Friday, July 29, 2005

Bezos on Lean Thinking

Topic: Management Improvement and Investing

10 Questions for Jeff Bezos, via Lean Manufacturing Blog

Time: Here's a question you probably hear all the time: read any good books lately?
Bezos: [Laughs.] I read a book recently about Toyota's lean production methodology, which is very interesting

Jeff Bezos is the founder and CEO of He really understand many quality management ideas: customer focus, long term thinking, process improvement, innovation. He also understands finance much better than most. I believe that knowledge is a large part of the reason he is not intimidated into going along with the short term thinking prevalent on Wall Street (as so many CEO's are). His huge ownership interest in Amazon and his decision to raise large amounts of cash for Amazon (by issuing bonds) during the tech boom, don't hurt either .

Amazon was one of the 10 companies selected in the 10 stocks for 10 years post. I created a Marketocracy portfolio to track that long term portfolio. The rules, at the time (for a Marketocracy portfolio), required more diversification so I added several stocks to the portfolio. I added positions in YHOO, MSFT, EMF, WMT, and BP. You can track the results of the Sleep Well portfolio.

You can also view results of another portfolio I have managed, through marketocracy, for several years: the Darvamore Fund. This fund is much more aggressive using the ideas of Darvas and Livermore as well as core positions that are selected for long term appreciation. Since the inception, in 2000, it has a annual rate of return 6.55% (655 basis points) higher than the S&P 500 index, as of today.

Thursday, July 28, 2005

Peter F. Drucker Award for Nonprofit Innovation

Topic: Management Improvement

Peter F. Drucker Award for Nonprofit Innovation:

"“The purpose of the Peter F. Drucker Award for Nonprofit Innovation is to find the innovators, whether small or large, to recognize and celebrate their example, and to inspire others."”
Peter F. Drucker

In the years ahead, America's nonprofits will become even more important. As government retrenches, Americans will look increasingly to the nonprofits to tackle the problems of a fast-changing society. These challenges will demand innovation -- in services, and in nonprofit management. The purpose of the annual Peter F. Drucker Award for Nonprofit Innovation is to find the innovators, whether small or large; to recognize and celebrate their example; and, to inspire others.

Applications must be complete and received by the Drucker School no later than August 12, 2005. Read the details on eligibility and how to apply

Estate Tax Repeal

Topic: -

The estate tax is the most capitalist tax that exists. Capitalism, which some seem to think is based on people inheriting assets from their relatives, is not. Capitalism is based on the concept that each person gets to receive rewards for their work.

Long before Adam Smith, noble rich passed on their wealth to their heirs. It was not Capitalist then and it is not Capitalist now.

Unfortunately many seem to have skipped economics in school and accepted the claim that Capitalism is about protecting the rich. They seem to believe it is a tenant of Capitalism that those that have the gold make the rules. That is in fact a risk that Capitalists must protect the economy from, not something Capitalist approve of. Those who believe in the wealth being passed from those who earn it to those who they like, believe not in Capitalism but in the state not taxing the idle rich but instead taxing those who don't have millions given to them. While many have come to believe that such idiocy is Capitalist, it is not. People should read the Wealth of Nations by Adam Smith to get a much clearer idea of what Capitalism is about than those in Washington DC have.

You have to have some taxes to run the government. The income tax is a poor tool, as it is a direct disincentives to positive economic activity. The best tax is one that doesn't take anything from someone who earned it. And that is exactly what the estate does, tax a portion of the millions someone is given.

The income tax, however, is the largest source of income and therefore it will not disappear. But if you are going to lower taxes, that is the tax you should lower not one on people being given millions of dollars. You might want to replace the income tax with a value added tax, but that is an issue for another day.

The idea that you would cut the estate tax when you have taxes like the social security tax and income tax is very poor economic thinking. The only reason to cut the estate tax would be if you collected more than enough money to run the government from the estate tax alone (you had already eliminated all other taxes).

It is a shame to see so many fall for the 1984 Orwellian doublespeak, where protecting the rich offspring of those who earned money is seen as Capitalist. Capitalism is about the free market and allowing the invisible hand of the market to direct resources. Capitalism is not about protecting the wealthy. It is a shame, but not surprising, to hear so many political leaders speak as though Captialism were intended to let those with the gold make the rules.

