"Black Box Thinking" aka "Lean Six Sigma"

A well written and engaging twist on #LeanSixSigma.  'Black Box Thinking' a new book by Matthew Syed.  The book deserves to do well. The concepts and methods have already been well documented in Lean Six Sigma however Mr Syed's book presents them in a way that everyone can relate to. Root Cause Analysis, Continuous Improvement ( #Kaizen ), understanding distribution of probability ( such as Normal Distribution / The Bell Curve ) etc are all covered!  These principles were all well understood, practiced and documented by companies such as Toyota and Motorola, and leaders in process improvement (such as Taiichi Ohno, Joseph Juran and W. Edwards Deming) as far back as the 1960's... 
What is interesting is that after over 50 years of the World being well aware of these principles for success it is still common for our senior managers, politicians, doctors etc to be ignorant of them. The Western education system is of course at fault. This is good news only for private consultants (such as me), and authors such as Mr Syed !

Management by Data and Hard Facts please.

#LeanSixSigma and the DMAIC method use measurement and collection of data from business processes, #hardfacts and statistical data analysis for evidence based management decisions.   Data Driven Decision making (DDD) is a key component of Lean Six Sigma.  In his book "Profiting from Evidence Based Management" ( 2008 ) Jeffery Pfeffer, professor of organizational behavior at Stanford University's business school ( and a Six Sigma advocate )  says that it is time for all managers to be more "Six Sigma' about the way they make decisions and solve business problems.

You may also be interested to read Dr. Pfeffer's article on the same subject in the Harvard Business review  https://hbr.org/2006/01/evidence-based-management.

Interestingly Pfeffer points out the two most common and erroneous ways management currently make business decisions are  1.   Using the opinion of an "Expert"  and  2.  Dogma and Ideology.

The downfall of the "Expert" method is that "Experts" see everything only through their own skill set.   Pfeffer explains:

“If you want to have an operation, ask a surgeon if you need one.” ( Joke haha ) Similarly, if your business needs to drum up leads, your event planner is likely to recommend an event, and your direct marketers will probably suggest a mailing. The old saying “To a hammer, everything looks like a nail” often explains what gets done.

The downfall of the "Dogma" method of management is perhaps more obvious.

Pfeffer explains:

When people are overly influenced by ideology, they often fail to question whether a practice will work—it fits so well with what they “know” about what makes people and organizations tick. In business, the use and defense of stock options as a compensation strategy seems to be just such a case of cherished belief trumping evidence, to the detriment of organizations. There is, in fact, little evidence that equity incentives of any kind, including stock options, enhance organizational performance. A recent review of more than 220 studies compiled by Indiana University’s Dan R. Dalton and colleagues concluded that equity ownership had no consistent effects on financial performance.

Instead of using 'Expert Opinion' of 'Dogma' we should follow the Six Sigma way of problem definition ( Define), data collection ( Measure ),  data analysis ( Analyze ) before we make a decision on how to improve ( Improve ) our business processes.

Inventory turn-over per year as a measure of 'Leaness'

I am presently studying the work of Dr Richard Schonberger who I consider one of perhaps the top 10 experts in Lean Six Sigma concepts and methods alive today ( several of the others are working for the Lean Enterprise Institute ).
Dr Schonberger  has a led a study which he called The Leanness Study which tracked the inventory turnover data for more than 1,400 companies in 33 countries over the past 12 years.

He considers the measure of  the number of times that a company turns over its inventory per year to be perhaps the best measure of the 'Leaness' of a company.   For example, all other things being equal, a company the turns over its inventory 20 times per year is more Lean than a company that only turns over its inventory 10 times per year,