What Could we do Better?
Instituting a Management Improvement Culture in Your Organization
Find the Root Cause Instead of the Person to Blame
Good Process Improvement Practices
Management is Prediction
The Purpose of an Organization
Performance Without Appraisal
Manufacturing and the Economy
Practical Ways to Respect People
10 stocks for 10 years
Deming and Toyota
Curious Cat Management Improvement Articles
Institute for Healthcare Improvement
Management Improvement Jobs
Deming on Management
Management and Leadership Quotes
I am now using this blog to re-post some comments I make other blogs. For my full management blog see the
Curious Cat Management Blog
Ex-Toyota Manager Consulting with Porsche in 1994
Interesting article from 1994. Shock therapy for Porsche
: The prestigious German car firm was speeding to destruction, so its chief swallowed his pride and hired Japan's top consultants to improve outdated methods of production. John Eisenhammer charts the brutal remedies they prescribed at the company's plant near Stuttgart:
The results are already impressive. The production time of the new Porsche 911 Carrera has been reduced by a third, to 86 hours. That is still some way behind the best comparable Japanese time of 50 to 60 hours, but Porsche claims to be well on target. Whereas 70 per cent of Porsches three years ago required expensive rectification at the end of the production line, the proportion is now half that. Inventory levels have been reduced by 44 per cent: 7,000 square metres of shopfloor space have been freed and rented out. A worker suggestion scheme, which in the past generated fewer than 20 ideas a month, has now exploded to around 2,500
While respect for people is an important part of the Toyota Production System, the practice of former Toyota managers were often the "tough love" variety
. Today, many people are often too timid, in my opinion, to call out things that need to be improved for fear of making someone uncomfortable. Where that balance properly lies though is based on the culture of the organization (and what needs to be done - occasionally there is a need to "shake people up" in order to make change take place more effectively).
In his own gruff way Mr Iwata agrees. 'We are not here to praise,' he growls. 'But there is hope for Porsche.'
Related: Early "Lean" Thinking
- Pay Practices Say More About Respect for People Than Words Say
- Respect for People and Understanding Psychology
- Respect for Everyone
Funny item from the story:
When not discussing production-line changes or conducting workshops, the Shin-Gijutsu people are ambushing staff. 'When I see one of Porsche's fine engineers, I do not say 'good morning',' grins Mr Nakao. 'I say, 'show me your hands. They must be dirty - engineers must always have oily hands'.' Used also to checking the soles of shoes worn by managers in the finance department, to see if they spend enough time walking around the factory, Mr Nakao was devastated to discover the trick did not work with Germans, who are used to resoling old shoes. 'We do not do this in Japan,' he says. 'How can I see if a man is doing his job properly if he keeps changing his soles?'
It is also illustrates that your practices need to adjust to the system. Time at the gemba
is important and transfers. Your specific means of checking that might have to be adjusted.
Labels: gemba, lean thinking, management consulting, manufacturing, respect for people, Toyota
The damage caused by "Management" by targets is much larger in dysfunctional organizations
The damage caused by "Management" by targets
is much larger in dysfunctional organizations - they are also more likely to be given more importance by dysfunctional organizations, that is a bad combination. In a great organization with an strong understanding of systems, respect for people, no pay based on "performance," an understanding of data and variation... then damage managing by targets does is much smaller. But the number of those organizations is not huge.
Reaction to: Target Setting, Cause and Effect
Related: Setting Goals Can Easily Backfire
- I achieved my goal by not my aim
- Be Careful What You Measure
- Targets Distorting the System
Labels: business, data, Deming, evidence based management, goals, management, motivation, process improvement, process thinking
What Works for One Business May Not Work For Others
Lean Thinking at Amazon
My comments on Michel Baudin's post discussing lean, service and Amazon
Unlike other Shmula readers, I can't jump from this to the conclusion that Amazon are based on Six Sigma or Lean. Instead, what I hear Bezos saying is "We studied what's out there, and went our own way." And that way is a game changer in retail worldwide, worthy of study in its own right...