Adam Smith knew the wealthy would try to setup rules to distort the free market. One of the important roles of the Government was to protect the free market from collusion by the wealthy to distort the free market. The powerful trying to set rules where they, and their friends, benefit and those who don't have the power lose (are taxed), is new.

Marketplace (a great economics program on NPR) had two commentaries on the topic of estate taxes: Robert Reich and Steve Moore.

The idea that Capitalism is about letting someone not work a day in their life and live off the wealth of their ancestors annoys me. I think Capitalism is a great system for improving the living conditions of humanity. But such poor thinking by our politicians threatens to cause great harm. My favorite charity shows how Capitalism can improve lives. Trickle Up is a charity that helps the lowest income people worldwide take the first steps up out of poverty, by providing conditional seed capital, business training and relevant support services essential to the launch or expansion of a microenterprise. Thousands take that opportunity and change their lives and the lives around them.

I find it frustrating that we have political "leaders" that claim that taxing some of the millions of dollars a relative of some millionaire is giving them is anti-capitalist. That such claims are not ridiculed is infuriating.

Myth No. 3: The tax can be avoided
Estate planning can reduce the tax bite. If you’re rich enough, however, your estate will eventually face taxes unless:

* You die in 2010, the one year in which the estate tax is scheduled to be totally repealed, or
* You give everything to charity, or
* You give everything to your spouse

Now, if it is a , why, if you give the money to charity when you die there is no tax? Oh maybe, it isn't a death tax at all but instead a tax on those recieving millions from the person that earned it.

Wednesday, July 27, 2005

Stretching Agile to fit CMMI Level 3

Topic: Management Improvement

Stretching Agile to fit CMMI Level 3
by David J. Anderson.

I highly recommend reading this article. My work happens to straddle both the management improvement and software development areas that this article covers. But, if you are interested in either area, this article offers some great material. And if you are interested in both, you are in for a treat.

At Microsoft, we've adopted the teachings of W. Edwards Deming and stretched our MSF for Agile Software Development method to fit the requirements for CMMI Level 3. The resultant MSF for CMMI Process Improvement is a highly iterative, adaptive planning method, light on documentation, and heavily automated through tooling.

Capability Maturity Model Integration (CMMI) is the process developed by the Software Engineering Institute (at Carnegie Mellon) that was heavily influenced by Quality Management. When I first ran across it (then called Capacity Maturity Model) in the mid 1990's, as I remember, I was struck that the model did a better job of integrating Quality Management ideas than most programs specifically calling themselves Quality programs.

I was also struck that it was extremely documentation heavy. It was developed for large, complicated, critical software system (for the Department of Defense). While the heavy documentation focus made sense for that type of development it seemed to require too much overhead for less complex software development efforts but still had lots of good ideas that smaller efforts could benefit from. And the ideas in David Anderson's paper show how to get the benefits of CCMI without the normal drawbacks (including importantly, as he mentions:

CMMI process implementations are often associated with conformance to plan, low trust environments, with command and control structures. These require a big design up front approach with auditing of conformance and by implication punishment for non-conformance.

As the paper mentions this is not necessary even though it is often the result of using CMMI.

This paper shows that it is wrong to associate these undesirable software engineering behaviors with the CMMI. It doesn't have to be that way.
By embracing the teachings of W. Edwards Deming and understanding their relationship to agile principles and practices, it is possible to develop a truly agile full life cycle process which meets the requirements for all 5 levels in the CMMI model. Specifically by using agile metrics such as velocity, cumulative flow and trends in open issues, we have designed planning and monitoring methods which embrace variation and allow for postponed, late commitment and adaptive iterative planning.

Saturday, July 23, 2005

Vice President Presents Baldrige Awards

Vice President Presents Baldrige Awards, press release from NIST (July 20, 2005).

The 2004 Baldrige Award for Quality recipients (links to case studeis):

The Bama Companies, Tulsa, Oklahoma (manufacturing category)
In its endless quest for improvement, Bama uses a battery of advanced strategies and tools, including the Bama Quality Management System, based on the quality improvement philosophies of W. Edwards Deming and the company’s own performance excellence model. The Bama Excellence System provides a framework for all decision-making. A Principle Centered Bama Culture, based on tenets developed by Stephen Covey, provides a context for creating and measuring excellence. Using Six Sigma methodologies since 2000, Bama has dramatically improved processes throughout the company. Total savings from Six Sigma improvements equates to over $17 million since 2001.

