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					                           M EA SUR EM ENT ,
                       T HE BR I DGE B ET WEEN
                           T HE HAR D A ND
                             SO F T SI DES
                                                           Arthur M. Schneiderman




V     isit Milliken and Co mpany, a
      1989 winner of the Malco lm
                                                       vice president of quality and pro-
                                                       ductivity improvement at Analog
                                                                                                                             Get the hard stuff right and much
                                                                                                                             of the soft staff will take care of
Baldrige Nat ional Quality Award,                      Devices, Inc., 2 I had also worked                                    itself.
and one of the things you will                         extensively in the development and
notice is the slogans on the walls.                    deployment of nonfinancial per-
One in part icular is eye-catching:                    formance metrics 3 and the use of the                            In this article, several examp les will
                                                       first balanced scorecard for their                               be used on how quantitative mea-
   “The hard stuff is easy, the soft stuff             management.4 My view was, and to                                 sures stimu late positive behavioral
   is hard and the soft stuff is more                  a great extent still is:                                         changes in both individuals and
   important than the hard stuff.”
                                                                                                                        organizations. However, before
                                                                                                                        proceeding, some defin itions are in
To an admitted hard-sider, this one                               EXEC UTI VE S UMMAR Y
                                                                                                                        order.
seemed dead wrong.
                                                        Both process and organizational
                                                       learning can be measured by looking                              DEFINITIONS
    Several years earlier, I had devel-
                                                       at the improvement half-life and its
oped the half-life metric as a driver                                                                                   Generally, when people talk about
                                                       rate of change.
of the improvement process.1 As                                                                                         the hard stuff, they are in the
                                                        These metrics can be used to draw
                                                                                                                        process view. Included here are
ARTHUR M. SCHNEIDERMAN is                              organizational and individual attention
                                                                                                                        process mapping, measures and
an independent consultant on process                   to the need for better approaches to
management. From 1986 to 1993 he                                                                                        metrics, improvement methodolo-
                                                       process improvement.
was vice president of quality and                                                                                       gies, and tools.
productivity improvement at Analog                      Most information at the boundary                                  In contrast, the soft stuff reflects
Devices, Inc. where he facilitated the                 between hard and soft sides of                                   the people view and is more
Quality Steering Council and chaired
                                                       improvement is in the form of                                    concerned with motivation, reward
the    Total   Quality   Management
Implementation Council. Schneiderman                   language rather than numerical data.                             and recognition, team dynamics,
has served on the Malcolm Baldrige                      Management, logic, and analytic                                and vision and mission..
National Quality Award as senior
                                                       practices can expand to provide tools                               Although these definitions paint
examiner and the Conference Board’s
US Quality Council II. He is located in                for understanding this alpha-numeric                             the two views as black and white,
Boxford, Massachusetts and can be                      interface in terms of degrees of                                 they are simp ly different aspects of
reached at (978) 352-2031 or at                        freedom rather than simple true or                               a total system for imp rovement.
art@schneiderman.com.                                  false rigidities.


