Monthly Archives: March 2007

Goodbye Quarterly Targets?

Goodbye Quarterly Targets? [the broken link was removed], Business Week:

For about a decade, companies have tried to goose their stocks-or manage the market’s expectations-by putting out quarterly earnings projections. Now the practice has come under fire as business leaders fret that the focus on short-term targets undermines long-term growth.

On March 14 the Commission on the Regulation of U.S. Capital Markets in the 21st Century, a project of the U.S. Chamber of Commerce, urged executives to stop issuing their short-term goals. The practice is a “self-inflicted wound by American CEOs,” says commission member Robert Pozen, chairman of MFS Investment Management, a Boston fund manager.

Debate over this issue has simmered for years. Indeed, dozens of companies, including Coca-Cola and McDonald’s, have quit publicizing quarterly earnings targets. Now the issue has become urgent, the Chamber argues, as U.S. companies face growing long-term competition from overseas, where such projections are not widely made.

Learning that a fixation on short term profits is bad for the organization is a good step. Deming talked about this problem over twenty years ago in seven deadly diseases of western management one of which was: the emphasis on short term profits.

Related: Life Beyond the Short TermDell Falls ShortConstancy of Purpose

Data Visualization Example

[I replaced the embedded video, since Google broke the original link with the way they shut down Google Video after buying YouTube]

In Myths About the Developing World, Hans Rosling shows some great graphics to display data on health care outcomes. This is one of the talks from the great TED conference that we have mentioned before. They really have some great webcasts available on their site.

The presentation also gives a concrete example of faulty knowledge (people thinking things which are not so – related to theory of knowledge). He also makes good points on stratifying data at the 14 minute mark. See gapminder.org for good additional material.

Related: Great ChartsOpen Access Education Materials

Metrics and Software Development

Lean-based Metrics for Agile CM Environments [the broken link was removed] by Brad Appleton, Robert Cowham and Steve Berczuk:

Measure Up! Don’t use metrics to measure individuals in a way that compares their performance to others or isolates the value of their contributions from the rest of the team. The last of the seven principles of Lean software development tells us to “Optimize across the whole.” When measuring value or performance, it is often better to measure at the next level-up. Look at the big-picture because the integrated whole is greater than the sum of its decomposition into parts. Metrics on individuals and subparts often create suboptimization of the whole, unless the metric connects to the “big picture” in a way that emphasizes the success of the whole over any one part.

I agree that measuring individuals is normally not an effective way improve. And “measuring up” can often be valuable. Often a fixation on small process measures can result in improvements that don’t actually improve the end result. But rather than the measure up view, I find looking at outcome measures (to measure overall effectiveness) and process measures (for viewing specific parts of the system “big picture”) the most useful strategy.

The reason for process measures is not to improve those results alone. But those process measures can be selected to measure key processes within the system. Say finding 3 process measures that if we can improve these then this important outcome measure will improve (using PDSA to make sure your prediction is accurate – don’t fall into the trap of focusing on improving that measure even after the data shows it does not result in the desired improvement to the overall results that was predicted).

Also, process measures are helpful in serving as indicators that something is going wrong (or potentially going better than normal). Process measures will change quickly (good ones can be close to real time) thus facilitate immediate remedies and immediate examination of what lead to the problem to aid in avoiding that condition in the future.

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Your Online Presence

Web anonymity can sink your job search [the broken link was removed]:

In today’s job market, turning up missing on the Web may not be a fatal flaw, and it’s probably better than having a search result in a photo of you in a hula skirt. But over time, the lack of a Web presence – particularly for IT professionals – may well turn from a neutral to a negative, says Tim Bray, director of Web technologies at Sun Microsystems Inc. “Particularly because we’re a core technology provider, if someone came looking for a senior-level job and had left no mark on the Internet, I’d see that as a big negative,” he says.

And it’s not just about technology, Bray says. “Most companies would rather have somebody who has demonstrated the propensity to contribute, and one [sign] of that is going out and getting involved, joining in the discussion.”

I think that is exactly right. For certain jobs the need for an online presence is not as critical, however, knowledge workers can really help out their prospects with a good online presence. Creating such a presence can be a big job or it can be a fairly simple site with a few articles with your ideas on topics that interest you. Creating your own blog can also be an effective strategy. Guest blog posts on another blog can also be useful.

An image of the johnhunter.com home page

[I added this image after the blog post – from my post: New JohnHunter.com Website]

Your own web site that can serve as the long term address is a very good idea (and getting a web site with your name is a good idea, if possible, even if you don’t use it right away, for example: johnhunter.com). Then you can link to various efforts (guest posts on blogs, articles at various sites, podcasts…).

