Country Boundaries are Becoming Less Important

Knowledge workers are the new capitalists by Peter F. Drucker

knowledge workers are highly mobile within their specialism. They think nothing of moving from one university, one company or one country to another, as long as they stay within the same field of knowledge.
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Money is as important to knowledge workers as to anybody else, but they do not accept it as the ultimate yardstick, nor do they consider money as a substitute for professional performance and achievement. In sharp contrast to yesterday's workers, to whom a job was first of all a living, most knowledge workers see their job as a life.

I agree with Drucker. Singapore, Shanghi, Rio De Janeiro, Stockholm, Hong Kong, Berlin, Tokyo, Paris... and many more are going to be destinations for those that grow up in the USA. The numbers of people moving out of the USA in the next 30 years for jobs in the top 10% of the income bracke,t will be many multiples of what it was in teh last 30 in my opinion.

The USA has great advantages. China and Inida do too. But so do many other locations. The USA probably has more ability to absorb mistakes and I still feel it is the best situated, but the gap is much much smaller than it was 30 years ago.

Related: USA Losing Brain Drain Benefits - Long Term Economic Growth - Technology Centers of Excellent and Economic Growth - Keeping Out Technology Workers is not a Good Economic Strategy

Lean Thinking for a Scary Economy

The Role of Lean in the "New Normal" World (the broken link was removed)

The "New Normal" often means we are hanging on, and feel our best days are behind us. For the first time in the USA, many feel their children's future will be filled with less opportunity than they experienced.
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We need to embrace the "New Normal" as a both a challenge and an opportunity. [North Carolina University] IES is working to help organizations move toward making "circumstances" that will generate true job growth in this "Flat World".

The improvement aspects of lean manufacturing are very beneficial. And the quick response to the market (reduce inventories, pull...) are very beneficial. Both help in any economic climate and are useful today.

I actually think some even more beneficial traits exist in lean thinking for the current economic climate. Lean, the way Toyota practices it, is not about optimistic hopes (focusing on great potential gains) but instead on minimizing risk. I can't find it now, but I believe Taiichi Ohno was clear that he was very focused on making Toyota safe for the long term. Not chasing after quarterly or yearly profit targets.

While many focus on Toyota's quick changeover, pull systems..., and rightly so the importance of long term thinking is huge. When you are focused on long term benefits - you don't take huge risks. You don't over leverage your company. Long term thinking along with respect for people means you focus greatly on avoiding a situation where your company into a position where you have to have layoffs. If that means you leave some potential profits on the table in rabid markets - fine.

I own stock in Toyota and am very happy I do.

The economic future is still bright. But it is also more demanding. The huge amounts of relative wealth the USA enjoyed from 1950-2000 is becoming a thing of the past. Riding on the success that came automatically from that wealth will not work. Improvement is needed to succeed.

Related: Bad Management Results in Layoffs - Managing Our Way to Economic Success (1986) - CEOs Want Health-Care Reform

Work on System Improvements for Best Results Not Problems with Individuals

The Deification of Deming

When people discuss how best to change an organization, Lean proponents will invariably cite Deming and argue that since he has shown that 94% of the potential for improvement is in the system there is little point in working with organizational culture.
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If lean is ever going to become more mainstream people must start treating it less as a religion with its own gods and more as a collection of insights that have to be carefully tailored to the context you are working in.

Also "94% of the potential for improvement is in the system there is little point in working with organizational culture" is about the opposite of the point he was making. His point would better be stated that there is little point in working on "problems with individuals."

Working on "culture" can mean many things. And often it is just a big waste of time. But the reason for that is not due to systemic/common cause versus special causes.

What Dr. Deming was suggesting is you need to look for systems improvements (which could be cultural - a culture that operates with data based decision making, an understanding of variation...). I think the red bead experiment illustrates the point he was making - any focus on fixing the employees on that system is futile if you don't change the system.

Related: Blame the Road, Not the Driver - Common cause variation - Deming on Management

SPC - Charting and Improving Results

Everett Clinic Video, Redux – The Need for SPC Thinking

Looking at 5.x% and comparing it against an arbitrary goal does little to tell us about the health of the work system. Is 5.x% the typical average performance? Is that much higher than usual?

This is a great opportunity to use the methods of Statistical Process Control. The main management decision is to decide "react" or "not react" to that daily data point. SPC helps us with this (again, Wheeler’s brilliant little book explains this far better than I can in a blog post).

If we choose “not react” because 5.x% is lower than the goal, we might be missing an opportunity for process improvement. Generally, it’s better to present more than one data point – even if you don’t do full-blown SPC, you should present a run chart.

Well put. A simple run chart can be very helpful. One of the uses is to identify special causes. And then to use special cause thinking in those cases. What is important about special cause thinking? That you want to identify what is special about the data point (instead of focusing on all the results as you normally would). What is important about doing that? You want to do it right away (not a week or a month later). Keeping the chart lets you identify when to use special cause thinking and react quickly (to fix problems or capture good special causes to try and replicate them).

