Tag Archives: Management

Process Improvement and Innovation

Every so often an article appears discussing the need to change focus from process improvement to innovation (and recently they are followed with quite a bit of blog talk). I disagree on several grounds. First you have needed to focus on both all the time. Second, it is not an either or choice. Third, the process of innovation should be improved.

I do not believe process improvement is bad for innovation. Bad process changes can be bad for innovation. But if we are looking at a research and development organization where the output is new products then process improvement would be focused on improving the processes to make that happen. The type of process improvement would be different than those made to manufacturing a product better.

Some six sigma efforts are little more than cost cutting efforts. And those efforts might claim a “process improvement” that is really just cutting costs in R&D. But we should not confuse bad management with the good practice of process improvement. Yes, cutting costs for the sake of cutting costs often leads to problems. Waste should be eliminated (which can reduces cost). Focus on eliminating waste. Eliminating waste in innovation activities is no worse than eliminating it anywhere. It might be more difficult to determine what is waste (that is where management skill and knowledge come into play) but the idea that process improvement (including eliminating waste is bad for innovation is something that should be rejected). And process improvement in innovation should not be limited to eliminating waste.

A good example of process improvement in innovation activities: Fast Cycle Change in Knowledge-Based Organizations (pdf format) by Ian Hau and Ford Calhoun, published by the Center for Quality and Productivity Improvement, University of Wisconsin – Madison.

Related: Better and DifferentNew Rules for Management? No!Quality and Innovation“New” Management NeedsManagement Advice Failures

People are Our Most Important Asset

One of the beliefs I try and get the organizations I work for to adopt is to truly value excellent people. The costs are challenges of hiring great people, to me, makes it critical to do what you can to keep your exceptional people. I probably haven’t written about this because it can conflict with my advice against performance appraisals. I do actually believe it is possible to know certain people are great and contribute greatly to the success of your organization. I also believe many (a majority) organizations do such a bad job of identifying those people they shouldn’t even try. But if you can identify some people that seem to be positive special causes of success there is a good argument for making sure they are happy.

I don’t believe you should try to pay these special employees fairly. Overpay them. I would much rather waste (10-20% on extra pay) than pay them fairly and make it easier for them to switch to another job. Talk to them and make sure they are doing what they want and making the progress they want. I find (I don’t have enough data to know if this is generally true) that the best people complain the least and so you need to make extra efforts to find out what they might like to see improved. Include these provisions during your human resource planning, make it a point to get the most qualified people to want to work for you.

Don’t focus all of your energy on putting out fires and expect those that keep their areas of responsibility in decent shape without your intervention to just cope on their own. Since many managers adopt this “only dealing with the squeaky wheel” strategy (without saying that is what they do, of course), force yourself to spend time coaching, learning, helping… the most successful – as well as others. I want to have employees delighted (all of them ideally, but at least those that are most critical). As Deming said it is easy for competitors to take away satisfied customers – it is not easy for a competitor to take away delighted customers. The same holds for employees.
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Ackoff’s F-laws: Common Sins of Management

Russ Ackoff once again does a great job of providing insight into management. I highly recommend A Little Book of f-Laws [the broken link was removed] where Ackoff, with Herbert Addison and Sally Bibb, present 13 common sins of management, such as:

Managers who don’t know how to measure what they want settle for wanting what they can measure

See: Deming’s thoughts on unknown and unknowable figures. A book with over 80 management flaws (er I mean f-Laws) will be published in January – you can even submit your own [the broken link was removed].

Related: Ackoff articles and booksblog posts on Ackoff’s ideasManagement Advice Failures
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Five Pragmatic Practices

Becoming a Great Manager: Five Pragmatic Practices by Esther Derby [the broken link was removed]

1) Decide What To Do and What Not To Do

Deciding what to do and what not to do helps focus efforts on the important work – work that will contribute to the bottom line of the company. Articulating a mission has another benefit: When everyone in your group knows the mission and how the work they do contributes to it, they will be able to make better decisions about their own work every day.

2) Limit Multitasking
3) Keep People Informed
4) Provide Feedback
5) Develop People

I don’t see these as new ideas that have not been discussed before. But this article does a nice job of covering some good ideas. Taking the time to read this article can help remind you of some good practices you may neglect.

What is Wrong with MBA’s

Two interesting posts from Compound Thinking: What is Management? [the broken link was removed – this is one of many examples of a good blog’s domain lapsing and being bought by someone to promote unrelated items.]:

Management is helping others become great.

Well said. As Deming would say management’s responsibility is to work on improving the system (to allow everyone in the system to do great work). This encompasses a wide variety of things, including:

  • creating sensible hiring processes
  • designing systems that allow people to do great work and take pride in what they do
  • providing a system of education and training

What’s wrong with MBAs? [the broken link was removed]:

MBA graduates generally aren’t the kind of people dedicated to helping other people achieve greatness.

Instead, they want to achieve greatness on their own — which can be a worthy goal. It’s just a terrible goal for a manager. Good managers are relentlessly focused on helping the people they work for perform at their best.

There certainly is something about MBA graduates that they often focus on measuring how important they are and how much they should be paid. I believe his statement that “managers should be dedicated to helping others achieve greatness.” This can run counter to performance appraisals schemes where people have to claim responsibility for successes in order to get more cash.

It is hard enough to create and sustain great management systems without adding more challenges to achieving success. When the management system results in having credit for each success fought over (to allocate credit to whoever convinces others they deserve the credit) it is much harder.

Related: Joel’s MBADeming’s 14 obligations of managementposts about respect for peopleSeven Deadly Diseases

Hiring the Right People

The job market is an inefficient market. There are many reasons for this including relying on specification (this job requires a BS in Computer Science – no Bill Gates you don’t meet the spec) instead of understanding the system. Insisting on managing by the numbers even when the most important figures are unknown and maybe unknowable. Using HR to find the right person to work in a process they don’t understand (which reinforces the desire to focus on specifications instead of a more nuanced approach). The inflexibility of companies: so if a great person wants to work 32 hours a week – too bad we can’t hire them. And on and on.

At first I titled this post the Hiring Process but that creates a analytic view of the hiring process separated from the important part which is workers actually working. The hiring process just provides resources that are needed. But in many places it is the reverse, the hiring process provides resources and then the rest of the process deals with that output as best it can.

Seth Godin had a very good post recently, The end of the job interview:

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Not Innovation but Still Interesting

10 years of the most innovative ideas in business in not packed with ideas on innovation: it was obviously titled by someone hoping to catch the interest of those following the innovation fad. Still it has interesting stories originally published in Fast Company, including:

How to Give Good Feedback [the broken link was removed] by Seth Godin
The Accidental Guru (on Malcolm Gladwell) by Danielle Sacks
Built to Flip [the broken link was removed] by Jim Collins
A Design for Living by Linda Tischler
and Join the Circus by Linda Tischler

The last one is about Cirque de Soleil which is an innovator (though even in this case it seems better might be more apt than different but maybe I am being too stingy). Read more blog posts on innovation.

More on Overpaid CEO’s

CEO pay up big – but not performance:

The Corporate Library analyzed the compensation of nearly 1,400 chiefs for its annual report on CEO pay. The group’s median total compensation rose 16 percent between 2004 and 2005. A year earlier, CEOs got a bump of 30 percent in total compensation, which includes salary, bonus, perks, exercised stock options and other long-term incentive pay.

This is more bad news. As Drucker, Buffet and many others have said CEO overpayment is bad for companies, workers and shareholders. Even when they are fired they often take away tens of millions of dollars. Absolutely ridiculous. I sure hope the bubble of CEO pay bursts soon – the only suitable comparison this century is the internet stock bubble. But every year it just gets worse. I would add overpaying CEO’s to Deming’s seven deadly diseases of western management.

Related: Excessive Executive PayWarren Buffet on ridiculously out of line executive compensationExcessive CEO PayMore on Obscene CEO Compensation

Evidence-based Management

Bob Sutton’s writing includes the excellent article “Management Advice: Which 90% is Crap?” (which we discussed in: Management Advice Failures) and the Knowing Doing Gap. I just discovered his blog today which is quite good: Work Matters. A recent post – Hand Washing and Evidence-based Management, includes some good advice on data and process improvement:

I’ve written before about how handwashing by medical care workers is one of the most well-documented preventable causes of death and disease in health care settings.

Self-report data can be worse than useless. They describe an Australian study where 73% of doctors reported washing their hands, but when the docs were observed by a researcher only 9% were seen washing their hands.

The way they finally got compliance up to nearly 100% was to have a group of the hospitals more influential doctors each press their palms on plates that were cultured and photographed, which resulted in images that “were disgusting and and striking, with gobs of colonies of bacteria.”

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The State of Lean Implementation

Interesting survey by the Lean Enterprise Institute notes the following as the major obstacles to transforming to a lean organization.

1 Lack of implementation know-how: 48%
2 Backsliding to the old ways of working: 48%
3 Middle management resistance: 40%
4 Traditional cost accounting system doesn’t recognize the value of lean: 38%

I wonder if asking why several more times would help [broken link replaced with a new link]? It is not as though the difficulty in adopting lean thinking is unique. I don’t know of a management improvement method (TQM, BPR, Six Sigma, ToC…) that easily leads to changing the way a company operates.

Related: Why Use Lean if So Many Fail To Do So Effectively

via: lean blog