It is interesting to see what Amazon continues to do. I think you are right that they have learned good things and are applying them their way. Often Bezos does what I see as much more fundamental lean thinking
than those that spout the term a great deal.
For example: Bezos going to the gemba
, Bezos root cause analysis
... Bezos understand the weakness of traditional accounting more than most any executive (he was a Wall Street analyst), this is way more important than I ever see mentioned in what makes him, and Amazon, different.
Bezos practices long term thinking
better than nearly every "lean" company (though Toyota, and some others do this very well). From this mindset many things spring - focus on long term customer value, invest in value stream (Amazon's purchase of Kiva robots for example). Willingness to go against the current fashion, being directed by Wall Street analysts what is in the businesses, etc..
There are also job announcements, over the years, looking for lean experience and expertise I have seen from Amazon (which is a clue they are interested in lean).
Labels: business, customer focus, innovation, lean thinking
Hopefully Other Countries Will Save Us From USA's Attempt to Sell Us Out to Aid Big Political Donors
The Trans-Pacific Partnership has been atrocious. Essentially the USA has been strong arming other countries into secretly selling out their citizens to provide benefits to large USA political donors. The Obama administration has once again done the opposite of being the open and honest organization candidate Obama promised.
The hopes of stopping the corruption of the USA political system, in this case, wrests with other countries protecting their citizens (and the citizen's of the USA from the corrupt practices. Vice President Bidden seems particularly focused on paying off his donors and friends with this horrible treaty. The USA administration realizes the selling out the innovators and rights of citizens for large political donors is so toxic it would likely not survive if there was the transparent government candidate Obama promised.
The TPP should be stopped. I would not trust politicians that don't speak out against it publicly now. Politicians have become adept at hiding what they promote behind secrecy and misdirection. Many are hoping they can hide behind the secrecy around the trampling of innovators and citizens in the TPP to pay off their donors while claiming the appose the horrible policies of the TPP. If they are not speaking out now, all they are doing is taking advantage of the secrecy the Obama administration has made its policy for trying to hide government action that harms the country from public view.
The Trans-Pacific Partnership being pushed by Washington is nothing more than a corporatist power grab
by William Pesek.
American lawmakers and civil liberties groups have complained for some time about the opacity surrounding the treaty's terms. Mild grousing turned into outrage last month after WikiLeaks did what Barack Obama's White House refuses to: share portions of the document with the public. The draft of the intellectual property rights chapter by Julian Assange's outfit validated the worst fears - that TPP is a corporatist power grab.
Rather than heed the outcry, the US doubled down on secrecy, refusing to disclose more details.
Hasn't the US wondered why so many of east Asia's most promising democracies have avoided the treaty? The popular excuse for why Indonesia, the Philippines, South Korea, Taiwan and Thailand aren't among the 12 TPP economies is that they aren't ready or are trapped by their own timidity. A better explanation is that their leaders realise that truly transparent and accountable governments, to borrow Kerry's own words, shouldn't be leading their people into the unknown.
The root cause of this situation is the corrupt USA political system
. At a bit less abstract level the TPP seeks to worsen the deadly diseases of the broken patent and copyright system
(and also worsen the broken health care system). The TPP is an attempt by those that understand systems thinking to mold the system in secrecy to benefit those giving USA politicians lots of cash. We can only hope that other countries are not willing to do the bidding of the USA in this case (though the USA is willing to provide incentives and threats to allow it to deliver for those giving USA politicians cash
Related: Intellectual Property Rights and Innovation
- The People We Elect Recently Are Dramatically Falling Us
- Cash for Votes subreddit (political corruption)
- Why Copyright Extention is a Very Bad Idea
Labels: business, copyright, government, information technology, innovation, society, techonology, trust
Risks Should be Taken Wisely
I agree. I think it is wise to understand you are willing to take certain risks in order to improve and innovate. Sometimes things might not work out. That doesn't mean you don't do what you can to mitigate the impact of things that don't work out.
It does seem to me the "accept risk" (fail fast, accept failure...) folks would be better served to focus a bit more on mitigating the results of failure. Sure accept risks when you determine it is worth taking the risk due to the benefits.
