Posts Tagged Six Sigma

smartKPIs.com Performance Architect update 45/2011

It is time to reinvent management. You can help.

An interesting question I came across this week got me thinking. The question, rather rhetorical was along the lines of: “Why follow some model developed by a consultant when hundreds of smart people from hundreds of companies have spend tens of years developing and refining models line Baldrige and EFQM?”

The long answer to such a question, from my perspective is the following:

  • For the same reason the several of the dozen companies involved in the Nolan Norton Institute study experimented in 1990 with Balanced Scorecard prototypes expanded from Art Schneiderman’s original “Corporate Scorecard” piloted at Analog Devices. It is a classic tale of practitioner insight, mixed with academic rigour and consulting acumen and embraced by organizations willing to innovate while contributing to the enrichment of management as a discipline. (Details in the preface of Kaplan and Norton’s 1996 book.)
  • For the same reason Motorola’s CEO Bob Galvin embraced in 1985 the quality improvement ideas expressed in a research report by two of its employees: Mikel Harry, PhD. (academic rigour) and Bill Smith (practitioner insight, with 35 years of experience in engineering and quality assurance). Their proposed MAIC problem-solving approach became a stepping stone in the evolution of  Six Sigma. The D was added by IBM and other early adopters after Motorola winning the Baldrige Award in 1988.
  • For the same reason why after being presented in an efficiency report to the Executive Committee, Donaldson Brown’s return on investment formula was adopted by Du Pont in 1912. Brown was a 27 years old engineering graduate at the time. The subsequent work done by Brown at Du Pont and General Motors is legendary, with many cost accounting techniques and principles such as Return on Investment, Return on Equity, Forecasting and Flexible being established and used in a corporate context. They were gradually adopted by corporate America and grew to became part of the financial fabric of today’s corporate environment.

The short answer to the question is innovation and progress. Management is constructivist in nature. It is based on innovative ideas being proposed, tested and followed as they prove their value.

My 15 years of work as a management practitioner and consultant and 6 years of academic research offered me the opportunity to analyze plenty of models, frameworks, methodologies and abstract concepts. Some of them are puerile, some of them make sense to me, some of them don’t make sense to me, but make sense to others, many of them are trademarked in an effort to protect and monetize and lots of good work is inaccessible to many due to it being published in academic journals. My advice to anyone, be it consultant, researcher or practitioner is to never stop learning and exploring with an open mind. Great management concepts do not emerge overnight. Over time, some ideas lead to others, some impractical tools had some good points that inspired new hybrids, many organizations had the courage to support innovative staff members and consultant promoted prototypes and great things happened.

Then again, we have the option to put blinkers on and follow industry standards, widely recognized methodologies and popular management tools. That is perfectly fine, too. I myself hold a TOGAF certification (Enterprise Architecture) and I am an PRINCE2 certified practitioner (Project Management). That didn’t stop me to learn about and use components of the Zachman Framework, DODAF, FEAF (Enterprise Architecture), as well as PMBOK and other hybrid project management concepts. I enjoy exploring and generating my own taxonomies, typologies and conceptual systems.

Earlier this year, Gary Hamel launched a call for Management 2.0 in his blog posts: Inventing Management 2.0 and Improving our capacity to manage. The movement is already gaining traction at: The Management Innovation eXchange (MIX) and is supported by academic institutions (i.e London Business School), Industry Organizations (i.e. Dell, National Australia Bank) and research drive consulting companies (i.e. McKinsey&Company and Gartner). In my opinion, such a triumvirate is essential for progressing administrative science theory and practice.

Gary Hamel’s answer to the above question would probably be: It’s time to reinvent management. You can help.

Aurel Brudan
Performance Architect,
www.smartKPIs.com

Walker, Rob 1992, “Rank Xerox – Management Revolution”, Long Range Planning, Vol. 25, No. 1, pp. 9 to 21

smartKPIs.com Performance Architect update 21/2010

Plan-Do-Check-Act (PDCA) / Plan-Do-Study-Act (PDSA), Philosophy and Performance Management

One of the administrative science domains that feeds Performance Management as a discipline is the quality movement. The Plan-Do-Check-Act (PDCA) cycle is at the core of the link between the two fields. It has been promoted and used in its current form for over 50 years. However, its roots can be traced back to ancient Greece.

Socrates (469-399 BC) formulated the dialectic inquiry process based on the idea of questioning and modifying understanding through the conflict of opposing ideas. This technique was further refined by Aristotle (384-322 BC), who enunciated a method of scientific investigation that employed both dialectics and empirical observations. His deductive reasoning approach combined with inductive elements became the foundation of the western scientific method, influencing philosophy and scientific inquiry for hundreds of years.

The famous arab scholar Ibn Sina, known to the western world as Avicenna (980-1037), proposed two stages of the scientific knowledge discovery process: conceptualizing what is meant and verifying what is being conceptualized, the basis of what evolved into what is being called the “Avicennian logic”.

Francis Bacon (1561-1626), considered one of the fathers of the scientific revolution, employed such an approach in defining a more modern version of the scientific method, with the balance leaning more towards the induction reasoning. The conceptualization becomes hypothesis and verification is separated into two further steps: data gathering and results analysis.

In the 20th century, Dr. Walter Shewhart (1891-1967) brought this process of inquiry traditionally used in research and education in business organizations. His collaborator and mentee, Dr. Edwards Deming (1900-1993) refined and popularized this concept as the Plan – Do – Check – Act (PDCA). Deming called it the “Shewhart cycle” and later replaced Check with Study, however in common use it remained the PDCA process, referred to as the “Deming cycle”.

