Utah Open Source Planet

Peter Abilla
no nic
shmula

» Operational Excellence is not a Substitute for Effective Leadership or a Good Strategy

It’s old news that Fannie Mae (FNM) is in big financial trouble. Through some bad decisions and an overall poor strategy, they are now on the brink of collapse. What is news, however, is that they are starting an Operational Excellence program and are aggressively recruiting for a Director of Lean Six Sigma — a recruiter called me today, wanting to talk with me about the job.

Apparently, after stumbling upon shmula.com via a google search on Lean or Six Sigma keywords, the recruiter felt impressed to contact me and thought I’d be a good fit for the position. What happened next really solidified my view: Operational Excellence IS NOT a Strategy; it can enable a strategy, but Operational Excellence — in itself — is not a strategy. That is, for firms that wish to remain competitive in the marketplace, Operational Excellence is necessary, but not sufficient.

She and I talked about the job and the state of Fannie Mae. She told me that there’s job security. She, then, went on to share that Operational Excellence is going to be a key strategy going forward for Fannie Mae. I told her thanks, but that I’m not interested right now but to keep me in mind for other opportunities.

The Art of Exclusion

Michael Porter (Porter’s Five Forces) argues — I believe correctly –, in his seminal work, What is Strategy, that Operational Excellence is necessary but not sufficient. What is needed — even still and always — is a winning strategy. In his article, he argues that the essence of strategy consist of two related propositions:

strategy is engaging in activities that are different than the competition
strategy is engaging in activities that are similar than the competition, but perform better than the competition

Regarding (1), Porter argues that, regarding (1), the firm must choose a position — one that sets the firm apart from its competitors; a position that makes the firm and its products or services uniquely and competitively different and leads to a sustainable and profitable competitive advantage. Porter then claims that an important aspect of strategy is deciding what NOT to do — the art of exclusion.

Regarding (2), a firm will undoubtedly engage in activities that are similar than the competition. For example, take a traditional internet retailer — a firm in that space will usually have a front-end store and a fulfillment back-end. To set the firm apart on similar activities from its competitors requires that the firm perform those activities better — with better quality, lower costs, with better service, and deliver quicker than the competition.

Deploying a Lean or Six Sigma culture within your firm is essentially an activity borne from (2) — but it is not a panacea; by itself, a culture of Operational Excellence will find itself lacking in a hyper-competitive world.

Necessary but Insufficient

While Fannie Mae might wish to adopt Operational Excellence, it has, over the recent years, essentially failed to engage in activities that are uniquely and competitively different than the competition.

Speaking as an outsider, it appears that Fannie Mae has continued to run an efficient business, producing products and services that had adequate demand, but the Fannie Mae leadership executed a poor strategy, rife with bad decisions leading the firm to its current state of near-collapse: No amount of Operational Excellence would have prevented failure stemming from poor decisions and a bad strategy.

The Need for Leadership

The theme, I see, with most corporate problems, overwhelmingly points to Leadership. The OPPOSITE of long-term thinking, inspiring, visionary, humane, collaborative, reflective, selfless, nurturing, interested, responsible, and mobilizing is what seems to be what most companies elevate to the Chief Executive position.

Emulating Gary Convis

Gary Convis was recently brought in to be the CEO of Dana Corporation (DAN), an $8.7 Billion manufacturer of auto parts. Convis is a 40 year veteran of the auto industry and a former executive at Toyota. Dana Corporation is a struggling giant, currently in bankruptcy. When asked what words of wisdom he has to impart to his new team members at Dana Corporation, he said this:

“manage as if you have no power”

For me, that statement elegantly summarizes the the essence of Leadership — the type of Leadership that is capable of satisfying both (1) and (2) above.

The job description if below, right above the comment section, in case anyone is interested.

+++++

Articles on Ethnography and Design:

Articles on Leadership:

Articles on Queueing Theory:

Articles on Operations, lean and six sigma:

The Fannie Mae Job Description

Fannie Mae is a shareholder-owned company with a public mission. We exist to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to ensure that mortgage bankers and other lenders have enough funds to lend to home buyers at low rates. In 2008, we mark our 70th year of service to America’s housing market. Our job is to help those who house America. For more information about Fannie Mae and our career opportunities, please visit www.fanniemae.com.

The Director of Lean Six Sigma is also the Master Black Belt and is responsible leading a team to deploying and driving Lean Six Sigma across assigned divisions/functions. This position has significant leadership impact on the success of the Lean Six Sigma program and reports directly to the VP of Operational Excellence. As a senior member of the Lean Six Sigma Team, this position will drive results oriented performance improvement initiatives using the proven methodologies of Lean and Six Sigma while ensuring accountability, focus, strategic alignment and cross functional relationships with the other Fannie Mae entities through the use of metrics based goals and objectives. This position will also develop and deliver the materials and method for effectively training Champions, Sponsors, Black Belt and Green Belts on the Lean Six Sigma methodologies.

