Joe and Wanda on Management

Joe Kerr and Wanda B. Goode, two characters from Nick McCormick’s book, “Lead Well and Prosper,” dispense their management wisdom

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Month: June, 2008

Deming’s Deadly Disease #3 – Annual Reviews

28 June, 2008 (23:16) | Leadership, Management | By: Administrator

Last post we talked about one of W. Edwards Deming’s 14 points to transform management listed in his book, Out of the Crisis. This time, we’re going to address one of the Deadly Diseases from the same book.

Deadly Disease #3 – Evaluation of Performance, Merit Rating, or Annual Review – Deming has some harsh words for Annual Reviews and proposes their eradication. Here’s a quote…

“The performance appraisal nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry and politics… it leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in a group differences that may be caused totally by the system that they work in.”

Here’s another one…

“Basically, what is wrong is that the performance appraisal or merit rating focuses on the end product, at the end of the stream, not on leadership to help people. This is a way to avoid the problem of people. A manager becomes, in effect, manager of defects.”

Deming offers the following alternate recipe…

  • Institute education in leadership; obligations, principles, and methods.
  • More careful selection of people in the first place.
  • Better training and education after selection.
  • Instead of being judges, leaders need to be colleagues, counseling and leading people on a day-to-day basis, learning from and with them… working for the improvement of quality.
  • The people that form the system will be subject to the company formula for raises in pay. There should be no ranking within the group.
  • Discover who falls outside the system, and reward/address accordingly.
  • Hold long interviews with every employee, three or four hours, at least once/yr, not for criticism, but for help and better understanding on the part of everyone.
  • Figures on performance should not be used to rank the people that fall within the system, but to assist the leader to accomplish improvements of the system.

Joe Kerr: I don’t believe I’m saying this, but I think I agree with Deming on this one. Get rid of the reviews. I know the go-to people on my team. I’d rather not spend the time retrofitting accomplishments to some review system to justify increases for my team members. Plus, we do all our reviews at the same time, so I haven’t been able to vacation in January for years.

Wanda B. Goode: Deming makes a lot of sense. It is awfully difficult to try to quantify performance. Once you do, it seems that people always find a way to work the system, to the detriment of the intent of the goals. Further, when there is subjectivity in the performance review process, there is often a huge disparity in rating from manager to manager. They can certainly cause some damage. I’m not so sure the people know just what to do to achieve a higher rating either.

I still find myself wrestling with it though. It’s the method we’ve been using to administer “Pay for Performance” for so many years. Maybe I’m like the managers that Deming mentions in his book. Those that say, “They can’t be all bad.” He says the reason we try to hang on is that it’s the system that actually put us where we are today. It must be working then, right? I think it also has to do with the fact that annual reviews are easier too – certainly easier than implementing the 14 points.

I’d like to pilot Deming’s method. I think it would be difficult to convince the big shots to do away with all annual reviews at once. After all, Deming made this recommendation over 20 years ago, and I’m not aware of any corporation that has heeded the advice.

Here’s the blog entry that originally turned us on to Deming and specifically the call to abolish performance reviews.

Deming’s Point #11 – Eliminate Numerical Quotas/Goals

24 June, 2008 (00:07) | Leadership, Management, Productivity | By: Administrator

In his book, Out of the Crisis, Quality guru W. Edwards Deming describes 14 points required to transform American Industry. Today we are going to concentrate on the 11th point – Eliminate Numerical Quotas for the Workforce, and Eliminate Numerical Goals for People in Management.

This is contrary to the way many of us have been brought up. It’s certainly contrary to the way that most businesses currently operate.

Deming doesn’t like quotas and goals because they focus on the outcome rather than the process. He argues that half the workers will be above average and half will be below – no matter what you do. If you have a stable system, then there is no use specifying a goal. You’ll get whatever the system will deliver. If a goal is set beyond the capacity of the system, it will not be reached. If you don’t have a stable system there is no reason to set a goal, because you have absolutely no way of telling what the system will produce.

In addition, goals and quotas can be so arbitrary. Improve productivity by 10%. How? Most spout out numbers with no plans to reach them. Natural fluctuations in the right direction are interpreted as success. Fluctuations in the opposite direction result in a series of fire drills that create more problems and much more frustration.

Deming refers to quotas as “fortresses against improvement of quality and productivity. Peer pressure holds the upper half to the rate, no more. The people below the average can not make the rate. The result is loss, chaos, dissatisfaction, and turnover.” He offers as evidence the many men and women in factories standing around the last hour or two of every day waiting for the whistle to blow because they already met their quota. Others just can’t make the quota, unless they “bury their pride in workmanship and turn out an inferior product.”

He acknowledges that the intent of quotas and goals is noble: predict costs; improve productivity, etc. The actual effect, though, “is to double the cost of the operation and to stifle pride of workmanship. There are more engineers engaged in construction of work standards, and people counting production, than there are people engaged in actual production.”

So what is Deming’s solution? He advocates replacing work standards with leadership – understanding the work that you and the workers are responsible for, understanding who the customers are, and how to better serve them.

Deming does not say, “Don’t measure.” He is an advocate of measuring, but not as a way to define a job. “Is your job to make 25 calls per hour, or to give callers courteous satisfaction?” Measure and then improve the system and address those that fall outside the limits of performance variation.

What do you think Joe and Wanda?

Joe Kerr: There’s a reason the Japanese lost to us in WWII!

Wanda B. Goode: Interesting stuff. I’m still working on processing it. I need to hear more. I know Deming is against performance evaluations too. I’d imagine it’s for similar reasons. Maybe we can take that up too. I really want to find out more about his solution.

Check out this post for a real life example of a quota that does not appear to accomplish the desired result.

Deming’s 14 Points

20 June, 2008 (01:11) | Leadership, Management | By: Administrator

In his book, Out of the Crisis, Quality guru W. Edwards Deming describes 14 points required to transform American Industry…

  1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
  2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
  3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
  4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
  5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
  6. Institute training on the job.
  7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
  8. Drive out fear, so that everyone may work effectively for the company.
  9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
  10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
  11. Eliminate work standards (quotas) on the factory floor. Substitute leadership. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
  12. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality. Remove barriers that rob people in management and engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.
  13. Institute a vigorous program of education and self-improvement.
  14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

In the next few posts we’ll take a deeper dive into some of these points. In the mean time, I have a couple questions. This book was written in 1982. How have we been doing since it was introduced? Has American business transformed?

Joe Kerr: Not sure whose 14 points are wimpier, Wilson’s or Deming’s!

Wanda B. Goode: Some companies have obviously gotten the message. I’d say the majority probably have not. I’m looking forward to more detailed discussions.

See the following post for humorous illustrations on each of the 14 points.

Drexel University “Icahn”

16 June, 2008 (23:27) | Leadership, Management | By: Administrator

Just read an article in Sunday’s Philadelphia Inquirer about Carl Icahn’s public address at Drexel University’s Business School graduation ceremony. Mr. Icahn is not the most beloved man on Wall Street. One can certainly take issue with some of his tactics. He’s given many CEOs nightmares, some surely more deserved than others. In this commentator’s opinion, though, he certainly did give an entertaining speech.

Carl did not mince words. He said management was in a state of crisis. “We have an inability to compete.” The Corporate American system is dysfunctional. He described our system as anti-Darwinian. CEOs are like frat presidents – likable, not too bright (maybe buffoons), good politically. They don’t make waves and don’t have ideas. They are just there. They just keep moving up the corporate ladder. They never put a person under them that’s smarter than they are, because they don’t want to be challenged. They eventually become CEOs. The people that come after them are worse than they are, and so on. Each one is a little dumber than the previous one, until soon the companies are “run by morons.”

Boards are inept. He compared board meetings to Saturday Night Live skits. The board members arrive at a meeting, pick up their checks, look at a few charts, smile at the CEO, and start planning for their night at the theater.

Regardless of what you feel about Carl Icahn, or his opinion on corporate management, he had some valuable advice to share with the graduates.

His prescription for success…

  • Work hard
  • Become very, very good at something (anything).
  • Have an honor code and live it. Your word is your bond.
  • Be a person that thinks for yourself. Go against the trend. Innovate.
  • Don’t get too full of yourself during the good times or too low in the bad.

Joe and Wanda, care to comment?

Joe Kerr: Guy obviously didn’t survive pledge week.

Wanda B. Goode: I think there is certainly some truth to what he says. In fact, our book, Lead Well and Prosper, is based on the premise that there is a management crisis. The book is based on the fundamentals of leadership and management – an antidote to the crisis. Yes, another shameless marketing plug from Wanda.

To find out more about Carl’s talk and/or to listen to it, click here.

Ice Breakers

11 June, 2008 (23:53) | Management, Meetings, Team Building | By: Administrator

When getting together with a group of people for a meeting or a training class, it’s often good to do a warm-up exercise to allow the attendees to get to know one another, and to clear their minds of distractions prior to focusing on the task at hand.

In his book, The Team Handbook, Peter Scholtes has a number of suggestions for warm-ups, to include an activity called “Superlatives.” It goes like this… Ask attendees to study the characteristics of the group and come up with superlative adjectives that contrast them to the others (e.g. tallest, baldest). Have each person share her/his adjective and allow the group to test for accuracy. Sounds like fun.

Joe and Wanda, what effective ice breakers have you used?

Joe Kerr: I don’t know much about ice breakers, but I’m extremely familiar with one super effective ball breaker. He goes by the name of Joseph Kerr.

Wanda B. Goode: I like to go around the room and have each person indicate what kind of tooth paste they use. I was introduced to this activity a few years back in a training class. It sounds a little goofy, but it works. For some reason, the topic of toothpaste seems to generate quite a bit of conversation and laughter. Give it a shot and see how it goes. Tally up the responses and announce the winner.

Click here for another suggestion for an ice breaker.

Do you have any ice-breakers that you’d like to share?

Haagen-Dazs Theory on Productivity

2 June, 2008 (22:53) | Leadership, Management, Success | By: Administrator

Here’s the final excerpt that we’ll examine from Karen Salmansohn’s book, Ballsy: 99 Ways to Grow a Bigger Pair and Score Extreme Business Success. It’s tip number forty-three…

“As you know, it doesn’t take discipline to eat spoonful after spoonful of Haagen-Dazs. You can bet that nobody will ever say to you, “Wow, look at your discipline – how you just keep spooning down that pint!” Yet you keep on spooning. Why? You’ve got passion… When you love what you do, you don’t mind doing it, and so you keep on doing it… and doing it… Keep reminding yourself what you love about your widget… and why others’ lives will be improved by your widget… so you stay in a heightened state of excitement and passion to work.”

Joe and Wanda?

Joe Kerr: Please don’t hit me with the passion speech. I’ve been around too long. I’m happy when I get through the day without throttling someone. I’m passionate about my pay check. Let’s leave it at that.

Wanda B. Goode: It certainly does make it easier to enjoy your work when you’re passionate about it. I guess the trick is to find a way to be passionate about it. Managing can be very difficult at times. When my frustration level runs high, it helps if I remind myself why I’m in it. If I can do one thing during the day to help someone out, or maybe advance a pet project, it tends to get me back on track.

Karen offers up the following tips to re-find your passion when you’ve lost your way…

  1. Remind yourself why you were passionate about your work in your honeymoon period… then ask yourself why your honeymoon waned, and Un-wane the wane!
  2. Does your work improve people’s lives? Remind yourself how what you do MATTERS!
  3. Ask yourself WHO you want to be, not just what you want to do. Get your identity re-synchronized as a successful, happy, confident, communicative, problem-solvin’ genius of your craft, dammit!
  4. Link your success to something else… like baby needs a new pair of shoes… or mommy needs a new pair of Pradas.

For an interesting post on reigniting passion in your work, click here.