We, being what we are, have mental models that immediately bucket words. This is why my good friend Rajesh Babu was ever critical of my loose use of words. If I wrongly use the word “I” instead of “We” he would ask patiently if that is what I meant. That was just one example.

Even more difficult is branding. Take a look at the age old problem of CSM, Certified Scrum Master. If only they had called it Certificate in Scrum Practices or CSP.

The second one is more recent. Its doing the rounds in various mailing lists and I had blogged about it earlier. I am convinced about this process as is evident. Let us for one second assume that I was. Why would you call something Shock Therapy? For a process so natural what an odd choice of words.

Or maybe I am being too sensitive.

We should end the practice of awarding business on the basis of pricetag alone.

Maiju asked me to elaborate, and this is my understanding of it. In manufacturing, which is the context Deming uses in his Out of the Crisis book, the idea is that you are providing a service to your customer. It really is in your interest to ensure that your customer gets your product at the highest quality. If you have suppliers then they too must have this same vision. It will cost you if your suppliers provide you something that is sub-par. In a world driven by accounting, and its vagaries, it is inevitable that costs after the fact are not accounted for. I need 3m washers, let me pay 30c for it and get it from China rather than 40c for it from Michigan. This decision is made in isolation. Later on, you realize that there is greater risk in the cheaper product. Quality is one, on-time supplies is another. A small part like this can have a significant impact on your ability to deliver. The idea of getting 3 quotes and choosing the cheapest is retarded. But common.

Take a look at this.

Engineers have traced it to improper instructions on what type and length of fasteners to use on certain titanium parts.  The fasteners, located throughout the airplane, were installed primarily by suppliers at the factories where the major sections of the jet are being built, and affect all of the fuselage sections built so far.

Japanese manufacturers, at least the lean ones, have a relationship with their suppliers that is almost counter-intuitive. They might even go out of their way to help their suppliers at the cost of their production goals. Toyota is very good at that. The reason for this, apart from the humaneness of lean, is that they want to make sure that their products are the best. Squeezing your supplier doesn’t make sense because this means that they will cut corners. In the long run you will lose out. Of course, quarterly results are not as much of a concern there.

Now look at software. I find a budget-based funding of projects insufficient in making decisions. Most people say, how much do I have in my piggybank and then decide what to spend where. It really is difficult to calculate ROI and the effectiveness of an IT project. This means that a budget of a few million is spent on projects that may not have a positive ROI.

Another issue I have with budget based funding is that it doesn’t look at the picture as a whole. We have funding to buy an off-the-shelf solution but not to provide our developers with the best of machines. We know that the key to long-term success is the ability to think and act systemically.

Is it cheaper to pay a software supplier $25/hour for a developer or $150/hour for a developer? It depends right? So if you had a “budget” of $500,000 and someone quotes $520,000 and someone else $300,000, who should you go with? Again it depends, right?

A developer working in the same building as you is worth more. An experienced developer who is focused on delivering and understands good engineering practices is worth a lot more than a college grad. Productivity gains? I have heard 10X productivity gains can be made.

What does the $300,000 get you? What does the $520,000 get you? Will you have the ability to modify scope? What’s the quality going to be like? Are the teams going to work together in the same room with you? How well will they understand your requirements? Will they commit to something? What is the cost of having multiple vendors in the same project? Would you rather work with the same supplier? Do you trust one more than the other? The practice of asking for 3 quotes and choosing the cheapest was created in an environment devoid of trust. There are not too many places where this will work well.

Hence, awarding business on the basis of price alone doesn’t make much sense. As with all else, you benefit by building long-term relationships.

Money motivates neither the best people, nor the best in people. It can move the body and influence the mind, but it cannot touch the heart or move the spirit; that is reserved for belief, principle, and morality.

This was #4 on Deming’s list.

I wish the Certified Scrum Master was not a certification at all. Maybe the introductory 2-day course just does that. I wish the words Certified and Master was used a little bit more sparingly. Perhaps the Practitioner certification should be the equivalent of CSM.

On a not so unrelated topic, the number of times I have changed my mind about new ideas, the number of times certain things work in one project setting but not another makes me realize that there is little that I know with certainty. I can only use my experience and my judgment to analyze the project setting and decide how to adapt all that I know about Agile or Lean to best suit that setting.

I have had some projects, like now, where we don’t have planning sessions, or demos or sprints. Not the way its prescribed. But I believe that we are Agile. I have had projects where the stories were written in great detail and others where it was very lean.

CSM is really an introduction to Agile. It’s after you apply it a few times that you master it. And I am not in any way stating that I have mastered it. The word master means just that. I don’t wish to dilute it.

I don’t know if its the dearth of good testers that causes this. But, I sort of get this feeling that there is some implicit assumption in the industry that a tester or a QA is someone who automates tests. This doesn’t resonate with my experience with that role. A QA is not a BA with automation skills. They do a lot more. This is one specialized role.

I have to share this link from Evolving Excellence. Anything can go wrong when managing a project, or running an organization. It could be internal or external. In many cases you don’t have a way of predicting what might go wrong or when. But it helps to be prepared, not by some superfluous risk management system that is half baked because the process demands it, but by creating a culture that absorbs it.

Toyota will be affected by the downturn in demand, but they will also be the best equipped to weather it. The primary reason for this is that for them people come first. Yes, everyone says that. But not like this. It is not just that people come first, it is that other people come first. Working together with other people in a culture based on individuality does not help organizations. Ego comes in the way, and it is this that causes us to create a structure that feeds this ego.

Performance reviews that are individual based. Salary structures that assume that somehow the head of the company is worth a thousand times more than a worker that actually touches the product. Hire and fire policies that treat labour as an expense and not an asset. Decision making that is top down, with little thought given to its impact.

Working together creating a symphony requires a deep understanding of the other artists around you. A mistake by any one can spoil the whole experience, but at the same time, you can do a lot more as a team.

Perhaps this downturn will cause more firms to move to Lean.

If you incentivize a person, you have to be ready for that person to try her best to maximize her incentives. Its natural. This is why you have to ensure that your incentives benefit the system as a whole. Individual incentives don’t necessarily benefit the greater good.

This is a paragraph I read today:

“Mitchell said ACORN threatened to close the office if he and his team didn’t meet their quota to register 13 to 20 voters a day.”

Let us pretend that the sentence read as follows:

“ACORN gives their employees a quota of registering 13 to 20 voters a day”

What do these sentences tell you about this organization? What are your concerns? Would you give a developer a quota of 50 lines of code a day? Are we living in the 21st century? Are you comfortable with even the second statement?

Look at Deming’s 11th point:

11a. Eliminate work standards (quotas)

11b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

If we introduce incentives that make little sense for the organization as a whole, eventually, the organization is bound to suffer. The leaders are at fault here. Not the workers who had to stay within the system.

What afflicts us at the moment is a lack of ethical leaders who value honesty, openness and integrity. Let us make the difficult decisions and the difficult choices so that we can create a culture that enables the organization to last beyond a few years.

From the Curious Cat.

Interestingly the most number of winners of the Deming Prize since 2000 are from India.

Is the title of Chapter 3 of Deming. What are the Diseases?:

1. Lack of constancy of purpose

2. Emphasis on short-term profits

3. Evaluation of performance, merit-rating or annual review

4. Mobility of Management

5. Running a company on visible figures alone

6. Excessive medical costs

7. Excessive cost of liability

I’ll write a post on obstacles later. I do have a comment to make on #2 and #3. We might not realize this now, but being profitable is only as important as keeping the company alive.