In the 1990s, with the ascent of new management concepts such as the Six Sigma and the Balanced Scorecard, the PDCA process morphs into the new mutations. In Quality Management, the Six Sigma methodology employed the DMAIC project methodology: Define – Measure – Analyze – Improve – Control and the DMADV project methodology: Define – Measure – Analyze – Design and Verify.

In Performance Management, when the Balanced Scorecard as a concept needed a more robust application framework in mid 1990s, the PDCA came to the rescue again. It provided the elements required for migrating the Balanced Scorecard concept from a Management Accounting stage to the Strategic Management stage.

Today, at the down of a new phase of evolution of Performance Management as a discipline, these stages of scientific inquiry of process execution form the essence of the “management” component in “Performance Management”. They illustrate that Performance Measurement is required but not sufficient. Sound Performance Management practices based on the PDCA cycle give context and make the entire journey of improving performance interesting and relevant.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan

Performance Architect,
www.smartKPIs.com


Relevant links

Aristotle: http://galileoandeinstein.physics.virginia.edu/lectures/aristot2.html

Bacon: http://plato.stanford.edu/entries/francis-bacon/

Ibn Sina: http://www.iep.utm.edu/avicenna/

Socrates: http://philosophy.lander.edu/ethics/socrates.html

smartKPIs.com Performance Architect update 16/2010

The importance of learning from practice

DuPont, Toyota, Xerox, Analog Devices, Motorola…

What do they have in common?

Abstract reasoning and introspection enabled humans to advance scientific knowledge at an ever accelerating rate over the last 2500 years. As opposed to other natural sciences such as physics and chemistry, human organization or administration is more loosely defined, some considering it a science and others an art. However, both proponents of management as a science and as an art agree on its ultimate function – the one of getting things done or accomplishing desired goals.

While administrative science is one of the oldest fields of human inquiry, it is still behind in terms of maturity and impact, especially when compared to other fields. Scientific management is less than 100 years old and reporting the level of advancement in this field to others, one might consider it as being in its embryonic stage. It is ironic, as it is perhaps one of the most important aspects of human life – how as people on Earth we organize ourselves to live harmoniously and keep a balance between so many conflicting forces and priorities at so many levels.

So what can be done to accelerate the progress of administrative science, better known in practice as management, at both theoretical and practical level?

While there are many avenues to be explored, one of them is simple and with a considerable impact on both short and long term: Learning from practice.

Over time, administrative science has been driven by 3 main categories of contributors:

  • Academics – researchers employing rigorous academic research methods.
  • Consultants – commercial entities providing expert advice to challenges faced by practitioners.
  • Practitioners - business professionals that apply in practice principles of management to achieve desired results.

A key ingredient for speedy progress in management is cross-polenisation of ideas. That is exchanging opinions, learning and trying new approaches and sharing results, to contribute collaboratively to the body of knowledge. However, each of the three categories of contributors has certain limitations in terms of their contribution to this process:

  • Academics – sound academic research is slow and faces many challenges in terms of data availability and quality.
  • Consultants – as profit oriented businesses, generally the main purpose is profit generation by deploying services. The emphasis on Research and Development in management consulting organizations is inconsistent. Even when it is actively pursued, results are often influenced by marketing and revenue imperatives.
  • Practitioners – due to the ever-increasing demands of today’s fast-paced business environments, many of them have difficulties keeping up to date with professional development. Allocating time to activities such as research, documenting and sharing findings or even sharing opinions is mostly an exception rather than a rule.

For things to change, each of contributors from each of these categories needs to put more efforts both individually and collectively. Ultimately the most important category is the one formed by practitioners.

They spend most of their time in organizations that can be considered virtual laboratories for the administrative science.

They offer opportunities to change, experiment and innovate at a scale unmatched by both academics and consultant altogether.

This is one of the reasons why practitioners are key to the progress of administrative science. They are close to the data, can make decisions and have an unbiased position towards results as they are impacted by them anyway.

Both academics and practitioner have a key supporting role in this process. They can offer guidance and facilitate the cross-polenisation of ideas. The voice of practitioners needs to be heard more often: at conferences, on discussion forums, in academic and business publications and in businesses.

Successes from the past illustrate that, the contribution of practitioners to administrative science is the key driver of innovation in this field.

DuPont Analysis, Toyota Production System, Benchmarking, Balanced Scorecard and Six Sigma…

What do they have in common?

These concepts emerged from practice, championed in the companies nominated in the first question of this post. They were not concocted by consultants or academics in research laboratories.

Indeed, furthering the knowledge and application of such concepts in practice can’t be achieved without the support of the management consulting industry and academic institutions. They have done a rather good job so far.

However, listening to the voice of practitioners and learning from practice is something that we haven’t yet improved considerably. This is a condition that has to be met before the administrative science process of maturing is to accelerate dramatically.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan

Performance Architect,
www.smartKPIs.com


Relevant links

http://www2.dupont.com/Heritage/en_US/related_topics/donaldson_brown.html

http://www2.toyota.co.jp/en/vision/production_system/

http://hbr.org/1987/01/how-to-measure-yourself-against-the-best/ar/1

http://www.managerialaccounting.org/Balanced%20Scorecard.htm

http://www.motorola.com/Business/US-EN/Motorola+University/About