3M CEO on Six Sigma

Posted on February 8, 2007 by John Hunter

3M in building spree to end capacity constraints

3M should complete the first of an 18-factory build-out in the third quarter, said its chief executive late Tuesday, as it makes up for years of underinvestment on the factory floor – even in its well-known household products. “Our major challenge will be getting all these plants launched,” said 3M CEO George Buckley at a Lehman Brothers conference. Buckley, who joined the St. Paul, Minn. company just over a year ago, has embarked on a global physical expansion program… Buckley said he realized the company was facing manufacturing constraints in several of its product lines.

In the past, a 3M culture that viewed new investment with circumspection and an over-reliance on the Six Sigma management technique made it shy of building some needed capacity, Buckley said. “We got ourselves into a position in which we thought Six Sigma would come to our rescue. We all known that in reality it’s something that runs out of steam,” he said.

Well if you “know” that you are not properly executing a six sigma management system. Previous posts on this topic: Management Advice Failures – Change is not Improvement – Leaving Quality Behind? – Going lean Brings Long-term Payoffs. Often six sigma programs amount to cost cutting programs (which can easily run out of steam); but that is so far from effective six sigma management. It isn’t fair to equate a programing calling itself “six sigma” but not using six sigma methods with the actual practice of six sigma management.

Still the CEO still seems to believe in lean six sigma [the broken link was removed]:

“We will continue to drive our growth agenda, which will be funded via aggressive productivity improvement efforts, such as global strategic sourcing and lean six sigma.”

Continue reading →

Posted in Management, Manufacturing, quote, Six sigma, Systems thinking | Tagged | 1 Comment

Don’t ask employees to be passionate about the company!

Posted on February 7, 2007 by John Hunter

Don’t ask employees to be passionate about the company!

People ask me, “How can I get our employees to be passionate about the company?” Wrong question. Passion for our employer, manager, current job? Irrelevant. Passion for our profession and the kind of work we do? Crucial. If I own company FOO, I don’t need employees with a passion for FOO. I want those with a passion for the work they’re doing.

As we discussed in Stop Demotivating Employees Douglas McGregor explained theory X management (managers believe the workers will do only what they are forced, coerced into doing). Theory Y management starts with the premise that people want to do good work, the job of management is to help them do so (create systems, eliminate roadblocks, etc.). The whole post quoted above does a good job of explaining how to create that environment.

Related: Dangers of Extrinsic Motivation – Why Extrinsic Motivation Fails

Posted in Creativity, Management, Psychology, Respect, Software Development

Compensation at Whole Foods

Posted on February 6, 2007 by John Hunter

Compensation at Whole Foods Market [the link that Whole Foods broke was removed]

Most large companies also pay their executives large amounts of stock options in addition to large salaries and cash bonuses. However, this is not the case at Whole Foods Market. As the chart below indicates, the average large corporation in the United States distributes 75% of their total stock options to only 5 top executives with the remaining 25% going to everyone else in the company (actually most of the remaining 25% goes to the next level of executives below the top 5). At Whole Foods, the exact opposite is true: the top 16 executives have received 7% of all the options granted while the other 93% of the options have been distributed throughout the entire company with all Team Members eligible for a grant after 6,000 hours of service to the company.

This is the kind of data you would expect if people are the organization’s most important resource. If instead senior management thinks the company exists to fund their lavish lifestyle and only needs to do other things like provide value to customers, reward investors, provide meaningful work to all employees… as a way of funding lavish living by CEOs you get the behavior discussed in: Graph of Obscene CEO Pay, More on Overpaid CEO’s and Excessive Executive Pay.

Whole Foods CEO Pay [the broken link was removed]

Related: Excessive Executive Pay – The Purpose of an Organization – Warren Buffett’s Shareholder Letter – Starbucks: Respect for Workers and Health Care

Posted in Management, Psychology, Respect, Systems thinking | Tagged , , , | 1 Comment

Short Video on TPS History

Posted on February 5, 2007 by John Hunter

Short video on TPS History from the Art of Lean web site. The video discusses Toyota history and topics including: Jidoka, Just in Time…

Related: Toyota Production System posts – manufacturing posts – management webcasts

Posted in Management, Toyota Production System (TPS), webcast

Motivating People to Change

Posted on February 4, 2007 by John Hunter

Don’t miss a nice series of posts by Jon Miller: How to Motivate People to Change – part 1, part 2, part 3. [links broken, so removed 🙁 ]

Success may come in the short term when motivation is through a combination of fear and reward centering on financial safety and security, belonging to a group and achievement of status…
There is some question as to whether this type of approach to motivation is sustainable, and at the very least it is not one that can be applied to motivate 100% of the workforce…

Toyota’s Creative Idea Suggestion System is possibly the longest continuing and most successful improvement methodology today. It is a great process for motivating workers and for sustaining improvement. So simple, yet so powerful.

Related: Stop Demotivating Employees – Communicating Change – theory x motivation – Incentive Programs are Ineffective – Motivational Posters – theory x or theory y management – posts on managing respect for people

Posted in Deming, Lean thinking, Management, Psychology, Respect, Toyota Production System (TPS) | Tagged , , ,

Toyota Management Speech by Gary Convis

Posted on February 2, 2007 by John Hunter

Gary Convis – Management Briefing Seminars [the link that Toyota broke was removed]

To be a successful automaker or supplier in today’s competitive world, I believe every single person involved in your value chain must fully understand the company’s mission and direction, and execute their roles perfectly to move toward shared goals. As an example, when a potential customer walks into a dealership, they are about to buy the second most expensive product they will ever own.

