Thursday, May 17, 2018

Understanding Variation Doesn't Mean Crushing Any Variety

It doesn't follow that because Dr. Deming sought to reduce the variation that caused processes to be unreliable and that harmed customers it meant he was against variety or failed to understand the importance of variation in different contexts than the context where it caused problems. Drawing such a conclusion is just not sensible when looking at Deming's work. It is a misunderstanding that is usually caused by taking one quote and drawing poor conclusions about what that quote meant.

quote text: Standardization does not mean that we all wear the same color and weave of cloth, eat standard sandwiches, or live in standard rooms with standard furnishings. Homes of infinite variety of design are built with a few types of bricks, and with lumber of standard sizes, and with water and heating pipes and fittings of standard dimensions.

Dr. Deming understood the organization as a system and how understanding variation fit within that system. When variation within the system causes problems and reduces efficiency then reducing variation important. It is a mistake to attempt to take thinking that is part of a system and analyze it without understanding the context within which it has meaning. Reducing variation has a specific context within Deming's thinking and that did not mean reducing variety or reducing variation when it was useful.

W. Edwards Deming understood you didn't use the same improvement thinking every time you wanted to improve. You selected the useful management tools and concepts that fit the current situation. It is important to have a wide variety of tools and thinking to allow finding the best ways to improve different situations.

Iteration is an extremely important part of improvement efforts. Why? Because, trying a variety of ways to improve and a variety of changes to the existing conditions will lead to finding the most valuable improvements. The PDSA improvement cycle is designed specifically to introduce more variation into improvement experiments. The value of many small attempts using different tactics (introducing variation to learn what works best) is a core part of a Deming management system.

W. Edwards Deming stressed the importance of understanding psychology and appreciating how different people provided important contributions and how that variety helped the organization. You need to design systems to maximize the benefit gained due to some forms of variation.

It is a mistake to think that W. Edwards Deming didn't understand the value of variety or of variation in the right context. One must reduce the variation that is damaging to the ability of a system to deliver reliable value to customers. That doesn't mean variety and variation in other contexts are not understood to be valuable.

Related: How to Improve Your Understanding Variation and to Use Data to Improve - We Need to Understand Variation to Manage Effectively - Standardization Doesn’t Stamp Out Creativity

This is an edited comment I wrote in response to post on Linked In but since they have repeatedly broken links over the years I don't link to that site any more.

Monday, May 07, 2018

Learning from Gemba Walks

comment on: What’s the Right Way to Do a Gemba Walk?

Well said. Both "treating people as individuals and showing them respect" and "learning how they wish to influence outcomes in their lives and work" are very important. I also think one of the keys that makes gemba walks valuable is for the person doing the walk truly seeking to learn; a curiosity about the nature of the work at this particular gemba seems present in those that make it a valuable process (that curiosity continues and grows it isn't satisfied on a walk instead it is stoked to encourage more learning).

Related: Deming Wanted Managers to Understand the Systems They Managed and to Visit Where the Work was Done - Gemba Keiei by Taiichi Ohno - Out of Touch Executives Damage Companies: Go to the Gemba

Sunday, April 22, 2018

Wednesday, March 14, 2018

The Management System is the Key

Comments on: Lean is All About People – Or is It?

I think there are a number of necessary conditions and without them even whatever people think is the most important don't make the difference. The interactions between the components are extremely important. Rather than the analytic view to focus on individual pieces I think the key to a good management system is a focus on the organization as a system. That requires an organization that is: customer focused, continual improving with a respect for people.

Related: How to Create a Continual Improvement Culture - Give People Enough Rope (and the Right Rope) to Achieve - Management Matters: Building Enterprise Capability - Engage in Improving the Management System

Follow up comment (to another comment made on the blog):

But it doesn’t offer a very easy handle for people to grasp. The so-called lean system is actually a set of systems, quite complex when you map it out.

I agree. It is helpful to make things simple to appreciate and understand – bearing in mind of course:

“Everything should be made as simple as possible, but not simpler.”

I think too often people (in relation to management ideas) demand that things be made more simple than is possible to adequately understand the systems involved. This of course leads to problems. A huge value provided by people like Russell Ackoff is their ability to help explain what is needed in fairly simple terms. Still understanding how these ideas are being expressed in our management systems and how to apply the concepts to our management systems is still a challenge.

Good lean thinking (lean manufacturing…) efforts do a great deal to help this process. Even when they oversimplify (which I think is often) they get closer to appreciating the overall management system than nearly any other management framework. I believe it is possible to make things “more simple than possible” more effectively than other instances of making things “more simple than possible.” I think one of the big differences between the best lean efforts and the others is the increased value placed on deeper understanding and thinking systemically.

