June 19, 2012
This is a rewrite of an unpublished article I wrote in 1994, when many businesses had recognized the importance of their internal culture and its impact on their business. I believe the principles still hold, though the understanding of culture and how to create lasting business success seems to have slipped in the intervening years, at least in the United States.
Where were we going in the TQM era?
The intent of the Total Quality Management (TQM) cultural change effort of the late 20th century was to achieve maximum organizational effectiveness, meaning maximally effective people. To be highly effective, people must be deeply committed. This requires that people care about their work, employer, coworkers, etc., for they will only be committed if they care about what they are doing and whom they are doing it for. Fortunately, people have a natural tendency to care about their work. The sense of accomplishment available through work gives people reason to feel better about themselves, and makes caring and contributing possible and even pleasurable. The positive self-image that arises in this kind of environment is a far more powerful motivator than any externally applied influence and results in far higher quality of work. By comparison, fear is also a powerful motivator, but its effects are detrimental to the quality of work produced in many ways, and they all increase cost without a matching increase in value. But how are business systems involved? Read the rest of this entry »
June 15, 2011
First let me define my term “Organizational Incompetence”. Sometimes in business you sit in a meeting and hear people grousing and struggling, and perhaps arguing and talking over each other in their frustration. The problems they describe are almost always not of their own making, nor do they have the wherewithal to remedy them by themselves. You begin to perceive that on some particular aspect of business the organization just doesn’t do well, and it keeps posing problems to groups and individuals and holding up productive work. The appearance is that the organization is incompetent, at least in some particular way or area, and is suffering from needless cost, waste, and widespread frustration and stress. In essence, the organization or a system within it is dysfunctional. So how does this occur and what can you do about it? Read the rest of this entry »
May 25, 2011
Pay-for-performance, merit pay, and annual reviews have not worked out well. W. Edwards Deming started as a statistician but became one of the greatest business thinkers in human history. His ability to penetrate common business issues and get to the fundamental truths and fallacies behind them was amazing. His research clearly illuminated what most of us had already felt, if we took the time to think about it: pay-for-performance and periodic performance reviews, while often yielding us pay increases and other rewards, almost always left us feeling mistreated and angry, and sometimes in competition with our colleagues – not a good feeling. Why is this? Read the rest of this entry »
October 28, 2010
Here’s a very interesting article detailing a debate held at The University of Michigan Ross School of Business, Oct. 20, 2010, on corporate social responsibility. Here also is my favorite quote from the debate:
“Companies are given a wonderful privilege in society, which is limited liability. And I think society should say to companies the quid pro quo for limited liability is that you will not play a political role at all. Citizens play a political role; companies should just obey political laws, and that’s it. …But the least we can do — and I agree totally with Tom — is have much more transparency and pressure on companies to make their lobbying transparent.” — Aneel Karnani, associate professor of strategy, Ross School of Business, The University of Michigan, Oct. 20, 2010
Please read the entire article for some very thought provoking discussion on the topic of corporate social responsibility, if the topic interests you. I maintain that this is a key aspect of corporate behavior, and critical at a time when corporate power is expanding rapidly in our political system and threatening to swamp the influence of the electorate.
As always, I welcome your comments. – Tim
April 2, 2008
One of the most frequent and frustrating occurrences I see among corporate managers is the failure to understand the cost-benefit ratio of information. This is the idea that it costs a certain amount to obtain each bit of information, and that cost rises as you approach 100% of the information you might need (or think you need) while the value of each bit of information falls. To relate it to the Pareto principle, in almost any situation you can get 80% of the information for 20% of the cost, but the other 20% of the information will cost you four times as much. This is perhaps a bit of an overstatement, but illustrates the concept. Read the rest of this entry »