                                             J O U R N A L O F S T R A T E G I C P E R F O R M A N C E ME A S U R E ME N T

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                                                                                                                        life? Research showed that it
MEASUREME NT PROCESS                     AND                                                                             depended on process complexity,
ORGANIZATIONAL                                              For any given process the                                    which in turn had two dimensions:
LEARNIN G                                                                                                                     organizational
                                                            half-life is constant over a
                                                                                                                              technical
If the process view of an organiza-                            significant range or
tion is taken, it is as the sum of a
nu m b er of inter c o nn e cte d pr oc es se s.
                                                                   improvement.                                         This dependency was captured in a
                                                                                                                        three-by-three matrix that had
Each of these processes has cus-
                                                                                                                        half-life values ranging from one
tomers       and        suppliers.        The
customers have requirements, and                                                                                        month for low organizational and
                                                                                                                        technical complexity processes to
organiza tions strive to match the
                                                        K is the change in knowledge, t                                twenty-two months for high ones.6
process        output           to       these
                                                        is the time interval, L is the rate of                               Associated with any given improve-
requirements.           Results metrics
                                                        learning, and F is the rate of                                   ment process is its own half-life matrix.
measure how well the organization
                                                        forgetting. L-F can be called the net                            Pre-T Q M, industrial engineers wer e
perform this.
                                                        rate of learning, which we always                                relied upon to design and improv e our
    Internal to the process are a few
                                                        hope is positive.                                                processes. The wo rkers job was to fol -
key variables that drive its output.
                                                            As process knowledge increases,                              low the standard oper ating procedur es
In general, they are invisible to the
                                                        the gap between the processes‟                                   (SOP) dev eloped by these engineers.
processes‟ customers. Measurement
                                                        inherent capabilities and actual                                 TQ M empo w ered the process exec u -
of these variables produces a set of
                                                        outputs will decrease. Inherent                                  tors not only to follow the procedur es,
process metrics. In mathematical                        capabilit ies represent the ultimate
terms, results metrics are the depen-                                                                                    but also to spend a portion of their time
                                                        limit the process can achieve with-                              improving them. This change in
dent variables and process metrics                      out significant capital investment.                              improvem ent process has led to a ten-
are the independent variables asso-                     Consequently, any results metric
ciated with a process.                                                                                                   fold reduction in improve ment half-
                                                        should also decrease, defined as a                               lives and com me nsurate incre ase in the
    Process knowledge is the set of                     measure of that gap. Therefore, the                              net rate of pro cess learning.
tangible and intangible operating                       rate of change of a results metric is
procedures used to convert the                                                                                               Transforming intangible into
                                                        a function of net process learning.                              tangible knowledge will greatly
inputs to outputs. If knowledge is                      Conversely, the rate of change of a                              reduce process forgetting while net-
constant (i.e. operating procedures                     results metric is itself a measure of
unchanging), and the process vari-                                                                                       works and best practices databases
                                                        net process learning.
                                                                                                                         will accelerate problem solving.
ables are stable, then the output of                        A little over a decade ago, I dis -
                                                                                                                             There does not appear to be an
the process will also be stable, sub-                   covered that the use of total quality
ject only to statistically predictable                                                                                   accepted definition of organiza-
                                                        management (TQM) tools and
                                                                                                                         tional learning. The fo llo wing is
variability. This phenomenon is the                     methods produced a constant rate of
                                                                                                                         offered:
purview of statistical process                          improvement which I called the
control (SPC).                                          improvement half-life. 5 For a typical
                                                                                                                              Organizational learning is the
    Process improvement requires                        process,       the    half-life    for
                                                                                                                              acquisition, application, and mas-
new knowledge that manifests itself                     improvement was nine months. This
                                                                                                                              tery, of new tools and methods
in changed operating procedures.                        meant that the gap between current
                                                                                                                              that allow more rapid improve-
This change in knowledge is called                      performance and the ultimate
                                                        process capability could be cut in                                    ment of those processes whose
learning. Note also that process
                                                        half in nine months. The remain ing                                   improvement is critical to the
knowledge can be lost. For
                                                        gap could be cut in half in an                                        success of the organization.
example, undocumented procedures
that rest in volatile human memory                      additional nine months. Because the
can be lost when the process                            half-life is a measure of rate of
                                                                                                                         In ot he r w ords , th e h alf-lif e is a
executors move on to other                              improvement, it is also a metric of
                                                                                                                         res ults m etric of th e i mp ro ve m e nt
assignments.          This        loss       of         net process learning.
                                                                                                                         pro c ess. A s th e i mpr ov e m ent pro c ess
knowledge is called forgetting. This                        For any given process the half-                              itself is i mpr ov e d, w e e xp ect to se e
can be expressed mathematically as:                     life is constant over a significant                              half-liv es de cr e as e f or a give n le v el
               ΔK                                       range of improvement. What then                                  of p ro c ess co m ple xity. Th e r ate of
                   LF                                 determines the value of the half-
               Δt                                                                                                        change of process half-life, at con-

