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How Much Quality Training Do You Need? July 18, 2016

Posted by Tim Rodgers in Management & leadership, Operations, Quality.
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OK, not everyone needs to be a Six Sigma Black Belt, but what elements of quality training should be provided to everyone in the organization?

When I worked at Hewlett-Packard in the early 1990s, senior leadership in our business unit attended a week-long series of six sigma classes at Xerox. When these HP folks returned they were provided with training materials and required to teach their direct reports about six sigma, and those direct reports were required to teach their direct reports, and so on all the way down the organization to people like me.

At the time, quality was not really part of my official responsibilities. I worked at a desk, creating product marketing programs for an internal supplier. The six sigma training was interesting to me, but I didn’t see the relevance to my daily work. What I remember most about those classes was how we were supposed to organize routine meetings, including assigning roles during the meeting and being clear about the objectives for the meeting. I don’t remember anything that seemed directly applicable to the quality of our output as a business unit, or the quality of the work artifacts that we produced as part of our daily responsibilities. It just didn’t seem relevant.

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What’s the Value of ISO 9001? January 25, 2016

Posted by Tim Rodgers in Quality, strategy.
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Earlier tonight I called in to listen to a presentation given at my local American Society of Quality (ASQ) chapter meeting about some of the changes in the ISO 9001 specification in the new 2015 version. I thought the speaker did a great job. He’s a consultant who makes his living helping companies become ISO 9001 certified and preparing for audits. He highlighted the differences in the new version of ISO 9001, and provided some useful tips about how to prepare for the updated requirements.

I don’t think he intended to do this, but he also made me question the purpose of ISO 9001 certification, and specifically whether it’s worth the time and money and effort.

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Competitive Advantage and Quality June 11, 2014

Posted by Tim Rodgers in Quality, strategy.
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I learned a lot when I got my MBA, and it was well-worth the time and money spent, but when I think about it now there are only a few concepts and themes that have really stuck with me. One is Michael Porter’s writings about the two primary sources of competitive advantage: cost and technology.

If you compete on cost, you’re supposed to be constantly looking for ways to reduce your internal expenses and cost of sales, eliminating waste, and improving productivity and throughput so you can offer customers a market-leading price for your product or service. If you compete on technology, you’re supposed to be constantly innovating, identifying un-met or un-expressed customer needs, and developing and delivering market-leading solutions that meet those needs before your competitors do, which usually allows you to command a price premium. Some companies try to do both at the same time, applying their cost management efforts on operations and market fulfillment, however companies that fail to focus their strategies will fail to compete.

This is pretty simple view of competitive advantage, which is probably part of the reason why it’s so well-known and memorable, but it makes intuitive sense, at least to me. I see examples everywhere. Some retailers and consumer electronics companies aggressively drive out cost in order to be able to offer low prices (Walmart); others use technology to create an experience that encourages customers to pay more (Starbucks, Apple). I believe that Walmart and Apple are equally innovative, the difference is what advantage the innovation is supposed to serve.

Where does quality fit in? Can a company compete on quality, and what does that look like? Attention to quality can support either the cost or technology strategy. The cost benefits of improved quality should be fairly obvious, including reduced expenses due to scrap or rework, internal testing and inspection, and post-sales support and warranty. These costs are not always measured and tracked, but they’re real. The hard part is understanding the relationship between actions that save money today and the risk that those actions will lead to additional cost in the future, such as buying cheap parts that fail in the field.

Quality supports the technology strategy in two possible ways. First, there’s a timeliness issue when you compete on technology; you have to get there before your competitor does. A focus on quality during product development will mean faster time-to-market. It’s important to note that product quality should match customer expectations. It doesn’t have to be perfect; customers can be pretty forgiving when your offering is technically superior, and especially so when the market is still new.

Second, a reputation for high quality (whether deserved or not) enhances the technology strategy and helps sustain a premium market price. We tend to think of technology in terms of advanced features and performance, but quality should be considered one of those dimensions as well.

Companies may not deliberately set out to compete on the basis of quality, but quality should definitely be considered an element of either the cost or technology strategy.

