What to Do To Create a Continual Improvement Culture

This month the ASQ Influential Voices discussion explores what to do and avoid in order to create a performance culture? James Lawther shared his ideas on what not to do to get things started.

I have discussed steps to take in order to build a culture of continual improvement in numerous posts over the years (see related links below). What it boils down to is building a system that supports that culture. Your culture is the result not your aim.

David Heinemeier Hansson put it well recently in his essay, CEO’s are the last to know:

But the bottom line is that culture is what culture does. Culture isn’t what you intend it to be. It’s not what you hope or aspire for it to be. It’s what you do.

In order to create a culture that enhances your effort to continually improve you must crate systems that move things in that direction. Part of that system will be the continual assessment of how your organization is falling short of your desired culture. This requires honest assessment of the current state. And it requires those in leadership to design systems to get a clear picture on what is really happening in their organization.

As I said on Twitter in relation to that article leaders need to understand danger of “losing touch” and take steps to counter that risk. Often the explanation for why something happened (a process producing a failure, a leader not being aware of the real culture…) is an explanation of what the system needs to be designed to address.

wall mosaic with tree, animals and people

Mosaic on an outside wall of a temple at Wat Xieng Thong in Luang Prabang, Laos. By John Hunter.

In many organization CEOs are not aware of what is going on. This is a weakness that must be addressed systemically. Many of the better management methods proposed by W. Edwards Deming address this issue. CEOs are given a false picture when they focus on results instead of the management system. CEOs are given a false picture when they crate a climate of fear. CEOs are given a false picture in organizations focused on achieving bonuses instead of continual improvement.

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The Road Not Taken

Two roads diverged in a wood, and I–
I took the one less traveled by,
And that has made all the difference.

Wonderful advice and so poignant. But actually, if you read the whole poem, what we take from the quote isn’t what the poem was saying. Earlier in the poem it says

Though as for that the passing there
Had worn them really about the same

view out windows of a temple

photo from a temple in Siem Reap, Cambodia by John Hunter

Robert Frost was poking fun at his friend who would obsess over what fork to take in the path as they walked when in reality the choice made no difference.

And “that has made all the difference” is poking fun at self justifications of our actions; congratulating ourselves for doing something not really worthy of accolades.

Still the top three lines do seem like insightful advice. Of course what is really needed is insight into when choosing the road less traveled is wise (or at least a sensible gamble) and when it is less traveled for very good reasons.

I do believe we far too easily slip into habits encouraged by the well worn path most people take. And therefore think balancing that tendency with at least considering the road less traveled more often is wise. But I actually like that when you read the full poem it really isn’t saying that.

Related: Chomphet Hike, Luang Prabang, LaosOlympic National Park PhotosThe Aim Should be the Best Life – Not Work v. Life BalanceMaking Better DecisionsRhinoceros Hornbills on Mount Santubong

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Using Technology to Improve The Sharing of Knowledge

This month the ASQ is asking Influential Voices to discuss methods to aid in sharing knowledge. Manu Vora kicked the discussion off with his post on The Gift of Knowledge Transfer Through Technology.

My career has been largely shaped by the pursuit of better ways to communicate. I grew up surrounded by those seeking to improve management (Bill Hunter, George Box, Brian Joiner, Peter Scholtes…). When I was in grade school that focus was largely on statistics and the value of multi-factor experiments (Dad was a statistician who wrote the “bible” on design of experiments, with George Box and Stu Hunter: Statistics for Experimenters). As I moved into high school Dad was doing much more direct management consulting (it was also a combination of statistics, engineering and management but the emphasis shifted over time) based on Deming’s ideas.

The knowledge of how to properly experiment on system with multiple important factors to experiment with (nearly all experiments) has been around for almost 100 years. Yet, even so, still many college level courses talk about the need to adjust one factor at a time (OFAT) and many businesses still experiment this way. The rate at which we incorporate new knowledge is still very poor.

Technology can help improve our adoption of better understanding. Creating a climate and expectation of continued learning is also important, but I won’t talk about that in this post.

I published and presented (I think at an ASQ conference though I can’t recall which one right now) a paper on Using Quality to Develop an Internet Resource in 1999. The purpose of that internet resource was to share knowledge about quality management and the article provides insight into both those ways of looking at what was done (using quality ideas to create a resource and using the internet to spread quality ideas).

A few years later I started this blog to help people find knowledge that would make them more likely to succeed with efforts to improve management. I believe deeply in the value of Deming’s ideas on management but see so many companies make poor attempts to improve management. There are many things needed to improve the success of organizations improvement efforts but I believe the right knowledge (the ideas talked about by Deming, Ackoff, Ohno, Scholtes, etc.) will help a great deal.

