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Tuesday, September 25, 2012

Lecture 3 Management Strategies

Lecture 3 discusses management strategies and the principles underlying a particular management style. Many management strategies have been used over the years and this course is based on a combination of well-known strategies. The resultant combination is a coherent strategy that has proven to be effective.

You can guess by now that what I am proposing is a management strategy that combines process improvement with increased worker motivation. We have to look at some history of management theory to see how this can be done. Interestingly, different management strategies have been developed by people with very different backgrounds, or what I call “management schools”. Figure 1 is a simplified outline of the strategies that we are interested in for this course and the schools that developed them.

 Figure 1. Management Strategies That Form the Basis for Effective Leadership

Effective leadership is derived by combining well known and well proven management strategies. Scientific management was developed in business schools. Fredrick Taylor is the “father of Scientific Management”. It stresses objectivity, measurement, precision and focuses on increased productivity. It appeals to Theory X managers. (If you are not familiar with Theory X and Theory Y managers be patient and we will get to definitions.) This management strategy has evolved to be Management by Objective (MBO) or some variant of MBO. In a typical organization that uses MBO strategic objectives are deployed downward to objectives for all managers. It works reasonably well and is popular in today’s short term focused environment. It is assumed for this course that the students are working in an organization that follows some form of MBO.
The limitation on the effectiveness of basic MBO is typically due to Theory X managers leading a top down driven process that limits employee participation in an organization’s decision making processes and often to over emphasis on management by numbers. Limited participation in decision making on objectives results in workers having limited buy in to the objectives and therefore limited motivation to achieve them. This happens even if rewards are tied to achieving the objectives. Over emphasis on numbers tends to neglect the importance of intuition, business philosophy and what Professor William Ouchi calls subtlety, i.e. taking into account personal traits and feelings of workers.
The human relations school efforts that resulted in what is popularly called Participative Management, started with Elton Mayo. Mayo did the work at the Hawthorne plant of Western Electric that led to defining the Hawthorne effect. The Hawthorne effect is an organization’s response just due to outside attention. Participative Management has concern for the worker as a human and what motivates humans. It appeals to Theory Y managers. At the name implies Participative Management involves employees much more in the organization’s decision making. Participative Management strategy also works reasonably well. The limitation on the effectiveness of Participative Management is due to Theory Y manager’s overemphasis on trying to keep workers satisfied at the expense of achieving objectives efficiently.
Theory Z was defined by William Ouchi, based on his work and the work of others, and derives from addressing problems organizations face when led by Theory X or Y managers. (See the book “Theory Z” by William G. Ouchi) Ouchi believed that it is possible for managers to combine MBO and Participative Management in a way that retains the effectiveness of each without the limitations of each. A Theory Z organization has a well-defined mission, business philosophy, and clear objectives. It also trusts employees and involves employees in the decision making process. It balances the importance of numerical measures with the importance of maintaining its core values and the trust and commitment of employees. Professor Ouchi’s research demonstrated that Theory Z organizations achieved higher productivity than either Theory X or Theory Y managed organizations. It addition, Theory Z companies become known as sources of well trained and effective managers.
Quality improvement was developed to improve product quality and reduce production costs. It was developed primarily by statisticians and physicists like Deming, Juran and Shewhart before WW II. Their work lead to approaches called statistical process control (SPC) and continuous process improvement (CPI). After WW II Genichi Taguchi, a Japanese engineer and statistician, added his famous quality loss function and design of experiment techniques called “robust design” that are particularly useful for engineering and manufacturing processes. In the 1980s Eliyahu M. Goldrat, another physicist, and his associates applied the theory of constraints to business processes and their work added to the earlier methods for improving the quality of processes. All of these techniques apply rigorous mathematical methods to the analysis of business processes. Where rigorous mathematics is too cumbersome heuristics or rules of thumb proven over long experience are used.
In the 1980s quality improvement was extended from production processes to all types of organizations: government, education, medical, etc. These quality improvement approaches are often grouped under names like Total Quality Management (TQM), Six Sigma or some company derived variant of these names. The quality improvement movement also led directly to what I call Effective Leadership in figure 1. This came about primarily through the work of W. Edwards Deming and his disciples. It is described well in Brian Joiner’s book “Fourth Generation Management: The New Business Consciousness”. Thus Effective Leadership is not new. It has been studied and successfully used since the 1980s. The reasons it is not more widely practiced are discussed lecture 4.
There are two reasons why I prefer to define the path to Effective Leadership as shown in figure 1. First, Effective Leadership is a simpler name than Fourth Generation Management and more descriptive. Second, I believe that when described as evolving from the quality improvement movement it seems not to have a sound foundation in management theory. It appears to be radically changed from past practices and many organizations have had difficulty implementing the philosophy directly. When viewed according to the path shown in figure 1 it is seen to have a solid foundation and it is easier to visualize the process of incorporating Theory Z and one of the variants of process improvement.
Note that by now you see that I assume you have familiarity with basic management theories and are at least aware of the names of important management gurus from the past. (Look up these gurus and theories in Wikipedia if you are not familiar with them.)  Just as you can’t do calculus without understanding arithmetic and algebra you can’t be an effective manager without understanding basic management theory and some of the rationale behind the theory. Since many students are already familiar with these basic theories and their developers I do not spend time on them in this course.
Why have I picked this combination of strategies?
•     We live in a short term environment and management by objective (MBO) has proven to work in this environment
•     Most businesses use MBO or a variant so most students are constrained to use this strategy by their work environment
•     However, MBO by itself has limited effectiveness because workers lack control, which stifles their motivation and therefore their effectiveness
•     Ochi addressed this limit by combining MBO with participative management to empower workers in his Theory Z strategy
•     Effective Leadership adds tools from the Quality Improvement School for managers and workers to enable empowerment that further motivates workers and achieves even more productive processes.
Summary of the history of methods discussed in this course:
The management strategies and the principles underpinning this course are not new.
•     Theory Z
–    Derived From Theory X & Theory Y~1960
–    Important contributions by Maslow, McGregor & others~ ‘60s & ‘70s
–    Practiced by leading companies in the ‘70s
–    Defined by William Ouchi in his book “Theory Z” in 1981
•     Process Improvement Principles
–    Developed 1900-1945, used effectively, primarily in USA
–    Forgotten in USA from 1945 to ~1980
–    Introduced by Deming and others to Japan post WW II and used to develop Japan’s reputation for high quality and low cost products
–    New methods were added by the Japanese, particularly by Taguchi
–    Reintroduced to USA in 1980’s to help US manufactures compete with Japan
–    Success in manufacturing led to adoption by other types of organizations
You will benefit from reading Theory Z, if it is available in your local library. Also, Google the following topics and read the Wikipedia descriptions: Theory Z, Elton Mayo, Hawthorne Effect, Douglas McGregor, Theory X, Theory Y, W. Edwards Deming, 14 Points, Genichi Taguchi, TQM, and Six Sigma. The listing for Theory Z will lead you to many of the other topics. Note one error in the discussion of Theory Z. It says American Companies were unsuccessful in implementing W. Edwards Deming’s approach to management. Whereas many companies may have tried and failed, I personally know of many companies that implemented Deming’s approach and were extremely successful.
After the readings answer these questions:
1.   What objectives of Ouchi’s Theory Z have become unlikely to be achievable in today’s business culture?
2.   Which theory (X, Y or Z) does the culture of your company fit best?
3.   Is your boss predominately Theory X, Theory Y or Theory Z?
4.   Which Theory does your personal style fit closest?
5.   Is your personal style compatible or in conflict with your company’s culture?
6.   Based on what you have learned so far can you identify any strengths and weaknesses of your management style?
At the completion of the homework and exercise you will be prepared to continue with Lecture 4.

