Hopeful About India’s Manufacturing Sector

Posted on December 11, 2005 by John Hunter

Why Am I Hopeful About India’s Manufacturing Sector [the broken link was removed] by Indra:

As World Economic Forum Founder and Chairman Professor Klaus Schwab said in recently held India Economic Summit, 2005, “It is indeed important for India to excel globally not only in the services sector but also in the manufacturing sector. Manufacturing in India has become much more sophisticated with the introduction of high technology in many of its production processes. A key priority for India is to provide jobs for its large population and in this regard, the resurgence of Indian manufacturing would generate millions of jobs throughout the country.”

Since India’s manufacturing economy is so small now they would actually see increases in manufacturing jobs. China has lost many more manufacturing jobs than the USA (15 million to 2 million from 1995 to 2002) as previously China’s factories were staffed with millions of workers with no actual work to do.

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Posted in Economics, India, Manufacturing | Tagged , , | 2 Comments

The 70 Percent Solution

Posted on December 10, 2005 by John Hunter

The 70 Percent Solution [the broken link was removed] by John Battelle, an interview with Google CEO Eric Schmidt:

We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses, ones related to the core businesses in some interesting way. Examples of that would be Google News, Google Earth, and Google Local. And then 10 percent of our time should be on things that are truly new. An example there would be the Wi-Fi initiative.

Google is also well know for the 20% rule for technical staff [the broken link on Google’s site was removed]

Google engineers all have “20 percent time” in which they’re free to pursue projects they’re passionate about. This freedom has already produced Google News, Google Suggest, AdSense for Content, and Orkut – products which might otherwise have taken an entire start-up to launch.

Both models attempt to assure significant time is devoted to new ideas.

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Posted in Google, Innovation, Management, quote, Systems thinking | Tagged , , , , | 4 Comments

Drucker Opinion Essays from the WSJ

Posted on December 10, 2005 by John Hunter

The Wall Street Journal has posted selected opinion essays by Peter Drucker [the broken link was removed] along with several tributes to Drucker.

The Five Deadly Business Sins (article removed so link removed), 1993:

  • the worship of high profit margins and of “premium pricing”
  • mispricing a new product by charging “what the market will bear
  • cost-driven pricing
  • slaughtering tomorrow’s opportunity on the altar of yesterday
  • feeding problems and starving opportunities

Is Executive Pay Excessive?, 1977. In 1977, his answer was, no. As pay did become excessive, Drucker became a prominent voice against the unjust pay of CEO’s.

Economically, [the] few very large executive salaries are quite unimportant. Socially, they do enormous damage. They are highly visible and highly publicized. And they are therefore taken as typical, rather than as the extreme exceptions they are.

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Posted in Management | Tagged , , , | 3 Comments

Six Sigma Hospitality

Posted on December 10, 2005 by John Hunter

The Six Sigma Syndrome [the broken link was removed] by Saurabh Jaggi

Starwood has run over 3000 projects worldwide to date in areas such as productivity, menu re-design, resort concierge, email marketing and launching a worldwide sales initiative. Another of its chain of hotels, The Westin Turnberry resort in Scotland won the IQPC’s 5th Annual European Six-Sigma summit in London in April 2004. It won the European award in the category ‘Design for Six Sigma’ for a reservation project.

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Innovate or “Play it Safe” to Avoid Risk

Posted on December 8, 2005 by John Hunter

The Xooglers blog has some really interesting posts. In one, “But, but, that’s just crazy talk!” [the broken link was removed], Doug Edwards discusses a great example of what true leadership is about.

In my defense, my background conspired against me. Past public relations debacles had taught me always to evaluate worst-case scenarios before considering the possible benefits of any new initiative. “First, do no harm” had become my mantra.

This is the reality of many people. There are many reasons why avoiding risks is smart and should be encouraged. But when avoiding risks stifles innovation the risks to the organization are huge.

And I took a notion that maybe I should be more open-minded about big ideas that, on the face of them, seemed ludicrous. I would have many opportunities to test this resolve in the years to come.

A great lesson. The hard part is that stupid decisions can easily be made when knowledge is lacking. There is no substitute for knowledge – W. Edwards Deming.

Playing it safe isn’t always safe. In rapidly changing markets (which are quite common lately) “playing it safe” is often riskier than “taking chances” on new ideas.

Quote from Lion of Lean [replaced link to original article with a link to my post that discussed that article, and more – because the original link has been broken], interview with Jim Womack:

So this guy, who was around 60, gives me an incredibly frosty look and says, “Because I know everything.” Everything? “That’s my job,” he says.

You have to read the article [well since they broke the link, you can read my previous post] to understand that quote.

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Posted in Creativity, Google, Innovation, Management, quote | Tagged , , , , | 2 Comments

Data Based Decision Making

Posted on December 6, 2005 by John Hunter

Acumen visits Google:

As a first step, we hope to collaborate with interested Googlers to find better ways to learn what works around the world. Identifying powerful solutions to poverty that are useful to people in different settings, and that are market-driven, scalable, and sustainable, is our greatest challenge. Second, we’re hoping to strengthen how the world measures both social and financial returns to investments in delivering critical goods and services to the poor. Like Google, we hold a deep belief in the power of measuring everything we can.

