A Summary of The New Economics, by W. Edwards Deming

In The New Economics for Industry, Government, Education, by W. Edwards Deming, Deming argues that the current system of management in business, government, education, and healthcare is flawed – that we must learn to cooperate, rather than to compete, in order to achieve maximum effectiveness. In his eyes, the present style of management is a “prison created by the way in which people interact.” He views this “climate of competition” as being destructive to the organization. To combat this destruction, Deming devises a System of Profound Knowledge with the goal of transforming the prevailing style of management; from that of competition, to cooperation. His System consists of four parts, providing “a map of theory by which to understand the organizations that we work in.”

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A Summary of Six Sigma for Managers, by Greg Brue

Six Sigma for Managers, by Greg Brue, provides its readers with a thorough understanding of the basic principles of Six Sigma and its implementation. To Brue, Six Sigma means many things for an organization. First, Six Sigma is a statistical basis for measurement, allowing the organization to quantify how well they are producing quality material by measuring the Defects Per Million Opportunities (DPMO). Second, it provides a philosophy and a goal for the organization to get behind, and be motivated by. Third, it provides a methodology through a five-step process, also known as the five “vital factors.” And finally, it provides a symbol of quality for the organization, and a sense of pride when the organization achieves its goal.

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OverDrive E-Book Lending Up in 2011

A few weeks ago, OverDrive — a leading distributor of e-books and audio books — announced that 1.6 billion book and title catalog pages were viewed on OverDrive powered ‘Virtual Branch’ websites in 2011. This is an increase of 130% from 2010.

OverDrive also announced a few other increasing statistics:

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A Summary of The 7 Habits of Highly Effective People, by Stephen R. Covey

In The 7 Habits of Highly Effective People, Stephen R. Covey presents a series of seven sequential habits, aimed at giving the reader the tools to move along – what he likes to call – the “maturity continuum.” By understanding where one stands on this continuum, Covey argues, one will be better suited to focus their efforts sequentially on the seven habits – and gain a greater interpersonal effectiveness. To covey, this book is a “principle-centered, character based, inside-out approach to personal and interpersonal effectiveness.”

This summary will cover the foundational concepts of the book and give an overview of the seven habits. Though this book is a “self-help” book, it covers many topics that can be helpful to project managers. To give a greater focus to this summary, this will also cover how this book is relevant to the practice of project management.

The 7 Habits of Highly Effective People

General Concepts

While Covey was a doctoral student, he devoted himself to an in-depth study of the success literature published in the United States since 1776. From his studies, Covey noticed that the literature from the first 150 years focused on what he likes to call a “Character Ethic,” while the last 50 years focused on a “Personality Ethic.” Covey describes the Character Ethic as the basic principles of effective living, – things like integrity, humility, fidelity, modesty, and the Golden Rule – while the Personality Ethic describes success as being a function of ones personality, public image, attitudes, or behaviors. Though both are essential to success, the Personality Ethic is a learned, secondary trait, while the Character Ethic is a natural, primary trait. He argues there is an inherent flaw with the Personality Ethic in the sense that “where we stand depends on where we sit” – or, the way we see things is based on our experiences. This leads into a discussion about paradigms, and how one’s perceptions of the world entirely depend on one’s experiences. To demonstrate this concept, Covey asks the reader to think of paradigms as maps. He relates this by describing how it would be virtually impossible to find your way around Chicago if you are relying on a map of Detroit; however, if you understand the basic geographic principles of a city, it would be possible for you to find your way around. Covey furthers his argument by saying, oftentimes “the way we see the problem, is the problem.”

Covey also describes how one’s perceptions can be changed through a “paradigm shift.” He offers a few examples of this, but the one that stands out in my mind was an experience he had on a train. A man boarded the train with his two children, who were clearly out-of-control. They were loud and obnoxious and, from Covey’s perspective, bothering all the passengers in the train car. Covey noticed that the father was not doing anything to settle the children, and asked the man to “control them a little more.” The man turned to Covey and explained that his wife, their mother, had just died in the hospital and they were all having a hard time grasping the reality of what just happened. Covey’s paradigm was shifted — changing his attitude from annoyance to concern. From this example, Covey makes the point that we need to understand how our paradigms influence our perceptions of reality, and be mindful of these perceptions when making decisions.

