System by Sarah Perrin:

Within Toyota itself, non-production personnel support the TPS approach. “We very much value the Toyota way,” says David Betteley, managing director of Toyota Financial Services (UK) and vice president operations for Europe and Africa. “The key values of the Toyota way are teamwork, respect, challenge, kaizen and genchi genbutsu.

“You produce a new product and it can be replicated by a competitor almost immediately, so you have to be always innovating. We are very dealer focused. We have to provide not only a competitive service pricewise to dealers, but also be competitive in terms of the length of time it takes to deal with things. We have to be moving and changing all the time and never sit still.”

Applying the TPS to non-production areas of the business isn’t easy, of course. “It’s a challenge converting these best practices in Toyota that have been developed for production and moving them down into sales and marketing, which is what we do,” says Betteley.

It is nice to see this article in Accountancy Age. One more nudge toward lean accounting.

Related TPS non-manufacturing posts: Toyota IT OverviewLean RetailingMarketing in a Lean CompanyMore on Non-Auto ToyotaJapan Airlines using Toyota Production System PrinciplesKeeping score with lean accounting