What Will You Do With the Time You Save? May 7, 2014

Posted by Tim Rodgers in Management & leadership, Process engineering, strategy.
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When laptops and cell phones and remote access first emerged as an option for office workers a lot of folks tried to justify the incremental expense by arguing that they would be so much more productive as a mobile worker, no longer tied to a specific cubicle. Some even tried to calculate an ROI based on quantitative estimates of labor cost savings or higher efficiency. The arguments all seemed to be based on the idea that we would be able to get so much more done by feeing ourselves from the constraints of a physical office. I suppose we really are getting more done. Mobile technology has become the standard for the majority of knowledge workers and we don’t think twice about the cost of the hardware or worry much about the security of remote access.

Lately I’ve been reminded of those claims of the higher productivity of mobile workers because of the current interest in lean production and business process improvement. One of the reasons that some people cite for resistance to these kinds of changes is the fear that it will lead to layoffs because fewer people will be needed to manage the new processes. We hate being overworked, but apparently some believe that it comes with job security.

First of all, there’s no job security at a company that’s rife with waste and inefficiency. Unless you’re a legal monopoly, competitors will figure out how to operate more efficiently and eventually your higher expenses will make you un-competitive and unprofitable.

Second, why does it have to be a choice between inefficiency and layoffs? Why would anyone assume that higher productivity automatically guarantees workforce reductions?

I’m not naive, I know this does happen. If you have five buyers in your purchasing department and you figure out how to get the same work done with four people, then you have one more person than you need. But, that’s a narrow way of looking at the issue. You have one more person than you need for that job, but you also have one more person that can be assigned to a different job. In many cases there’s some other part of the organization that’s starved for resources (assuming the skills are transferable), or a project or strategic initiative that hasn’t been able to get off the ground (including further process improvements).

If you save money as a result of process improvement, you can choose to put that money in your pocket, or you can invest it elsewhere. Yes, you can reduce expenses by cutting headcount, but did you consider using those resources to help increase revenue, or accelerate time-to-market, or improve quality?

Certainly you shouldn’t expect much support for changes that lead to higher productivity if it’s understood that there will be layoffs as a result. I don’t remember big layoffs when we implemented mobile technology. We found more work to do.

 

Adding Value With Less March 13, 2014

Posted by Tim Rodgers in Management & leadership, strategy.
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One of the most common complaints I hear from managers and individual contributors is that they never have the resources they need to get the job done. The schedule, deliverables, or both are impossibly unrealistic because they’ve been denied the budget, the hiring authority, or the access to the internal staff that they really need. When they fail to achieve their objectives, it’s because upper management (or whoever has the authority to approve their requests) got in their way.

In fact, they’re probably right: upper management may have been directly responsible for refusing their request for more time or resources, but were they given any reason to do otherwise? People often present these decisions as an equivalency between results and resources. “I can complete this if you give me that.” But, have they presented a convincing argument that supports that equivalency? Have they presented other options, or explained the risks of operating with less-than-adquate resources?

Put yourself in the perspective of the person who controls the resources. Their best-case scenario is that you will be able to do the job within the schedule with no additional cost beyond what has already been budgeted. There’s going to be some natural resistance to any request for more resources (or at least there should be if they’re managing within a budget), and the burden of proof is on the requestor.

The mistake that people make is framing this as a binary choice: either they get everything they ask for, or they’re doomed to failure. As a manager, I’m generally open to multiple options. I want to know what can be done, and what the risks are, at a variety of “price points.” I want to brainstorm about pros and cons, priorities, and alternatives that may not be obvious. It’s this kind of collaborative problem solving that leads to better decisions and adds value in an organization. It also helps the team understand and appreciate the constraints that the business is operating within, which builds commitment. Finally, making tradeoffs and learning how to get things done with less are important skills that strengthens the organization.

Getting Off to a Good Start January 13, 2014

Posted by Tim Rodgers in Management & leadership, Organizational dynamics, Process engineering, Project management.
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The transition to a new company can be disorienting. The HR folks always have a lot of forms to fill out, and it can take a while to figure out the e-mail and other IT systems. The work processes may seem familiar, but the terminology and acronyms may be very different. “It doesn’t work that way here,” is something you’re likely to hear a lot. Meanwhile, there are meetings to attend, active projects that need to be managed, and crises that require immediate attention.