I wrote about this earlier this year: Taking risk, but do so wisely
Accepting risk doesn't mean failure is good. And it doesn't mean the results of experiments are all blameless. You can do a poor job of taking risks. If that is done, we should learn from it and improve how we take risks going forward. I would also put my focus process over people (what, good and bad, can we learn about how we did this experiment or took this risk to do better experiments and risk taking going forward).
In response to: To Blame or Not to Blame
Related: Find the Root Cause Instead of the Person to Blame
- Blame the Road, Not the Person
- Respect for People Doesn’t Mean Avoiding Any Hint of Criticism
Labels: business, design of experiments, evidence based management, experiment, innovation, process improvement, systems thinking
Lean v Innovation is a False Dichotomy
The whole idea that process improvement efforts are harmful to innovation frustrates me. It is due to misunderstanding what is labeled as process improvement. Lean isn't about just making whatever process exists less wasteful. Lean focuses on value added to customers but people forget that.
A separate idea people have is that in order to improve processes you need to improve all of them the same way. Wrong! The way you improve the internal operations of a fast food restaurant are not going to be the same things you do to improve a think tank or research lab. But both have processes. The results of both can be improved by improving how the systems work.
Yes a think tank or research lab would not be served well by the same types of processes as a fast food restaurant. And a fast food restaurant wouldn't be served by the type of process improvement that would benefits a research lab.
I have written about this several times, including:
Response to: Lean v. Innovation…Wrong Question!
Related: Clayton Christensen on Innovation and Macro Economics
- Accept Taking Risks, Don’t Blithely Accept Failure Though
Labels: innovation, management consulting, process improvement, process thinking, systems thinking
Pilot on a Small Scale First - Good Advice We Often Ignore
Response to: Pink NFL Penalty Flags Surprisingly Cause Confusion
This is an example of why piloting new ideas is wise. The truth is we often don't pilot stuff. Many times it works out fine (and no-one mentions we didn't pilot it on a small scale). When you don't pilot and it then fails on a big scale this is the question, I think.
Were we bozos for not seeing the risk - looking back is it a pretty strong case we should have piloted.
If we often don't pilot and it works 99 times out of 100 it may be we are pretty good at knowing what needs to be piloted and excepting some failures is ok in order to get things done. Part of the decision that is critical is making sure you don't fail to pilot when it is really costly to be wrong (which is part of the decision on whether to pilot).
We can just always point to failure to pilot as the dumb thing to do when it fails. But I see that as a bit overly simplistic. Many organization don't pilot well. Getting them to do so all the time would likely stop you from doing better stuff. Getting them to do so when
- there are likely to be be things we should learn
- there are significant questions about how it would work
- the costs of widespread failure are large
- we can't consider the potential risks and make a judgement that there is likely not to be a problem
Piloting on a small scale is best. It is what I recommend and encourage. I just think seeing the failure to pilot as a cause of the widespread problem is too simplistic. Why did we fail to pilot needs to be the next question - don't stop at the failure to pilot as the root cause. From there you will nearly always discover, unless maybe you are Toyota or the Kaizen Institute or something :-) that your organization consistently fails to pilot before adopting on a wide scale. Then you need to dive into that issue...
With this particular example it seems to me one that could have been thought about rationally and a decent case that we don't need to pilot could have been made. And that illustrates that there is always a risk to implementing without piloting (there is a risk of doing it anyway including a very big one of failing to catch the problems because your pilot failed to capture some important features (for example - you didn't think of the need to pilot with pink towels... - this would be an easy mistake to make).
And it shows why thinking about pilots is important - which is another thing we often fail to do, considering how to make the pilot cover the risky scenarios that may take place. Sometimes organizations will use certain locations to pilot stuff which can be useful - you can train these locations to provide good feedback, etc.. But as soon as you make the pilot locations different than were it will be done there are risks of not catching things.
It is the interaction of variables that often creates problems which it was this time. Pink flags meet the initial criteria of being noticeable. The interaction of putting many other pink items into play (certain jerseys, towels, etc.) is what seems to be the issue.
Related: What is the Explanation Going to be if This Attempt Fails?