Lead the development and implementation of Lean Six Sigma for Fannie Mae and establish a sustainable model for continuous process improvement

Manage a team to drive the model of continuous process improvement through Lean Six Sigma and creating development opportunities by setting direction and driving quality results

Align Lean Six Sigma initiative and project objectives to business strategy, and prioritize projects accordingly

Train, coach and develop Black Belt and Green Belt resources assigned to projects related to Lean Six Sigma tools and methodology and offer technical expertise and guidance in project reviews

Provide technical leadership and coordination to major improvement projects within the business

Provide problem resolution point of contact for Black Belts and Green Belts to offer technical or professional expertise

Lead multiple process improvement teams towards quantifiable result in defect reduction, cost avoidance, loss reduction or revenue enhancement

Deliver significant operational improvement and financial benefit across assigned divisions/functions

Act as change agent to instill Lean Six Sigma culture throughout the organization

Serve as internal expert on process improvement tools and techniques focusing on Lean Six Sigma and coach process owners, black belts, and deployment leaders

Expand the education and develop training curriculum for Fannie Mae leaders, managers and process improvement teams regarding Lean Six Sigma

Facilitate quality and change management processes; identify customer needs and key drivers to reach customer satisfaction goals with financial benefit

Lead the identification, prioritization and selection of process improvement opportunities

Develop a more formalized approach to organizing and pursuing projects, including development of project management skills and techniques

Monitor service delivery to ensure customer satisfaction and project delivery to ensure benefits are realized

Advise and support Senior Management regarding culture change needed to successfully accomplish and maintain improvements

KEY QUALIFICATIONS

Technical competency in Lean Six Sigma skills: Lean, DMAIC, DFSS, Kaizen/Work-out, process management, change management and advanced statistical techniques

Subject matter expert in process improvement with a focus on Lean Six Sigma tools and techniques

Significant experience in application of Lean Six Sigma in the mortgage or finance services industry

Strong leadership abilities and experience including situations involving organizational culture change

Ability and demonstrated experience in providing education and training related to process improvement including Lean Six Sigma

Strong written and verbal communication skills with emphasis on oral presentation skills and class room training techniques

Project management expertise and experience

Facilitation of groups, especially as it relates to identifying opportunities for improvement

Significant experience in use of metrics and benchmarks to drive process improvement

Strong analytical skills including the ability to assess complex situations and data, and reduce important and actionable tactics

Experience in complex organizations and matrix reporting relationship

Ability to interact with multiple layers of the organization with demonstrated success initiating change and ability to influence at all levels

Minimum of 8 years professional level experience

KNOWLEDGE/SKILLS REQUIREMENTS

Bachelor’s Degree (MBA preferred)

Formal Lean or Lean Six Sigma training and Master Black Belt certification

5+ years of Lean and/or Six Sigma performance improvement and change management experience, with a minimum of 2 years of experience as a Master Black Belt

Completion of 3 transactional-related projects with demonstrated success and financial results (preferably in the mortgage or finance services industry)

Extensive Lean and/or Six Sigma Performance Improvement experience 5+ years consulting or management experience in the mortgage or finance services industry preferred.

Extensive training, coaching and mentoring experience (strongly preferred)

Proficiency in Windows, Minitab, Excel, Word, PowerPoint and both simulation and project management software

COMPENSATION

Fannie Mae’s compensation and benefits package is very competitive. It is designed to help employees meet varying needs throughout their careers and to reward employee’s skills, experience, and potential. Fannie Mae is an equal employment opportunity employer and considers qualified applicants for employment without regard to race, gender, age, color, religion, national origin, marital status, disability, sexual orientation, or any other protected factor. As a condition of employment with Fannie Mae, any successful job applicant will be required to pass a pre-employment drug screen and to successfully complete a background investigation, which may also include a credit check if the position is sensitive in nature.

by psabilla at 5:38 AM under business , lean , six sigma , strategy (Comments)

Peter Abilla
no nic
shmula

» Not Accountable, Not Responsible

Team size can make a big difference in the success of your service or product. What is counterintuitive for most people is that the larger the team size, the lower the likelihood of success for your service or product. Why? Entropy can set in and large teams are inherently bad vehicles for communication. More insipid, however, is that the larger the team, there is a higher likelihood of accountability and responsibility being diffused across the team.

When accountability and responsibility is massively diffused, then the mantra holds: if everyone is charge, then nobody is in charge. In this article, I quantitatively show the inverse relationship between team size and productivity & how team size does impact the effectiveness of communication and accountability & the eventual success of the service or product.

I’ve written about efficient teams before here and here. When I was at Amazon, teams were organized into small, delta teams called “2-pizza teams”: no team should be larger than 2 pizzas can feed. It’s a great approach to team size. In my short career, I’ve learned how true that rule is. Here’s another thing I’ve learned –

2 people are smarter than one
3, 4, 5, 6, 7, 8 people are smarter than 2
a team larger than 9 people is just a big dumb gelatinous blob (acronym: BDGB)

Okay, that’s not true at a wholesale level, but it sure feels like it. A small team with highly smart and capable team members can do much more than 10 mediocre team members. The Wisdom of Crowds mentality doesn’t work that well when it comes to efficiency in teams.