Related: Blogging is Good for YouYour Online IdentityInterviews with John HunterCurious Cat Management Improvement Articles

GM Lacrosse: China and the USA

Made in China, an article exploring the new GM LaCrosse:

The redesign was pitch perfect, so well targeted that the Chinese LaCrosse is on track to sell nearly 110,000 units in its second year in production. (In the United States, the LaCrosse isn’t expected to approach the 100,000-unit mark, ever.) Now, with that success still fresh, Qiu and the China design team face a critical test. They will design the next Buick LaCrosse, due out at the end of the decade, for the entire world.

I wonder how much value there is to designing cars to be world cars? Occasionally that might make sense and standardizing parts and even design processes… makes sense to me (as much as practical). The key it seems to me is “so well targeted” and local manufacturing.

Their plan, unprecedented within GM, was to pit teams of designers from around the world against each other.

I don’t like that idea. As much as possible they should cooperate with each other.

Using Google to Eliminate Some IT Costs

Computer Science 101: A Case Study In Google Applications [the broken link was removed]:

Sannier plans to shut down the university’s own e-mail servers later this spring. When that happens, thousands more will move over. The portal provides access to other functions of Google Apps, including calendar (which users can now share online, something they couldn’t do before), instant messaging, and search. Within the next two months, Sannier expects to offer personalized home pages and Google’s Docs & Spreadsheets applications combo.

The cost to ASU: zero. The university had been spending a half-million dollars a year on servers and storage for its open source e-mail system, including administrative support costs. More important is the faster pace of innovation. “Now we’re on Google’s development curve, not ours,” Sannier says.

Google’s efforts with Google Apps have fairly quietly become quite significant. I find gmail excellent (and Google talk and Google calendar are good but hopefully will be improved significantly). I must say I find Open Office very good and so don’t quite see the value in Google docs but maybe I am missing something (for those few documents that benefit from collaboration Google’s model sounds interesting – though a wiki seem like the best option in that case). Seems very possible Google Apps are an example of Clayton Christensen’s concept of disruptive innovation.

Exposing CEO Pay Excesses

The politics of pay from The Economist:

Although barely one-tenth of the 2,000 biggest American companies have yet reported under the new rules, the tally of negative headlines is already mounting. “There are already plenty of examples of firms reporting chief-executive pay packages of millions of dollars more than expected,” says Paul Hodgson of the Corporate Library, a research firm. He reckons that the firms that have already reported are a representative sample likely to provide a good indication of the overall trend.

Thankfully, more of the ludicrous pay packages details are being made public and shame will force some changes (those approving these pay packages have to justify such reckless spending). Of course, some feel no shame no matter how egregious the situation. As I mentioned earlier, I would add excessive executive pay to Deming’s seven deadly diseases of western management. We need to drastically role back the luducrous pay packages.

Related: More on Obscene CEO PayExcessive Executive PayToyota’s CEO pay under $1 millionWarren Buffett on Excessive CEO PayCompensation at Whole FoodsBloated CEO salaries, subsidized by taxpayers, undermine American valuesCEO Compensation: A Problem That Just Gets Worse

Making Suits in the USA

Trying On Toyota’s Methods (site broke link so I removed it):

Keeping Abboud’s suit manufacturing in the United States has advantages, such as reduced shipping time, he said. He also believes overseas workers can’t beat the quality and price of the suits Abboud produces in New Bedford, which sell in Nordstrom Inc. and Bloomingdale’s for $700 to $1,000.

Abboud says its sales are about $400 million a year. The company is doing fine, but management says the U.S. factory has to improve constantly to justify the higher salaries its workers make, compared with foreign rivals. The average wage in the factory is $12 an hour, plus union benefits. That’s three or four times what workers in Mexico make, Sapienza said.

“It’s one thing to do it in 2007,” he said. “Are we going to be able to do it in 2010? In 2012? … In the final analysis, if Toyota can make a car in 13 hours, there’s no reason we shouldn’t be able to make a suit in a much reduced period of time.”

Related: Made in the USAJoseph Abboud: Lean ManufacturerMore on Joseph Abboud

Eric Schmidt Podcast – Google Innovation and Entrepreneurship

iinnovate podcast interview with Eric Schmidt, the CEO of Google.

“Normal sales quotas” – oops maybe Google can learn from others in this area. I found it interesting that Eric Schmidt teaches at Standford even while being the CEO of Google, because as he says he learns from students questions. The podcast series, done by 2 Stanford students, has quite an impressive list of, I guess, visiting speakers at Stanford: Andy Grove, Alex Counts, David Kelley…

via: Eric Schmidt Interviewed On Entrepreneurship, Management and More

Related: Innovation at GoogleGoogle Shifts FocusChaos Management (by design) at Google