ISO 9000 and Quality Gurus

You may wonder what's behind ISO 9000? Who are those guys who established principles, incorporated in ISO 9000. First of all, let's see who are these guys who contributed to quality. They are: Walter Shewhart, Edwards Deming, Joseph Juran, Genichi Taguchi,Armand Feigenbaum, Kaoru Ishikawa, and Philip Crosby.

Walter A. Shewhart (1891 � 1967) Born in Illinois, USA, Shewhart graduated University of Illinois and then he obtained the doctorate in physics at University of California in 1917. Working at Western Electric Company as an engineer, he was able to make a serious contribution to a major problem: reliability of the equipment buried underground. Control charts created by him were use to differentiate between assignable sources of variation and pure chances of variation. Shewhart studied randomness and recognized variability which exists in all manufacturing processes. In his opinion, reducing variability is equivalent to quality improvement. Later Shewhart worked for Bell Telephone Laboratories until his retirement in 1956. He wrote several articles and books, most representative being Economic Control of Quality of Manufactured Product in 1931, Statistical Method from the Viewpoint of Quality Control in 1939. On more thing about Shewhart: he is considered to be the grandfather of quality control. Top of the page

W. Edwards Deming (1900 � 1993) Known as the father of quality, Deming was a statistics professor at New York University during the 40s. He studied for several years with Walter Shewhart; this was the base of his contribution to quality. After World War II, Deming was involved in assisting Japanese companies to reborn from their own ashes. His contribution was in improving quality, by setting a 14 points principles which should be the foundation for achieving quality improvements. Japanese companies applied extensively these principles; today's power of Japan and quality of their products has a strong root in this matter. Deming emphasized on the role of management in achieving quality. He noted that around 15% of poor quality was because of workers, and the rest of 85% was due to bad management, improper systems and processes. In his opinion, managers should involve employees in solving the problems, not simply to blame them for poor quality. Deming's 14 principles are: create constancy of purpose (short term reactions has to be replaced by long-term planning), adopt the new philosophy (management should adopt his philosophy, rather than to expect the employees to do that), cease dependence on inspection (it concerns to variation � in other words, if there is no variation, no inspection is needed because all products shows no defects), move towards a single supplier for any one item (working with several suppliers, automatically involves variation in raw materials), improve constantly and forever (it refers to decreasing variation, as a key to better quality), institute training on the job (another source of variation is the lack of training of workers; train them properly to do a certain job, and they will do it with far less variation), institute leadership (distinction between leadership and supervising), drive out fear (eliminate fear at worker's level to get their support for improvements. Fear is counter productive), break down barriers between departments (here comes the concept of "internal customer" which is found in TQM; a department is a supplier for next one. The second one is the client for the first one), eliminate slogans (usually, it's not the employee who did it wrong, but it's the system who allowed that. No need to create tension on worker, as long as the system fails to prevent problems), eliminate management by objectives (as long as workers had to achieve an established production level, quality will be a secondary target), remove barriers to pride of workmanship (bringing problems all the time to worker's ears, will create a discomfort for them. Lower satisfaction of workers equals a lower interest for doing good items), institute education and self � improvement (education is an asset. Everyone has to improve themselves), transformation is everyone's job (improvements exists at every level). The most important book he wrote among other is Out of the Crisis in 1987. What is relevant to this book along these 14 principles is that he initiated the movement toward Total Quality Management, even he didn't used this expression. Nowadays, there exists Deming Prize, introduced by JUSE (Japanese Union of scientists Engineers); this prize is awarded annually for best proponent of TQM. Top of the page SOURCE

Six Thinking Hats

Looking at a Decision from All Points of View
'Six Thinking Hats' is a powerful technique that helps you look at important decisions from a number of different perspectives. It helps you make better decisions by pushing you to move outside your habitual ways of thinking. As such, it helps you understand the full complexity of the decision, and spot issues and opportunities to which you might otherwise be blind.Many successful people think from a very rational, positive viewpoint. This is part of the reason that they are successful. Often, though, they may fail to look at a problem from an emotional, intuitive, creative or negative viewpoint. This can mean that they underestimate resistance to change, fail to make creative leaps, and do not make essential contingency plans.
Similarly, pessimists may be excessively defensive, and people used to a very logical approach to problem solving may fail to engage their creativity or listen to their intuition.If you look at a problem with the 'Six Thinking Hats' technique, then you will solve it using all approaches. Your decisions and plans will mix ambition, skill in execution, sensitivity, creativity and good contingency planning.
This tool was created by Edward de Bono in his book 6 Thinking Hats.
How to Use the Tool:
To use Six Thinking Hats to improve the quality of your decision-making, look at the decision 'wearing' each of the thinking hats in turn.
Each 'Thinking Hat' is a different style of thinking. These are explained below:
White Hat:With this thinking hat, you focus on the data available. Look at the information you have, and see what you can learn from it. Look for gaps in your knowledge, and either try to fill them or take account of them.This is where you analyze past trends, and try to extrapolate from historical data.
Red Hat:'Wearing' the red hat, you look at the decision using intuition, gut reaction, and emotion. Also try to think how other people will react emotionally, and try to understand the intuitive responses of people who do not fully know your reasoning.
Black Hat:When using black hat thinking, look at things pessimistically, cautiously and defensively. Try to see why ideas and approaches might not work. This is important because it highlights the weak points in a plan or course of action. It allows you to eliminate them, alter your approach, or prepare contingency plans to counter problems that arise.
Black Hat thinking helps to make your plans 'tougher' and more resilient. It can also help you to spot fatal flaws and risks before you embark on a course of action. Black Hat thinking is one of the real benefits of this technique, as many successful people get so used to thinking positively that often they cannot see problems in advance, leaving them under-prepared for difficulties.
Yellow Hat:The yellow hat helps you to think positively. It is the optimistic viewpoint that helps you to see all the benefits of the decision and the value in it, and spot the opportunities that arise from it. Yellow Hat thinking helps you to keep going when everything looks gloomy and difficult.
Green Hat:The Green Hat stands for creativity. This is where you can develop creative solutions to a problem. It is a freewheeling way of thinking, in which there is little criticism of ideas. A whole range of creativity tools can help you here.
Blue Hat:The Blue Hat stands for process control. This is the hat worn by people chairing meetings. When running into difficulties because ideas are running dry, they may direct activity into Green Hat thinking. When contingency plans are needed, they will ask for Black Hat thinking, and so on.
You can use Six Thinking Hats in meetings or on your own. In meetings it has the benefit of defusing the disagreements that can happen when people with different thinking styles discuss the same problem.A variant of this technique is to look at problems from the point of view of different professionals (e.g. doctors, architects, sales directors) or different customers.
You may find our Six Thinking Hats Worksheet useful when you're examining a decision using this technique.
Example:
The directors of a property company are looking at whether they should construct a new office building. The economy is doing well, and the amount of vacant office space is reducing sharply. As part of their decision they decide to use the 6 Thinking Hats technique during a planning meeting.
Looking at the problem with the White Hat, they analyze the data they have. They examine the trend in vacant office space, which shows a sharp reduction. They anticipate that by the time the office block would be completed, that there will be a severe shortage of office space. Current government projections show steady economic growth for at least the construction period.
With Red Hat thinking, some of the directors think the proposed building looks quite ugly. While it would be highly cost-effective, they worry that people would not like to work in it.
When they think with the Black Hat, they worry that government projections may be wrong. The economy may be about to enter a 'cyclical downturn', in which case the office building may be empty for a long time.
If the building is not attractive, then companies will choose to work in another better-looking building at the same rent.
With the Yellow Hat, however, if the economy holds up and their projections are correct, the company stands to make a great deal of money.
If they are lucky, maybe they could sell the building before the next downturn, or rent to tenants on long-term leases that will last through any recession.
With Green Hat thinking they consider whether they should change the design to make the building more pleasant. Perhaps they could build prestige offices that people would want to rent in any economic climate. Alternatively, maybe they should invest the money in the short term to buy up property at a low cost when a recession comes.
The Blue Hat has been used by the meeting's Chair to move between the different thinking styles. He or she may have needed to keep other members of the team from switching styles, or from criticizing other peoples' points.
It is well worth reading Edward de Bono's book 6 Thinking Hats for more information on this technique.
Key points:
Six Thinking Hats is a good technique for looking at the effects of a decision from a number of different points of view.
It allows necessary emotion and skepticism to be brought into what would otherwise be purely rational decisions. It opens up the opportunity for creativity within Decision Making. The technique also helps, for example, persistently pessimistic people to be positive and creative.
Plans developed using the '6 Thinking Hats' technique will be sounder and more resilient than would otherwise be the case. It may also help you to avoid public relations mistakes, and spot good reasons not to follow a course of action, before you have committed to it.

