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The Importance of Management Improvement

Posted on August 23, 2007 by John Hunter

John and Bill Hunter

If organizations just adopt management improvement practices I firmly believe customer service, financial performance and employee satisfaction could be improved. This was a big part of the reason I started to use the internet to share management improvement ideas back in 1996 (plus I find management improvement interesting).

On the note of making a difference in people’s lives. I have had far more people tell me how my father (Bill Hunter) made a huge difference in their lives than ever tell me anything like that about myself. Now there is the sensible explanation, that he actually had a big impact on people’s lives (but you also have to figure most of those people never saw me so the chance for them to say anything didn’t exist…). I believe far more people told me (after he died) than ever told him, which says something about psychology in the USA, I think. But I don’t really know what people told him – so I could be wrong about that.

Anyway the point of this is that many people have told me their life was significantly changed by working with him on management improvement initiatives (mechanics talking about how he changed the workplace they had been in for years, people who saw that they could contribute more and changed careers, managers that realized how much damage they had done but now were on the right track…). There was obviously a great deal of emotion for many people. And it was largely about applying concepts like Deming’s management system, Toyota Management practices, statistics (yes even that)… and his ability to talk to everyone and make them comfortable (tons of people mentioned this – that this university professor would ask me questions and talk to me like a person, not talk down to me and be interested in my answers and…). As I continue through life I realize that this management improvement stuff really can matter if done right.

I have grown to enjoy maintaining the management improvement resources and other Curious Cat web sites but this is the reason I started and continued these efforts over the years. Today there is a great amount of useful management information online – but for years the pickings were quite slim.

The photo is of dad and me a few years ago.

Posted in Career, curiouscat.com, Deming, Management, Psychology, Respect, Statistics | Tagged Deming, leadership, management, respect for people, William Hunter | 11 Comments

Pragmatism and Management Knowledge

Posted on August 22, 2007 by John Hunter

Is the Theory of Constraints (TOC) a Theory? [the broken link was removed]:

I suppose it’s a question of precision then. There are many things that you could argue are useful, if you argue backward from the end result. Yet they are not predictive, or repeatable to any degree of precision. In addition to “last things” there should also be the “next things” that a theory allows for or predicts. As a pragmatist, it’s hard to argue with results. As a Lean thinker, I have to argue for process and predictability.

There are strong ties between Deming’s ideas and the pragmatic philosophy; one paper offers a nice overview: Deming and Pragmatism [the broken link was removed].

I like George Box’s quote “All Models Are Wrong But Some Are Useful” This can also be dangerous when people don’t understand the limits of usefulness. A danger is that people believe the model is more true than it is (they don’t understand the limitations).

The pragmatists were concerned with the theory of knowledge – how we know what we know. They were very concerned with evaluating thought and beliefs. They believed in testing to determine whether theories were correct. This thinking underpins the Shewhart/Deming/PDSA cycle.

I believe the question raised in the original post is very similar to the struggle Shewhart went through in developing the control chart and Shewhart cycle. He wanted to address the exact issue of finding things that not only appear to be useful (which includes many instances of things that appear to be useful but in fact are not – we people are prone to this in many ways) but are predictably useful.

Posted in Deming, Management, Theory of Constraints | Tagged theory of knowledge | 1 Comment

Tesco in the USA

Posted on August 22, 2007 by John Hunter

Tesco is opening Fresh and Easy stores in the USA: starting with Los Angeles, San Diego, Phoenix and Las Vegas. Tesco is the third largest retailer in the world and well known for using lean management methods. I added Tesco to my long term stock picks last year (and Warren Buffett owns about $2 billion dollars worth, too). Their recent press release offers hope for Tesco operating with lean thinking in the USA:

“No where is our approach to serving every neighborhood more evident than Los Angeles, where we will open stores everywhere from Hollywood to Compton,” said Tim Mason, Fresh & Easy Neighborhood Market CEO. “Everyone deserves the opportunity to shop for fresh, quality foods at prices they can afford and Los Angeles is no exception.”
In addition to announcing initial store locations in the Los Angeles area, the company also discussed how it is trying to create a great place to work. Fresh & Easy conducted extensive research with potential employees, who told them that being treated with respect is a key factor.
…
Fresh & Easy also concluded that employees consistently rank pay, healthcare, retirement savings and paid time off as the top four most valuable components in their rewards program. The company’s rewards package includes those four critical elements and more.

Their blog also offers hope they will practice lean thinking: Keeping things simple at fresh& easy:

For example, why fill a shelf one product at a time if you can figure out a way to fill it twelve products at a time? It makes no difference to customers, it takes the same amount of effort, but it’s twelve times faster. Good for reducing costs, which can then be reinvested in lower prices. Or why use so much energy lighting a store when you can use natural light? You just need windows, and a way of turning down your lights during daylight hours – good for the environment, and good for reducing costs, which again can be re-invested in lower prices.

Perhaps the single biggest example is the way in which we’re approaching our assortment of products. We will only have about a tenth of the range of a full size supermarket, which means that the sales of each individual product will be much higher. This in turn reduces costs across the supply chain, which once more can be reinvested in lower prices.

Posted in Creativity, Customer focus, Lean thinking, Management, Respect, Systems thinking | 1 Comment

Google Video Customer Service

Posted on August 21, 2007 by John Hunter

Google Video sold digital videos that were controlled by Digital Rights Management DRM (so the purchaser didn’t buy something they bought the right to view the digital media according to a set of constraints. I, and many others find these DRM deals a bad deal for customers. I think Google realized that DRM made their Google Video a bad business (though maybe they decided it was a bad business for other reasons).

Well Google’s original method of existing the business left many people upset – with good reason I think. Google has wisely reacted to that feedback by improving the exit strategy (including full refunds and the ability to play videos purchased for the next 6 months). This improvement is evident for customers but also is an improvement from the perspective of the other stakeholders too. An update on Google Video feedback

When your friends and well-intentioned acquaintances tell you that you’ve made a mistake, it’s good to listen. So we’d like to say thank you to everyone who wrote to let us know that we had made a mistake in the case of Google Video’s Download to Own/Rent Refund Policy vs. Common Sense.

To recap: we decided to end the Google Video download to own/rent (DTO/DTR) program, and are now refocusing our Google Video engineering efforts. The week before last, we wrote to Google Video DTO/DTR program customers to let them know that videos they’d already bought would no longer be playable.

We planned to give these users a full refund or more. And because we weren’t sure if we had all the correct addresses, latest credit card information, and other billing challenges, we thought offering the refund in the form of Google Checkout credits would entail fewer steps and offer a better user experience. We should have anticipated that some users would see a Checkout credit as nothing more than an extra step of a different (and annoyingly self-serving) kind. Our bad. Here’s how we’re hoping to fix thing…

Posted in Customer focus, Google, IT, Management | 1 Comment

Improvement Tools and Improving Management

Posted on August 21, 2007 by John Hunter

Tools are just tools [the broken link has been removed] by Lee Fried

We have begun to shift away from a tool driven approach to one more centered on improving our management systems. This makes the work far more difficult, yet far more rewarding.

Great post. Great goal; and quite a challenge. My personal belief is while you are trying to make this change (which takes years) to become an organization that acts as a system you must balance education (an investment – one of the best forms of investment often) and improvements gains today (both are needed). And just applying tools effectively can often provide nice gains today (with the right guidance and proper restraint).

Often the two go hand in hand – there is little more educational than actually participating in using quality/lean/improvement tools and concepts to solve your own problems. That is the best way for managers to learn about lean thinking. But I think when you see this dual role of current improvement efforts it changes your measure of success – not just measuring improvement for today (or improvements in the value stream that will pay dividends for years) but also valuing the new knowledge gained by the participants. I have never been able to quantify the benefit of the education but that doesn’t bother me.

Posted in Deming, Education, Lean thinking, Management, Quality tools, Systems thinking | Tagged management tools, Quality tools | 1 Comment

Deming Institute Annual Conference: Oct 2007

Posted on August 20, 2007 by John Hunter

Impage of W. Edwards Deming and the Purdue Campus

Learn how to do your work better, faster, and for less cost, plus find more time to plan your future and develop balance in your life – Attend The W. Edwards Deming Institute Fall Conference. Gain new insights to:
* Reduce product and service variation
* Enhance job satisfaction
* Redesign organizations as a system
* Appreciate the thinking behind the Toyota Production System
* Discover the role of psychology in continual improvement
* Understand trends in improving healthcare

Speakers include: Norm Bafunno (Senior Vice President – Manufacturing and Administration, Toyota Motor Manufacturing, Indiana, Inc.), Bill Bellows – Associate Technical Fellow, Pratt & Whitney Rocketdyne), Joyce Orsini (Fordham University, Deming Scholars MBA Program), John Pourdehnad – Ackoff Center for Advancement of Systems Approaches), Gipsie Ranney (Statistical Consultant) and Don Wheeler (Consulting Statistician and Author).

Posted in Career, Deming, Management, Toyota Production System (TPS) | Comments Off

More Bad Customer Service Examples :-(

Posted on August 19, 2007 by John Hunter

It is sad to see so many examples of bad customer service. I wish enough companies would adopt management improvement principles so that at least I could avoid dealing with the others altogether. Here are 2 more bad examples from the Washington post today. Cellphone Contracts – Hard to Get off the Hook

Fed up with dropped calls and a string of defective cellphones, Corey Taylor said he became irate when he learned he’d have to pay $175 to get out of his long-term contract with Verizon Wireless. So he resorted to a rather extreme measure. He faked his own death.
…
Consumers filed more complaints about cellphones than any other industry for the past three years, according to the Council of Better Business Bureaus; contract issues consistently rank among the top three gripes, along with billing and service problems.

Another in the long list of bad service from Verizon examples. And the Post also has a story on the continuing Passport saga, which just feeds the perception that government can’t manage:

“This is a clear admission of failure and a decision not to solve the problem, leaving thousands of travelers in the lurch,” said Sen. Charles E. Schumer (D-N.Y.). “What color is the sky in their world?” Rep. Steven LaTourette (R-Ohio) said to the Associated Press. “I can’t believe they’re proposing a rule where they want to charge you the same amount, and in return, you’re virtually guaranteed to get worse service.” Demand for passports soared at the beginning of the year as travelers sought to comply with a new border security law requiring passports for all U.S. citizens flying within the Western Hemisphere.

Wouldn’t you love to see what lean thinking passport operations could accomplish (which is really just part of the system that passed the law – one of the numerous failing of the State Department was not adequately explaining the consequences/requirement of the new law? I know I would.

Posted in Customer focus, Lean thinking, Management, Public Sector | 2 Comments

Don’t Empower

Posted on August 18, 2007 by John Hunter

I believe I learned this from Peter Scholtes, though maybe I am remembering it wrong or explaining it wrong (so give him the credit and if I mess it up it is my fault). I believe there is a problem with using the term empowered. Using the term implies that it one person empowers another person. This is not the correct view. Instead we each play a role within a system. Yes there are constraints on your actions based on the role you are playing. Does a security guard empower the CEO to enter the building?

Some systems are setup with a great deal of micro managing. Then consultants look around and say you need to empower your employees to think. Which often results in mangers saying “you all are empowered” go forth and do good work. Saying that is meaningless. What matters is changing the system. The system needs to respect people. That is not increased by people using the word empowered. In fact it is decreased, I believe, due to the implied notion that one person “empowers” the other (what can be granted can be withdrawn).

I believe organizations should be designed so that decisions are made at the appropriate level. Systems should be designed to produce good results by allowing people to contribute. People should be trusted to do their job. They should not be micro-managed. They should work from standard work instructions. They should practice kaizen… When discussing empowerment this topics come up, but the wrong term reinforces the wrong view of the situation.

It is similar to the problem with “motivation.” What managers need to do is eliminate de-motivation – not to motivate. Manager’s don’t need to “empower” employees they need to fix the system to treat employees with respect and allow them to do their jobs well.

Posted in Deming, Management, Psychology, Respect, Systems thinking | 5 Comments

Data Based Blathering

Posted on August 17, 2007 by John Hunter

Ok, this is one of those posts you might want to ignore or you might enjoy. Before blogs there is little chance this would reach you. But I am tired of seeing the American Customer Satisfaction Index (ACSI) promoted as if it were some encouragement for better management when all it seems to do to me is encourage superficial, non data based claims. And since it my blog I can rant if I feel like it.

ACSI: Flat Customer Satisfaction Suggests Continued Weak Consumer Spending

That is the title of the news release. Are they kidding!! They think a flat American Customer Satisfaction Index (ACSI) reading is going to lead to weak consumer spending? I doubt it. I really doubt it. What data, or theory is that based on? Jeez this whole thing just makes me crazy. Trying to use a index to promote the “importance of quality principles” (ASQ is one of the “sponsors” of this effort) and customer focus in this way – ARGH. It does the opposite – showing people how to misuse numbers. How to overreact to variation. How to compare one dot to another dot and make claims from those 2 dots. I am sure I will make mistakes in my statements but the ACSI has bugged me since it was started with the way it ignores sound quality practices and promotes the opposite of what people like Dr. Deming taught.

“American automakers are narrowing the gap with Asian manufacturers, but they’re still coming in last,” said Prof. Fornell. “Though foreign nameplates just passed domestic cars for monthly sales, Detroit’s Big Three might have an opportunity to take advantage of Toyota’s difficulties in maintaining quality as it increases production. When you make more cars, chances are quality is going to slip.”

I suppose it it possible their was a statistically significant change in the actual consumer satisfaction in favor of the Big Three versus Asian Manufacturers, though I doubt it. But fine, lets say it isn’t just random variation. And heck for a sentence or two lets even accept this measure of “satisfaction” is even meaningful. Why would making more cars mean your quality is going to slip? This seems like trying to say something about numbers when you don’t really have anything to say. Toyota will make more cars next year, most likely (unless there is a large recession), so is your prediction that their ASCI is likely to slip? Please read Practice and Malpractice in Management Research v 6.0 by Paul R. Carlile and Clayton M. Christensen.

Making a prediction and testing it out would at least be applying some semblance of the PDSA cycle (granted I probably shouldn’t even bring that up as it is such a stretch from a what PDSA really is) – but the concept of PDSA is that it is a learning cycle. You make a prediction based on your theory and then test out your theory. The claim is making more cars means your quality is going to slip (which in the context I take them to mean is equivalent to the ASCI number slipping – otherwise the quote is basically a non-sequitur)?
Continue reading →

Posted in Data, Economics, Google, Toyota Production System (TPS) | 3 Comments

Are Google Management Practices Worth Studying?

Posted on August 16, 2007 by John Hunter

Larry Dignan asks “Is Google reinventing corporate management or just living off the fruits of one big breakthrough?” Well, I believe Google offers a great deal for managers to study – see our posts on Google management practices. But that is not the same as reinventing corporate management. Most companies have no way of just replacing their management system with a “Google management system” – they don’t have the managers to make it work, or the staff or the systems or maybe even the business… However there is plenty that can be learned and adopted. In, Google: Reinventing management?, Larry states:

For me, Google doesn’t have the track record to claim much of anything regarding management practices. In technology I look to Cisco Systems as a company to study. Cisco rode the dot-com boom, lived through the collapse and is in a great position for the next phase of the Internet buildout. All of that retooling happened on the fly with Cisco CEO John Chambers at the helm. We should let Google’s model ripen for a while and study Cisco’s management model in the meantime.

My advice, study Deming and Toyota and Ackoff and Christensen and Google and a whole group of leading management thinkers. And use the knowledge to create a management system that works in your organization. A good way to start: read these management books and read the blogs like: Lean Six Sigma Academy, Evolving Excellence, Lean Blog, Panta Rei, etc.. And apply what you can where you are. Don’t try to copy what one place does or expect some consultant install management into your organization.

Posted in Innovation, IT, Management | Comments Off