Ohno said

Last week I spoke at the Lean Summit in Holland. The audience gave me a warm reaction. But I was very disappointed to be told afterwards that the ‘Toyota people’ – which means the US/UK people who studied in Toyota – rejected what I had to say. Apparently their problem was with my declaration that standardisation of work in service organisations often leads to worse service and higher costs because it damages the system’s ability to absorb variety.

Ohno said you cannot improve without first standardising work. That is undoubtedly true in anufacturing; but is not true in service. In fact if you start with standardisation in service you can make things worse. The sad thing is they talked about me, not to me. I hope once they are over the emotional reaction we can have a dialogue, I am sure there is a lot we can learn from each other.

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The customer sets the nominal value

The reaction of the ‘Toyota people’ in Holland reminds me of a similar encounter ten years ago at a Deming conference. I had the audacity to disagree with Ko Yoshida, who had presented the case for applying Deming’s work in service organisations. He had chosen restaurants as his example and had started with standardisation of work. I pointed out that in restaurants the customer sets the nominal value: what matters to a group of fishermen at 6am is different to what matters to a business woman with a lap top in the afternoon.

Ko Yoshida graciously accepted that I had made an important observation and when a later questioner referred to the same he said Mr Seddon had already pointed to ‘this fundamental flaw’ in his approach. The fact that he remembered my name was even more remarkable, as each questioner would give his/her name only once before making any remarks.

It is perhaps no coincidence that someone who knows Ko Yoshida is translating my latest book into Japanese. He is also a student of Ohno.

People often say the distinguishing feature of Japanese management thinkers is their curiosity. I am sure Ohno would have wanted us all to keep learning.

By the way, the translator wants to know if any other Japanese people are reading my latest book. If this is you, please get in touch.

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The customer sets the nominal value (2)

A reader writes:

“My family and I took a quick trip to Southend – the much understated Essex Riviera – yesterday. As it was a hot day we decided to stop for an ice cream at the Rossi shop on the sea front. My son and I had a small cup of lemon ice each, which was delicious and we were all quite happy. The trouble started when my partner asked for a vanilla ice cream in a cone with strawberry sauce. The lovely young man behind the counter told us that they could not put strawberry sauce on the cone; the sauce was only used for sundaes. When we asked why, he just reiterated it again and offered us a chocolate flake instead. My partner was quite intrigued and so offered 20p for a squirt of the sauce. Still they refused and said that they only put it onto sundaes. When we queried it with the lady behind the counter, she just looked at us blankly and asked for the money.

Next time we visit I plan to ask for a sundae in a cone with strawberry sauce and see what happens….”

Maybe Rossi thinks service is all about standardisation?

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BSI chief should retract false claims for ‘Quality’ standard

Some of you may have read the articles by myself and Stevan Breeze (chief exec BSI) in the Daily Telegraph. In his response to my criticisms of ISO 9000 (which you can read at: https://www.vanguard-method.com/v1_lib.php?current=946) Stevan Breeze quoted research that is out of date and has been rescinded by the authors.

Mr Breeze stated, “European research calculated the average profitability from 1994 to 1998 of 400 registered firms against that of 400 that were not. The conclusion: registered firms were measurably more profitable than those that were not. Benefits include improved management control, productivity, customer service and staff retention.”

The authors of the research revised their findings and concluded: “We have found no evidence that certification has any significant influence on profitability or sales growth”. Either Mr Breeze is unaware of this important revision or he has chosen not to disclose it. In either case he misleads the reader. He should retract this claim.

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ISO 9000 just doesn’t work

The Telegraph coverage generated a lot of mail, here is a selection:

A reader in the US writes:

“The work of [my company] is based on ISO 9001 certification, and despite the fact that our implementation methods emphasize a customer view, worker empowerment, ‘internal customer relations’ and rather advanced thinking in process management, the majority of our clients are those looking for the certificate rather than any other types of benefits. We are more than able to provide that, but now that we have five years under our belts, we are able to look back and see that, for the most part, our clients have not improved their businesses in any significant way.”

And UK readers wrote:

“Having worked for a major certification body for some 8 years I can also without fear of contradiction agree with the conclusion that there was no difference. In fact those registered organisations would have wasted resource and money to maintain the bureaucracy – the poor souls who had to 'maintain' the raft of procedures and records and look after the auditors.”