A more quantitative explanation is as follows:

One of the root causes of failure in projects is communication — either a lack thereof, miscommunication, or hand-off’s. Large teams are inherently vehicles for bad communication. This is basic combinatorics — for a given project, suppose there are persons A and B. In this scenario there is only 1 communication link. Add person C, now we have 3 communication links, A-B, B-C, C-A. Add person D, then we have 6; Add person E, then we have 10 communication links. Inductively, as team size grows, the raw combinatoric communication link counts grows geometrically, not linearly. To demonstrate this, we use basic statistics of the form n-choose-r, where !, such as n!, is equivalent to n factorial, to arrive at the formula for how many pairs we can choose from n items:

shmula.com, combinatorics

For the number of pairs, we can reduce the above formula to the following:

shmula.com, combinatorics

Visually, as team size grows, the communication links grows non-linearly, but exponentially:

shmula.com, combinatorics

A Rejoinder

Do not let the above dissuade you from large teams; if the product requires a large team, then that is what is needed. Caution, is what I am arguing here. The facts are that the larger the team, the more communication channels there are and the entire process then becomes more error-prone. If the product requires a large team, then expect the above challenge and manage it.

A Conclusion

There is wisdom in Bezos’ notion of the 2-Pizza Team. Small teams — provided you have the right people — work incredibly well. Also, there is wisdom in Toyota’s usage of Obeya or “The Big Room” as a way to mitigate defects caused by large teams. A combining of the two will most likely make for a great team and a successful product.

Articles on Ethnography and Design:

Articles on Leadership:

Articles on Queueing Theory:

Articles on Operations, lean and six sigma:

by psabilla at 4:56 PM under 2-pizza teams , agile , amazon , complexity , design thinking , drum-buffer-rope , dynamic systems , gemba , heijunka , ishikawa , it at toyota , just-in-time , kanban , lean , lean consumption maps , muda , obeya , operations , regression analysis , root cause analysis , simplicity principle , six sigma , software , supply chain , takt time , team size , theory of constraints , the visual factory , toyota , variation , visual management , waste (Comments)

Peter Abilla
no nic
shmula

» Maintain Forward Tension

One principle in Wing Chun is the maintaining of forward tension. To explain, I’ll draw the distinction between Tension and Energy and show how this principle in Wing Chun can be applied to Change Management.

Tension is a type of Energy

A Wing Chun maxim goes as follows:

soft and relaxed strength will put your opponent in jeopardy

That maxim means that forward tension is not necessarily using force, or forcing through a barrier or “pushing through”. But, there is soft force, or tension, such that when a gap presents itself, then the hand or arm shoots forward like a spring. The “shooting forward” is not done with force, but is an unleashing of potential energy.

Using that definition, then, Forward Tension is much different than the overly-used business term “Breakthrough.” In the context of Forward Tension, the notion of “breakthrough” is ridiculous, because it connotes a forcing of oneself or of one’s ideas. Forcing anything only invites resistance and rebellion, not conversion.

So, in sum, tension is really potential energy and when a gap presents itself, that potential energy becomes kinetic energy. Forward Tension works with the current context in such a way that does not invite rebellion or resistance or eventual back-biting. It is open, but straightforward.

Application to Change Management

Don’t force things on people. The most humane approach to change management is to treat those involved in the change as human beings; this means having a dialogue — listen, speak, listen some more, argue a little, and steadily deposit goodwill.

As much as I like love data, I also fully understand that data does not soften hearts or change people’s minds: true change happens when people feel heard, have given their opinion, are willing to try something new, and are part of the change. The challenge in change management is largely an emotional one; a psychological one; a relational one.

Hold The Tension

Without forcing or pushing of people, maintaining the tension encourages discussion, debate, and invites people to inquire and become curious about the topic of change. That is the key: behave in such a way that it invites people to learn, argue, debate, and eventually try it out.

Tension in Wing Chun

The video below shows Sifu Grados in Chi Sao (Sticky Hands). This sensitivity exercise demonstrates the principle of holding the tension and visually explains the principle of transformation of potential energy to kinetic energy very well.

NOTE: none of the movements are rehearsed. What is taught and practiced are the principles and how those principles are applied during Chi Sao depends on the situation.

Articles on Ethnography and Design:

Articles on Leadership:

Articles on Queueing Theory:

Articles on Operations, lean and six sigma:

Advertisement: compnay formation by Jordans

by psabilla at 7:36 AM under 5s , a3 report , bullwhip effect , business , change management , click-to-ship , complexity , customer obsession , customer service , design thinking , drum-buffer-rope , dynamic systems , efficiency , ethnography , featuritis , gemba , genchi genbutsu , general , heijunka , ishikawa , it at toyota , kanban , leadership , lean , lean consumption maps , metrics , muda , obeya , operations , pareto principle , poka-yoke , process measures , productivity , quality , root cause analysis , six sigma , statistical process control , strategy , supply chain , takt time , the beer distribution game , theory of constraints , the profit tree , the visual factory , toyota , variation , visual management , waste , wing chun , zero defects (Comments)

Peter Abilla
no nic
shmula

» Fast Food Congestion

Every system has constraints — sometimes several — minor bottlenecks and major bottlenecks. What makes managing constraints even more challenging is that bottlenecks move: up-and-down the process paths.

I saw this phenomenon recently during a visit to a fast food restaurant, which I discuss in this post — but, my application of the Theory of Constraints, Lean Manufacturing, and Six Sigma as applied to a Restaurant can be applied to any Dynamic System.

One of the key lessons in The Theory of Constraints is that the contraint or the bottleneck determines the throughput for the entire system. This means, then, that if we optimize and improve a non-bottleneck, then those efforts have almost zero impact on the overall throughput of the system. It is only when we improve and optimize the contraint that we will see improvement in the throughput of the entire system.

Every system has a constraint — that is neither good nor bad — but just a fact of dynamic systems. Once you’ve identified the constraints in your system, then the next step is to manage it.

I was able to obtain some empirical volume data for a Burger King. The data below is taken from one Burger King restaurant. I imagine the numbers would be significantly different if we were to average the volume by geography, restaurant size, or by other factors. Now, consider the following process map for a typical Burger King:

Click on the image for a larger view.

For this restaurant, over the course of an average month, Burger King produces 34227 sandwiches. This means, then, that for an average hour, Burger King produces 198 sandwiches per hour during normal hours.

But, on Friday and at 12:00PM, Burger King experiences higher-than-normal volume and so we add a “Peak Multiplier” of 18% and 17.9% to arrive at 256 sandwiches during Peak Hours. The “Peak Multiplier” is not completely arbitrary, but a quasi-educated guess at the volume increase during those hours. In both cases of Fridays and Lunch Hours, we add a ~20% multiplier.

Now, let’s take a look at the process map above. We see the Assembly Step producing 200 sandwiches an hour. We consider the Assembly to be the constraint in the system. The upstream processes produces more than 200, but when we arrive at the Assembly, the capacity of that step is lower than its upstream processes. So, the maximum throughput of the entire system above is 200 sandwiches per hour.

Under normal hours, the constraint functions reasonably well. Since normal hour demand is 198 sandwiches per normal hour, the Assembly Step can produce at least at that amount — but, it’s cutting it close. Under peak volume, the constraint is not able to fulfill demand.

How To Manage a Constraint

Under normal hours, it appears that the Assembly Step can produce at expected demand. But, there are several things that could put burden on the constraint and cause it to producing less than capacity. Here are some of those items:

Rework: Having to Re-Assemble sandwiches adds undue burden on the system and exaggerates the effects of the constraint, leading to a potentially higher-than normal work-in-process, or build-up.
Set-up & Changeover: If all the parts aren’t immediately available in the Assembly step, then it could lead the operator to slow down which could lead to build-up and higher-than-normal work-in-process.

It’s easy enough to see that the Assembly Step needs some help. Here are several things Burger King — or any system with constraints — can do to better manage the natural constraints that are in every system:

Eliminate Defects at the Constraint: This means that all waste is eliminated or reduced at the constraint.
Have the Quality Steps in Front of Constraint: In support of the first bullet, make sure that the parts entering the Assembly step are free of defects.
Support the Constraint: Add labor to the constraint or more lines, if that is prudent.
Appropriately use Buffers: Systems with Constraints exhibit a feast/famine phenomena. To avoid having too much coming into the constraint or too little coming into the constraint, have a buffer of parts large enough that the constraint stays appropriately busy. Put another way, reduce the variation in front of the constraint as much as is possible. A Drum-Buffer-Rope system might be appropriate for some systems.
Evaluate the overall system: How much of the steps in the system are really value-add to the customer? What is the process-cycle effeciency of the process?

Conclusion

All systems have constraints. Identify what they are, quantify the effects, then manage it. The above Burger King example shows how this can — with some effort — be done. What are the constraints in your systems? What can you do to better manage those constraints?

+++++

Articles on Ethnography and Design:

Articles on Leadership:

Please articles on Queueing Theory below:

Articles on Operations, lean and six sigma, please visit the links below:

Advertisement: compnay formation by Jordans

by psabilla at 5:40 PM under 5s , a3 report , bottlenecks , bullwhip effect , business , complexity , drum-buffer-rope , dynamic systems , efficiency , gemba , genchi genbutsu , heijunka , ishikawa , it at toyota , kanban , lean , lean consumption maps , lean manufacturing , metrics , muda , obeya , operations , pareto principle , process measures , productivity , quality , root cause analysis , six sigma , supply chain , takt time , theory of constraints , the visual factory , toyota , variation , waste (Comments)

Peter Abilla
no nic
shmula

» Do Not Run From Your Customers

I’ve spoken extensively about the unheralded — but, arguably, the most important — Pillar of The Toyota Production System: Respect for People. Today, I want to highlight an interesting company that appears to have done an amazing job at Participative Management and in eliminating fear and mediocrity in the workplace: Semco Group.

