Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs - Poor Management Harms USA Manufactures (2005)
The global competition in manufacturing is intense. But America is still the largest manufacturer in the world and managers should not be allowed escape responsibility for their failure to manage effectively with claims that manufacturing in the USA cannot compete. The biggest change needed is an improvement in management. Other things would also help greatly, such as improving the health care system. continue reading: Poor Management Harms USA Manufactures (2005) - Performance of People: Does Performance Appraisal Help?
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 can’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.
continue reading: Performance of People: Does Performance Appraisal Help? - Excessive Executive Pay
 The excesses are so great now they will either force companies to:
- take huge risks to justify such pay and then go bankrupt when such risks fail (and some will succeed making it appear, to some, that the pay was deserved rather than just the random chance of taking a large risk and getting lucky).
- make it impossible to compete with companies that don’t allow such excesses and slowly go out of business to those companies that don’t act so irresponsibly
- hope that competitors adopt your bad practice of excessive pay (this does have potential as most people are corrupted by power, even across cultural boundaries). However, my expectation is the competitive forces of capitalism going forward are going to make such a hope unrealistic. People will see the opportunity provided by such poor management and compete with them.
As long as the pay packages were merely large, and didn’t effect the ability of a company to prosper that could continue (slicing up the benefits between the stakeholders is not an exact science). The excesses recently have become so obscene as to become unsustainable. continue reading: Excessive Executive Pay - Landscaping Firm Applying Deming's Management Ideas
Each Brickman branch operates with a standard production model that the company developed in the late 1970s with consultant and renowned statistician W. Edwards Deming... Scott Brickman said the model emphasizes continuous improvements in communication with its nearly 10,000 commercial customers and education and cultivation of its employees to learn and advance within the company.
continue reading: Landscaping Firm Applying Deming's Management Ideas - Toyota Manufacturing Powerhouse
Unusual among automakers, “they don’t hide a lot,” Coventry said. “It’s like going to the Super Bowl and having the opposite side throw their playbook on the table. It’s as if they feel they can still beat you on the field.”
Toyota has greatly advanced management practice worldwide through their actions.
In a reflection of Toyota’s team-oriented approach, its executive pay is paltry by U.S. standards. Analyst Ron Tadross at Banc of America Securities estimates the total annual compensation of Toyota’s CEO at under $1 million – about as much as a vice president at GM or Ford Motor Co. makes in a good year.
The executive pay crisis in America is a symptom of the failure of American management to understand their role. Executives are part of the system and have acted shamefully in allowing obscene pay for a few while claiming they must force others to suffer (due to “the market”). continue reading: Toyota Manufacturing Powerhouse - Management Improvement Flavors
Some tools are much more common in one program, even if they are not limited to one program (such as Design of Experiments used heavily in six sigma). But design of experiments existed long before six sigma and was used by sensible people to improve for decades before six sigma.
The biggest difference I see in the programs is the overall aim. And that overall aim affects everything else. I happen to be a fan of Deming’s ideas. Most of these programs take a great deal from Deming’s ideas. I believe Lean is closest to Deming’s ideas (which makes sense as Lean is essentially the Toyota Production System TPS). continue reading: Management Improvement Flavors - Google: Experiment Quickly and Often
this is basically piloting changes on a small scale, analyzing the results and repeating that quickly. Quick, frequent experimentation with iteration is a tactic all organizations would benefit from. continue reading: Google: Experiment Quickly and Often - Innovation and Research and Development
Innovation can be related to productivity improvement or it can be completely unrelated. A company could innovate with an ideas like the remote control for televisions (or microlending or air bags). That innovation may not contribute in any way to manufacturing televisions more productively.
Other innovation may be related to improving the productivity alone and add no additional functionality to the customer. Many innovations will provide a combination of both benefits. Both innovation and productivity improvement are important. continue reading: Innovation and Research and Development - The Economist on Drucker
In the late 1990s he turned into one of America’s leading critics of soaring executive pay, warning that “in the next economic downturn, there will be an outbreak of bitterness and contempt for the super-corporate chieftains who pay themselves millions.”
continue reading: The Economist on Drucker - The Failure to Improving Using the Ideas of Peter Drucker and Others
Many of their ideas are ignored. However, even so, his influence on management in America, and worldwide, has been significant and positive. The way I see it even though managers are only benefiting from say 20% of the wisdom of Deming or Drucker that could very well still make Deming or Drucker the most influential management expert.
Related: Why Use Lean if So Many Fail To Do So Effectively continue reading: The Failure to Improving Using the Ideas of Peter Drucker and Others - Superior Customer Experiences Start with Respect for Employees
Oakley found that there is a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance. Employee satisfaction is a key antecedent to employee engagement. He also found that organizations with engaged employees have customers who use their products more, and increased customer usage leads to higher levels of customer satisfaction.
This is not a zero-sum game. Good managers grow the pie so all the stakeholders can get more benefit (customers, investors, employees…). continue reading: Superior Customer Experiences Start with Respect for Employees - Managing Innovation
You manage processes such as thinking up a new way to use computer technology differently than you manage a process to manufacture tires. But the idea that you don't manage and improve the process just because the process seems discontinuous is a mistake. continue reading: Managing Innovation - Management Pioneer Peter Drucker 1909 – 2005
The present people in organizations are still stuck in the 19th-century model of the organization. When big business first emerged throughout the industrial world around 1870, it did not emerge out of the small businesses of 1850 — it emerged independently. The only model available, the most successful organization of the 19th century, was the Prussian Army…
The Prussians succeeded because they had created an organization. They were the first ones to use modern technology effectively, which in those days meant railroad and telegraph. Business copied the command and control structure of the Prussian army, in which rank equaled authority. We are now evolving toward structures in which rank means responsibility but not authority. And in which your job is not to command but to persuade.
continue reading: Management Pioneer Peter Drucker 1909 – 2005 - Government Lean Six Sigma
Once the political decision has been made to eradicate polio then that desire can be carried out – and politics really has little impact. Other examples are not as simple. A political decision to eliminate AIDS runs into political controversies in selecting the best strategies to accomplish the goal.
A desire to eliminate hunger, poverty or homelessness run into differing opinions on how those problems should be addressed. I can’t imagine any politician against the elimination of those problems. However, many politicians will be against various tactics to accomplish those goals.
Political decisions have management components but arguing about the poor management effectiveness of political decisions is a bit too advanced for our current capability, I believe. It seems silly for a government to subsidize mansions being built in hazardous areas where insurers would not insure construction, but for political reasons it continues. It seems silly to have the political leadership prohibit the government from negotiating lower drug costs from suppliers, but they do. continue reading: Government Lean Six Sigma - Be Thankful for Lean Thinking
Through better information engineering, supply chain improvements have resulted in a reduced bullwhip effect, lower inventory levels, reduced logistics costs, and streamlined payments. These improvements appear to have helped produce macroeconomic benefits such as more stable economic output and higher productivity growth.
continue reading: Be Thankful for Lean Thinking
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