Texas Nameplate Company, Inc., Dallas, Texas (small business category) They also won an award in 1998.

Technology and training have led to dramatic improvements in production. Between 1998 and 2004, the incidence of product nonconformity with specifications, as a percentage of sales, dropped from 1.4 percent to about 0.5 percent, significantly lower than the Industry Week median (2 percent). In that same period, TNC reduced its quote response time from 6 hours to less than 2 hours, and it trimmed the length of its production cycle from 14 days to under 8 days.

Kenneth W. Monfort College of Business, Greeley, Colorado (education category)
MCB continually evaluates its performance and incorporates those evaluations into its short- and long-term planning cycles. The process includes use of Key Performance Indicators

Robert Wood Johnson University Hospital Hamilton, Hamilton, New Jersey (health care category)
Also with a focus on Excellence Through Service, the leadership team works within a system that links all management functions—from planning and implementing policies, new technologies, and new facilities through ongoing cycles of evaluation and improvement—with unhindered communications at all levels. Each Executive Management Team member, including the CEO, holds daily briefings that are designed to share key information with the staff and to answer questions. As a result, over the past four years, employee satisfaction with hospital leadership has
improved to almost 100 percent.
RWJ Hamilton has reduced its rates of mortality, hospital-acquired infections, and medication errors to among the lowest in the nation.

Friday, July 22, 2005

New Toyota CEO's Views

The Man Driving Toyota from Business Week:

Toyota has grown in the past few years, but [there's a risk] that a belief that the current status is satisfactory creeps into the minds of employees. That's what I'm worried about.

We should never be satisfied with the current status. In each division, function, or region, we still have numerous problems to cope with. We need to identify each one of those tasks or problems and fully recognize them and pursue the causes. This needs to be done by all the people working for Toyota.

I think, this echoes my recent comment on post, Is Quality Foolproof?, on the Vision Thing blog:

I think the instances of such failures are just a sign that even Toyota still has quite a bit to improve. I think this announcement likely is a result of common cause variation (it is the natural result of the current system). The natural result (of the system) is not that they have this particular failure, but that this recall is consistent with the % of vehicles that required a recall of this general character. I believe they are getting better over time but they still have a long way to go. With a result based on common cause you want to look at the entire system when designing an improvement plan not at the root cause of the seat belt issue. See Responding to Variation online and the book, Forth Generation Management, by Brian Joiner.

It is good to see the new Toyota CEO still believes they need to keep keenly focused on continuous improvement.

Simple, but true, point by the new CEO, Katsuaki Watanabe:

Management has to visit the shop floor and gain first-hand experience of what's taking place. We need to look at the manufacturing processes, listen to voices, and clearly recognize problems.

Tuesday, July 19, 2005

Agile Management

David Anderson publishes the Agile Management Blog, wrote the Agile Management for Software Engineering: Applying the Theory of Constraints for Business Results, and works for Microsoft. Robert Scoble, technical evangelist, also with Microsoft, has posted an online video interview with David Anderson on Microsoft's Chanel 9 online.

Quote by David Anderson, from the video: "My work focuses on applying the teachings of two management science gurus, one is Eli Goldratt and the other is W. Edwards Deming".

Take a look at the video and also the Agile Management Blog for all sorts of great posts on software development and management topics. Such as:

Trust is Essential to Agile:
Agile software development brought the idea of trust to the forefront. When there is trust, there is less waste, less extra work, less verification, less auditing, less paperwork, less meetings, less finger pointing, less blame-storming. Building trust between the engineering group and the customers is the first goal for any agile manager. Equally building trust with and amongst the engineering team is also essential.

No More Quality Initiatives
That's why in MSF for CMMI(R) Process Improvement, I've included daily standup meetings to surface issues and monitor and manage risks, eliminate special cause variation and make it everyone's business to do so. That's why we're dropping conformance to plan and conformance to specification in favor of conformance to process and focus on variation reduction. That's why we're encouraging a bottom up, empowered team, consensus model. That allows decentralized decisions to be made quickly. The way to institutionalize continuous improvement across an organization is to make it everyone's business, every day!

The video and blog post provide great ideas on how to apply Deming and Goldratt's ideas from someone who is applying them to improve the performance of the organization.

Saturday, July 16, 2005

Saving Lives: US Health Care Improvement

Topic: Management Improvement

8 part special report by US News and Word Report on improving the US Health Care system.

Join IHI in an ambitious initiative called the 100K Lives Campaign. Its goal is to save 100,000 hospital patients' lives by 9 a.m. on June 14, 2006, exactly 18 months from Berwick's call to arms, by introducing six changes in hospital procedures. Each change addresses a problem, such as deaths from infections following surgery, and presents an arsenal of weapons to fight it, such as tighter timing of antibiotic doses before surgery.

I have long felt the Institute of Healthcare Improvement and Don Berwick were the leaders in health care management improvement. The Breakthrough Series is a great white paper on an excellent improvement methodology IHI developed and use. IHI white paper library.

A Breakthrough Series Collaborative is a short-term (6- to 15-month) learning system that brings together a large number of teams from hospitals or clinics to seek improvement in a focused topic area. Since 1995, IHI has sponsored over 50 such Collaborative projects on several dozen topics involving over 2,000 teams from 1,000 health care organizations.
Teams in such Collaboratives have achieved dramatic results, including reducing waiting times by 50 percent, reducing worker absenteeism by 25 percent, reducing ICU costs by 25 percent, and reducing hospitalizations for patients with congestive heart failure by 50 percent.

Thursday, July 14, 2005

Management is Prediction

Topic: Management Improvement

re: post on prediction on the Deming Electronic Network:

Petter Øgland wrote:

...that intelligence more or less boils down to updating a predictive model of the world. As far as I can see, this is the C.I. Lewis epistemology that Shewhart and Deming based their philosophy upon.

...but is there any kind of operational definition for 'prediction' that would explain what Deming means when he uses this word in various contexts?

I think your first point is correct, which I see as: learning by predicting, then looking at the result and then adjusting understanding to this new information is very powerful.

I believe Deming's thoughts about prediction are most effectively put into action using the PDSA cycle. Specifically, you must predict what the results in the planning phase (prior to piloting improvements). I find that this is rarely done. I don't think the form of that prediction is critical (narrative with loose numerical guesses, precise numerical prediction...). The critical issue is making the prediction, then comparing the results to that prediction and then figuring out how your original understanding can be improved based on the new data.

Learning will not only be about the specific case being examined, but also, over time, learning about yourtendenciess in prediction. For example, do you: overestimate the size of the improvement, underestimate the time it will take to institute a new process improvement, underestimate the complexity of IT projects...? Basically, over time, learning from your prediction history the biases that affect your predications (which are then tied to your model for viewing the world...). Then, that knowledge can be used to improve your ability to make better predictions in the future. Without actually predicting and then examining the results people often make the same errors in their belief about the potential outcomes of changes for not just years, but decades.

I believe the act of formally making a prediction is critical to improving the learning process. I think prediction and examination of results is rarely done. And I think it is a very powerful component to creating an organization that can improve rapidly.

The understanding Deming had of prediction was as a component of the Theory of Knowledge. The importance of prediction is due to the impact it has our our learning. Prediction, with subsequent evaluation of results and then adjust to the model used to make the original prediction is a process that improves a person's ability to understand how they think. By going through this prediction cycle many times the person becomes better at using the knowledge the have. Even if they don't learn about the theory of knowledge abstractly as a concept they learn about the theory of knowledge in practice. On page 101 of the New Economic and for several pages thereafter Deming addresses prediction.

John Hunter

Tuesday, July 12, 2005

Managing Fear

Topic: Management Improvement

The post, Root Causes of Crunch Mode from the Game Manager blog makes the good point that

Fear and anxiety are known to reduce comprehension and learning ability. W. Edwards Deming made "drive out fear" one of his 14 management changes America needed to make in order to compete with Japan. Fear is a valuable physiological reaction in some situations, but fear make(s) it difficult to think, and thinking is generally superior to fighting in most corporate settings.

A good article on this topic is, Driving Out Fear by Gerald Suarez (who I worked with for several years). There are also 3 videos on this topic by Dr. Suarez, available from Management Wisdom, the producers of the Deming Library tapes. I must admit I didn't really understand the effects of fear and anxiety on performance until hearing Dr. Suarez speak on the topic many years ago.