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stant process complexity is a metric                                                                           “Turbo TQM,” assigns team mem-
of organizat ional (versus process)               People’s time is not always                                  bers on a half- or full-t ime basis.
learning. Mathematically, it can be                  the bottleneck in the                                     This can significantly accelerate the
shown as:                                           improvement process.                                       revolutions per month (RPM) o f the
                                                   Often data collection is                                    improvement cycle and lead to
             Lp  t½                             limited by the cycle time of                                  effectively shorter half-lives. Note
              t                                       the process itself.
       Lo   ½ 
                                                                                                               that people‟s time is not always the
                                                                                                             bottleneck in the improvement
             t  complexity                                                                                  process. Often data collection is
Lp is the process learning metric,                                                                             limited by the cycle time of the
Lo is the organizational learning                                                                              process itself.
metric, and t ½ is the process                                                                                    The following section examines a
                                              development of new ones are the
improvement half-life. Lo is in fact                                                                           real examp le in which a sustained
                                              keys to organizational learning.
the half-life for the imp rovement                Why does the half-life model                                 gap between actual and expected
process itself.                               work? Most applications of the                                   half-life, co mbined with a b it of
    Consider for examp le, a real             TQM imp rovement methodology                                     interdivisional co mpetition, was the
situation7 where an organization,             rely on taking a large problem and                               key in turning a TQM skeptic into a
new to TQM, is working on                     breaking it up into smaller p ieces.                             dedicated champion.
reducing late shipments in their              Typically, the biggest piece will
order fulfillment process. The                represent 30 to 50 percent of the
complexity of their process is such           entire problem, Once identified, the                             AN EXAMPLE
that we would expect a twelve-                improvement team determines a                                    In 1987, Analog Devices estab-
month half-life.                              corrective action, implements it, and                            lished and openly published a set of
                                              modifies the operating procedures,                               nonfinancial performance goals as
    However, being new to the TQM
                                              to reflect the imp roved process.                                part of its five-year strategic plan.9
improvement methodology, their
                                                  It then turns to the next biggest                            The half-life method, customer
initial half-life is forty months. As
                                              piece, wh ich will again represent                               input, and competitor analysis were
they master this methodology, the             30-50 percent of the remain ing
half-life drops continuously and                                                                               used to set these goals. The half-life
                                              problem. Th is never-ending cycle
approaches the twelve-month level.                                                                             was also used to set intermediate
                                              constantly works to close the gap
                                                                                                               quarterly goals and to deploy these
The half-life of their half-life curve        between current performance and
                                                                                                               goals to each of our divisions as part
is nine months. Their Lo is nine              ultimate process capability. If the
                                                                                                               of our annual planning process.
months and their eventual Lp will be          process is capable of satisfying
                                              customer requirements, then that                                 Although a one-page summary that
twelve months. Once an organiza -
                                              gap will also be narrowing. If it is                             combined these with the key
tion has mastered a given
                                              not, then a new process must be                                  financial goals was init ially referred
improvement methodology, all new
                                              designed which has the capability of                             to as the “Quarterly Performance
improvement efforts are expected to                                                                            Audit, “ it quickly became known as
                                              meet ing these requirements.
start at close to the appropriate                                                                              the “Scorecard.”
                                                  As a rule of thumb, a team will
half-life for that process. This                                                                                   At that time Analog had a highly
                                              take three to five months to
model suggests that Lo will vary              complete each improvement cycle.                                 decentralized organization and each
significantly over time, as new               Therefore, a roughly 40 percent                                  division was left to determine on
paradigms are invented, embraced,             improvement in four months                                       their own how to achieve their
and mastered, by the organization.            translates into a half-life of about                             scorecard goals. At most divisions,
    The toolsets that enable process          five months. A more co mplex                                     a staff member was assigned
learning      vary     with    process        process has more and therefore                                   responsibility fo r one of the metrics
complexity. 8 For example, the 7-QC           smaller p ieces and takes more time                              on the scorecard.
tools, the 7-MP tools, and                    per cycle, hence a longer half-life.                                 At our largest division, Joe, the
simu lation modeling, span the range              Improvement activities usually                               operations manager, was assigned
fro m lo w to high complexity.                account for two to four hours per                                responsibility for the on-time
                                              week of team activity. To accelerate                             delivery metric.
Mastery of existing toolsets and the
                                              the rate, Carrier Corporation‟s

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    As my office was located at that                                          EXHIBIT 1
facility, and my boss (the COO)                                               Late Shipments by Division*
was acting general manager, I was
asked to sit in on all of the staff                                                             DIV A            DIV B              DIV C          DIV D         DIV E    Corporate




