The Quality Geek

July 22, 2007

Theory v. Reality

Filed under: Balanced Scorecard — thequalitygeek @ 4:30 pm

In late June, the Committee for Economic Development issued the latest in a series of reports by business think tanks illustrating a growing change in the way American business is thinking about value. “Built to Last: Focusing Corporations on Long-Term Performance,” lays out a strong case against a destructive short-term focus that has infected American capitalism in recent years. It calls on companies to stop issuing quarterly earnings guidance and instead take the long view: “Decision making based primarily on short-term considerations damages the ability of public companies — and, therefore, of the U.S. economy — to sustain superior long-term performance.”

What interests me, as a CQG (Certified Quality Geek), is the link that the think tanks referenced above assume exists between published measurements and decision making. It’s a critical idea in developing dashboards, and it reminds me of conversations I’ve had over the years with business leaders in the organizations I’ve worked for.

Early in my career as a quality geek, I brought fresh eyes (read “naivety”) to the job. I argued with Sr. Vice Presidents whose dashboards I was developing that a variety of output measures should be included for monthly review and discussion. I couldn’t understand what seemed to me to be their fear of information. What I couldn’t see then, thanks to my lack of real world experience, was the causal relationship that exists between the metrics that are published and the improvement actions that are implemented. Time and again I’ve borne witness to reactive “improvement” projects that spring from pressures received by business managers from their key stakeholders, projects aimed at improving a single metric that make little or no sense in the context of the total data set. Projects that drive me crazy.

The fact is, in most organizations, the things that get done have little to do with long-term strategy. They have everything to do with fears and insecurities that are created by pressures felt by the primary decision makers. Pressures are driven by poorly performing metrics; use that as your starting point and you have a wholly different insight into what makes for a good dashboard.

June 16, 2007

Heatlhcare – right or privilege – now that’s provocative!

Filed under: Efficiency, Process Focus — thequalitygeek @ 3:49 pm

Dr. Kelly Rainer teaches at Auburn University, and he recently posed this question to his masters level students in an MIS class. He’s an excellent teacher and his classes are extremely engaging. He encouraged conversation on the right v. privilege question by assuring the students that there is no right answer to the question, freeing them up to speak their minds. I don’t think Dr. Rainer really believes there is no right answer, and I don’t, either. Most questions have one, when examined through the lens of a quality geek.

A true quality geek would tell you that well-designed systems do their best to prevent defects from occurring. So try to look at the health care question from the perspective of cost/benefit and health of the system. Putting aside for the moment whether it’s fair or not that money is a barrier to health (though I have strong thoughts on the issue, it’s an opinion question that’s hard to talk about factually), we can say definitively that the current system in the US is driving a reactive medical culture. US doctors and hospitals, etc. are fantastic at fixing us when we’re broken (reacting to defects), but crap at preventing us from becoming broken (preventing defects from emerging).

If you can imagine a system that can be described like this at an organizational level, anybody with any sense would say that it’s poorly designed (insofar that any system that values reaction over prevention is inefficient by definition). Any system that can be accurately described in these terms is producing the wrong answers as a matter of design. So to defend this kind of system doesn’t make any logical sense.

The primary drivers of the healthcare system in the US are all financial. So the primary outputs that make any sense are also financial. The financial stakeholders – doctors, insurance companies, big pharma – are all doing quite well, because the system is designed to ensure that they do quite well. The patient’s experience, on the other hand, has a large degree of variation because it is directly correlated with access to funds. So the system isn’t designed to ensure consistently positive outcomes for all types of patients.

“So what?”, I guess is the right cold analytical question. Well, one result of a system that is designed to be reactive is constantly climbing costs. This is true of any reactive system. So the ‘so what?’ is that the system, as it’s designed, is unsustainable. It’s a system that’s bringing corporations as large as Ford, Chrysler, and GM to their knees at the moment – and they’re just the canaries in the coal mines. Every corporation that provides health benefits will have to address this issue relatively soon.

It’s true that it’s a huge problem that’s scary as hell to actually deal with. But not dealing with it because it’s a huge and scary problem is without question the wrong answer.

