“All anyone asks for is a chance to work with pride.” — W. Edwards Deming

I posted another “tribute” to Russ Ackoff in my blog at the 2.0 Adoption Council’s collaborative site and thought to share it outside the Council as well. Our site is enabled by Jive SBS and is private, so I’d like to share it with others. What follows, then, is the post as I wrote it the other day:

I am of the opinion it takes a certain kind of sensibility to understand how and why Enterprise 2.0 fits into an organization and, more importantly, how it can increase the effectiveness of everyone and everything with respect to how that organization realizes its goals. In my mind that sensibility was understood well (if not best) by people like W. Edwards Deming and the man I’d like to reflect on just a bit in this post, Russell Lincoln Ackoff. I am writing this because Russ just died last October 29 and the resonance of his passing has yet to settle amongst the community of people who knew him – either personally or through his writings and teachings. Just today I received an email from John Pourdehnad, Director of ACASA at UPenn, with a link to another tribute to Russ, which I urge you to read. I have written about his passing also, as Russ affected me profoundly. I was hoping to visit with him once again next month. Alas, that was not to be. You can read my feeble attempt here, and you can read the latest blog I received from Johnnie here. If you aren’t aware of who Russ was just Google his name and you’ll find plenty out there to inform you.

I raise this issue for several reasons. One is my feeling that, much like so many great people, the full impact of Russ’s influence will only be felt now that he is gone. Whle he was alive he was the spokesperson for his thoughts; nobody could convey what he had to say as well as he could and few tried. Absent his presence it now falls to those of us who stood at his feet to now stand upon his shoulders and try our best to carry on his work. Make no mistake about it, Russ was an important figure in contemporary thought. Not merely in business, but also in education and life in general. No less than Peter Drucker held Russ’s work in high esteem. Drucker once wrote a letter to Russell, which he proudly displayed on the wall of his office. In it, Peter had this to say:

“I was then, as you may recall, one of the early ones who applied Operations Research and the new methods of Quantitative Analysis to specific BUSINESS PROBLEMS — rather than, as they had been originally developed for, to military or scientific problems. I had led teams applying the new methodology in two of the world’s largest companies — GE and AT&T. We had successfully solved several major production and technical problems for these companies — and my clients were highly satisfied. But I was not–we had solved TECHNICAL problems but our work had no impact on the organizations and on their mindsets. On the contrary: we had all but convinced the managements of these two big companies that QUANTITATIVE MANIPULATION was a substitute for THINKING. And then your work and your example showed us–or at least, it showed me–that the QUANTITATIVE ANALYSIS comes AFTER the THINKING — it validates the thinking; it shows up intellectual sloppiness and uncritical reliance on precedent, on untested assumptions and on the seemingly “obvious.” But it does not substitute for hard, rigorous, intellectually challenging THINKING. It demands it, though — but does not replace it. This is, of course, what YOU mean BY system. And your work in those far-away days thus saved me — as it saved countless others — from either descending into mindless “model building” — the disease that all but destroyed so many of the Business Schools in the last decades — or from sloppiness parading as ‘insight.’” (I took this from a comment by Steve Brant – a friend – to Michael Trick’s Operations Research Blog. I have personally read the letter as well, in Russ’s office earlier this year)

Another reason I wish to point to Russ’s work is my belief it can – and should – play a significant role in our understanding the implications of Enterprise 2.0. As Andy points out so saliently in his book, and as I would hope most of us have already come to realize, our work is not merely to theorize about the efficacy and implications of adopting E2.0 principles, but rather to apply them to the conduct of our respective organizations such that they improve their day-to-day operations and assist them in achieving their strategic goals. I think that can best be done by also understanding the systemic nature of the organizations within which we operate, and Russ had unique understanding and insight into how this was so.

The intent I had for my personal blog, which I link to above, was to work on reconciling Systems Theory – as taught by Russ and others – to the philosophy of Dialectical Materialism; perhaps a bridge too far given the demands on my time and energy. I do, however, wish to continue understanding how the principles of E2.0 (here’s a great overview Dion linked to in Twitter) can be best understood from the viewpoint of Systems Theory. To that end I will continue attempting to reconcile what Russ had to teach us with the work we are all engaged in with respect to this council. It is my hope many of you will asssist in this endeavor. I believe it is extremely important to our success. Actually, I believe it is a valuable component of the continuing development of human thought and organization – economically, politically, and socially. I welcome your comments.

