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Tuesday, July 23, 2013

Review of Lectures 23-29

The first 22 lectures deal with the management functions of staffing, communicating and motivating. The remainder of the lectures deals with selected aspects of control. It is assumed that the student understands methods of cost and schedule control appropriate to the student’s organization. If not, references for self-study are provided in lecture 23. It is critical to understand how to apply the principles of control to different organization types because these principles must be tailored to the organization type and applying them inappropriately results in significant inefficiencies. It is also necessary to understand management accounting, which differs from standard financial accounting, in order to make sound decisions relating to costs of products or services. The three aspects of control discussed in lectures 23-28 relate to processes involved in the day to day work of any organization. These three are risk management, theory of constraints and process improvement.
Risk is the consequence of undesirable events on the work of an organization. Risk is inherent in every type of activity. The objective of risk management is to proactively identify risks and take actions that reduce the probability that an undesirable event occurs and/or reduce the consequence of the event should it occur. Lecture 24 describes a ten-step process for effective risk management and provides templates used in risk management. The primary templates are the risk summary grid, which is useful in the early stages of an activity for communicating risks to managers, customers and the team working the activity and the risk register, which is more useful in day to day management of risks once an activity is underway.
Lecture 25 is a brief overview of the theory of constraints. Understanding the theory of constraints is easier if we think of a process as the combination of supplier, input, process, output and customer, or what is termed SIPOC for the initials of each word. The inputs are transformed to outputs by the process. The activities or processes that any organization performs are a series of SIPOC steps with the outputs of one step being the inputs to the following step. Actual processes are usually complex networks of SIPOC steps but we can understand the theory by examining a simple series of steps. Then it is clear that the output of the overall process cannot occur at a rate any faster than the rate of the slowest step in the process. Applying the theory of constraints should be the first step in process improvement.
Often managers try to keep every worker busy all of the time thinking that is the most efficient way to manage an activity. This can violate the theory of constraints and lead to costly excess work in process and sometimes extra workers to facilitate work in process. It doesn’t matter if the process is a service process dealing with paperwork or a manufacturing process. Applying the theory of constraints minimizes work in process, cycle time and staff size. Some workers may not be busy at all times but this doesn’t lead to extra costs. Rather it creates time for workers to conduct process improvement and opportunities for cross training workers to do more than one step. The student is encouraged to read the referenced books by Eliyahu Goldratt.
Lecture 26 explains that statistical variation is present in the actual values of all parameters relating to an organization’s processes. Measuring this variation and understanding the resulting information is essential to effective management. Managers and workers must know the difference between common cause variation (the manager’s responsibility) and special cause variation (the worker’s responsibility). An activity, the “system” in process improvement language, must be stable, i.e. exhibit only common cause variation, before attempting to improve the process by reducing the variation and/or changing the mean value of a parameter. A system is brought into stability by fixing the special cause variation revealed by data measuring the variation. Control charts are a visual means of evaluating variation to determine common cause and special cause.
Effective process improvement is achieved via several different approaches. Total Quality Management and Six Sigma are two popular approaches proven to be effective. Implementing any effective process improvement approach requires that all or a subset of workers and managers receive comprehensive training in statistical process control. Only after such training should workers, or specially trained facilitators, be empowered to execute process improvement.
Lecture 27 provides guidelines for learning and using statistical methods. Learning to think statistically is discussed and approaches to learning this useful skill are outlined. This lecture also describes two of W. Edwards Deming’s famous experiments and one that I developed that help managers understand variation and how to manage in the presence of variation. The funnel experiment demonstrates dramatically the things that go wrong when inappropriate actions are taken in the presence of variation. The red bead experiment demonstrates how hard workers try to carry out manager’s directions, even when the goals a manager sets are obviously impossible due to the effects of variation. Watching a video of this experiment is an experience beneficial for all managers. It provides vivid demonstration of the “goodness of intent” of most workers and of the damage managers cause via arbitrary, and often unrealistic, slogans and exhortations. The productivity experiment teaches the value of reducing variation.
Lecture 28 concludes the discussion of variation and process improvement by giving some simple examples that illustrate the typical steps in a process improvement activity. Visual tools, including fish bone diagrams, flow charts, work flow diagrams, deployment charts and control charts are described. These examples teach enough of the methodology of statistical process control to enable the student to begin improving simple work processes. It is important for the student to undergo more thorough training before applying statistical methods to complex work processes. Complex processes can have subtleties that are not covered in the simple examples discussed in lecture 28.
Lecture 29 deals with leading the team, which is the main function of an organization’s manager. Developing an effective organization, as described in the first 28 lectures, can be viewed as necessary to free the manager from being so bogged down with problem solving related to personnel or processes that there is no time to lead the organization in achieving its strategic objectives. Key to leading the team is effective planning. Lecture 29 summarizes a planning process called Process Quality Management (PQM) that focuses on the fundamentals of planning. I and many others have found this process effective in helping the manager lead his organization in achieving strategic objectives. PQM facilitates the planning for achieving strategic objectives in a one or two day concentrated session.
There are no exercises for this review session as the last lecture is your most important exercise.
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” in hard copy or for Kindle at:
or hard copy or for nook at:
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Wednesday, July 10, 2013

