W. Edwards Deming “Unemployment is Not Inevitable . . . It is a Sign of Bad Management”

January 24, 2011 Tripp Babbitt Leave a comment

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Over the weekend, I was preparing my paper for the International Deming Conference in March. I decided to look at some videos of W. Edwards Deming on YouTube and other assorted mediums. Having attended Dr. Deming’s 4-day seminar I felt the familiar pull of a lost message about American management and that the Western style of management needs to change. That was in 1984 . . . and not much has changed.

Dr. Deming in one video outlined the 5 Deadly Diseases of Management. They are:

Constancy of Purpose
Emphasis on Short-Term Profits and Thinking
Annual Rating of Performance/ Merit Pay
Mobility of Management
Use of Visible Figures Alone

All of these things Dr. Deming warned us about in 1984 are present in almost all American businesses and government today. The banking crisis we are finally emerging from in the emphasis of banks to seek larger and larger profits to achieve targets. Short-term thinking isn’t just accepted, it is encouraged.

The problems with mobility of management are rooted in the lack of knowledge that management has about the systems in which they manage. Many lack the basic knowledge of their systems and manage based on common sense. But common sense can only be achieved by having knowledge from being in the work understanding it – outside-in as a system from a customers point of view. Anything less is leads to waste and sub-optimization.

The financial targets in American business are highly visible to anyone who manages and in government the focus on visible costs. A shame that very few can answer a simple question like, “what measures matter to customers?” Most will say, “oh yeah, that too”, but have no idea from their functional perch.

And so we live with high unemployment that is firmly rooted in bad management. Education is a top priority in the US and many states to help America become more competitive. A noble aim, but our problem is not just education . . . it is the wrong management theories being taught that deepen our plight.

Join me for the International Deming Conference in New York City on March 21 – 22.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public). His organization helps executives find a better way to make the work work. Read his articles at Quality Digest and his column for CustomermanagementIQ.com Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected]. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Copying and the Weak Service Organization

January 20, 2011 Tripp Babbitt Leave a comment

The allure of copying in service sings like the siren’s song . . . but like the siren’s song it leads the ship to the rocks. – Tripp Babbitt, 2011

So ,what is copying?

Besides the stuff that mediocrity is made of, it has many faces. A short list might be:

Tools – Lean and many improvement methods promote this approach. It is an attempt to capture lightening in a bottle.

Best Practices – Promoted by technology companies so they don’t have to do more for the contract overruns they have. If everybody is doing it, it must be good. This is a ridiculous concept for the gullible. You will hear things like, “We did this for (insert big Fortune 500 company here) so it must be good” or “we don’t want to reinvent the wheel.”

Pavlovian management pants its way to the promised land. A short cut to saving money. Give me some of that!

It was W. Edwards Deming that warned us against copying in the 1980 TV White Paper, “If Japan Can, Why Can’t We?” His famous words that the US wanted to copy Japan, “but they don’t know what the copy!”

But copying does far worse things, it stunts our growth. Once we have a tool or best practice the search ends and management moves on. The tools limit our ability to find new tools and methods for tomorrow’s problems leaving management looking for more to copy.

I compare tools and best practices to when we do physical inventory. If you look at the inventory sheet first to see if the item is on the shelf, we miss the items that are not on the sheet. This is why we need to count shelf to sheet. Tools and best practices are like counting sheet to shelf, where we limit what else might be out there and stunts our thinking and growth.

Systems thinking organizations learn to think for themselves and can separate from all the pretenders that are always a step behind the competition and the market. They are puzzled why copying others leaves them consistently behind. The market wants the real thing and not a poor copy of the original, works for paintings, why not service business?

Investing in new methods to uncover better thinking and innovation doesn’t require copying it requires originality and a different perspective about the design and management of work.

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Planning First? Then You Better Plan to Recover Later

January 19, 2011 Tripp Babbitt Leave a comment

Without fail, organizations begin with plan. The annual plan, strategic plan, project plan tied to budgets and full of targets. It is a top-down way to do business. The smart ones, after all, are the ones at the top. They make the big bucks to make the hard decisions and set direction. But this approach is destroying any chance of success.

The reality is most businesses work this way and most would tell you that it would be foolish to do anything without a plan. But they discount knowledge . . . and I am not talking about the diploma that managers have on their walls that they got for being active in academia and social fraternities and sororities.

Nor am I talking about the “knowledge” gained from those management reports that waste paper and time to produce. Those management reports lack context.

I am talking about the knowledge one gets from being where service is provisioned between customer and staff. You see and hear things that you can’t get from a report or diploma. It is real life drama played out before your eyes.

Going and getting knowledge allows you to see the dysfunction that is created by the last plan you put into place. This then requires you put together another plan to get rid of the alleviate the carnage of the last plan.

The damage of decisions managers made away from the work by implementing targets, costs constraints, improvement plans, technology projects and much more. All these things tend to increase costs, reduce service and morale and make a mockery of common sense.

Worse, improvement really requires no plan but to get knowledge. So all those long meetings and binders made (that sit on the executives shelf to collect dust are just another form of waste. Large sums are evaporated in this manner.

Going to listen to customers and front-line staff helps managers understand why the systems they built waste money, and sub-optimize systems. Business improvement depends on their showing up to see for themselves. It also requires watching and understanding and not fixing until one gains a systems perspective of the performance.

Managers will find why performance is the way that it is by asking good questions about purpose, customer demand, flow and the system conditions (work design, roles, measures, technology, etc.) that drive performance. They can then more easily correlate the management thinking that underlies this performance.

So, if you are required to plan, begin first by understanding the organization as a system. Knowledge is easily gotten as long as it is done before the planning session.

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How Failure Demand Leads to Waste in Service

January 14, 2011 Tripp Babbitt 3 Comments

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Staying at a Marriott, I was promised free internet – a benefit that you get with Platinum level loyalty. A small event turned into a major pain with multiple points of failure. As customers, we can see the waste and it is frustrating when things go wrong . . . but it is costly to the service organizations in future revenue and the cost of dealing with it.

The inability to connect started with an Ibahn menu that did not allow me to connect for free. This prompted me to call the front desk. The front desk said just to go ahead and charge it to my room. I hung up, but soon learned that the Ibahn menu did not have an option to charge to my room, only a credit card number.

The next phone call was back to the front desk where I was told that they would connect me to Ibahn because they had just updated the Ibahn service the day before. The IVR menu for Ibahn requested the hotel’s phone number and the number on the hotel label did not work. This led to the next front desk call to get the correct number and reconnect to Ibahn. Getting worn out?

My next call to Ibahn allowed me to successfully navigate the IVR menu and reach Victor. I am sure this wasn’t his real name and that by the accent I was calling India. Victor told me that there should be two wireless networks – one for the room and one for public areas. I had somehow connected from my room to the public area network, but after searching could not find the room wireless network that apparently held a potential victory for me to connect.

Victor asked that I walk around the room with my laptop to see if it could be picked up. I accommodated this request. The next request I did not. He wanted me to walk out into the hall. Shouldn’t this have been done by one of the Marriott staff or Ibahn people, why did I need to become the tester? Worn out yet?

Victor and I exchanged some terse words where he finally agreed to allow me to connect for free through the magic of technology (blahhhh!). By Sunday night (next day), my free internet expired and instead of using the “helpful” Marriott staff or dealing with Ibahn, I used my credit card. It did not work, because American Express flagged it as fraud and called my house and sent me an email. After 20 minutes navigating the American Express IVR and finally speaking to someone . . . I had my connection.

Think it is over? Not so fast. Monday morning I spoke to the front desk asking that they resolve the issue and the promise was they would. When I returned from my client, the internet still wouldn’t connect. Calling the front desk, I asked what had happened and the response was the Ibahn people hadn’t shown that day.

I continued to use my credit card and set up a meeting with the sales director as I was told the general manager was “tied up” that day. I shared the story with the sales director and she promised to make this right. Later that day her solution to reimburse the internet charges was to credit my account, but expenses were paid by the client that didn’t help. So I left with matters unresolved, but promises to rectify. We will see what happens from here.

My message to Marriott . . . this is the new millennium and free internet service would make business life a lot easier. Business travelers go through enough without having the hassle of failed service. But more importantly, internet is crucial to tying back to both work and family when you are traveling. Most customers would walk away and never come back, not me, I love the hope of better accommodations as they are all lacking.

Service organizations fail to see the real costs from trying to get revenue. A little bit of revenue for Marriott is a huge pain for customers in services that they need to get things done. They see the revenue they get, back not the carnage and inconvenience to customers. These costs aren’t as easy to see, but they are there.

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Source of Management Assumptions that Destroy Service

January 11, 2011 Tripp Babbitt Leave a comment

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Working with a new group this week, we talked about the history of mass production and the industrialized design that influences both manufacturing and service today. Adam Smith, Eli Whitney, Frederick Taylor, Max Weber, A.P. Sloan were the staple names that are inextricably linked to industrialized design. These thought-leaders of their day still influence the design. But better thinking has come along and ignoring it, is done at your own peril.

The mass production thinking is especially damaging as this leads to sub-optimization and waste in the design and management of work. This thinking is not only rampant in industry and government, but is perpetuated by our eduction systems. The thinking has become a metaphorical boat anchor that keeps improvement from emergent and profound.

However, our assumptions about the design and management of work don’t just persist from education. Biases, experiences and existing myths play a role.

Biases are developed as we are rewarded, we may not challenge those things that give us extra money to buy things. Who wants to challenge a bad system when it is paying me handsomely on a yearly or quarterly bases? After all, the US debt we are piling up for our children is bad . . . what difference does it make if we pass on uncompetitive systems too?

Our experiences are also used to eternalize bad systems. We have built processes into our systems to prevent events that rarely happen, but the monoliths we have created in making sure it never happens again are resource draining. This thinking (in part) led to Dr. W. Edwards Deming to say “experience, by itself, teaches nothing.”

Breaking the cycle of assumptive management is difficult as it is in our DNA. But like some components of DNA, this one cancerous. It is in need of removal before we hand this off to the next generation.

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Industrialized and Mass-Production Thinking is Still the Enemy

January 7, 2011 Tripp Babbitt Leave a comment

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To take a look at business we have to go back in time to a Post WW II world. Manufacturing was decimated by the war, except in one country . . . the United States. The world turned to the US for products.

Because of world demand, the US focused its manufacturing on mass production and the thinking from Frederick Taylor and Henry Ford. How many can we produce and how fast? . . . Were the questions that US manufacturing was trying to solve. No competition and no focus on quality.

This worked well until a meeting in Japan on July 13^th, 1950. Where W. Edwards Deming met with 21 presidents of industry that represented about 80% of the capital of Japan. Dr. Deming promised that if they followed better thinking that the US would be screaming for protection from Japanese goods in 5 years, they did it in 3.

In the greatest upset in economic history, US manufacturing faltered . . . culminating in the 1970’s with the bankruptcy of auto industry giants – Chrysler and Ford. This lead to some self-reflection in the US about how a small country like Japan with few natural resources could put the US on its heels.

In 2011, the design of American manufacturing and service still has that mass-production flavor. Some have managed to change to just survive (always good motivation to do so), but service still lags in thinking. Many technology organizations think of their software development process as a production line. A wholly wrong approach if you hope to make good software.

I have talked about economies of flow before, but it is scale thinking that still wins the day. Reducing costs through outsourcing, shared services leads to service designs that have the opposite outcome of what is desired . . . or unintended consequences. In this case, the unintended consequences are increased costs, worse service and reduced morale.