                                                 Monthly Perc ent of Lines Shipped Late
                                                                                          100
meet ings. Joe was a very proud and,
to some extent, autocratic manager.
His initial reaction to a very
aggressive improvement goal was
“if that level of performance could
be achieved, we would already be                                                          10
there ... it just can‟t be done.” Over
time, the division‟s performance did
not improve. My help was declined.
Pressure mounted and everyone was
frustrated, fro m the CEO down.                                                            1
    One of the displays that I used to                                                           14                 14                N/S           N/S            N/A       34
track performance against plan was                                                                                                Half-life (months)
the chart shown in Exh ibit 1. 10 I                                                              *See reference 3

posted this chart on the door to my           Joe held in his staff meet ing                                                                  able, and suggested alternative
office. If a div ision had elected to         conference room, Joe took his                                                                   solutions. Often in putting the case
use TQM to improve their delivery,            normal seat at the head of the table.                                                           together, the team would see the
I also posted the starting date and a         Needless to say the team meet ing                                                               situation more clearly and reach
Pareto Chart (rank ordered bar                took on the tone of a staff meeting.                                                            consensus on its own.
chart) of causes of lateness as               Several of the participants said                                                                    Analog Devices practiced a
identified by their QIP (Quality              nothing during the whole meeting.                                                               flavor of a seven-step improvement
Improvement Process) team. After a            With a little coaching, the next                                                                method used widely in Japan.11 The
few months, it became apparent that           meet ing was in a different room and                                                            last step, step seven, is called
those divisions that were using QIP           Joe made sure that he sat at the                                                                “reflect ion.” Here the team reflects
teams were improving wh ile the                                                                                                               on its team experiences, prepares for
                                              middle o f the table. Several months
others were not. People would co me                                                                                                           its     management       presentation
                                              later, Joe turned over the team
by my office and look at the charts                                                                                                           (reward and recognition), and plans
                                              leader position to his manager of
on a regular basis.                                                                                                                           for is next imp rovement cycle. In
                                              production planning and changed
    One night, Joe passed my office                                                                                                           reflecting, the team addresses the
                                              his role to team sponsor.
on his way out, returned, and came                                                                                                            questions, “What went well?” and
                                                  There were many occasions in
                                                                                                                                              “What were our major weak-
in. He looked at the charts and then          which      finger    pointing    was                                                            nesses?”
turned to me and said, “Art, I thin k         redirected to data collection and                                                                   Typical answers to the first
you‟re calling me a bad manager.”             analysis. As the team became more                                                               question might be, “Everyone
Two hours later Joe agreed to start a         familiar with the TQM tools and                                                                 participated,” “Everyone met his or
QIP team and I agreed to be its               methodologies, behaviors changed.                                                               her commit ments,” and “Larry
facilitator. Confronted with data             Knowing that hip-shooting would                                                                 pitched in to help Sue when she was
that showed other similar divisions           no longer work, team members                                                                    out sick.” Identified weaknesses
were achiev ing results using TQM,            brought data to meetings in support                                                             might include, “We spent too long
Joe‟s skepticism softened.                    of their positions.                                                                             collecting data,” “We didn‟t always
    As team facilitator, I did have to            Functional issues were resolved                                                             end our meetings with clear action
overcome many soft issues. For                using an “elevation process.” If the                                                            items,” “I wish we had someone
example, the team consisted of Joe            team could not resolve the issue on                                                             fro m accounting on the team.”
(as the team leader, of course) and           its own, a case was put together that                                                               Too often, these types of
included several of his direct                described the issue, provided                                                                   evaluations are done in an open loop
reports. At our first meeting, which          whatever relevant data was avail-                                                               fashion. Individual performance

