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Deming Prize 2007

Posted on October 17, 2007 by John Hunter

India continues to shine with Deming Prizes (and of course there economy and stock market have been doing pretty well too). Companies based in India took home both Deming Prizes this year and the Japan Quality Medal. Countries of organizations receiving the Deming Prize since 2000 (prior to that almost all winners were from Japan):

Country	Prizes
India	14
Thailand	8
Japan	4
USA	1
Singapore	1

The 2007 Deming Prizes went to Asahi India Glass Limited, Auto Glass Division and Rane (Madras) Limited. Three different divisions of Rane received awards in the previous the last 4 years, making this Rane’s fourth prize in 5 years.
The 2007 Japan Quality Medal went to Mahindra & Mahindra Limited, Farm Equipment Sector.

The 2007 Deming Prize for Individuals went to Mr. Masayoshi Ushikubo, Chairman, Sanden Corporation. The Sanden International portion of Sanden was the third USA based organization to win a prize in 2006 (prior winners were: Florida Power & Light Company in 1989 and AT&T Power Systems in 1993). I mentioned India’s economy and stock market above, China’s economy and stock market are doing amazingly well also and then have yet to have a Deming Prize winner. I hope China, USA and many another countries can follow India’s current performance in this area. Deming Prizes are not awarded on a quota or forced ranking basis – any deserving applicants in any year can receive a prize.

Learn more about the Deming Prize.

Posted in Deming, India, Management | 4 Comments

Management Improvement Carnival #21

Posted on October 16, 2007 by John Hunter

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

Leadership by Ron Pereira – “5. Learn. I recently discussed the importance of having mentors in your life. I also believe it is important for a leader to continue learning him/herself.”
Prioritizing the Elimination of the 7 Types of Waste by Jon Miller – “Priority #1. Overproduction is the worst of the wastes because a) it multiplies the other 6 wastes, and b) it hides your true capacity, thereby causing you to make bad decisions such as turn work away or invest in unnecessary additional capacity.”
Kanban boards in software development by Scott Miller – “This also empowers the development team to be a “pull” system. A developer can pull a card from the “To Do” column and work on it. The project manager can see what the status is at any moment.”
A series of post on My Visit with the Lean Dentist by Mark Graban – “Pull: I did see the famous ‘kanban cards‘ for pulling resources to the patient, whether it is a dentist or a hygenist. There were times I was talking with Dr. Bahri and there came the kanban card.”
Critical chains: a decade later by Bill Harris – “Don’t work on something just because you think you have to keep busy or be more efficient or productive. Ensure you have excess capacity in all the feeding paths to keep the constraint (the critical chain) busy”
Where to Start Improvement by Dave Nave – “The question of where to start improvement is not an ‘either/or’ choice of top-down or bottom-up approach. The place to start is both.”
Why Parker Gets It by Kevin Meyer – Hats off to Parker for another great year. That kind of commitment to the customer almost makes us want to run out and buy their product… even if we don’t need it!
Jeff Bezos on Lean and Six Sigma by Peter Abilla – quote of Jeff Bezos: “Something we haven’t talked about, but that is super important in our culture, is the focus on defect reduction and execution. It’s one of the reasons that we have been successful for customers. That is something I had to learn about.”

Posted in Carnival, Management | Comments Off

Enhancing Passion of Employees

Posted on October 13, 2007 by John Hunter

What can we do to enhance passion amongst employees?

Some think you need to pay people more. If tomorrow you doubled everyone’s pay they are excited for a short time a few months later everything is the same on the passion front (it would lesson turnover as people stay for the extra money compared to what they would get elsewhere).

Douglas McGregor explained, in the Human Side of Enterprise, nearly 50 years ago, the theory x and theory y styles of management.

Theory x believes you need to get people to work by tricking them, threatening them, motivating them, etc. Theory y believes they want to work and managers need to eliminate the de-motivation that is in place in many organizations. Dilbert makes fun of quite of a few of the stupid management practices that sap passion from people.