- Accept Taking Risks, Don’t Blithely Accept Failure Though
- Management is Prediction
- Combinatorial Testing for Software
- European Blackout: Human Error-Not
Labels: business, coaching, Deming, evidence based management, experiment, leadership, lean thinking, management, process improvement, process thinking, quality tools, systems thinking
Early "Lean" Thinking
"There are some who criticize the 'early days' of the Lean movement as being too focused on tools. But, I’ve re-read a lot of the early material and this is not the case
." - Mark Graban
Exactly right. It seems to me it was when the first "lean manufacturing" fad wave hit and you had lots of people (that didn't study and learn what it was really about) quickly churn out their oversimplified "lean manufacturing" cookbook tool approach. That is when the tool approach took off and because it is easy to train people on tools that has always been a popular way to sell services to companies.
It is really just putting new tools into the existing management system instead of adopting new management thinking which is what the people that actually studied "lean" were doing and talking about. The tools can be helpful but it is a very limited approach to "lean" (if you can even call it that - really it should be called using a couple of lean manufacturing management tools). The initial people who studied Toyota, and other companies in Japan (mainly), understood it was a different
way to manage - not just using a couple of tools.
But it was hard to figure out how to actually do it (getting management to improve is hard - it is easy to sell management some training that will "make workers better"). It was easy to offer training in setting up QC circles and how to use various tools, so much of that happened. The biggest change in the selling lean training is you no longer see people selling QC circle training, they now sell other tools.
Here are some early reports (so early it preceded the lean terms widespread use). It also means the focus hasn't already been set by the Machine that Changed the World
but it is the same stuff that those that studied in 1980, 1990, 2000 or 2013 saw - it is more about respect for people and using everyone's brain than any specific tool. And these articles have a bit more focus on using statistics and data than much of lean literature today (partially because George Box
and Dad were statisticians and partially, in my opinion, because current lean literature is light on using data).
Peter Scholtes report on first trip to Japan
Managing Our Way to Economic Success: Two Untapped Resources - potential information and employee creativity
by William G. Hunter, 1986
How to Apply Japanese Company-Wide Quality Control in Other Countries
by Kaoru Ishikawa. (November 1986).
Eliminating Complexity from Work: Improving Productivity
by Enhancing Quality by F. Timothy Fuller, 1986
On Quality Practice in Japan
by George Box, Raghu Kackar, Vijay Nair, Madhav Phadke, Anne Shoemaker, and C.F. Jeff Wu. (December 1987).
The early lean stuff was much like what is discussed there (though these were before the "lean" term had taken hold). These were all first published as reports at the University of Wisconsin - Madison Center for Quality and Productivity Improvement
founded by my father
and George Box.
While the format of the documents may be a bit annoying thankfully they are actually available, unlike so many articles supposedly meant to stimulate better management practices (look at major "associations" that don't even make articles available online without a blocking paywall preventing the articles from doing much good).
Related: Management Improvement History (2004 post)
- Early History Of Management Improvement Online (2007)
- Transforming With Lean (2007) "Successful management improvement is not about mindlessly applying quality/lean tools."
- "The tools are very helpful but the change in mindset is critical. Without the change in the way business is viewed the tools may be able to help but often can prove of limited value."
Lean Thinking and Management (2006)
- From lean tools to lean management
by Jim Womack, 2006 - I would link to the original article but it is gone :-(
Labels: Deming, employees, experiment, lean thinking, managing people, manufacturing, process improvement, process thinking, quality tools, respect for people, statistics, systems thinking, Toyota
Mistake Proofing and Mistake Making Less Easy
Kanban And Lean - A Challenging Association
I've come to refer to American Lean literature as "Boston Lean" to clearly differentiate it from Toyota materials generally translated from original Japanese. What makes me uneasy about Boston Lean is its focus on "the pursuit of perfection" through "waste elimination" where waste is "muda" (or non-value-adding activities). The typical Lean consulting firm, and again, I find myself mentioning, McKinsey, offer Lean through a defined approach that involves value stream mapping, identifying non-value-adding activities in the workflow, designing out those activities and then managing a change initiative to install the new, leaner process with the waste designed out. Like yesterday's post, my objection is to the process-engineering-centric approach and the notion that the process engineer knows best. This designed and managed change approach is truly the antithesis of of the Toyota kaizen approach where the workforce is empowered to make their own changes and processes evolve.
I think your kanban ideas are excellent. I think you are defining "Boston lean" to really be badly done lean. There is a lot of badly done lean - just as it seems to me every management system is poorly executed very often
(specific practices or management tools can be adopted quite successful fairly frequently but overall system just are not, from what I have seen). I am not sure if management ideas are necessarily poorly executed so often but they certainly are quite frequently.
There are tons of great lean blogs by people based in the USA (Jon Miller
, Mark Graban
, Kevin Meyer
, Jamie Flinchbaugh
, Tracey Richardson
, Mike Stoecklein
, Bill Waddell
, Bob Emiliani
...). If people read what those people are doing and saying I don't think any of the negatives of "Boston lean" are present.
I am guessing "Boston lean" is a swipe at the Lean Enterprise Institute
(since they are based in Boston). I don't really think that is accurate. It seems to me LEI support lean done right - a system that help employees improve, not some top down dictate approach. I agree with you that much of what is called lean is bad management. I think LEI and those I listed about (and many more) practice lean as it should be, and I don't think that practice of lean has the drawbacks you mention.
Related: Lean Manufacturing and the Toyota Production System
- Why Use Lean if So Many Fail To Do So Effectively
- Rethinking or Moving Beyond Deming Often Just Means Applying More of What Dr. Deming Actually Said
====== David's comment on his blog ===========
Please take the time to observe what Lean consulting firms actually do. Do they sell managed transition initiatives that involve value stream mapping, designing out the waste and then deploying the expert designed "lean" (waste reduced) process definition? If you can refute that this is actually not what they are doing and how they make their money, then we can talk. Please show me the case studies where a true kaizen culture has been coached into organizations by these firms? Please show me the evidence where the workforce are empowered to perform their own kaizen events and that the consulting experts involved didn't actively design the new processes and manage the transitions.
====== my response to David's comment =======
You can look at what the people I suggested are doing, or you can chose not to. I am just suggesting that you would benefit from looking at them. I don't feel it is my job to provide the evidence packaged up for you. I also understand you have no reason to listen to anyone unless you feel like doing so.
I think your claims are what I said, looking at bad implementations calling themselves "lean" (and as I said, there are many) and defining that as Boston Lean. That is your right but it isn't so useful it doesn't seem to me. The main problem I see is that you seem to have missed all the good stuff being done with lean in the USA - that is your right, but I think you are missing a good opportunity to learn from others good work.
A great deal of great work is being done with the real lean principles -- respect for people and continuous improvement
-- in the USA, and it has been done for decades.
You can ignore the good work being done by some because there is lots of bad stuff labeled lean. I just think the great stuff being done is useful and those interested in managing their organizations better would benefit from paying attention to the people doing good work (the ones I mention above and plenty of others).
Labels: agile software development, lean thinking, management consulting, process thinking, respect for people, systems thinking
Twice the Cost, Significantly Worse Results - The Sad State of Health Care in the USA
Why Is the United States So Sick?
Americans die younger and experience more injury and illness than people in other rich nations, despite spending almost twice as much per person on health care. That was the startling conclusion of a major report released earlier this year by the U.S. National Research Council and the Institute of Medicine.
Not so startling if you have paid attention the last few decades. The deadly disease of excessive health care costs (with, as Deming noted, the bad results that come from poor systems that are bloated with cost, waste and poor quality) has been a huge problem for decades.
The newest part of the breakdown is how even the massive spending in the USA has not been successful in even keeping the USA at a mediocre level compared to other rich countries. It was maybe arguable the results in the USA were no worse than average 20 years ago. It is getting impossible to make that claim today. Twice the cost, significantly worse results. Eventually you would think people would get tired of excuses.
The poorer outcomes in the United States are reflected in measures as varied as infant mortality, the rate of teen pregnancy, traffic fatalities, and heart disease. Even those with health insurance, high incomes, college educations, and healthy lifestyles appear to be sicker than their counterparts in other wealthy countries.
