4th Annual Management Blog Roundup

The Curious Cat Management blog carnival highlights recent management blog posts 3 times each month. This is the 4th year that the normal rhythm is being broken to review the past year in management blogging. From now until January 12th some excellent management blogs will be hosting reviews of what has transpired on great management blogs over the last year.

You can find links to all the reviews, as they are posted, on the home page for Management Blogs: 2011 in Review. As managers looking to improve the performance of our organizations, we really are lucky to have so many excellent management blogs to learn from. It is difficult to stay on top of all the wonderful options: hopefully these posts will provide some good resources to follow in the year, and years, ahead.

Matt Wrye, at Beyond Lean, has started things off with posts looking at: Squawk Point and All Things Workplace.

Again this year we have many management bloggers joining the annual roundup. Over the next 3 weeks posts will be seen on some great blog, including: Jamie Flinchbaugh, Lean Six Sigma Academy Blog, Business 901 and many more.

Related: 2010 management blog review2009 management blog roundupCurious Cat Management Blog Directory

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Taking What You Don’t Deserve, CEO Style

The excesses to which CEO’s and their board buddies go to in taking from corporate treasuries what they don’t deserve continues to amaze me. The level to which the bad behavior is accepted is apparent in the lack of progress at dealing with those that are taking what they have no moral right to. As shouldn’t have to be explained (but maybe does) leadership isn’t about avoiding being indicted. The levels to which these people take from the organization they are suppose to be leading is a very sad commentary on our leaders. They act as though the corporation exists to enrich them, and their friends, personally: and all the other stakeholders are just leeches on the system.

CEO’s deserve to be paid well. As they were in 1970. As their abuses (with the support of subservient boards) became greater and greater the outrage increased. Peter Drucker moved from defending highly paid CEOs (say 20 or even 30 times the median employee pay) to expressing dismay at the massively excessive pay packages in the 1990s (which were much lower than that taken by the current crop of self important leeches).

Taking such excessive amounts from the corporate treasury is innately dis-respectful to all other employees (though usually they through large amounts of cash at those they have to see often which bring them into the camp of those taking instead of the masses being taken from). Whatever nice words they use to try and give an illusion that they respect those they work with (or their stockholders, suppliers, customers, communities…) doesn’t change their disrespectful actions.

Company CEO 2010 Pay
   
5 year pay CEO % of 2010 Earnings total employees
UnitedHealth Group Stephen Hemsley $101,960,000 $120,470,000 2.2% 87,000
Qwest Communications Edward Mueller $65,800,000 $75,000,000 company lost $55 million *
Walt Disney Robert Iger $53,320,000 $147,080,000 1.3% 156,000
Express Scripts George Paz $51,520,000 $100,210,000 4.4% 13,170
Coach Lew Frankfort $49,450,000 $137,870,000 6.7% 8,200
Polo Ralph Lauren Ralph Lauren $43,000,000 $155,250,000 9.0% 24,000
Gilead Sciences John Martin $42,720,000 $204,240,000 1.5% 4,000

Executive pay from Fortune, annual earnings from Google Finance, employee totals from Yahoo Finance. * Quest was merged into CenturyTel and I can’t find Quest employee data.

This problem is far worse in the USA than anywhere else. Some CEO’s have become jealous and urged that they be allowed to take more so they can not feel so sad about how much less they make. And so companies from other countries are moving in the wrong direction. The USA continues to move so quickly away from any sense of propriety however that they seem to be gaining on the rest of the world for how badly we can do in this area. There are of course, companies in the USA that don’t believe in letting the CEO treat themselves to whatever they want. Costco is a great example of this. That CEO respects his fellow employees and customers. We need more outrage at those CEOs that refuse to lead and instead just seek to take whatever loot they can before they leave.

Related: Another Year of CEO’s Taking Hugely Excessive Pay (2007)CEO’s Castles and Company PerformanceHonda’s top 36 employees received $13 million total (2006)

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Dr. Deming in 1980 on Product Quality in Japan and the USA

I posted an interesting document to the Curious Cat Management Library: it includes Dr. Deming’s comments as part of a discussion organized by the Government Accounting Office in 1980 on Quality in Japan and the United States.