Respectfully,

Rick

Well. Southern New Mexico is a completely different animal than Northern New Mexico. If I really had to pick animals,  I think I would say Northern New Mexico is a strange and beautiful ibex-y mountain goat with crazily shaped horns and colors that is majestic but friendly, whereas Southern New Mexico is a kind of rattlesnake with beautiful scaly patterns that is polite and keeps its respectful distance but will bite the shit out of you if you step on it. Also, the ibex is tolerant and pretty progressive, and the rattlesnake is quite conservative and into family values. It seems that Nothern New Mexico is kind of a destination for folks with crazy selves and spirits that want land that matches, whereas in Southern New Mexico people were born there or end up there by accident and just kind of never leave.

The land in Southern New Mexico is also beautiful but in a slightly different way. It’s all flat and vast and wild and rugged. It really speaks to Anne. I find it gorgeous but it doesn’t move me in a similar way. I think it so resonates with Anne cause it’s not that different from Kenya. There’s something about the nature that you were around as a pre-adolescent/adolescent– when you were all about having intensely conscious relationships with things –that remains extremely evocative. In the morning we went on a hike at Rockhound Park before her interview. Here’s pictures:

This is the type of road on which Anne would like to live

here's another cactus

Anne was interviewed by the administrative director of the clinic and the regional director, who was a real rancher whose family had been ranching the land for five generations. Anne was so into that. He was really nice, unassuming, quiet, and watchful – exactly what you would expect a real-live cowboy to be. I went with for a tour of Deming and a trip to the high school and the jail, because Anne would be working at those sites as well through the clinic. The school would only let the healthcare provider provide healthcare if they didn’t talk about  or provide birth control. There was no sex education allowed in the school system.  There is a disproportionately high rate of teen suicides. I can only imagine how awful it must be for queer/progressive young people.

the clinic (and our shadows)

A large portion of the people being held in the jail are people who were picked up illegally and are awaiting deportation. A large part of Deming’s economy comes from a Homeland Security Border Patrol training facility.

Also, Christian bookstores seem to have some kind of monopoly on the ability to distribute caffeine. We couldn’t find one open cafe that was not designated as a Christian coffee shop.

Probably needless to say, I felt pretty alienated, culturally, though I admit that I’m especially sensitive and without skin right now because of all the transition we’re going through.  The administrator of the clinic was really kind and helpful, but she introduced me to everyone as Anne’s “friend” despite the fact that Anne referred to me as her partner in person, in an email and in a voicemail. Every time she said “friend” I felt slapped in the face with disapproval. She also wouldn’t use the words “gay” or “lesbian” even when we asked her point blank about what it would be like for us to live here. She said “there are others” and “I worked with people who….I never saw anyone be unkind to them.” It’s very possible– in fact, after spending more time with her the next day, I think it’s likely–that her discomfort and refusal to use those words came from a lack of familiarity and a fear of saying something offensive rather than a total disgust for all things queer, but at any rate I was picking up on and getting upset by something – maybe just a general feeling — in the community that made me feel really not at home and potentially very not accepted and really uncomfortable.

That night Anne and I talked about how we both felt really drawn to the idea of moving here to be an alternative to the dominant culture for people who are struggling and not fitting into that value system or whose struggles are neglected by it. I feel needed here in a way that I am not, to such an extreme degree, in New York. . But I can’t do it without a community to support me, as much as I would want to. I felt a little bad about myself last night, and wished I were stronger and less sensitive.

The next day, the woman who probably inadvertently hurt my feelings with what may not have been her homophobia arranged for me to meet someone at the community mental health clinic that serves the area. It just so happened that the CEO and the HR director were coming down from the headquarters in Silver City and I suddenly had an interview. The clinic seemed a lot like the one I worked at for my second year internship, but with significantly more services and significantly less ego. I liked it. They very much wanted me to come on board, and they also wanted to take Anne and have her be a psychiatric PA. The interview pretty much consisted of asking me what salary I require. It seemed like it might be a good place to work and it would actually count toward my clinical license, but it would involve living in Deming. But after more time with more people I felt less extremely put off and was able to see much more nuance. So now I’m confused. This experience makes more acute the struggle going on between my adventurous, challenge-loving self and my comfort/familiarity/acceptance-needing self-caring self. Probably we’ll have to find more of a compromise than Deming is.

