Monthly Archives: July 2007

iPhone + AT&T = Yikes

What a surprise – lousy customer service from a cell phone company. What a shame that it is no surprise at all. Don’t they have tons of MBAs with 6 figure salaries? They do have a CEO paid over $31 million last year. It is so frustrating that even basic stuff is so poorly done, so often and for so long. iPhone+AT&T Bill=Uh-Oh:

It’s a staggeringly, hatefully complex document, designed by some Monty Pythoneseque committee in charge of consumer confusion.

Many people, before the iPhone was released, were already predicting bad results based on Apple’s choice of partner. They wondered how Apple would maintain their typical customer focus when relying on a partner without a good reputation. Well, it is much easier to degrade a system to return the poorest results than to create a system performing at best levels of any portion of that system. This is a great example of failing to deal with the entire system (value stream…).

The first bill, believe it or not, comes to $150. It’s filled with unexplained services and features that were never mentioned during the signup process, like MEDIA MAX, EXPD M2M, VOICE PRIVACY, and AT&T DIRECT BILL. After studying this thing for 20 minutes, I think I’ve got it figured out: activation charge ($36), prorated monthly fee for June ($26 for voice, $13 for Internet use), taxes and fees ($15), plus July billed in advance ($40 voice, $20 data).

What an embarrassment. And the fact that the companies that provide such “service” are not even embarrassed is even more embarrassing.

This development illustrates yet another clash between Apple’s typical philosophy of elegance and simplicity–and the unprepared, cluelessness of its cellular partner.

Very well put, though it could expect more of Apple. They had to know what they were getting their customers into and the failure to manage that better is something their customers have every right to blame Apple for. Read the comments for tons of real customer opinions that are overwhelmingly negative. I wish companies would spend half the time, effort and money fixing these systemic problems that they spend on marketing efforts with little resemblance to what you experience if you actually become a customer.

Related: Standard Prepaid Cell Phone PolicyGood Customer Service ExampleIncredibly Bad Customer Service from Discover CardCustomer Service is ImportantIs Poor Service the Industry Standard?No Customer Focus

Multi-Tasking: Why Projects Take so Long

From a new, interesting, Theory of Constraint blog by Kevin Fox – Multi-Tasking: Why projects take so long and still go late

In many companies the impact of multi-tasking is obscured by the fact that in spite of its prevalence most projects still finish on time. While this reliability is nice, it masks the even more significant opportunity to cut project durations substantially. If projects are being delivered on or close to schedule, and multi-tasking is occurring, it can only mean that the task estimates used in the plan are significantly inflated.

But understanding is not enough. The drivers of multi-tasking are built into the processes, measurements, and systems most companies manage their projects. We strive hard to keep people busy all of the time, to maximize the output of all of our resources and be efficient. Performance measures on project managers and executives motivate them to focus on delivering individual projects, without understanding of the impact of their actions on the rest of the pipeline. Conventional scheduling and pipelining tools pay no attention to these factors and routinely overload resources making multi-tasking nearly inevitable.

via: Silk and Spinach. Related: articles on Theory of ConstraintsMultitasking is not Part of Standard WorkFlowFast Cycle Change in Knowledge-Based Organizationssingle piece flow

TVS Group Director on India – Manufacturing, Economy…

[The link to the podcast has been broken so it has been removed.]

Gopal Srinivasan is Director of TVS Electronics Limited, Joint Managing Director of Sundaram-Clayton Limited and Director of various other TVS Group companies. TVS group companies, based in India, have been awarded 5 Deming Prizes. He discusses Deming and quality a bit. He also discusses their experiences in manufacturing in China and the strengths they have found in each country. And he discusses the Indian economy and manufacturing.

In the second part of the podcast [the broken link has been removed] he talks about the growth of the economy of Tamil Nadu and the inclusive approach required to help India grow. via Gopal Srinivasan of TVS Group of Companies on Entrepreneurship [the broken link has been removed]

Related: Hopeful About India’s Manufacturing SectorToyota Chairman Comments on India and ThailandIndian Deming Prize Winner Expanding2005 Deming Prize Awardees2004 Deming Prize

Amazon’s Amazing Achievement

I have mentioned I like the way Amazon, and Jeff Bezos, have been managing in several posts. Recently Amazon has added very strong financial results to that portfolio of things they do well. Amazon earnings announcement:

Net sales increased 35% to $2.89 billion in the second quarter, compared with $2.14 billion in second quarter 2006. Excluding the $46 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 33% compared with second quarter 2006.