From the Driving out Fear article:

Fear erodes joy in work, limits communication, and stifles innovation. Fear fosters short-term thinking as people search to avoid reprisal, perhaps at the expense of others in the system.

Fear also produces questionable data, as people tend to focus on eliminating the threat instead of working to achieve the desired positive outcomes.

See previous post: Targets Distorting the System

John Hunter

Sunday, July 10, 2005

Could Toyota Fix GM

Topic: Management Improvement

re: Thomas L. Friedman: Save us, O Toyota based on Thomas L. Friedman article in the Herald Tribune Save us, O Toyota where he states:

I have a question: If I am rooting for General Motors to go bankrupt and be bought out by Toyota, does that make me a bad person? It's not that I want any autoworker to lose his or her job, but I think the only hope for GM's workers, and maybe even our country, is with Toyota.

The Lean Manufacturing blog post asks: "if Toyota bought or merged with GM, could Toyota "fix" GM?"

Yes, Toyota could fix GM. Even the right leaders and managers, within GM, could fix GM but it is a huge long term job and it would be harder to do it internally because you will have to do it while competing with Toyota. Also they have some difficult issues to deal with since their previous managers did not tihnk of the long term (20-50 years out from the decisions they were making in the 70s though 90s).

I wouldn't buy GM if I were Toyota, though. Why bother. Just grow Toyota, it is working very well so far. It makes sense to buy if you need to grow quickly to gain critical mass, or you will lose the opportunity to grow early in a fast moving market. High tech companies (like Cisco and Intel) often do well buying other companies - but just as often high tech companies make more mistakes buying than is justified by the successes.

Another reason to pursue buyouts is to buy market share to appear to be growing (or not shrinking), for example the HP and Compac merger (this is often driven by the ludicrously huge salaries of CEOs... of US companies trying to get even more ludicrous incentive "bonuses"). But that almost never works over the long term, Dell has grown past the combination of those two without any significant buyouts. Good companies are almost always better off just growing themselves. Buying companies can work when it fits into sensible plan, it just often is not done that way.

The only purchases I would focus on if I were Toyota are those companies innovating new technology. If some companies have developed great stuff, with say battery technology, and Toyota realizes it is much better than what they have then consider buying those companies.

You may also want to buy a company if they had assets, clients, people, propritary technology... that you could buy more cheaply (looking at the long term full costs) than you could grow "organically" yourself.

But while you could probably buy assets of GM cheaply, I am not sure it would be the best decisions when you look a the long term.

Do you really want to buy their facotries and then have to completely redesign everything, it might well be better just to design what you want from the ground up.

Saturday, July 09, 2005

Millennium Development Goals

Topic: Management Improvement and Economics

re: Six Sigma Training for the G-8?

Interestingly Prime minstrel Blair recently showed an understanding of systems thinking (specifically how targets can result in worse performance, when targets result in distortion of the system rather than improvement). In the targets in health care case the easy "politics of the warm fuzzy feeling" would be to declare victory in setting targets. In that case PM Blair realized that while the data might look better the actual results might not necessarily be better (when the system is distorted or the data is distorted).

Measures are a proxy for the actual situation and far too often people forget the proxy nature of data in process improvement.

I would agree the target of a .7% of GDP as a aid goal is an activity/input measure. It is like measuring the amount of dollars spent on polio vaccination. Often (though to a lesser extent today than 10 years ago) the amount of money being spent is used as the measure of how much is being done (instead of a measure of outcomes). The best measure for the polio example, is the reduction, or elimination of polio in the population. The amount of money being spent is a measure that tells you something; but an outcome/result measure of polio within the population, is what should be used to measure success. At the same time, without the commitment of funds by the government to the vaccination program (and, in fact, research and development before that) the resulting reduction in polio would not have been achieved.

I would say most measurements used in any Six Sigma effort would be process measures. The problem in many efforts is not in having process measures, it is in the failure to use outcome measures.

