management

Deming Revisited for a Physically Resource Constrained Global Economy

W Edwards Deming did his celebrated work in an era when environmental and social constraints where not at the forefront of managerial minds and his body of work can be interpreted as a method of maximising solely economic profit.

Although Deming was a child of his times; it is clear from the Preface to ‘Out of Crisis’ that he was reaching out to the Concept of Sustainable Development. Which I define as the process of continual improvement on the journey to perfect Quality and Deming would recognise as his, holistically defined.

Deming said in the Preface  “Performance of management should be measured by the potential to stay in Business, to protect investment.. to protect jobs through improvement of product and service for the future, not by quarterly dividend”.

We have now passed through a period of perhaps 30+ years where environmental and social process failures were seen as an add on burden to organisational management but now, in the resource constrained future we find ourselves in, we have to see them for what they are, core survival issues, and we must be treat them as such by revisiting Deming’s teaching.

As Deming said “Survival is not Compulsory”

Deming Laid down his teaching in 14 points, interpreted at http://www.hci.com.au/hcisite2/articles/deming.htm as

1.”Create constancy of purpose towards improvement”. Replace short-term reaction with long-term planning.

2.”Adopt the new philosophy”. The implication is that management should actually adopt his philosophy, rather than merely expect the workforce to do so.

3.”Cease dependence on inspection”. If variation is reduced, there is no need to inspect manufactured items for defects, because there won’t be any.

4.”Move towards a single supplier for any one item.” Multiple suppliers mean variation between feedstocks.

5.”Improve constantly and forever”. Constantly strive to reduce variation.

6.”Institute training on the job”. If people are inadequately trained, they will not all work the same way, and this will introduce variation.

7.”Institute leadership”. Deming makes a distinction between leadership and mere supervision. The latter is quota- and target-based.

8.”Drive out fear”. Deming sees management by fear as counter- productive in the long term, because it prevents workers from acting in the organisation’s best interests.

9.”Break down barriers between departments”. Another idea central to TQM is the concept of the ‘internal customer’, that each department serves not the management, but the other departments that use its outputs.

10.”Eliminate slogans”. Another central TQM idea is that it’s not people who make most mistakes – it’s the process they are working within. Harassing the workforce without improving the processes they use is counter-productive.

11.”Eliminate management by objectives”. Deming saw production targets as encouraging the delivery of poor-quality goods.

12.”Remove barriers to pride of workmanship”. Many of the other problems outlined reduce worker satisfaction.

13.”Institute education and self-improvement”.

14.”The transformation is everyone’s job”.

To be continued…

See also https://trailblazerbusinessfutures.wordpress.com/2011/10/26/re-defining-quality/

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Re-defining Quality

Posted on LinkedIn at http://linkd.in/u2UGFd

Define Quality…! A conversation about a Quality definition is getting hot, What is your definition?

Derek Deighton • Quality (BigQ) is that which ~

“Maximises the ‘essential’ value added to society resulting from the creation, use and disposal of a product or service at continually reducing Resource Intensity”

In a resource constrained environment any process, product or service that does not add ‘essential’ value to society has infinite Resource Intensity and zero utility or Quality

Any organisation that cannot define and realise, at continually reducing resource intensity’ the ‘essential’ value it adds to society will not survive in a resource constrained environment.

The ‘First Law of Sustainability’ states ~ In a resource constrained environment, goods and services can only grow at the rate at which their Resource Intensity is reduced, the resource use per person per unit of ‘essential’ value delivered. 1=P*C*RI

LittleQ is any recognisable subset of BigQ, fitness for purpose, conformance to specifications, customer satisfaction etc.

This approach to Quality is dictated by the need, in a resource constrained environment, to do the ‘right thing’ right by using resources ‘effectively’ not ‘efficiently’ using resources to do the wrong thing.

‘Failure Demand’ is any economic, social or environmental cost, or possible cost, that prevents, or might prevent, ‘essential’ value being maximised over the product or service life cycle.