Operating income increased 149% to $116 million in the second quarter, compared with $47 million in second quarter 2006. Net income increased 257% to $78 million in the second quarter, or $0.19 per diluted share, compared with net income of $22 million, or $0.05 per diluted share in second quarter 2006.

Pretty impressive. It seems Amazon might be able to begin delivering strong current financial performance (they have done so at least twice, and maybe longer depending on how you look at it…) and continue to build and innovate for the future. That is when a company really sets itself apart from the crowd. Previously, from the investing perspective, the argument was largely based on the belief that the steps taken today were building for the future (a fine thing, but risky – without the evidence of success actually making real profit it is often easy to make a good case for why the future will be good). In an investment it is more comforting when current earning provide some evidence the profits predicted in the future have some basis in reality.

Since the beginning of April Amazon’s share price has gone from $40 a share to $70. And based on the after hours trades today it is going to be in the $80s tomorrow (though after hours trades can often be misleading – there is some more confidence based on the large volume of hour trades in Amazon, but still…). I must admit this price does seem like it might be getting a bit ahead of itself but Amazon is making an impressive case for strong future performance.

Related: Amazon Innovation10 stocks for 10 years (April 2005)12 Stocks for 10 Years Update (June 2007)Very Good Amazon EarningsBezos on Lean ThinkingIs Amazon a Bargain?

New York City Travel Photos

Photos from my trip to New York City last year are now online. Photos include: The Cloisters (part of the Metropolitan Museum of Art – though located far uptown) art and architecture of medieval Europe, the remodeled Museum of Modern Art, Rockefeller Center, Empire State Building and Flatiron Building.

Related: New York City Photo EssaysParis Travel PhotosPacific Northwest photosCurious Cat Travel Photos

photo of stained glass window - The Cloisters, NYC
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Google Exceeded Planned Spending on Personnel

Often people have trouble understanding Dr. Deming’s disapproval of arbitrary numerical targets. What he was trying to prevent is what many see every day, such as managing to quarterly earnings targets. There are several problems with numerical goals but in here lets focus on one. The change from managing for what is best for the business to managing to hit a target. Google Profit Trails Analyst Estimates; Shares Slide:

The company hired more people than expected last quarter, Chief Executive Officer Eric Schmidt said on a conference call. Google added 1,548 jobs, mostly in sales, marketing and engineering, bringing its total to 13,786. “We overspent against our own plan on headcount,” he said. “We decided it was not a mistake. The kind of people we brought in were so good that we’re glad we did this.”

Great statement. And if more people could manage that way, one of the problems with numerical goals would be eliminated. But with so many organizations tying huge bonuses to meeting arbitrary numerical targets you will have a great deal of difficulty getting managers to hire 3 extra people this quarter, who will help the business, but will ruin their chance at a bonus. Or even if they just take a hit on their performance appraisal compared to the other managers that meet the headcount target – even if it meant turning away talent the organization could have benefited from greatly – and then the manager that missed their target loses out in the next promotion opportunity.

I am happy to own a tiny portion of Google and glad they are making decisions like this. Now just because I think there is a good case to be made for exceeding the targets that doesn’t mean that hiring more people is necessarily good. It is perfectly possible Google is hiring too many people and making a bad prediction about how these people will benefit Google in the long run. I am just saying I strongly support not tying yourself to short term numerical targets, if you predict a better decision requires taking actions that will cause the target to be missed.

Google increased profit by 28%, from the second quarter last year, to $925 million (and down from $1.0 billion in the first quarter of 2007). Lest you think personnel can’t really cost Google that much can it, just the stock based compensation in the second quarter reduced earning by $242 million in the quarter (an “expense” that wasn’t reported just a few years ago). Google had 13,786 full-time employees as of June 30, 2007 (up 1,548 in the quarter) – so that is over $17,500 per full time employee. If anyone at Google wants to talk I am open to considering an employment offer.