If you find that the pace of blog posts isn’t compatible with the pace you  would like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective Leadership” at:
or hard copy or for nook at:
or hard copy or E-book at:

Monday, September 17, 2012

Lecture 2 B What is Effective Leadership?

Why so much training as defined in Lecture 2A?
 • In my experience it takes 40 to 60 hours of training in the materials covered in this course before managers experience an “aha” moment; i.e. sees that they need to change their management methods and/or their behavior.
 • Until this “paradigm shift” happens the manager is not able to fully motive employees and therefore cannot get the potential best productivity for the manager’s organization.
 • Additional self-study is necessary to expand the managers understanding of these method
 – It is assumed the student knows basic Management by Objective (MBO) or Value Based Management (VBM) techniques, if not then additional self-study is needed
 – This course is only an introduction to process improvement techniques. Self-study or additional courses are needed to understand and apply these techniques properly
 • Finally, it is necessary for each member of your organization to learn new problem solving and process improvement skills if such skills are not part of your organization’s current capabilities.

You might think that there is no way you can justify providing 40 hours or more training to every worker in your organization. I know the feeling. I was faced with the same problem when I embarked on the journey I am recommending for you. I didn’t see how my organization could spend the money required to train everyone. It took some hard arguing by key members of my staff to convince me there was no other way to achieve the objectives my boss and I expected. It turned out they were right and not only could we afford it but, in hindsight, we couldn’t afford not to do the training. It took the entire available training budget for two years and stopped all other training but the results were an estimated return of $5 to $8 for each dollar of training money spent and the return was realized within 3 to 18 months. No other investment we could have made would have been as effective.

If at this point you are still skeptical please take the time to read the following description of what happened in an organization I managed when we followed the methods of this course. If you are ready to start studying you can skip this story and go to Lecture 3.

 My Experience with These Methods
 I became a general manager of a manufacturing company with a mandate to improve profitability. The company had a good record with its customers for delivering high quality products on time. However, this was achieved at considerable cost. The company was barely cost competitive with its competitor and was not making the return on investment the parent company desired. The managers were a mix of good and not so good. The workers had excellent work ethics but there had been labor union problems and unrest remained a significant undercurrent. I had two things in my favor. First, my predecessor had instilled a culture of being winners. Whether it was quality, health and safety or some community activity the employees had a strong desire to be the best and most were willing to work to achieve that goal. Second, my boss was supportive and gave me the freedom to do what was necessary to improve the profitability of the company.

My staff and I followed the methods taught in this course and achieved spectacular results. It took several years but we gained a 20 percent cost advantage on our competitor and it was eventually forced out of the business segment we addressed. We were able to consolidate two manufacturing plants into one of the original plants and drop leased properties while maintaining the same sales level. Our labor problems disappeared and workers that had desired to become union managers instead asked to become company managers. Empowered worker teams made major cost savings by improving their processes and they were excited to have the opportunity. It was easy to see that once they were trained and empowered they became self-motivated. Instead of thinking about what they didn’t like about their jobs they thought about how they could make their jobs easier and how they could save the company money. It may seem strange but the workers actually were energized when they could make changes that saved money. When I walked through the plant they would come to me to tell me about savings they had achieved. There were smiles on their faces and enthusiasm in their voices. When my boss made his quarterly visits I had one or two teams make a presentation to him on their cost saving projects. They and my boss loved these sessions.

I left the company at that point but visited my successor several years later to ask him if our methods had proven effective over the long term or were just a short term response to our management attention. His answer was that the methods were effective over the long term. Effectiveness had improved to the point that he was no longer involved in day to day operations. He said the workers took care of normal work and any problems that came up. They only came to him for his signature for new capital equipment. This enabled him up to spend his time addressing the long term objectives of the company.

 Few of the things we did were specific to manufacturing businesses. Most apply to any organization. We applied quality improvement techniques and empowerment of workers across the company. We also added theory of constraints and just-in-time methods to manufacturing and Taguchi design of experiment methods to both engineering and manufacturing. We not only trained managers to empower their employees we removed any managers that were unable to adjust to what they perceived as loss of control of their workers. A couple of these managers were considered essential to the business due to their long experience and knowledge. However, when they were replaced with managers more amenable to empowering workers the productivity in their departments improved substantially. Many of our successes came in the finance and human resources departments and had no relation to the specifics of manufacturing.

 There were four lessons that we learned; some the hard way of doing things wrong at first, failing and having to make changes in our approach before we achieved the desired results. The four are:
1. The methods we used were so effective that there was no other way we could have received as large a return on the investment of our time and money. We concluded early on that our competitor would become uncompetitive with us and be forced out of our business segment if he did not adopt similar methods. He did not as far as I know and later did drop out.
 2. An organization can only achieve dramatic improvements if the top manager is personally and deeply involved in every new activity.
 3. Training must be doubled or even quadrupled at every level from top manager to lowest level pay grade.
 4. It is cost effective to hire outside expert consultants to guide process improvement methods until internal experts are developed.

  If you find that the pace of blog posts isn’t compatible with the pace you would like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective Leadership” at: or hard copy or for nook at: or hard copy or E-book at:

Tuesday, September 11, 2012

Lecture 2 A What is effective leadership?

Lectures 2A and 2B define Effective Leadership, review what you should study in addition to this course material, describe what benefits the diligent student can expect and tell a story that validates the claims for the results of the recommended study.

Effective Leadership 
Effective Leadership is the behavior of an organization’s leader that enables the organization to function to its fullest capability. Most managers are not effective leaders. Their behavior actually inhibits the effectiveness of their organization. It requires training; self-study and practice to become an effective leader. In some organizations it also requires great courage to behave in ways outside the parent organization’s primary culture.

Management and leadership can be simply defined as management is doing things right and leadership is doing the right things. This course is about both because to be effective you must do both the right things and do things right. To achieve the benefits promised in the introduction the student must be both an effective manager and leader. In most cases the benefits are achieved only via change in the manager’s behavior and the organization’s work methods. Change doesn’t happen without leadership. Perhaps a metaphor best explains effective leadership. Think of a well-trained dog working or playing with its master. Both know what is expected of them. The dog has certain freedoms and certain limits. The dog knows the freedoms and limits and is able to perform effectively with little guidance from the master. The master knows and respects the dog’s abilities so that he or she knows what commands are necessary and when they are needed. This enables the dog and master to enjoy their activities together. It takes training and persistence to achieve this relationship but it is rewarding for both the dog and master. I don’t need to describe an ineffective dog trainer/master as you have likely seen the results and they aren’t pretty. Neither the master nor the dog has a good time.

Effective leaders are like the effective trainer/master of a well-trained dog. They can empower their workers because the workers have been effectively trained and motivated. The workers willingly take responsibility for their jobs because they have control of their jobs, within agreed upon limits. Properly trained, motivated and empowered workers are more productive and happier than workers that are neither properly trained nor empowered and therefore must be micromanaged by their supervisors. Leaders of properly trained and empowered workers are not swamped with daily crises and have the time to provide the leadership needed to achieve the organization’s strategic objectives.

First Exercise 
Spend a few minutes thinking about your working environment and the culture of your organization.
Now: Without looking ahead describe how you characterize the current working environment-
First: In the organization you manage.
And then: In the organization you work in or report to.

Did your description include words like?
• High Pressure
• Fast Paced
• Cost Cutting
• Short Term Focus
• More From Fewer Workers
• Crisis Every Day
• Everyone working several tasks at once

If not, you are in a very rare and exceptional organization. If so, then you are in a typical 21st century work environment. You can complain about it at home but to be successful you have to learn how to thrive in such an environment. I believe this course will help. You need to know how to achieve effective long term results in a short term environment. That is the subject of this course.

Now let’s address what justifies my claim that the principles and methods presented in this course will enable your organization to achieve a 20 to 30% improvement in effectiveness. Let’s look at two conditions in most organizations. First, many gurus of management and of quality improvement methods assert from their experience that the extra cost due to poor quality in most organizations ranges from 20 to 40 percent of the total costs of the organization. Second, “Many managers would agree that the effectiveness of their organizations would be at least doubled if they could discover how to tap the unrealized potential present in their human resources” (See p 4 of The Human Side of Enterprise by Douglas McGregor)

Therefore most organizations have the potential for a 20 to 40 percent improvement if they eliminate the cost of poor quality. There is the potential for a 10 to 20 percent improvement if only half the cost of poor quality is eliminated. The methods for improving quality are well known and are being practiced in some organizations. These methods go by various names such as Total Quality Management, Continuous Process Improvement, Six Sigma and other such names.

How to tap the unrealized potential present in workers is less well known but there are proven methods. I am not sure if taping unrealized potential at least doubles the effectiveness as McGregor says many managers claim but I know it makes an improvement equal to or greater than improving poor quality. This course shows how to both reduce the costs of poor quality and to tap the unrealized potential of workers. I have achieved these goals in organizations I have managed and watched others achieve them in organizations for which I have consulted. Properly combined these two methods easily result in a 20 to 30 percent improvement in organizational effectiveness.
Now the bad news. In addition to this course of study it takes follow-up to achieve the desired results, including:
• Additional 40-60 hours of training for yourself and for each member of your organization (less if your organization already has an effective quality improvement program in place.)
• 50-100 hours of self-study (self-study can be cut in half by doing assigned homework)
• Practicing what you have learned with the organization you manage for two to five years

Not easy, but if it was there would be many effective leaders and most organizations would be achieving their potential.

  If you find that the pace of blog posts isn’t compatible with the pace you would like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective Leadership” at: or hard copy or for nook at: or hard copy or E-book at:

Thursday, September 6, 2012

Part I Leadership for Motivating People

1 Introduction 
This introduction describes how the course material is structured for individual study, suggests an approach to studying the material and lists definitions of key terms used in the course.

How does this course work? 
The course material is presented in a series of lectures with exercises accompanying most lectures. The student is to study each lecture and complete the exercises at the end of the lecture or included within the body of the lecture. In many cases the exercises are specific to the student’s work so no answers are provided. The benefit is from the student thinking about how to apply the principles and methods discussed in the student’s organization. In other cases the exercises are more general and discussion of the results is included in the lecture materials.

