In their book Switch: How to Change things When Change Is Hard, the authors Chip and Dan Heath describe a powerful idea that runs counter to what many of us have thought about stretch goals as motivators of change. They claim stretch goals are not as effective as smaller bite-size goals that are easier to meet. Such "shrunken goals" more readily and steadily provide positive and reinforcing feedback to the person or group that is undergoing change.
This idea is also supported by the getting-things-done guru, David Allen, who advocates focus on the next action, and not on comprehensive - and daunting - to-do lists. This baby steps approach is not new, of course, but it conflicts with the infamous stretch-goal ideal often touted by corporate leadership. The stretch goals may be great for defining long-term vision, but they can be counter-productive in motivating day-to-day change actions.
Tuesday, May 4, 2010
Tuesday, April 13, 2010
Why the Particular Interest in Decision-Making?
When I was a young executive at General Motors, I had the common young man's frustration with what seemed to me a series of baffling and irrational decisions that I saw being made at the highest level of the company. At the age 30 or so, I was young enough to be still brash, but in a responsible enough position enough to see what I thought were too many truly dumb decisions being made by the executives of the company.
At that point in my life, being a 20th Century history buff or dilettante ("a person who takes up an art, activity, or subject merely for amusement, esp. in a desultory or superficial way; dabbler"), I came across a book that greatly influenced my interests and thinking ever since -- The Guns of August by Barbara Tuchman. The book had at that time, during the Viet Nam War, a resurgence of popularity because of its focus on folly in decision-making during war.
Originally published in 1962, it is a military history book that primarily describes the events of the first month of World War I. In addition, the book provides the crucial context for this momentous event of the 20th Century by presenting as background a brief history of the plans, strategies, world events, international cultures prior to and during the war. The book was awarded the Pulitzer Prize for General Non-fiction for 1962. By the way, Barbara Tuchman is probably the most distinguished female military historian ever and had to overcome more than her share of both blatant and indirect sexism, not unusual in that era.
Why did this book affect me so? It made plain that folly, miscalculations, and misconceptions in decision-making are just somehow inherent in the human condition. The trail of disastrous mistakes made by multiple parties in the run up to WWI was painfully and powerfully described in the Guns of August. I have been studying the good and the bad of decision-making ever since. The most important insights from my study are what I want to briefly cover for you today. Sometimes it seems that we humans haven't learned much since 1914.
At that point in my life, being a 20th Century history buff or dilettante ("a person who takes up an art, activity, or subject merely for amusement, esp. in a desultory or superficial way; dabbler"), I came across a book that greatly influenced my interests and thinking ever since -- The Guns of August by Barbara Tuchman. The book had at that time, during the Viet Nam War, a resurgence of popularity because of its focus on folly in decision-making during war.
Originally published in 1962, it is a military history book that primarily describes the events of the first month of World War I. In addition, the book provides the crucial context for this momentous event of the 20th Century by presenting as background a brief history of the plans, strategies, world events, international cultures prior to and during the war. The book was awarded the Pulitzer Prize for General Non-fiction for 1962. By the way, Barbara Tuchman is probably the most distinguished female military historian ever and had to overcome more than her share of both blatant and indirect sexism, not unusual in that era.
Why did this book affect me so? It made plain that folly, miscalculations, and misconceptions in decision-making are just somehow inherent in the human condition. The trail of disastrous mistakes made by multiple parties in the run up to WWI was painfully and powerfully described in the Guns of August. I have been studying the good and the bad of decision-making ever since. The most important insights from my study are what I want to briefly cover for you today. Sometimes it seems that we humans haven't learned much since 1914.
Monday, March 29, 2010
How Can Checklists Be Important to Lean Thinking?
Recently, I read the latest book from Atul Gawande, The Checklist Manifesto, and it brings to life a great Lean technique, the humble checklist. Malcolm Gladwell in Amazon provides a brief summary and review:
Checklists, properly conceived and designed, do not, as this ridiculous review in the Wall Street Journal posits, encourage rote, unimaginative thinking (see this for a detailed take-down of the WSJ review). On the contrary, they free up the expert professional to focus on solving the problem at hand and not waste time and mental energy rediscovering and remembering what has been done many times before. I will discuss what makes a good checklist in a future entry.