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appraisals rarely start with the pre-
                                                                                                                     Sean: “OK, Joe, how are you
vious cycle‟s findings and next
                                                                                                                     doing it. Stretching the lead
steps. Our teams were encouraged,                    It is the hard stuff that                                       times? Building inventory?”
as part of their train ing, to review               solves problems; the soft
their previous reflections at both the                stuff is an important                                          Joe: “No, no ... This QIP stuff
                                                                                                                     really works.”
start and end of each improvement                             enabler.
cycle. By rev iewing them at the
beginning, they could plan steps to                                                                             The following week, Sean called to
address their identified weaknesses;                                                                            ask if I could drop by on my next
at the end, they could see how well                                                                             visit. By the way, they are
they did. In this way, the reflection          (CEO) and Tom Malone (president)                                 represented in Exh ibit 1 as divisions
step became closed-loop. This                  attend every rally, and give out the                             A and B.
closure greatly enhanced the teams                                                                                 A few years later, management
                                               prizes at their conclusion.
                                                                                                                decided, for very complex reasons,
learning.                                         While the QC Circle conferences                               to set a flat annual goal. Joe came to
    This self-diagnosis is included in         have perhaps an 80/20 focus on                                   my office for an explanation. He
the     teams‟       presentations   to        learning versus celebrating, the                                 said, “Art, with no improvement
management, wh ich addresses each              sharing rallies have the converse.                               goal, I don‟t have any job.” The
of the seven steps. The collective             Which is right? That depends on the                              greatest champions are converted
experience of the QIP teams                    current needs of the organization, a                             skeptics, and in this case, it all
provides the fact base that                    very important soft-side decision.                               started with data.
management can use, for examp le,              Here again, data fro m the team
in setting priorit ies in TQM training         reflections and employee surveys                                 FUZZY LOGIC
(e.g. expanding training in data               can provide the basis for the                                    Success is like a giant magnet. It
collection and analysis or adding a            decision.                                                        draws people from all corners of the
module on meet ing management).                                                                                 organization, some of who m have
                                                                                                                made little or no contribution to that
    Analog Devices held periodic               Solution Versus Enabler
                                                                                                                success. At the first sign of trouble
corporate wide and divisional “QIP             This example shows that the soft                                 they are the ones who declare that
Fests” where teams jo ined together            stuff can emerge as countermea-                                  they have the solution. This
to celebrate their success and share           sures to real problems teams                                     happened at Analog when several
their experiences. In designing these          experience in doing the hard stuff. It                           unrelated     situations    in   1989
conferences, two different models              is the hard stuff that solves                                    triggered a reversal in performance
were examined.                                 problems; the soft stuff is an                                   at nearly all d ivisions. Delivery
                                               important enabler. Too often, the                                started to get worse.
QC Circles and Sharing                         soft stuff is approached as an end in                                A newly hired corporate support
Rallies                                        itself. Consequently, it does not                                staff manager took the position that
In Japan, there are almost daily QC            contribute to accelerated learning                               our setback was the result of a lack
Circle conferences held in various                                                                              of company vision and mission
                                               and      imp roved     organizational
                                                                                                                statements, too many teams, and the
parts of the country. Teams give               performance.
                                                                                                                need for facilitator and teamwork
very structured and standardized                   As an epilogue to this example,
                                                                                                                training. When asked for data to
fifteen-minute Presentations, the              Joe‟s division became the most                                   support her position, she answered
main objective of which is to share            rapidly improving div ision at                                   “I don‟t need data, this is my area of
best practices in the use or the               Analog. In fact, they were right on                              expertise.”
seven-step improvement methodol-               their annual half-life based goal                                    Since Analog was still in the
ogy.                                           line. Standing at the bar at one of                              early stages of its quality journey,
    At Milliken & Co mpany, they               the     company‟s      manufacturing                             confusion over what to do next ran
have been holding quarterly                    council meetings, I overheard the                                rampant. In my view, following her
“sharing rallies” for fifteen years.           following conversation between Joe                               recommendations would violate the
Teams are allowed five minutes for             and Sean, his counterpart at a sister                            very principles that the company
their    presentations    and    the           division that had made a quick start                             was trying to inculcate in the
participants get to vote on the                but had plateaued for the past                                   organization; Analog would be
“best” presentation. Roger Milliken            several months:                                                  leaping fro m problem to solution

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                 M E ASU R EM E N T ,     T H E        B RI D G E        B E TW E E N            T H E   H AR D   AN D   S O F T   S I D E S


without     collecting      data   and
identifying the root cause. To act on                       EXHIBIT 2
                                                           Example of Survey Res ults
her advice would be setting the
worst possible example.
                                                                                                         Progress to Date
   On the other hand, I did not
know the answer either. It was only                                                                                                                unweighted
                                                                                                                                                   weighted
several years later, when Sterman,
Reppening, and Kofman built a
System Dynamics based computer




                                                  Division
simu lation model of the Analog
Devices experience, that I was able
to see through the complexity of the
situation and understand the real