Globally the situation is evident but the full import is not being recognised in the face of spiralling consumption.

BigQ ~ ‘Leading for Competitive Advantage’ The Big Q PDF

http://www.sita.co.uk/downloads/ReinventingTheWheel-1110-web.pdf

On our failure to understand External Failure Demand

The World Economic Forum has just released a report ‘From Risk to Opportunity‘ that looks at six different themes

• The challenge of a shifting balance of power
• The challenge of natural resource scarcity
• The challenge of inclusive growth and equality
• The challenge of economic uncertainty
• The challenge of fragile states and new conflicts
• The challenge of global risk management

This is a wide ranging Report that this Blog will come back to, but it includes this comment that is critical to the situation we find ourselves in, as SystemUK, and Globally

“There are commonalities between all sorts of
disparate risks: the BP Gulf disaster, the terrorism
incident in Germany, Wikileaks, the euro zone crisis.
The interconnectedness is that they are all out of the
flow of day-to-day events. They are low probability
but high consequence events.”

Axel P. Lehmann, Member, Group Executive
Committee and Group Chief Risk Officer, Zurich
Financial Services, Switzerland; Member of the Global
Agenda Council on Systemic Financial Risk

There was a time when organisations were increasingly aware of the work of thinkers in ‘Quality’ such as Deming, Juran and Crosby but those were simpler days and we have moved on to a confusing, reductionist world of CSR, Environment, H&S and Sustainability.

These ‘Quality Gurus’ understood the core concepts of Organisational Leadership’ and the costs of less than perfect ‘Quality’ of organisational and product/service performance , of not doing the right thing right, every time.

Central to this was understanding the risks and costs of external Failure Demand arising from actions that ignore the consequences of the economic, environmental or social downside of decisions. The News International disaster is a current example.

Unless we rediscover these eternal truths there is little possibility we can create ‘Sustainable’ organisations and societies, as Quality and Sustainability are just the two faces of the same coin and ‘Sustainable Development’ is the journey of continual improvement towards perfect ‘Quality’

dd 


									

Corporate Sustainability should start at Business School

Corporate Sustainability Should Start At Business School

 

Zachary Shahan October 30, 2010

 
 As far as one can see, corporations aren’t going away and will continue to play an extremely important role in society. That makes their relationship to the environment a critical issue.

Too often, environmentalists are reacting to what corporations do. Rather, we need to advance a more holistic school of social change in the business world.

That means we need to go to the roots of the corporate world and understand where businessmen and women are coming from. You heard me: Business schools.

The inspiration for this post comes first from a tremendous book that nails this topic— The Sustainable Business (available as a free download from the European Foundation for Management Development). The author, renowned scholar and businessman Jonathan T. Scott writes, “to understand sustainability it’s essential to begin by first comprehending the big picture…Rather than building up from particulars to generals (the empiricist method), one must begin with generals—an in-place, intuitive wisdom of the logic behind thinking in the long-term, what it entails, and why it’s important.”…………….

Full story at http://ht.ly/326LM

Seeing your company as a system

Much-needed guidance on making companies more employee-centered, adaptive, and capable.

Bank failures, health insurance rate hikes, and the troubles of auto manufacturers provide recent examples of the vulnerability of big, fast-changing systems and the ways in which large organizations can careen out of control. No matter how disparate the causes of failure, there is always a common thread: somewhere, somehow, management has let its attention slip. As executives and politicians struggle with regulation and reform, now is an opportune time to reflect on the leading ideas that have shaped what we know about the management of social systems, particularly corporations, and how to stabilize and improve them.

The recognition that a company is a complex social system and a living community has been an underlying theme of leading management thinkers as far back as the early 20th century. Nevertheless, the machine continues to be the dominant metaphor for business leaders, many of whom seek to solve their problems by “pulling levers” or “pushing buttons”: making large-scale changes without a clear feeling for how those changes will affect the collective action of the company…………

Full article at http://www.strategy-business.com/article/10210?pg=all

What’s Driving the Business Case for Carbon Management?

