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July 27, 2009

Thomas Peter's confession

Okay , I have been reading Tomas Peters and Robert Waterman's 'In Search of Excellence'  for a good hour or two. It was generally interesting to see what they say about business excellence

Apparently the book was a big hit during the 80s , and even today, you can find 6-7 copies in the library which kinda suggest the book is a worthwile read right?

But hey I came across this article (link) attributed to Tom Peters himself (written by an editor who interviewed Tom) , written in 2001, where he confessed to criticisms that he and Waterman faked the data in the book Search. What I find amusing though is he also talks a lot of well known business figures like Drucker, Xerox , and the dark side of McKinsey where he worked as consultant. Some of the quotes from I like from this article are ...

"I had no idea what I was doing when I wrote Search

The 8 basic rules of management in Search originated from

"One morning at about 6, I sat down at my desk overlooking the San Francisco Bay from the 48th floor of the Bank of America Tower, and I closed my eyes. Then I leaned forward, and I wrote down eight things on a pad of paper. Those eight things haven't changed since that moment. They were the eight basic principles of Search. "

Why did he write this book? Because he was pissed! Pissed at what?

"Who was I pissed off at? At Peter Drucker, for one. Today, everybody acts as if Peter Drucker has always been one of those who gets it. Go back and read Concept of the Corporation. Peter Drucker may be an Austrian, but he's more German than the Germans when it comes to hierarchy and command-and-control, top-down business operation." 

You think Xerox is a great company?

"Xerox was considered to be the company of the century, but I knew better. There it was, all in one place: the bureaucracy, the great strategy that never got implemented, the slavish attention to numbers rather than to people, the reverence for MBAs -- you name it....So here it is: If you want to reduce Search to a core message, that message would be this: Xerox sucks."

I am only up to page three and  this gives me a sense of thrill and excitement like I am reading up on some business gossip ... haha...

Despite confessing in public of his that the book doesnt quite stand up in terms of academic rigor, by the time you get to about page 4 (of the article, not the book) , one begin to see that that despite the inadequacies, his main message was essentially right "Soft is Hard". He argues the conventional wisdom at the time was Hard was Hard. People who deeply believed that strategy, structure, procedures, and numbers were the ten commandments to business management. This message mirrors all the stuff we have been learning in our class so far EFQM, Six Sigma, TQM, Kowledge management and so on. The key message is this, without an utter attention to the people, all the best strategies, tools, programs, initiatives are close to complete uselessness. I believe this is also something that deep underpins my current project which is looking at some of the limitations of these management innovations. Looking back , the reason that the message of this book was essentially correct is, I believe, not a mere coincidence. The fact is , even though the data (presumably qualitative data the authors claimed to have interviewed business managers) was fabricated, the fact is both of them were consultants who had years of experience with business industry. Furthermore, Tom himself got a PhD from Stanford on Organisational behaviors . Taken together they probably had a pretty good theoretical background on business management, and a practical view of real world business. Coupled together it was not suprising their conclusion were not too far from the truth. The book itself , allude to plenty of management theorist at the time such as James March, Karl Weick, Chandler and many other well respected organisational and management theorists, making a strong case for their argument from a academic point of view.

In the last couple of pages, Tom concludes that he is no longer interested in excellence, but he is interested in interesting. He argues the way business may suceed in today's world of fast paced environment is daring to try, to learn, and be different. Customer does not buy the same even if it has always remained the same for many years. They buy new, cool things. However, we often attribute consistency to quality as well , for example if every can of Heinken has a slight different taste, would it still be popular as it is today? So, here then is one of greatest paradox of business. "To be excellent, you have to be consistent. When you're consistent, you're vulnerable to attack. Yes, it's a paradox. Now deal with it!"

At this point I am also thinking about whether it is appropriate to try and define excellence (i.e. find the set of associated characterisitcs). The difficulty and the dilemma with this exercise is , like many other kind of vague mysterious words e.g leadership, love, courage, what ever you come up with, you can always find an exception to the rule.  If excellence is what Tom describe it to be - Different, then perhaps the very exercise of trying to define it (and hence standardise it) , very much contradict what it means to be Excellent.