There’s a honeymoon period when expectations are low, but that doesn’t last. At some point you’re expected to make a significant contribution and thereby justify the decision to hire you instead of someone else, or filling the position from within. This can be a time of paranoia and overcompensation. After all, for the first several months the company has little investment — financial or emotional — in your employment. It’s not that hard to let you go if it’s “not working out,” or if you’re “not fitting in.”

That may be true, it may not work out, but there are things you can do to get off to a good start. You need some early results that build confidence (including self-confidence) in your skills and methods.

1. The first thing to do is to quickly accomplish a task that you’ve been assigned. It almost doesn’t matter what the task is, the objective is to get others to see you as a person who meet their commitments, and gets things done on-time without being reminded. Of course it’s even better if the task has strategic priority, but as a people manager I’ve found that it’s easier to re-focus someone than it is to build a fire under them.

2. The second thing you need to do is to eliminate a problem. What you’re demonstrating here is the ability to take responsibility, get to the root of the issue, and deliver results. This is also your opportunity to apply the skills and experience that got you the job in the first place. This may be something that was assigned to you by your manager, or it may be something you’ve found on your own, but either way it’s important for people to recognize that you’ve made something better as a direct result of your actions.

3. While working on your problem, you need to build relationships within the organization. These are your sources of information, your partners in getting things done, and ultimately the people who will confirm your reputation and your value. They will also teach you how the organization really works and how to get things done.

4. Finally, you need to find out what success in this job looks like. You may think you know, based on the job description, but that has to be verified with your manager. Pay special attention to deliverables: it’s not just what needs to be done, but when those results are expected. Quantitative and objective measures are better. This is also a good time to schedule an early review to confirm that you’re on the right track.

You got the job, so you have some credibility. However, you can reduce your paranoia and focus on the job by establishing your reputation and delivering quick results. After that, start on your 30-60-90 Day Plans.

Change Management and “Moneyball” (Movie Version) December 1, 2013

Posted by Tim Rodgers in baseball, Communication, Management & leadership, strategy.
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The other day I watched the movie “Moneyball” again and was reminded of a few important characteristics of successful change management. Brad Pitt stars as Billy Beane, the general manager of the Oakland A’s baseball team, an organization struggling with a limited budget to develop, attract, and retain players.

Some background:

At the beginning of the movie we learn that before the 2002 season the A’s have lost three of their best players who have signed more lucrative contracts elsewhere. Beane is trying to figure out how to replace these players, and more generally put together a winning team within the financial constraints imposed by ownership. After a chance encounter with a low-level analyst from a rival organization, Beane realizes that he cannot compete if he builds a team using the traditional ways of assigning value to players. Almost out of desperation, he decides on an unconventional strategy based on the emerging science of sabermetrics. He immediately faces resistance from his experienced staff, specifically the field manager and scouts who are unconvinced and in some cases actively working against the strategy.

Ultimately it’s fairly happy ending: despite public criticism of Beane’s decisions and early disappointments on the field, the A’s have a successful season. At one point they win 20 straight games, setting a new league record, and they make the playoffs, but lose in the first round. Beane is offered a significant raise to leave the A’s and join the Boston Red Sox  where he would have the opportunity to apply the same principles with a much larger budget. Beane declines the offer, but the unconventional strategy has been seemingly validated.

The movie focuses Beane’s underdog status and uphill battle during the season, and I’m sure some of the real-life events have been changed for dramatic effect. Regardless of whether they actually happened or not, there are several scenes that illustrate elements of successful change management.

1. A clear explanation of the new direction. In the movie, Beane leads a meeting of his senior staff to discuss plans for acquiring players for the upcoming season. This looks like Beane’s first opportunity to apply his new strategy, but he misses an important chance to align with his team. It’s clear that he’s the boss with the final authority, and it’s not necessary for everyone in the room to agree, but Beane could have taken the time to explain the new direction and acknowledge the objections. In later scenes, Beane acknowledges this mistake to his field manager who has been undermining the strategy through his tactical decisions, and fires a senior staff member who has been especially vocal in opposition.

The lesson: the team may not agree with the change, but they should be very clear about why change is needed. Team members should have the opportunity to raise objections, but once the direction has been set, their only choices are to support the change or leave the team.

2. Removing options to force compliance. Beane is frustrated by opposition from his field manager who gives more playing time to players whose skills are not highly valued in Beane’s new system. Beane stops short of giving a direct order to the manager to be make decisions that are more consistent with the strategy, and instead Beane trades these players to other teams, effectively removing those undesirable options. This is a variation of what is sometimes called “burning the boats,” from the Spanish conquest of the Aztec empire. You can’t go back to the old way of doing things because that way is no longer an option. As Beane replaces players, his manager has fewer opportunities to not follow the strategy.

The lesson: this seems like passive-aggressive behavior from both parties, but I can see how it can be effective. My preference would be to reinforce the desired change rather than take away choices, but if the old way is very well established you need to help people move on and not be tempted to return.

3. Giving it a chance to work. The A’s get off to a slow start and pressure builds on Beane to abandon the new strategy. In one scene he meets with the team’s owner and assures the owner that the plan is sound and things will get better. It eventually does, despite all the skepticism and opposition, and the movie audience gets the underdog story they were promised.

The lesson: even the best ideas take time. It’s absolutely critical to set expectations with stakeholders to help them understand how and when they will detect whether the change is working. Impatience is one of the biggest causes of failure when it comes to change management. 

Firing Customers For Profit November 7, 2013

Posted by Tim Rodgers in Management & leadership, strategy, Supply chain.
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Businesses large and small generally work diligently to satisfy customers, and they’re frequently reminded that the cost of acquiring a new customer is much greater than the cost of retaining an existing one. Unfortunately many of those businesses fail to appreciate that each customer has an incremental cost, not just to acquire, but also to manage. It’s possible that an organization can spend more money to support a customer than what they get in return, which is obviously an undesirable situation.

Early stage companies are particularly susceptible to this kind of trap. In their eagerness to turn their ideas into revenue, they will often incur hidden costs in order to customize products and services for each potential customer. Any customer who is willing to pay looks like a good customer. Geoffrey Moore writes about this in his excellent book “Crossing the Chasm” (HarperBusiness, 1991). The danger is that the company loses economies of scale, leverage and re-use efficiencies, and ultimately the focus that defined the unique profit opportunity in the first place.

Unprofitable customers or segments can be hard to detect. It’s easy to add up the direct material cost of a single product configuration, but you also need to understand how much time your sales and support staff spend with a customer. Does your purchasing team have to manage unique suppliers? Does your quality team perform special tests or inspections? Your indirect labor may be spending a disproportionate amount of time dealing with requirements and requests from customers who squeak.

Unprofitable customers are not necessarily bad for the business. Moore writes about segments with “bowling pin potential” that may be a net loss today, but enable the firm to establish foundational processes, move up the learning curve, and leverage and grow in the future. These loss-leaders have long-term strategic value, but it’s important to understand and assess the investment in order to ensure the expected return.

Actually refusing to do business with a customer is extreme and could hurt your reputation, but consider ways to reduce the cost to manage a customer that isn’t currently providing a net profit or enables future profitability. The firm that fails to understand their “cost to serve” may find itself out of business despite many happy customers.

Innovative Design vs. Lean Product Development April 17, 2013

Posted by Tim Rodgers in Management & leadership, Product design, Project management, Quality.
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I’ve been very busy focusing on my job search and some self-improvement projects, and unfortunately it’s been harder to find some time to address my accumulated backlog of topics. I regularly follow several group discussions on LinkedIn related to product development and quality, and lately a popular discussion topic is how to inspire innovation in product design.