What you need to do is eliminate de-motivation, not to try to enhance passion directly.

Also, as Guy Kawasaki’s makes a good point when he says “the key to getting great people to work for you is to have a great product. That is why Google does so well. That is why Apple does so well.” This can help. Being a part of something great gives many people passion.

Posted in Management, Psychology, Respect, Systems thinking | 4 Comments

Using Capitalism to Make the World Better

Posted on October 11, 2007 by John Hunter

I have mentioned Kiva before: Microfinancing Entrepreneurs (on our Curious Cat Economics and Investing blog). In addition to being a good cause Kiva really shows some great management strategies. The use of Information Technology to connect people directly is a wonderful example of using IT effectively (understanding psychology).

Kiva lets you loan money directly to an entrepreneur of your choice. Kiva provides loans through partners (operating in the countries) to the entrepreneurs. Those partners do charge the entrepreneurs interest (to fund the operations of the lending partner). Kiva pays the principle back to you but does not pay interest. And if the entrepreneur defaults then you do not get your capital paid back (in other words you lose the money you loaned). I plan to just recycle repaid loans to other entrepreneurs.

I have just placed an additional $150 in loans to 6 business entrepreneurs (in Honduras, Indonesia[2 loans], Tajikistan, Uganda and Ukraine), along with a $100 donation to Kiva (adding to my previous Kiva loans of $350). Since our last post the Oprah Winfrey Show, President Clinton’s newly released book Giving and others have sung the praises of Kiva and made it a challenge to find entrepreneurs of Kiva to lend to (Kiva is working on building their capacity – to keep up with the demand. That seems to have been partially fixed (for awhile the supply of the entrepreneurs was completely exhausted) in last few weeks (though still they limit you to no more than $25 per entrepreneur – in order to allow the large numbers of people that want to lend to at least have the chance to loan something).

If you lend through Kiva, add a comment with a link to your Kiva page and I will add you to our list of Curious Cat Kivans.

Posted in Creativity, curiouscat.com, Economics, Fun, IT, Management, Psychology | 7 Comments

Where to Start Improvement

Posted on October 10, 2007 by davenave

Guest post by Dave Nave

The question of where to start improvement is not an ‘either/or’ choice of top-down or bottom-up approach. The place to start is both. Leading an organization requires both a long-term and a short-term focus. With changing management practices being long-term and improving operational efficiency being short-term. The organization is a system. Optimization of any single component (management practices or production operations) frequently detracts from the whole.

For many years I firmly believed (actually hoped) the bottom-up approach would be the most effective. Especially since I came from the shop floor. However, after watching several large companies try the bottom-up approach, I realized that it didn’t work. You can show management success, but they will not believe it. Especially when the management practices involves the underlying beliefs that workers are untrustworthy, and must be dominated and controlled. I saw one Fortune 20 company turn around their operations using a process improvement program. When the bottom line numbers drastically improved, upper management scrambled for years trying to find out why. Five years later, I don’t believe they still understand how it happened, or why.

To help clarify the various arguments of top-down or bottom-up approach to implementing improvement in my own mind, I wrote a paper. Most arguments focus on ‘success’ – however that is determined! What I though was missing, was the perspective of a leader who has a broad knowledge of business, the desire to help the long-term health of the organization, but did not the ability to hold off the financial dogs of short-term results. Once I started looking deeper, two key factors came to light, time to see results versus scope of influence throughout the organization. Bottom-up produces short-term improvement however it’s effects are limited to the local area. Top-down takes a long time to see results, but it effects the very foundation of the organization. The hybrid of a top-down support for a bottom-up improvement approach is not the answer. The Fortune 20 company mentioned above, tried a high level support approach to a bottom-up improvement methodology. Looking through the lens of speed and scope, suddenly product redesign (Value Engineering) became a viable option. Providing a balance of moderate returns with a moderate time delay.

