US – China Balance of Trade – 1997 to 2004 (July and counting)
Here are 7 sins that leadership often commits: aimlessness, management by results, carrot and stick people management, fuzzy systems management, divided responsibility, worker training worker, and steady state thinking.
Below are Three Sigma’s sins. (Click here to see one version of Deming’s Seven Deadly Diseases of Management.)
Aimlessness
An enterprise’s success begins and ends with leadership. If leadership fails to establish and communicate the enterprise’s aims and the methods by which those aims will be realized, everyone in the organization becomes mired in aimless activity. Most energies soon become devoted to reactive fire fighting and crisis management. Departments become focused on parochial matters. Managers become focused on individual performances. There is much activity, but the needs fulfilled and the problems solved have little or no bearing on the organization’s overall success. Worse yet, people’s best efforts cancel each other out, causing the organization to spiral downward toward chaos.
For leadership to take aim it must have knowledge of customer requirements and system capabilities. Using this knowledge, leadership must take calculated risks based in an ability to predict future demand for its products and services. Leadership must then communicate aims and allocate resources to the methods by which workers can act within the system to realize those aims.
Management by Results
Management by results focuses on end point data; revenues, sales, quotas, goals, and objectives. As a consequence, knowledge about the system and its component processes is not available. The system of production and service cannot be improved on the basis of end point data. Without such knowledge, the best efforts of individuals are tantamount to tampering; which is at best ineffective and more often, detrimental in its effects.
The alternative to management by results is to gather time-based data about processes and then apply appropriate statistical techniques to interpret the meaning of that data. Over the long run such measurement produces real knowledge about what the system and its component processes actually do. Leadership can then assist everyone in the organization to improve continuously.
Carrot and Stick People Management
At least eighty percent of the opportunity for improvement lies in the system by which products are produced and services are delivered. Most workers, including those with the job of leadership, put forth their best efforts and achieve results insofar as the system and its component processes allow. No matter what the index used, positive and negative incentives and pay differentials between workers in like jobs does nothing to improve performance. Performance evaluations and rank ordering of employees on any set of criteria destroy teamwork, pit department against department, and worker against worker. Carrot and stick people management encourages tampering and dishonesty; both of which prevent leadership from acquiring the knowledge of the system and its component processes needed to continuously improve the system.
Fuzzy Systems Management
The system and its component processes are the means by which the organization realizes its aims. In any organization, these consist of shared understandings about what is to be done, and how it is to be done. If these shared understandings are fuzzy, the processes in which people participate cannot be communicated, stabilized, and controlled, and therefore remain unpredictable.
The first step in establishing stable, controllable, and predictable processes, is the creation of a set of top-down documents by which everyone can see and understand the system by which products are created and services are delivered. These documents must be designed in such a way so that they can actually be used by members of the organization to keep the processes making up the system predictable. The system and its component processes cannot be improved unless they are predictable.
Divided Responsibility
At an operational level the procedure is a method by which a person conducts a process. Divided responsibility occurs when it is unclear who owns a process procedure. It is the surest way to ensure that a necessary action will either not be completed or will not be performed in a predictable fashion. Nobody can win when the responsibility for a procedure is divided. In addition, the procedure can not be continuously improved.
Every important process in a system must be designed at the procedural level and ownership must be assigned. Once ownership is assigned, the owner must be provided with the means and methods for running and assessing the procedure in order to determine if the process procedure and its products conform to the organization’s designs and its predicted outcomes. Only a predictable process can be improved.
Worker Training Worker
No matter what the entry skills of workers and managers hired into an organization are, the process of learning goes on as they are integrated into the system by which products are produced and services are delivered. If a systematic and controlled training process is not used, workers will learn by happenstance and it’s “. . . off to the Milky Way” (Dr. W. E. Deming). What’s more, there is no such thing as unlearning–”You only get one chance to do it right” (Dr. W. E. Deming.)
The people making up an organization are its greatest asset and potentially its greatest liability. Everyone in the organization must participate in an ongoing, coherent, and controlled, top-down educational process by which they learn the enterprise’s aims; the system by which products are produced and services are delivered, and the methods used in the processes in which they participate.
Steady State Thinking
When an enterprise is run exclusively in terms of specifications, requirements, and end-point data. it commits a fundamental error of steady state thinking. Steady state thinking short circuits continuous improvement. While the data shows that some things are “good enough”, the organization fails improve constantly and forever. Leadership falls into an administrative frame of mind in which the primary activity is to keep things up to standard; to keep things as they are. Typically, there is a reliance on inspection as the primary method of controlling for quality. As a consequence of steady state thinking, the enterprise stagnates, ceases to create useful new knowledge, and looses its competitive edge. The organization becomes stuck and the world marches on.
Variation is a normal component of all processes and the objective of leadership must be to recognize variation that is characteristic of the system and that which is due to special causes. Energies invested in eradicating sporadic instances of special variation produce few long term gains. The objective of continuous improvement must be to continuously work to reduce common sources of variation; that is to say variability which is inherent in the processes making up the system. The reduction of variation increases system predictability which, in turn, allows leadership to extend its reach.