Covey then argues that, in order to become a principle-centered, character-based, effective person, one must understand where they stand by conducting an inside-out analysis of themselves, and by applying habits that help them become more in-lined with their principles and mission. To do so, Covey introduces what he likes to call the “maturity continuum” – a three-stage process along which someone develops from being (1) dependent to (2) independent to (3) interdependent. Covey argues that his seven habits can move someone through these stages.

First it is important to define “habit.” In his words, “a habit [is] the intersection of knowledge, skill, and desire” – they are internalized principles and patterns of behavior that can help one be effective and “produce happiness.” He then describes how effectiveness is achieved through the P/PC Balance, where P is Production and PC is Production Capacity. He notes how it is important to maintain the P/PC Balance so both P and PC are developed and maximized over the long-term, rather than the short-term. By maximizing P and PC over the short-term, this leads to burnout and the depletion of resources.

Overview of the Seven Habits

Covey then describes his seven habits by breaking them into three sections:

  1. Self-mastery
  2. Achieving interdependence
  3. Renewal.

Habits 1 through 3 cover the topic of self-mastery, and helps one move from the dependent to the independent point on the maturity continuum. These habits are:

  1. Be proactive
  2. Begin with the end in mind
  3. Put first things first

When Covey discusses the first habit of proactivity, he introduces the concept of the Proactive Model, where one has the ability to choose their response to stimuli through (1) self-awareness, (2) imagination, (3) conscience, and (4) independent will. This habit emphasizes the importance of our reactions, and encourages us to act responsibly and take initiative when it comes to our situations. We do not have to act according to a social map, but we can act on our principles. To further his point, Covey describes Viktor Frankl’s fundamental principle about the nature of man as being, “between stimulus and response, man has the freedom to choose.” Also, Covey discusses the concepts of the “circle of concern” and the “circle of influence.” Covey argues that by being proactive, responsible, and taking initiative, one can widen their circle of influence into the circle of concern and become more influential and respected.

When talking about the second habit of “beginning with the end in mind,” Covey argues that one must reflect and understand what principles they live for to truly develop mastery of one’s self. He suggests developing a personal mission statement for how one lives their life. He also suggests this for organizations. It is important to visualize and plan for the future, so that one can implement their values into their daily activities, and prioritize effectively.

Finally, when Crosby discusses the third habit by putting “first things first” he refers to a method of prioritization based on urgency and importance. For this, he develops a Time Management Maturity Grid that breaks activities into four quadrants. Crosby argues that one should devote their time to activities in quadrant two, and delegate the other activities to maximize one’s effectiveness. He also discusses the idea of Emotional Bank Accounts when it comes to personal relationships. He emphasizes that one must not treat relationships in terms of efficiency, but rather effectiveness. He also emphasizes that one must make more deposits than withdrawals into Emotional Bank Accounts to maintain lasting relationships.

Habits 4 through 6 involve achieving interdependence, and help one move from independent to interdependent on the maturity continuum. These habits are:

  1. Think win/win
  2. Seek first to understand, then be understood
  3. Synergize

The fourth habit of “think win/win” emphasizes the benefit of working with mutual benefit in mind. Crosby introduces the idea that there are six paradigms of human interaction:

  • Win/Win
  • Win/Lose
  • Lose/Win
  • Lose/Lose
  • Win
  • No Deal

He argues that Win/Win or No Deal are the two most effective paradigms. This applies across businesses, organizations, and families. If you strive for a Win/Win situation, or even a compromise, a trust is built that is the foundation for a great working relationship. From there, he develops five dimensions of the Win/Win situation, which are:

  • Character
  • Relationships
  • Agreements
  • Support Systems
  • Processes

He also develops a four-step Win/Win process:

  1. See the issue from the other point-of-view
  2. Identify key issues
  3. Determine results for acceptable solutions
  4. Identify new options to achieve results

The fifth habit of “seek first to understand, then to be understood,” emphasizes the benefit of empathic listening. When we “prescribe before we diagnose,” or when we insert autobiographical responses, we lose trust and withdraw from Emotional Bank Accounts. It’s much more effective to listen.