I was first made aware of Semco Group after watching this amazing video on the MIT website. I sought to learn more about Semco and found some pretty amazing case studies such as the following:

Semco appears to have operationalized a very humane workplace and has also produced some impressive results, proving that fear and intimidation and mediocrity are not necessary ingredients to do well in the corporate world:

Reforms implemented during that time led to 65% reduction in inventories, a marked reduction in product delivery times and a product defects rate that fell to less than 1%. As the business climate improved, Semco’s revenues and profitability improved dramatically. As of 2003, SEMCO had annual revenue of $212 million, from $4 million in 1982 and $35 million in 1994, with an annual growth rate of up to 40 per cent a year. It employs 3,000 workers in 2003, as opposed to 90 in 1982.

Semco publishes and collectively live by the “Semco Survival Guide”, opting for something much simpler and thinner than a big, thick manual. Here are two points that I personally appreciate:

Our People: We avoid using terms like “employees”, “staff”, “collaborator” and similar terms. We are a team and we only have “people”. This is what we call everyone who works with us. Try as hard as you can not to use terms which are so common, but which do not express equality.

Customer Services: This is very important. Never fail to serve a customer well; do not run away from the customer, and do for the customer exactly what you would expect if you were in their position. Be honest about deadlines, prices and service conditions - never promise something you cannot deliver.

I find “never run away from your customer” an interesting thing to say — I think this point requires some reflection:

Do we — as an act of omission — run away from our customers — either in action or mentally or emotionally?

Below is their survival guide, taken directly from their website:

Leadership
We believe that organizational structure is required to ensure good business processes. However, only people who have respect for their followers can be leaders. Situational leadership will always be stimulated and respected.

Position
At the Semco Group, it makes no difference whether someone has a high ranking or a humble position. The most important thing is to always try to learn and teach new things.

Job Rotation
Whenever possible we rotate people: Some people change area and other people change business unit. This is another development opportunity offered by the company.

Freedom
There is no space at the Semco Group for formalities. The doors are always open and people should say what they really think, without worries or inhibitions.

Honesty
Everything at the Semco Group is based on trust. Whenever there is dishonesty, and there is always the possibility that there will be somebody dishonest, the company takes hard action.

Accusations
The company does not encourage people to accuse others - this should only occur when you believe you have access to concrete facts that somebody is benefiting while harming everybody else. Anonymous letters are not considered.

Gambling
No gambling of any type is permitted within the company.

Weapons and Violence
It is completely unacceptable to carry weapons inside the company. Any type of violence employed by one person against another is seen as an extremely serious event.

Unions
Unions are an important method of protecting workers. Unionization is free within the company. The Semco Group believes that constant relationships with unions are healthy for the company and the employees. The presence of union members at the company is always welcome.

You… and the Others
Based on the fact that everyone can say what they think, rumors and gossip should not be stimulated. Any attempt to harm another person is looked on very seriously. Take part and speak openly of what you are thinking in order to improve things.

Sales at the Company
The entry of salespersons to deal with personal issues is only permitted when scheduled by the interested party.

Loan Sharking
Any employee lending money to another while charging interest is considered abusive and this is dealt with by the company as a serious matter.

Discrimination
The Semco Group does not permit discrimination based on sex, colour, religion, politics etc. Everybody must have identical opportunities at the company - help to make this a reality.

Use of Authority
Many positions of the company involve the use of authority. Pressure, tactics that involve people working while afraid or any type of disrespect are considered incapable leadership and improper use of authority.

Working Hours
The Semco Group has flexible working hours where possible. This is a method of meeting the needs of each person, without harming the company.

Employee Timesheet Control
At the Semco Group, each person controls their own working hours. This is a method of transferring responsibility to each person.

Commissions
People at the Semco Group usually create commissions to deal with issues of collective interest. Take part to ensure that the commissions are active channels which effectively defend your interests, which may often not coincide with the interests of the company. Here, this conflict is seen as healthy and necessary.

Internal Promotions
At the Semco Group, people already working for the company are given preference when a new position or a promotion appears, as long as they fill the requirements for the job.

Vacations
The Semco Group does not believe that anyone cannot be replaced. Everybody must take their annual vacations, always. This is fundamental for the health of the people and the company as a whole - no excuse is good enough to justify accumulating vacations.

Recruitment
Where there is recruitment or a promotion, people in the department have the chance to interview, analyze and take part in the decision to choose the candidate.

Evaluation by Subordinates
Every six months you will fill in a questionnaire and say what you really think about your immediate superior. Be open and honest, when filling in the form and during the discussion that should take place afterwards.

Retirees
We have no restrictions on active or part-time work for retirees or people of an advanced age. Nobody is too old for us - on the contrary, we believe that experience comes with age.

Everyday Participation
The Semco Group philosophy is based on active involvement and participation. Do not sit back. Have an opinion, put yourself forward as a candidate, always say what you think - do not be just another cog in the wheel. State your opinion about everything that interests you, even if you weren’t asked for it. Be active about your feelings.

Suggestions
We want everybody to participate; opinions will always be welcome and should be spontaneous. The Semco Group does not use and is not wish to implement suggestion box programs. Whenever there is a need or interest, we can institute campaigners that encourage specific suggestions.

Dynamism
The Semco Group is normally a company that implements major changes from time to time. Don’t be scared - we think this is positive. Look at the changes without fear - these are typical characteristics of the Group.

Salary Policy
The Semco Group seeks to involve people in discussions regarding what is a fair salary for each employee. Of course, there are times when people think their salaries should be higher and the company believes it cannot pay more. What is important is to always provide an opportunity for discussions regarding this type of issue.

Strikes
The decision to take part or not in this type of event is an individual one. This is part of democracy and is respected by the company.

Personal Life
Each person’s life belongs to themselves and the personal life of each person at the Semco Group is sacred. Providing it does not interfere with the work of the environment, the company is not interested in what each person does with their own life. The human resources area is available to provide support in any area, but the company will never get involved in people’s private lives.

Former Semco Employees
Whenever anybody leaves the company, they are always welcome back - we have nothing against former Semco employees. On the contrary.

Severance
Whenever there are dismissals the company spends hours and days carefully considering the case (or cases). The company avoids dismissals as much as it can and is extremely involved in protecting justice - we must all take this line - dismissals are very serious and must be dealt with carefully by everybody.

Occupational Safety
This is not only a company responsibility. Keep your eyes open, always avoid accidents, use safety equipment even when it is bothersome - we cannot take risks with our health. Make a special effort along these lines, demand that the company do its part and do not let CIPA become a pro forma commission.

Statement of Results
On a periodic basis you’ll find out the results for your unit and for the company, and will be able to discuss them. Watch the results closely and ask any questions you want - there are no issues that cannot be discussed. Very few companies offer this - take advantage!

Profit Sharing Program
The Profit Sharing Program at the Semco Group is for real. This is a participation in which each unit wins. Each company and the Group have its own program, according to the characteristics of each business.

Relations
In order to avoid injustice or embarrassment, close relations do not work at the same unit, workplace or with the same leader, except in special cases. In completely different and unrelated locations, there are no formal restrictions.

Hourly/Monthly Workers
At the Semco Group there is no discrimination - Here everybody is a salaried worker and everybody is treated the same.

Our Personnel
We avoid using terms like “employees”, “staff”, “collaborator” and similar terms. We are a team and we only have “people”. This is what we call everyone who works with us. Try as hard as you can not to use terms which are so common, but which do not express equality.

Use of Company Resources
Do not mix company work and resources with personal services. During working hours, nobody should provide services to other people only for personal benefit, which does not stop people using a colleague’s services outside business hours, agreeing the conditions between themselves, without involving the company.

Customer Services
This is very important. Never fail to serve a customer well; do not run away from the customer, and do for the customer exactly what you would expect if you were in their position. Be honest about deadlines, prices and service conditions - never promise something you cannot deliver.

Communication
The Semco Group and its people must communicate openly and honestly. You must be tranquil and believe what is said in company notices – demand transparency when you are in doubt.

Pregnancy
Pregnancy is considered a time of great importance and happiness by the company. Never allow an injustice to be committed with one of our pregnant women – they deserve our respect and care.

Informality
Having a birthday party at the end of the working day or using nicknames is part of the company culture – don’t feel intimidated, and don’t stick to formalities.

Pride
It’s only worth working for someone you are proud of. Create this pride in the quality in what you do. Never deliver a product or service that fails to meet customer expectations, do not write a letter or communiqué that is not honest, and do not let the company’s stature fall – always fight for your pride.

Respect to Visitors
Give our visitors all of your attention and respect. Never let anyone wait more than 5 or 10 minutes. Meet everyone with courtesy, be they a supplier, customer or anyone else.

From the little I’ve seen, I’m quite impressed with Semco. If there are any that would care to chime-in on what they know of Semco — I’d love to hear about it in the comment section. Below is an interview with Ricardo Semler, the CEO of Semco.

+++++

Articles on Ethnography and Design:

Articles on Leadership:

Please articles on Queueing Theory below:

Articles on Operations, lean and six sigma, please visit the links below:

by psabilla at 11:16 AM under a3 report , business , customer obsession , gemba , genchi genbutsu , heijunka , ishikawa , it at toyota , kanban , leadership , lean , muda , obeya , operations , participative management , philosophy , productivity , quality , respect for people , ricardo semler , root cause analysis , semco , six sigma , strategy , takt time , teaching , theory of constraints , the visual factory , toyota , toyota production system , variation , waste (Comments)

Peter Abilla
no nic
shmula

» We Remember Experiences, Not Features

“people remember experiences, not features or attributes” - a.g. lafley

I love companies and products that are disruptive, simple, and yet elegantly meets an unarticulated but dire customer need.

Today, we are speaking with Gauri Nanda, the inventor of Clocky and founder of nandahome.com.

+++++

Tell us a little about yourself: education, background, and career focus.

I have been designing products for a few years now, since I was a student at the MIT Media Lab researching the intersection of design and technology. Because of all the interest surrounding him, Clocky gave me the drive to start a company. Since graduating, I founded Nanda as a place to find things that are missing from our lives and create them. Our ideas come from ordinary questions like ‘Why does my alarm do such a terrible job of getting me up?’ and ‘Why can’t I find a bag that makes it easy to carry my heavy laptop around?’ Then, from these ordinary questions, we set out to create extraordinary products. Things that are at once both simple and exceptional.

What is Clocky?

Clocky is, quite simply, the most obvious way I could think to get out of bed. He is an alarm clock that runs away when you don’t get out of bed on time. He will jump from your night-stand and run around the run in random directions. Because you don’t know where he’ll end up, you have to get out of bed, and find him to silence his alarm. In this ‘hide-and-seek’ game, you wake up in the process!

What is the Alarm Clock Problem?

When I was a student, I would hit the snooze bar repeatedly, never realizing how late it was getting. I had friends who told me that they would put the alarm clock on the other side of the room, but because they knew where it was, they would just sleep walk to it, turn it off and go right back to bed. As a designer, it was obvious that the alarm clock needed to be improved, both in functionality and in personality. In addition to doing the job of an alarm clock better, Clocky is also an attempt to imbue alarm clocks with living qualities so that it is ultimately more fun to use.

Did you study people sleeping? Can you share a little about the ethnographic steps to observing people sleeping and waking up — what insights did you gain? How did those insights evolve into your solution, Clocky?

During the development time, we received countless emails from people who needed a better solution than their current alarm clock was providing. Over and over, I heard the same story of people repeatedly hitting the snooze button and never reaching a wakeful state. During the design process, we tested the product out with potential customers and made changes to the program as well as the interface (including buttons and backlight) to ensure better usability. It was very important to me to maintain a minumum of user interface controls so that anyone could use the clock almost immediately.

Past the concept phase, tell us about the product development process and the iterations Clocky went through to finally arrive at the current version. For example, the Clocky prototype was much bigger than the current version — what led to that design decision?

The original prototype took me a couple of weeks. It was put together with the materials I had at my disposal while I was a student at the MIT Media Lab, and turned out to be little more than a pair of Lego wheels and motors and a shag covering to hold it together. At this time, I wasn’t optimizing Clocky for size and efficiency, but rather just creating a proof-of-concept for a class project.

In order to get Clocky ready for commercial sale, I worked with a team of engineers and manufacturers on the design for about a year. We went through about 3 design iterations on the external casing. We didn’t want Clocky to take up too much room on a night-stand so we reduced the size considerably. We also wanted Clocky to be much lighter, since it was to withstand a drop to floor everyday. Through a lot of engineering and testing, we identified the parts of the clock that would endure the most shock when Clocky jumps off of a night-stand. We designed those parts so that the force would be directed away from them.

Material sourcing and manufacturing — can you share about your experience in that arena.

The original prototype I put together quite quickly using limited materials I had at my disposal. The shag was used to emphasize Clocky as something with living quality. In a manufacturing context, materials are chosen that are durable and easy to work with. I decided to retain the living quality of Clocky by arranging the buttons and the LCD screen in such a way to describe a face.

We compared and contrasted various strong and shock absorbing materials. For example, for Clockies wheels, we needed a material that would bounce back and not wear too much over time because the body should not hit the ground when he falls. We tested out several different customers for this purpose.

How long has Clocky been in the market now? Clocky has a (funny/cool) factor to it. Do people really like using it? Do people laugh or curse at it when they wake up? Tell us about that.

Clocky was launched right around the holidays. If had quite a lot of good feedback:

“Just talked to my daughter - She was thrilled with her first morning with Clocky! She said it woke her up smiling and then she was giggling as she chased it around her room and downright laughing by the time she turned it off! By then she was wide awake and ready for her 8AM Bioengineering Class!”

“My daughter is presently at Dartmouth. She’s the master of the snooze alarm. When home, she can go for hours with the alarm going off, hitting the snooze button, and probably not waking up at all. When I saw the info about Clocky on line, I immediately ordered one to be shipped to her at college. It’s been a week after Clocky’s arrival, and already I have success to report. For example, she got up today in time to go to a job interview, which went well. She reported having to find Clocky behind the refrigerator. It Works!”