June 13, 2007

Chasing Quality (Your Economic Life Depends on It)

Filed under: Innovation, Quality Focus, Uncategorized — thequalitygeek @ 7:30 pm

William is a guy I work with. Ever since he drunkenly proclaimed at happy hour that he has royalty in his family tree he’s been known around the office as Prince William. He’s a bright guy – a business analyst specializing in developing markets – and is good for an ernest breakroom conversation once or twice a week. He’s also adept at ordering jello-shooters in Mandarin Chinese; though that’s both off-point and a matter of faith on my part I find it interesting enough to mention. Recently I let it drop to Prince William that I believe most companies that are known for being quality-focused actually aren’t quality-focused at all – they’re merely famous for an ad campaign that’s quality-focused. He of course demanded I back that claim with data, and since I had none I challenged him to rattle off statistics demonstrating China and India already have – as Prince William often claims – arrived as our economic rivals to be most feared and respected. what he said floored me. I’ll paraphrase:

– The smartest top 25% of people in China represent a population greater than all of North America.
– As you are reading this entry, 60 babies will be born in America. 351 will be born in India (+/- depending on your reading speed).
– China has more honors students than the US has students (India does, too).
– The U.S. ranks 20th in the world for broadband penetration.

He went on, but to be honest I tuned him out. I was already thinking that Brzezinski’s Choice might be an apt model for our economic relationship with China and India. (Brzezinski was Jimmy Carter’s Chief of Staff and he argued in his book, The Choice, that the US is at a decision point, with pursuit of a position of world leadership as the left fork in the road and pursuit of world domination as the right fork.) As Prince William hammered home point after winning point, I was thinking, choose wrong and we’re Rome, choose wrong and we’re England circa 1900.

How does this relate to quality? I might be wrong of course – please, tell me why if you think so – but I think US organizations need to make a strategic choice to lead the world in innovation and quality-focus, which I’m arguing will be our two critical differentiators in the world marketplace during the next hundred years. Because, to be honest, when I hear statistics like the ones Prince William trotted out, I can’t help but think that there is no way in the world we compete and win on efficiencies or price with countries who can bring it like China and India will be bringing it in the decades to come.

So it might be time to get a little radical in our thinking. How, specifically, does an organization encourage innovation? How does an organization create an atmosphere of creativity? How are these ideas linked back to developing a culture that lives securely within its quality-focused intentions? We’ll have to develop this thread more fully, but a central idea that I’m attracted to involves a change in direction. Not working harder, with cultures that cultivate and encourage our (on average) 55 hour work weeks, our 60% vacation utilization, our focused pursuit of MBAs. Work smarter, by creating cultures that chase connections, leaps of insight, inspiration – things that only come to us individuals when we’re in the shower, taking a stroll, slowing down.

April 3, 2007

Zombie, Inc. (The Walking Dead)

Filed under: Uncategorized — thequalitygeek @ 1:51 pm

In my experience, you have to get someone’s attention if you want what you have to say to sink in; I make this next statement in that spirit. Two-thirds of the organizations currently listed on the world’s stock exchanges are going to fail. In all likelihood, you work for one of these walking corpses, and in all likelihood they’re failing now, as you read this.

Reality checks are good for attention grabbing. Here’s the historical reality on which the above statement is based: no more than a third of today’s major corporations will survive in an economically important way over the next twenty-five years. We know this is true, and we know it’s because most organizations are unable to sustain meaningful growth. No more than ten percent of all companies will be able to sustain above-average returns for more than a decade. As always, the interesting question, and the question to which the answer provides the best antidote to stagnation and failure, is why. Why do organizations find it so difficult to maintain meaningful growth?

The answer lies in the strategic approach to driving innovation and the willingness of organizations to adopt process-focused management practices. The linkage between innovation and growth, as measured things like by R&D spending, patenting, and innovation counts, is undeniable. There have been enough studies on the topic now to accept the linkage on its face and move on to the next point of focus, and the next focus point should relate to how innovation should be factored in to each organization’s strategic planning. The reason so many organizations have trouble maintaining growth is that most executives believe that the future is now, and therefore do not take the time to institutionalize innovation. Too many decision makers focus on generating a great new innovation or two to pump up growth in the relative near-term, as opposed to developing a systematic process focus that can create an innovation engine capable of driving growth indefinitely. The argument for a longer-term approach seems to be a simple one – after all, the ability to maintain growth is tied, by definition, to what an organization does over time. It’s amazing how much push-back the simplest ideas can generate.

Companies that buy into the truth of this argument find that it leads them in a very specific direction: they define innovation as one of their critical processes, and they become more process-focused generally. They also adopt some innovation-specific critical-to-quality (CTQ) metrics, such as lead time required for innovation and differentiated competitive advantage resulting from innovation, by which they can measure their progress. The bottom line is that companies cannot succeed and survive in an economically important way by being occasionally innovative. They must be consistently innovative over time at a rate that exceeds the rate of their competitors.