The CEO lady told us that she thought we would probably feel more comfortable in Silver City (they also have a clinic there), which is an hour up into the mountains. We had already decided to spend the weekend there, and we arrived tonight. It has even less people than Deming – like, 2/3 less – but it has some high-falutin conceits. There’s art galleries and co-ops and coffee shops galore. It actually reminds us both a lot of Asheville (I even saw a few overly generous beards), but a version of Asheville that hadn’t yet exploded with popularity and population.  But I had a very different reaction to it than I did to Asheville. I was so excited to see coffee shops with transgender magazines in them and food co-ops and a restaurant that had fancy dishes and an Israeli name and dreidl spinning during Channukah. It’s amazing what a little perspective (deprivation?) will do.

This post is actually really hard to write because I feel confused about what I think of my experience in Deming and overwhelmed with experiences and reactions, but I’ll write more as I have more sorted out – no new places this weekend. Just relaxing and exploring and letting things settle.

I had a recent discussion with a client about  the financial uncertainty they are facing during these tough economic times.   Sales are down nearly 30%, and they have had to scale back employee work hours.   They are concerned about letting talent go because of a very justified fear that they may not be able to get that talent back when the market picks up.  

This is a dilemma faced by an increasingly large number of employers who recognize the peril of terminating talent.  With unemployment officially at 10% and realistically closer to 18% when you factor in the under employed and those just not looking for work, it does appear that many employers believe that there is no alternative.  

The reality is that virtually all organizations can increase their bottom line by decreasing staff.   Be it the bloated federal government that many estimate to be 30% overstaffed to the small mom and pop that needs nine employees instead of ten, opportunities to shed heads abound.   But is it the right thing to do?

The one certainty for all organizations is that they have two ways to increase their profitability; increase sales or decrease costs.   During times of economic malaise it is unlikely that sales are going anywhere so the focus must be on reducing costs.  

There are a number of ways that companies can do precisely that, but more often than not management is wary of things that appear to be too good to be true.   A great example is a company called Total Energy Concepts that uses the concept of power factor correction to reduce electric bills by a guaranteed 15% with no new money required from customers.   By reducing the utility bill, a portion of the savings pays for the system installation while the company gets the difference as new found money on their bottom line.   Learn more about this awesome way to save money and go green at www.energy-pure.com.

As I was sharing with my client, opportunities like this abound.   The key to finding this money is to think outside the box, which often means doing more than reducing staff.  Don’t get me wrong;  poorly performing or complacent staff should always be reduced during good times and bad.   But that is a topic for a different day.  

Look around your organization and see where organizational optimization can occur.   Some of it will be staffing, but more often than not it is something, such as your electric bill, that is right in front of you.   Leverage your business to business relationships with experts in workflow optimization and learn how you too can be on the path to finding millions. 

Chris Tidball is the Vice President of Business Development for Sequoia Financial Services of Glendale, CA.   He is a former executive for multiple Fortune 100 corporations and is the author of Kicked to the Curb : 20 Essential Rules For Coming Out On Top When Your World Has Been Turned Upside Down.   He can be reached at (904) 742-9031 or via email at chris@christidball.com

Keen to Be Lean | CFO Magazine | Josh Hyatt, Contributing Editor

Most articles on lean in the mainstream press don’t portray lean fairly or adequately.  Many times it is innocent ignorance on the part of the journalist.  The lean paradigm is a broad, complex, yet subtle to the uninitiated.  Most journalists are too ignorant of the paradigm to adequately convey it to a broad audience.  Some just do lazy work and miss-portray lean as cost cutting method that relies on squeezing more out of fewer people.  The article linked above isn’t one of those.  Hyatt does a decent job bringing lean news to his audience.

I recommend that you read the article.  It is only three pages and fairly dense.  At least two of the people that he quotes are widely accepted lean experts: lean executive educator, Bob Emiliani, and Lean Enterprise Institute Sr. Fellow for Health Care, Mark Graban (who blogs here.)

Hyatt brings up a couple particularly relevant points: hospitals have no choice but to cut costs, lean isn’t about headcount reduction, lean can help you avoid capital expenditure, and you don’t need to turn every improvement effort into MSc in Accounting thesis by turning everything into dollars – just know what good is and do that.