The lectures are short, typically taking no more than 10 to 20 minutes of study per topic. It is expected that the student spend at least an equivalent amount of time on the accompanying exercises. The reason for keeping the lectures short is recognition that the students are fully loaded workers or managers and can spare only a brief time each day for self-study. In addition to the lectures and exercises the student must read supplemental materials. In some cases this is to fill in knowledge that is assumed to be known and other cases it is to expand on the lecture materials. Implementing the methods taught begins early in the course with the student developing and applying a personal action plan.

The personal action plan is developed by the student as the student progresses through the course. The typical sequence is to study a lecture and any necessary additional sources for the lecture, work the exercises for the lecture and then think through how the material should be applied to the student’s organization and management processes. From this analysis actions are defined and then practiced and refined until the actions are part of the student’s normal behavior and organizational changes are complete. Step by step direction is given for developing the personal action plan.

Course Outline and Structure 
There is logic to the organization of the course material and it is helpful for students to know this structure before starting to study to better understand what is covered and plan their study. Students new to management are advised to work through the lectures in sequence. More experienced managers may want to skim introductory material and concentrate on topics that address known problems in their organization.

The three lectures following this introduction discuss some of the basics of selected management strategies and the functions that managers perform in their daily work. Lectures 5-16 address half of the job of effective leaders, motivating the people in their organization. Lectures 17-22 examine the management functions of staffing and communicating. Lectures 23-28 address portions of the control function that are common to all organizations, risk management and process improvement. Lecture 29 provides a proven methodology for planning change in an organization, which is the responsibility of the organization’s leader. The course ends with guidance on completing and implementing the student’s leadership action plan that is developed step by step during the course. Reviews of material covered are included periodically to facilitate learning.

I suggest that you plan your approach to this study before you start and stick to your plan. For example, select a time during the day when you can devote 20 to 40 minutes to the course work. It might be during your lunch break, the period between when you get home from work and you prepare or eat your evening meal, right after you eat or after your kids are in bed. If you make it a practice to set aside this time each day or three days per week then your family or associates are more likely to respect this time as your personal time. I suggest the lunch hour because you can study with several of your associates. This is more fun and makes the exercises more effective because you can discuss them together.

 Do not let learning this material take so much time from your job that your basic work is compromised. It is probably reasonable to spend up to ten percent of your time on this course, e.g. about four hours per week, and ninety percent on your current work objectives. Over time this will enable you to continue to perform your work well and to constantly improve your management skills. Also do not try to learn this material in a quick read through. The material is meant for you to study and to reflect on how it applies to you and to your organization. Sometimes it is best to take a week or more following up on an exercise that reveals a problem in your organization or reading recommended supplemental material.

I do not recommend that managers and their subordinates be on the same study team, at least for the first part of the course, because it can inhibit frank discussions and may lead to unrealizable expectations. For example, your subordinates upon learning that your current behavior should be modified may expect you to instantly change and few of us are capable of instant behavior changes.

After the student has completed the course and is confident that the methods can be put into practice in the organization then is the time to involve subordinates in discussing and learning this material. If you are a manager of other managers then it is necessary that your subordinate managers understand, buy into and commit to implementing the methods taught in order for the organization to benefit. Learning the material and then teaching it to your staff is an effective way to truly understand these methods. There are situations where it is effective for the manager and subordinate managers to learn together. I leave it to the students to analyze their subordinate managers and their organizations’ cultures before making this decision but be careful or workers will think this is just another short-term fad or “quick fix” and not give it the sustained attention it requires.

 There is no quick fix for poor leadership styles. It takes study, continued outside reading and practice to achieve the desired results. It is hard work but the rewards are great in terms of both self satisfaction and the more responsible positions this study enables the student to achieve. When you succeed you will find an unexpected benefit. Your job will be considerably easier. The day to day crises that plague most managers will begin to diminish and you will be able to focus most of your time on high payoff tasks rather than solving daily crises.

Definitions that are used in this course:
• Manager-The person responsible for leadership of a group of people. (team, section, department, or division,)
• Worker-A person belonging to group that reports to a manager (Almost all managers are also workers) • Student-The person reading this material, who can be either a worker or a manager
• Organization-The group of people led by a manager; it can be any number of people and may include many other managers
• Process- The individual and collective procedures by which workers execute their work. Every process has inputs, outputs, customers and suppliers.
• System-The inputs, outputs, process, management, environment, etc., that is everything but the workers. The system includes all of the processes that affect any worker or manager.
• Enterprise-The whole organization where workers and managers are employed.

 If you find that the pace of blog posts isn’t compatible with the pace you would like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective Leadership” at: or hard copy or for nook at: or hard copy or E-book at: