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How Downsizing is Handled When Management Respects People

Posted on March 27, 2008 by John Hunter

Three Amazing PHP/MySQL/Perl Developers Now Available [broken link removed] – Posting on Craigslist. The url will expire so I included everything but the contact info below (follow the link for contact info).

Yesterday I had to do one of the more difficult things — lay off three of my good friends, all of whom are talented and professional developers.

I’m posting here today in hopes that someone out in the world is looking for some seasoned talent, people who can get things done for you. I will personally recommend all three of these guys, and I’ll detail below each of them. If you are interested, I’m including my phone number. I’ll take your contact information and give it to the person(s) you are interested in, and you can take it from there.

Here goes.

Developer #1
I’ve worked with Developer #1 since 2005. He’s worked for Fortune 500 companies and small startups. His strengths are conceptualizing and implementing complex systems using PHP and MySQL. These systems are not limited to the web, however the web is where most of his work has been for the last few years. During his employment with me, he:
* Designed a complex billing system, complete with audit trails
* Developed a site-wide internationalization system, allowing us to easily translate any phrase on the system to a different language
* Designed and successfully implemented several difficult projects based on half-way decent specifications documents (my fault)

Posted in Deming, Management, Respect, Software Development | Tagged jobs, Management, respect for people, Software Development

Losses Covered Up to Protect Bonuses

Posted on March 24, 2008 by John Hunter

Does it surprise you to learn traders would cover up losses to protect bonuses? It shouldn’t, it happens over and over. Would it surprise you that almost any bonus (or quota) scheme increases the odds that the data will be doctored to meet the goals? It shouldn’t. Intelligent measures to make such doctoring difficult can help reduce the practice. But it is a likely risk of any such goal. As we have quoted Brian Joiner as saying: there are: “3 ways to improve the figures: distort the data, distort the system and improve the system. Improving the system is the most difficult.” So it is no shock that distorting the data is often the tacit people use (especially when the rewards are great or the punishment for missing is severe).

Of course the people that take unethical or illegal action are responsible for their actions. But managers that set up poor systems and then get poor results should not be surprised. You mainly read about the exciting distortion of data – but there is much more such distortion that doesn’t seem interesting enough for the press.

Traders at top investment bank ‘covered up losses to protect their bonuses in Â£1.4 bn scam’

A top investment bank said yesterday that some of its traders had tried to protect their massive bonuses with a Â£1.4billion scam. Credit Suisse was forced to admit it will pay the price for the traders’ ruthless scheming by sinking into the red. All the traders involved – some of them based in London – have been fired or suspended.

Shares in the bank, which is based in Zurich, tumbled 7.5 per cent yesterday. Credit Suisse admitted it had discovered intentional “pricing errors” by a small number of traders involved in complex investments linked to the mortgage market.

Posted in Deming, Investing, Management, Psychology | Tagged bonus, extrinsic motivation | 8 Comments

Unconscionable Executive Pay

Posted on March 19, 2008 by John Hunter

WaMu: Skip customers; save the execs [the broken link was removed]

Since last summer, the company’s shares have lost nearly 80% of their value. But the bank is a softy when it comes to bonus pay for top brass. After CEO Kerry Killinger and other top executives missed all or a big part of their bonus pay last year, Washington Mutual wasted little time taking steps to apparently make sure it won’t happen again — even if the mortgage market and the company remain in the tank.

The board decided in February to use different performance yardsticks that could make it look like Killinger and other top executives were doing great jobs — and all but ensure them millions of dollars in bonuses for 2008. Those huge losses piling up because of subprime loans and foreclosures? At bonus time, the bank will ignore them.

The behavior of executives that take what they have no right to in unjustifiable pay schemes continues to be a disgrace. Thankfully more people are shedding light on the unconscionable behavior. Excessive executive pay is both a sign of awful ethics and a driver of bad management action. I add two new diseases of western management to Dr. Deming’s 7 deadly diseases; massively overpaid executives is one.

Posted in Deming, Management, Respect | Tagged executive pay | 6 Comments

Drug Price Crisis

Posted on March 18, 2008 by John Hunter

In 2005 I posted about some of the problems with drug pricing. It is nice to find at least a couple of people at MIT that want to have MIT focus research on the public good instead of private profit. As I have mentioned too many universities now act like they are for-profit drug or research companies. That is wrong. Drug companies can do so, institutions with purported higher purposes should not be driven to place advancing science below profiting the institution.

Solving the drug price crisis

The mounting U.S. drug price crisis can be contained and eventually reversed by separating drug discovery from drug marketing and by establishing a non-profit company to oversee funding for new medicines, according to two MIT experts on the pharmaceutical industry.
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Following the utility model, Finkelstein and Temin propose establishing an independent, public, non-profit Drug Development Corporation (DDC), which would act as an intermediary between the two new industry segments — just as the electric grid acts as an intermediary between energy generators and distributors.

The DDC also would serve as a mechanism for prioritizing drugs for development, noted Finkelstein. “It is a two-level program in which scientists and other experts would recommend to decision-makers which kinds of drugs to fund the most. This would insulate development decisions from the political winds,” he said.

I see their idea as one worth trying. Lets see how it works. Their book: Reasonable Rx – Solving the Drug Price Crisis by Stan Finkelstein and Peter Temin

Posted in Creativity, Economics, Health care, Science | Tagged commentary, economy, Health care, Science | 3 Comments

NCAA Basketball Challenge 2008

Posted on March 17, 2008 by John Hunter

Once again I have created a group on the ESPN NCAA Basketball Tournament Challenge for curiouscat college basketball fans. To participate, go to the curiouscat ESPN group and make your picks.

This year we also have a second challenge, using sportsline, that rewards picking upsets. So those that enjoy the tournament please join the fun. The password for this one is cat

Go Badgers and Go Davidson,

Posted in curiouscat.com, Fun | Tagged Fun

Management Improvement Carnival #31

Posted on March 14, 2008 by John Hunter

Please submit your favorite management posts to the carnival. Read the previous management carnivals.

Lean *is* About Quality, Folks by Mark Graban – “The two ideas are connected — improving flow (in itself) ends up improving quality and improving quality improves flow.”
Statistical software is not six sigma by Rob Thompson – “With a good understanding of the process at hand, practitioners can solve many problems using statistical software. However, if there’s a lack of process knowledge, it’s hard to be sure of what’s going on in the process, or what the statistical analysis is revealing”
Key Points for Managing Kaizen Idea Systems by Jon Miller – ” As a rule there should be 1) no suggestion box, 2) a simple suggestion form, and 3) team-based dialog to evaluate ideas.”
Adjustment or Tampering? by John Dowd – “Deming called it tampering. It is the adjustment of of a stable process after each occurrence; treating every event as though it were special. It makes things worse.” (curious cat: tampering)
The Importance of Heijunka by Mark Rosenthal – “Production leveling, however, is difficult, and the management has to have the fortitude to do it. Honestly, most don’t. They don’t like to deliberately set the necessary inventory and backlog buffers into place”
Harmony and Toyota by Ron Pereira – “As we walked along the cat walk we were able to gain a birds eye view of the assembly operation. There was just so much to see… it was overwhelming.”
A Good Layout is in the Details by Mike Wroblewski – “By focusing the majority of our effort on grasping the situation first, the action of moving was fairly uneventful. No firefighting, no frantic emergencies, no heroics and no customer disappointments.”

Continue reading →

Posted in Carnival, Management | Tagged Carnival, management

Webcast on 2-Bin Systems

Posted on March 11, 2008 by John Hunter

Illustration of how 2-Bin Systems work, by Bill Hanover.

Posted in Lean thinking, Management, Quality tools, webcast | Tagged management tools, Manufacturing, training, webcast

Pleasing Customers

Posted on March 10, 2008 by John Hunter

Why is 37signals so arrogant? by Don Norman

The Brash Boys at 37signals Will Tell You: Keep it Simple, Stupid. Brash is an understatement. I was quoted in the article because of my article arguing that simplicity is highly overrated: the tasks that we do require tools that match the requirements, and these add complexity.
…
Yes, they are arrogant — and proud of it: “Arrogant is usually something you hurl at somebody as an insult,” Hansson said. “But when I actually looked it up — having an aggravated sense of one’s own importance or abilities’ — I thought, sure.” Park concludes his article by saying “Call it arrogance or idealism, but they would rather fail than adapt. ‘I’m not designing software for other people, ‘Hansson says. ‘I’m designing it for me.’ ” “I’m not designing … for other people.” I think that simple phrase speaks volumes. Thank goodness most companies recognize that this attitude is deadly.