Everybody knows that health care gets more expensive every year.  Even those of us blessed with decent employer provided plans feel the increase in higher deductibles and monthly payments every year.  In the article Hyatt brings tells us that recent agreements between hospitals and the Administration will knock $155 billion off government payments to hospitals over the decade.  From the article:

In July, as part of an agreement with the Administration to help pay for reform, hospitals agreed to forgo $155 billion in government reimbursements over the next decade. That translates into $2.7 million of annual cuts for each of the country’s 5,700 hospitals.

That’s a lot of headwind to overcome and doesn’t include ‘health care inflation.’

Hyatt portends how health care organizations might begin covering this headwind, by reducing waste NOT reducing heads.  From the article:

Guided by spreadsheets and benchmarks, a conventional cost-cutting exercise will simply look for expenses that can be eliminated, such as employees. But that approach can still leave waste in the system — hampering the productivity of a smaller workforce that must, if anything, become more productive.A lean hospital would take a more holistic view, hoping to boost revenue and improve service by, for example, developing standardized methods that allow operating rooms to be changed over more quickly. A hospital that can disinfect and restock in half the time can increase the number of procedures it performs and reduce wait times.

It’s not often in that you hear a journalist that is not part of the ‘lean genre’ relate that lean ISN’T about leaning out the staff.  He makes a great point in that reducing people is reducing an EXPENSE not reducing a WASTE.  Only the people can improve their work over the long term.  They are needed if the organization is to become more productive – they are intellectual capital.  In the second paragraph Hyatt shatters a familiar paradox, you can’t have it more AND better.  Basically he correctly recapitulates what Deming, Juran, and Crosby among others have told us for along time – higher quality means more efficiency and more effectiveness.  More and Better are really just two forms of the same quantity.

One of the often under-reported benefits lean (even in the lean literature and in the lean blogosphere) is the advantage of reduced capital burden that lean will deliver.  Thirty second MBA – if you can deliver more services or products without spending more on capital then the only increases in cost are your direct costs – you get a big chunk of revenue while only increasing a portion of your costs.  This leaves you with what finance people like to call decreased operating leverage (here too).  Basically if you can can run your business without having to spend a lot on capital and keep your costs variable you can make money in both up and down markets. This has been a big boost to Toyota relative to other automakers in recent decades – make more with relatively less capital employed.  It is sometimes called moonshining because moonshiners make perfectly good whiskey with virtually no capital burden.  The article talks about a hospital that avoided $80 million in brick and mortar work by reducing some waiting waste:

If there are too many patients waiting on beds in the hallway, for example, maybe the answer is to build a bigger ER. But wait: Is the ER really maxing out its capacity? If not, then the answer may lurk further down the value chain. Maybe patients can’t get into rooms because an inefficient discharge process creates a bottleneck. That’s exactly what happened at one hospital, which mulled an $80 million expansion to its maternity ward but then found that once a nurse was dedicated to the discharge process, the existing facility could keep up with demand.

The article brings out another point that the non-lean literate world needs to understand.  Not everything has to be translated into dollars and cents to be a validated as a worthwhile improvement.  As entrepreneurs and process experts we should know what “good” is.  If we spend time in the gemba and with the customer we certainly will.  From the article:

They measure success based on metrics, but not necessarily financial ones. Some are quality measurements, such as the reduction of certain kinds of infections. Others are based on improving time performance, a big issue in health care. ThedaCare, for instance, wanted to reduce the time from “door-to-balloon” — the minutes between a patient’s arrival at the ER with chest pains and catheterization. “The faster the blockage gets cleared, the less damage gets done to the heart,” says Graban of the Lean Enterprise Institute. Or, as the hospital likes to put it: “Time is muscle.”

Reengineering the process has brought it down from 91 minutes to just 37 minutes. Not coincidentally, the average post-cardiac-surgery length of stay has dropped as well — from 6.2 days to 4.8 days, a 25% reduction.

Heart muscle is priceless.  Go ahead and try to put a dollar sign it.  Your number would mean nothing.

Pretty good article from a source outside the lean genre.  What do you think?  Did Hyatt do a pretty good job of accurately communicating the lean paradigm?  Did you find anything particularly poignant?