                                                  Corporat e Wide
root causes.12 (Their findings are
discussed later in this art icle.)
   What I chose to do was to go to
those people in the organization
who should have the best
knowledge of the situation: the                                     0          1                          2                 3               4                  5
division general managers.                                                   wors e                           neutral                     better
   I constructed a survey that had a                  What have we done well?                                       What have we done poorly?
mix of questions some of which                        “…selected one thing to focus on:                             “…have not culturally ingrained the
could be answered on a quantitative                   on-time delivery, and achieved a                              QIP philosophy”…“we haven’t built
                                                      meaningful win…”                                              excitement among the GM’s”…“we
scale (0 to 5) and others in words.                                                                                 don’t have enough QIP leaders in
Questions included the following:                                                                                   the division staff…”
                                                           “…identified clear priorities, established                “…divisions really don’t understand
    How do you rate overall QIP                           the metrics, and kept them very visible
                                                           … (this) has led to GM buy-in to QIP…”
                                                                                                                     how customer’s needs have
progress to date?                                                                                                    changed…”
                                                           “…very rapid and broad acceptance
    What have we done well?                               of QIP…”                                                 “…failed to define QIP. We think QIP is
                                                                                                                    QIP teams, it’s a subset of TQC, but
    What have we done poorly?                                                                                      you’re now telling me that it’s the same
                                                                                                                    as TQC. That was never explained to us…”
     What problems      should    we
anticipate?                                    anonymity, but nearly all declined.                                   numerical data did not dig deeply

     How      do     you          rate
                                               Detailed notes were taken and all
                                               quotes were confirmed.
                                                                                                                     enough, while the quotes provided
                                                                                                                     context, but as language data, could
understanding of QIP at           your                                                                               not be analyzed ... or could they?
                                                  The results were presented in a
division? Co mpany wide?                                                                                                    In 1965, Lofti Zadeh “invented”
                                               written report to the corporatewide
     How valuable have            the         QIP Council. Exh ibit 2 is a typical                               a new approach for analy zing co mplex
                                                                                                                  systems called “fu zzy logic .” The science
following been in driv ing QIP?                excerpt taken fro m that report. The
                                                                                                                  of fuzzy logic legit imizes the modeling of
                                               chart shows the GM‟s perception of
    Half-life concept                                                                                            systems where truth takes on degrees and
                                               the total company as well as their
    Scorecard                                                                                                    informat ion can be in linguistic form.
                                               division‟s progress to date. Also
    General Manager Council                                                                                      Although Zadeh is credited with the
                                               shown        are     the     division                              invention of fuzzy logic, many
     meet ing updates
                                               revenue-weighted average and the                                   applications predate his discovery.
    Bonus adder (based on nonfi-
                                               range of responses (double-ended                                   System Dynamics, the basis of systems
     nancial metrics)
                                               arrows). The quotes were used to                                   thinking, is a form of fuzzy logic that had
    Others                                                                                                       its origins in the work o f Jay Fo rester in
                                               add further depth of meaning to the
                                                                                                                  the 1950‟s.13 Also, in that period, Jiro
                                               data. The results of this traditional
   Each survey was conducted on a                                                                                 Kawakita invented the K-J method for the
                                               part of the survey proved interesting                              analysis of language data.14
one-on-one basis. They ranged from
                                               but lacked sufficient detail to                                           A short while after the survey
forty-five (45) to ninety (90)
                                               produce actionable next steps and                                     was      completed, I had            the
minutes. The GMs were offered
                                               priorities. The problem was that the                                  opportunity to extensively apply and
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  EXHIBIT 3
  A Re sult From the General Managers Survey

                                           M E ASU R EM E N T ,        T H E      B RI D G E    B E TW E E N            T H E   H AR D    AN D     S O F T   S I D E S
QIP Improvement Opportunities
                                                                      Performance                                                            performance on something deemed
                                             poor                            ok                          excellent                           noncritical and are candidates for
                                         vital                                                                                               reevaluation of allocated resources.
                                                                        7                                                                       The most important area is that
                                                         9                                     Maintain
                                                                                                                                             above the maintain band. These
      Criticality to QIP Success


                                                        Improve                                                                              represent areas viewed by the GMs
                                                                         8                                                                   as critical to success but performing
                                                                                                                                             below what they believed was
                                                                        2                                                                    required. Using distance from the
                                   important
                                                                        3                                                                    band as a numerical measure of
                                                                  1
                                                                                                                                             need      for    imp rovement,    the
                                                                                                                                             following list can be created:
                                                                                        Re-evaluate