Intranets are great tools to share knowledge within your organization. They can also be powerful tools to connect people to internal resources within your organization.

Wikis are a great tool to share a knowledge base (and to maintain things like standardized work, visual job instructions etc.). Wikis are a wonderful technology because of how easy they make the management of shared knowledge. It may well be you print out various things to post and make more visible (depending on what makes sense for the work environment).

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Look at All the Data and Be Wary of Unjustified Confidence

Interesting interview with Richard Feynman about the NASA’s space shuttle Challenge disaster. He discusses very well the problem of not thinking of all of the data and how systems produce results with variation.

“Results” are not enough to judge whether the current process is wise. He describes a child running into the street without looking that is warned by his parent and counters with the evidence that nothing happened. A child repeating this several times can think they have evidence it is not unsafe but that isn’t so.

With the Challenger disaster a simple view of the data analysis problem was a failure to look at all the data – failure to look systemically. Instead they looked at just the data points where problems were seen and those problems all were not catastrophic. If, you looked at all the data, it was pretty obvious cold weather greatly increased problems and if you listened to the engineers those problems were very serious and risked catastrophic results.

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Applying Improvement Concepts and Tools to Your Daily Life

This month the ASQ Influential Voices is taking a bit different approach. This month we are looking at applying quality tools in our personal life based on the post from other influential voice, Sunil Kaushik: How Lean Helped Me Travel To Egypt With Just $500.

Sunil is on a nomadic trip around the world to learn and enjoy the experience while also helping others applying lean thinking.

I just returned from my own nomadic adventure.

John Hunter at Marble Mountain - Buddha  statue in background

John Hunter, in a cave at Marble Mountain, Da nang, Vietnam. This is one of my last stops before returning home. See more of my travel photos

I have experience applying quality tools since I was a kid being guided by my father. Another influential voices author, that I met in Hong Kong when I presented a a Deming seminar, included a mention of that connection in his post: Quality Life and Succession.

In this blog I write about using management improvement thinking in my personal life. That extends from management concepts such as optimizing the entire system and not getting trapped by habit or convention, for example in: The Aim Should be the Best Life – Not Work v. Life Balance.

My father applied these ideas in our family life and so naturally they formed my way of thinking. At the core was a focus on experimentation and focusing on what was important. It is easy to spend a lot of time on things that really are not that important and questioning if the actions we are taking is really what we should be doing based on the most important aims was a natural part of how we thought growing up. In order to experiment effectively you need to be able to understand data and draw appropriate conclusions (post on an experience with my father as a child: Playing Dice and Children’s Numeracy).

Also we would look at what wasn’t giving the results we desired and experiment on how to improve. I include in “results” the happiness or frustration the process causes (so as a kid this was often the frustration my brother and I had in doing some task we didn’t want to do – cleaning our room, doing homework etc. and the frustration our parents felt at having to continually bring us back onto task). Much of this effort amount to setting the understanding and incentives and process to get better results (both the end results and increasing happiness and reducing frustration of all of us in the family).

A concept I use a good deal in my personal thinking on a more concrete level is mistake proofing (or at least mistake making less easy). Many people do this, without really thinking that is what they are doing. But by thinking of it consciously I find it helps you design processes to be most effective.

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Interview of John Hunter by Jimena Calfa On Quality

Jimena Calfa interviewed me for her blog OnQuality as part of her Quality Interview Chain.

John Hunter with river and cloudy hills in the background

John Hunter, Yangshuo, China. See photos from my trip to China

What are you doing to ensure you continue to grow and improve as a professional and/or as a person?

John: I don’t do anything consciously to achieve that. I think if we retain a thirst for knowledge and curiosity and have a desire to do a good job we will do what is necessary. I follow my passion to learn largely through the internet (blogs, webcasts, articles and podcasts). And I constantly question and experiment and adapt based on what I learn.

Which is your favorite quality quote?

John: There are so many – I don’t have a favorite, more like 50 favorites. But here are four:

“The old-fashioned idea of a good manager is one who is supposed to know all the answers, can solve every problem himself, and can give appropriate orders to his subordinates to carry out his plans… A good modern manager is like a good coach who leads and encourages his team in never-ending quality improvement” by George Box – When Murphy Speaks, Listen

Read the whole interview on OnQuality.