I concluded that a three prong approach is needed. But, how do you manage that? By cooperation and collaboration between improving; management practices, product redesign, and process improvement.

If anyone is interested in reading my thought paper, you can download the paper – Improvement Triad: Processes, Products, and Management Practices. I would love to hear your feedback.

Posted in Deming, Management | Tagged Deming, guest post, tips | 3 Comments

Early History Of Quality Management Online

Posted on October 5, 2007 by John Hunter

I started looking at quality management resources online in 1995 (maybe 1994). At the time I was on the board of the Public Sector Network – what would become the American Society of Quality (ASQ) government division. When we started working with ASQ it took something like 2 months from the time I wrote an article until people received it. Now in 1995, the internet (outside of universities) was in its infancy. I was writing a column on the resources online for quality management – these consisted of bulletin boards (that you used your modem to call directly) and “gopher” and “ftp” sites and email lists a very few web sites. Ftp and gopher are internet protocols (as is the hypertext transfer protocol – http – we all use for the web now). Well things changed frequently back then and by the time my article would be published phone numbers wouldn’t work, addresses would be out of date, etc..

So I figured I should post my article online so people could just go there and see the updated phone numbers, addresses, etc.. That wasn’t so easy to do back then. But several of us at a W. Edwards Deming Institute conference decided to create a Deming Electronic Network (DEN). And one of those people was Del Kimbler who worked at Clemson and had access to a web site where he agreed to host the DEN. So I asked about posting the Online Quality Resource Guide there and he agreed.

Del is retiring from Clemson and so we are moving some of the material off Clemson to curiouscat.com. As part of that I ran across this November 1995 edition of the Online Quality Resource Guide. There really was a small number of good online resources for managers back then. We forget how lucky we are today. The first article I can find (right now anyway) is from the Spring of 1995. It listed a total of 2 web sites in addition to a BBS and several email lists. Clemson was listed as a gopher site and web site.

We have recently moved the Public Sector Continuous Improvement Site and Community Quality Electronic Network to curiouscat.com. Some history on PSCI and CQEN.

Posted in curiouscat.com, IT, Management, Public Sector | 4 Comments

Change for Your Customer

Posted on October 4, 2007 by John Hunter

Lets say you buy a some ice cream. You get your wonderful ice cream cone from the employee and they point you to a small metal dish to pick up the coins you should recieve as change (the currency is handed to the customer by the employee). A fair number of stores in the USA do this (the change is automatically put in the dish – essentially by the cash register).

It is a small thing but it seems to me this is pretty lame customer service. Ok, I understand you can speed things up but still it seems not the right image to present to customers that you can’t be bothered to hand them their change. Chipotle (at least at some stores) has given this practice a smart twist – I think. The change is dispensed to the employee (they don’t need to count it) but they then hand it to the customer – which seems to convey a sense of customer focus. I am sure this doesn’t matter much to many people but my guess is that the psychology of personal contact is marred by being directed to pick up your change from a dish.

Posted in Customer focus, Management, Psychology | Comments Off

Management Improvement Carnival #20

Posted on October 3, 2007 by John Hunter

Read the previous management carnivals. The Management Improvement Carnival #20 is hosted by Evolving Excellence, some of the highlights include:

Elegance Offsets at Elegant Solutions. If carbon offsets are viable, then why not lean offsets, feature creep offsets, and even PowerPoint offsets?

Pushback at DailyKaizen. “… in the Toyota Motor company, staff understand why a certain thing needs to be done a certain way because it is explained to them as part of the process of training.”

Top 10 Success Factors for 5S at Gemba Panta Rei. Most organizations on the lean journey have 5S programs. Here’s how you can help ensure success.

Deciding About Indecision at Simplicity. “Indecision means the inability to reach a conclusion when many people are counting on you to validate their trust in your leadership.”

Leading a Retrospective Before Introducing a Team to Kanban at aremsan. “The purpose of this retrospective was to look back at how user stories find their way to production, and to find ways to shorten the process and increase quality.”