Bruce

A estas alturas del curso ya sabéis que me gustán mucho las líneas de tiempo. Una grave carencia de manuales de Economía de la Empresa de bachillerato es que desarrollan desordenadamente conceptos y escuelas, y  al final os crea un batiburrillo en la cabeza.

Teoría: enfoques de gestión

No podemos entender la aportación de Elton Mayo si antes no valoramos lo que hicieron Taylor y Ford. Ni tampoco la obsesión de Ouchi por conocer los secretos de la industria japonesa sin maravillarnos antes del descubrimiento que les transmitió  Deming.

Parece evidente, pero este es el mayor agujero negro de los libros de texto.

La mayor parte de ellos hablan de la dirección por objetivos de Drucker (1950) como si la hubieran descubierto y aplicado hace dos días…

Normalmente las editoriales son muy conservadoras. Se copian la misma estructura unas a otras, y más ahora, en el que el sector editorial está sufriendo la mayor crisis de su historia,  los despidos son masivos y los directivos buscan más pasar desapercibidos y conservar su puesto,  que innovar y crear los libros de calidad que la nueva sociedad del conocimiento demanda.

En Economía de 1º,  Mc-Graw Hill se atrevió con el Penalonga a innovar, y logró el libro de más exito del mercado. Lamentablemente no ha salido un Penalonga de 2º de Bachillerato.

Para la línea de tiempo,  he intentado elegir a los grandes entre los grandes. Sólo me he permitido una pequeña licencia con el último nombre: Pilar Jericó.

Con sus libros (“Gestión del Talento: Del profesional con talento al talento organizativo”, “La nueva Gestión del Talento: construyendo compromiso”  y  “NoMiedo en la empresa y en la vida” ), se ha convertido en una auténtica referencia a la hora de abarcar este nuevo horizonte de la administración de empresas que es el talento.

De sus libros me encantan su elección de citas y sus didácticos esquemas.

In  a Q&A in Harvard Business School’s Working Knowledge, Harvard Business Professor William George, author of 7 Lessons for Leading in Crisis, talks about seven leadership lessons for weathering crisis.  It’s a good read.  One of the lessons is, “Face reality, starting with yourself.”

Lean thinkers will recognize this as hansei or self-reflection.  Professor George argues that leaders have to be humble enough to admit weaknesses and flaws that they see. Too often lack of introspection and an abundance of hubris (defined by classicist J. Rufus Fears as “the outrageous arrogance that inflicts suffering upon the innocent”) keep people from effectively leading people and organizations.  The willingness to look critically at yourself and the humility deal with that reality is something that contributes to  effective lean leaders.

Professor George says this about the paradox between our cultural expectation of a leader and what is required of a leader(from the Q&A):

One of the great myths of leadership in recent years is that leaders have to appear strong and invulnerable to mistakes and pressures. All of us without exception make mistakes and will capitulate under enough pressure. The key is being open with others, taking them into your confidence, admitting your mistakes, and looking to them for advice and support. Rarely does anyone turn down a leader who genuinely asks for help.

Mr. George continues in the same Q&A talking about how ‘authentic leaders’ can begin resolving the paradox:

Authentic leaders find ways to resolve this struggle. Expressing humility is a great skill because it not only brings leaders closer to their management teams and employees, but also encourages similar candidness and humility in others. By taking the first step in revealing their vulnerabilities, leaders encourage an atmosphere where concerns and doubts are voiced…. It’s difficult to do, but expressing vulnerabilities appropriately will make leaders more effective.

This willingness to increase self-knowledge and then be humble before people and problems is part of what Deming intended in the seventh of his fourteen points, “adopt and institute leadership.”  By sharing your vulnerabilities with and seeking counsel from those around you (even those who report to you or those who rely on your technical leadership) breeds an atmosphere of trust which goes to the essence of Deming’s eight point, “drive out fear and build trust.”

This willingness to reflect honestly on the current situation and the humility to accept responsibility allows leaders to see the situation with clarity.  Prof. George from the Q&A:

Because their jobs compel them to demand a great deal from their employees, their companies, and their products, most demand the same from themselves. In so doing, they are at risk of letting their egos take over and letting their protective shells harden. When things go wrong—which they inevitably do—they assume the fault lies elsewhere. Yet in most cases the leaders bear a high degree of responsibility for the problems, often as a result of the direct or indirect pressures they put on their people.