Economies of flow thinking helps lead us to better design as what is good for the customer always is good for the bottom-line. To many, this is counter-intuitive. The prevailing thinking is that better service costs money and it is with the industrialized thinking of yesteryear.

And so as we enter 2011, we still have the fundamental thinking problems about the design and management of work. Will this be the year that you do something about it?

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A Costly Paradigm – The Inverse Influence Factor

January 4, 2011 Tripp Babbitt 1 Comment

Many a business that seeks improvement starts with business processes to improve and miss the huge opportunities to fix how they design and manage work. Near the top of the list is what I call the “Inverse Influence Factor” . . . where the influence of how systems (including processes) are put together by those that are further away from the work.

The Inverse Influence Factor (IIF) is defined by decisions that are made further from the work. Defined – The farther from the work one is in the hierarchy or roles, the greater the influence on the work and the design of the work. This would seem illogical to most and it is, but it is practiced in business and government on a daily basis.

Why would the supporting casts of finance, information technology and human resources wield more control over systems then those that operationally perform the service? Add management with their “big picture” thinking and the affects of decision-making on the work can be devastating.

The existing business improvement fads of recent ignore the need for change in these areas pressing ahead for process improvement using kaizen events. These fads completely miss or ignore the fact that IIF is at play.

The problem with ignoring IIF is the people that make decisions in traditional organizations have no knowledge of how things operate. Improvement rarely comes without knowledge about how services are delivered. Management and supporting roles lack perspective and they happily move forward with process improvement, because they don’t have to change. Change is (after all) for the little people from their perspective.

The truth is that no improvement comes without systemic change. And with the largest area of need for change being the design and management of work, there is much to address. When we fail to address these the results are anemic or non-existent.

Systems demand that they be run by the people with knowledge of the work. Not from people that have theories and ideologies separated from the work.

Improvement begins with getting knowledge about work or leaving the decision-making in the hands of those that do and/or understand the work. This is a course correction for many service and government organizations that plan first and think later.

If the IIF is in play in your organization, waste and sub-optimization will prevail in your system. Influence should come from knowledge, not hierarchy.

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Indiana Education – Job Reviews for Teachers

January 3, 2011 Tripp Babbitt 2 Comments

The performance review is back in the limelight. Indiana teachers are rated 99% as “effective” according to the Indianapolis Star. The Star bemoans the fact that this is not possible in business and that this needs to change when students don’t pass 25% of the statewide exams.

Dr. Tony Bennett calls it a “statistical impossibility.” But if Dr. Bennett understood statistics he would understand that performance is driven by the education system and not individual teachers. Teachers can claim 5% of the performance and the system (administrators, parents, technology work design, structure, etc.) can claim 95% of the performance. So why are we spending our resources to improve the 5%?

Expect targets from the state department of education as they have for number of school days and graduation rates. Teachers jockeying to “look good” rather than be good. Teaching to the test rather than showing how to become better learners.

Maybe the better question is how many times in business we have to take tests about our knowledge in business. Performance appraisals don’t help in business and won’t help in education. It is a form of coercion, and brown-nosers . . . not innovation wins this game.

Great irony that later in the article Dr. Bennett’s goal is to make all teacher’s ratings “effective.” I thought he said that was a statistical impossibility?

If Dr. Bennett wants to improve education he needs to improve the education system. And with the theories he is promoting, improvement becomes a statistical impossibility.

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Monthly Archives: January 2011

W. Edwards Deming “Unemployment is Not Inevitable . . . It is a Sign of Bad Management”

Copying and the Weak Service Organization

Planning First? Then You Better Plan to Recover Later

How Failure Demand Leads to Waste in Service

Source of Management Assumptions that Destroy Service

Industrialized and Mass-Production Thinking is Still the Enemy

A Costly Paradigm – The Inverse Influence Factor

Indiana Education – Job Reviews for Teachers

The 95 Method