Personal defenses

An important discussion in organisational learning is why organisations does not 'learn'? Argyris argues learning is the continuous double loop learning - challenge and changing those deep held assumptions (theory in use). But double loop learning is inhibited by organisational defenses. Argyris explains organisational defenses arise from deep held individual belief to avoid oneself from threatening situations. Some of these beliefs include

  • Self protection at all cost- avoid confrontational situations that exposing myself to blame
  • Protection of others- avoid testing other's assumptions which evoke negative feelings in them, and making them feel they are to blame  
  • Control the situation and task- taking actions or views , act privately, avoid public inquiry that might refute my own view

If I think about these things , I can easily recall myself having these beliefs and how they controlled my decisions. Take blogging for example, I believe sometimes I don't want to express my views because I don't want it to be refuted by others. Certainly in life, I am the type of person that would try to avoid exposing other's flaws. My unwillingness to confront the deeper level problems, both in myself and in others, often led me to believe I was helping others but when in fact I was merely rescuing others. The latter doesn't actually doesn solve the problem and doesnt prevent the same issue from re-ocurring.

This seem like good practice of social behavior, in order to get along. But in organizations, these assumptions manifest itself in distrust, non-cooperation, political game and so on ... all are merely symptoms of set of our underlying assumptions about interpersonal behaviors.

When people holds these assumptions about the behavioral world of organisation, the organisational whole becomes resistant to accepting new views, trying new things, and change organisational routines (theory of action) that may inadvertently reinforce these personal level defenses.

A few years ago the notion of EQ or Emotional Quotient was very popular. People often relate one's EQ to their success in life. Now I think about it, people with high EQ are probably quite aware of their personal defenses and know how to manage it effective in themselves and others.

 


July 26, 2009

Theory of action vs Theory in use

For weeks now I wondered about the terms 'theory of action' and 'theory in use'm what they mean and how they are different. They are two concepts introduced by Chris Argyris and are widely cited in organisational learning literature. Unfortunately, except in the earlier work by Argyris, he doesn't seem to define them clearly , rather it was used straight away. The same  goes with the literature. No definition , somehow reader are expected to know them already

Today I finally know the difference

Theory of Action is a theory of deliberate human behaviour which is for the agent a theory of control but which, when attributed to the agenet, also serves to explain or predict his behavior (P.10)

On the other hand, he explains the difference with theory-in-use as

When someone is asked how he would behave under certain circumstances, the answer he usually gives is his espoused theory of action for that situation. This is the theory of action who which he gives allegiance and which, upon request, he communicates to others. However, the theory that actually governs his actions is his theory in use, which may or may not be compatible with his espoused theory (p.11).

In more straighforward terms, theory in action is the things you say you do. Theory in use iswhat you actually believe and not just what you say you believe. These two may not be the same e.g. attitude toward smoking, sexual orientation, exercise, healthy eating, and more generally, political correctness.

Chris Argyris- Organizational learning- A theory of action perspective


Defense routines

Few days ago we received the feedback for the Management of change module. It was a long awaited feedback since we submited the assignment about six weeks ago. I am not saying Dee was slow in returning the feedback but like they say "Good things come to those who wait", I think what I got was well worth the wait.

First thing I noticed was the length of the written feedback. One thousand words by my computer editor's estimate. Well I think this is the first I I ever got such as detailed feedback for any of my work. As far as I am aware, Dee does this for all her students. Just imagine the time and effort she'd put in to mark 16 assignments or in some other classes , 30+.

At the first reading it was a bit uneasy because of the critical tone she used to examine my work, just like when we had the module. It often feels as if she could see the unvoiced assumptions deep down in my mind and ruthlessly tear it out into the open. 

In one passage she wrote

Most issues were well discussed but unfortunately, your last line (...there simply was not enough time to build that relationship) overturned a good number of insights that went before. This highlighted what appeared to be a blind spot on your part, what Argyris has often described in his work on organisational defensiveness. You were a leader and you had enough time to form relationships with people ¡V leaders in other simulations in the past have managed to form highly positive and communicative relationships with their staff in the past. 

The reason I picked this one is because well first I don't fully agree with her but if I come up with any excuses, I'd end up being labelled being "defensive". It's like I am not allowed to explain myself. Secondly, organisation defensiveness is something I am researching for my project. So I thought it would be interesting to compare my experience and what I learnt from the literature so far.  According to Argyris (1978;101) Organisational defense is when what people use to protect themselve from threatening situations, implictly suggesting that these actions are counter-productive. Organisational progress may be hindered if certain key players decide it was not in their self interest to adopt new practice, routine, or idea and so on. People do it because it prevent them from engaging in a painful and difficult task of 'critically examining their role within organisation'. So organisation defenses is a mechanism people use to prevent themselve from changing.

Was I being defensive when I made that comment? Did I say that because I didn't want to admit that I wasn't doing a good job? I don't think I was because for that entire paragraph I was reflecting on the mistakes I made as the financial manager during the business simulation

Perhaps as the management we didn't communicate well and more importantly allowing workers to communicate back to us which contributed lack of mutual understanding and a divisive culture.  

The reason I added that comment at the end  (...there simply was not enough time to build that relationship.) was simply from my own observation of the environment at the time (deadline, confusion, yelling, and a lot of stress) there was simply no opportunity to build realtionship with the group member. Given that we were not suppposed to stop producing output throughout, it was difficult to focus on soft people issues when there were more pressing issues (profit) to deal with.

Of course, the couter argument for this is "In real life, this is what business environments are like, you don't get time to work on soft issue, you gota do them both at the same time!". "Besides other groups have managed to build a cooperative culture in the past , why can you?" Well, this is difficult  to argue with that since I havn't had that business experience and seen personally for myself how such people issue could be solved under the same conditions.

To quickly conclude, I don't think I was being defensive when I made that comment in my writing. It seems like the problem I encountered was although I know perhaps what I should have done, I didn't actually believe I could do it. I didn't believe we could have attended to 'building a open culture' under the time and performance pressures.I guess this just leave me with what do I need to do to close the gap?

 


July 18, 2009

Value of good quality?

Eight months ago, I wrote a blog on the "Cost of Bad Quality" (see here). The choice for this title is, well, my childish way of responding to my previous entry :P

The idea for this blog actually came from doing my project research which is going pretty well (thank you for asking). In my research I became particularly interested in the causal relationship between Doing Quality and Business Performance.  Since few would dispute that quality is highly desirable in product and service that we consume.  We generally take for granted that all things associated with quality is probably good for us, including the popular quality methods used and advocated by consultants and practitioners. In fact, most books on quality seem to suggest either explicitly(i.e. Harry & Schroeder (2000); Pande et al (2002;2000), or implicitly (Deming 2000, Crosby 1984) that quality contribute to direct business performance (i.e. Six Sigma).  However, I feel because people have taken these ideas for granted that anything associated with quality (such as quality methods) are generally being treated in an unscrupulous fashion.  

One of the exciting (but also tedious) thing about this area of research is that there seem to be huge inconsistency in the literature. Many empirical studies suggest positive correlation when just as many suggest the opposite. How to explain such disparity in finding? Various suggestions are posed such as researcher  bias (Powell 995), unscientific research methodology (Powell 1995), lack of objective information on actual practise & different interpretation and application of quality (Easton and Jarrel 1998)and selection bias in firm (Powell 1995)and so on.

But these are , in my opinion, minor error in research methodology that do not fully explain why there are two large body of contradicting conclusions. Is there an actual difference on the firm level (i.e. between adopt & non-adopting)? Or is there another explanation (beyond firm level) for such empirical disagreement?

What I find most exciting is that I seem to have found at least two arguements, both offers macro level explanations for the observed discrepancies. The first one is from an institutional theory perspective (a strand of organisational theory). I won't describe its origins. It is suffice to say that the theory argues firms tends to conform to existing practises (thus becoming more alike) because they want to be seen as legitimate (justified in existence) in the eyes of stakeholders. In another word, Firm A sees many companies doing Six Sigma and it feels it has to do Six Sigma as well in order not to be seen as falling behind. Evidence of this phenomenon has been observed particular in heavily regulated industries such as health care and financial sector (presumably to conform to regulation or compete for state resources) (Westphal 1997, Deephouse 1995). However,  in less-regulated industries, managers will choose to conform to industry practise because doing so give them better reputation and pay (Staw and Epstein 2000). Now, how does this relate to Doing Quality and Business Performance? Institutional theory argues firms adopt quality methods not because it want to improve process efficiency or yield but because of other reasons such as regulation or higher compensation. Therefore, there is likely to be a gap between rhetoric (what firms say they will do) and practise (what firms actually do). Now, when researchers send out questionnaires to company manager asking about their quality effort. The pool is likely to be made up of firms that are totally serious of quality effort and firms that approach quality in an apathetic, half-hearted manner.  The inclusion of firms passive about quality leads to results that show quality effort made no significant (or even negative) effect on business performance.

Now, you may say "But that doesn't explain everything! What about those studies that are careful about choice of sample to make sure only firms serious about quality are selected?". Indeed there are studies that control for such bias by selecting only firms that won quality awards (Baldridge or EFQM), or certified with ISO 9000. Because of the third party assessment process, the selected firms are more likely to have implemented consistent quality practises. But there is another explanation for this situation too. It is from the resource based view of organisation-namely firm success is determined by the resource it posses. Since possession of quality practice (a resource) confers an advantage (in product, process quality, and customer perception) over its competition, firms will choose to practise quality in order to outcompete or in the case of slower adopters compete with earlier adopters. Now, that is all very well and good. Competition is good for the society. However, the problem comes when a quality practise diffuse to the extent that most firms have it and the quality practise itself no longer confers a competitive advantage (Porter 1996). Imagine if everybody in your class got an "A" for final exam, how does this make your own "A" special or unique? This is particularly problematic in the case of pre-packaged, generic quality practises (i.e. Six Sigma) because of the ease of implementation (faster industry adoption), but also the faster the rate of loss in competitive edge. Think about why some firms choose not to be seen as associated with certain quality methodologies - simply because otherwise it would be seen as indifferent with its competition in customer's eyes. You may also relate this to the faddish phenomenon of management initiatives. As one "idea" become saturated in the marketplace, firms look for the next "big" thing to differentiate themselves from competitors. Consultants and business managers are in a mutually dependent relationship. Consultants (and partly academics) simply provide an avenue for such "ideas". Now, like before, I must ask "how does this relate to doing quality and business performance?".  According to the resource based view of the firm, early pioneers of a quality practise would enjoy a first mover advantage (Lieberman & Montgomery 1988) of huge financial benefits from process improvements marketing.  Late adopter of a quality practise would gain virtually no benefit due to the extended diffusion of practise.

To conclude, is good quality valuable? Probably so. But does this mean practising quality will always deliver good business value? The empirical evidence seem to have given us a largely confusing and contradicting answer. In this short entry I have tried to offer a macro-level for such discrepancy in literature from both organisational behavior and strategy perspectives. When quality practise is adopted only superficially, the difference in actual practise between serious and passive adopters may be difficult for researcher to detect. Even with the inequality in actual practise controlled, the ease of quality practise diffusion in the industry means competitive advantage based on quality is becoming more difficult to sustain. This in turn, differentiate early adopters from the later adopters whom may both be doing exactly the same thing!


July 14, 2009

My two cents worth on competing with Management Initiatives

Ah... We are nearing the end the Msc dissertation, I have noticed how my blogging activity have dropped dramatically after modules were completed

Laziness?

Perhaps

At first I thought this is because no more class= no new stimulation to the brain = no reflection

But surely I must be learning lots by now from doing all the research??

Admittedly up until few days ago, I was still struggling with the direction of my project

"What question am I trying to answer?"

"Is there really an answer to this question?"

Huh... I guess I was totally confused, and when I am confused, I find it hard to reflect

.

.

However.....................

I am begining to think that the most difficult part is over, no more confusion!!!

And I can begin to relate what I have been reading, to what I already knew

What do I mean?

For example, one of the things I have been thinking about is "Business"

What is their goal? Why is there one Management Initiatve after another? TQM, BPR, KM, Six Sigma, DFSS. Lean Six Sigma, organisational learning, learning organisation ... ... ...

And I think I am begining to have clarity, it is still hard to explain at the moment, I will try putting this down in pens and paper

One of the thing I have come to realise is the idea of competitive edge

Business exists by out-competing one another

Throughout history, business compete by having something that the competition lacks

This something is of many things. It could be how much money business have, what technology, machinery, government relation... and so on

In the 80s, the competitive challenge was Quality. There was a  Japanese threat on quality. So this gave rise to TQM, Quality circle, worker empowerment, SPC...

In the early 90s, people realise having quality is not enough. Business need to change all the time. So the notion of learning organisation was coined. Sadly, the term learning organisation is a rather miscontrued usage because it bear little relationship to the organisational theories on organisational learning that began in the 1950s. Confusing ? Definately!

In the mid 90s,  people are through with quality, product quality is on par with the Japanese make. Then people realise they need another competitive edge. Hammer and Champy wrote an article in HBR and then a book on Business Process Reegineering BPR. It was thought, we need not only quality, but quality at lower cost! People realise business relate to customer through its actvities. Value adding activites are Good while Non-value adding activities are Bad! BPR then is about re-drawing business so that business consist only with value adding processes.

Nearing the end of 1990s, and the begining of 2000, there was a revival of quality- as Six Sigma. Similar to its earlier ill-fated brother TQM, it too focuses on Quality and Cost. But it claims to be better than TQM. How? Well from what I can gather, the language is different (more jargons), the way it came to dominance is different (look at successful stories from GE, Motorola, Honeywell!). But fundamentally, it is based on the same principles + tools of TQM that started 30 years ago. Where TQM failed, that its meaning have since became lost with the broadening of its concept, Six Sigma claims to have succeeded.  Through a clever packaging of quality principles (PDCA, Variation control, team based problem solving), and a business-like language to navagate your around all the nitty gritty details, it somehow became a paneacea for all your business problems.  If you want a "Complete idiot's guide to quality control", then Six Sigma is your answer!  Of course I am kidding myself here, there is more to Six Sigma than I what I have described but the point I try to make here is that history often repeats itself. After a while , when the Six Sigma hype has subsided, people begin to wonder "Hey ! why hasn't it worked for me?". Usually, people blames it on the culture, the people, and the resistance. A "learning environment" it seemed, was a pre-requisite for success. But the same kind of problem existed long before Six Sigma came along. The Quality gurus, like Deming, Juran, and Ishikawa have discussed these issues which some have categorised as 'Soft TQM". Somehow, the Six Sigma advocates choose to neglect this (You'll be surprised to find how little reference to Quality history in Six Sigma books). The reason TQM lost its meaning is two fold. First there is a large divergence in the writing between quality gurus and little reconcilliation in a single all encompassing framework. Second, when it gets to the "Soft TQM", that is where the difficult part begins. Leadership, knowledge, people, trust, culture, continuous improvement and so on means different thing to different people.  It is like IQ, or handsomeness, or beauty, you either have it or you don't. It's exact meaning is ambiguous. In business and in life, ambiguity is problematic. There isn't exactly a 'complete idiot's guide" to leadership either. Getting the the Soft issues right is hard work and people don't like hard work, especially when they don't know when it is going to pay off. Consultants too find it much harder to sell 'leadership' than something tangible, logical, rational & tool-like solutions.

Now the latest management thinking appears to be 'knowledge management'. This arise from the notion that in today's world, neither quality, cost, or even processes give you the competitive edge you need. What is needed is people and the knowledge that rest in people. This fit well with the idea that only innovation will enable business to outlast its competition.

By now I think all of us can begin to see a pattern here. All these initiatives, while the core ideas are good in itself (quality, process, knowledge are all important), but it is being approached in a solution like way. Somehow, there is this "THIS IS YOUR ANSWER!" mentality. Perhaps this is caused by heavily solution oriented culture of business environment. But the reality is, there isn't always an obvious solution to business problems. Getting the people problems right, requires hard work. Not just in business, in family, relationships, and between nations.

Succession of management initiatives has often been refered to in a jeering way such as "Flavor of the Month", "Management fad" , or "Keep your heads down, it soon will pass".  Despite this, has there been progress? I should think so. Everytime a new idea come along, it is based on a particular symptom common the everyone in the industry. Management fashion gets everyone's attention on the problem. Even though like other new ideas, the initial phase is always filled with confusion, ambiguity, and many lost dollars and cents. With time, as business gain greater clarity, they will learn to cherry pick the parts of 'package' that are useful and build it into their organisational routines. This is what moves organisations forward. This is organisational learning. After the business innovation has been completely exploted beyond recognition, another will rise to replace it.

So is there an end to this ? Will there be the next something after knowledge management?  I should think so. Some ideas gaining popularity seem to be the environmental issues (Sustainability !) which is already gaining currency in the literature (and advertising!) . We will see :)


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