The sixth habit is all about synergy. Synergy has been a buzz-word in business for the last two decades, but is little understood. At the basic level, it means “the whole is greater than the sum of its parts.” In an organizational unit, if you value the differences of the individuals and leverage those differences, you can produce a benefit much greater than previously attainable. This is achieved through trust and cooperation, and emphasizes the importance of communication.

Finally Habit 7 involves self-renewal. At this stage, one should focus on “sharpening the saw,” and focus on developing four facets of one’s self. These four dimensions are:

  1. Physical
  2. Spiritual
  3. Mental
  4. Social/Emotional

Overall, with the seven habits, Covey proposes an in-depth process for maximizing personal and professional effectiveness. By developing the seven habits sequentially, Covey argues one may lead a principle-based life and, hopefully, achieve ultimate happiness.

How This Book Applies to Project Management

Here are a few ways in which this book can be applied to the practice of project management:

  • The importance of effectiveness over efficiency.
  • The importance of balancing Production and Production Capacity (P/PC Balance).
  • The importance of planning and organizing as outlined in Quadrant Two of the Time Management Matrix.
  • The importance of understanding paradigms, and how everyone perceives things differently.
  • The importance of utilizing the paradigm shift in persuasion.
  • The importance of the maturity continuum, especially in relation to Crosby’s Quality Management Maturity Grid.

If you found this summary helpful, or have anything to add, please reply with a comment below.

A Summary of Quality is Free, by Philip B. Crosby

In Philip B. Crosby’s book, Quality is Free, Crosby puts forth a method of improving organizational efficiencies and output by first understanding the true definition of quality, and then acting upon that understanding using many tools. In his words, this is the “art of making quality certain”.

Quality is Free

From the onset, Crosby wants the reader to understand that the conventional way many people think about quality is faulty. He does this by simply stating, “quality is free.” By this, he means that quality is the “ability of an organization to conform to requirements.” He then follows up by saying the actions that cost money are the “unquality” things; or, the actions needed when things are not done right the first time. He considers these unquality actions — or nonconformance to requirements —  to be the “Cost of Quality.” Crosby then makes the argument that by not understanding the objective definition of quality (conformance to requirements), management is unintentionally causing an increased Cost of Quality for the organization.

Crosby makes it clear that “quality is an achievable, measurable, profitable entity that can be installed once [one has] commitment and understanding, and is prepared for hard work.” He then offers an example for how he implemented a program at the corporate level. For his example, Crosby uses the ITT Corporation. In 1965, ITT wanted to do something about quality on a corporate basis. In order to do so they, along with Crosby, set four objectives:

  1. To establish a competent quality management program.
  2. To eliminate surprise nonconformance problems.
  3. To reduce the cost of quality.
  4. To make ITT the standard for quality – worldwide.

Crosby holds this as a shining example of how to set objectives, but suggests it isn’t wise for every operation to have the same quality program – each organization needs to tailor their quality program for their special needs. For ITT, it involved a fourteen-step program (discussed later) that took many years to implement. As Crosby put it, they “embarked on a deliberate strategy of establishing a cultural revolution” in the organization.

To establish a cultural revolution within the organization, Crosby argues that an essential integrity system needs to be in place, consisting of four pillars. These four pillars are:

  1. Management participation and attitude
  2. Professional quality management
  3. Original programs
  4. Recognition

He suggests that each item is as crucial as the others, that without the pillars in place, the quality program would crumble.

Crosby then leads the discussion back to quality, where he develops his “five erroneous assumptions about quality.” These assumptions are as follows:

  1. Quality means goodness, or luxury, or shininess, or weight.
  2. Quality is intangible, therefore not measurable.
  3. There is an “economics of quality.”
  4. All problems are originated by workers.
  5. Quality originates in the quality department.

These erroneous assumptions help support the conventional way of thinking about quality, and prove to be an obstacle when creating a culture of quality within an organization.

After Crosby establishes his main concepts, he provides some tools to help organizations develop and measure quality programs of their own. The first of these tools is a measurement tool known as the Quality Management Maturity Grid (QMMG). This grid is a matrix consisting on five columns and six rows. Each column represents a “stage” — or level of maturity — in which the organization happens to be, while each row represents a measurement category.

The five maturity stages are:

  1. Uncertainty
  2. Awakening
  3. Enlightenment
  4. Wisdom
  5. Certainty

The six measurement categories are:

  1. Management understanding and attitude
  2. Quality organization status
  3. Problem handling
  4. Cost of quality as percentage of sales
  5. Quality improvement actions
  6. Summation of company quality posture
Quality Management Maturity Grid
Click to view full size image.

The purpose of this grid is to help an organization understand where they stand when in comes to implementing an organization-wide quality program. As the organization progresses, they will advance in their levels of observed maturity.

The second tool Crosby introduces is the fourteen-step Quality Improvement Program (QIP). The goal of this program is to lay out a pre-determined set of objectives to help address the issues within an organization and make a real, positive change when it comes to quality and quality management. The fourteen-steps are (paraphrased):

  1. Establish commitment from management
  2. Establish a quality improvement team
  3. Establish a baseline for quality measurement, and measure regularly
  4. Perform a Cost of Quality (COQ) evaluation
  5. Educate workers about what quality means to the organization
  6. Take corrective action
  7. Establish an ad hoc committee for the Zero Defects program
  8. Train supervisors on how to implement quality program
  9. Establish a Zero Defects Day
  10. Create a culture of goal setting in the organization — have each employee set 20, 60, 90 day goals
  11. Have employees describe problems that prevent them from performing error-free work, and remove those error points
  12. Recognize employees for meeting goals
  13. Establish regular quality meetings
  14. Repeat

One of the key components of the QIP is the idea of Zero Defects, as outlined in the seventh step. This is the idea that everyone in the organization is working with the ideal goal of reaching a point where no defects in quality occur.

Side note: Crosby is well known for his work related to the Zero Defects concept.

Finally, Crosby introduces ten management style traits that prove to be effective when implementing a quality management program These ten traits are:

  1. Listening
  2. Cooperating
  3. Helping
  4. Transmitting
  5. Creating
  6. Implementing
  7. Learning
  8. Leading
  9. Following
  10. Pretending.

Using these concepts and tools, Crosby creates an approach to management that changes the way the organization, and individuals in the organization think about quality. Since quality is now free, the entity now has an incentive to work towards zero defects and process control. By using these methods of measurement, prevention, awareness and correction, any organization can be much more successful and profitable.

IBISWorld and E-book Revenue Estimates for 2012

Today I was reviewing IBISWorld‘s industry report for Book Publishing in the US (published in September 2011) and discovered a discrepancy in their estimates for e-book revenues in 2011. Being a long-time fan of IBISWorld and their industry reports, I was particularly proud of myself for spotting the error and promptly brought it to their attention. I emailed their Client Support address to let them know, where I heard back from Lauren — a very friendly and helpful Client Relations Manager (yes, IBISWorld, give her a raise).

Anyway — long story short — in response, they provided me with a sneak-peak at their e-book revenue estimates for 2012.

They estimate that e-book sales will account for 15.3% of industry revenues in 2012.  They also project e-books sales to expand at an annualized rate of 10.3% to account for 22.9% of industry revenues by 2017 (or $6.7 billion).

AWESOME!