In the 1970’s and 1980’s while losing market share at alarming rates American auto executives claimed that the Japanese makers paid too little, made too few models, the American worker is lazy.  They lacked the humility to acknowledge that their management practices were behind their decline.  The Japanese auto work made 106% what his American counterpart made, that the Japanese automaker made on average 15% more models, and their own management practices kept the American auto worker busy doing wasteful things.  They were doomed by their arrogance to fail.

Toyota President, Akio Toyoda, recently apologized for his company’s poor financial performance and for the loss of lives due to safety problems related to a recent recall.  He acknowledged that Toyota is at stage four (grasping for salvation) of the five stages of declined that Jim Collins outlined in his book, How the Mighty Fall (really good article and podcast from BusinessWeek here.)

Taking time to reflect, and being humble enough to ask for help, acknowledge responsibility, and communicating your vulnerabilities helps acheive clarity and keeps your model of the situation and yourself current. We all have some reasons to be humble.  We just need to remind ourselves of them.

Anybody have ‘bad boss’ stories that they want to tell (or any ‘good humble and introspective boss’ stories before I am accused of being Mr. Negative.)  This blog accepts anonymous comments so your boss won’t find it on a Google search.

Bruce

During my working life, I’ve heard this word a lot – always struggled to understand what it means to me and the organisations I worked for.

Now that I am running my own project management company (MJP Project Management Consultants Ltd), looking to offer project management services to small, medium and large organisations, I am much more interested. I am also working through a MSc in Operations & Supply Chain Management – which covers TQM and quality management extensively, so I believe I have gained a very good understanding of quality.

So the original question was – quality  – what is it?

If we look at the Oxford English Dictionary, it talks about a degree of business excellence. I would be worried that this focuses to much on the supplier and not on the customer. In today’s global economy with markets and competition across the globe, it is important that organisations focus on the customer and their needs. So for me a better definition of quality would be “to meet the customer expectations and needs“.

Of course for different customers, quality would mean different things to them … look at flying – a business class passenger would expect a flat bed, top notch service, as well as reliability and safety – but an economy passenger would want a cheap ticket, comfortable seat, as well as reliability and safety – different customers, with different ideas of quality and requirements.

So – how does this affect your organisation?

It is important that you understand your customer and market you sit in. If you can exceed your customer needs on a regular basis, then the chances are you will built up customer loyalty and be seen as excellent business performing organisation. Take John Lewis in the UK – they have built an excellent reputation for customer service, which in turn has created a loyal bunch of customers. If we look at low budget airlines, their order winner is price, so for them quality is all about achieving cost savings, so they can offer the lowest prices – so no free luggage, credit card fees, etc – but their model seems to work – just look at EasyJet & RyanAir.

Finally I would say that quality is very important to an organisation and should be at the forefront of an organisation’s strategic objectives. Deming stated that “quality starts in the boardroom” and I do not disagree – senior management need to drive any quality improvement plan.

Do provide feedback – this is my first company blog … I will be doing more on a range of topics.

Mark

Unter der Rubrik Klartext / Forum schreibt Dr. phil. Guido Wolf,  M.A., dass William Edwards Deming ursprünglich einen PDSA-Zyklus zur Entwicklung von Produkten und nicht zur Verbesserung von Prozessen erarbeitet hat:

• Plan a change or a test, aimed at improvement
• Do - Carry out the change or the test (preferably on a small scale)
• Study the results. What did we learn? What went wrong?
• Act – Adopt the change, or abandon it, or run through the cycle again

Diesen Zyklus benannte er nach seinem Lehrer Walter A. Shewhart Shewhart-Cycle.

In der Folge haben japanische Manager den PDCA-Zyklus daraus entwickelt. Wobei v.a. das Act nicht mehr so recht passt: positive Ergebnisse beim Check machen einen erneuten Durchlauf unnötig und v.a. fehlt durch das Check (statt dem ursprünglichen Study) das Lernen  wie es bei Deming noch Teil des Study war.