Please submit your favorite management posts to the carnival by commenting on this post.

Posted in Carnival, Management | Comments Off

Bring Me Solutions Not Problems

Posted on October 1, 2007 by John Hunter

My comments on: No Problem Without a Solution [I removed the broken link]

I understand that most managers feel that their employees should not bring them problems. Instead, expressed in the most positive way, employees should fix things or bring possible improvements. However, I think that is poor management.

I understand there may well be more detail than you provide that adds a more sensible (but more complex) reaction that stated in your post about your situation. However, there are many example, of bosses that expect their people not to bring them “bad news” not to bring them “problems” and that attitude is exactly wrong in my opinion.

What they are saying is: if you know of a problem but don’t know of a solution I would rather we continue to have that problem than admit some of my staff don’t know how to fix it (and then have to deal with it myself – maybe then having to accept responsibility for results instead of just blaming you if I am never told and there is a problem later…). I think that is setting exactly the wrong expectations.

Employees should fix things. They should bring solutions to managers to improve things that might be out of their ability to fix. But if they know of a problem and not a solution and a manager tells the employee they don’t want to be brought problems then I don’t want that manager.

If an employee never learns how to find possible solutions themselves that is not a good sign. But it is much, much better to bring problems to management’s attention than to fail to do so because they know the manager thinks that doing so is weak. It is the attitude that problems are not to be shared that is weak, in my opinion.

Posted in Lean thinking, Management, Psychology, Respect, Systems thinking | Tagged curiouscat, management, managing people, problem solving, Process improvement, Respect, Taiichi Ohno, tips | 8 Comments

CEO’s Given Lottery Sized Payouts

Posted on September 27, 2007 by John Hunter

Comment on: Fun With Statistics, CEO Life Edition

In the US, CEO’s tend to be fairly interchangeable these days and it is rare for their tenure to exceed five years. There are some notable exceptions such as chain-saw Al and Neutron Jack, but in general a change of CEO doesn’t seem to do much over the long term. This is one of the criticisms of American CEO’s they seem to be more interested in feathering their nest and getting out quickly rather than running the firm for the long-term benefit of all the stakeholders.

Another useful comparison would be with Japan where top decisions tend to be much more based upon consensus and not as dependent on the American Superstar model.

Wouldn’t being “less and less critical to the long-term success of the organization” make it more and more difficult to justify salaries that would make a King jealous? If the USA CEO’s are less critical why are the USA CEO’s paid the highest (and most unbelievable crazy) amounts? I have thought for years CEO pay in the USA has nothing to do with their “worth,” this seems one more piece of evidence for that belief.

Today, in the USA, CEOs are basically win the lottery when they start and then either win some more and stay or don’t win and are let go. The lottery performance appraisal aspect Deming talked about (rewarding whoever random variation or macro economic and micro economic trends smiled upon during the period). So if a market (housing, oil, steel, investment banking, microchip, hotel…) is booming why give all the CEO’s in that market huge payoffs? What do they have to do with the economic boom in the entire market? Why pay them a lottery sized payout when a boom occurs? Occasionally a CEO may help make decisions that position the company to take advantage of a predicted boom particularly well (such a case could at least trigger a discussion on the worth of that action).

We also have to recalibrate Deming’s comments to say regular performance appraisal raffle winners. CEO’s are now actually getting $40,000,000 – lottery sized – annual pay so using the term lottery is a bit misleading for everyone else. The same issue hold though rewarding people for what is often just micro factors similar to the macro factors listed above for CEOs.

Warren Buffett on overpaid CEO’s:

Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won’t change, moreover, because the deck is stacked against investors when it comes to the CEO’s pay. The upshot is that a mediocre-or-worse CEO – aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo – all too often receives gobs of money from an ill-designed compensation arrangement.

Posted in Deming, Management, Performance Appraisal, Systems thinking | 2 Comments