“We are Consulting Engineers in Failure Investigation, Failure Avoidance, Materials Science and Engineering and, as such have contact with perhaps 300 different companies. It is our view that BS 5750 and the subsequent ISO standards have in fact got in the way of quality and inhibited innovation.”

“I heard recently that the Environment Agency had done a similar study on the effect of ISO14000 on environmental performance with a similar outcome (i.e. it makes no difference at all). I'm afraid I have dropped out of this scene recently but I am glad to see that you are still carrying the banner. Some while ago I wrote a research report for the ABI in which I undermined the 'management systems' approach pretty comprehensively. This was done through the BRE and their certification people knobbled it. These vested interests will go to considerable lengths to avoid criticism in the public domain. They are not about to allow their licence to print easy money to be revoked. Power to your arm.”

There was also one e-mail telling me I am completely wrong, it came from a man in BSI. No surprise there then.

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6Is this excellence?

Last month I chaired a conference where someone from the Inland Revenue announced that the IR had spent ten years working with the excellence model, spent £3 million a year but found it ‘difficult to track benefits’. Apart, the person said, from Cumbernauld – the IR place that won an award. What was not cleared up was whether ‘success’ in Cumbernauld went further than winning the award.

Another informant tells me they have forty people in Cumbernauld who spend their time administering the ‘excellence’ work, writing the reports etc. Make me wonder what the others do.

At the same event the top man at the British Quality Foundation showed data about the take-up of the excellence model in the public sector and showed the opinions of the users to be positive. I sat there thinking cognitive dissonance – if you’ve spent all that time and money you’re not going to say it was unhelpful, and anyway, who wants to be seen as not ‘up for excellence ’? A bright observer in the audience asked: “But was there any customer data about the impact of using the model”?

In the early days for ‘next steps’ agencies, they had to be using the model to get their freedoms, the police inspectorate use it, so the police forces use it. But does it ‘bake bread’? I think you now my views on that. If you don’t go read them at: https://www.vanguard-method.com/v1_lib.php?current=953

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The MBA not to avoid

Last month I visited Hull University Business School where they offer an MBA. What impressed me was the curriculum included a good chunk on systems thinking. For some time I have been using Henry Mintzberg’s quip, that MBA should stand for ‘maybe best avoided’; but if you want to do an MBA, this is one worth doing.

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Another way to cheat our health

In the last newsletter I included a piece written by a doctor on how people cheat to make the targets in the health sector, in response a reader writes:

“There is another way that they fudge the waiting list. In Ysbyty Glan Clwyd (Hospital in Wales), they send out letters each month to patients waiting for an appointment to tell them that they will soon be going onto the waiting list and ask them to fill a form in saying that they still want the appointment. It is only when they give out the appointment the time starts ticking down so my friend has been on the 'waiting for appointment' list for five months and when he eventually gets an appointment he will only be on the official appointment list for less than 6 weeks. His doctor sent him to that hospital because they only have a 6 week waiting list when our closest hospital has a waiting list of 10 weeks.”

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The ministerial mind

A reader writes:

“Re your request for observations on the ministerial mind following the health minister closing only half the quangos. Ministers and politicians owe their jobs to votes, not to true effective performance of their jobs. They are selected by votes on the basis of what they say they'll do. Their past experience and skill base is rarely challenged in relation to their ability to do the job – most would fail any normal interview for the job anyway!

So they spend their time trying to please as many people as possible = greatest potential number of votes. Thus – If he closes all quangos, lots of people who like quangos are upset = no votes from them. If he closes no quangos, lots of people who hate quangos are upset = no votes from them. But if he closes only half the quangos, then statistically, although he'll half upset both quango likers and haters, he stands the best chance of maximising votes – simple!

Their motto must be – If you please half the people half the time you may get half the votes, which is better than doing the right thing 100% and risk getting no votes! This is why most policies only ever go half way to doing what needs to be done – look at the railways.”

Quite. And now they tell us it was a mistake to fragment them. Who made this mistake?

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Vanguard funded by ODPM

People often write to me to tell me to ‘tone it down’ otherwise ministers will never listen to me. Just for the record, Vanguard is conducting three ‘pilot programmes’ in housing, funded by the Office of the Deputy Prime Minister. Of curse I told them they don’t need to do ‘pilots’, I could take them to places we have already been and show them housing solutions. But you know how government works… I shall meet the evaluation panel this month.