This is not just a transaction. Everything must be handled with professionalism… to build trust… and ideally establish a relationship with that customer for life. But it goes well beyond dealers. It also extends to suppliers, logistics partners, IT providers, team members in our plants, design engineers, sales and marketing associates, and anyone else responsible for getting our vehicles into the driveways of satisfied customers.

Related: articles by Gary Convis – lean thinking articles – posts on the Toyota Management System

Posted in Lean thinking, Toyota Production System (TPS) | Tagged , | 1 Comment

Management Improvement Carnival #4

Posted on February 1, 2007 by John Hunter

Another edition with links to interesting management improvement blog posts.

  • Lean Office Redesign by Marcie MacRae – “We freed up space, improved visibility and flexibility. And the best part is the lack of a “control center” for visual boards is no longer an excuse for not having Hoshin Kanri review sessions.”
  • The Bullwhip Effect by Peter Abilla – Tips “Reduce lead time of material, Reduce variability with effective use of the Heijunka and one-piece flow, Cooperation and good relationships with your supply chain partners.”
  • Lean Trip to Toyota by Elizabeth Seyler – “Let’s just say that i had an “awe-inspiring” moment when we entered the facility. It was big. Very big. There were so many visuals that my sensory system went into overload”
  • If You Don’t Slow Down and Think Now, You’ll Curse Yourself Later – “When people grab for quick, simple, and, above all, quick answers, they lay themselves wide open to the mistakes collectively called attribution error: this process of assuming links and patterns where none exist.”
  • W. Edwards Deming on the Forces of Destruction by Michael Kaufman – “Extrinsic motivation slowly destroys self esteem, dignity, cooperation and a yearning for learning – all of which are innate and high early in life.”
  • What is Kaizen? by Mike Wroblewski – “As soon as they read the clue, they just started running without trying to understand the meaning of the clue. In their excitement to act, they did not think first.”

    • Continue reading →

Posted in Carnival, Management, Quality tools | Tagged ,

Transforming With Lean

Posted on January 31, 2007 by John Hunter

Dave Gleditsch, Chief Technology Officer, Pelion Systems, makes many excellent points in: Transforming Your Business To Lean: Lessons Learned [the broken link was removed]:

First and foremost, we should always keep the customer at the forefront of the planning and implementation process. A key to success is in being able to find the customer in every single metric you choose to measure your Lean transformation progress by.

Often measures become the focus and the reason for improvement is obscured. Improvement should eliminate waste and improve value to the customer. Measures should help determine the success along that path but improving the numbers is not the aim, the numbers are merely proxies for that aim.

In truth, there are a variety of best practices and methods that will drive significant Lean improvements. American Standard had a significant variety of products and manufacturing processes

Successful management improvement is not about mindlessly applying quality/lean tools. The tools and concepts are very helpful but then people must make judgements about what is needed, what to emphasis, where to focus, how to proceed given the current organization…

Continue reading →

Posted in Customer focus, Deming, Lean thinking, Management, Management Articles, quote | Tagged , | 1 Comment

Encourage Improvement Action by Everyone

Posted on January 31, 2007 by John Hunter

Centralizing decision making is not an effective way to manage organizations. Organizations need to encourage improvement by everybody in the organization. We need to create a system where that is encouraged and supported.

However, there can be problems with just making improvements individually. We tend to overreact to variation. Therefore we tend to tamper with systems which actually increases variation and reduces performance. Also there can be effects on other parts of the system due to a change that are not obvious at the point of change. We need to remove undue bureaucracy. However, it is good to remember that, such efforts are much more effective and safe when supported by a good system (standardization, PDSA, visibility, communication, lean thinking, well trained workforce…).

Without an understanding of systems and interactions sometimes changes are made without an understanding of the consequences those changes. The beer game is a good example of one way this can cause problems (people don’t always understand all the consequences of their actions). To be clear I agree with setting up systems that allow people to make improvements in the workplace. Just be cautious to avoid tampering.
Continue reading →

Posted in Management, Process improvement, Respect, Systems thinking | Tagged , ,

5 Million Lives Campaign

Posted on January 30, 2007 by John Hunter

IHI has created the 5 Million Lives Campaign [the broken link was removed] in the wake of the successful saving 100,000 lives campaign.

Despite the extraordinary hard work and best intentions of caregivers, thousands of patients are harmed in US hospitals every day. Hospital-acquired infections, adverse drug events, surgical errors, pressure sores, and other complications are commonplace. Based on data collected over several years from multiple partner institutions, IHI estimates that nearly 15 million instances of medical harm occur in the US each year – a rate of over 40,000 per day. This is a burden larger than most patients and professionals, and even some health care researchers, realize.

It is time to declare this toll unacceptable; time to end it.

IHI understands how to manage improvement: this campaign has great possibilities to improve the health care system. See previous posts about IHI’s work: Going Lean in Health Care – Seven Leadership Leverage Points – Fixing Health Care from the Inside – Deming Institute Conference: Tom Nolan

Posted in Health care, Management | Tagged