January 8, 2007

Uncle GDP Gives a Life Lesson

Filed under: Balanced Scorecard, GDP, Success Measurement, The Prestige, Waste — thequalitygeek @ 9:55 pm

Uncle GDP, cocktail in hand, puts his arm around you and points out to the beach from your condo’s balcony. You can hear birds, their feathers slicked tightly to wings and chests, standing on the coast line screaming. The rocks on the beach around them are black and wet, the ocean itself undulates slowly like a black silk sheet clipped to a clothes line on a gently gusty day. The Prestige is sinking in the background; it is being tugged out to deeper waters off the coast of Spain to mitigate the damage, in the hopes that it will drop to the bottom of the frigid ocean and its remaining cargo will solidify two miles below the surface.

Over the next several days you watch as the French Navy brings oil trapping nets and provides them to Galician fisherman, and workers create a floating barrier to protect the coastline. Dead birds sit on the beach like incredibly lifelike onyx statues. Fish begin to wash in, on their sides, and workers quickly execute oil spill disaster plans. A preliminary cost for the cleanup and lost economic activity is estimated at $42 million. The good news for Spain, however, is that the oil spill will reflect as a positive event at a macro-economic level. Uncle GDP smiles at you drunkenly and winks.

I look at the world through my quality geek lens. As a result, I see in this story events that will repeat themselves, because the system is not designed to discourage them. Until the system is re-designed to honestly account for the costs of oil spills and similar events, so that they become net negatives at the macro-economic level, they will continue to happen. That is how decision-making processes operate. It’s a stomach-turning realization, that this kind of event is designed in to our system.

In the context of our quality conversation, an oil spill such as the one caused by The Prestige represents waste on a tragic scale, and highlights a critical problem with GDP as a success measurement system.

Quality geeks understand that all waste, from an oil spill to a loading dock stacked with rotting fruit, is the result of a defect or defects in a process, and should be rooted out of the system. All systems have waste, but due to poorly designed success measurement systems like the one built around GDP, most of it is hidden and most of it is ultimately accepted as a cost of doing business. The problem is that many of the success metrics commonly used by organizations, like their macro-economic Uncle GDP, routinely ignore or downplay the impacts of waste. The cumulative impact of all this waste resonates on a global scale. The waste is real, it’s sickening, and it can be easily found by perusing the newspaper on most days.

It’s rare that a single metric can be used to define success or failure, and the problems with using GDP to define a country’s economic success perfectly illustrate why. Quality geeks at all levels should bang the drum for the implementation of business review processes centering on the use of balanced scorecards. By marrying ourselves to dishonest or incomplete definitions of success we create systems that encourage their own slow deterioration. This holds true both on the organizational and the global scale.

January 5, 2007

Efficiency is Not a Dirty Word

Filed under: Efficiency, Lenny Bruce, Quality, Quality Toolbox, The Princess Bride — thequalitygeek @ 7:16 pm

Here’s something that drives me crazy: a perfectly good word is co-opted by someone with an agenda and given a new definition, scaring people away from its use. It happens frequently in politics, most famously with the word “liberal” during the last two presidential elections. Democratic candidates ran away from the old and newly damaging label like peepers who tripped a motion-sensitive floodlight and toward something more benign, like “progressive”. The literal meanings of the words be damned. The pendulum seems to be swinging, as it ever does; any politician with POTUS aspirations in 2008 will likely be distancing him or herself from the “conservative” label.

My problem with all of this is that I kind of like words. They’re fairly effective tools. Seeing a word mis-used for me is like seeing a fine set of woodworking tools left to rust in a neighbor’s front yard. It seems wasteful, and lazy. Worse, from the perspective of the carpenter, being careless with the tools makes the eventual process of woodworking less effective. Less efficient.

Which brings me back to quality. I’m noticing more and more these days a deterioration in the practical meaning of the word efficiency. Most often it’s used in conjunction with the idea of cost savings, sometimes by people who are for the approach (stridently, “we need to become more efficient!”) and sometimes by those who are against it (sneeringly, “it can’t just be about efficiency!”). To both camps, I am begging you, please knock it off.

