Tag Archives: Market Based Management

Weekend Reading: Some Things Are Best Done Badly

Weekend Reading: Miscellaneous Classic BooksMindTools for Chaos, Hate, & Discontent: Managing “Rebels”Addressing Tardiness, and Organizing the Disorganized

The top ten words given to the English language by the internet

Injured Hispanic worker could not read English warning sign; sues for discrimination.

How to plan for productive and happy summer interns (and why)

The health warnings written on your face

Project Management: Teach Subcontractors to Use Project Metrics

How amplified individuals are doing what established institutions can not do [The concise description of a little-known phenomenon and some insightful suggestions makes the self-promotion of the author tolerable.]

How Small Wins Can Lead to Big Success

Fact: Funding  improvements in a large company is a bureaucratic nightmare. Potential solution: internal capital markets. [Market-Based Management goes mainstream?]

Noria lays out oil filter ratings

Flying Flashback: Before fear ruled the airport and the masses begged to be fondled, searched, and patted and thanked the Commissars so gratefully

Torquing: it should be part of your plant’s standard work process

Some things are best done badly

Unfortunately, I have to miss them when they come to Boise, but here’s Celtic Woman with The Voice:

Cause Mapping the Abilene Paradox (With a Few More Solutions and Resources)

Rocky Mountain Fog near a Valley RoadI have written before about the road to abilene, which comes from an article [PDF] referenced in the book Success With the Gentle Art of Verbal Self-Defense. This concept is so important to organizational function that it bears greater discussion. It’s implications for the MBM Challenge Process and organizational health are hard to overstate.

The Abilene Paradox is that sometimes, it’s false agreement, rather than conflict, that trips up organizations and causes them to go in unproductive or counterproductive directions. When people privately assess the situation one way, perceive that others think differently, and then agree with what they think the group believes, we have the paradox.

Let’s distill the article into a causemap. Here are the causal factors, evidence, and possible solutions enumerated by the article:

Cause Mapping the Abilene Paradox

Click for full size

This exercise helps in a very significant way: it allows us to examine what questions have been explored, and what have not been asked. There is no shame in missing information: even a book can not explore every angle of every question. Everything is too big and too interconnected. Fortunately for us, we do not need to be a Buddha or Dalai Lama to solve many of our basic problems. [Though it might help!]

If we were to extend the cause map further, we might put in a box somewhere—perhaps as the cause of the fear of isolation—called “herd mentality.” The cause of herd mentality might be found in evolutionary psychology: bands of primitive man that hung together were more likely to survive and reproduce than those who tended to “go their own way.” But such speculation into evolutionary psychology does not lead to possible solutions.

Alternative Solutions

One more possible solution is to make the way a little easier for the “confronter.” The author acknowledges that the risk of separation is real, and that ostracization or exclusion are brutally efficient punishments. But he encourages the confronter to consider the likelihood, rather than the possibility, of these negative consequences.

An alternative approach might be to really embrace the negative scenario with all the gusto we can manage. See Tim Ferriss’ video on practical pessimism:

Not only are we fired for our actions, we are abandoned by our family, shunned by our friends, and left crying in the gutter in pouring rain with a cardboard box for cover. The absurdity of it becomes quickly obvious. You may be cured or not, but it’s worth a try.

More Resources

One resource that may help an aspiring “confronter” is Hornstein’s Managerial Courage, which studied and distilled those actions and motivations which may not guarantee success, but puts the odds in our favor.

Another resource is Crucial Conversations, which provides a framework for having safe conversations about controversial, emotionally-charged subjects.

If you are a manager, supervisor, head-of-household, or leader who wishes to avoid creating your own Road to Abilene, then reading about the MBM Challenge Process is advisable. The Science of Success is a good place to start.

The Ordeal of Change by Eric Hoffer

The Ordeal of Change by Eric HofferBook Review: The Ordeal of Change by Eric Hoffer

It has often been said that power corrupts. But it is perhaps equally important to realize that weakness, too, corrupts. Power corrupts the few, while weakness corrupts the many. Hatred, malice, rudeness, intolerance, and suspicion are the fruits of weakness.

—Eric Hoffer

When reading Eric Hoffer it is easy to identify his work as that of an intellectual giant. This dock worker and migrant laborer turned social commentator is better read, more informed, a clearer thinker, and more in touch with reality than most college graduates.