The document provides some interesting thoughts from Dr. Deming and others; Dr. Deming’s statements start on page 52 of the document. For those really interested in management improvement ideas it is a great read. I imagine most managers wouldn’t enjoy it though (it isn’t giving direct advice for today, but I found it very interesting).

Some selected quotes from the document follow. On his work with Japan in 1950:

This movement, I told them, will fail and nothing will happen unless management does their part. Management must know something about statistical techniques and know that if they are good one place, they will work in another. Management must see that they are used throughout the company.
Quality control must take root with simple statistical techniques that management and everyone in the company must learn. By these techniques, people begin to understand the different kinds of variation. Then quality control just grow with statistical theory and further experience. All this learning must be guided by a master. Remarkable results may come quick, but one has no right to expect results in a hurry. The learning period never ends.

The statistical control of quality is not for the timid and the halfhearted. There is no way to learn except to learn it and do it. You can read about swimming, but you might drown if you had to learn it that way!

One of the common themes at that time was Deming’s methods worked because Japanese people and culture were different. That wasn’t why the ideas worked, but it was an idea many people that wanted to keep doing things the old way liked to believe.

There may be a lot of difference, I made the statement on my first visit there that a Japanese man was never too old nor too successful to learn, and to wish to learn; to study and to learn. I know that people here also study and learn. I’ll be eighty next month in October. I study every day and learn every day. So you find studious people everywhere, but I think that you find in Japan the desire to learn, the willingness to learn.

You didn’t come to hear me on this; there are other people here much better qualified than I am to talk. But in Japan, a man works for the company; he doesn’t work to please somebody. He works for the company, he can argue for the company and stick with it when he has an idea because his position is secure. He doesn’t have to please somebody. It is so here in some companies, but only in a few. I think this is an important difference.

At the time the way QC circles worked in Japan was basically employee led kaizen. So companies that tried to copy Japan told workers: now go make things better like the workers we saw in Japan were doing. Well with management not changing (and understanding Deming’s ideas, lean thinking, variation, systems thinking…) and staff not given training to understand how to improve processes it didn’t work very well. We (those reading this blog) may all now understand the advantages one piece flow. I can’t imagine too many people would jump to that idea sitting in their QC circle without having been told about one piece flow (I know I wouldn’t have), and all the supporting knowledge needed to make that concept work.

QC circles can make tremendous contributions. But let me tell you this, Elmer. If it isn’t obvious to the workers that the managers are doing their part, which only they can do, I think that the workers just get fed up with trying in vain to improve their part of the work. Management must do their part: they must learn something about management.

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Management Improvement Blog Carnival #150

Mark Graban is hosting Management Improvement Blog Carnival #150 on the Lean Blog, highlights include:

  • Watching Waste in the ER! – As part of his relatively new blog, Anthony Scott (Frontline Lean) writes about his experiences with waste in an emergency department. The waste isn’t surprising to those who have been a patient or those who have worked in the E.D. Scott is a supervisor in a lean manufacturing setting and he applies lean thinking to this unfamiliar environment.
  • Case Study: The Nordstrom Innovation Lab – Eric Ries (Startup Lessons Learned), author of the excellent book The Lean Startup, has a post with video featuring the use of “Lean Startup” methods and mindsets within a Fortune 500 company. Eric writes, “It’s one thing to talk about “rapid experimentation” and “validated learning” as abstract concepts. It’s quite another to see them in action, in a real-world setting.”
  • Top 3 Things I’ve Learned After 18 Months in Healthcare – My friend and DFW-area neighbor Mike Lombard (Hospital Kaizen) reflects on his first 18 months after transitioning from manufacturing into healthcare. In addition to his main points, Mike ends the post with an invitation for others to Move to Healthcare, writing, “Like I said earlier, I’ve learned a lot (a lot more than is shown here) and I continue to learn everyday. If you’re an engineer, project manager, quality professional, operations manager, or any other type of business professional, you can make the move to healthcare. Just be ready to focus on people, deal with complexity, and be proud of your work. Most of all, be ready to continuously learn and improve.”