Der Autor schlägt daher den PDSL-Zyklus vor, der statt dem Act ein Learn vorsieht:

• Plan – die Veränderung an Produkt, Prozess, Struktur etc. sorgfältig planen
• Do - die Veränderung wie geplant durchführen
• Check – die Veränderung durch Messungen, Tests, Audits etc. prüfen
• Learn -die Prüfergebnisse auswerten die Erkenntnisse ableiten.

Soweit zu dem Artikel in Kurzform.

Im Quality Improvement Paradigm (kurz QIP), das von Victor Basili entwickelt wurde,  ist dieser Mangel schon lange behoben. Lernen ist hier Teil von Erfahrung aufbereiten, zudem ist hier vor allem das Lernen in der Organisation durch eine Experience Factory (Erfahrungsdatenbank) sytematisiert . Dieser Zyklus ist deutlich praxisnäher, weil er u.a.

• die Standortbestimmung als eigenen Schritt sieht,
• in der Planung die Bestimmung der Ziele betont – siehe dazu  Goal-Question-Metric (GQM) und
• einen zusätzlichen Mini-Zyklus in der Pilotierung enthält.

QIP bestimmt das Handeln in allen Projekten, die die Mitarbeiterinnen und Mitarbeiter von Maud Schlich IT-PROJECT-SERVICE durchführen.

Beispiel für QIP im Kleinen:

• Standort bestimmen – Auswertung einer Metrik, z.B. “Fehlerrate im Abnahmetest liegt aktuell bei 35 Fehlern der Kategorie A”
• Ziele definieren – “Absenkung der Fehlerrate im Abnahmetest auf maximal 5 Fehler der Kategorie A durch Verbesserung des Systemtests”
• Prozesse, Methoden, Techniken auswählen – Schulung der Sytemtester zum Certified Tester Foundation Level, Schulung der Testmanagerin zum Certified Tester Advanced Level Test Analyst und Testmanager, Einführung von systematischen Testfallentwurfstechniken mit Hife von Coaching der Testmanagerin durch einen fachlichen Coach
• Pilotieren – Anwendung der neuen Testfallentwurfstechniken im Pilotprojekt (in mehreren Iterationsschritten)
• Ergebnisse analysieren – Prüfung, welche Testfallentwurfstechnik welche Fehler aufdeckt mit welchen Raten und in welchen Teststufen
• Erfahrungen aufbereiten – Dokumentation der Lessons Learned aus dem Piloten und Überarbeitung der Testpolitik / Qualitätspolitik

Beispiel für QIP im Großen:

• Standort bestimmen – Durch eine vollständiges Assessment
• Ziele definieren – Planung des Verbesserungsprojektes
• Prozesse, Methoden, Techniken auswählen – entsprechend der Planung des Verbesserungsprojektes
• Pilotieren – Anwendung jeweils einzelner Prozessverbesserungen in Piloten
• Ergebnisse analysieren – Prüfung der Wirksamkeit der Verbesserungen und der Eignung für alle Projektarten
• Erfahrungen aufbereiten – Umsetzung der Lessons Learned in der Prozessmodellierung und Nutzbarmachen der Erfahrungen bzgl. Durchführung von Verbesserungsprojekten für die nächsten Schritte

QIP ist also für kleine und große Vorhaben gleichermaßen gut geeignet. Auch für sehr kleine Vorhaben lässt sich QIP bestens anwenden – dann können die ersten drei Schritte evtl. auch nur in wenigen Stichpunkten beschrieben sein oder auch nur im Kopf durchgeführt werden (bei Ein-Personen-Vorhaben).

Probieren Sie es doch einmal aus und schreiben Sie einen Kommentar zu Ihren Erfahrungen.

One of the greatest challenges facing all types of industries in today’s tough economy is how to turn a profit.   The main driver of any bottom line is related to people, processes and technology and surprisingly success can be derived from all three, even today.   By effectively leveraging these, companies can either make a profit by cutting costs or gaining market share, or ideally achieving their ultimate success through a combination of both. 

In a typical private sector business, headcount takes as much as 60% of the annual operating budget.   Trimming headcount to 55%, or even 50%, can have a dramatic savings on the bottom line.   However, companies have to be wary of such undertakings if they aren’t properly structured for the additional burden that will be placed on the remaining workforce.  

When embarking on such a restructuring endeavor it is imperative that a carefully thought out plan has been devised, using both internal resources as well as implementing B2B relationships with reliable business partners.   In addition, looking carefully at, and mapping out, the end to end workflow of your existing business model for organizational gaps can provide keen insight into where these cuts should occur. 

