Issue 28 (late), Friday 22nd September, 2000
Made in New Zealand - twice winners of the America's Cup
Subscribe/unsubscribe - bottom of the page


Award is a free fortnightly email magazine with the tools, techniques and best-practice models that deliver high performance in the new economy
In this issue
START - 21.5m reasons to be late
WarmUp - corporate citizenship
Ten Minute MasterClass - data warehousing
Quick case study - values statements vs corporate reality
Conference - concurrent engineering
Ten Minute MasterClass 2 - Baldrige process management
Outtakes - what business leaders are saying about CRM
Sixty Second Snapshots
>> Working women
>> Writing an internet marketing plan
>> Sticky ideas
>> What's hot at APQC
>> 50 books that define the new economy
Resources - conflict management

New member? Here are all the back issues - and here are our web resources - one of the world's best completely free Baldrige Award and organisational excellence web sites. AOL customers (and others who can't access web-page emails) here's the on-line version at our web site - at www.baldrigeplus.com/award26.html. Click here to send us an email. Click here to subscribe.
START
We're late. Sorry. But as we've already explained to the readers of our alternate eZine EDGE FIRST, there's an excellent reason. To be pedantic, 21.5m good reasons. It's an Award-relevant story, and it's here (click) if you're interested.
WarmUp - corporate citizenship
Almost all the popular 'Baldrige' awards schemes have a section on corporate citizenship, and all but the very best organisations score low in that area. Why? Well, probably because it's a novelty to many of them. It's not exactly clear what good corporate citizenship is. The link to excellence is not always self-evident. And when you're working to drive down costs the feel-good stuff gets the axe first, right?

Lets assume you want to do better. Where to start?
(1) Look at what the champions do (starting, of course, at www.baldrigeplus.com/eight.htm).
(2) Subscribe to the international journal. The International journal! Yep. If it moves, there's an international journal. Here's the details:
The Journal of Corporate Citizenship - ISSN 1470-5001. Published January, April, July and October. First issue January 2001.
Details: www.greenleaf-publishing.com

'Corporate Citizenship' is a broad term that is being increasingly used by business, governments and academic researchers to develop an understanding of the changing relationship of business and society, or indeed, business in society, says the blurb.

The rationale behind the launch of the Journal of Corporate Citizenship is to provide a global forum for researchers and practitioners to explore varying perspectives and to further define the role, scope and purpose of business in a globalised economy. The Journal will welcome contributions from researchers and practitioners immersed in public policy, organisational behaviour, economic history, strategic management, citizenship, human rights, corporate governance, sustainability management, responsible supply chain management, stakeholder management, poverty, gender and globalisation – to name just a few of the areas represented in the hundreds of ideas and abstracts submitted to the editorial team in 2000.
More information – contact Bela Arora, b.arora@warwick.ac.uk
Ten minute MasterClass® - data warehousing
Jonathan Siegel, contributor to the Deming Electronic Network, posted some material recently on data warehousing. We'll summarise:

“One of the innovations in information technology in the last decade has been data warehousing,” he began, “which began in the early 1990s but has really taken off only recently. A data warehouse is a compilation of a company's data organized and designed to support long-term managerial decision-making as distinct from day-to-day production.”

The guru, according to Siegel, is WH Inmon, who has written extensively on how systems to support long-term decision-making need to be designed and built differently from production systems. Inmon's views are replete with approaches which, “often un-footnoted and in different jargon, are adaptations of Deming's ideas,” Siegel said.

Sidebar – what are 'Deming's ideas'? Here's a primer - scroll down the list for “A Deming Primer,” which you'll need Acrobat Reader to download – it's a .pdf file.

For example, Inmon's presentation Successful Data Warehousing: 10 Critical Success Factors (on his web site at www.billinmon.com) includes:
1. "Build the data warehouse iteratively, not in a "Big Bang" approach. In the on-line presentation Accelerating The Development of the Enterprise Data Warehouse, Inmon explains iterative development aka circular development, and one sees almost immediately that it is nothing other than the Shewhart cycle in different guise.

Sidebar – Siegel says that “traditional IT approaches operate like construction projects and require complete specification of designs before any building occurs). In his on-line article "Choosing the Right Approach to Data Warehousing: Big Bang vs Iterative”, Inmon elaborates on his view that the consistent failure of the IT community to employ an iterative (Shewhart cycle based) approach has been the single most important factor in decision-support system failure: “The feedback generated by the DSS [Decision Support System] analyst at the end of each iteration forms the basis for the redesign of the next iteration. Because the feedback is so important, the feedback loop between the end user and the data warehouse administrator is a very important component of success. Unfortunately, from an organizational perspective, the two communities of users and developers have not enjoyed a long standing relationship. In order to enjoy long term success in the data warehouse development environment, the relationship between the development organization and the end users must be cemented.”

A few others of the 9 factors:
3. Involve the end-user up front – Inmon elsewhere emphasizes how the content of data depends on purpose and provides a method for selecting the point of view a warehouse is designed from and building its information with respect to that point of view.

5. The role of metadata [data about data] is very important – Inmon takes several steps in the direction of Deming's view that data has no meaning without knowing its context and how it was obtained.

6. The transformation process will consume tremendous amounts of resources – elsewhere Inmon writes about the effort needed to ensure data quality. He also emphasizes the attention that needs to be paid to method and the affect it can have on meaning.

7. Data marts are built with the data warehouse as a source – the single-source requirement comes from Inmon's observation that two sources somehow seem to produce two values – compare Deming's "no true value" argument..

9. The costs of warehousing must be post-allocated back to the actual user – the operative word here is post, Siegel says. Allocating costs before development will hamper effective development because it will skew development around artificially preconceived notions of where value lies and hamper the discovery aspects of iterative development. This is a compromise, but it's a giant step in the direction Deming advocated, considering that most large software projects are cost-allocated well in advance.

10. While a data model is essential to warehouse development, its creation had better not hamstring the development process. Inmon argues that an effective data model needs to be discovered through iterative observation and development – it will take its shape as development progresses – so expecting the initial data model to be anything other than an initial guess is to hamstring development.

Siegel says that data models – which are simply the way a company organizes the record of a part of its experience – are best thought of as a theory, refined by testing against further experience – before one can use it successfully for prediction (management decision-making). “This means, he says, that “designing a data model and building a data warehouse … is a process of discovery involving the repeated testing of theories.

Taking this notion … into the practicalities of how to do design and build software – and Bill Inmon does exactly that – really gets at the core of the radical break from traditional IT thinking, [which] regards a data model as a do-once construction and wants to see it fully laid-out before construction begins.

In "Bill Gates Is a Failure", attacking the definition of failure used in a recent Data Warehouse Network survey, Inmon argued strenuously that abandoning a preconceived approach based on new information is actually essential to success – it means that learning has occurred – and is a normal part of development, never a failure.

"This definition of a failure is out of phase with the way that data warehouses are built. People don't fail when they learn enough about data warehouses to alter their initial design. In fact that is how little data warehouses grow up to become successful large data warehouses."
Quick Case Study® - values statements vs corporate reality
AT the heart of the recently settled US strike between Verizon Communications and its telecoms workers (says ethicist Jeffrey L Seglin, Sunday NY Times, September 17) were the high stress levels experienced by service representatives. One possible culprit - and something not explicitly addressed by the settlement - was that a company-wide values statement clashed with customer service reality.

The conundrum is common: How to ensure that your published values don't conflict with how employees are actually treated? Verizon's core values statement, as published in a recent company newsletter, are integrity, respect, imagination, passion and service.

But are they, and do they? No, Seglin suggests, and here's one stark disconnect: the company's requirement that customer service responses must end with the scripted "Did I provide you with outstanding service today?" Having just calmed an irate customer, a representative offering such a response - clearly tied to Verizon's core value of service - could set her off again. The request was cited by strikers as one cause of stress.

The problem with scripts is that they "don't sound natural, and you wouldn't believe that I was even concerned about you, " said Melissa Morin, Verizon customer service rep and president of local 1400 of the Communications Workers of America.

Worse, Seglin says, scripts, even if intended to promote better and more measurable service and sales, may fly in the face of Verizon's other stated values. We value imagination, the company says, but make sure you stick closely to this script? What kind of respect is that?

Verizon says its values principles are taken from the best-selling "Built to Last" (HarperCollins, 1994), which said visionary companies have core values and a core purpose. But James Collins, co-author with Jerry Porras, said those values were not enough in themselves. The key "is to preserve the core values and purpose, and stimulate change, improvement, innovation and renewal - at the same time, all the time," he said. And, I'd have thought, develop your own, not nab someone else's!

Turns out – according to James A. Smith, a Verizon spokesman – that while customer reps don't have to do everything by the script, doing so is a "management tool of measurement." And pay is tied not only to whatever product is sold but also to how well customers, in later surveys, rate the service provided.

We can hear John Seddon warming up … does that sound like a sweat shop to you, and would you expect customer service or winning the rewards to be the prime motivator? As David Gebler, president of Working Values, an ethics training firm based in Boston, says "When there's such a strong incentive to meet a production number, in some sense you can be tacitly encouraging shortcuts."

At Verizon, the conflict is not lost on employees - and has wide implications. "Employees understand the values statement," Ms. Morin said. "But I don't know that they believe the company is following its own words. They went into this micromanaging period where they started timing everything, picking every single word apart. People sort of just look at the values statement and go, `yeah, right.' It's just a piece of paper."

Values statements that do not reflect reality can do more harm than good, by fostering cynicism and anger. Rather than creating a statement just because great businesses do so, a company's managers may better spend their time finding what values exist within the company, and determining whether those values foster the type of company they want. If the answer is no, the managers should figure out how to respond.

Jeffrey L Seglin teaches at Emerson College in Boston and is the author of ``The Good, the Bad, and Your Business'' (John Wiley & Sons). His Sunday NY Times column on business ethics appears the third Sunday of each month.

Resources - Jeffrey has emailed to say that Abuzz.com, a company owned by the New York Times, has created an area for discussion of values statements on its site. To participate, go to http://www.abuzz.com/?a=vbc&b=q.100033. You'll have to register, he says, which might take a minute or so, but it doesn't cost anything.
Conference – concurrent engineering
What's 'concurrent engineering'? It's what gets new products to market in a fraction of the time taken by doing things linearly. For a best practice example of CE in new product introduction (NPI), take a look at NPI at Solar Turbines, scroll down the list for the .pdf file.

Sidebar – CE is not just an NPI strategy. Your editor is leading a local government flood-protection project in New Zealand where there's an urgent need to get protection works built, in a legislative environment where consents to construct can potentially take years. How to achieve both? Run the various processes (design, public consultation, resource consent applications, pre-construction works, and so on) concurrently. Sure, it tests the limits of the legislation, and the tolerances of the key players, but it'll (crossed fingers) get the community back on its feet months, maybe years, sooner.

Interested in a conference? – ISPE/CE2001, Concurrent Engineering: Research and Applications, is a major forum for the international scientific exchange of multi-disciplinary and inter-organizational aspects of concurrent engineering (CE) planned for August 20-22, 2001 in Anaheim, California, USA. The focus will be on the use of integrated enterprise processes, collaborative work, information sharing, co-locating resources, and integrated frameworks and tools. More information at this web page. Conference chair is Dr Biren Prasad, Director, CERA Institute, Tustin, CA. Email prasadb@ugsolutiuons.com
Ten Minute Master Class® 2 – 'Baldrige' process management
Baldrige category 6.3 (supplier and partnering processes), says “Describe how your organization manages its key supplier and/or partnering interactions and processes.” And specifically: (2) “How do you incorporate performance requirements into supplier and/or partner process management? What key performance requirements must your suppliers and/or partners meet to fulfill your overall requirements? And (3), in part, “How do you ensure that your performance requirements are met?”

DEN correspondent David Hartman asked recently (we're summarising) 'I'm currently responsible for improving the quality of the products/services our suppliers provide, but I'm not sure we're measuring performance appropriately. We rate them on quality and delivery:
- delivery is calculated as receipts (lots received) on time (within specified limits) against receipts received early/late
- quality is calculated as total receipts from a vendor against the number of receipts accepted (after inspection).

But, said Hartman:
- this approach does not measure specific commodity- or part number-performance
- it is labor intensive to determine what commodities/part numbers the vendor IS having problems with (although all of this information is being entered into, and is available through accessing many different screens of an electronic database/spreadsheet).

Jay Warner, Principal Scientist, Warner Consulting, of Racine, WI, USA. Email: quality@a2q.com, web: http://www.a2q.com, responded (and again – we're summarising) by asking: What's the purpose? Do you want to weed out the worst vendors? What are you going to measure ?

How about getting your information from the receiving/inspection department, Jay suggested, coded for significance - things that could shut down the line are given more weight. Things that could damage the device functionality after the customer gets it, even though it slips through incoming inspection, get a lot of weight. Paint color, say, might be weighted low for some products, high for others.

Have some sort of database set up for this information, so you can break it down by product, or by item significance. Into the database goes delivery, supplier, whatever. Many companies also include the number of price increases in the last year or so, and amount. All these things get score and a weight.

Then you add up the scores, weighted, to get a total score. Set the weights and scoring so that it comes out on a scale of 0 to 100%. To make it really good, fix it so a supplier can go over 100%, and so a 'decent' supplier will hit about 70. Adjust the weights so that things you really care about get more impact.

Each year, or more often, review the score with each supplier. They don't see or learn of their competitors' ratings. If it goes down, you 'reduce their participation.' If it goes up, they get more business. They quickly learn what they can do to raise their score, which is what you want.

Depending on your situation, you may find that the suppliers resist this kind of thing strongly. Lots of excuses. The old way worked, didn't it? Well, you are paying the piper, you decide. Minor variants of this procedure are used by a number of companies I can think of, Jay wrote. “If you set the weighting before you score each supplier, you may find the results do not match the purchasing VP's expectations. Might be some new news in there, too.”

Baldrige scoring? Let's say a firm has done this for three or four years, presents the data in control-chart format, links the approach to corporate goals, and has reviewed both the rationale and methodology at least once. They can show there's been 'improvement', however defined, as a result. No benchmarks, no internal or external comparisons. How would a Baldrige assessor rate their efforts? I'd put them in the 30-40% range (systematic approach, deployed, beginning of evaluation and improvement).
Outtakes - what business leaders are saying about customer relationship management (CRM) issues, from Peppers and Rogers Inside 1to1:

- John Chambers, Cisco Systems CEO, on what a corporation will look like ten years from now (Aug 21-28 issue of Business Week). “… there will be nothing in the 10-year window except e-companies. That does not mean that brick and mortar will go away, but click and mortar will become the only means of survival. … keeping your finger on the pulse of your customer will become a requirement."

- Ken Lay, Enron chairman and CEO, in a Feb 21st Forbes ASAP article titled Voices of the Revolution. "[The Internet] provides companies an enormous capability to go directly to the customer and tailor-make the product, moving from mass production to mass customization. It is basically transforming the way we all do business."

- Michael Boyd, director of CRM for Eddie Bauer, on multi-channel marketing in a Summer 2000 article in The DMA Insider. "No matter which definition [of CRM] you choose, the key element is a fundamental change in the way we measure success in business. Channel-oriented measures (such as this year's sales vs last year's) and product-oriented measures (such as how many widgets we sold this month) have been the mainstays of business measurement metrics for centuries. They are quickly giving way, however, to relationship – and customer-oriented – measures, such as current customer value, projected lifetime value and potential value.”
Sixty second snapshots
Brutally short summaries of material too valuable to junk

>> SSS 1 – Working women. Highlighting the importance of empowering women entrepreneurs in the business world, WorkingWoman.com has introduced an online networking system that aims to introduce women-owned businesses to government and the corporate world. The Women's Business Exchange is designed to link women entrepreneurs to corporations and government agencies that could use their services and products. The site will link with the US government's womenbiz.gov.

>> SSS 2 – Writing an internet marketing plan. While marketing online can be anything but traditional, common sense and old-school principles need not get thrown out the window. Hollis Thomases answers some typical questions and provides a list of resources at: www.emarketer.com/how2/articles/20000831_mktplan_ht.html?ref=wn

>> SSS 3 – Sticky ideas. Stickyideas.com has just been featured in Wirednews.com as a "great creative resource." Your editor has contributed a short feature article. For thought-provoking web sites like: www.expecting.de, www.eyestorm.com, www.davidbowie.com and www.giantstep.com, and for recommended books and feature columns to get your creativity flowing, visit www.stickyideas.com. We recommend it.

>> SSS 4 – What's hot at APQC? They say it's corporate performance measures, “those vital measures used by organizations to assess the health of the organization and to provide focused direction to operations and support managers.” A topic that's highly relevant to our 'Baldrige' readers. APQC's information specialists have gathered links to articles, publications, and Web sites; a list of best-practice institutions; and additional resources about measuring corporate performance … at www.apqc.org/free/hot/hot0900.htm.

Communities of Practice - there's a powerful new organizational form emerging that promises to help us all capitalize on the expansive opportunities of the knowledge economy. It is known as the community of practice (CoP) – groups of people who share a certain kind of expertise and are bound together by a common mission or purpose. Britton Manasco, a research fellow and special adviser for APQC, has written an article about communities of practice. www.apqc.org/free/articles/hiddenpower.htm.

>> SSS 5 – 50 books 'that define the new economy' – if you promiscuously cut and paste – and who, standing shoulder deep in the relentless e-stream, doesn't – you'll sometimes lose track of the finger prints. Where did that ace phrase come from? Oops. Lost the link. Here's one from my file – apologies to the author: “The new economy is a concept that's revolutionising everyone's working life. If you believe this, what stories do you tell most often to peers to inspire them to shape the new economy? Who authorised these stories? What are the core resources...? Here is a popular suggestion of top 50 books that define the new economy,” www.topica.com
Resources – Conflict Management
>> Conflict management, CRAWLEY John, Nicholas Brealey (1995) ISBN 1-85788-014-5.
>> Handling Conflict and Negotiation, Manchester Open Learning (1993) ISBN 0-7494-1140-6.
>> Human Relationship Skills, NELSON-JONES Richard, Cassell (1993) ISBN 0-304-31962-7.
>> Listening to Conflict, VAN SLYKE Erik J, AMACOM (1999) ISBN 0-8144-0429-4.
>> Managing Anger, LINDENFIELD Gael, Thorsons (1993) ISBN 0-7225-2715-2.
>> Tough Talking, MARTIN David, Pitman Publishing (1996) ISBN 0-273-62192-0.
>> Working it out at Work, HAY Julie, Sherwood Publishing (1993) ISBN 0-9521964-0-9.
>> Working with Emotional Intelligence, GOLEMAN Daniel, Bloomsbury (1998).
>> Work it Out, KREBS HIRSH Sandra, Davies-Black Publishing (1996) ISBN 0-89106-088-X
Advertisement
No it's not. Well, it almost is. We'd like to remind you about EDGE FIRST, our companion eZine dedicated to leaders and leadership - a fortnightly serving of provocative thinking about what it means to be a leader, and the tools, techniques and best-practices that drive leadership improvement. If you haven't seen it, click here for a complimentary issue.

In recent issues
Competing for the future - Hamel is THE MAN, embrace innovation!
Women and leadership - for real progress ... give men the nappies
Quick case study/Jennifer White - on picking winning teams
tompeters! - new economy DNA. Flaky? Irresistable! The survival kit
Snapshots of the new economy - from Seybold to Subramanian
eStrategy - best, first, fastest, lastest ... just watch out for Wal-Mart
A better way - but don't try this at home
Gen II - who wants to be a CEO
Interested in hiring a coach?
Give us a call. We'd love to talk to you about it! Or any other proposals. Here's Malcolm Macpherson's resume.
Next issue 3/4 October. Reader contributions warmly received!

Copyright © 2000, Macpherson Publishing
All rights reserved. But if you found this eZine useful we strongly encourage you to email it intact to a business associate, friend or acquaintance. Award and EDGE FIRST are trademarks of Macpherson Publishing. Contact us at macalex1@xtra.co.nz; visit our web site at www.baldrigeplus.com. 3,250 words, formatted in HTML
Subscribe Unsubscribe