Certainly, a lot of people may purchase Clocky because they think he’s funny or just out of curiosity. I think it’s great if people just get a good laugh out of Clocky. I hope that Clocky enables a new way of thinking about the things we use every-day. The buzz surrounding the product may be attributed to the fact that Clocky attempts to humanize technology and make it more personable, a concept which I believe could be applied to many products that we use on a daily basis so that they become more usable.

Why is there a Snooze Button? Can I program it to travel to where my Gym Clothes are, so that when I finally find it and turn it off, I have no excuse but to work out because I’m where my clothes are at?

Well I sort of felt (and a lot of people agreed), that a person should have some time to get up, and have a chance to turn off the alarm before Clocky runs away. So we allow for one snooze. If the person using Clocky is alert as soon a they hear the alarm, the may opt to disable to snooze button. We found that Clocky does not need to employ sensor technology to do his job. He may bump into objects on the floor or hit a wall, but because he is programmed to change directions a few times, he will usually get ‘unstuck.’ We have a couple more versions of Clocky in R&D. Future versions of the clock will employ more sophisticated technology to achieve some exciting features we have planned. We envision an entire Clocky product line.

Where can people buy Clocky?

Clocky is currently only available for purchase online at nandahome.com. We will be announcing select retail availability soon.

What is next for Clocky? What other projects are you currently working on? What problems are trying to solve through innovative product development?

We have a line of ‘Lapsacs’ out now, which are bags with laptops in mind. The idea was to reinvent the common black laptop case into something more stylish and more comfortable for carrying around a heavy computer. Much like Clocky, the Lapsacs came out of what I observed to be a common need. We have other products in R&D which I can’t disclose yet!

Thanks very much Gauri!

+++++

Articles on Ethnography and Design:

Articles on Leadership:

Please articles on Queueing Theory below:

Articles on Operations, lean and six sigma, please visit the links below:

ShareThis

by psabilla at 6:12 AM under business , clocky , cnbc , customer obsession , design thinking , ethnography , gauri nanda , genchi genbutsu , human-centered design , humane design , lean , unarticulated customer needs (Comments)

Peter Abilla
no nic
shmula

» Necessary but Insufficient

motorola in big trouble Motorola (MOT), the inventor of Six Sigma, is in big trouble. Even though it invented Six Sigma, this is a clear example that shows how Lean or Six Sigma are not a cure-all for corporate woes, but that good leadership and a winning strategy are key in a competitive world — Lean or Six Sigma is necessary, but not sufficient.

The Art of Exclusion

Michael Porter (Porter’s Five Forces) argues — I believe correctly –, in his seminal work, What is Strategy, that Operational Excellence is necessary but not sufficient. What is needed — even still and always — is a winning strategy. In his article, he argues that the essence of strategy consist of two related propositions:

strategy is engaging in activities that are different than the competition
strategy is engaging in activities that are similar than the competition, but perform better than the competition

Regarding (1), Porter argues that, regarding (1), the firm must choose a position — one that sets the firm apart from its competitors; a position that makes the firm and its products or services uniquely and competitively different and leads to a sustainable and profitable competitive advantage. Porter then claims that an important aspect of strategy is deciding what NOT to do — the art of exclusion.

Regarding (2), a firm will undoubtedly engage in activities that are similar than the competition. For example, take a traditional internet retailer — a firm in that space will usually have a front-end store and a fulfillment back-end. To set the firm apart on similar activities from its competitors requires that the firm perform those activities better — with better quality, lower costs, with better service, and deliver quicker than the competition.

Deploying a Lean or Six Sigma culture within your firm is essentially an activity borne from (2) — but it is not a panacea; by itself, a culture of Operational Excellence will find itself lacking in a hyper-competitive world.

Necessary but Insufficient

While Motorola might remain one of the hallmarks of Operational Excellence, it has, over the years, essentially failed to engage in activities that are uniquely and competitively different than the competition. Speaking as an outsider, it appears that Motorola has continued to run an efficient business, producing products and services with few defects and delivering on-time, but products and services in a market that has changed to demand less and less of Motorola products, in favor of competitors products, such as the Apple (AAPL) iPhone.

The Need for Leadership

The theme, I see, with most corporate problems, overwhelmingly points to Leadership. The OPPOSITE of long-term thinking, inspiring, visionary, humane, collaborative, reflective, selfless, nurturing, interested, responsible, and mobilizing is what seems to be what most companies elevate to the Chief Executive position.

Emulating Gary Convis

Gary Convis was recently brought in to be the CEO of Dana Corporation (DAN), an $8.7 Billion manufacturer of auto parts. Convis is a 40 year veteran of the auto industry and a former executive at Toyota. Dana Corporation is a struggling giant, currently in bankruptcy. When asked what words of wisdom he has to impart to his new team members at Dana Corporation, he said this:

“manage as if you have no power”

For me, that statement elegantly summarizes the the essence of Leadership — the type of Leadership that is capable of satisfying both (1) and (2) above.

+++++

Articles on Leadership:

Please articles on Queueing Theory below: