The Curious Cat Management Carnival has been published since 2006. The carnival, published twice a month, links to great, recent, management blog posts. I hope you find these post interesting and find some new blogs to start reading. Follow me online: Google+, Twitter and elsewhere.
- Toyota, Respect for People (or “Humanity”) and Lean by Mark Graban – “I’ve really come to appreciate how ‘respect for people’ and ‘continuous improvement’ (or Kaizen) are intertwined. We practice CI because we have RFP… we practice RFP by engaging people in CI and challenging them to perform better… for the sake of our customers and our patients (who we have respect for).”
- Where There is Fear You Do Not Get Honest Figures by John Hunter – “The problems fear creates result in bad data, ineffective decision making and the destruction of joy in work.”
- Comparing the Five Lean Principles to the Toyota 14 Principles by Matt Wrye – “The standardization allows for a baseline when a problem arises. If standards are being followed then the problem becomes easier to diagnose. Once the root cause is discovered, allowing the employees the freedom to improve the standard so the issue doesn’t surface again promotes empowerment and respect for people. This respect for their knowledge of the process will help to foster more improvement ideas from them.”
- Disruption guru Clay Christensen says incumbent media players are making a classic mistake by Mathew Ingram – “incumbent players in a particular industry routinely fail to make the necessary changes to the way they do things, even when they can see the disruption occurring all around them. In almost every case, they see the disruptors as not worthy of their attention because they are operating at the low end of the market, and either don’t see that as important or are too committed to their existing business models.”
The Market Discounts Proven Company Leadership Far Too Quickly
Developing a strong executive leadership culture is not a short term effort. It isn’t based on one person. It almost never deteriorates quickly. Yet markets continually overact to minor blips on the long term success of companies. I think this is mainly due to a failure to appreciate systems and a failure to appreciate variation along with plenty of other contributing factors.
The market’s weakness does provide investment opportunities. Though taking advantages of them is much more difficult than spotting a general weakness. While excellent management almost never becomes pitiful overnight (regardless of how often talking heads would have you believe) business can change very quickly due to rapidly changing market conditions. Avoiding the purchases when the underlying business has sustained a significant blow that excellent management will deal with but which will reduce the value of the enterprise going forward is key to taking advantage of the market’s silly overreaction to bad news (or even calling things “bad news” that are not actually bad just not as awesome as some were hoping for).
My positive opinion of Toyota’s management has continued for a long time. A few years ago an amazing number of people were all excited about the “decline of Toyota” and wrote about how Toyota’s ways had to change. I wrote at the time was this is needless hysteria and if Toyota just focused a bit more on applying the Toyota’s management methods they would be in great shape. The problems were due to Toyota’s mistakes in practicing the Toyota Production System not in a weakness of those practices.
Looking at a chart of Toyota’s stock price from 2007 to today it peaks at about $137 in January 2007 and bottoms at $58 in early 2009 and now is at $96. Toyota’s stock price has been priced richly due to respect for management and consistently strong cash flow. As it fell below $75 there you no longer had to pay a premium for excellent management, but that management was still there. I like getting bargains when I buy stocks. One of the things I have learned I am too focused on bargains and I should be more willing to accept less of a bargain to get great management systems – so I have adjusted, and have improved my results. When I can get a great bargain and great management it is wonderful, though sadly a rare occurrence. Toyota’s price now seems reasonable, but not a huge bargain.
The market continually gets overly excited by either actual problems or perceived problems. I wrote about this happening with Netflix 2 years ago. Netflix made some mistakes and faced some tough business issues. The evidence of sound, sensible, effective management vastly outweighed the evidence for management failure – yet there were hundreds of articles about the pitiful failure of Netflix management.
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