I don’t agree. Not compromising leads to solutions that are unlikely to be all things to all people. But with an intelligent and knowledgeable leader will lead to excellent solutions for those that share desires. Now I don’t think this is the best strategy, especially for growth. But it can be an excellent strategy for startup, innovators and those seeking 1,000 fans.
Continue reading →

Posted in Competition, Creativity, Customer focus, Management, Psychology, quote, Software Development, Systems thinking | Tagged complexity, Customer focus, Psychology, Software Development, usability | 2 Comments

Toyota’s Commitment

Posted on March 8, 2008 by John Hunter

From Toyota’s blog, Living Up to Our Commitment

We’ve received reports that on a small number of model-year 1995 to 2000 Tacomas, excessive corrosion of the frame has caused perforation of the metal. The reason for this, it appears, is that the frames of some of the 813,000 vehicles built during this time-frame may not have adequate corrosion protection.
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Because of our oft-stated commitment to standing behind our products, we’re extending the rust-perforation warranty covering these trucks for a period of 15 years from each vehicle’s original date of purchase, with no mileage limitation, for corrosion damage that results in perforation of the vehicle’s frame material. Owners of these Tacomas need not be the original owners. Even if you bought your Tacoma second- or third-hand, it’s covered by this extended warranty.

Once again Toyota shows what it means to go beyond the traditional way of thinking (where often MBA bean-counters and lawyers decide what should be done) instead of someone interested in having the company actually live up to a higher mission. From a previous post on their blog:

The Toyota Way is a management philosophy involving 14 principles that is the essence of the DNA of our organization and really all those who make up the company. In its basic form, the Toyota Way boils down to two fundamental practices: Respect for People and Continuous Improvement.

Posted in Customer focus, Management, Toyota Production System (TPS) | Tagged blogs, cars, Customer focus, Deming, management, Toyota, Toyota Production System (TPS) | 4 Comments

Inside Honda’s Brain

Posted on March 7, 2008 by John Hunter

Inside Honda’s brain by Alex Taylor III

why is Honda playing with robots? Or, for that matter, airplanes? Honda is building a factory in North Carolina to manufacture the Hondajet, a sporty twin-engine runabout that carries six passengers. Or solar energy? Honda has established a subsidiary to make and market thin-film solar-power cells. Or soybeans? Honda grows soybeans in Ohio so that it can fill up cargo containers being shipped back to Japan. The list goes on. All this sounds irrelevant to a company that built some 24 million engines last year and stuffed them into everything from cars to weed whackers.
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Since 2002 its revenues have grown nearly 40%, to $94.8 billion. Its operating profits, with margins ranging from 7.3% to 9.1%, are among the best in the industry.
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The wellspring of Honda’s creative juices is Honda R&D, a wholly owned subsidiary of Honda Motor. Based in Saitama, west of Tokyo, R&D engineers create every product that Honda makes – from lawn mowers to motorcycles and automobiles – and pursue projects like Asimo and Hondajet on the side. Defiantly individualistic, R&D insists on devising its own solutions and shuns outside alliances. On paper it reports to Honda Motor, but it is powerful enough to have produced every CEO since the company was founded in 1948.
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The engineer in Fukui [Honda’s president and CEO] cannot help but be intrigued by what his former colleagues are up to, and his office is only a few steps away from Kato’s. But even with the CEO just down the hall, says Kato, “We want to look down the road. We do not want to be influenced by the business.”
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mistakes like the Insight are also the exception. R&D has provided Honda with a long list of engineering firsts that consumers liked, including the motorcycle airbag, the low-polluting four-stroke marine engine, and ultralow-emission cars.

Posted in Innovation, Management, Science | Tagged Asia, cars, engineering, Innovation, Japan, research | 1 Comment