I do believe you often have to start with overly simplified explanations and concepts as you introduce management improvement concepts to new organizations. This is often done, and it is sensible. The problem I see is alms never is it understood this is what is happening and there is no effort to build the capability of the organization to grow the management system into one with people that gain a deeper understanding of the tools, skills, ideas and concepts.

Wednesday, January 31, 2018

Avoiding Difficult Problems

Response to: Toyota is Admired for Good Reason… But About Those Rotating Job Shifts…

Thanks for another good post. It points out that while Toyota does many things very well they have opportunities to improve. And I am sure they agree they have a huge number of things to improve.

I agree, this rotating shifts seems like something important to try and improve. One of the things that happens in many organizations is that working on things that are going to make lots of people mad are often avoided. This rotating shift work seems like something that is likely to make people upset.

Even if you worked on improving it, likely during those PDSA cycles many people would be annoyed. And if you were working on it, you could get blamed, you could be tarnished as someone people didn't like it and didn't appreciate "you doing this to them." If, on the other hand, no one is making significant efforts to improve, even if people are annoyed it is at some amorphous policy and usually doesn't stick to 1 person.

If the dis-satisfaction does accumulate toward 1 person (say the plant manager) that person then often will push through and deal with it - or assign someone to deal with it and stay on them to make sure they do the difficult work (even if doing so will make that person's life much more difficult).

Now I would hope Toyota is better managed than that and doesn't shy away from important work just because the people that would take the lead have strong reasons to avoid working on that task.

There are often so many things to improve that it isn't too hard to shift the focus away from something that no one wants to take on. Sometimes though things are so important they must be taken on. Usually those would be more direct and obvious problems. Systemic problems that cause great damage but in a less visible way (such as rotating job shifts) are less likely to be addressed.

Coping with this issue (of avoiding unpleasant, systemic and long term rather than acute problems) is one of the things that separates great corporate culture from decent or bad corporate culture.

If there are fairly obvious or fairly easy improvements those would likely be acted on. There are, rarely, but still sometimes, instances where those vocal or politically powerful individuals who would lose out in a fairly obvious improvement will prevent action.

I am pretty sure Toyota doesn't have fairly easy improvements on this issue, that they must realize is important, that they are just not getting to. I am a bit less confident that Toyota isn't avoiding trying to find solutions using a PDSA type effort because it would be really hard and risky work for whoever takes it on. Also Toyota can try to rely on the good will built up through their many efforts to expect enough employees to say that they will accept the suffering caused by this policy for the good of the everyone.

I am not convinced there are not ways to improve the situation. And I am pretty confident it is important enough to try. And I believe (though I might be wrong) with a concerted effort of knowledgable people improvements that would make a big difference in the quality of life could be achieved. I am not so certain those people involved in leading the effort would be seen in great lights though even if they "succeed." People are much more likely to remember negative consequences to them personally, even if they gain much more than they lost overall. And most will remember the effort negatively if they lost only a little but overall the gains (to the overall organization) were much bigger: in such cases many will hold onto feelings that they were harmed by those that took action.

Related: Respect for People Doesn’t Mean Avoiding Any Hint of Criticism - The Importance of Critical Thinking and Challenging Assumptions - Unpacking the Components of Hard Work to Design Better Work Conditions

Wednesday, January 24, 2018

Creating Web Sites That are Reliable from a Usability Perspective

Comments on: Applying Kaizen to My Various Websites, Trying to practice what I preach...

Good job actually practicing what we recommend others do (kaizen, customer focus...). More management consultants need to do so. I found another thing I think can be improved, this screenshot shows how a floating box (to the left of the screen) blocks the main content:


That covering box moves as you scroll the page so it is always covering part of the content.

[Update: further testing showed this was a temporary glitch - it didn't replicate even on my machine. See comments on the original post for more details. Browsers are not perfect in executing code that is meant to be on the page, sometimes it doesn't quite download everything right, or it misses one action (such as onmouseout) and then behaves oddly...]

One of the big problems I see for web sites development is a failure to understand and test how a wide variety of users will experience a webs site. Often they are designed to look nice for the conditions that the designer has (perhaps huge screen, perhaps low latency, which can mask code issues for users that have high latency internet connections) and that they share with those who approve designs.

It is one thing, for a blog from 1 person to have less than ideal usability for a wide variety of user views. I can completely understand that. Granted I do believe those of us that encourage others to continual improve also need to do that ourselves. What I can't accept is how many web site with huge budgets have very poor coding that results in many users (given the very large user base) have to suffer from bad usability issues.

Those big budget sites should know better than to code in a way that fails to value basic web concepts such as the extremely wide variation in how users will view the web site (screen size, operating system, browser, window size, font size preferences of the user...).