Related: USA Spends $7,960 Compared to Around $3,800 for Other Rich Countries on Health Care with No Better Health Results
- Can We Expect the Health Care System in the USA to Become Less Damaging to the Economy?
- Measuring the Health of Nations (USA ranked 19 of 19 rich countries)
- CEOs Want Health-Care Reform (2009)
- posts on the health care system on my management blog
Labels: government, health care, society, software testing
Giving and Accepting Advice and Feedback
Reaction to: The Trap of False Hypocrisy
When you are getting feedback or advice the most important factor is if you can use it effectively.
When you giving feedback or advice the most important factor is doing so in a way that is most likely to result in it being used effectively.
When you get feedback or advice that isn't particularly well delivered (lets say much delivered in way that is much worse than the example - even cruelly given). Your reaction (if what you care about is getting better) should be based on what would help you be better, not the form the advice takes. If what you care about is doing what is suggested in a good manner (which may even be lousy advice) then your reaction should be baed on how they give feedback, or advice to you.
People are affected by how advice is given and in fact how much they like the person giving advice and whether they think the advice is good or not. Those are factors to consider in giving advice. In my opinion those are factors to overcome in accepting advice. If I miss good advice because the person delivers it inelegantly or I don't like them or whatever it is I who lose.
If the core issue the person raises with feedback is something you should address, do so. Don't have that determined by how successfully they gave feedback. In the post one of the issues I think Benjamin was trying to address was providing better feedback and in encouraging logical thinking. Both of which are worthy and make sense doing. I would say that is a 2nd issue. Issue 1 is if the feedback has merit. Issue 2 is if the feedback provided could be improved and if the logic behind the explanation of the feedback is good.
As I said in a previous post, I believe you should evaluate advice on merit, not whether the advisor follows the advice
Related: The difference between respect and disrespect is not avoiding avoiding criticism
- Respect for People, Understanding Psychology
- I would much rather hear that someone felt a proposal won’t work
than have them be quiet because they don’t want to be seen as negative
=== more thoughts, based on James' comments
on my comments above ===
James, I agree with your thoughts. One of the things I continually struggle with is completely presenting my thought in writing - normally I think of 4 caveats I should make then what I say is so long I get tons of complaints it is too long. In general I have tried to reduce that. But I often leave things with too much imprecision (that is too much that is/can be wrong). Trying to be clear, complete and conscience is something I still need lots of work on. Your points about really most isn't right... are exactly my thoughts.
I think not wanting to take the "time to process hostile feedback" is something everyone does though often with less self awareness. And it extends beyond "hostile" to any type that is hard to process (different people have different points they struggle with most). If it is too much bother to figure out why this is useful (logically, emotionally...) we don't want to deal with it.
We will seek out people that we work well with. We will pay more attention to feedback from those who have given us feedback in the past that we used to make a change and saw a good result (either because they are perceptive in seeing the problem, skilled at presenting the case to us, skilled at showing us a way forward, skilled at providing feedback we can actually use (you can give me all the feedback in the world about how to be a better pro basketball player I am not going to be able to use it effectively).
And much more we will block, ignore and deflect feedback we don't want - whether it is hostile, confusing, impossible for us to figure out how to act on, unconvincing... That is why, if you care about having your feedback listened to you often need to design it for the person you are talking to - do they want it all dressed up with compliments about their overall wonderfulness, do they want you to provide some possible options for doing things differently, do they want you to explain the impact of the issue...
I think most people are frustrated with feedback that "takes too much energy and time to process." I think this is why there is so much talk about giving effective feedback. I see too little talk on how to take even effectively given feedback and use it to improve, which is a big part of taking too much energy to implement.
My opinion is that many people have trouble processing the feedback they get, but even more so they have trouble figuring out what to do with it even if they could understand what the issue was (I have a feeling that isn't nearly as big a problem for you but I am just making guess). Even if they can really see what could be improved, turning that into actual improved performance is often not easy.