Lenny Bruce was arrested in 1961 in San Francisco because he insisted on exploring literal meanings of words. Well, that and because he kept saying “cocksucker” in public. There was a man who respected the tools of his craft. My point here is that efficiency is not inherently good or bad – it is a word that describes the relationship of the output to the input of any system. How can you be “for” or “against” efficiency? It reminds me of that great scene from The Princess Bride:

Vizzini: “Inconceivable.”

Inigo Montoya: “You keep using that word. I do not think it means, what you think it means.”

Efficiency implies the optimization of productivity (measured outputs over measured inputs). To improve efficiency, the productivity ratio is improved. You can do that in a number of ways: by holding inputs constant and improving outputs (by reducing waste, say), by holding outputs constant and decreasing inputs (there’s your cost-savings play in an efficiency context), or any other combination that decreases the ratio of inputs to outputs. Like all the other tools in the quality toolbox, it’s there for the betterment of the organization, and is only as good as the craftsmen and women who use it.

As the saying goes, it’s a poor carpenter who blames his tools.

December 6, 2006

Something About Me I Thought You Should Know

Filed under: Cormac McCarthy, CTQ, Good to Great, Jim Collins, Joan Silber, Quality Focus — thequalitygeek @ 1:43 am

You should know that Cormac McCarthy is my favorite novelist. I expressed this to Joan Silber years ago, when she was doing her time as my writing teacher at Warren Wilson, and she expressed distress, saying McCarthy was “too mean to live”. A recent NY Times review says that “The Road“, McCarthy’s latest, “…would be pure misery if not for its stunning, savage beauty.” A great line, and one that I think would be a fine choice for describing Mr. McCarthy’s entire writing career. Maybe even fit for his headstone a few years hence.

McCarthy routinely swings for the fences, thematically speaking. He leaves the impression that his work is critical to him, even when no one else is looking. In a conversation about Quality, then, McCarthy is relevant because he provides an inspired example of how to go about being great at what we do.

Greatness, organizationally speaking, is not only relevant to the Quality discussion but the entire point. And the pursuit of greatness, as wise men from McCarthy to Jim Collins understand perfectly, can be pure misery; it is all too alluring to be directed into easy mediocrity by the siren song of quarterly earnings report.

McCarthy didn’t become financially successful until the publication of “All the Pretty Horses” in 1992. He’d been a published author at that point for nearly 30 years, since 1965’s “The Orchard Keeper”. Both “Blood Meridian” and “Suttree” had been published in the meantime and most people who know what they’re talking about consider those two novels to be his best work. He’d therefore gone about the business of being great with no external reward for nearly 30 years.

The point I’m making is relatively simple. Focus on short term results, and you sacrifice your shot at greatness. Focus on long term strategy and you’re equally lost. Focus, however, on becoming great at what you do, and short term/long term results will eventually take care of themselves. We’re uniquely positioned, as Quality Professionals, to advocate the continuous pursuit of organizational greatness.

All organizations are able to articulate the thing at which they would like to be great. They should also be able, with some guidance, to define greatness in specific terms. The role of the true Quality Geek should be to facilitate this discussion, to midwife the organization’s level one CTQs describing that at which the enterprise wishes to be great, and then to ruthlessly hold the organization’s performance up to that unforgiving mirror and require nothing less than unrelentingly honest self assessment. There’s no way of really knowing, but I suspect that if Cormac were a CEO, this is the kind of behavior he would respect.

December 5, 2006

Little “i” Innovation

Filed under: Innovation, Little i Innovation, Systematic Innovation — thequalitygeek @ 6:48 pm

A process engineer is hired by a service organization after a successful career spent improving work flow and throughput in a manufacturing environment. He busies himself identifying tools he used in his manufacturing career that could be retrofitted for use in the service industry to the benefit of his new employer.

A Quality Manager in a small call center develops a formula for assigning a dollar value for each hour spent by a customer service representative assisting clients, allowing the organization to understand for the first time the cost/benefit ratio of the customer service function.

A line worker develops and perfects a new technique for trimming excess plastic from the bumper of her high injection-molding machine. She shares the practice with her workmates and soon her cell sets new a factory productivity record.

One thing that these three scenarios have in common is that the activity being described is invisible to the external customer. In many cases, unfortunately, the activity also goes largely unnoticed by the organization’s leadership group as well. It is fair to say that in this kind of organizational environment, insufficient value is placed on little “i” innovation.

Too often, organizations that are interested in developing a culture that rewards innovation focus exclusively on large-scale, breakthrough innovations of process, technique, or product. This is a greedy approach to fostering innovation that encourages the occasional home run at the expense of the regular base hit. A system that organizes an enterprise’s collection of both big and little “i” innovations is another way of defining systematic innovation. (A good article advocating systematic innovation and calling out organizations for using what he refers to as rhetorical innovation, Real Innovation by Michael Slocum, can be found on the relatively new website). Little “i” innovation is critical to fostering continuous improvement and needs to be rewarded as it occurs. It also must be measured, tracked, and trended like any other critical process. If it is ignored, or allowed to remain invisible, it will inevitably go away.

Organizations interested in rewarding innovation as it occurs would be well advised to review existing recognition and reward programs and ensure that they are aligned with their innovation intentions. Doing so goes a long way to pushing awareness of the innovation intention down the corporate hierarchy and encouraging innovation where it is found. It is relatively simple to recognize and reward “the next big thing”. To truly build a culture that lives within the innovation intention, however, little “i” innovation also needs to be valued and actively encouraged.

November 29, 2006

Feeding the Beast

Filed under: continuous improvement, Quality, Quality Management — thequalitygeek @ 3:18 pm

In order for an organization to be successful, everyone knows that continuous improvement is critical.  But what does that mean, specifically?  How do we ensure that our organizations are designed to drive continuous improvement?

I think in terms of Input, Process, Output.  I’m a quality geek, a process guy, it’s how we think.  So in talking about continuous improvement, I think first about the inputs that are necessary to drive the continuous improvement process.  Since most of my professional experience has come as a quality management professional, I also place a high value on an organization’s quality group and its ability to supply critical inputs to the continuous improvement process.  The quality group, if it’s been engineered properly, is uniquely positioned to feed the continuous improvement beast.

I call it a beast because its hunger never abates.  To be healthy, the beast must be fed constantly.  A good quality group is in the business of collecting information on the organization’s defects – exactly the kind of food the continuous improvement beast thrives on.

The key question to ask about your organization in this context thus becomes centered on the quality function.  Is it positioned to cast its net over the entire organization, or is it too narrowly focused to provide any substantive insight?  Does the data that it collects reside in a centrally located database?  Is that data readily accessible?  Does the continuous improvement beast know how to get into the database/feeding pen?

The quality function should be looked at as the most critical supplier of continuous improvement nutrition.  If that’s not the case in your organization, make re-engineering the quality group job one, and your continuous improvement beast will be strong and healthy.

November 14, 2006

On the Danian-Wired Continuum

Okay, let’s get this out of the way – The Wire is by far the best drama on television today, and the best cop show in television history. There, I said it, and I feel better. The show is a triumph of substance over style, featuring a slow-burning, character-driven plot that cares about the issues of the place it lives in. It’s like a great baseball game, or a brilliant chess match, in which seemingly nothing happens, nothing happens, nothing happens, and then, suddenly, everything happens, and all of the connections become clear. A Wired organization, then, is the opposite of a Danian organization. A Wired organization is so well-aligned that each employee is a critical employee, each function is a critical function. A Wired organization would no sooner eliminate its quality group in a cost-cutting move than it would fire the CEO and executive staff in order to meet a quarterly EBITDA number. Most companies are somewhere between Danian and Wired organizations. But all organizations are in a constant state of becoming, and we would do well to get good at understanding the direction in which our businesses are moving.

To that end, I’ve come up with an organizational Rorschach Test that anyone can take, inspired by the Enron book Conspiracy of Fools by Kurt Eichenwald. My premise is that there are two critical lessons that can be taken from Enron’s historic collapse; the idea here is to apply these lessons to your own organization. Ask your organization whether it agrees with the statements below, where its practices are in relationship to these lessons, and (if it agrees with the statements) which lesson it believes is the most critical. Your answers will place your company somewhere on the Danian-Wired continuum. Ready? Here we go:

1. The singular lesson from the Enron collapse was one of conflicted interest, as with the auditors who didn’t audit for fear of losing other consulting fees, or analysts who inflated recommendations for fear of losing underwriting opportunities.

2. The primary lesson from the Enron collapse was the steep cost of valuing intelligence over wisdom.

Each lesson is valid in its own way. And like the Rorschach, there’s no right answer. The scoring is subjective. The idea is to answer honestly, pay attention to how you answer, and to place your organization somewhere on the Danian-Wired continuum. Once done, pay attention to which direction your business is moving.

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