Over the past decade, through his writing in The New Yorker magazine and his books Complications and Better, Atul Gawande has made a name for himself as a writer of exquisitely crafted meditations on the problems and challenges of modern medicine. His latest book, The Checklist Manifesto, begins on familiar ground, with his experiences as a surgeon. But before long it becomes clear that he is really interested in a problem that afflicts virtually every aspect of the modern world--and that is how professionals deal with the increasing complexity of their responsibilities. It has been years since I read a book so powerful and so thought-provoking.
Gawande begins by making a distinction between errors of ignorance (mistakes we make because we don't know enough), and errors of ineptitude (mistakes we made because we don’t make proper use of what we know). Failure in the modern world, he writes, is really about the second of these errors, and he walks us through a series of examples from medicine showing how the routine tasks of surgeons have now become so incredibly complicated that mistakes of one kind or another are virtually inevitable: it's just too easy for an otherwise competent doctor to miss a step, or forget to ask a key question or, in the stress and pressure of the moment, to fail to plan properly for every eventuality. Gawande then visits with pilots and the people who build skyscrapers and comes back with a solution. Experts need checklists--literally--written guides that walk them through the key steps in any complex procedure. In the last section of the book, Gawande shows how his research team has taken this idea, developed a safe surgery checklist, and applied it around the world, with staggering success.The reason checklists are so Lean-like is that they are built on the core concept of standardization of work. One of Gawande's major themes is that as the world becomes more and more complex, the typical response of most professions is to promote more specialization. This can, in many cases, be a dead-end as the narrow specialist can miss the obvious if it is out of his or her small area of expertise. Furthermore, the view of the total system and it's response, which is often not the sum of the parts, can be overlooked by the specialist.
The danger, in a review as short as this, is that it makes Gawande’s book seem narrow in focus or prosaic in its conclusions. It is neither. Gawande is a gorgeous writer and storyteller, and the aims of this book are ambitious. Gawande thinks that the modern world requires us to revisit what we mean by expertise: that experts need help, and that progress depends on experts having the humility to concede that they need help.
Checklists, properly conceived and designed, do not, as this ridiculous review in the Wall Street Journal posits, encourage rote, unimaginative thinking (see this for a detailed take-down of the WSJ review). On the contrary, they free up the expert professional to focus on solving the problem at hand and not waste time and mental energy rediscovering and remembering what has been done many times before. I will discuss what makes a good checklist in a future entry.
Wednesday, March 24, 2010
If Lean is So Great, Why Toyota's Recent Meltdown?
On the subject issue, there is a insightful column at lean.org based on an interview with a top Japanese Toyota watcher, Professor Takahiro Fujimoto of the University of Tokyo. His bottom line -- increasing complexity, commercially and technically, with a large dollop of arrogance thrown in. This is not a new lesson to any student of history.
The current series of problems represents a massive failure on the part of Toyota. And Toyota must take full responsibility for ending up where it is today. But the root causes of these problems are not easily identified. Many internal and external factors have combined in a complex mix. These include misjudgments by Toyota, and overconfidence in its own quality. The factors also include increasingly complex vehicle design, production increases and globalization, and the resulting explosive rise in the number of related problems. While some of these factors are specific to Toyota, others affect the industry as a whole....I visited Toyota in 2001 as a representative of GM to look at their benchmarking activities. We were treated politely, but condescendingly, as they made it clear that they had nothing to learn by looking at anything GM did. That may have been true, but it was presumptuous, close-minded, and, it is plain now, a precursor to the arrogant thinking that recently got them in trouble. It is also thinking that is counter to the open, inclusive mind-set that is integral to the Lean Management they perfected. They got away from their roots.
Toyota has absolutely made its own errors: clearly there are specific aspects of Toyota's organizational culture that lurk behind its poor decision-making. Moreover, I have observed an air of arrogance that may certainly have weakened Toyota in recent years. Yet it must be noted that Toyota faces the same huge challenge as any other company of its scale, in terms of product, market, and production complexity - all the challenges of globalization. The automobile companies of developed countries have been and will continue battling what we might call the demon of complexity - a long-distance obstacle course on which they are challenged to build their capabilities....
Having spent the '90s being admired for producing the world's best quality, an arrogance born of overconfidence started to appear in certain sections of headquarters. The signs of that unfortunate arrogance are clear. The number of customer complaints received by the company is significant. And yet even as quality problems and accidents occurred, Toyota leadership clearly responded by saying, "our quality is perfect - it's the user's fault." This attitude is a severe departure from Toyota's true management philosophy and demands correction.
Monday, March 22, 2010
What the Heck is Lean?