I know we are all busy but, Mark, has done a great job highlighting some excellent posts. Take a look at the full carnival post and each of the posts. It is very nice to see how many great posts we are able to find for every carnival. A decade ago finding this kind of content was nearly impossible.

Related: Management Improvement Carnival #50Management Improvement Carnival #100

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Management Improvement Carnival #149

Jon Miller hosts Management Improvement Carnival #149 looking at blog posts examining motivation, highlights include:

  • a wonderful cat photo
  • Kevin Meyer found some bright spots on his trip to India and documented them in several fun articles in Evolving Excellence. My favorite was leadership lessons from Ganesha, a set of mindsets and behaviors that are both motivating personally and constructive in motivating others.
  • On productivity and motivation, one article began by explaining how researchers found that doing or saying something nice, even if this was a very small gesture, has proven to improve the job performance of people including doctors. The premise is that positivity promotes performance.
  • Addressing the question of “Where do I start?” in learning lean thinking and putting it into practice, Mark Rosenthal suggests adopting the find the bright spots advice from the book Switch. Finding brights spots is always good advice. While companies fail at thing for a wide variety of local and specialized reasons, success tends to cluster around a handful of factors; motivated people; removing waste, variation and burden; a long-term view. We need to drill a level deeper in each one of these.

I agree that motivation is a very important topic. I think trying to improve management without a good understanding of how people are really motivated is very difficult and weaknesses in this area end up frustrating many improvement efforts.

Related: Incentivizing Behavior Doesn’t Improve ResultsMotivate or Eliminate De-MotivationYou’ve Got to Find What You Love

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Psychology of Improvement

Even if ideas are good and have significant importance (high value to customers, reduce waste dramatically, improve safety…) implementing the ideas can be difficult. Getting people to make an effort to improve a situation by simply laying out the dry facts is not very effective. You need to engage in the management system to make your ideas something other people care about and want to do (you need to consider the psychology of getting things done in human systems).

Often a good way to do this is not to just think what is best for the performance of the system, but figure out what people want fixed/improved… and then figure out what I think could help. Then pick among various options to improve based upon the advantages to the performance of the organization, desires of decision makers and the ability of an improvement effort to build the capacity of the organization for customer focused continuous improvement.

Few places I have worked just want to adopt Deming’s ideas (which is my belief for what is the best way to improve performance). But they have things they care about – reducing the times people get mad at them, increasing cash flow… I find it much easier to help them with their desires and slowly get them to appreciate the benefit of Deming’s management ideas, lean thinking and quality tools. Though even this way it isn’t easy.

Even if the organization I am working with doesn’t think based on Deming’s ideas, I do. So I believe any effort to improve the management system must consider all 4 areas of Deming’s management system. In the beginning of an improvement effort psychology is very important for the change agent to consider and deal with. With an understanding of psychology and an understanding of the organization you can build appropriate strategies to improve and build the capacity of the organization to improve over the long term.

I also think about the long term as I am thinking of how to help. It is important to not just solve the current dilemma but to improve the organizational capacity to improve in the future. And for me that means increasing people’s understanding of the ideas I explore in the Curious Cat Management Improvement blog.

Related: Building the Adoption of Management Improvement Ideas in Your OrganizationStop Demotivating EmployeesHow to Improve

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Management Improvement Carnival #148

Jamie Flinchbaugh hosts Management Improvement Carnival #148, highlights include:

  • Since I’m just back from the 1st Lean for HR Summit, I thought I would also showcase an HR-oriented blog. This one from Emily Douglas challenges HR to step up to the plate in The HR Puzzle.
  • Old Lean Dude, aka Bruce Hamilton, aka “Toast Guy”, writes in Illogical Progression on how hoshin gets used as an organization progresses on their lean journey.
  • Michael Baudin writes about the use of sports metaphors in Black belts, scrums, and other metaphors. His opening sentence says it all: “To be useful, a metaphor must help understanding.” Too often, metaphors are cute but not useful.
  • Matt Wrye, a lean practioner blogging at Beyond Lean, writes Hired for one. Promoted for another. It’s a reflection on the balance between technical and relationship skills.