Related: Leadership While Viewing the Organization as a System (interview with Bill Fox)Software Process and Measurement Podcast With John Hunter (interview by Tom Cagley) – Management Improvement Leader John Hunter (interview by Tim McMahon)Lean Blog interview with Mark Graban: Podcast #174 – John Hunter, Management Matters

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Publish Articles Promoting Better Management Using Open Journals

William Woodall shared this wonderful article he wrote with George E. P. Box with me, Innovation, Quality Engineering, and Statistics. My thoughts on being able to read it online:

Thanks Bill, it is a great article. And thanks for having it openly available. I really wish professors would stop allowing their work to be published by those seeking to close access to the ideas we are trying to promote. I realize there are pressures to publish in historically prestigious journals.

For professors that have “made it” you will do a great service to others (and help promote the ideas in your field that you have devoted your life to) by refusing to submit to closed science journals (or closed professional society journals etc.). For those trying to secure full professorships I wish they would too, but I realize the hard choices they face.

The maximum closed-ness we should tolerate, in my opinion, is closed access for 1 year after which it becomes open. Require this in writing in the agreement, don’t just accept that the current practice is to promote the sharing of ideas; if it isn’t in writing some person may have the publisher adopt closed science later and block access to the content you wanted to share.

It is especially distressing, to me, when government dollars fund the time the professor spends and then the end result is closed to the public. Thankfully some universities and some government agencies paying for the writing of these articles are demanding that the articles be published in an open access fashion.

On the other hand if you want to publish on rate and rank, the value of annual performance appraisals, bonuses for hitting targets etc. feel free to use closed science publishers.

Related: The Future of Scholarly Publication (2005)Fields Medalist Tim Gowers Takes Action To Stop Cooperating with Anti-Open Science CartelHarvard Steps Up Defense Against Abusive Journal Publishers25 provosts from top universities jointly released a letter supporting current legislation to require open publication of scientific research (2005)Problems with Management and Business Books

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The Future of Quality is to Actually Do What People Talked About Decades Ago

In the current ASQ Influential Voices post, Laurel Nelson-Rowe, ASQ managing director, asks: What’s the Future of Quality?

The report they link to is hidden behind a register-wall. Hopefully in the future ASQ will have better User Experience (Ux) practices in place on the web site.

But it is a good example of the failures to adopt well known, decades old recommended practices. This failure to just do what the best experts have suggested for a long time is an example of the kind of thing we should hope to see eliminated in the future.

We don’t need fancy new ideas or breakthroughs. We just need to adopt what many people have been saying for decades. Read Russell Ackoff, W. Edwards Deming, Peter Scholtes, George Box, James Womack and Brian Joiner you will be well on your way to knowing what you need to know to help us to reach a good future for quality.

There are quite a few people that have provided very good material on lean thinking and the other ideas on management improvement. This list isn’t meant to say you should limit yourself to these people. I just feel you don’t need to go in search of new things, we have much better ideas than any new things being sold now from management experts that have been decades of material we would benefit greatly from applying today.

If you want a bit on user experience (given the importance of the internet and software applications today ) you can read: Signal to Noise, Boxes and Arrows and A List Apart.

If you want to appeal to those that think you must read something new you can read a bit of Eric Reis, Elon Musk, Jeff Bezos and Dan Pink. They offer good ideas, Eric Reis offers the most concrete suggestions in this group (Dan Pink is next). And those that like shiny new things will be happy with your new names (for a while). The Ux people also will provide concrete ideas to use. I personally find many excellent management bloggers are valuable resources to managers.

We haven’t done nearly as much with all the great management concepts explained decades ago. Not much of what is said to be new in the last 20 years provides more value than the stuff we haven’t gotten around to doing yet that was laid out long ago. If we want better managed organization to provide better results to customers, employees, stockholders and other stakeholders would be wise to make the future of quality actually applying what Deming, Ackoff, Scholtes and the other provided us.

I think we will be able to make this the future of quality. We take a long time to adopt better ideas for management but we do adopt them (with lots of backsliding in many organizations, but over the decades the movement is in the right direction in most ways).

Related: We really need to change how we improve the practice of managementNew or Different? Just Choose BetterGood management is good management: it doesn’t matter if someone figured out the good idea 100 years ago or last week.New Rules for Management? No!

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Top 21 Executives at Toyota Getting a Raise to a Combined US$14.9 Million

The difference between Toyota and so many other companies is obvious in many ways. One of the stark differences is how executives are paid. Toyota’s belief in a strong management system contrasts with the self worship many USA executives practice. How the executives pay themselves illustrates this very well.

Even with a proposed 19% pay boost the top 21 executives at Toyota would get a combined US$14.9 million in the proposal for this year.

Toyota Plans 19% Boost in Director Pay After Record Profit

Toyota proposed 1.52 billion yen ($14.9 million) in combined compensation and bonuses to 21 directors, including President Akio Toyoda, in a notice to shareholders today. The Toyota City, Japan-based company paid 1.28 billion yen the previous fiscal year.