29 Leading the Team

Everything discussed up to this point is supportive of the manager’s main function, which is leading the organization in accomplishing its strategic objectives. I have discussed several times how implementing the methods discussed eventually frees the manager from daily firefighting activities thereby making time for more strategic work. An organization of highly motivated workers that are trained and empowered to control their processes will conduct the organization’s normal activities with little oversight from the manager. However, accomplishing an organization’s strategic objectives almost always involves doing some things differently or some new things. The success of the organization depends on accomplishing these different or new things successfully. Ensuring that the organization has the highest probability of success in achieving strategic objectives is the responsibility of the leader. In this lecture I describe a process that helps both the leader and the team achieve an objective involving change from normal practices.
The process was developed and widely used by IBM and others in the 1980s. (See the paper by Maurice Hardaker, and Bryan K. Ward, titled How to Make a Team Work in the journal Harvard Business Review, November 1987, page 112) IBM called the methodology Process Quality Management or PQM. It is fundamentally a planning process in which goals, business processes necessary to achieve the goals and measures to track progress toward goals are identified. What sets it apart and contributes to its usefulness is the focus on fundamentals of planning. Recall the Super Bowl metaphor I used earlier to guide you in developing your action plan. PQM follows a similar pattern.
PQM starts with the leader gathering all of his or her direct reports that are involved in achieving the intended goal in a one or two day planning session. If possible hold this session off site and forbid cell phones and PDAs during the session. The team is typically made up of up to a dozen people that are involved in the business processes associated with the goal. Hardaker and Ward advise not including more than a dozen as a larger team gets unwieldy to manage. It is essential to have all involved people in the planning session and allow no observers or hangers on. It is also preferable that someone other than the organization’s leader facilitate the process so that the team is not constrained by the leader’s preconceived beliefs. The following steps are carried out during the planning session:
  1. The leader introduces the goal and explains why the organization must achieve the goal. The objectives are for the team to understand the goal, to convince the team that the goal is necessary and that they all are required to help achieve the goal. Then the facilitator takes over leadership of the process and the organization’s leader becomes a team member.
  2. Brainstorm to identify possible measures of success. Then narrow the identified measures to six to eight that are both necessary and sufficient. These measures are called the critical success factors. One method for narrowing the list is to post the whole list and ask the team to privately rank them in importance. Comparing and discussing the team’s rankings allows the list to be thinned. Work on the list until all team members agree that the remaining measures are the necessary and sufficient measures. That is, if all measures are achieved then the goal will have been achieved and if any measure is not achieved then the goal will not be achieved.  Consensus is required before proceeding to the next step.
  3. Brainstorm to define the business processes that must be carried out to achieve the measures of success. To avoid getting vague and useless descriptions of business processes follow these rules:
    1. A business process is defined as a verb plus object, e.g. design products.
    2. Each process should have an owner who is responsible for managing or carrying out the process.
    3. The owner should be a member of the team.
    4. No owner should have more than four processes to manage or carryout.
    5. Following a similar process used to define the critical success factors develop a list of business processes that are necessary and sufficient to achieve all of the critical success factors. Again consensus is required from the entire team. Expect to have anywhere from 10 to 20 processes. The preferred approach to developing this list is to prepare a relationship matrix as described next.
  4. Prepare a relationship matrix of critical success factors vs. business processes. An example matrix is shown in figure 30. The example has truncated the number of business processes and critical success factors but it illustrates the approach. Start with the first critical success factor and identify every business process that is necessary and sufficient to achieving this success factor. Work through each critical success factor in turn. Now the list of necessary and sufficient business processes is complete. Typically processes are added and deleted during the preparation of the relationship matrix.
  5. Fill out the last two columns in the relationship matrix. These rank the organization’s capability for each process in the column labeled business process quality and count the number of business processes that apply to each critical success factor. The business process quality ranking are made subjectively as A = excellent, B = good, C = fair, D = poor and E is for processes that don’t currently exist or are embryonic and not enough experience is available to rank them.
  6. The counts and business process quality columns assist in allocating resources for changes to business processes. There are rarely available resources to fully fund every desired change in business processes so some prioritization must be made. These columns are used to guide the assignment of resources to each process. Processes that have a high number of counts and rankings of D or E must have adequate resources. Processes that have counts of only two or three and rankings of B or C can be assigned fewer resources. Processes with A rankings and counts of only one or two may need little or no additional resources.
  7. Affirm responsibility for each business process to its owner. The objective is to have every team member agree that they are responsible for one or more business processes and, most important, any necessary changes to the processes. Make sure team members understand their responsibility and know how they are going to approach any necessary changes.
  8. Define and get agreement on a plan to monitor the status of work on the activities and progress on the critical success factors. Depending on how the new work relates to normal work monitoring may occur automatically via existing information systems or it may require special meetings or it may be done as part of normal staff meetings.
  9. If it is not possible to get all team members comfortable with their next steps during the one or two day session then schedule follow up meetings with individual team members that might be needed to clarify details of their new assignment.