Make sure you check out the full carnival for many more great management posts.

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Manufacturing Skills Gap or Management Skills Gap?

I stumble across articles discussing the problem of manufacturers having difficulty finding workers with the skills they need (in the USA largely, but elsewhere too) somewhat regularly. While it is true that companies have this problem, I think looking at the problem in that way might not be the most insightful view. Is the problem just that potential workers don’t having the right skills or the result of a long term management skills gap?

To me, the current manufacturing skills gap results directly from short term thinking and disrespect for workers practiced by those with management skills shortages over the last few decades. Those leading the manufacturing firms have shown they will flee the USA with the latest change in the wind, chasing short term bonuses and faulty spreadsheet thinking. Expecting people to spend lots of time and money to develop skills that would be valuable for the long term at manufacturing firms given this management skills shortage feels like putting the blame in the wrong place to me.

Why should workers tie their futures to short term thinking managers practicing disrespect for people? Especially when those managers seem to just find ways to blame everyone else for their problems. As once again they do in blaming potential workers for their hiring problem. The actions taken based on the collective management skill shortage in the manufacturing industry over the last few decades has contributed greatly to the current state.

If managers had all been managing like Toyota managers for the last 30 years I don’t think the manufacturing skill gap would be significant. The management skill gap is more important than the manufacturing skill gap in my opinion. To some extent the manufacturing skill gap could still exist, market are in a constant state of flux, so gaps appear. But if their wasn’t such a large management skill gap it would be a minor issue, I believe.

That still leaves companies today having to deal with the current marketplace to try and find skilled workers. But I think instead of seeing the problem as solely a supplier issue (our suppliers can’t provide us what we need) manufacturing firms would be better served to look at their past, and current, management skills gap and fix that problem. They have control over that problem. And fixing that will provide a much more solid long term management base to cope and prosper in the marketplace.

Another management issue may well be the hiring process itself. As I have written about many times, the recruitment process is highly inefficient and ineffective. When you see workers as long term partners the exact skills they have today are much less significant than their ability to meet the organizations needs over the long term. In general, information technology recruiting has the worst case of focusing on silly skills that are really not important to hiring the right people, but this also can affect manufacturing hiring.

Related: IT Talent Shortage, or Management Failure?Dee Hock on HiringManufacturing Jobs Increasing for First Time Since 1998 in the USA (Sept 2010)Building a Great Workforcemanufacturing jobs have been declining globally (including China) for 2 decadesImproving the Recruitment Process

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Practical Ways to Respect People

What matters is not your stated respect for people but your revealed respect for people. Here are some ideas that I collected on how to practice respect for people.

  • Don’t waste people’s time: have meetings only when necessary and provide agendas in advance. Use email effectively instead of presenting material in meetings that can better be presented in email. Don’t have complex benefit manuals, aimed at making lawyers happy, that employees are expected to use.
  • Do what you say you will.
  • Provide bad news early (don’t hope it will get fixed somehow so you don’t have to address it, let people know what is going on and let them help).
  • Pay people fairly – I would venture to say most senior executive pay today is inherently disrespectful, If I am wrong about the “most” part, certainly a huge amount executive pay is inherently disrespectful.
  • Put the long term success of all stakeholders as the focus (don’t risk people’s jobs for short term bonuses, don’t use large amounts of leverage risking the future of the company…). Respect all stakeholders and provide them confidence their long term success is important. Companies that find themselves laying off workers due to management’s failure to succeed over the long term are not being respectful to those workers. That failure is most obvious today, but the important improvement is not in handling the layoff today, it is in the behavior for years before that did not build a system that was successful in the long term.
  • Tell people what they can do to improve. It is respectful to help people improve. Not mentioning weaknesses that should be worked on is treating a person like a child that needs to be shielded from any hint of criticism.
  • Don’t expect a few people to do far more than their fair share of work because management allows poor performance to continue un-addressed.
  • Continue reading

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Management Improvement Carnival #147

Jason Yip hosts the 147th edition of the Management Improvement Carnival on his blog: You’d think with all my video game experience that I’d be more prepared for this. Highlights include:

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