Gary Hamel on Management Innovation

I have mentioned before that I think Gary Hamel is one of the leading management thinkers on innovation. Here is an interesting interview (via: brisebois blog) with him – Gary Hamel: management innovation

Management innovation is innovation in management principles and processes that ultimately changes the practice of what managers do, and how they do it. It is different from operational innovation; which is about how the work of transforming inputs into outputs actually gets done.

The management innovation lab is an experiment in itself. For the sake of simplicity, there are two hypotheses. The first is that we can invent a methodology that will allow us to be much more purposeful about management innovation, and that will allow us to dramatically accelerate the evolution of management itself.

The second hypothesis is that we can help organisations learn how to experiment with new management principles and processes in ways that won’t disrupt current success.

Related: Gary Hamel’s Idea HatcheryGoogle ManagementEffective InnovationManaging InnovationProcess Improvement and InnovationManagement Innovation Lab web site

Management by Walking Around

Management by walking around (MBWA) is based on the concept that a manager needs to actually understand what is really going on – not just view reports in an office. By seeing the actual state of affairs they can better understand what management improvements are actually doing where work is being done. Lean thinking includes a great deal on the importance of going to the gemba to make decisions. Anyone interested in MBWA should look at some of that material (as often MBWA is too superficial to do much good). Knowing what is to be accomplished by MBWA is important and I think often those that say they do MBWA are not clear on what that is.

In a similar way a manager needs to see how their web site works, if the web is of importance to their organizations (true for most organization but…). Just visiting it and trying to accomplish tasks (purchase an item, find information) would be a good step. In Is Management by Walking Around still relevant for retail furniture stores in a cyber-based culture? by Larry Mullins he discusses this idea (and the idea that yes MBWA is still important):

The message to take home is: set aside a day and walk around. Visit your website and spend some time with it. A neglected website is much like a neglected back end. It is easy to hide if the boss never comes around. And not only is it a golden opportunity lost in permission advertising, it could very well be a source of annoyance if information is out-of-date and inaccurate.

Related: Ohno Circlemanagement improvement searchInformation Technology related postsGemba Kaizen by Imai

Management Improvement Carnival #15

Please submit your favorite management posts to the carnival.

  • John Kotter on Change Management by Lauchlan Mackinnon – “Kotter therefore suggests an 8-stage process for managing organisational change that addresses each one of these concerns and turns them around to a key stage in the successful management of change”
  • Six Sigma and Innovation by James Todhunter – “while classical Six Sigma is primarily a statistically driven approach to system performance optimization, there are opportunities at every phase within the methodology to augment the process with innovation best practices.”
  • 8 Tips to Better Meetings by Ron Pereira – “Summarize. Throughout the meeting remind the participants what has been accomplished by restating things a bit. Also, if any ideas or solutions have been discussed summarize those as well.”
  • Top 10 Improvement Tools Named After Lean Sensei by Jon Miller – “Kano Model – The chart below illustrates how there is the Voice of the Customer (spoken needs) as well as what is sometimes called Mind of the Customer (latent or unspoken needs).”
  • Communicate And Train To Foster Innovation – “Contrary to what some may think, ‘innovation process’ is not an oxymoron.” [This is so true, innovation and process improvement are not contrary ideas – John]
  • Ten Questions with Jeffrey Pfeffer by Guy Kawasaki – “many companies presume that incentives are the answer to everything, and have a very mechanistic model of human behavior. That is also incorrect.”
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The Joy of Work

Comic by Joe Sayers, Wanna play work?

Wanna play work - comic

A good laugh, but also a reminder of an important idea. We spend much of our life at work: we deserve to have pride in what we do and even enjoy it (shocking I know). Read the respect for people posts for some ideas on how to make your workplace better. If you think a new job might be the answer – find management improvement jobs via Curious Cat Career Connections.

People are entitled to joy in workDr. W. Edwards Deming

Related: What Business Can Learn from Open SourceStop Demotivating Employees