Figure 30 A simplified example relationship matrix of business processes vs. critical success factors.
Having a well-developed plan is only the beginning. Carrying out the plan is the real work and success is usually dependent on persistence in this work. It typically takes a year or more to achieve significant goals. If your plan is expected to take more than a year it is wise to review your plan after a year. Conditions may change and any pertinent changes need to be integrated into your plan. If achieving the goal is essential to the success of the organization then it is essential that the organization’s manager lead the team during work on achieving the goal. Don’t delegate this responsibility. Delegate other work to make time for this more important work. Recall the research of Gary Lynn and Richard Reilly cited in lecture 9. Successful developments are three and one-half times as likely to have senior management intensely involved as failed developments.
1.     Review the planning you did for your current efforts toward achieving the strategic objectives for your organization. Did you follow planning fundamentals similar to those outlined in the PQM process?
2.     Do you have a strategic objective or goal for your organization that would benefit from using the PQM process to achieve organizational alignment?
3.     Is your organization in the process of striving toward a major goal and having difficulties making progress? If so consider carrying out a PQM planning session.
4.     Are there barriers that prevent you and your reports from holding a PQM planning session for critical strategic objectives?
5.     What can you do to remove these barriers?

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” in hard copy or for Kindle at:
or hard copy or for nook at:
or hard copy or E-book at:

Tuesday, July 2, 2013

28 B Example: Improving the library process

In most cases the largest cause in a Pareto chart is the first target for improving a process. However, in this example the students aren’t complaining about the time they spend in the stacks. The students’ primary complaint is about the second shortest step in the overall process. Based on these observations the process improvement team decides to divide the problem into two pieces. First they will determine if they can reduce the amount of data required for the checkout process, thereby addressing the main complain of the students, and second they will analyze the process in more detail to see if the overall time can be shortened without major investments in new equipment or facilities.
Examining the rational for requiring the student’s local and home addresses for checking out books determined that this policy traces to the era before the college established computer databases of student information and the use of student ID numbers. It was incorporated into the checkout software just because it was part of the process at the time the software was introduced. Therefore the team checked to ensure they could get access to a student’s addresses if they had a student’s name and ID number. Confirming that they could they dropped this requirement from the checkout process and modified the library’s policy documentation to reflect this change. All librarians and assistant librarians were notified that student address data is no longer to be collected.
The team examined the raw data collected on the individuals using the library to see if any additional insight might be gained on the process. This led to discussions with the assistant librarian that collected the data.  The discussions revealed that if a student returned to the catalog after being in the stacks then each of the times the student spent waiting for the catalog computer, using the computer or searching the stacks were added together. For example, if a student returned to the catalog computer three times then the total time using the catalog computer is the sum of the three independent times. Examining the raw data indicates that about 50% of the students return to the catalog more than once and about 25% return three or more times. Discussions with students returning to the catalog computer more than once showed that these students were noting only one book at a time when doing a catalog search. They then go to the stacks, examine the book and if it doesn’t have the information they need they return to the catalog computer, repeat the search and examine the next most likely book.
Based on this new information the team concluded that the instructions for using the catalog are inadequate, possibly explaining why 81% of those surveyed found the instructions of little or no use. The team modified the instructions to include recommending that the students note several books from each search that might contain what they need before going to the stacks and examining any of the books. The modified instructions were posted beside the catalog computers and notices were posted reminding the library users that the instructions had changed.
Next the team prepared a work flow diagram and a deployment chart to see if any additional insight into improving the process is provided by either of these tools. Work flow diagrams and deployment charts are items that I have found useful that are not in my 1987 copy of the Memory Jogger. These are based on process flow charts and add information not usually associated with flow charts that helps identify process improvements. For our purposes the definitions of these items are:
        Flowchart- A schematic step by step description of a process. It can be top level or very detailed.
        Work flow diagram- A floor plan of the workspace that includes the movements of people and items involved with the process.
        Deployment Chart- A matrix of process steps and workers showing who is responsible for each step.
Simple examples better explain why these diagrams and charts are useful. Important information for process improvement efforts not included on flow charts is the spatial relationships of steps in the process and who the primary and secondary workers are that are responsible for each step.  This information is provided in work flow diagrams and deployment charts. Examples of these are shown in figures 26 and 27 for the book checkout process.
Figure 26 Work flow diagram for checking out a book.
The work flow in figure 26 shows that this work space can be improved to make the student’s job easier by moving the card catalog closer to the stacks so that students that have to make a second and third trip to card catalog need to take fewer steps. The work space can be improved to make the librarian’s job easier by moving the librarian’s computer closer to where the students bring their books at the checkout station so the librarian doesn’t have to move back and forth to access the computer and work with the student. These improvements are not apparent from just the process flow chart illustrated in figure 21.