There are lots of details to consider in order to provide effective feedback. If your goal is to get the feedback used (such as when you are coaching an employee) I think it is often wise to spend the most time on helping people with process of improvement. If people get feedback they can easily use to improve and they can see the results they often want more. The same ideas as your "feedback into information I can use."
And when I say "they can see the results" that again is an indication that it might be an effort to improve feedback in an organization will be enhanced by increasing people's ability to see results (which to me is about understanding data, understanding processes, customer focus, systems thinking...).
Well I went on far to long and it is still not very clear I don't think but, that is the best effort I could make today...
Labels: coaching, management, managing people, systems thinking
Learn from Experience Only When Theory Drives Learning
Drucker's CEO Pay Suggestion 15 to 25 Times the Lowest-Paid Employee Pay. Actual CEO Pay Today: 354 times Median Employee
(on the Drucker Institute blog):
Today, the CEOs of the largest U.S. companies make 354 times more than the average rank-and-file worker. At some companies— including Abercrombie & Fitch, CBS and Nike—the ratio is in excess of 1,000 to 1.
As far as Drucker was concerned, this sort of pay structure was absurd. “It is surely not professional altogether for people who are employees and not ‘owners’ to pay themselves salaries and bonuses greatly in excess of what their own colleagues, that is, other members of management, receive,” Drucker wrote in The Frontiers of Management. “And it is not professional to pay oneself salaries and bonuses that are so far above the social norm as to create social tension, envy and resentment. Indeed there is no economic justification for very large executive incomes.”
In fact, in The Changing World of the Executive, Drucker recommended that companies have a “published corporate policy that fixes the maximum compensation of all corporate executives, after all taxes but including all fringes, as a multiple of the after-tax income of the lowest paid regular full-time employee (including fringes).” He added, “The exact ratio is less important than that there should be such a ratio.” (His suggestions ranged from 15-to-1 to 25-to-1, depending on the size of the company.)
Thanks for posting this. I have been posting about the damage done by excessive executive pay for years
. In doing so I have pointed to Drucker as someone who saw this practice as extremely damaging.
I agree the burdens of regulation need to be considered. The abuses by those on boards and in the senior executive positions of the control they have over the corporate treasury
to take what they don't deserve completely overwhelms the regulatory burden. We sadly have many boards and senior executives that are enriching themselves at the expense of companies and doing great damage to those companies, the stock holders, the employees and other stakeholders.
Related: Narcissistic Cadre of Senior Executives
- Tilting at Ludicrous CEO Pay 2008
- Pay Practices Say More About Respect for People Than Words Say
- CEOs Plundering Corporate Coffers
- Obscene CEO Pay (2006)
Labels: business, employees, leadership, management, overpaid executives
Grades, Test Scores and Complex Brain Teasers Are Not Good Ways to Pick Employees
Google HR Boss Explains Why GPA And Most Interviews Are Useless
Google doesn't even ask for GPA or test scores from candidates anymore, unless someone's a year or two out of school, because they don't correlate at all with success at the company. Even for new grads, the correlation is slight, the company has found.
Bock has an excellent explanation about why those metrics don't mean much. "Academic environments are artificial environments. People who succeed there are sort of finely trained, they’re conditioned to succeed in that environment,".
Exactly right. Graduating (and the difficulty of course - lots of math or science course for example tell you something about the students capability) tell you something about a person's ability to put up with a constraining system (which many jobs also have) but grades are not very valuable. And graduating just gives you a bit of data, people can have that same capability without graduating.
Google also used to be famous for posing impossibly difficult and punishing brain teasers during interviews. Things like "If the probability of observing a car in 30 minutes on a highway is 0.95, what is the probability of observing a car in 10 minutes (assuming constant default probability)?"
Turns out those questions are"a complete waste of time," according to Bock. "They don’t predict anything. They serve primarily to make the interviewer feel smart."
Dee Hock has some very good ideas on hiring
: "Hire and promote first on the basis of integrity; second, motivation; third, capacity; fourth, understanding; fifth, knowledge; and last and least, experience."