By examining existing processes, many companies can harness their strengths by looking back at the core competencies that made them great.    For instance, an insurer may have gained large chunks of market share due to outstanding customer service or an unparalleled competency in their core claims or underwriting  processes.

As is the case with many industries, at some point in time, companies often bite off more than they can could chew.   It became almost assumed that if they could do one thing right, then they could do all things right.  In the end, not only did the overall processes contribute to the demise of the bottom line, but the core competency that made the company great was sacrificed as well. 

This vicious cycle is ubiquitous throughout businesses in America, with no sector being left untouched.   It is a predictable outcome that comes when a paradigm becomes one of invincibility.   The good news is that this can be fixed with relatively minor organizational adjustments.

As the bottom line suffers, management often looks to the people to provide instant relief.  By cutting a certain percent of staff, there is an instant perceived benefit; but is there?  Possibly, depending upon the caliber of the terminated employees and the implementation of new processes and systems designed to improve efficiencies.  

Many companies make the mistake of using specific criteria when determining which employees will be part of a reduction in force, with one of the main considerations often being tenure.   While tenure can be a consideration, don’t minimize the reality that with tenure can come complacency and retention based solely upon this criteria can do more harm than good, offsetting an gains made on paper.  Rather, the focus should be on quality.   Keep the most qualified employees; those with the highest productivity who achieve the greatest results.  

Next, focus on parts of the process that have been bolted on over years.  These are likely outside of the core competency and provide the greatest opportunity for savings.   An example would be an insurance carrier that excels in claims investigation.   Bolt ons may include the first notice of loss, where a party other than the adjuster, gets information about the claim and parties involved.   Subrogation, salvage, SIU and legal services provide yet more examples of bolt on processes that likely don’t involve the handling adjuster.   Each of these processes takes a certain level of specialization, yet they often fall out of the scope of a company’s expertise.  

Over the years, many companies have incorporated these processes in house under the premise that they are saving money.  This may be a true statement, but with these savings comes a sacrifice on quality, results and ultimately the bottom line resulting in millions of dollars in money being left on the table annually. 

Using subrogation as an example, let’s assume that it costs a company 15% to keep this process in house.  For every $100 dollars brought back in by the subrogation department, $15 dollars was paid out in the form of salaries, benefits and other overhead.   What if a company with expertise and resources far beyond a typical carrier could bring in $200 dollars for every $100 that the insurer was currently realizing?   Sounds good, but with quality comes a premium.   Perhaps that expert is charging 25% instead of the 15% that the carrier currently pays.   The key here is the net back, in this case a full 2.5% increase to the bottom line by outsourcing the process.  

In a real life situation involving a large utility, the company had been insourcing their collections at an annual cost of 15% with a return of 10% meaning that for every $100 in past due receivables, they were getting a 6% recovery.      They decided to outsource and put the process out for bid.   They selected three vendors, all charging 25%.   Three years into the project they are recouping 8%, which may not justify the outsourcing costs until the rest of the story is revealed.   Two of the vendors are bringing in a mere 4%, while the third vendor is bringing in 20%.   Fortunately this utility implemented a very transparent process that enabled them to find the organizational gaps amongst their business partners.   By adhering to a model of continuous process improvement, they now can add even more money to their bottom line as the vendor producing results conducts a second look on the cases that were closed with minimal collections. 

By focusing on the bottom line and looking for organizational gaps, companies can inevitably find ways to increase their bottom line.  By partnering with competent experts, companies can have a truly profound impact that will stun board members and shareholders alike.   The focus on quality must never be forsaken in the chase for organizational excellence, the pinnacle of what defines truly great companies. 

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 Chris Tidball is the Vice President of Business Development for Sequoia Financial Services, providing consulting services and workflow optimization to the financial and insurance industries.   He is a former subrogation and claims executive for a large, multinational insurer and is certified in Six Sigma methodology.   He is the author of the newly released book Kicked to the Curb: 20 Essential Rules for Coming Out On Top When Your World Has Been Turned Upside Down and is a frequent speaker at industry events and trade shows who can be reached at (904) 742-9031 or via email at chris.tidball@sequoiafinancial.com