We have an epidemic of bad coding practices that result in failures which then are excused by those responsible as edge cases. Good coding practices would avoid the errors. But instead we code using needlessly complex and error prone ways and then say that we can't deal with the edge cases that only impact a few people. The problem isn't that those few people are requesting some special feature. The problem is the practices used are creating solutions that look nice for some subset of cases but that are not acceptable for other users. Coding with the entire user base in mind from the start would avoid any need to treat those "edge cases" that were only made into edge cases because the coding solutions are not designed for the entire spread of variation in users needs.

The most cost effective and reliable way to deal with this is often to just avoid extra complexity. Having the popup box with additional content can be cool and it can be coded in ways that don't create the issue I see here. But to do that in a way that doesn't create bad usability for some users is complex. Sometimes you can rely on fancy Wordpress themes that have properly dealt with all those complexities. But in my experience, that is very rare. They do ok with a large set of the users but create really bad usability issues for users that don't fit what they considered the normal use case (and created "edge cases" that have bad usability). Or if you are a big budget site you can try to code all the extra complexity yourself. That can be done successfully but I find it fails often. They create fragile systems to deliver and then are overwhelmed at how to deal with all the users that don't fit their expectations for users and they just decide to let those users suffer.

I run across these bad usability practices on big budget website every single week. It isn't some rare poor practice, it is epidemic. It is similar to USA manufacturing practices in 1980: poor practices are so widespread that everyone thinks such poor practices are acceptable. Hopefully this epidemic can be replaced by much better practices fairly soon.

Related: Use Urls – Don’t Use Click x, Then Click y, Then Click z Instructions - Functional Websites are Normally Far Superior to Apps - Bad iTunes Usability and How to Submit a Podcast to iTunes - Usability, Customer Focus and Internet Travel Search - Making Life Difficult for Customers - Designing In Errors

Saturday, January 20, 2018

REITs Value When Interest Rates are Rising

Comments on: Debunking REIT Interest Rate Myths

Well argued. I am new to investing in REITs as an investor but I agree that the "conventional wisdom" doesn't make sense. I primary have dipped into only apartment REITs.
As with many misleading claims there is some truth behind the claims about REITs and interest rates.
It seems to me that the 3 biggest explanations for REITs declining if interest rates rise are
  1. lowered value of REIT assets - this one makes the least sense to me. I get the cash flows (if they are set for years into the future) will be given less value but for my particular focus (apartment REITs) the cash flows could well increase (over the longer term) as the same factors causing rates to rise allow rental rents to be increased.
  2. lower value of the current yield - this makes perfect sense, though it seems to me it vastly under-values the real LONG TERM impact. For a bond this is just true that the value of the future payments are worth less if interest rates rise. But for REITs if rates rise do to a stronger economy and thus they are able to raise rents and raise dividends then you do see a drop in the value of near term dividends but in the longer term it is much less straight forward. It may well be that the gains for the REIT in the long term exceed the lowered value of the reduced value this years dividends (though it may also be true that the payments do not increase to even out the comparison to new expected yields). This will of course be dependant on the REIT type and individual REIT portfolio.
  3. As you say the increased costs do to higher rates are not baked into all REITs. It does seem to me (again I am new to REITs) that they often are going to experience higher costs but it isn't immediate. As you say often they have fixed rates but also it seems (again maybe I am wrong) they often have fairly high amount of debt coming due in say the next 5 years that has to be rolled over - and also new purchases will have these higher rates.

Related: Looking at Real Estate in This Challenging Investing Climate (2015) - Looking for Yields in Stocks and Real Estate (2012) - Landlords See Increase in Apartment Rentals (2010)

Tuesday, December 12, 2017

Failing to Adopt Better Methods is Sadly a Common Management Practice

comment on Is Andre Drummond a Better Free Throw Shooter This Season?
Using "Process Behavior Charts" to Answer This Question

There is also a fairly convincingly better method to shoot free throws - underhanded. As I stated in my post, Why Do People Fail to Adopt Better Management Methods?

People can be very attached to the way things have always been done. Or they can just be uncomfortable with the prospect of trying something new.
...
Wilt Chamberlain was 28 for 32 from the line shooting underhanded in his 100 point game (the most points anyone has scored in a NBA basketball game).

He was a career 51% free throw shooter (almost entirely shooting traditionally).

But he had a good reason not to use underhand style more often. He felt like a sissy using that style and making them. I am sure the Boston Celtics were happy to let him focus on being scared of looking foolish while they won championships. You are correct if you don’t think I really meant he had a good reason.

This reluctance to use better methods is not limited to underhanded free throw shooting. Managers fail to adopt better management methods every day that are equivalent to failing to improve free throw results using a proven method.