One of the striking features of Hoffer’s writing is that it is a virtually endless supply of quotable quotes. It was tempting just to extract some juicy ones and post them. It is very difficult to “summarize” Hoffer because his writing is so concise and compact already that it is difficult to condense further.

Out of all his works, The Ordeal of Change is the third I’ve read, and the most directly relevant to management and industry. The concept of change, and human reactions to it, are of particular importance to those attuned to Market Based Management. Whether the attentive reader agrees with Hoffer or not on all points, he will come away from the book better informed about how to promote change, but more importantly what kind of change should be promoted.

Key Concepts

Key concepts are either recurring themes or strong individual points made with a fairly general application. Books with a more theoretical bent will have more “key concepts.”

  • When we have no pride in ourselves, pride in one of our associations with a collective or a leader becomes overpowering. The opportunity for meaningful individual action and self-advancement prevents mass fanaticisms. Thus, weakness is as much a corrupting influence as power, and it breeds malice and intolerance.
    • [Lesson #1: If you pay people well enough to entice them to stay but give them no support or chance to succeed, you will have the worst possible outcome: you will keep them.]
    • [Lesson #2: If you give the worker no voice at all in affairs, they will probably organize in order to be better heard. The result is usually satisfying to no one.]
  • The low social status of the intellectual in the western world causes them to promote many of the -isms of the masses. Communists may persecute their intellectuals, but they must take them seriously to do so. America tends to ignore them. In return, the Communist intellectuals have turned a criminal gang of psychopathic murderers into “saviors of the world.”
    • [Lesson: Give the men of words a place in the order to win them over. If you don't they will use their powers of persuasion to cause discontent. They are not necessarily wiser than the rest in identifying what is in their best interests.]
  • Origination [innovation] requires a loose social order where individuals have the room to tinker and follow hunches.
    • [Lesson: A rules-based culture will struggle with innovation.]
  • Not having a fixed place in the social order keeps everyone off balance. Without a guaranteed place in society, each man must prove his worth anew each day. This is not the path of fulfillment, but it at least provides men with justification for existence.
    • [Lesson: Discretionary effort will be reduced with an increased emphasis on tenure.]
  • Management is seen as mostly the same to the worker, be he ideologue, profit-seeker, technician, or bureaucrat: he sees the worker as a means to an end. Complete unity of worker and management means the worker can be taken advantage of just as though management wielded coercive power. His safety, then, lies in a well-defined division of labor separating him from management. One thing is certain: the capitalist profit-seeker is a far easier taskmaster than the ideologue.
    • [Lesson: Workers are generally suspicious of philosophical or ideological persuasions for a reason. Ideology is not the sole province of the communist, and is becoming increasingly common in American business. Thus we have a prevalence of slogans.]
  • The pioneers were not specifically seeking hardship, but if they had “made good” in the east then they would have had little incentive to leave and start over elsewhere. Hence, our vast western territories were cleared by society’s undesirables. America is the ironic result of what people from the low end of society can build when left alone.
    • [Lesson: Innovation will probably not come from well-rounded, socially-adjusted individuals. It will more likely come from wierdos, introverts, obsessives, and people with unconventional tastes. Does your recruiting process screen these people out? Does your culture make them feel unwelcome?]

Publisher’s Blurb

From Amazon.com:

Eric Hoffer—one of America’s most important thinkers and the author of The True Believer—lived for years as a Depression Era migratory worker. Self-taught, his appetite for knowledge—history, science, mankind—formed the basis of his insight to human nature. Nowhere is this more evident than in Hoffer’s seminal work, The Ordeal of Change, essays on the duality and essentiality of change in man throughout history.

Table of Contents

Chapter 1: Drastic Change

Chapter 2: The Awakening of Asia

Chapter 3: Deeds and Words

Chapter 4: Imitation and Fanaticism

Chapter 5: The Readiness to Work

Chapter 6: The Intellectual and the Masses

Chapter 7: The Practical Sense

Chapter 8: Jehovah and the Machine Age

Chapter 9: Workingman and Management

Chapter 10: Popular Upheavals in Communist Countries

Chapter 11: Brotherhood

Chapter 12: Concerning Individual Freedom

Chapter 13: Scribe, Writer, and Rebel

Chapter 14: The Playful Mood

Chapter 15: The Unnaturalness of Human Nature

Chapter 16: The Role of the Undesirables

Perverse Incentives and Unintended Consequences

This Prezi was created in order to guide a discussion on perverse incentives for a group of supervisors unacquainted with Market-Based Management. This purpose is achieved by placing perverse incentives among the spectrum of unintended consequences and providing clear and concise definitions and examples. Most of the examples were selected and paraphrased from Wikipedia. A brief presentation is followed by some discussions questions which will apply the principle to the workplace.

It will be noted in the course of the presentation that the perverse incentives do not disprove the utility of the example policies, but that the negative side-effects do exist and may not be what the designers intended or wanted. [I attempted to use only examples with proven perverse incentives.]

Discussion Questions

  1. Incentives to overproduce can result from production-related metrics. For example, in Soviet Russia, factories were measured on how many tons they produced (presumably with hard labor in Siberia being the penalty of failure). Thus, they produced only very large nails. What incentives to overproduce might we have here and what drives it? Define “production” very broadly here: we could “overproduce” on-spec or off-spec product, production inputs, reports, or wasted motion or time.
  2. Incentives to underinvest can result from cost-related metrics. Every company has limited resources to invest, and good cost control practices benefit customers by keeping prices down and preventing waste. But conforming to year-old budgets also restricts us from capitalizing on emergent opportunities. What incentives to underinvest might we have here and what drives that? Define “invest” broadly: we could invest in efficiency, reliability, safety, and environmental compliance as well as production capacity. [Similarly, growth metrics can lead to overinvestment, but this may be a greater problem in marketing. My primary audience is manufacturing.]
  3. Incentives to unproductive competition can result from conflicting incentives or narrow optimization. For example, I will be fired (or denied a performance bonus) if uptime of my operating unit falls below 90%. But the stores manager will be fired (or denied a performance bonus) if he fails to cut inventory by 20%. We probably are not going to like each other very much: I want lots of spares on hand and he will work hard to get rid of them. What unproductive competition might we have here and what drives it?

More Information

For more information on perverse incentives and unintended consequences, I recommend the following works:

Weekend Reading: The Age of the Operator-Maintainer

Weekend Reading: Scary, Haunted Library

Happy Walpurgisnacht (next week)!

Trend Alert: Milennials [younger workers] share their salary more often, expect more transparency

News Flash: Koch Industries is a leading bidder for the Tribune Company

Wild, Wild West: Samurai sword-wielding Mormon bishop comes to aid of Utah neighbor [This is too just much awesome for one news article.]

Where do you start with reliability? How about clean, tight, and lubricated?

A great article [PDF] by Mark Paradies on the difficulties of causal analysis [Is causal analysis really too hard for most people? Personal experience on dozens on incident investigations would indicate in the affirmative, but it's a hard thing to accept.]

3 great questions for changing “change management” (or “management of change”)

Before you install hydraulic equipment, always, always, always consider your strategy for maintaining oil cleanliness

Solving Gearbox Water Contamination Issues

Hiring? Past job titles just aren’t that important. Really.

A Comment Better than the Original Article ["Guest" writes on 4/17 at 6:51 AM: "Your article doesn't say anything. Yes, Thatcher was one way and could have been another way, which you admit might not be better and might even be worse. Big deal! This is the problem with Leadership as an academic subject. It's wishy washy with absolutely no answers." Had me laughing.]

Terrific checklist for manual-to-automatic lubrication systems that can apply to almost any form of automation

New Hubble telescope nebula photo

Horse Head Nebula

Credit: NASA, ESA, and the Hubble Heritage Team (STScI/AURA)

How long does it take to make something a best practice? It’s about time we changed the job title of operators to operator-maintainers

Weekend Reading: Filtering versus Flushing and Conflicting Visions

Weekend Reading: Miscellaneous Classic BooksSolving US Manufacturing’s New Talent Challenge: Consider these steps to attract, retain and develop much-needed supervisors.

Incentives 101: The Principal-Agent Problem [Incentives 101 only includes awareness. Resolution of the principal-agent problem is a controversial and highly contentious issue in management and what satisfies one principal may be unsatisfactory to another.]

Don’t ignore Viscosity Index (VI) when selecting a lubricant

When should oil be filtered?

Alternatives to flushing lubricants

Glycol contamination in engine oil: what it looks like and what it does

More efficiency through the use of checklists

Are you in the “real world” of maintenance?