MindTools.com - Join Our Community!
The next article explains Cost/Benefit Analysis - a useful technique for assessing the viability of a project. To read this, click 'Next article' below. Other relevant destinations are shown in the "Extension Resources" list underneath.
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'lateral thinking' and 'parallel thinking'

EDWARD DE BONO
"On the Internet there is much misleading and erroneous information about 'lateral thinking' and 'parallel thinkingtm'. Some of the sites make false claims about me and my work. Because this is my official website I want to take this opportunity of clarifying matters regarding lateral thinking and parallel thinkingtm*.
LATERAL THINKING
I invented the term 'lateral thinking' in 1967. It was first written up in a book called "The Use of Lateral Thinking" (Jonathan Cape, London) - "New Think" (Basic Books, New York) - the two titles refer to the same book.
For many years now this has been acknowledged in the Oxford English Dictionary which is the final arbiter of the English Language.
There are several ways of defining lateral thinking, ranging from the technical to the illustrative.
1. "You cannot dig a hole in a different place by digging the same hole deeper"
This means that trying harder in the same direction may not be as useful as changing direction. Effort in the same direction (approach) will not necessarily succeed.
2. "Lateral Thinking is for changing concepts and perceptions"
With logic you start out with certain ingredients just as in playing chess you start out with given pieces. But what are those pieces? In most real life situations the pieces are not given, we just assume they are there. We assume certain perceptions, certain concepts and certain boundaries. Lateral thinking is concerned not with playing with the existing pieces but with seeking to change those very pieces. Lateral thinking is concerned with the perception part of thinking. This is where we organise the external world into the pieces we can then 'process'.
3. "The brain as a self-organising information system forms asymmetric patterns. In such systems there is a mathematical need for moving across patterns. The tools and processes of lateral thinking are designed to achieve such 'lateral' movement. The tools are based on an understanding of self-organising information systems."
This is a technical definition which depends on an understanding of self-organising information systems.
4. "In any self-organising system there is a need to escape from a local optimum in order to move towards a more global optimum. The techniques of lateral thinking, such as provocation, are designed to help that change."
This is another technical definition. It is important because it also defines the mathematical need for creativity.
PARALLEL THINKINGTM
I introduced this term in my book 'PARALLEL THINKING' (published by Viking, London and Penguin Books, London).
Parallel thinking is best understood in contrast to traditional argument or adversarial thinking.
With the traditional argument or adversarial thinking each side takes a different position and then seeks to attack the other side. Each side seeks to prove that the other side is wrong. This is the type of thinking established by the Greek Gang of Three (Socrates, Plato and Aristotle) two thousand four hundred years ago.
Adversarial thinking completely lacks a constructive, creative or design element. It was intended only to discover the 'truth' not to build anything.
With 'parallel thinking' both sides (or all parties0 are thinking in parallel in the same direction. There is co-operative and co-ordinated thinking. The direction itself can be changed in order to give a full scan of the situation. But at every moment each thinker is thinking in parallel with all the other thinkers. There does not have to be agreement. Statements or thoughts which are indeed contradictory are not argued out but laid down in parallel.In the final stage the way forward is 'designed' from the parallel thought that have been laid out.
A simple and practical way of carrying out 'parallel thinking' is the Six HatsTM method which is now being used widely around the world both because it speeds up thinking and also because it is so much more constructive then traditional argument thinking.
Information on Lateral Thinking and Six HatsTM methods are available on this website. Particulars of training courses are also given.
Edward de Bono

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Six Value Medals

Six Value Medals Brochure
A Revolutionary New Framework, Book, and Course for Leaders, Teams and Individuals From Dr. Edward de Bono

The key to making decisions that will deliver maximum value lies in creating a framework that is specific enough to add meaning but is also pliable enough to expand and contract with each unique challenge.
You'll find a framework robust enough to support these efforts in Edward de Bono's new course, Six Value Medals.

The skills taught in Six Value Medals help people quickly but thoroughly scan for values, prioritize which values are the most important to pursue, and then ensure that top values are addressed and maximized every step of the way. It's like putting on a pair of glasses with six lenses, one for each of the six important value categories.

The Six Value Medals

Gold: Gold is a precious metal, and so are people. The gold medal asks what matters to the people? Human values include pride, achievement, a sense of belonging, hope, trust, and growth.

Silver: Silver medal impacts the organization. What matters to the organization? What are our goals as a company and how will a prospective action help us or hinder us in pursuit of these goals?

Steel: Steel must be as strong as possible. The steel medal asks what are the implications for quality? How will the decision at hand impact the quality of what we do?

Glass: Glass can take the shape of many functional, often beautiful and colorful objects. The glass medal covers change, innovation, simplicity and creativity.

Wood: Wood spotlights ecology values in the broadest sense. Is there a positive or negative impact to the environment if we take this road?

Brass: Brass looks like gold but is not. Brass medal values examine appearances and perception. How will this action be interpreted?

"It is not enough to know that values are important. We need better ways of perceiving values, talking about them and assessing them. That is the best basis for action of any sort. The Six Value Medals framework gives you the tools to do this."
- Dr. Edward de Bono

Too often, organizations cannot articulate the basis for their decisions. As a result, they may fail to notice and resolve conflicts in values that have a negative impact on employees, the organization, clients, community relationships, and more.

Until now there has not been a concrete way to assess the impact that a decision may have on our attempts to create and protect value. When employees can scan, identify, and prioritize values, they become vital partners in growing your business.

"It was very satisfying to watch the participants learn about the Six Values and apply them both to their personal lives and our work here at GMAC Insurance. The feedback from the attendees was very positive, and we are planning another class for March."
- Michael Campbell, Six Value Medals, Certified Trainer at GMAC

Edward de Bono's Six Value Medals: A Complete System for Incorporating Value into Business Solutions
How You Can Experience Six Value Medals
Dr. Edward de Bono launched his newest training course in October 2007. Participate in the end-user Six Value Medals training course or a Six Value Medals train-the-trainer certification.

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Deming Prize vs Baldridge Award

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List of Deming Prize winners

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Deming Prize 2007
India continues to shine with Deming Prizes (and of course there economy and stock market have been doing pretty well too). Companies based in India took home both Deming Prizes this year and the Japan Quality Medal. Countries of organizations receiving the Deming Prize since 2000 (prior to that almost all winners were from Japan):
Country
Prizes
India
14
Thailand
8
Japan
4
USA
1
Singapore
1
The 2007 Deming Prizes went to Asahi India Glass Limited, Auto Glass Division and Rane (Madras) Limited. Three different divisions of Rane received awards in the previous the last 4 years, making this Rane’s fourth prize in 5 years.The 2007 Japan Quality Medal went to Mahindra & Mahindra Limited, Farm Equipment Sector.
The 2007 Deming Prize for Individuals went to Mr. Masayoshi Ushikubo, Chairman, Sanden Corporation. The Sanden International portion of Sanden was the third USA based organization to win a prize in 2006 (prior winners were: Florida Power & Light Company in 1989 and AT&T Power Systems in 1993). I mentioned India’s economy and stock market above, China’s economy and stock market are doing amazingly well also and then have yet to have a Deming Prize winner. I hope China, USA and many another countries can follow India’s current performance in this area. Deming Prizes are not awarded on a quota or forced ranking basis - any deserving applicants in any year can receive a prize.
Learn more about the Deming Prize.
Related: Deming Prize 2006 - Deming Prize 2005 - Deming Prize 2004 - Top 10 Manufacturing Countries - Toyota Chairman Comments on India and Thailand - 2006 Deming Medal presented to Peter R. Scholtes
by John Hunter Tags: Deming, India, Management Permalink to: Deming Prize 2007

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Quality & India learnsigma Says: October 18th, 2007 at 12:30 pm
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The Deming Prize Winners for India 2000-03
IBEF: December 24, 2004


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Between 2000-2003, nine Indian companies won the coveted Deming Prize, a byword in excellence and quality. Only two companies outside Japan were conferred the highest Deming Award: Japan Quality Medal. Sundaram- Clayton, Brakes Division, was one of them.
During the same period, seventeen companies successfully challenged the Deming Application Prize; of these, six were Indian companies. Only two companies were given the Deming Quality Control Award for Operations Business Unit; both Indian companies, viz, Birla Cellulosic and Hi-Tech Carbon.
We therefore consider it worthy to bring the stories of the journeys covered by the Indian companies in their pursuit of the Deming Prize. These case studies effectively capture the milestones benchmarked by Indian industry in their evolution towards achieving excellence, inspiring many more companies both in India and abroad, to emulate them and collaborate with them as business partners.
Click Here to Download . Size:1.17 mb
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Deming Prize winners from India in from 1998 onwards

Deming Prize

The Deming prize, established in December 1950 in honor of W. Edwards Deming, was originally designed to reward Japanese companies for major advances in quality improvement. Over the years it has grown, under the guidance of Japanese Union of Scientists and Engineers (JUSE) to where it is now also available to non-Japanese companies, albeit usually operating in Japan, and also to individuals recognized as having made major contributions to the advancement of quality. The awards ceremoney is broadcast every year in Japan on national television.

Two categories of awards are made annually, the Deming Prize for Individuals and the Deming Application Prize.
Contents
1 Winners of individual award
2 Winners of application prize
3 See also
4 External links

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TAGUCHI

Genichi Taguchi
Gen'ichi Taguchi (田口 玄一) (born January 1, 1924 in Tokamachi, Japan) is an engineer and statistician. From the 1950s onwards, Taguchi developed a methodology for applying statistics to improve the quality of manufactured goods. Taguchi methods have been controversial among some conventional Western statisticians but others have accepted many concepts as valid extensions to the body of knowledge.
Contents
1 Life
2 Contributions
2.1 Loss functions
2.2 Off-line quality control
2.2.1 System design
2.2.2 Parameter design
2.2.3 Tolerance design
2.3 Design of experiments
2.3.1 Outer arrays
2.3.2 Management of interactions
2.3.3 Analysis of experiments
3 Assessment
4 Honours
5 Footnotes
6 External links

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Taguchi methods are statistical methods developed by Genichi Taguchi to improve the quality of manufactured goods, and more recently also applied to biotechnology[1], marketing and advertising. Taguchi methods are considered controversial among some traditional Western statisticians, but others accept many of his concepts as being useful additions to the body of knowledge.
Taguchi's principal contributions to statistics are:
Taguchi loss-function;
The philosophy of off-line quality control; and
Innovations in the design of experiments.

Contents
1 Loss functions
2 Off-line quality control
2.1 System design
2.2 Parameter design
2.3 Tolerance design
3 Design of experiments
3.1 Outer arrays
3.2 Management of interactions
3.3 Analysis of experiments
4 Assessment
5 Bibliography
6 See also
7 References
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TAGUCHI METHODS
TAGUCHI'S DEFINITION OF QUALITY

TAGUCHI'S LOSS FUNCTION

TAGUCHI, ROBUST DESIGN, AND THE DESIGN OF EXPERIMENTS

EXAMPLES AND CONCLUSIONS

FURTHER READING:

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a talk on Financial Management

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how ISO 9000 was guided by Quality Gurus

ISO 9000 and Quality Gurus
You may wonder what's behind ISO 9000?
Who are those guys who established principles, incorporated in ISO 9000.
First of all, let's see who are these guys who contributed to quality.
They are: Walter Shewhart, Edwards Deming, Joseph Juran, Genichi Taguchi, Armand Feigenbaum, Kaoru Ishikawa, and Philip Crosby.

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Bill Gates

Published Writing - Books by Bill Gates
The Road Ahead
In the 1996 edition of The Road Ahead, Microsoft Chairman and CEO Bill Gates laid out his vision of an interconnected world built around the Internet. Based on the premise that life will be transformed by the convergence of inexpensive computing and inexpensive communications, Gates drew from his experience at the center of the personal computer revolution to give insights on the growth, evolution and impact of technology.


Microsoft celebrates its 20th birthday and come August, replaces the aging combination of MS-DOS and Windows 3.11 with the bells & whistles of Windows 95, triggering mass upgrades worldwide and prompting the adoption of an all-new, whizz bang version of Microsoft Office.

Gates turns 40 and, clearly feeling on top of his game, he collaborates with Microsoft's Chief Technology Officer, Nathan Myhrvold, and Peter Rinearson, to write his vision for the future - titled The Road Ahead. The book is pitched as Bill's "bird's-eye view of the undiscovered territory on the information highway - an authoritative, thought-provoking, and very readable travel guide for the journey.

In this optimistic and refreshingly realistic book, Gates looks ahead to show how the emerging technologies of the digital age will transform all our lives."It occupies the top slot on the New York Times' bestseller list for more than seven weeks and goes on to sell over 2.5 million copies.

Of course, attempting to predict the future in any aspect of life, let alone a fast-paced industry like IT, is fraught with danger. Sensibly, Gates acknowledges this in his

Foreword:
I'm writing this book now as part of my contribution to the debate (about the information highway) and, although it's a tall order, I hope it can serve as a travel guide for the forthcoming journey. I do this with some trepidation.

We've all smiled at predictions from the past that look silly today. you can flip through old Popular Science magazines and read about conveniences to come, such as the family helicopter and nuclear power "too cheap to meter."

History is full of now ironic examples - the Oxford professor who in 1878 dismissed the electric light as a gimmick; the commissioner of US patents who in 1899 asked that his office be abolished because "everything that can be invented has been invented.

This is meant to be a serious book, although ten years from now it may not appear that way. What I've said that turned out to be right will be considered obvious and what was wrong will be humourous.

Well, William, it is indeed now ten years later. Let's take a stroll down memory lane and see how many changes you correctly predicted and how many were wide of the mark.

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Inside Out
To commemorate Microsoft's 25th anniversary, the company published Inside Out, a book written by and for employees which highlights the products, people and culture that transformed Bill Gates' and Paul Allen's vision for personal computing into reality. Each chapter of the book features an introductory essay by Bill Gates, reflecting on the company's history and looking ahead to future opportunities.


Business @ the Speed of Thought
Business @ the Speed of Thought was written to inspire you to demand - and get - more from technology, enabling you and your company to respond faster to your customers, adapt to changing business demands, and prosper in the digital economy. Business @ the Speed of Thought is not a technical book. It shows how business and technology are now inextricably linked. Each chapter is structured around a business or management issue, showing how digital processes can dramatically improve your results.
Related Links
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Bill Gates Home
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World's No. 1 management guru is an Indian

8 Nov 2007, 0014 hrs IST,Neelima Mahajan,TNNSMS NEWS

C K Prahalad has been declared the world’s foremost management guru : India gave the world the word “guru”. And now, an Indian has been declared the world’s foremost management guru.

C K Prahalad, professor at the University of Michigan’s Stephen M Ross School of Business, has been crowned the greatest management thinker alive by Thinkers 50, an annual ranking of the top 50 management thought leaders in the world.

In this year’s Thinkers 50 — released in London on Wednesday — Prahalad (No. 3 last year) has trumped the likes of former US Federal Reserve chairman Alan Greenspan, strategy guru Michael Porter and Microsoft founder Bill Gates to emerge as No. 1.

There are three other Indians in the top 50: CEO coach Ram Charan at No. 22 (up from No. 24 last year), innovation guru Vijay Govindarajan of the Tuck Business School at No. 23 (No. 31 last year); and Harvard’s Rakesh Khurana at No. 45 (No. 33 last year).

"Not many management thinkers actually follow up important early ideas with genuinely groundbreaking future ideas. This is what C K Prahalad has managed to do.

His work with Gary Hamel set the strategic agenda of the 1990s. Now, with "The Fortune at the Bottom of the Pyramid", he has established the social, entrepreneurial and economic agenda of our times," said Stuart Crainer and Des Dearlove of Suntop Media, the organisation which brings out the Thinkers 50 ranking.

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Management books

If you are into the corporate easy life and don't want to rock the boat, cut your engines and stop reading this message now.

But... ...if, like us, you are tired of predictable reportage, superficial reasoning and articles that focus on symptoms instead of root problems, read on...


Why do so many magazines, books and newspapers judge a manager by his or her ability to turn around a company? To help answer that, here's a second, more personal question: do you think a turnround provides a realistic test of a manager's character and abilities?

Whatever your views, read on because you certainly won't find what you are about to read in other media. This is valuable material you can use to get ahead -- and we charge what it's worth. In business you get what you pay for.

Managers good and bad
Before we get personal about certain Chief Executive Officers, turnrounds and their abilities, let me explain that we are going to invite you to download a special issue of Letter to Thinking Managers, the private monthly newsletter. It's on free trial, which means if you don't like it, we don't charge you. There's more about that time-limited offer later and you'll find it worth looking over. If you don't take up our offer, there's no other way you'll ever get to see this report.

This special issue of Letter to Thinking Managers took a look behind the corporate quotes and press releases (the kind you find in those cheap business magazines and papers, but not in our newsletter). We examined what really happened in many of those famous turnrounds and concluded that standards are pretty low. To read the special issue, Managers Good and Bad, order your free trial subscription today. We'll also send you two current issues. Just click below, or on any link in this message. Follow this link for details of our free trial offer, or read on to find out more about the hard-hitting way we cover management thinking: http://www.thinkingmanagers.com/prewp/pwmani95.html

From terrible to mediocre

To illustrate our point about Chief Executive Officers, Letter to Thinking Managers examined the current position of Xerox and other companies. Here, to start us off is a quote from Anne Mulcahy, CEO of Xerox: 'Turnround or growth, it's getting your people focused on the goal that is still the job of leadership'.

Yeah, but... I suppose moving Xerox from terrible to mediocre certainly constitutes a great leap forward. But the sales increase expected this year would be the first since 1999 - which in absolute terms hardly ranks as a medal-winning performance. Not only are the standards debatable, but the methods used in turnrounds are essentially one-off, short term and misleading. But as you'll learn from our particular brand of investigation, they are also highly predictable.

Try Letter to Thinking Managers, at no charge for the next two monthsLetter to Thinking Managers is the monthly private briefing from Edward de Bono and Robert Heller, world leaders in creative business management. It is only available on private subscription and you won't read our kind of hard analysis anywhere else. Follow this link for details of our free trial offer, or read on to find out more about the hard-hitting way we cover management thinking: http://www.thinkingmanagers.com/prewp/pwmani95.html

Some say: we hit too hard on the chin.
We Say: stand taller and we can't reach you

Our invitation is for you to look over Letter to Thinking Managers newsletter at no charge over the next two months. Click on any of the links in this message. We'll send you two issues, with your free special issue on Managers, Good and Bad.

Now let's get on with the fight:
How CEO's disguise bad management

In your special issue, you'll learn how 'The cult of the CEO' disguises bad management. We also explain why financial performance is mistakenly used as the prime measurement by journalists and observers who, perhaps, are too young or inexperienced to know better. We explain why good managers cannot be differentiated from the bad just on the evidence of the financial results.

This, as with all topics discussed in Letter to Thinking Managers, is powerful, right-hand lead stuff. We punch right through the flim-flam of corporate double-speak and in the process show up other media who dutifully file their me-too reports as though everything was going well.

You are unlikely to see or hear anything remotely like Letter to Thinking Managers elsewhere. Download your $47 report nowYour special issue is worth $47 but won't cost anything with your trial subscription. Remember - our material is not cheap, but then nothing of any value is. As a businessperson who has registered on our website, I believe you will recognise just how effective our kind of 'management logic' can be - especially when effective performance assessment is called for. Follow this link for details of our free trial offer, or read on to find out more about how we cover management issues: http://www.thinkingmanagers.com/prewp/pwmani95.html

So what's wrong with the Xerox 'turnround'?
Mulcahy's turnround program is typical: make sharp staff and business cutbacks, and bring in a new chief financial officer. As we explain, that's due to the misplaced 'cult of the CEO'. But the tougher tests of management ability come after the clean-up, when the turnround boss must compare, not with the failed predecessors, but with the best of the competition. The CEO cult assumes, against all the evidence, that the fate of the entire organization depends overwhelmingly on the single eminence who takes all the decisions and governs all the strategic management.

In fact the truth is an organisation's success or failure depends on the strength of management at all levels and in all functions. A 'well-managed company' can't just mean one with a brilliant and forceful boss. A truly great CEO proves him or herself by the quality of the people managing alongside the central figure and those who answer to these leading managers: and on how all staff are mobilised to give their best. So why don't other media pay attention to this crucial issue?

Let's go back to our very first question:
'Why do so many magazines, books and newspapers judge a manager by his or her ability to turn around a company?' Here again is where Letter to Thinking Managers gets tough and rough. So if you are into the corporate easy life and don't want to rock the boat, cut your engines and stop reading this message now. But if, like us, you are tired of predictable reportage, superficial reasoning and articles that focus on symptoms instead of root problems, read on because we would like to have you aboard. Follow this link for details of our free trial offer, or read on to find out more about the hard-hitting way we cover management thinking: http://www.thinkingmanagers.com/prewp/pwmani95.html

Are you, like us, tired of phony financial measurements?
The media, like the stock market, by and large measures turnrounds and good performances in the sales figures, the profit and loss accounts and the investment returns. It doesn't take much hard thinking and analysis to report, for example: • Immelt's 19% rise in the GE stock price • Pepsico's Reinemund's 17% predicted rise in 2004 earnings per share • Nike's Knight's 15% rise in fiscal year sales to $12.3 billion, on which the company earned nearly a billion dollars - up by 27%. Investors may claim this is perfectly fair. And the journalists find it all boringly easy to write up those 'business reports'. But it's not insightful analysis, nor a good measurement of management ability. The investor cares only for the financial results, above all the share price. Wall Street is indifferent to the means, so long as that price rises. Yet the price has many disadvantages as a measure of managerial worth. It is not within the direct control of any management and has an unspecific relationship to underlying non-financial performance.

It is fundamentally short-term, whereas the destiny of the company is determined over the long term - Nike is nearly 40 years old, for example. Worst of all, putting the financial cart before the performance horse risks the taking of short cuts. Read on to find out what pandemonium that can bring! Follow this link for details of our free trial offer, or read on to find out more about the hard-hitting way we cover management thinking: http://www.thinkingmanagers.com/prewp/pwmani95.html

What we can learn from good and bad managersUsing the criteria set out in Letter to Thinking Managers, just take a look at the list of 'good' managers published in Business Week for example. No virtue stands out. But one vice is glaringly conspicuous among the worst and the fallen. That vice is fiddling the figures. Here is our 'Roll of dishonour': • Mortgage giant Fannie Mae misstated earnings for three and a half years, leading to a $9 billion restatement that wiped out 40% of the supposed profits in the period • The Krispy Kreme doughnut chain is in trouble for the way it accounted for franchisee buyouts • Royal Dutch Shell notoriously overcounted its oil reserves by 20% - a mere 4 billion barrels • Software giant Computer Associates boosted quarterly earnings by keeping its books open for extra days - 'the 35-day month' • At Nortel Networks, a great name in telecoms, 'several investigations are under way to determine if CEO Frank Dunn cooked the books to generate profits and cash bonuses' The moral is clear. You can spot the good managers because they insist on having financial and other data delivered to the highest possible levels of accuracy and honesty: and they don't treat the financial outcomes, which take in their own options and bonuses, as achievements in themselves: Financial outcomes are just a product of those achievements. Follow this link for details of our free trial offer, or read on to find out more about the hard-hitting way we cover management thinking: http://www.thinkingmanagers.com/prewp/pwmani95.html

Letter to Thinking ManagersLetter to Thinking Managers is the leading newsletter for those managing every kind of business, at whatever level. You receive two issues to evaluate during your trial. You also receive our special issue on Managers, Good and Bad. That alone will put you far ahead of the average business commentator. If you decide to continue your subscription after your two-month free trial you'll build a substantial workbook of best practice procedures for every important aspect of running and growing a successful business.

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This email is sent by Heller Management Ltd, 7 Park Place, Wadebridge, Cornwall, pl27 7ea, United Kingdom

Edward De Bono

QUOTES
Perception is real even when it is not reality.
If you do not design the future someone or something else will designit for you.
We may need to solve problems not by removing the cause but by designing the way forward even if the cause remains in place.
Traditional thinking is all about "what is;" Future thinking will also needto be about what can be.
Effectiveness without values is a tool without a purpose.
'Nothing' is the space for everything.

http://www.edwarddebono.com/Default.php 

Deming

The prevailing style of management must undergo transformation. A system can not understand itself. The transformation requires a view from outside.

The aim of this chapter is to provide an outside view-a lens-that I call a system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in.

The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people.

Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to.

The individual, once transformed, will:
Set an example
Be a good listener, but will not compromise
Continually teach other people
Help people to pull away from their current practice and beliefs and move into the new philosophy without a feeling of guilt about the past

The layout of profound knowledge appears here in four parts, all related to each other:
Appreciation for a system
Knowledge about variation
Theory of knowledge
Psychology

more

more
detailed analysis of everything from customers' desires to the decision-making process itself, which is often fraught with erroneous assumptions.While analysis is unquestionably a staple of most businesses, that which increasingly distinguishes the winners from the losers in our information-laden world is the incisiveness of the analysis. In the competition for global markets, the Japanese outanalyzed the United States, then mustered the corporate willpower to find better and more efficient ways of acting on their conclusions. They were able to do this in part because an understanding of variation and the concept of continuous improvement gave every member of the company a common focus when discussing problems and changes.

The Fourteen Points are, in fact, based on the following six principal ideas that will be illustrated in the upcoming chapters:
1. Quality is defined by the customer. Improvement in products and processes must be aimed at anticipating customers' future needs. Quality comes from improving the process, not from "inspecting out" the shoddy results of a poorly run process.

2. Understanding and reducing variation in every process is a must.

3. All significant, long-lasting quality improvements must emanate from top management's commitment to improvement, as well as its understanding of t~e means by which systematic change is to be achieved. Improvement cannot come merely from middle managers' and workers' "trying harder." Neither quality improvement nor long-term profitability can be achieved through wishful thinking and arbitrary goals set without consideration for how they are to be achieved within the context of an organization's process capabilities.

4. Change and improvement must be continuous and all encompassing. It must involve every member in an organization, including outside suppliers.

5. The ongoing education and training of all the employees in a company are a prerequisite for achieving the sort of analysis that is needed for constant improvement.

6. Performance ratings that seek to measure the contribution of indual employees are usually destructive. Given a chance anagement, the vast majority of employees will take e in their work and strive for improvement. But _ "':ormance-ranking schemes can impede natural initiative.- one thing, by their very nature they create more "losers" , winners" and thus batter morale. And since they don't e into account natural variation, they are inaccurate and - :3Jr and are perceived as such by employees.
-e dering of Deming's Fourteen Points, the points theme been reordered in the interest of highlighting some of _ ~ es between them. For example, in Deming's book, his - to "improve constantly . . . the system of production _e" is number five. However, it appears here right after ?Oint number one, constancy of purpose, both because deas are very closely linked and because Deming's defnstant improvement is central to his philosophy.

5 constancy of purpose..' of purpose, on a macro level, entails an unequivocal long;mnitment to invest in, and adapt to, the challenging reof the marketplace. It is the antithesis of managing for ~ financial gain. Constancy of purpose, on a micro level, -e systematic fine-tuning of every function in a corporation : --e changes in company strategy and product line that are : ~ meet long-term market needs.-g's concept of constancy begins and ends with the cus- ile U.S. companies initially turned to Deming because - control of their processes and d\'i>covereo that they were _ 'r more faulty products than the competition was, they e-ed that eliminating defects isn't enough to capture _ccess depends on how well a company evaluates the ~roducts, and markets of today to figure out what the want tomorrow, and whether a company has the man:1\iction to change accordingly. It requires a commitment strategies and the analytical know-how to accurately _ -e organizational changes need to be made.- ;>anies may think this obvious. But the evidence of the


W. Edwards Deming

Born
October 14, 1900(1900-10-14)Sioux City, Iowa, USA
Died
December 20, 1993 (aged 93)Washington DC, USA
Occupation
Statistician
William Edwards Deming (October 14, 1900–December 20, 1993) was an American statistician, college professor, author, lecturer, and consultant. Deming is widely credited with improving production in the United States during World War II, although he is perhaps best known for his work in Japan. There, from 1950 onward he taught top management how to improve design (and thus service), product quality, testing and sales (the last through global markets)[1] through various methods, including the application of statistical methods such as analysis of variance (ANOVA) and hypothesis testing. Deming made a significant contribution to Japan's later renown for innovative high-quality products and its economic power. He is regarded as having had more impact upon Japanese manufacturing and business than any other individual not of Japanese heritage. Despite being considered something of a hero in Japan, he was only beginning to win widespread recognition in the U.S. at the time of his death. [2]
Contents
1 Overview
2 Early life and work
2.1 Work in Japan
2.2 Honors
2.3 Later work in the U.S.
3 Deming philosophy synopsis
3.1 The Deming System of Profound Knowledge™
3.2 Deming's 14 points
3.3 Seven Deadly Diseases
4 Quotations and concepts
5 See also
6 Notes
7 Bibliography
8 External links
//
more

Andry Grove

 

Only the Paranoid Survive

Only the Paranoid Survive: Book Preface
Sooner or later, something fundamental in your business world will change.
I'm often credited with the motto, "Only the paranoid survive." I have no idea when I first said this, but the fact remains that, when it comes to business, I believe in the value of paranoia. Business success contains the seeds of its own destruction. The more successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing left. I believe that the prime responsibility of a manager is to guard constantly against other people's attacks and to inculcate this guardian attitude in the people under his or her management.
The things I tend to be paranoid about vary. I worry about products getting screwed up, and I worry about products getting introduced prematurely. I worry about factories not performing well, and I worry about having too many factories. I worry about hiring the right people, and I worry about morale slacking off.
And, of course, I worry about competitors. I worry about other people figuring out how to do what we do better or cheaper, and displacing us with our customers.
But these worries pale in comparison to how I feel about what I call strategic inflection points.
I'll describe what a strategic inflection point is a bit later in this book. For now, let me just say that a strategic inflection point is a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.
Strategic inflection points can be caused by technological change but they are more than technological change. They can be caused by competitors but they are more than just competition. They are full-scale changes in the way business is conducted, so that simply adopting new technology or fighting the competition as you used to may be insufficient. They build up force so insidiously that you may have a hard time even putting a finger on what has changed, yet you know that something has. Let's not mince words: A strategic inflection point can be deadly when unattended to. Companies that begin a decline as a result of its changes rarely recover their previous greatness.
But strategic inflection points do not always lead to disaster. When the way business is being conducted changes, it creates opportunities for players who are adept at operating in the new way. This can apply to newcomers or to incumbents, for whom a strategic inflection point may mean an opportunity for a new period of growth.
You can be the subject of a strategic inflection point but you can also be the cause of one. Intel, where I work, has been both. In the mid-eighties, the Japanese memory producers brought upon us an inflection point so overwhelming that it forced us out of memory chips and into the relatively new field of microprocessors. The microprocessor business that we have dedicated ourselves to has since gone on to cause the mother of all inflection points for other companies, bringing very difficult times to the classical mainframe computer industry. Having both been affected by strategic inflection points and having caused them, I can safely say that the former is tougher. I've grown up in a technological industry. Most of my experiences are rooted there. I think in terms of technological concepts and metaphors, and a lot of my examples in this book come from what I know. But strategic inflection points, while often brought about by the workings of technology, are not restricted to technological industries.
The fact that an automated teller machine could be built has changed banking. If interconnected inexpensive computers can be used in medical diagnosis and consulting, it may change medical care. The possibility that all entertainment content can be created, stored, transmitted and displayed in digital form may change the entire media industry. In short, strategic inflection points are about fundamental change in any business, technological or not.
We live in an age in which the pace of technological change is pulsating ever faster, causing waves that spread outward toward all industries. This increased rate of change will have an impact on you, no matter what you do for a living. It will bring new competition from new ways of doing things, from corners that you don't expect.
It doesn't matter where you live. Long distances used to be a moat that both insulated and isolated people from workers on the other side of the world. But every day, technology narrows that moat inch by inch. Every person in the world is on the verge of becoming both a coworker and a competitor to every one of us, much the same as our colleagues down the hall of the same office building are. Technological change is going to reach out and sooner or later change something fundamental in your business world.
Are such developments a constructive or a destructive force? In my view, they are both. And they are inevitable. In technology, whatever can be done will be done. We can't stop these changes. We can't hide from them. Instead, we must focus on getting ready for them. The lessons of dealing with strategic inflection points are similar whether you're dealing with a company or your own career. If you run a business, you must recognize that no amount of formal planning can anticipate such changes. Does that mean you shouldn't plan? Not at all. You need to plan the way a fire department plans: It cannot anticipate where the next fire will be, so it has to shape an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event. Understanding the nature of strategic inflection points and what to do about them will help you safeguard your company's well-being. It is your responsibility to guide your company out of harm's way and to place it in a position where it can prosper in the new order. Nobody else can do this but you. If you are an employee, sooner or later you will be affected by a strategic inflection point. Who knows what your job will look like after cataclysmic change sweeps through your industry and engulfs the company you work for? Who knows if your job will even exist and, frankly, who will care besides you?
Until very recently, if you went to work at an established company, you could assume that your job would last the rest of your working life. But when companies no longer have lifelong careers themselves, how can they provide one for their employees?
As these companies struggle to adapt, the methods of doing business that worked very well for them for decades are becoming history. Companies that have had generations of employees growing up under a no-layoff policy are now dumping 10,000 people onto the street at a crack. The sad news is, nobody owes you a career. Your career is literally your business. You own it as a sole proprietor. You have one employee: yourself. You are in competition with millions of similar businesses: millions of other employees all over the world. You need to accept ownership of your career, your skills and the timing of your moves. It is your responsibility to protect this personal business of yours from harm and to position it to benefit from the changes in the environment. Nobody else can do that for you.
Having been a manager at Intel for many years, I've made myself a student of strategic inflection points. Thinking about them has helped our business survive in an increasingly competitive environment. I'm an engineer and a manager, but I have always had an urge to teach, to share with others what I've figured out for myself. It is that same urge that makes me want to share the lessons I've learned.
This book is not a memoir. I am involved in managing a business and deal daily with customers and partners, and speculate constantly about the intentions of competitors. In writing this book, I sometimes draw on observations I have made through such interactions. But these encounters didn't take place with the notion that they would make it into any public arena. They were business discussions that served a purpose for both Intel and others' businesses, and I have to respect that. So please forgive me if some of these stories are camouflaged in generic descriptions and anonymity. It can't be helped.
What this book is about is the impact of changing rules. It's about finding your way through uncharted territories. Through examples and reflections on my and others' experiences, I hope to raise your awareness of what it's like to go through cataclysmic changes and to provide a framework in which to deal with them.
http://www.intel.com/pressroom/kits/bios/grove/paranoid.htm

Jack Welch

www.nndb.com/people/006/000025928/

Jack Welch

Jack Welch on Management: Change Before You Have To
RSM Erasmus hosted a seminar on leadership and management in co-operation with Focus Conferences on 18 May 2004. Speakers included a powerful array of European business leaders and the keynote speech by Jack Welch, former CEO of General Electric.
Floris Maljers, Chairman of the RSM Erasmus Advisory Board and former Chairman of Unilever, opened the conference while Wim Kok, Prime Minister of The Netherlands (1994-2002), discussed issues relating to management in The Netherlands.
Roel Pieper, Managing Director and Chairman, Favonius Ventures addressed the audience on the topic relating to how applicable American management practises are in the Dutch business context; and Ad Scheepbouwer, Chairman and CEO, KPN spoke about creating new perspectives within his organisation.

Driven by the Love of Learning
Welch was interviewed by Charles Groenhuijsen, US correspondent for the NOS Dutch Public Television and Radio. Groenhuijsen asked some tough questions about CEO pay scale, the war in Iraq, and if American management style as exemplified by Welch, has a place in The Netherlands / international business environment of the 21st century.

In answer to the question "What drives you?" the ebullient and energetic Welch said "I love to learn."

Asked to elaborate, he noted that he "probably had 500 mentors," and particularly had learned a lot from Japanese business leaders the Toyoda brothers (of Toyota) and Sam Walton of Walmart.

Move Faster
Asked about any regrets, he said, "I would have done everything faster. Too often we pause when we should have charged. You're never fast enough." Speed was also at the top of his list when describing what CEOs of the 21st century are faced with. "Go faster. Encourage much more employee participation. And you have to be comfortable as a partner in international business."

Welch also emphasized on the developments of talents in organisations, comparing the role of the CFO and the head of HR in most organisations. "Why do you want the scorekeeper getting the power? The person building the team is more important," said Welch.

The Ultimate Business How-To Book
Once dubbed "Neutron Jack" for his sweeping downsizing at GE during the 80s - an act that made him the self-described "toughest boss in America" - Welch may well be the best-known CEO in the world.

He is the author of such books as Get Better or Get Beaten!, Jack Welch on Leadership, and Jack: Straight from the Gut; meanwhile he is currently in progress on his hotly-anticipated book Winning: The Ultimate Business How-To Book, due out in May 2005.

Fortune Magazine once crowned Welch "Manager of the Century" saying, "Welch wins the title because in addition to his transformation of GE, he has made himself far and away the most influential manager of his generation."

"Change Before You Have To"
Perhaps the best and most general advice given by Jack Welch was his reinforcing of one of his oft-repeated quotes, "Change before you have to." He stands by it today. "Never be happy where you are. Get a culture at your company that loves change. And every time there's a quantum change [in the business world], jump!"

The seminar concluded with a roundtable discussion by Gerlach Cerfontaine, President & CEO Schiphol Group, Ewald Kist, Chairman of the Executive Board ING Group, Thomas Leysen, CEO Umicore, Karel Noordzij Executive Director PGGM and Ad Scheepbouwer Chairman and CEO KPN. Moderated by Groenhuijsen, each panelist was given a quote of Welch and asked to comment on its applicability to Dutch business.
More Info?
Contact: Theo Backx, Executive in Residence at development@rsm.nl
RSM Erasmus Network

http://www.rsm.nl/portal/page/portal/RSM2/Newsroom/ItemPortletPage?p_item_id=2355505&p_pg_id=133&p_page_id=2540295


Downsizing the "Neutron Jack" Way

Arguably, Welch's most controversial move was the downsizing of the DI. At GE he was fond of saying: "Downsize before it's too late."

He hated bureaucracies and felt that the Agency should operate like a network of small businesses. He felt that even in good times, all organizations should regularly review expenses and the number of its personnel.

For example, Welch told me he downsized GE during one of its most healthy stages, earning him the nickname "Neutron Jack" (the guy who removed the people, but left the buildings standing).

He hated this nickname, and it hurt, but he said he hated bureaucracy and waste even more. At GE, Welch insisted that all businesses be number one or number two, or "fix, sell, or close." He added he learned over the years that there were glaring exceptions to this rule, but he wanted the DI to follow the spirit of this principle.

He said that good businesses have to be sorted out from the bad ones. During one of his frequent roundtable lunch discussions with DI analysts, Welch ruffled quite a few feathers when he said the DI has the tendency to overanalyze an issue or to take on too many "nice to know, but not critical" issues.

For example, he said that a significant number of DI products have very few customers. He exclaimed, "We shouldn't be bothering our very busy policymakers with obscure or hypothetical subjects on a country whose location most of us don't even know."Unless a specific DI issue met a certain threshold of policymaker interest, he said that the manager responsible for it should "fix" it or "close" the office down.

He said there were too many other more important issues to which DI analysts could be surged.When Welch began downsizing and closing offices and accounts, some DI managers complained, "You'll kill morale and you'll never be able to mobilize on this issue if it ever gets really hot."

Other DI managers complained, "You've already cut all the fat out. Now you're into bone and you'll ruin the organization if we cut more."

Welch said that both arguments were weak. He responded to his critics, "I've never seen a business ruined because it reduced costs too much, too fast. When good times come again, I've always seen business teams mobilize quickly and take advantage of the situation."

Welch felt it was wrong that the system in place in the public sector rewarded managers for being "empire builders" and not for downsizing, for expanding services and not for cutting costs.

He said he would continue to downsize, even if it risked congressional budget cuts in the near term. Welch had his own ideas for expanding in other areas, but he insisted that before he could do that he needed to make the directorate as lean and efficient as he could.

One day, in one of his most controversial moves, Welch also proposed cutting out an entire layer of management in the DI.He justified this by saying, "De-layering speeds communication." He added, "

As we became leaner at GE, we found ourselves communicating better, with fewer interruptions and fewer filters. We found that with fewer layers we had wider spans of management. We weren't managing better. We were managing less, and that was better."

He even caused much heartburn when he suggested DI managers should also consider drafting analytic papers instead of just editing them. He said, "Many believe we need more analysts in the DI. Perhaps this is true. Or perhaps, what we really need is less management."

An idea Welch was forced to abandon was his introduction of the concept of "managing by differentiation." "Winning teams come from differentiation, rewarding the best and removing the weakest, always fighting to raise the bar," he argued.Welch felt the DI should spend the next few years building a performance culture, and, when ready, begin systematically and frequently removing the bottom 10 percent of analysts and managers.

He stressed, "Lifetime employment is a failed strategy. I shouldn't have agonized as long as I did at GE on so many people who weren't going to cut it."

However, Welch stood down after unhappy HR managers reminded him that government employees enjoy many civil protections and that the CIA could not risk large numbers of disgruntled employees because of counterintel-ligence concerns.

One fuming HR manager even told him to his face, "I can't agree with you that lack of job protection is a good thing—in government or in business.

For example, people complain that Generation Xers have no loyalty. I think what is really going on is that Generation Xers can't be completely loyal because they feel that their employers won't be loyal to them during an economic downturn"




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