Related: Hiring the Right People for Your Company
- Signs You Have a Great Job, or Not
- Google’s Answer to Filling Jobs Is an Algorithm
- Hiring: Silicon Valley Style
- Interviewing and Hiring Programmers
Labels: employees, evidence based management, experiment, managing people
Setting Goals Can Easily Backfire
Response to: Goal-Setting is as Easy as 1+3
Aligning actions with strategic goals is key. And frankly this rarely happens. It is great when it does but it takes a much more systemic approach than just goal setting. Without a systemic focus on evidence based management goals often end up having people just focus on numerical targets whatever that results in for the rest of the business:
The Trouble with Incentives: They Work
Deming on the problems with targets or goals
“I achieved my goal by not my aim
. That happens a lot, we honestly
translate aims to goals. And then we do stupid things in the name of
the goal get it the way of the aim. We forget the aim sometimes and
put the goal in its place.” - nice story (webcast) from Mike Tveite
It doesn't have
to do so. It just does, quite frequently in many organizations. A culture that understands variation, thinks systemically and uses evidence based systemic measures of progress helps make sure the dangers are avoided. But that understanding is missing in most places that use goals.
Without that you should spend at least as much time worrying about the dangers the goals you are setting will pose and put in counter-measures to try and deal with them as you do on the rest of the effort around goals.
How to improve results: good process improvement practices
Labels: Deming, goals, lean thinking, process improvement, systems thinking
Social Media and Quality Management
My comment on Quality Trends in Uncommon Places
: "However, my personal view on the future of quality will be focused on New Industry - Social Media"
I would not agree with this statement. I agree social media is important. But it is one aspect. I expect quality management to continue to be focused on continual improvement
, respect for people, systems thinking, customer focus, understanding variation, etc.
I think it is important for companies to use social media well. And have it be people interested in the business not just flashy cool stuff. I wrote Red Bull asking where to buy their product and never even got a response. They spend millions on generating buzz - ignoring direct customer requests is foolish.
Quite a few companies provide better support if you Tweet them than in any other way. I find it odd they don't do the other options better (phone, email, in person...) but they do at least respond to tweets (they seem to have put a team in place and told them to provide good customer service via Twitter - which is nice, but why didn't they fix their other customer avenues?). That is another example why I think saying social media will be the key is wrong - it is good to use social media but you need to make customer focus your organizations focus
- not social media your orgs focus.
I think, building your personal career brand
is important. I think a blog is the most important way to do so. Personal web site, Twitter, Google+ etc. (links to mine)
are also good. I personally don't use Facebook.
Reddit is a great social media site (that many managers don't seem to be aware of). Here is a collection of (sub-reedits) focus on managemen
t. Reddit provide links to online resources ranked by votes of participant in focus topics.
Labels: management, quality management, social media
Apply Management Improvement Principles to Your Situation
Can’t Always Believe Somebody Saying “Toyota Would Tell You To...”
We’re not literally hanging “andon cords” or putting tape around every piece of equipment just because a factory does it. We have to be solving hospital problems and not just copying tools. I get that...
There’s going to be variation in healthcare and we have to plan for that and make sure patient care comes first. We need to have a reaction plan for how to try to get back on schedule (and part of that approach could be to have buffer times for charting during the day instead of doing all of the charting at the end of the day).
Well said. Don't surgeons use something equivalent to "tape to make visible if the right tools are ready"? It sure seems like something like that would be wise to me.
The whole idea is to take principles first (and then tools) that are helpful and apply them to your situation/system. The business type will affect decisions (likely software businesses or hospitals will be more similar to those in their industry than others due to some features of that that of business) as will your specific organization.
If you design a system to have much more cross training of people then it will allow you to take advantage of that compared to another organization that instead focused more on specialization.
The decisions you make about individual aspects of the management system will impact what options are sensible for you in any particular instance. It is helpful to challenge yourself by thinking what would others do with this type of dilema but it is helpful not in letting you copy something they do but rather to provide you a new perspective.
Related: Curious Cat Management blog posts on health care
- Curious Cat management blog posts on quality tools
Labels: business, health care, lean thinking, process improvement, process thinking, quality tools, systems thinking, Toyota