Joel Management

Topic: Management Improvement, Lean Thinking

Joel Spolsky writes the excellent Joel on Software blog and runs Fog Creek Software. Recently he has been writing about process improvement of the order fulfillment process for a movie on the experience of interns at Fog Creek Software, How to Ship Anything by Joel Spolsky

Shipping an international order now takes about 35 seconds, down from 3 minutes, and can be done by anyone, whether or not they have SQL and Mail Merge skills. Domestic orders are even faster since they don't need customs forms. Most of all, it's all really fun.

Joel is a great writer and tells a interesting story about of how they improved the process. This is one of a series of articles on the process improvement around order fulfillment for the documentary made of "project Aardvark":

Four interns are brought into Manhattan and given 12 weeks to design, develop, debug and ship a program that will change the way computer geeks around the world fix their friends' computers. Boondoggle Films presents a journey through the world of software development from the perspective of a unique upstart, four quirky interns, and the world of The Geek.

Shipping Update: "We discovered that 2 people working in tandem can ship an order every 12 seconds using the new system."

The level of detail in his posts is great. Aardvark'd DVDs Ship; Final P&L:

Incremental Expenses (per unit)

$2.00 - DVD production and delivery
$5.00 - Royalty to filmmaker
$0.30 - Envelope for shipping
$2.52 - Postage (weighted average)
$0.20 - Other supplies for shipping (labels, paper for packing slips, toner, boxes, etc)
$1.00 - Shipping labor (estimate, since most labor came from Fog Creek employees on the payroll anyway).

Total per unit: $11.02. Since we're selling at $19.95 that's $8.93 gross profit.

Fixed Expenses:

$5,000 - Stipend paid to Boondoggle Films
$5,000 - expense reimbursement to Boondoggle Films
...
So we need to sell 1694 copies to break even. As of today, we've sold 2595, so we made a profit on the movie of about $8048.

And he really understands the value of the movie to his company, which I agree with:

Not bad! I was hoping to break even on the movie, and make a "profit" through more applications to our summer internship program from people who saw the movie and were inspired to work for Fog Creek.

I want to work for them. More reasons to work for them:

• Fog Creek Software Management Training Program - our previous post on the Management Training Program


• Fog Creek Compensation
  
• Bionic Office


• Incentive Pay Considered Harmful - "If you're in this position, the only way to prevent teamicide is to simply give everyone on your team a gushing review. But if you do have any choice in the matter, I'd recommend that you run fleeing from any kind of performance review, incentive bonus, or stupid corporate employee-of-the-month program."
  
• The Joel Test: 12 Steps to Better Code

Engineering Education: China, India and the USA

Topic: Engineering Education, curiouscat.com

I just added a post, USA Under-counting Engineering Graduates, to our Curious Cat Science and Engineering Blog on a new report from Duke concerning data on engineering degrees from China, India and the USA: Framing the Engineering Outsourcing Debate. I think it is a great report. If you have any interest in this topic I strongly recommend it.

Related posts:

• Worldwide Science and Engineering Doctoral Degree Data
• Engineering Education and Innovation
• Joint Singapore MIT Degree Programs
• USA Science and Engineering Doctorates Hold Steady
• Engineering in America
• GAO Report: Federal Science, Technology and Engineering Trends
• 200,000 science and engineering doctorates in China by 2010?
• Science and Engineering Doctoral Degrees Worldwide

Poka-Yoke Assembly

Got Boondogle asks, Do you Read Instructions Carefully Before Assembly? Nope, I don't. I expect I can make a quick judgment if I really need to or I basically get it and can put things together well enough. I expect the supplier to make very obvious anything critical.

I am much less likely to read instructions that seem to be written by a lawyer, as I imagine are many others. If they provide simple, clear instructions I will use them (like Ikea provided for this desk I am using now). I find many good instructions require almost no words (they use pictures very well).

As Mike Wroblewski stated in his post:

Good manufacturers will recognize that there exists in our world this great divide between the instruction readers and the intuitive assemblers. Great manufacturers will put a system in place to prevent operator errors for both groups.

Poka-Yoke (mistake-proofing) is one of my favorite ideas. I just love the idea of not only making something that works well but making something that is difficult to have work badly. I encourage you to follow Mike's advice: "Look at your processes and products. How can operator errors occur? Think how a simple poka-yoke can eliminate the error and make it mistake proof."

Web site: John Grout's Mistakeproofing Site provides some everyday examples.

Book: Poka-Yoke : Improving Product Quality by Preventing Defects by Nikkan Kogyo Shimbun.

Carnival of Lean Leadership #4

Carnival of Lean Leadership #4. As usual there are a ton of great links and this one includes links to all the posts from project kaizen.

Enjoy,

Innovate or Avoid Risk

The Xooglers blog has some really interesting posts. In one, "But, but, that's just crazy talk!", Doug Edwards discusses a great example of what true leadership is about.

In my defense, my background conspired against me. Past public relations debacles had taught me always to evaluate worst-case scenarios before considering the possible benefits of any new initiative. "First, do no harm" had become my mantra.

This is the reality of many people. There are many reasons why avoiding risks is smart and should be encouraged. But when avoiding risks stifles innovation it the risks to the organization are huge.

And I took a notion that maybe I should be more open-minded about big ideas that, on the face of them, seemed ludicrous. I would have many opportunities to test this resolve in the years to come.

A great lesson. The hard part is that stupid decisions can easily be made when knowledge is lacking. There is no substitute for knowledge - W. Edwards Deming.

Quote from Lion of Lean, interview with Jim Womack:

So this guy, who was around 60, gives me an incredibly frosty look and says, "Because I know everything." Everything? "That's my job," he says.

You have to read the article to understand that quote.

Related Links:

• Management Training Program
  
• Deming on Management
  
• Data Based Decision Making
  
• Google: Experiment Quickly and Often
  

Data Based Decision Making

Topic: Management Improvement

Acumen visits Google:

As a first step, we hope to collaborate with interested Googlers to find better ways to learn what works around the world. Identifying powerful solutions to poverty that are useful to people in different settings, and that are market-driven, scalable, and sustainable, is our greatest challenge. Second, we're hoping to strengthen how the world measures both social and financial returns to investments in delivering critical goods and services to the poor. Like Google, we hold a deep belief in the power of measuring everything we can.

Google has done a fantastic job of using data to make decisions. In fact so much so, that some think they may go overboard trying to find an algorithm for everything. My dinner with Sergey:

It was a classic Google moment. Your S.A.T. score was the measure of your intellectual capability; your GPA represented the numerical summary of your ability to execute on that potential. Your value to Google could be plotted using those two data points.

Sergey's desire to reduce every decision to an equation would cause me a fair amount of frustration in the years to come. While it forced a discipline on me that was likely lacking in my career up to that point, it also went against my deeply-held conviction that some things are not expressible simply by deriving the correct algorithm. A lot of engineers at Google would dispute that with religious conviction, though they might admit that deriving the correct algorithm would be "non-trivial."

I believe you can't measure everything that is important. I also believe in most organizations the amount of stuff you can't measure usefully and realistically is quite a bit higher than it is for Google. Having highly intelligent, skilled and experienced people who can derive complex formulas effectively does greatly expand the effective use of measurements.

Still there are limits, and those limits are much lower for most organizations that have neither, thousands of phd level mathematicians, rocket scientists, software engineers etc. nor a anything approaching Google's percentage of such people.

Still I think we will benefit from the innovation that will continue to take place at Google. The are making great strides in using data to inform their decision making process.

Performance of People and Appraisal

The Statistical and Scientifc Thinking blog has several interesting posts on the Performance of People:

Why can'’t performance be numerically rated and ranked? It can'’t be defined operationally, it can'’t be measured with any degree of precision, it canÂ’t be separated from other effects, and it is destined to vary over time in any case. Any one of these factors present significant (if not insurmountable) problems itself. Combined the problems create an impossible barrier.

Performance of People III:

This essentially ended the practice of raise administration as a '‘zero sum'’ game. Many (if not most) companies make a total figure available for raises. That figure is then stated in terms of a percentage of total salaries. Each supervisor is instructed to average’ that percentage in administering raises among his or her employees. Thus, a given employee can only receive more than the average if another employee within the same supervisory unit receives less. This fosters competition within small units of the company. That is disastrous.

Related Links:

• Deming on Management: performance appraisal
  
• Performance without Appraisal post
  

Gary Hamel's Idea Hatchery

Gary Hamel's Idea Hatchery by Whitney Sparks:

Q: So how do you hope to change the standard approach to management?
A: Sometimes innovation is about creating a whole new class structure. Hierarchies are not very good at getting the best out of people. Communities are where people are most likely to give their gifts, bound not by economic dependency but [with] dreams.

I'd like to make business more humane. How do you create organizations where people can bring all of their humanity?

I advocate a system in which executives have to re-earn their power, [in which] their ideas have to compete with everybody else's ideas. [Not based upon] outdated Henry Ford attitudes. Work life has not become more interesting or compelling over the past few decades.

I don't think he is talking about lean manufacturing ideas of Henry Ford.

I admire his desire to learn where management is headed and to improve management education. I do think our management education needs to improve.

Gary Hamel articles and books