The millennium development goal measurements should be the focus of success or failure. Two interesting things about those goals. First they actually have outcome goals; that is much better than most efforts that don't even bother to have them (often they have what they believe are outcome measures but they are in fact not they are either process or activity/input measures). Second consultants will often say you need to set achievable goals and use as unrealistic a goal of "eliminate hunger worldwide" as the prototypical example of a bad goal. The first millennium goal - "Eradicate extreme poverty and hunger." I don't quite understand their measure for this goal though as is listed as "1) Reduce by half the proportion of people living on less than a dollar a day
2) Reduce by half the proportion of people who suffer from hunger"
It seems "Eradicate extreme poverty and hunger might be the long term goal, or vision, and reducing by half by 2015 is the real goal now.

However the millennium goals really should have operationally defined measurements specified. For example "Ensure that all boys and girls complete a full course of primary schooling" - there is no discussion of how that will actually be measured (although it may be listed somewhere since I only looked quickly).

This millennium project is obviously a huge project. The summary goals (those listed on the web site at highest level), while fine, will need to be supplemented with lots of outcome measures for the populations that together make up the entire population covered by the goals. At the very least the success at the level of countries will vary greatly (and likely even within countries that will be true).

If we take as a given the Declaration which each country has done, I believe, then the goals are set. The declaration obviously states that each country is not just responsible for achieving these results within their country but (specifically the industrialized countries) also to take significant action to help all the countries achieve these results. I think it would be a wonderful step forward, if countries that actually make progress are rewarded with additional resources. It seems to me without additional resources, in many countries there is no chance for success (and in fact I think it is pretty obvious that we will not succeed in actually meeting the goals). We can make significant progress but even just that is probably unlikely.

I agree it would be greatly beneficial if the method to reach those goals included a measurement system that provided good outcome and process measures (not just activity measures like spend so many billion dollars). And those measures were used to help determine what was working well and what was not. And then resources were focused where they had been effectively used and where they were not changes were made. The PDSA method should be used to test out potential good ideas on a small scale and then measure the success and invest in things that work and don't invest in cases when results are bad. The failure to focus on results, and basing development efforts on all sorts of ill conceived considerations, is a large part of the reason many of the problems are as bad as they are now.

I think there is hope for progress in the attempts to improve the situation for people worldwide. However, it will not be easy. A great first step would be to hold accountable those leading the effort (the United Nations, individual countries [most especially the security council, etc.). If we could even get to the point where the progress was visible and failures were an embarrassment to those in power, then we will increase the odds of success. But I doubt failing to reach the outcome measures will be seen as a problem that must be addressed and fixed, instead of explained away.

While it violates some of the "quality management" principles I would like to see teams of nations formed to meet these goals - within the teams. Then we could measure the success of those teams in reaching the goals within the team. I think there are 2 huge problems with succeeding at these goals. First they are very challenging due to the huge scope of the problems. Second no-one is accountable and it is easier to obfuscate and explain away failure than to make real efforts to try and succeed. My concept is that with a team setup, if certain teams were achieving much better results, I believe there would be pressure to perform placed on the other teams. I know this is not going to happen but I think it would improve the odds of success. This could also be done in the existing system if the governments really take responsibility to succeed but I don't see that as likely.

One reason I have an interest in the millennium goals has roots in my childhood. My father, Bill Hunter, was a professor (of statistics and engineering), worked on appropriate technology (see a great example of success in this area) and co-author of Statistics for Experimenters which is one of the classic text used by Six Sigma practicioners (the first edition was published in 1978 and second edition was published this year). As a child I lived in Singapore and Nigeria for a year as he was a professor in those countries. Singapore has pretty successfully improved, as measured by the millennium goals while Nigeria has not. Traveling during those years, and later, I was able to glimpse some of the conditions in many countries.

I do not think the success of a country is pre-determined. If a country is committed they can make substantial progress - some countries might need more resource help from others. But the commitment of the leadership of a country and of the people themselves is the most important factor. Economic success (which is required for many of the goals to be met) must be achieved, it has often required hard work and investment. That requires forgoing consumption of at least a part of the GDP growth to grow an economy. This is true even if you get large external resource additions, like the Marshall Plan, and if the people have very limited economic resources.

Trickle up is my favorite charity and an organization that is very effective at providing resources that allow people to make better lives for themselves. Trickle Up is focusing on 14 countries. I think some group of charities, foundations and countries could provide the same focus toward the Millennium Goals.