                                                      Maintain
                                                                                               unweighted                                         Area                    Points
                                   irrelevant                                                  weighted
                                                                                                                                                  Corporate QIP
                                                1. CEO's Staff          4.     *    8. Corp QIP function                                          training                  60
                                                2. Corp QIP Council     5.     *    9. Corp QIP training
                                                3. Div QIP Council      6.     *                                                                  The General Managers      25
                                                                        7.     GM's                                                               The Corporate QIP
                                                                                                                                                  function                  15
teach the method under the tutelage                                             As another examp le of the use of
                                                                                                                                                  Total                    100
of Professor Shoji Shiba. 15 Using                                           fuzzy logic, consider the last item in
the K-J Method with the language                                             the interview: QIP improvement
data contained in the quotations in                                          opportunities, shown in Exhib it 3.
                                                                             This mat rix provided a format for                              This list represents the fuzzy logic
Exh ib it 2, several clear hidden
                                                                             evaluating the importance versus                                consensus view of the GMs as to
messages emerge. A lthough we had
                                                                             performance for several groups and                              where imp rovements were most
done a good job in our tactics
(goals, metrics, focus on the vital                                          individuals (items 4, 5, and 6 with                             needed in the QIP infrastructure.
                                                                             names removed to protect them)                                  The point scores provide an
few), we had failed to create a sense
                                                                             thought to be critical to the success                           indication of the emphasis (i.e.,
of urgency based on a compelling
                                                                             of Analog‟s QIP efforts.                                        resources) that should be directed
business need for change and had
                                                                                The intent was to identify                                   toward each area. As far as next
not clearly linked our metrics to this
need.          Furthermo re,      our                                        responsibility    for    determin ing                           steps, the bottom line was clear: we
                                                                             corrective actions for our current                              desperately needed training in tools
self-diagnosis process had failed to
                                                                             situation. It was not for assessing                             and methods. There was little
uncover several weaknesses in our
                                                                             blame. Each GM was asked to place                               mention of train ing needs on the
organizational change        system,
                                                                             the identification nu mber at the                               soft stuff. The GM ‟s             also
including training and education
and company-wide d iffusion.                                                 appropriate location on the matrix.                             recognized that they were not doing
                                                                                Exh ib it 3 is the result of                                 all that was necessary and that the
   Ideally, the corporate QIP
                                                                             averaging these locations for each                              Corporate QIP function was not
council would have collected and
                                                                             of the identification numbers. The                              providing them with enough
analyzed language data around the
                                                                             solid points represent a straight                               support.
issue or theme, “What are the
                                                                             average, while the open points                                      The report to the Corporate QIP
weaknesses in our imp lementation
                                                                             represent the division revenue                                  Council o mitted the results for the
of TQM?” With the importance
                                                                             weighted average. Points ly ing                                 three individuals (items 4, 5, and 6).
weighted list of answers, we could
                                                                             within the band labeled maintain”                               These data were commun icated only
have proceeded to identify and rank
                                                                             reflect performance commensurate                                to them. It proved extremely
appropriate corrective actions and
                                                                             with their crit icality to the QIP                              valuable in h ighlighting issues
been better able to communicate
                                                                             process. Points below this band
their rat ional.
                                                                             would be indicat ive of h igh
regarding their roles in advancing                                              Should sensitive surveys like this                           The K-J Method is an excellent
us on our TQM journey, and made                                              be done internally or by outside                                team tool and yields a consensus
visible conflicts of these roles with                                        consultants? They should be done                                rather than individual view. There is
their own personal management                                                by an internal team (in Analog‟s                                a role for an outside facilitator in
styles and agendas.                                                          case, the Corporate QIP Council).                               guiding the process, but ownership

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                M E ASU R EM E N T ,   T H E    B RI D G E       B E TW E E N           T H E   H AR D     AN D     S O F T   S I D E S


of the conclusions must lie with the         measurement of process and
team driving the change.                     organizational learn ing and how                                   S. Kaplan, "Companies as Laborato ries' " The
                                                                                                                Relevance of a Decade, Paul a Barker Duffy
                                             measurement of the first, using the                                (ed.) (Boston: Harvard Business School Press,
The Trap                                     half-life method can encourage                                     1994): 179-182.
                                                                                                              5 Schneiderman, "Setting Quality Goals."
Returning to the research done by            changes in individual behavior. Can                              6 Arthur M. Schneiderman, "Are there Limits to
Sterman, Repenning, and Kofman,              traditional concepts be used to                                    Total Quality Management?" Strategy &
                                             prove that the half-life metric is                                 Business (Issue 11, Second Quarter 1998): 35-
their work demonstrated that the                                                                                45.
longer improvement half-lives for            directly related to learning? No, it                             7 Schneiderm an, "Metrics for the Order Ful-
                                             must be justified using fu zzy logic.                              fillment Process:' (Part 2, Exhibit 3).
the     more     complex     revenue-                                                                         8 Schneiderman, "Are there Limits to Total
generating processes (e.g. product              The second deals with a complex                                 Quality Management?"
                                             situation in which our trad itional                              9 Ray Stata, "Organizational Learning-The Key
development and sales), coupled                                                                                 to     Management        Innovation,"      Sloan
with severe downturn in the                  recourse is to opinion rather than                                 Management Review (Spring 1989 63-74).
semiconductor       business    cycle,       fact. In these situations, data can be                           10 Schneiderman, "Metrics for the Order
                                                                                                                Fulfillment Process:' (Part 2, Exhibit 3).
meant that productivity increased            collected and analyzed, but because                              11 Hitoshi Kume, Statistical Methods for
much faster than volume.                     most of it is in the form of                                       Quality Improvement (The Associ ation for
                                                                                                                Overseas Technical Scholarship (AOTS)
   With immense pressure created             language, fuzzy analysis is required.                              1985).
by a dangerously low stock price             Fortunately, tools exist for this                                12 Sterman, J., N. Repenning, and F. Kofman
                                                                                                                "Unanticipated Side Effects of Success ful
(felt throughout the industry) and           analysis, although they are not                                    Quality Programs: Exploring a Paradox of
the resulting high labor variances           widely understood. These tools                                     Organizational Improvem ent," Management
                                                                                                                Science.
caused by successful productivity            include the seven management and
                                                                                                              13 Jay W. Forrester, "Industrial Dynamics: A
improvement, Analog succumbed                planning tools17 and simu lation                                   Major Breakthrough for Decision Makers,"
                                             modeling.                                                          Harvard Business Review (July-August,
and had its first ever company-wide                                                                             1958).
                                                Finally, my last visit to Milliken                            14 Jiro Kawakita, The Original KJ Method
layoff. Th is triggered the age-old
                                             & Co mpany was as a guest at an in-                                (Kawakita Institute, Tokyo).
fear that improvement leads to job                                                                            15 Shoji Shiba, Alan Graham, and David
                                             house training course. I noticed that                              Walden, A New American TQM (Cambridge
loss. We fell right into the trap that
Deming foresaw and created fear in           there were a lot more courses and a                                MA: Productivity Press, 1993).
                                                                                                              16 W. Edwards Deming, Out of Crisis (MIT
                                             lot mo re talk about the hard stuff.
the workplace and a subsequent                                                                                  Center for Advanced Engineering Study,
                                             At dinner, I asked Tom Malone                                      1982).
suspension of effective improve-                                                                              17 See for example, Michael Brassard, The
                                             (Milliken‟s president) whether they
ment activ ities.16                                                                                             Memory jogger Plus+ (Methuen, MA:
                                             were becoming hard-siders. His                                     GOAL/QPC, 1989).
   What should we have done? The
model suggests that a greater focus          answer:
on     imp rovement of revenue
generating processes could have           “Well, „the hard stuff is easy, the
grown volume to fu lly utilize a          soft stuff is hard,‟ but the hard
more productive workforce. It also        stuff‟s important, too.” m:
                                                   Reprinted fro
         Journal of Strategic Performance Measurement, April/May 1998,
suggested that Analog might have                                                                                   Volume 2, Number 2
been too aggressive in cutting         Notes
prices, which exacerbated the
situation. Their findings are not
without controversy within Analog.     1 Arthur M. Schneiderman, "Setting Quality
                                               Goals," Quality Progress (April 1988): 51-57.
                                             2 Analog Devi ces is a mid-sized semiconductor
CONCLUSION                                     manufacturer.
                                             3 Arthur M. Schneiderman, "Metrics for the
This article has addressed two                 Order Ful fillment Process," Journal of Cost
related issues that reside in the              Management (Part 1: Summer 1996): 30-42,
                                               (Part 2: Fall 1996): 6-17.
space we have created for ourselves          4 Robert S. Kaplan, Analog Devices: The Half -
between the hard stuff and the soft            Life System (Boston, MA: Harvard Business
                                               School, 1989) Case #9-190-061; and Robert
stuff. The first deals with the




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