After recording an unprecedented 1.82 trillion yen profit last fiscal year, Toyota forecast this month that net income will slip 2.4 percent in the year ending March 31. The company predicts deliveries to increase in every major region except Japan, where the nation’s first sales-tax increase in 17 years is expected to temper demand.

Toyota has proposed raising its year-end dividend to 100 yen a share, or 165 yen for the full year.

The deadly disease of extremely excessive executive pay has been doing more and more damage every year in the USA. Toyota has avoided the pitfall shared by so many self-centered USA CEOs. The 19% raise does possibly indicate that Toyota is slipping (they also received a 19% increase last year). But they have a long way to go before executive pay becomes a serious problem at Toyota.

The 21 Toyota executives together don’t get paid what CEOs at companies in the USA that make as much as Toyota does (few companies are as successful as Toyota). Many senior executives that are not CEOs in companies in the USA make much more that all 21 Toyota executives together. Europe has largely adopted the massively overpaid practices for senior executives from the USA. Most European companies lag behind the abuse of USA executives, but the European companies use the excuse of the USA to grab ever increasing amounts from corporate treasuries. In do so they adopt similar reckless management practices in order to justify taking so much.

For now, executive pay (and with it all the management distortions caused by massively unjust pay packages for executives cause within companies) is a big competitive advantage for Toyota. Not all USA companies allow executives to loot the company, for example, Costco continues to pay executives and staff fairly and does very well. But many USA companies are being torn apart by executives seeking and taking hugely unjust pay packages.

Total pay for union workers at Toyota will increase 8.2% on average from last year (I think this is pay for Japanese union workers, though I am not sure about that). This was also the same amount as the increase was in 2014. This seems an unlikely coincidence, it seems intentional. If you see data like this from a process it often indicated an artificial cap exists (or there are restraining forces on the process that make data points beyond certain limits very unlikely).

If you have seen lower figures for pay increases for Toyota workers, that was for the regular pay level which did not go up much. Toyota has a very large profit sharing plan. Profit sharing payments to union workers were over 6 months of regular pay. The main increase in pay for employees was in profit sharing. The “profit sharing” payments are negotiated so it isn’t exactly like what you may think of as profit sharing but it is essentially what those payments are it seems to me.

Related: Toyota Post Record Profit and Splits $15 million in Pay and Bonus for top 21 Executives (2014)CEOs Plundering Corporate CoffersToo often, executive compensation in the U.S. is ridiculously out of line with performance – Warren Buffett (2006 – it is even worse today)No Excessive Senior Executive Pay at Toyota (2007)Honda’s 36 board members, included the CEO, were paid $13 million in 2008

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The Aim Should be the Best Life – Not Work v. Life Balance

My father had the most job satisfaction of anyone I have known. He had no separation between work and life. We toured factories on vacation. I visited Davidson College in North Carolina because he was consulting with a client in Charlotte before we went up to Duke and North Carolina for visits and asked the CEO what school I should visit. His grad students would call the house frequently.

Many of his best friends were colleagues. That is how I grew to know people like George Box, Brian Joiner, Soren Bisgaard and Peter Scholtes as I grew up. Various permutations of our family lived overseas based on his jobs in London (before kids), Singapore, Nigeria and China. Those experiences dramatically impacted all our lives and they were not about separating work from life.

The desire for a life embedded in other cultures and for travel drove decisions about work. He lived in Japan (because of his Dad’s job) for 2 years as a kid and that sparked his desire to do more of that as an adult.

My little brother, Justin, pushing me on a scooter at our house in Singapore.

My little brother, Justin, pushing me on a scooter at our house in Singapore.

The sensible aim is to optimize your life. Work is a big part of life. As with any system the results depend on the overall system not the performance of individual parts taken separately. Dad also died young. He was happy to have lived such a good life, even if he wished he could have lived longer he wasn’t bitter about missing anything.

When he learned he would die (of cancer) he mainly continued what he had always been doing living life and working on what he thought was worthwhile. One project he did take on, along with George Box, was creating the Center of Quality and Productivity Improvement at the University of Wisconsin-Madison. George’s speech about Dad’s work provides a nice look at how work and life – William G. Hunter: An Innovator and Catalyst for Quality Improvement.

He honestly looked back on his life and felt he had a life that few could have topped, even though it was cut short. He was certainly optimistic and positive. But my sense was this was his honest assessment, it wasn’t just some fake front he put on for others. He had been living his life as well as he could his whole life. And continuing to live it as long as he could was all he wanted to do.

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