If you would like any more information, be sure to buy IBISWorld‘s report when it comes out, or see my post about Four Trends in the Book Publishing Industry.

Note to Self: Affect or Effect?

I, along with many others, have always struggled with the correct usage of the words affect and effect. Well, no longer!

Affect
v. [uh-fekt]
1. to act on; to produce an effect or change in;
2. to impress the mind or move the feelings of;
3. to attack or lay hold of.

(i.e. to change or move)

n. [af-ekt]
4. feeling or emotion;
5. an expressed or observed emotional response;
6. inclination; inward disposition or feeling.

(i.e. a feeling or emotion)

Effect
n. [ih-fekt]
1. something that is produced by an agency or cause; result;
2. power to produce results;
3. the state of being effective or operative;
4. a mental or emotional impression;
5. meaning or sense; purpose or intention.

(i.e. a cause or result)

A Review of A New Brand World, by Scott Bedbury

I recently had the opportunity to read Scott Bedbury’s book, A New Brand World, in its entirety and have found it be one of my favorite business/marketing books to date. The book offers “8 Principles for Achieving Brand Leadership,” but delivers so, SO much more than that.

'A New Brand World' by Scott Bedbury

Now for some background on the author.

Scott Bedbury has played key roles in two of the world’s largest brands, Nike and Starbucks, and offers many case studies from each throughout the book. At Nike, he lead the company’s advertising efforts — in partnership with the famed advertising agency, Weiden + Kennedy — for seven years between 1987 and 1994. During this time, Nike’s sales grew from around $800 million to over $10 billion annually. Then, beginning in 1995, Bedbury “traded in his sneakers for coffee” and he spent three years as the CMO for Starbucks. During this time, the brand saw pivotal growth in both stores and sales.

From the introduction, Bedbury offers the view that “brand-building’s big cultural moment has arrived.” And, for being written in 2002, he certainly had some things right.

Here are his three reasons:

1. “[If] you understand your brand — its value, its mission, its reason for being — and integrate it consistently into everything you do, your entire organization will know how to behave in virtually any and all situations.”

It’s this integration that creates trust in a brand — the behavior and quality, over time. Once trust has been formed, then and only then can the advertising efforts of an organization truly be affective. These efforts must conform to what already is, not what should be.

2. “The most valuable assets of a company are no longer physical. [There] is one asset, an intangible one, that stands head and shoulders above all the others and that cannot be easily outsourced: the brand.”

That one is clearly evident today. From Nike and Starbucks, to Toyota and BP — nothing is as important as a brand’s reputation.

3. “There is and will continue to be increasing pressure on corporations, especially the large ones, to behave more responsibly as citizens — a trait that I’ve labeled elsewhere [as] ‘using your superhuman powers for good.’ “

This is even more true in today with the advent of Facebook, Twitter and Google+. Brands now have the opportunity to speak directly with their audience on a social level — to positively, or negatively influence the perceptions of their company. As Bedbury puts it, “in the New Brand World, there will be fewer places for companies that disrespect this fundamental social dynamic.”

Wow. That’s profound. Especially for 2002!

And that’s just in the introduction.

From there, Bedbury introduces one of his eight principles per chapter.

His “Eight Principles for Achieving Brand Leadership in the 21st Century” are as follows:

1. “Relying on brand awareness has become marketing fool’s gold.”

2. “You have to know it before you can grow it.”

3. “Just because you can doesn’t mean you should.”

4. “Transcend a product-only relationship with your customers.”

5. “Everything matters.”

6. “All brands need good parents.”

7. “Big doesn’t have to be bad.”

8. “Relevance, simplicity, and humanity — not technology — will distinguish brands in the future.”

Now, I don’t want to spoil the rest of the book for you. It’s a really fun, quick read. I highly recommend buying his book to learn more about his eight principles.

Here’s a convenient link if you would like to buy it from Amazon. (Yes, I am an Amazon Affiliate.)

Happy reading!