A strictly unofficial interpretation of Obama’s second inauguration address

A lot of literature is out there about Vision: having it or not having it. But what happens when there are strong conflicting Visions? [The video in the link specifically addresses "constrained" and "unconstrained" Visions and the application of the concept to politics. But this can happen on a smaller scale in any organization. The matter at hand is absence versus conflict versus shared Visions. See also The Fifth Discipline section on Shared Vision.]

 

Weekend Reading: Goals Into Questions and PhDs on Food Stamps

Weekend Reading: Miscellaneous Classic BooksManagement Is (Still) Not Leadership [but you need both]

Creative destruction in the legal profession

Infographic: America’s PhDs on Food Stamps [Crucial information is missing: what field have the PhDs receiving public assistance studied? One would think there would be a pie chart about this.]

How to transform your goals… into questions?

Echoing MBM, here is a suggestion to reward “smart failure” [MBM differentiates between calculated risks and situations where due diligence was not done. A good bet that doesn't pay off is treated differently than carelessness.]

Perspective on change: embrace it, but don’t compromise on fundamentals.

MindTools for speaking and presenting: creating effective presentation visuals and managing presentation nerves

This video shows what kind of videos you can produce with a small budget. [1:30 to 1:35 may be NSFW.]

Weekend Reading: Getting Rid of a Couch Potato Lifestyle

Weekend Reading: Exercise and Workout EditionGetting rid of a couch-potato lifestyle

How to allocate your time and effort [Key point: Getting "straight-As" is a goal to shoot for in school, but not at work.]

The five most common facilities risks

Smartphones: Do we own them or do they own us?

The Robber Barons got a bad name (of course). It’s true that some deserved it, but others didn’t. Do JP Morgan and James Hill really deserve to be lumped together? What’s the difference? The MBM Blog proposes this distinction: principled entrepreneurs vs. political entrepreneurs.

Don’t let employees flounder: tell them what you stand for

Social media’s potential contribution to business process management

Arnold’s six secrets of success:

Evernote Implementation for Engineers Part 2: Notebooks

Overwork, Messy Office, Disorganized

Your office? Time for a scanner and Evernote.

About a month ago, I briefly reviewed Evernote tagging as a superior tool to categorization in organizing the massive information libraries most engineers have to manage. Next, I promised a post on notebooks and here it is.

Notebooks vs. Tags

I address notebooks second because in using Evernote, notebooks are of secondary importance. To understand why, let’s analyze the features of notebooks and tags:

  1. The first difference is that tags are infinitely nestable. I can have a subtag of a subtag of a subtag of a subtag. Notebooks are not nestable, but a notebook stack can have a set of notebooks underneath.
  2. Second, notebooks are containers, and as such every note must be assigned one (and only one) notebook. Tags are optional.
  3. Third, notes containing nested tags do not have to contain the parent tag. If “AC motors” is a subtag of “motors” then I can have a note tagged ”AC motors” but not tagged “motors.” [Of course, the user can always enforce this rule on themselves and in this example it would be a good idea.] On the other hand, any note contained in a notebook is by definition also contained in the notebook stack. (Notebook stacks are “containers of containers.”)
  4. Fourth, sharing features are dependent upon the notebook. You can share a notebook, but you can not “share a tag.”
  5. Fifth, search text will find notes with a tag, even if the note or titles does not contain the word. If a note on sensors is tagged, “electronics” but does not contain the word “electronics” then a search for “electronics” will put it in the results. If I note on sensors is contained in a notebook called “Electronics” then a search for “electronics” will not put it in the results.
  6. Finally, you can search within ONE notebook or notebook stack, or you can search within ALL of your notebooks. It’s either-or: you can not search with two notebooks only (unless two notebooks is all you have).

When to Use Notebooks

So, if tagging is the primary system for organizing information, why use notebooks at all with all of those restrictions? The answer is: it’s not necessary to have more than one notebook. However, there are two situations in which notebooks should be used:

  1. The first situation is when you have a very large account and want to use notebooks to speed up your searches on a mobile or desktop device. If you have 20,000 notes and one notebook contains 1,000 notes within a stack containing 5,000 notes, then your search will go faster if you search the stack or notebook rather than the account. How you structure your notebooks is then determined by your search needs.
  2. The second situation is when you want to share your notebooks with individuals or open them up to all and sundry. If I have 100 notes to share only with my co-worker Billy Bob and 50 notes I want to share only with my bowling buddies Joe and Mike, 150 notes I want to make public, and 500 notes I want completely private, I have to make a minimum of four notebooks.

