The germ theory of management

tags
Scale Systems Theory

Notes

“Medicine has been “successfully” practised without the knowledge of germs. In a pre-germ theory paradigm, some patients got better, some got worse and some stayed the same; in each case, some rationale could be used to explain the outcome..”

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They can only apply what they know and believe. They have no choice.

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our managers do the same. When they are up against tough international competition, they look to changes in economic policy, in tax structure, in trade policy - everywhere except in their own understanding of what makes a company competitive. They question everything except their own theory of management.

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Changing People’s Beliefs is not Easy

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Your assignment is to persuade them to forget most of what they have been taught, to abandon much of the wisdom they have accumulated over their distinguished careers and to rebuild their understanding of the practice of medicine around the new theory of germs. Do you think you could do it?

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How will you feel if someone starts spreading the word that your treatments are a menace,

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Not everything the doctors did was wrong: just most things.

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The Required Changes in Management are Profound

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it is almost certain that some of the vacuum tubes will have very short lives.

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Shewhart's investigations lead to the concepts of statistical quality control and in terms of our analogy, his work, like Pasteur‟s, has laid the foundations for the „germ theory of management‟.

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The key idea is the elimination of the virus of variability.

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This idea was taught widely during World War II and was important to the successful development of America's mighty war machine.

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Variability - the Virus of Systems

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Because the management rates the operators individually and competitively, those who learn new tricks are not always willing to share them with their competitors. What the management then see is a large variability in the capabilities of their operators. They think they are witnessing the results of the variability of people; they aim to fire the “bottom half”.

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Too many people think of these delays and missed schedules as “normal”. They do not know what it means to be well.

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The inability to schedule things accurately means that for a complex activity, the total time required to do something is as much as 1000 times as long as it needs to be. This is the cost of the virus of variability.

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Processes can have an Immune System Deficiency, Too

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Dr Genichi Taguchi in Japan has pioneered the concept of a robust design, one which does not amplify variability but rather tends to attenuate it

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When managers spend large amounts of money to get around the effects of variability, instead of learning how to reduce it, we call their approach a “technology fix”.

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explains why the NUMMI plant, operated by Toyota for General Motors, is the highest quality plant in the GM system although it has the least automation.

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The Doctor or Manager as Detective

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After the audience suggests different cures based on the common wisdom, I explained to them that the numbers in the table were actually generated by the random number generator in my computer.

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In only two or three instances, out of thousands of people, did anyone suggest that perhaps the problem was in the system itself

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only three people have suggested that we analyze the data in the table to see if we could compute whether Eva's results should be expected

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“Look, I know that the numbers were generated by a computer, but nevertheless, I would still talk to Eva”!!

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Suppose the supervisor, however, does know about variability and does understand it is the system that needs to be fixed. Given this disparity in understanding, how do you think the manager will rate the supervisor?

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WHENEVER THERE IS A PROBLEM 85% OF THE TIME IT WILL BE IN THE SYSTEM 15% OF THE TIME IT WILL BE THE WORKER

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To sterilize a process will require someone to study what causes the variability and to remove the causes one by one.

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Some Managerial Myths

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THE PERVERSITY PRINCIPLE IF YOU TRY TO IMPROVE THE PERFORMANCE OF A SYSTEM OF PEOPLE, MACHINES AND PROCEDURES BY SETTING NUMERICAL GOALS FOR THE IMPROVEMENT OF INDIVIDUAL PARTS OF THE SYSTEM YOU WILL PAY A PRICE WHERE YOU LEAST EXPECTED TO.

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Goodhart's Law

Setting targets for the individual performer does not speed up the process. It slows it down as each performers tries to look good at the expense of the others.

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The work flows across the enterprise and attempting to treat it as piecemeal operations results in waste and expense.

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That is why container ships have been so successful. By pushing the inefficient packing problem onto someone else, they have eliminated the variability in the loading process.

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THE PEOPLE WORK IN THE SYSTEM. THE JOB OF THE MANAGER IS TO WORK ON THE SYSTEM TO IMPROVE IT, WITH THEIR HELP.

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have to acknowledge that workers do not control what goes on in their work.

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The State of Health of an Enterprise

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chart to help a manager make a diagnosis from the symptoms which will be exhibited to typical meetings.

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whether you like it or not, the enterprise is one system.

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The Transition of a Culture

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Conclusion

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