Google Should Stay True to Their Management Practices

Posted on December 9, 2008 by John Hunter

I believe in Google’s past, present and future. They have shown a great ability to ignore the short term focus that dominates (and kills success) of so many companies today. I am happy to invest in Google for the long term.

This current reaction to the economic crisis, is one of many times Google can be seen to be making significant changes to adapt based on market conditions and the results of their experiments and experiences. Google’s management in general and the 3 leaders continue to practice a management style based on an engineering perspective while so many others practice the style Scott Adams has pilloried in the pointy haired boss.

The thought and execution of Page, Brin and Schmidt (and others: Marissa Mayer) is at a different level than that of most other executives. Skepticism is wise. But I believe Google continues to have exceptional execution and focus on long term innovation.

The biggest risk I see, for them, is they become too focused on the short term and lose their ability to take advantage of the great opportunities available by focusing on long term success. Google is in a position where they are not forced to abandon long term plans due to cash flow problems. The only decision for Google should be whether something makes long term sense or not. If they are recalibrating and deciding they were being too lax in certain areas (without long term justification) then I am fine with changes. If though they are reacting to short term market conditions that is a big mistake.

Google Gears Down for Tougher Times

He says the company is “not going to give” an engineer 20 people to work with on certain experimental projects anymore. “When the cycle comes back,” he says, “we will be able to fund his brilliant vision.”

Bad idea, short term thinking. Don’t drive business practices based on short term earning releases. If the idea is not worth 20 people long term fine, don’t do it. If it is, do it. The lack of cash that would force many companies to abandon promising efforts is not an issue for Google. They have plenty of cash and are generating much more every day.

To better predict revenue, the company implemented quotas for ad-sales representatives and tied the pay of more employees to performance

Bad idea; quotas are a sign of management abdicating responsibility. Quotas are destructive to success. Pay for performance focuses employees on meeting targets instead of the best interests of the company. Quotas are destructive to constancy of purpose.
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Japan Airlines CEO on CEO Pay

Posted on December 8, 2008 by John Hunter

Nice webbast of CNN clip on Japan Airlines CEO cutting his pay to less than that of the pilots. He really seems to understand the company does not exist for him to plunder (unlike so many CEOs in the USA).

Related: Japan Airlines using Toyota Production System Principles – Under Nishimatsu, Japan Airlines Tries to Rise Above Legacy – Respect for Employees at Southwest Airlines – posts on executive pay – Honda executives not overpaid either

Posted in Management, webcast | Tagged , , , | 2 Comments

Online Management Resources

Posted on December 5, 2008 by John Hunter

Since long before I started this blog I have maintained the Curious Cat Management Improvement web site. In fact, that web site has been online since 1996; the blog started in 2004. I feel the web site has tremendous resources for managers looking to improve the performance of their organization (or course I am a bit biased).

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Information Technology and Business Process Support

Posted on December 3, 2008 by John Hunter

I moved from management improvement work into information technology work (where I continue to practice management improvement). Many IT practices follow quality management guidelines well (agile software development for one).

I have found it far easier to design and provide software solutions than convince people to change their processes directly. I found it funny that as I delivered new IT solutions, in which was embedded a redesign of the process, those changes were often accepted without any significant debate. But the same changes that I tried to implement without a new IT solution had been impossible to make progress on (all sorts of reasons why it couldn’t be done were raised).

I strove, and believe I succeeded, to implement software solutions in a manner consistent with management improvement concepts. I started doing so in areas where I had been working and I was designing software tools based on my intimate knowledge of the system. And in doing so I tried to use an iterative approach (and the concepts of PDSA, though not really formally doing PDSA) involving those who were actually working in the business system. So I am not talking about just plastering in some IT solution from headquarters on the other side of the continent.

Too often organizations fail to invest enough in IT. The IT department is staffed merely to do what others request (and often not even provided the resources to do that). So then the executives can get what they need from IT. Others can get IT to respond if the manager can elevate the issue and explain how important it is that they get some support. But in general, all sorts of obvious improvement opportunities are wasted because the resources to carry them out are just not available.

In my opinion many organizations would benefit from increasing the resources to IT and shifting the focus from passive supplier to active participant in using information technology to meet business needs. This requires staffing IT with some people that are able to work with others to determine business needs and then determine the best IT solutions and then deliver those solutions. I have found many IT people are well suited to this role (though not all – which is fine those that prefer to focus on technical implementation can do so).