What’s Driving the Business Case for Carbon Management?

“In the past five years, an increasing number of companies have launched projects designed to measure their enterprise carbon footprint,” Makower said at the beginning of the webcast. “But who owns that data?”

Companies face the challenge of filling the gap between the executive team, which controls the budget, and the functional teams, which have the skills to those who can carry out the initiatives.

The gap between functional and executive levels
This is where the chief sustainability officer (CSO) can come in to play a pivotal role in moving corporate climate agendas forward. “We see it as critical,” Metcalfe said, pointing to Nixon Peabody and BA Systems as companies employing CSOs.

He also noted Dow Chemical‘s approach in combining the CSO role with that of the Chief Information Officer, leading to the establishment of a holistic view of sustainability and the incorporation of this type of thinking into Dow’s corporate strategy and value systems.

Metcalfe scribed the period between now and 2012 as a period of uncertainty for companies, characterized by short-term cost pressures and climate change regulations fragmented along geographic lines. The executive view of sustainability is generally low, Metcalfe said………………………….

Read more: http://www.greenbiz.com/news/2010/05/28/whats-driving-business-case-carbon-management?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+ClimateBiz+(ClimateBiz.com)&utm_content=Google+UK

It’s a great time to be talking about the business case of sustainability; it isn’t about tree hugging and philanthropy.

SAP launches local Sustainability Executive Advisory Council

Despite the increasing focus on carbon emission reductions within IT and business, the widespread appointment of chief sustainability officers (CSOs) across Australia is unlikely, according to enterprise software giant, SAP.

Speaking to Computerworld Australiaahead of the company’s launch of its local Sustainability Executive Advisory Council, SAP’s chief sustainability officer and executive vice president of sustainability, Peter Graf, said an eventual carbon emissions trading scheme or tax on carbon emissions was unlikely to result in an increase in chief sustainability officers.

“When you have a tax or legislation it becomes a compliance issue, so [a CSO] is more prone to having the sustainability issue moved into the risk management or financial optimisation/finance department,” he said. “The point is that if you wait for legislation to hit, you’re not going to create any competitive advantage out of sustainability.”

CSOs who had been employed to address sustainability often face a hard time, struggling to be heard within their companies, Graf said.

“The successful sustainability officers I know are the ones who have an intrinsic understanding of how the business creates its value and have a career in where the value is created. That is the predominant model,” he said. “If I weren’t part of the development organisation and didn’t help create solutions for customers, then I would have smaller voice in the organisation.”

The net result for CIOs was that there was now a strong opportunity to sit down with the business and discuss sustainability beyond greening the data centre. “CIOs I see in many organisations are distracted by the share of voice the data centre gets,” he said. “Greening the data centre is important but it is only 0.4 per cent of global emissions, according to McKinsey, so the real opportunity for the IT organisation is to understand the wider impact that sustainability has on every business process in the organisation.”

For its part, SAP’s Sustainability Executive Advisory Council will seek to address the issue of sustainability as it applies to every organisation regardless of market vertical or size, Graf said.

“Sustainability is an overarching concept which touches every industry in parallel,” Graf said. “It’s also a nascent software market, so for us it’s key to work with leading companies, understand their challenges in dealing with sustainability and examine the practices they have put in place. We can then put those practices into software and then help many, many companies based on the lessons these leaders have learned.”

Current Sustainability Executive Advisory Council members include Telstra and Corporate Express.

“It’s a great time to talk about the business case of sustainability; it isn’t about tree hugging and philanthropy,” Graf said. “There is a lot of money at stake in driving down the costs of compliance and improving resource intensity and energy efficiency of companies and have them bring out more sustainable products.”

Article from http://www.computerworld.com.au/article/340700/sap_launches_local_sustainability_executive_advisory_council/