See for example Wayne Simmons and Keary Crawford “Innovation versus Product Development” (http://www.innovationexcellence.com/blog/2013/04/12/innovation-versus-product-development/), and Rachel Corn’s blog “Is Process Killing Your Innovation?” (http://blog.cmbinfo.com/bid/87795/South-Street-Strategy-Guest-Blog-Is-Process-Killing-Your-Innovation?goback=%2Egde_2098273_member_229196205). The latter post quotes a former 3M vice president who says that Six Sigma killed innovation at 3M, apparently because 3M’s implementation of Six Sigma required “a full blown business case and even a 5-year business plan to get a new idea off the ground and into production.” The VP wonders: how do you institutionalize innovation without stifling it?

The conventional wisdom seems to be that product design is inherently a creative, right-brain activity that will fail or at least fall short if constrained by process. You can’t make art on a schedule.

I think this is a false conflict. I don’t see any reason why teams shouldn’t be able to conceive new designs within a structured and disciplined product development environment. Obviously the ultimate objective is to get a product to market, so at some point the experimentation must end, doesn’t it?

Six Sigma is about reducing variation. The lean movement is about eliminating waste. I understand that the early stages of product development may be wildly unpredictable and seemingly inefficient. Shouldn’t the latter stages focus on predictable outcomes, standardized processes, fast time-to-market, defect prevention, and efficient production?

Can Managers Make Innovation Happen? February 12, 2013

Posted by Tim Rodgers in International management, Management & leadership, strategy.
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I’m hearing a lot about innovation these days. It seems that everyone is looking for new breakthrough ideas in products and services in order to grow revenue, differentiate from competition, and establish sustainable profitability. However, waiting for a flash of inspiration or “Eureka” moment is too random and unpredictable for most businesses. They would like to actively innovate, or at least provide an environment where productive innovation is more likely to happen.

What role do managers play in an organization that’s looking for innovation? What can managers do to inspire or foster innovation? I’ve always operated under the assumption that innovation is a creative, “out of box,” right-brain activity that can’t be managed with performance objectives and a schedule. I’m not convinced that you can innovate on-demand. I can’t recall ever attending a scheduled group brainstorming session that led to breakthrough ideas.

Some years ago I visited a peer manager at a different HP site to do some internal benchmarking and look for some best practices that I could bring back to my team. On a monthly dashboard of department metrics this manager included a bar chart showing the number of patent applications proposed by the team. I was astonished that this group of about 30 engineers and managers were averaging 30-40 applications every month. I was especially curious because this was a software quality team, and it wasn’t clear to me what part of our work could be patentable.

It turned out that the patent applications up to that time had nothing to do with software quality, or software testing, or anything remotely related to the products we were working on. Most of them seemed to be new applications of existing HP products. There may have been some occasional good ideas for new products in there somewhere, but I can almost guarantee that none of those patent applications were new, or unique, or valuable enough to be actually filed by the HP legal staff.

At the time I wasn’t eager to challenge the HP manager who was hosting my visit, but I still wonder what they were trying to do. The energy put into patent proposals didn’t seem to provide any direct contribution to the department’s objectives. I suppose it’s possible that the team brought more creativity and innovation to their work in software quality as a result of their patent efforts, but I couldn’t tell how that positively affected their other performance measures. I don’t think this was a good example of inspiring innovation.

I’m still not sure what managers can do to make innovation happen, but I think managers have a lot of influence over the work environment, and that can create conditions where innovation is more likely to happen:

1. Managers can communicate the business’s strategic interest in innovation, and help channel the team’s creativity to address specific needs (e.g., new products, new processes to reduce cost or improve quality).

2. Managers can identify those people in the team who are inherently creative and encourage them. Good ideas can certainly come from anywhere, but the fact is that some people are better able to think outside the box and make unexpected connections.

3. Managers can keep an open mind about new ideas and provide sufficient time and resources to evaluate them. This can be hard when resources are limited and the innovation is unfamiliar and risky. On the other hand, you shouldn’t expect the team to be innovative when there’s no chance their ideas will be given an opportunity to prove themselves.

I don’t think of myself as an innovative person who can generate creative ideas. I do think of myself as someone who understands the value of innovation to the business, and I want to do what I can to enable others to innovate effectively.

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