Another reason this often makes sense is how integral IT is to the functioning of the company. Expertise is technology is often very important today (and it is often missing). And getting your proactive quality experts working closing with IT will help them provide more value.

This post presents some thoughts in response to: Does anyone see value in merging Quality and Information Technology departments into a Business Process Management department?

Related: Software Supporting Processes Not the Other Way Around – Information Technology and Management – Using Quality Management Principles to Develop an Internet Resource by John Hunter, Jun 1999 (pdf)

Posted in IT, Management, Process improvement, Quality tools, quote, Software Development, Systems thinking | Tagged , , , , , , , | 6 Comments

Management Improvement Carnival #48

Posted on December 2, 2008 by John Hunter
Nicole Radziwill is hosting the Management Improvement Carnival #48 on the Quality and Innovation blog, highlights include:

  • With so much focus on Mumbai this week, Joe Munte’s post on the dabbawallas of Mumbai focuses on a illuminating and positive aspect of the dynamic city that provides lessons for effective management…
  • Keep it simple! Checklists and Change Programs by Crossderry is a couple months old – but I still like it. It provides a “useful reminder to avoid a common error made when PMOs first implement processes and controls – over-engineering”…
  • John Hunter reflects on Management at Google, and features a video of Schmidt and Hamel chatting. I am a big fan of Google because they skillfully implement effective, agile quality systems in an environment highly conducive to innovation…

This edition of the carnival is the first on our new schedule: we will now be publishing 3 times a month. Submit your nominations for management posts to include in future editions. The Quality and Innovation blog is the 6th blog to host the carnival, the others are: Evolving Excellence, Lean Blog, Lean Six Sigma Academy, Capable Blog and our own Curious Cat Management Improvement Blog.

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Embrace Diversity, Erase Uniformity

Posted on December 1, 2008 by Guest Post

Guest Post by Jurgen Appelo, author of the Managing Software Development blog.

Five years ago, when I started working for my current employer, the entire organization (about 30 people) consisted only of 20-something white straight single males. The atmosphere was what you would expect from such an environment: conversations on football/soccer, lewd jokes, the smell of beer, and trash in every corner. In short, the perfect place to work, if you were a 20-something white straight single male.

Then the organization started changing. The subculture of 20-something white straight single males in our region could not keep up with the rapid growth of our company. And so the women arrived. And the married guys. And people with kids. And people older than 40. And people from all sorts of ethnic, religious, sexual, and disabled minorities. Before we knew it, the organization had grown to 200 people, and the group of 20-something white straight single males had dwindled to just another minority. And it’s still a great place to work, particularly for the large majority of people representing one or two minorities.

Diversity is Important
In biological ecosystems, genetic diversity is one of the most important principles. Biodiversity (the variation of species) is the most obvious form of it, but there’s also diversity within species themselves. Did you know that honey bees are slightly different from each other? That’s how they regulate the temperature in their beehives. When a hive gets too cold, the bees start huddling together, buzzing their wings. And when it gets too hot, the bees spread out and they start fanning their wings. Now, when the bees would respond to the same specific temperatures, they would all start buzzing or fanning their wings at the same time, resulting in a wildly oscillating temperature in the hive. Therefore, to improve stability, nature has made sure that the bees respond to different temperature levels. When the temperature rises, one by one the bees will start fanning their wings. And the more bees join in, the slower the temperature will rise, until it stops completely. Diversity among bees smoothes and stabilizes the temperature in the beehive.

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Posted in Management, Science, Software Development, Systems thinking | Tagged | 1 Comment

More Management Blog Posts From October 2005

Posted on November 30, 2008 by John Hunter

photo of yellow flower

So why did I have 2 posts with selections of October 2005 posts? Frankly I think I just made an error last month and missed the first half of October 2005, then I made a mistake and started at the beginning of October when starting this post instead of the beginning of November. But I think in this case two mistakes lead to a decent result. I certainly think October 2005 was packed with good posts, but you can judge for yourself. The photo is from my trip to Glacier National Park.

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Family Business Gives $6.6 million in Bonuses to Workers

Posted on November 29, 2008 by John Hunter

The PEER Bearing Company (a manufacturer of bearings based in Illinois) was bought out by a Swedish company this year. The family that had owned the company gave surprise bonuses of $6.6 million to the 230 employees of the company (an average of over $28,000).

family thanks employees with surprise bonuses

Family members signed two thank-you cards to each employee, one in Spanish and one in English, expressing gratitude for “the loyalty and hard work of our employees over the years.” “They treated us like extended family,” said Maria Dima, who works at the company along with her husband, Valentin. “We won the lottery.”

On the day the checks were distributed, Valentin Dima watched as co-workers broke down in tears over their bonus checks. He drove home first, then opened his envelope: $33,000. His wife received a check for a smaller amount, and the two Romanian immigrants have since taken a Caribbean cruise to celebrate.
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The new owners intend to operate the company based 40 miles north of Chicago as a wholly owned subsidiary. Workers have been told that most will keep their jobs.

A small bit of good news for these troubling times. It is nice to see true respect for people being practiced. The family also created the Spungen Family Foundation, 2 years ago.

Related: Tilting at Ludicrous CEO Pay 2008 – Focus on Customers and Employees – People are Our Most Important Asset – Manufacturing Continuous to Increase in the USA

Posted in Management, Respect | Tagged , , , | 2 Comments

Thanksgiving: Micro-financing Entrepreneurs

Posted on November 28, 2008 by John Hunter

photo of Frew Wube in Ethiopia

This is a post from my Curious Cat Investing and Economics Blog. For me, giving back to others is part of my personal financial plan. As I have said most people that are actually able to read this are financially much better off than billions of other people today. At least they have the potential to be if they don’t chose to live beyond their means. Here are some of the ways I give back to others.

Kiva is a wonderful organization and particularly well suited to discuss because they do a great job of using the internet to make the experience rewarding for people looking to help – as I have mentioned before: Helping Capitalism. One of my goals for this blog is to increase the number of readers participating in Kiva – see current Curious Cat Kivans. I have also created a lending team on Kiva. Kiva added a feature that allows people to connect online. When you make a loan you may link you loan to a group.

I actually give more to Trickle Up (even though I write about Kiva much more). I have been giving to them for a long time. They appeal to my same desire to help people help themselves. I believe in the power of capitalism and people to provide long term increases in standards of living. I love the idea of providing support that grows over time. I like investing and reaping the rewards myself later (with investment I make for myself). But I also like to do that with my gifts. I would like to be able to provide opportunities to many people and have many of them take advantage of that to build a better life for themselves, their families and their children.

The photo shows Frew Wube, Haimanot and Melkan (brother and two sisters), an entrepreneur that received a grant from Trickle up. Trickle Up provides grants to entrepreneur, similar to micro loans, except the entrepreneur does not have to pay back the grant. They are able to use the full funds to invest in their business and use all the income they are able to generate to increase their standard of living and re-invest in the business.
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Posted in Economics, Respect | Tagged , , | 3 Comments

Honda has Never had Layoffs and has been Profitable Every Year

Posted on November 25, 2008 by John Hunter

Engineers Rule, 2006

Longtime auto analyst John Casesa, who now runs a consulting company, says, “There’s not a company on earth that better understands the culture of engineering.” The strategy has worked thus far. Honda has never had an unprofitable year. It has never had to lay off employees.
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The lean and compact Fukui, like all of his predecessors, is an engineer who started in R&D and later ran the subsidiary. While other auto chief-executives-to-be were punching keyboards in an accounting office, Fukui ran the company’s motorcycle racing operations. He’s still racing. He hikes the stairs to his tenth-floor desk–tenth floor so he’s in the middle of things at Honda’s 16-story Tokyo headquarters and a desk because executives at Honda don’t have offices. Honda doesn’t disclose executive pay in detail, but the sum of salaries and bonuses that Fukui shares with 36 board members, $13 million, is just about enough for the boss at a big American company.

I checked and Honda was also profitable in 2007 and 2008 fiscal year (ending in September) and no I see no evidence of any layoffs this year (when I look online).

Related: Honda Engineering – Back to School for Honda Workers, 1993 – The Google Way: Give Engineers Room – Google’s Ten Golden Rules – Toyota as Homebuilder – Curious Cat Science and Engineering Blog – Toyota’s CEO pay under $1 million

Of all the bizarre subsidiaries that big companies can find themselves with, Harmony Agricultural Products, founded and owned by Honda Motor, is one of the strangest. This small company near Marysville, Ohio produces soybeans for tofu. Soybeans? Honda couldn’t brook the sight of the shipping containers that brought parts from Japan to its nearby auto factories returning empty. So Harmony now ships 33,000 pounds of soybeans to Japan. An inveterate tinkerer, Honda also set up a center nearby to develop better soybean varieties and improve agricultural processes.
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