Friday, July 08, 2005

Toyota as Homebuilder

Topic: Management Improvement

Toyota Home - Applying the Toyota Production System to Home Building from Evolving Excellence

Toyota is all about cars and trucks, right? Not quite. I was just pointed to the Toyota Home page on Toyota's website, which briefly describes Toyota's activities in the home building industry.

From Toyota's web site:

Toyota Home - building 21st century comfort and luxury into houses in Japan. Come inside and see for yourself.

Concentrating the knowledge and technology of the Toyota Group to the housing business, Toyota's house making is based on the "Skeleton & Infill" approach. Based on careful consideration of customer lifestyles, three different structures have been developed for the Toyota Home line-up.

I often find myself wishing I could deal with Toyota instead of whatever company I am getting poor results from. The Evolving Excellence post mentions "Lean Construction is not really new." Not only that, queuing theory, lean thinking (in general), customer focus and process improvement are not unformed concepts that need a great deal of work before they can be applied in the real world. Still many organizations don't apply many concepts that have been proven effective for decades. So I hope Toyota gets into any business that continues to provide lousy value to the consumer (at least those where that consumer is me). I wish they would create their own credit card (they offer Toyota branded Visa and MasterCard credit cards now, in Japan), provide high speed internet service and run an airline.

Toyota is probably too smart to try and run an airline in the US (only Southwest seems to be able to that profitably). I believe there is a good chance they will manufacturer airplane components and other transportation areas (mass transit, personal transportation, shipping etc.). The transportation area is where it seems to me expansion into new businesses makes the most sense.

On the Toyota web site they list the following areas of non-automotive Toyota business: financial services, information and communications, marine and most surprisingly Biotechnology and Afforestation. Toyota states: "Biotechnology may seem far removed from the auto industry. It is, however, closely related to automaking in the context that they are both aiming to achieve a sustainable society, and their close relationship can be seen in the new Raum, launched in May 2003, which uses parts made from bioplastics."

Even with Toyota's explanation the biotechnology business seems like a business with little connection to their existing operations to me.

Monday, July 04, 2005

BBC Radio Program on Deming

BBC radio has an online podcast of a discussion of W. Edwards Deming's ideas. As far as I can tell the program is available for downloading just for the next couple days (I am exploring if we can find a way to make the program available online permanently - if anyone has experience working with BBC and has some helpful info please let me know).

The program is "In Business" on BBC 4. Peter Day moderates the discussion with guests:

Norman Speirs
European Director, Management Wisdom

Hazel Cannon
Leader of the Deming Forum

Jane Seddon
Process Management International

Debbie Ray
Good Samaritan Hospital Dayton, Ohio

Myron Tribus
former professor MIT and Dartmouth Universities in America

David Wormald
Managing Director, Raflatac

Nick Baxter
Chief Executive and Founder of Cornerstone International

I definitely encourage those interested in Deming's ideas to listen to the podcast. The discussion provides a good overview of the basic concepts (exploring why Deming's ideas are not "that Quality stuff that we did years ago"), a short history of Deming ideas and the state of affairs now. It is not an advanced tutorial for those who have been working with these ideas and now what to know how to solve specific issues they have run across. For those interested in applying Deming's ideas, as always, I suggest: The Leadership Handbook, Fourth Generation Management and the Improvement Guide (for more see: books to start with and the

National Parks

I just returned from several weeks visiting National Parks in the Northwest USA: Olympic, Mount Saint Helens, North Cascades, Glacier and Mount Rainer. I will post photos of the parks to the Curious Cat Travels section as I have time. The photo above, is me at Olympic National Park.

A article, from yesterday, discusses the use of National parks and comments on camping declining at the parks. I have always preferred to hike around during the day and then eat good food, sleep in a warm bed and take a warm shower. So maybe I am ahead of the trend the article argues is taking place. I found the most interesting part of the article to be:

There were 276.9 million visits to the National Park System last year... By comparison, combined attendance at Major League Baseball, National Football League and National Basketball Association games last season was about 110 million.

One of the surprising things about my recent trip was the lack of foreigners. Often, of past visits (Yellowstone, Grand Canyon, Rocky Mountains, etc.) close to half the people I see hiking seem to be foreigners . This time I would estimate less than 10%. My guess is this is just an anomaly of the time and places I visited but it was interesting.