Example Notebook Scheme

Of course, all this is very theoretical, and people like examples. So here is a selection of stacks and notebooks:

  • Notebook Stack: Culture, Economics & History
    • Notebook: Arts & Culture
    • Notebook: History & Biography
    • Notebook: Markets & Economics
    • Notebook: Peer-Reviewed Economics
    • Notebook: Peer-Reviewed Philosophy
    • Notebook: Peer-Reviewed Psychology
  • Notebook Stack: Directory
    • Notebook: Business Cards
    • Notebook: Directions
    • Notebook: Locations
    • Notebook: People [for whom I do not have business cards, like friends and family]
  • Notebook Stack: Management & Productivity
    • Notebook: Business & Marketing
    • Notebook: Creativity, Innovation & Problem Solving
    • Notebook: EH&S Management [Environmental, Health, and Safety]
    • Notebook: Kepner-Tregoe
    • Notebook: Management & Leadership
    • Notebook: MBM [Market-Based Management]
    • Notebook: MindTools
    • Notebook: Personal Finance & Investing
    • Notebook: Time Management & Productivity
  • Notebook Stack: Mathematics, Science & Technology
    • Notebook: Codes, Standards & Regulations
    • Notebook: Crafts & Trades
    • Notebook: EAM [Enterprise Asset Management]
    • Notebook: Industrial Vendor Literature
    • Notebook: Math & Science
    • Notebook: Peer-Reviewed Mathematics
    • Notebook: Peer-Reviewed Science & Technology
    • Notebook: Technology & Engineering
  • Notebook Stack: Personal Property
    • Notebook: Animals [Pedigrees and health records for my many animals.]
    • Notebook: Instruction Manuals [for my power tools, refrigerator, boiler, equipment, etc.]
    • Notebook: Orders [Copies of all online or catalog orders. At the top, I put a checkbox for "order received."]
    • Notebook: Personal Property [Records or maintenance records for anything that doesn't have its own folder.]
    • Notebook: Receipts [Scanned receipts from local stores. This has saved my bacon with warranty issues and saved well over the cost of a premium membership.]
    • Notebook: “My Street Address” [Mostly maintenance records.]
    • Notebook: ”Vehicle A” [Mostly maintenance records.]
    • Notebook: ”Vehicle B”
    • Notebook: “Vehicle C”
  • Notebook: Profound Knowledge [For information that I consider essential to my life and "who I am and who I am becoming."]
  • Notebook Stack: Projects
    • Notebook: “Company A” Projects [Contains no proprietary information!]
    • Notebook: “Company B” Projects
    • Notebook: “Company C” Projects
    • Notebook: My Projects

Next time, in part 3, we’ll examine some of the “advanced” (some might say hidden) search features that add an extra degree of control over searching.

Weekend Reading: Positivity and Longevity

Miscellaneous Classic Books (Weekend Reading)The Mining Industry’s Isolation Myth

2 people both make a difference in a kid’s life

10 Things to Leave Off Your Resume [PLEASE!]

An article with MBM/Decision Rights implications: Are Leaders Really in Control?

Contrarian advice: 10 Reasons to Stay in a Job for 10 Years [Read the comments: there is a lot of good argument for and against.]

MindTools for positive thinking at work: Building a Positive Team, Rebuilding Morale, and Thought Awareness

Eric Peters applied the Law of Unintended Consequences to automotive “safety” requirements. Bastiat may have had something to say as well.

The Presentation Mistake You Don’t Know You’re Making

Digital Staffing: The Future of Recruitment-by-Algorithm [Recruitment-by-algorithm may sound different and scary, but considering the existing system of resume-phone interview-site interview-decision, it may not be all that bad. If you consider hiring a professional-rank employee a decision close to "marriage" magnitude and an on-site interview a "first date" experience, then adding another element to ensure it's right for everybody is probably wise.]

ELECTION SPECIAL: Fred Reed writes the last necessary column on politics. Then he provides the Fred platform. Really, it makes sense. Compare it to the Republican and Democratic platforms.