First, lean has nothing to do with "faulty towers" as in:
(By the way, I love this cartoon for its triple twist: (1) the lean of the tower, of course, is not the meaning of "lean" in Lean Management; (2) the defective ones are straight -- the requirement is that the correct ones are "defective" in this case; (3) Lean Management would not involve sorting out finished defects at all, but preventing in the production process the possibility of such errors in the first place.)
Nor does Lean Management mean any of these common misconceptions:
Lean is the management philosophy and set of supporting methods that strive to maximize customer value while minimizing waste. A lean organization understands that it is critical to focus all of its key processes on increasing the value of its products and services to its customers. Work to any other end is waste.
More to follow, especially on why Lean must not be viewed as threatening to the workforce.
(By the way, I love this cartoon for its triple twist: (1) the lean of the tower, of course, is not the meaning of "lean" in Lean Management; (2) the defective ones are straight -- the requirement is that the correct ones are "defective" in this case; (3) Lean Management would not involve sorting out finished defects at all, but preventing in the production process the possibility of such errors in the first place.)
Nor does Lean Management mean any of these common misconceptions:
Lean is the management philosophy and set of supporting methods that strive to maximize customer value while minimizing waste. A lean organization understands that it is critical to focus all of its key processes on increasing the value of its products and services to its customers. Work to any other end is waste.
More to follow, especially on why Lean must not be viewed as threatening to the workforce.
Thursday, March 18, 2010
The Heritage of Lean Office Demystified II
The LODII is the second edition of one of a series of books on Lean Management published by Don Tapping, formerly the “Lean Guru” of Eaton Corporation, and available on-line at The Lean Store and on Amazon.
The common theme of all Don's books is to apply the principles the Toyota Production System, or Lean Management, to various organizational environments: manufacturing, administration, health care, construction, and financial services. Lean works for any enterprise that has even moderately complex business processes.
This second edition incorporates many suggested improvements form readers of the first edition but the main differences are: (1) the addition of a detailed case study that applies the principles of each chapter; (2) many examples and screen shots showing how common software applications can be applied in support of the Lean Office principles and tools.
Monday, March 15, 2010
It's Here: The Lean Office Demystified II
The book I have co-authored is now available: The Lean Office Demystified II:
I will be providing insights and references to the book in the coming weeks. Here is the site for ordering and to view excerpts.
Lean Office Demystified II reveals the secrets on how Lean can be leveraged with MS Office (and other applications) to move information where it is needed, when it is needed, in error-free ways never dreamed of - at the speed of sight. Learn how MS Excel, Word, Access, Grove, and Visio, as well as ACT!, Windows Explorer, and Google Docs can be used in applying Lean tools and concepts. This is all conveyed through the Global Winds case study that is included at the end of each chapter.
This easy-to-use book includes everything you need for success - readiness guides, worksheets, forms, screen shots, application examples, etc. Lean Office Demystified II goes beyond theory to explain how all this works in the actual business case study of Global Winds. Lean Office Demystified II will boost office performance, reduce costs, and increase customer satisfaction, while at the same time create stress-free work place. Computer users, Lean leaders, and front-line employees of the world now unite in this tools and concepts explained in this book!
I will be providing insights and references to the book in the coming weeks. Here is the site for ordering and to view excerpts.
Monday, March 8, 2010
How to Feel Better about Risk-taking
Another psychological phenomenon is studied in the business world. Sometimes these concepts seem unsurprising, but until demonstrated by research, one might not think about them seriously. This is a good example. It suggests that by being in a risk-taking environment or by recently reading about a successful risk-taker, one is more likely to make riskier decisions. The underlying facts and rational considerations of course are unchanging. Another trap to avoid -- or at least factor in. On the other hand, if you are unduly risk averse, overcome it by hanging out with risk-takers.
The study has shown that a group of investment advisors and accountants who have read a story on successful risk-taking decisions rated a traded stock as more valuable for investment, in comparison to a group who read a story on successful results of risk avoidance. "Priming, the underlying psychological mechanism, is well known in psychology, but to date was not analyzed with regard to financial decision making the way we did," said Dr. Doron Kliger who carried out the study along with his student Dalia Gilad.
Thursday, February 18, 2010
Risk and Uncertainty: A Useful Distinction
This blog entry from the Financial Times makes an excellent point about the distinction between risk and uncertainty. Sull notes that "People encounter risk when they face what I call a “clear choice,” where an agent can specify, in advance the possible outcomes relevant to their actions. A gambler, for instance, knows that there are precisely 38 possible pockets where the roulette ball could land, and where the ball lands will influence whether his bet pays off or not."
