Tag Archives: curiouscat

Leadership and Management

I don’t think the attempts to separate leadership and management are useful. I read plenty of things that are variations on Peter Drucker’s:

“Management is doing things right; leadership is doing the right things.”

A manager that is not concerned about doing the right things is a lousy manager. And a leader that doesn’t care about doing things right is a lousy leader.

Another theme of this contrasting type quote says some version of:

“Managers care about efficiency and leaders care about effectiveness”

A manager who doesn’t strive to be effective is also a lousy manager. It is also odd to suppose the detached leader (the type that lets the manager deal with the mundane while they dream), one that doesn’t concern themselves with customer focus, value chains, going to the gemba really has a clue about effectiveness. The idea seems mainly to view a manager is a cog looking at some tiny process and making it efficient without understanding the organization as a system or value chains or customer focus.

I think, the main problem is all of the attempts to contrast leaders and managers. Much of the time people are saying managers don’t do things they certainly should be doing.

The desire to express how leadership traits can be used by those without organizational authority are useful. Discussion of how certain traits can be seen as within the domain of leadership I suppose may be useful (it can help our minds see how various traits and practices combine to help get results – and we can categorize these under “leadership”).

Leaders that are primarily “big thinkers” and motivators without a clue about how to actually do the things they advocate (the model of “managers” deal with the implementation with blinders to the system while “leaders” are “above the fray”) is not useful in my opinion. It does note a somewhat common practice (in organizations today) but not one that is wise. Separating leadership from the gemba is not wise. Separating leadership from a deep understanding of customers is not wise. Separating leadership from how the organization actually works is not wise.

Plenty of others seem to disagree with my opinion though, there are many articles, blog posts, podcasts, talks… on separating leadership from management.

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94% Belongs to the System

I should estimate that in my experience most troubles and most possibilities for improvement add up to the proportions something like this: 94% belongs to the system (responsibility of management), 6% special.

Page 315 of Out of the Crisis by Dr. W. Edwards Deming.

the system that people work in and the interaction with people may account for 90 or 95 percent of performance.

Dr. Deming’s quote from the introduction to the Team Handbook

I think, in looking at the total of Deming’s work, that the point he is trying to make is that looking to blame people is not a good strategy for improvement. The impact due solely to a person’s direct action (not including their interaction with the system and with others) is small in comparison to that of the system within which they work. So, Deming (and I) want people to focus on improving the system; which will achieve better results than searching for what people did wrong.

What did Deming want people to take from his statements?

Did he want us just to accept bad results? No. He was not saying it is the system there is nothing we can do just accept that this is how things are. He wanted us to focus on the most effective improvement strategies. He saw huge waste directed at blaming people for bad results. He wanted to focus the improvement on the area with the greatest possibility for results.

Did he want to say people are just cogs in the machine? No. Read or listen to most anything he said at any significant length (a full chapter of this book, a full article he wrote on management, an hour from one of his videos) and it is hard to maintain such a thought.

Pinetree Trail, Frasers Hill, Malaysia by John Hunter

Did he believe that people were not important? No. He was trying to direct the focus of improvement efforts to look not at the fault with one person but to look at the system. I believe strongly he was correct. If you blame a person as the root cause of a problem, my first, second and third reactions are why? why? why? It is possible the person is to blame and there is no benefit to exploring system improvement instead of settling for blaming the person. But that is rare.

I have written about the importance of developing people to build the capability of the organization. My father wrote about it previously, “American organizations could compete much better at home and abroad if they would learn to tap the potential information inherent in all processes and the creativity inherent in all employees.”

I wrote about the importance of the ideas behind Deming’s quotes here, back in 2006 – Find the Root Cause Instead of the Person to Blame

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The Art of Discovery

Quality and The Art of Discovery by Professor George Box (1990):

Quotes by George Box in the video:

“I think of statistical methods as the use of science to make sense of numbers”

“The scientific method is how we increase the rate at which we find things out.”

“I think the quality revolution is nothing more, or less, than the dramatic expansion of the of scientific problem solving using informed observation and directed experimentation to find out more about the process, the product and the customer.”

“It really amounts to this, if you know more about what it is you are doing then you can do it better and you can do it cheaper.”

“We are talking about involving the whole workforce in the use of the scientific method and retraining our engineers and scientists in a more efficient way to run experiments.”

“Tapping into resources:

Every operating system generates information that can be used to improve it.
Everyone has creativity.
Designed experiments can greatly increase the efficiency of experimentation.

An informed observer and directed experimentation are necessary for the scientific method to be applied. He notes that the control chart is used to notify an informed observer to explain what is special about the conditions when a result falls outside the control limits. When the chart indicates a special cause is likely present (something not part of the normal system) an informed observer should think about what special cause could lead to the result that was measured. And it is important this is done quickly as the ability of the knowledgable observer to determine what is special is much greater the closer in time to the result was created.

The video was posted by Wiley (with the permission of George’s family), Wiley is the publisher of George’s recent autobiography, An Accidental Statistician: The Life and Memories of George E. P. Box, and many of his other books.

George Box

I would most likely not exist if it were not for George Box. My father took a course from George while my father was a student at Princeton. George agreed to start the Statistics Department at the University of Wisconsin – Madison, and my father followed him to Madison, to be the first PhD student. Dad graduated, and the next year was a professor there, where he and George remained for the rest of their careers.

George died today, he was born in 1919. He recently completed An Accidental Statistician: The Life and Memories of George E. P. Box which is an excellent book that captures his great ability to tell stories. It is a wonderful read for anyone interested in statistics and management improvement or just great stories of an interesting life.

George Box by Brent Nicastro.

George Box was a fantastic statistician. I am not the person to judge, but from what I have read one of the handful of most important applied statisticians of the last 100 years. His contributions are enormous. Several well know statistical methods are known by his name, including:

George was elected a member of the American Academy of Arts and Sciences in 1974 and a Fellow of the Royal Society in 1979. He also served as president of the American Statistics Association in 1978. George is also an honorary member of ASQ.

George was a very kind, caring and fun person. He was a gifted storyteller and writer. He had the ability to present ideas so they were easy to comprehend and appreciate. While his writing was great, seeing him in person added so much more. Growing up I was able to enjoy his stories often, at our house or his. The last time I was in Madison, my brother and I visited with him and again listened to his marvelous stories about Carl Pearson, Ronald Fisher and so much more. He was one those special people that made you very happy whenever you were near him.

George Box, Stuart Hunter and Bill Hunter (my father) wrote what has become a classic text for experimenters in scientific and business circles, Statistics for Experimenters. I am biased but I think this is acknowledged as one of (if not the) most important books on design of experiments.

George also wrote other classic books: Time series analysis: Forecasting and control (1979, with Gwilym Jenkins) and Bayesian inference in statistical analysis. (1973, with George C. Tiao).

George Box and Bill Hunter co-founded the Center for Quality and Productivity Improvement at the University of Wisconsin-Madison in 1984. The Center develops, advances and communicates quality improvement methods and ideas.

The Box Medal for Outstanding Contributions to Industrial Statistics recognizes development and the application of statistical methods in European business and industry in his honor.

“All models are wrong but some are useful” is likely his most famous quote. More quotes By George Box

A few selected articles and reports by George Box

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Customers

Customer focus is critical to succeed with management improvement efforts. Few argue with that point, though my experience as a customer provides plenty of examples of poor systems performance on providing customer value (usability, managing the value stream well, etc.).

At times people get into discussion about what counts as a customer. Are customers only those who pay you money for a product or service? What about internal customers? What about users that don’t pay you, but use your product (bought from an intermediary)? What about users that use a service you provide for free (in order to make money in another way, perhaps advertising)? What about “internal customers” those inside your organization without any payment involved in the process?

I find it perfectly fine to think of all these as customers of slightly different flavors. What is important is providing what each needs. Calling those that actually use what you create users is fine, but I think it often just confuses people rather than adding clarity, but if it works in your organization fine.

To me the most important customer focus is on the end users: those that derive value from what your organization provides. If there is confusion between various customer groups it may be helpful to use terms like end user, but really using the term customer for a wide range or customers is fine (and modification such as internal customer to provide some clarity).

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Special Cause Signal Isn’t Proof A Special Cause Exists

One of my pet peeves is when people say that a point outside the control limits is a special cause. It is not. It is an indication that it likely a special cause exists, and that special cause thinking is the correct strategy to use to seek improvement. But that doesn’t mean there definitely was a special cause – it could be a false signal.

This post relies on an understand of control charts and common and special causes (review these links if you need some additional context).

Similarly, a result that doesn’t signal a special cause (inside the control limits without raising some other flag, say a run of continually increasing points) does not mean a special cause is not present.

The reason control charts are useful is to help us maximize our effectiveness. We are biased toward using special cause thinking when it is not the most effective approach. So the control chart is a good way to keep us focused on common cause thinking for improvement. It is also very useful in flagging when it is time to immediately start using special cause thinking (since timing is key to effective special cause thinking).

However, if there is result that is close to the control limit (but inside – so no special cause is indicated) and the person that works on the process everyday thinks, I noticed x (some special cause) earlier, they should not just ignore that. It very well could be a special cause that, because of other common cause variation, resulted in a data point that didn’t quite reach the special cause signal. Where the dot happened to land (just above or just below the control limit – does not determine if a special cause existed).

The signal is just to help us systemically make the best choice of common cause or special cause thinking. The signal does not define whether a special cause (an assignable cause) exists of not. The control chart tool helps guide us to use the correct type of improvement strategy (common cause or special cause). But it is just a signaling device, it isn’t some arbiter of whether a special cause actually exists.

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New Deadly Diseases

Management and the economy keep evolving. Many good things happen. In the last decade the best things are probably the increased deep adoption of lean thinking in many organizations and the adoption of lean and Deming methods in software development (agile software development, kanban and lean startup [which I do realize isn’t limited to software development]).

Sadly all the deadly diseases Dr. Deming described remain. And, as I said in 2007, I think 2 new diseases have become so widespread and so harmful they have earned their place alongside the 7 deadly diseases (which started as the 5 deadly diseases). The new deadly diseases are:

extremely excessive executive pay
systemic impediments to innovation

In my view these 2 diseases are more deadly to the overall economy than all but the broken USA health system. The systemic impediments to innovation are directly critical to small percentage (5%?) of organizations. But the huge costs of the blocks to innovation and the huge “taxes” (extorted by those using the current system to do the opposite of what it should be doing) are paid by everyone. The costs come from several areas: huge “taxes” on products (easily much greater than all the taxes that go to fund our governments), the huge waste companies have to go through due to the current system (legal fees, documentation, delayed introduction, cross border issues…) and the denial of the ability to use products and services that would improve our quality of life.

The problems with extremely excessive executive pay are well known. Today, few sensible people see the current executive pay packages as anything but the result of an extremely corrupt process. Though if their personal pocketbook is helped by justifying the current practices, some people find a way to make a case for it. But excluding those with an incentive to be blind, it is accepted as a critical problem.

More people understand the huge problems with our patent and copyright systems everyday, but the understanding is still quite limited. Originally copyright and patents were created to provide a government granted monopoly to a creator in order to reward that creator for contributing to the development of society. Copyrights and patents are government granted interventions in the free market. They are useful. They are wise policy.

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Leading Manufacturing Countries from 2000 to 2010: China, USA…

chart showing leading manufacturing countries output from 2000-2010

Chart of manufacturing production by the top 10 manufacturing countries (2000 to 2010). The chart was created by the Curious Cat Economics Blog. You may use the chart with attribution. All data is shown in 2010 USD (United States Dollar).

Over the years I have been posting data on the manufacturing output of leading countries. In 2010 China finally overtook the USA to becoming the leading manufacturer (long after you would have thought listening to many news sources and political leaders). In a previous post on the Curious Cat Economics Blog I looked at the output of the top 10 manufacturing countries with a focus on 1980 to 2010.

In 1995 the USA was actually very close to losing the lead to Japan (though you wouldn’t think it looking at the recent data). I believe China will be different, I believe China is going to build on their lead. There has been some talk for several years of manufacturing moving out of China seeking lower cost countries. The data doesn’t support any decline in Chinese manufacturing (or significant moves away from China toward other South-East Asian countries). Indonesia has grown quickly (and is the largest SE Asian manufacturing country), but their total manufacturing output is less than China grew by per year for the last 5 years.

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My New Book: Management Matters

Image of the book cover of Management Matters by John Hunter

Management Matters by John Hunter is now available.

I have a new book in progress: Management Matters. It is now available in “pre-release format” via leanpub. The idea I am experimenting with (supported by leanpub) is pre-publishing the book online. The ebook is available for purchase now, and comes with free access to the updates.

My plan is to continue working on the book for the next few months and have it “release ready” by October, 2012. One of the advantages of this method is that I can incorporate ideas based on feedback from the early readers of the book.

There are several other interesting aspects to publishing in this way. Leanpub allows a suggested retail price, and a minimum price. So I can set a suggested price and a minimum price and the purchaser gets to decide what price to pay (they can even pay over suggested retail price – which does happen). The leanpub model provides nearly all the revenue to the author (unlike traditional models) – the author gets 90% of the price paid, less 50 cents per book (so $8.50 of a $10 purchase).

They provide the book in pdf, mobi (Kindle) and epub (iPad, Nook, etc.) formats. And the books do not have any Digital Rights Management (DRM) entanglements.

Management Matters covers topics familiar to those who have been reading this blog for years. It is an attempt to put in one place the overall management system that is most valuable (which as you know, based on the blog, is largely based upon Dr. Deming’s ideas – which means lean manufacturing are widely covered too).

I hope the book is now in a state where those who are interested would find it useful, but it is in what I consider draft format. I still have much editing to do and content to add.

Leanpub also provides a sample book (where a portion of the content can be downloaded to decide if you want to buy). If you are interested please give it a try and let me know your thoughts.

Leading Improvement and Enjoying the Rewards

The better job you do of managing the easier your job becomes.

As a manager your primary responsibility is to improve the system: both the systems within your sphere of control and those outside of it. The more effectively you do so, the less firefighting you have to do. The less firefighting the less hectic and chaotic your days are. And the more time you have to focus on improving the system.

The better you are at leveraging your efforts, the greater your impact, and more quickly your job gets easier. Most effective leveraging involves improving the system. Improvement to the system continue to deliver benefits continuously.

A specific form improving the system is coaching people so they are able to be more effective at improving the system themselves. One valuable role you can play is to help avoid the existing traps that prevent improvements. Early in a transformation to a continual improvement culture there are significant barriers to improvements. Those not only prevent the system from improving rapidly they can easily derail the motivation people have to improve. It is hard to maintain a desire to improve if every effort to do so feels like a long slog through quicksand.

As you create a system where people have the knowledge, drive and freedom to improve you get to enjoy continual improvement without any direct action by you. As this happens you are able to spend more time thinking and learning and less time reacting. That time allows you to find key leverage points to continue the progress on improving the management system.