You have to be careful as we tend to examine most everything as a special cause, when most likely it is just the expected result of the system (with normal variation in the data). Special cause thinking is not an effective strategy for common cause results.

Related: Quality, SPC and Your Career - Statistical Engineering Links Statistical Thinking, Methods and Tools

Performance and character

Response to, Toxic Employees

But what if this employee is a rock star salesperson or contributor but has the bad attitude? Do you put up with the attitude issue for the great performance?

Does performance override character?

Or do we want performance and character?

What if this person when confronted, justifies their behavior with “it’s the truth and I’m the only one with the guts to speak out”?

What if this person is a top executive with political ties to the company President yet others below feel the pain?

What if this person is not an employee but a customer?

Is it following our "respect to people principle" by not addressing this person’s behavior?

We want performance and character. It is not respecting the person (and more importantly all the others that must suffer) to ignore their toxic behavior. 

I must admit I do have sympathy for the "I'm the only one with the guts to speak out" claim. But that doesn't excuse bad behavior, speak out, but do in a non-toxic manner. 

You have to confront and address toxic behavior. It isn't easy. People with power and also people with a history to getting results can get used to being able to do whatever they want. Some cultures that is normal. 

It isn't ok in a lean culture. Bottom line. If the CEO accepts it they are deciding they don't want to be lean. They might want to adopt some lean tool (which can benefit even non-lean organizations). But allowing toxic behavior directly contradicts respect for people. 

Related: People are Our Most Important Asset - Negativity - The Lazy Unreasonable Man

How to Motivate Front Line Workers

I see respect for people (that I think requires striving for joy in work) is critical. Dr. Deming stressed the importance of letting people take joy in work. A big part of this are many sensible respect for people notions. But also he stressed the importance of allowing people to take pride in what they do. Critical to this is providing meaningful work and organizing the work so that people can see and feel the contribution they make.

The overly simplistic example is that tightening one screw all day on an assembly line is very easy to think of yourself as a cog in a machine. Work needs to be designed to let people take pride in their contributions. An understanding of the whole system and work cells often helps. Sharing information so everyone can think of the big picture helps. Companies that truly focus on a vision can do this very well. But it is not a simple - plug this idea in exercise. To build such a culture takes an understanding of psychology and a true commitment to respect for people. Posts on my blogs about motivation.

Response to: How to Motivate Front Line Workers - Trust Your Staff to Make Decisions - Douglas McGregor's classic, The Human Side of Enterprise - Respect for People – Understanding Psychology

Lean Six Sigma Health Care Sucess

Another Hospital CEO Talks Lean Culture

There’s a lot covered in the article – celebrating successes, communicating, and building on your successes. They also share a huge success in reducing waiting times for MRIs (from 25 to 28 days to just 3).

Great example. Senior leadership support and understanding is incredibly helpful. You can make progress without it. But eventually it becomes very difficult to work on the system without senior leadership support.

This example is also nice in showing that lean six sigma can work. So often organizations using the buzzwords don't have success. And it helps show different organizations can take different tactics. Many people don't like having a separate "improvement" office - as it can be seen to isolate it from everyday work. I think a separate, small, office, can help push improvement (especially in the first few years).

Related: lean manufacturing resources - blog posts on six sigma - resources for improvement health care management

Monopolists Provide Lousy Service

I think there are many companies that obviously do not attempt to provide good customer service: airlines, large banks and Verizon are examples that have huge numbers of customers being treated very poorly. If there are options to choose decent service it doesn't bother me so much (credit unions provide a very good alternative to large banks most often). Thankfully you can often avoid United, American... by choosing Jet Blue or Southwest but obviously that is not always possible. Verizon is even more annoying because they have bought their way into very anti-competitive positions (banks and airlines also obviously have done so alos).

Near monopolies have the freedom to provide lousy service. Companies like Verizon, American, Chase, Wells Fargo... attempt to make their customer hostility sustainable by securing monopolistic positions. It has worked pretty well for them. I think we are much more likely to get customer friendly policies by new companies coming along that don't sell out the oligopolists. Unfortunately the anti competitive behavior these companies favor it just to buy out customer focused alternatives instead of providing service themselves.

Regulators allow such anti-competitive behavior is another thing we could hope to see change. But the chance of proper regulation of anti-competitive behavior is not good. And hoping those companies stop being so customer hostile is not something that will likely work. I don't see good odds that the monopolistic customer hostile companies will change. Those companies that don't have monopolistic positions are not such a big issue because after providing universally bad service they go out of business. It would be nice if our regulators didn't allow the monopolistic behavior but they obviously are going to do their part to allow capitalism to function, bad service and high prices is what we can expect from the monopolistic companies.

Re: How to Design Poor Service – Expect 100% Utilization of People or Resources

Related: Why is Customer Service So Bad? - Verizon Provides Lousy Service = Dog Bites Man - Price Discrimination in the Internet Age