Figure 27 Deployment chart for finding and checking out a book. (The rectangles indicate a primary responsibility and the ovals a secondary responsibility for a given task)
The deployment chart shown in figure 27 adds new information to the process description, although in this simple case it doesn’t suggest any improvements to the process. An alternate version of the deployment chart lists process steps under columns labeled with the titles of individual workers involved in the process. In general it is good practice for process improvement teams to start by developing the process flow chart, the work flow diagram and the deployment chart as a first step and to try various forms of these charts and diagrams rather than just preparing a single flow chart before beginning analysis.
Often just putting charts and diagrams on paper suggests simple improvements, as the work flow diagram did for the book check out process. The observant student will have noticed that the description of the library processes is much simpler than what actually happens. For example, the flow chart, work flow diagram and deployment charts lack the loop back to the catalog if the student doesn’t find the information needed in the books examined from the first search of the catalog. If all three charts are developed at the beginning of a process improvement activity it is more likely that missing steps are identified.
Checking the effectiveness of candidate improvements
The process improvement team moved the catalog computer and the checkout computer as suggested by the work flow diagram. They then collected new data for a week to see if these changes and the changes they had made to the checkout process had any impact on the number of complaints received or on the time to find and check out books. The post improvement data is shown in figures 28 and 29.

Figure 28 Post improvement complaint check sheet.

Figure 29 Post improvement times for finding and checking out books.
The post improvement data shown in figures 28 and 29 indicate that the objective of reducing the number of complaints was met and some reduction in the average time to find and checkout books was achieved. Although only a small reduction in time the students spend in the stacks was achieved there is a significant reduction in all other times. The students spend less time in queues and less time providing data to the librarians. Note that the time the librarians spend in processing books is also cut in half. This is attributed to the reduction in time listening to students complaining. The time listening to complaints was also increasing the time students had to wait in the queue for checking out books. The librarians found that they had more time for other work and they were enjoying their jobs more without having to listen to so many complaints.
This example of process improvement contains several lessons learned that are worth listing. These include:
·       Processes are often much more complex in actuality than workers first perceive. This is usually because they think of how the process ought to work rather than how it actually does.
·       First attempts at collecting data often miss key data because of incomplete descriptions of processes.
·       Fixing a problem in one step can often have unexpected benefits in other steps in a process. In the library example eliminating the need for providing unnecessary data to the librarians not only reduced complaints it reduced the times librarians spent in listening to the complaints and the time students spent in queues waiting for free librarians.
·       Processes often contain unnecessary steps due to some past rational that no longer applies.
·       Improving processes almost always makes workers jobs easier and if continued over time can reduce the number of workers required to carry out processes.
Process improvement should be an ongoing effort and if it is the improvement teams build on past work so that their flow charts and data collection become refined with time. The fact that first efforts are not as complete as they might be isn’t important as long as improvement activities continue.
I hope that this example shows how continuous process improvement with trained and empowered workers contributes to higher quality work, more motivated and happier workers and a more effective organization. This is the type of organization that survives and thrives in today’s competitive global environment.
I also hope this example has convinced you to learn statistical process control in more depth. This example is only an introduction to statistical methods. There are different types of control charts that are used for different analyses. These include p charts, np charts, c charts and u charts in addition to the x-bar – R chart used in the library example. In addition to control charts you need to know about run charts and scatter diagrams. The Memory Jogger book recommend in an earlier lecture defines all of these methods.
You may try statistical methods on simple work processes based on what you have learned in this lecture. I must caution you that although that may work well you could cause more problems by trying to apply these simple methods to a process that demands more complex treatment or different analysis than described here. If you have access to someone versed in statistical techniques then go ahead and begin using these techniques but be sure to ask the expert to review your work to ensure the methods apply to the processes you intend to improve.
Since some books and training courses on statistical process control do not discuss work flow diagrams and deployment charts you can learn to prepare these tools by practicing on processes around your home. Develop a flow chart, a work flow diagram and a deployment chart for the activities you engage in from the time you get up in the morning to the time you leave for work. If you are married I don’t recommend trying to get your spouse to change the morning routine based on any process improvement you identify from your charts. You may be judged as having gone a bit overboard.

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” in hard copy or for Kindle at:
or hard copy or for nook at:
or hard copy or E-book at: