Leadership Barometer 37 Five Mistakes Using Data

February 10, 2020

The Great Quality Guru, W. Edwards Deming had a lot to say about how managers use data incorrectly and waste the resources of an organization.

It was part of his philosophy of quality which he called “profound knowledge.” He stressed a number of mistakes typically made by managers when handling data. Here are some of the problems along with the antidote for each misuse.

Mistake 1 – Assuming variation is a result of special cause variation when it is really due to common cause variation.

Common cause variation is when a system is in statistical control with small random type variation occurring.

The only way to tell if a system is in control is to consider all the data, usually by plotting it, and finding out if the data variation is within certain defined bounds, called “control limits.”.

If it is in control, then for managers to ask people to explain the variation is simply a waste of their time. People will dutifully go off and try to find out what caused the variation, but the answer will be only a guess and not valid information.

When one or more data points go outside the control limits of normal variability, then there is a special cause. In these cases, it is not only possible but vital to determine what caused the variation so it can be controlled and eliminated in the future.

Most managers fail to determine if a signal is due to special cause variation when they ask underlings to explain what happened. This causes a large waste of effort and time and it lowers trust.

Mistake 2 – Assessing the capability of a process based on the most recent data point.

It is tempting to react to the most recent data and ask people to take corrective action based on that. At home, we might say, it’s cold in here, why not turn up the heat?

But just because it is cold at the moment does not mean the system needs to be adjusted. It may be the low point of the cycle that is in common cause variation. In which case, if we turn up the thermostat, we are doing what Deming called “tampering.”

Tampering is defined as moving the set point of a system experiencing common cause variation in an attempt to reduce the variation. In fact, it can be demonstrated that “chasing” the perfect setting will result in a large increase in the variation of the process. It is better to leave things alone.

Many of us have experienced this when sitting in a meeting. All of a sudden someone will say, “Whew, it is very warm in here” and turn down the thermostat. Ten minutes later people in the room are reaching for their sweaters because they are chilled, so up goes the thermostat.

All day long people fiddle with the darned thermostat and swear at the heating system. The problem resides in the fingers of the people playing with the setting, not the furnace control. They are tampering, which results in roughly double the temperature variation than if they just left things alone.

Mistake 3 – Interpreting two points as a trend

This flaw is ingrained so deeply into the fabric of our thinking that we rarely even realize how stupid most statements of movement really are. Every day we read in the paper or hear on the news something like the earnings for Company X are up by 20%. We think that is a good thing. Rubbish!

All it means is that in comparison to four quarters ago the earnings are 20% higher. It says nothing about the actual trend of the data. For knowledge of how the company is doing, we need to plot the data and consider the quarterly earnings over something like 8 consecutive quarters. Only then we can know what is really going on.

Many advertisements for products are based on the faulty logic that two points make a trend. When we hear that interest rates on mortgages is down by ½ point, that is a symptom of two points equaling a trend. We really cannot use that data to imply what has been happening to interest rates in the past or is likely to happen in the future.

Mistake 4 – Looking for blame rather than root cause

When something goes wrong, managers often focus on who messed up and why rather than what aspect of the system was the root cause so it can be fixed. They think if they can pinpoint the culprit and punish him or her that will eliminate problems in the future.

Actually, the reverse is true. By trying to find a scapegoat, people tend to hide the truth and work to pin blame on other people to protect their own interests. That leads to infighting, conflict, and other disruptive behavior.

Mistake 5 – Too much automation of process data.

This issue is counter intuitive. One would think that data plotted and interpreted by computers would be superior to that plotted by hand.

In fact, data where people have been involved in the process is more useful, because people have the ability to spot peripheral issues and correct them where a computer will just keep logging rubbish.

When people rely on the machine always being right, there can be disastrous results because, at the root of it, the machines are controlled by people, but once programmed, people tend to rely too much on the machine and forget to check for sanity.

That situation is how pilots occasionally fly into the side of a mountain, because they rely too much on the dumb auto pilot and forget to watch where they are going.

When we take the time to use data correctly, we normally build higher trust within an organization, because people are not being asked to resolve a figment or ghost of a real issue.

These 5 mistakes are the most common ones. There are other symptoms of how managers use data incorrectly to the detriment of their organization and the people. The antidote for each of these problems is to make sure managers are educated on these flaws and modify their behaviors to avoid the pitfalls.

The preceding information was adapted from the book Leading with Trust is like Sailing Downwind, by Robert Whipple. It is available on http://www.leadergrow.com.

Robert Whipple is also the author of The TRUST Factor: Advanced Leadership for Professionals and, Understanding E-Body Language: Building Trust Online. Bob consults and speaks on these and other leadership topics. He is CEO of Leadergrow Inc. a company dedicated to growing leaders.


Leadership Barometer 33 Downsizing Tips

January 13, 2020

Every organization deals with downsizing occasionally in a struggle to survive difficult economic conditions. These times are true tests of the quality of leadership.

In many cases, downsizing leads to numerous problems in its wake, especially lower trust.

The most crucial shortage threatening our world is not oil, money, or any other physical resource. It is the lack of enlightened leaders who know how to build trust and transparency, especially when draconian actions are contemplated.

We are in need of more leaders who can establish and maintain the right kind of environment. A serious problem is in the daily actions of the leaders who undermine trust, even though that is not their intention.

The current work climate for leaders exacerbates the problem. The ability to maintain trust and transparency during workforce reductions is a key skill few leaders have.

Downsizing is a unique opportunity to grow leaders who do have the ability to make difficult decisions in ways that maintain the essence of trust.

Thankfully, there are processes that allow leaders to accomplish incredibly complex restructurings and still keep the backbone of the organization strong and loyal. It takes exceptional skill and care to accomplish this, but it can be done.

The trick is to not fall victim to the conventional ways of surgery that have been ineffective numerous times in the past. Yes, if you need to, you can cut off a leg in the backwoods with a dirty bucksaw and a bottle of whisky, but there are far safer, effective, and less painful ways to accomplish such a traumatic pruning.

One helpful tool in a downsizing is to be as transparent as possible during the planning phase. In the past, HR managers have worried that disclosing a need for downsizing or reorganization might lead to sabotage or other forms of rebellion.

The irony is that, even with the best secrecy, everyone in the organization is well aware of an impending change long before it is announced, and the concealment only adds to the frustration.

Just as nature hates a vacuum, people find a void in communication intolerable. Not knowing what is going to happen is an incredibly potent poison.

Gossip and rumors generally make the problem bigger than it actually is, and leaders find themselves dealing with the fallout.

Human beings are far more resilient in the face of bad news than to uncertainty. Information freely given is a kind of anesthesia that allows managers to accomplish difficult operations with far less trauma. The transparency works for three reasons:

1. It allows time for people to assimilate and deal with the emotional upheaval and adjust their life plans accordingly.
2. It treats employees like adults who are respected enough to hear the bad news rather than children who can’t be trusted to deal with trauma and must be sheltered from reality until the last minute.
3. It allows time to cross-train those people who will be leaving with those who will inherit their work.

All three of these reasons, while not pleasant, do serve to enhance rather than destroy trust.

Don’t humiliate people

Another tip is how to break the news to someone who will be terminated. One way to handle the situation is to ask yourself how you would like to be treated if the situation were reversed. Would you like to be paraded down the hall to pack a box with your possessions and escorted outside the gate and forced to hand over your keys and badge?

Many enlightened leaders have handled the separation in a more humane way. They break the news to the individual and share that the employee needs to find alternative employment. They may even offer assistance with ideas on where to look and offer for a reference.

Then, the employee is not immediately escorted off the premises, but is allowed to pack things up over the next several days and say good bye to friends and work colleagues. Some employers have even experimented with letting the impacted worker use the facilities and equipment for a short while during the job search.

HR managers will quickly point out the risks of having formerly employed workers on the premises, and it is true that the person needs to understand that if he or she is disruptive in any way, then the leaving will be immediate.

The idea is that when you treat separated employees with respect and kindness, even when the news is not good, they respond with a better attitude, which generally improves the outcome.

The more powerful result is that the employees who are not leaving are also impressed by the way these former colleagues were treated. That factor tends to bolster morale a bit for workers who are now asked to take up the slack.

Full and timely disclosure of information and thoughtful exit processes are only two of the many tools leaders can use to help maintain or even grow trust while executing unpleasant necessities.

My study of leadership over the past several decades indicates that the situation is not hopeless. We simply need to teach leaders the benefits of building an environment of trust and transparency and how to obtain them.

Robert Whipple, MBA, CPLP, is a consultant, trainer, speaker, and author in the areas of leadership and trust.


Firm but Fair Leadership

April 16, 2016

There are hundreds of assessments for leaders. The content and quality of these assessments vary greatly. You can spend a lot of time and money taking surveys to tell you the quality of your leadership.

There are a few leading indicators that can be used to give a pretty good picture of the overall quality of your leadership. These are not good for diagnosing problems or specifying corrective action, but they can tell you where you stand quickly. Here is one of my favorite ways to measure a leader’s skills.

Firm but Fair

Great leaders know how to navigate the minefield of being compassionate but have a sense of discipline within the organization. It really is a delicate balance. You need to make accommodations in some circumstances and draw a firm line in others.

We have all seen leaders who are too eager to please. They bend over backwards to be accommodating to the needs of people in the organization. Their objective is to ensure everyone is “happy” almost all the time.

In return, people take advantage of the leader and make more requests for special consideration. Also, since people can observe the concessions made by the leader with other people, a sense of equity demands that when a similar situation comes up the same concession is extended to others.

Before long, the leader has lost all sense of control. In a desperate attempt to regain order, the leader tries to draw lines in the sand. This is annoying to people who have become accustom to a more lax interpretation of the rules. So, being too accommodating is dangerous. When you try to hold the line later, people tend to resent it.

On the flip side, going too much “by the book” gains one a reputation for being a hard ass. That reputation limits the amount of discretionary effort people are willing to expend. If a leader shows no compassion for the typical tight spots people find themselves in, he becomes an ogre that demands respect through command and control. Scrooge, before his transformation, was a good example of this kind of leader.

Neither of these extremes is desirable. The “sweet spot” is to have a reputation for being firm with application of the rules, but compassionate as well and willing to be flexible in extreme cases. Also, be cognizant of the need for fairness. This implies putting a damper on the issue of playing favorites. I have written elsewhere on the issue of favorites.

Briefly, we need to recognize that we cannot avoid having favorites within any population. We are human beings. What the great leader does is show in many ways that, even though there are favorites, he does not “play favorites.” To avoid this, the leader tries to treat each person as a favorite and operates outside his comfort zone for some small percentage of the time.

In their excellent book, Triple Crown Leadership, Bob and Gregg Vanourek use the analogy of “steel and velvet.” They point out that the best leaders flex between being firm like steel and showing care, like velvet. Their thesis is that being velvet all the time leads to weak leadership, but being steel all the time leads to disgruntled workers who comply but are not engaged in the work.

One obvious thing that some leaders miss is that being firm implies having standards. Neither of the extremes in this dimension is advisable. On the one hand, you can have a burdensome employee manual with thousands of rules that people find hard to remember. If you find yourself “hiding behind” the employee manual when making decisions on personal requests, you may be in danger of over doing the bureaucratic mumbo jumbo.

On the other extreme is the office where there are no formal rules, and “we just try to always do what is right.” That condition is a slippery slope, because without some form of standards people don’t know what to expect. They push the limits until things get way out of control.

The optimum position is to have a crisp and concise set of expectations, and everyone should know they are enforced. People should also be aware that there are emergency situations where a rule can be waived, but those situations are rare. Knowing when to grant an exception is what puts the art in leadership. In general it is best to lean toward the formal side but be willing to flex when required.

Bob Whipple is CEO of Leadergrow Inc., a company dedicated to growing leaders. He speaks and conducts seminars on building trust in organizations. He can be reached at bwhipple@leadergrow.com or 585-392-7763.


Quality Check for Meetings

November 27, 2011

For most of us, meetings are our most significant time-wasting activity. If you have not found yourself frustrated while sitting in a useless meeting with no escape, you must be a hermit.

The interesting thing is that we, the participants, really do have the power to manage these interfaces between people in ways that are productive, impactful, and fun. In this article, I want to focus on a simple quality check as a means to improve meetings.

The way time is used in meetings is a part of the overall culture of a team. Managing meetings well is one activity that will improve team performance, but it should not be done in a vacuum. It should be a part of an overall process to improve trust and accountability within the team. Leaders normally set the pace for what goes on in any team, so they need to take a lead role in managing meetings for better outcomes.

I advocate that teams have a quick evaluation at the end of each meeting. The leader simply states the following. “Our time is precious, and meetings use a lot of time. It is our responsibility to make sure we are making the best use of every minute. How many of you think this meeting was an excellent investment.” The feedback can be in the form of a quick discussion, a questionnaire, or, if trust is high already, just a thumbs up for good, thumbs down for bad. Of course, if a binary vote turns out to be mostly negative, a conversation needs to take place to understand the specific issues. It can take less than a minute, but it gives a quick feedback. The other benefit is that it lets people know the leader is not clueless and is open to suggested improvements for next time.

For this method to be fruitful, the leader must establish an environment of trust. People need to know they will not be punished, in any way, for giving their opinions. If the leader reacts well to comments, even if the input suggests the leader is wasting the group’s time, then trust will be enhanced. Another benefit occurs if the leader includes other people in planning future events to prevent the same problem at the next meeting.

It is critical if the leader does such an evaluation that he or she follows up and actually makes the changes suggested. A subsequent time check should not bring up the same issues. If it does, then stronger action is required before going further. The leader is responsible for the follow up and modification of meeting processes, even though he or she may ask for help from others as well.

This quality check allows everyone to take ownership of the meeting process to ensure it is vital and adding value. If there are problems in the meeting format or content, they can be addressed before the next meeting, so bad habits are not proliferated. I urge you to add this simple check to the end of all your meetings. It will pay big dividends.


Business Integrity

January 26, 2011

This article describes my interaction with two local business entities to illustrate how customer service experiences with contractors on the same job can vary greatly. I had an occasion to hire a chimney sweep this year and had vastly different experiences with two different organizations.

My masonry chimney was glazed with many years of creosote buildup, so I called in a “reputable chimney sweep.” The owner told me that it would cost a lot more than just a regular cleaning because they would need to use a special rotary chain technique to chip off the buildup. The guy came and looked at my configuration. He said I would need to have it cleaned, then the chimney would need to be lined with a stainless steel liner, and finally I would need to purchase a new woodstove, which he would be happy to sell me and install. The estimate came to over $5,000. He used scare tactics indicating we would have to get it done eventually to be up to code, and he did not mention that we might get help from our homeowner’s insurance.

That kind of sticker shock along with his high pressure approach sent me looking for a second opinion! I came across an outfit called Mr. Sweep – Monroe. The owner discussed my problem on the phone and gave me an estimate to do the rotary cleaning. He also said he could line the chimney, if necessary. His price was more reasonable than the first outfit, so, after checking with the BBB, I set up an appointment.

Bob and his assistant, Mark, arrived mid afternoon on a Saturday. They went right to work, after closing the chimney damper so all the soot would not spill into the house. Bob went up the fully-extended 40-foot ladder, removed my chimney cap, and started cleaning with the rotary chain device. It was a very cold day, and they were outside for over an hour, working from the top.

Mark shared with me that he had many vertebra fused in several operations, and his neck was held together with stainless steel screws. He was particularly susceptible to cold and suffered for days if he got too much exposure. Mark came in to vacuum up the ashes from the bottom. There was so much debris that he could not get the damper to open. He and Bob worked for 4 hours, vacuuming the particles through a small slit next to the damper until they could finally get it open. The job ended up being many times the effort than was estimated. Much of the work was out in the cold, yet they charged me the estimated cost at the end.

Bob told me that my chimney tiles were cracked from a recent chimney fire, and I would need to have a liner put in. He gave me an estimate of $2,175 to bring my chimney back up to code and make it safe – less than half what the other guy wanted. He said because the damage was due to a recent chimney fire, my home owner’s insurance should cover the liner. I would only have to pay my $250 deductable. A total of $250 sounded much better than $5000. I was thrilled! We made a date to install the liner for the following week.

Bob and Mark arrived on schedule and proceeded to unroll the massive flexible stainless steel pipe. Bob immediately noticed that there was a kink in the pipe caused by rough handling by the shipper. He just did not think it was right to install a kinked pipe, even though many chimney sweeps do it, so he got on the phone and ordered another one to be shipped out that same day. Two days later, they were back to install the second pipe. This one was in good shape.

Bob and Mark set out some special insulation to wrap around the pipe for better performance. Bob shared that many sweeps do not insulate the pipe because there is one interpretation of the code that makes it unclear whether insulation is required or not. Bob said that he refuses to install a liner that is not insulated, but he said over half of the sweeps manage to slide by without insulation. That lowers their cost and makes the installation much easier, but it is not a quality job.

The afternoon they picked was even worse weather than the first day, but Bob knew I wanted to use my stove on a very cold weekend, so on an 18-degree Friday with lots of snow and 25 mile per hour winds, Bob and Mark went up the 40-foot ladder carrying the heavy and bulky pipe to line my chimney. Bob had to carry the pipe out onto the snowy roof balanced on the peak and leaning into the wind while Mark worked to stuff the pipe down the chimney. Bob had to arch the pipe upward while balancing on the snowy rooftop in the wind (the pipe looked rather like the shape of a fishing pole when you have a big one on the line) so it was nearly vertical at the top of the chimney. I was petrified, but he seemed to take it in stride, even though the wind chill was -25 degrees F.

They got the pipe in and got down safely, much to my relief. Then they went inside to hook up the pipe to the stove. This process was significantly more complex than they had estimated it would be due to the configuration of my chimney, but they stayed with it until the job was done. Mark, with his bad neck, went up to install the cap on top of the chimney, alone in the howling wind. It was brutal.

They finished the job, charged me the original estimate, cleaned up every bit of their mess, and left to go soak in the tub. As they drove out, I thought about the entire experience. These days we are so used to shoddy work and contractors trying to take advantage of customers.

With Mr. Sweep, there were many opportunities for them to take the easier way out, but they adhered to a customer-focused approach, and absolutely did not skimp on the quality, even though the weather was awful and they made less per hour than expected. I was really impressed with their work and service that was evident with both Bob and Mark. Their actions and attitude of service rather than sale made me trust them as business people displaying high integrity. They communicated with me throughout the process, so I understood the logic of what they were doing and why.

You can bet I will be going with them any time I need service in the future. If you ever need chimney service from a company with high integrity, I suggest you call Mr. Sweep! If you do not have a chimney, but are a local business person, consider these individuals as role models for what great customer service is all about.