On the other hand, "Uncertainty arises out of “messy situations,” where the variety of actions an agent could take to achieve her goals is nearly infinite.... The broader range of possible actions complicates the data required to inform action. In messy situations, managers cannot specify in advance all the possible states of nature that might influence their best course of action."
The difference is useful to keep in mind when making difficult decisions. In many cases, statistical, objective analysis is simply not available. The uncertainty will not go away. In such situations, soft factors such as judgment, experience, values, and fuzzy historical precedences may be the best information you can get. That's why you make the big bucks. Be humble but decisive, and keep gathering information on the consequences, adjusting if necessary along the way.
An example of the difference:
On the other hand, "Uncertainty arises out of “messy situations,” where the variety of actions an agent could take to achieve her goals is nearly infinite.... The broader range of possible actions complicates the data required to inform action. In messy situations, managers cannot specify in advance all the possible states of nature that might influence their best course of action."
The difference is useful to keep in mind when making difficult decisions. In many cases, statistical, objective analysis is simply not available. The uncertainty will not go away. In such situations, soft factors such as judgment, experience, values, and fuzzy historical precedences may be the best information you can get. That's why you make the big bucks. Be humble but decisive, and keep gathering information on the consequences, adjusting if necessary along the way.
An example of the difference:
The relevance of outcomes is defined by the range of actions an agent can take to achieve her objectives. In clear choices, the range of actions is limited and well-defined–a fan bets or not–but mind-boggling in messy situations–the coach juggles countless interactions of trades, training, strategy and tactics to win. The following thought exercise illustrates the distinction between risk and uncertainty.
Imagine Warren Buffett goes to the mountain and God hands him a tablet with the correct probability distribution of possible market caps for Microsoft a decade hence. Assuming Buffett’s investment horizon is ten years, this information is most useful in deciding whether or not to invest. For Steve Balmer, this information is practically useless. He could quit of course, or buy more options based on the divinely revealed probability distribution. But if he decides to stay, he would need much more granular data on how competition, technology, regulation, macroeconomics and other factors might interact to create specific opportunities or threats. Only this more detailed information would allow him to take precisely the right actions in the right combination at the right time.
Monday, January 25, 2010
Quick Decision-Making
Some decisions must be made instantenously (Should a quarterback make a hurried, possibly inaccurate throw, or take the sack?). Others require extensive modeling, searches for alternatives, and gathering of data (Dare I mention the quest for national health care?) A third category, however, is those decisions needing some analysis but for which there may be limited time or resources for a thorough analysis.
As noted in this blog entry at Psychology Today:
As noted in this blog entry at Psychology Today:
The modern science of quick decision-making is called heuristics. It is concerned with finding simple rules for making good decisions in complex situations. One of its discoveries (proved in areas from weather forecasting to the prediction of high school dropout rates) is that there is often no need to assess the relative importance of different factors. Just drawing up lists of "for" and "against", and going with the longer list, can produce as good a result or better.
This is what Charles Darwin did when deciding whether to propose marry his cousin Emma. His original list is still on display at his home in the village of Down, England for all to see. The pros included companionship ("better than a dog, anyhow"), while the cons included the fact that he would have less money for books. The list of pros was longer than the list of cons, and Darwin duly proposed. Darwin's procedure is now called "tallying."
"Tallying" allows quick decisions that can be surprisingly accurate. It can be used in many area of life (sometimes with caveats that I discuss in "The Perfect Swarm"), but it is not the only simple rule that the science of heuristics has come up with to help us steer our way through the complexities of life.We can't analyze the heck out of every complex decision, but we often can avoid jumping to ill-considered conclusions by simply taking a few moments to think through and jot down the pros and cons involved. It often happens that the decision will become obvious and you will be able to move forward confidently.
Monday, January 11, 2010
Choosing without Bias
This Blog entry from Psychology makes the excellent point that you must be careful when making choices among options presented one at a time. According to a cited recent paper based on people choosing among sampled wines, "There is an overwhelming tendency for people to pick either the first or the last of the items in the sequence." Also, the more inexperienced tasters tended to choose the first wine tasted much more often.
Being aware of such bias is obviously very important if you want to make the best decisions possible. It's tough enough to choose among similar options without dealing with your own thumb on the scales.
Being aware of such bias is obviously very important if you want to make the best decisions possible. It's tough enough to choose among similar options without dealing with your own thumb on the scales.
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