Google has done a fantastic job of using data to make decisions. In fact so much so, that some think they may go overboard trying to find an algorithm for everything. My dinner with Sergey [the broken link was removed]:

It was a classic Google moment. Your S.A.T. score was the measure of your intellectual capability; your GPA represented the numerical summary of your ability to execute on that potential. Your value to Google could be plotted using those two data points.

Sergey’s desire to reduce every decision to an equation would cause me a fair amount of frustration in the years to come. While it forced a discipline on me that was likely lacking in my career up to that point, it also went against my deeply-held conviction that some things are not expressible simply by deriving the correct algorithm. A lot of engineers at Google would dispute that with religious conviction, though they might admit that deriving the correct algorithm would be “non-trivial.”

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Posted in Data, Google, Management | Tagged , , , | 4 Comments

Project Kaizen Co-Blogging Week

Posted on December 6, 2005 by John Hunter

The Project Kaizen Co-Blogging Week has started. The posts in the first day have been interesting. Including, Improving Workgroups:

The result is individuals doing individual work. People create their own training materials because the corporate materials “are proprietary” and there’s too much risk in sharing them (a ridiculous concept since the company in question hardly invented lean, the slides were all borrowed from outside lean knowledge, yet now this company doesn’t want to follow Toyota’s model by sharing).

There’s an enormous amount of waste that’s created because the company doesn’t use available technology (web-based or otherwise) to create a true TEAM of lean consultants. The consultants should be posting case studies, helping each other with problems, and coaching each other, all in the name of continuous improvement and kaizen.

I completely agree.

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Performance of People and Appraisal

Posted on December 5, 2005 by John Hunter

The Statistical and Scientific Thinking blog, by John Dowd, has several interesting posts on the Performance of People [the broken link was removed]:

Why can’t performance be numerically rated and ranked? It can’t be defined operationally, it can’t be measured with any degree of precision, it can’t be separated from other effects, and it is destined to vary over time in any case. Any one of these factors present significant (if not insurmountable) problems itself. Combined the problems create an impossible barrier.

Performance of People III [the broken link was removed]:

This essentially ended the practice of raise administration as a ‘zero sum’ game. Many (if not most) companies make a total figure available for raises. That figure is then stated in terms of a percentage of total salaries. Each supervisor is instructed to average that percentage in administering raises among his or her employees. Thus, a given employee can only receive more than the average if another employee within the same supervisory unit receives less. This fosters competition within small units of the company. That is disastrous.

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Google: Ten Golden Rules

Posted on December 5, 2005 by John Hunter

Google: Ten Golden Rules [the broken link was removed] by Eric Schmidt and Hal Varian:

At google, we think business guru Peter Drucker well understood how to manage the new breed of “knowledge workers.” After all, Drucker invented the term in 1959. He says knowledge workers believe they are paid to be effective, not to work 9 to 5, and that smart businesses will “strip away everything that gets in their knowledge workers’ way.” Those that succeed will attract the best performers, securing “the single biggest factor for competitive advantage in the next 25 years.”

Google really is doing things differently. One way you see it is that some of those used to being the most powerful players complain that they don’t get respect at Google, at Google the engineers rule. Um, maybe they shouldn’t complain too loud, maybe the reason Google is doing better is they focus on the Gemba (where value is added to the customer).

Googling For Gold [the broken link was removed]:

The suits inside Google don’t fare much better than the outside pros. Several current and former insiders say there’s a caste system, in which business types are second-class citizens to Google’s valued code jockeys. They argue that it could prove to be a big challenge in the future as Google seeks to maintain its growth. They deem the corporate development team as underpowered in the company, with engineers and product managers tending to carry more clout than salesmen and dealmakers.

Truthfully Google is a special case. Still managers should learn from Google’s success. Google isn’t afraid to take risks and try things that others are won’t. It seems to be working pretty well.

Posted in Google, Innovation, Management | Tagged , , , | 7 Comments

Ford’s Wrong Turn

Posted on December 5, 2005 by John Hunter

Mr. Ford’s Wrong Turn, Why U.S. Automakers Can’t Blame Japan by James P. Womack:

What makes this claim so extraordinary is that Japanese companies, led by Toyota Motor Corp., are thrashing Ford by building vehicles in North American factories with North American-made parts and North American workers, who receive American-style wages and health benefits. And increasingly, these Japanese brand vehicles are engineered in America by Americans.

Consider a few facts about Toyota. About 65 percent of the vehicles the firm sells in North America it assembles in North America, and it would assemble a much higher proportion here if it could only keep up with its rapid sales growth. Toyota will open its seventh North American assembly line in Texas next summer… By the end of the decade, Toyota will be able to assemble about as many cars as Chrysler does in North America, and it is closing in on the capacity Ford will have after plant closings that are widely expected to be announced in January.

In fact, thanks to hiring by Japanese, Korean and German auto makers, total employment in the U.S. motor vehicle industry over the past decade has held steady at about 1.1 million.

The problem for American car companies is pretty clearly poor management. Toyota, and others, builds cars in America profitably.

Paying for health care, as Womack mentions, is a significant problem. The high cost of the existing health care system has been known to be a burden on the American economy for decades but politically it has been preferable to delay taking action. At some point that will change and the systemic problems will be addressed. Knowing this, the US auto companies still overpromised in the last few decades and now must cope with the decisions they made.

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Posted in Lean thinking, Management, Management Articles, Manufacturing | Tagged , , | 2 Comments