Activity II: Articles

Activity II: ARTICLES & READINGS

The articles & readings cover a variety of issues that impact how you think and/or make decisions.

We encourage you to study those with an asterisk (*).

Introduction
Articles and Readings / Questions/Thoughts
* / “The Emerging Theory of Manufacturing” by Peter F. Drucker / If you have not read material by Peter Drucker, we urge you to do so. In this article, Drucker discusses factors or forces that must be understood and dealt with for a company to be successful in the year 2000. He wrote the article in 1990.
Learn to think out of the “Box” and read articles for “sectors” other than your own areas of interest. Then adapt these “new ideas” to your situation.
Question 0.1: Discuss how the forces Drucker discusses could apply to your personal development.
* / “What Makes a Leader?” by Daniel Goleman / For decisions to be effective they need to have both logical integrity and be accepted by the people who will be affected by them and/or have to implement them.
Question 0.2: What emotional intelligences do you feel you possess now, and which ones will you have to work on?
* / “Creating Appreciative Learning Cultures” by Frank J. Barrett / Question 0.3: Do you use an adaptive learning focus or a generative learning one? What does your company use? What can you do to help the way your company learns?
Question 0.4: Do you have a highly developed power of appreciation? Provide an example of how you use this power.
Chapter 1
Articles and Readings / Questions/Thoughts
Excellence / Professionals embody the learning dilemma: They are enthusiastic about continuous improvementand are often the biggest obstacle to its success.
It has been our experience that most students believe in the need for life long learning and feel they practice it. We find more students who loudly proclaim, “I love to learn,” but then only study areas that they are already comfortable with.
Learning is changing. Think of large companies that have been incredibly successful but have had times of struggles. A short very incomplete list includes DEC, GM, IBM, and Sears. We encourage you to celebrate the mistakes you make as an opportunity tolearn ... to truly change.
Question 1.1: Reflect on how you react to studying areas you may not be comfortable with: mathematics, statistics, finance, computer technology, etc. Are you honest with yourself about your strengths and weaknesses? Discuss how you have taken responsibility to achieve excellence.
* / “Teaching Smart People How to Learn” / Question 1.2: Learning is changing. Most companies advocate change to improve the profit picture. How easily do your adapt to new situations?
W. Edwards Deming: A Theory for Management / Question 1.3: W. Edwards Deming was one of the major driving forces behind Total Quality Management. Students ask “Why read ‘old’ articles?” Our response is that some authors present ideas that stand the Test of Time. Deming puts tremendous faith in the power of the system (the process). Briefly discuss your Learning System (how you learn), your Decision Making System, and your Value System.
“The Theory Behind the Fourteen Points: Management Focused on Improvement Instead of on Judgment” / You can find more information about the Deming Library at

“Farsighted Corporations Focus on Long-Term Gains” / This article is now ten years old. Did the article forecast a cultural evolution in U.S. corporations—a new balance between stakeholder and stockholder?
Note the discussion on the stakeholder philosophy and its intellectual roots in systems theory. Systems theory tells us that the survival of the individual firm depends on the efficiency of the overall system. The driving system of almost all of our systems is the economic system.
In his book The Future of Capitalism: How Today’s Economic Forces Shape Tomorrow’s World, Lester Thurow posed the question, “Is the capitalistic system now the best system for our society?”
One of the causes of the problems that Japan is now facing is the lack of an adversarial relationship between companies; money was lent to “friends.” The hard questions and analysis were often not done on business loans.
Chapter 1 continued
Articles and Readings / Questions/Thoughts
Question 1.4: Over the long run we believe companies with stakeholder values will outperform the shareholder companies. Is your company a stakeholder or stockholder company? Which approach do you try to follow: stakeholder or stockholder? Over the last ten years has your company been successful because of itself or in spite of itself?
* / “Planning on the left side and managing on the right” / Question 1.5: Are you a left or right brain thinker? Explain.
* / “Strategies, Systems, and Organizations: An Interview with Russell L. Ackoff” / This article was published in 1997. In Chapter 2 there is an article written by Ackoff in 1967. Note Question 2.2.
* / Peter Senge “Interview” / Question 1.6: Discuss any common themes you see between the Ackoff and Senge interviews?
“Damned lies” / The article is a great example of why we say Chapter 3 is the most important chapter of the Decision Making Book.
“FINANCE AND ECONOMICS - The unmeasurable lightness of being” / The article is a great example of why we say Chapter 3 is the most important chapter of the Decision Making Book.
* / “The Necessary Art of Persuasion” / This article illustrates the roles that style and substance play in negotiations. The information should help you prepare for your Delphi position and presentation.
Chapter 2
Articles and Readings / Questions/Thoughts
“Be Data LiterateKnow What to Know” / Question 2.1: Think of the 3 reports you “read” the most. Are they descriptive or prescriptive reports? We believe most reports are data dumps. Why do people continue to look at data rather than information? A prescriptive report is a report that “prescribes” an action to be taken by the reader or at least directs the reader toward an action that would improve the performance of the reported “system.”
Visual Explanations / Question 2.2: How much visual information is contained in the three reports you just discussed. Can you think of how pictures would improve the reports?
* / “Information as a Resource” / Harlan Cleveland was the first Dean of the Hubert H. Humphrey Institute of Public Affairs at the University of Minnesota. He wrote The Knowledge Executive: Leadership in an Information Revolution (Published 1988).
Starting in 1995 when the Internet took off, we believed society truly began treating information as a resource. The concept of information as a resource was pushed heavily in the 1960s, but few companies truly understood how to utilize the resource.
“Management Misinformation Systems” / Question 2.3: This article (written in 1967 by Russell Ackoff) addresses five assumptions. How many of the five issues he raised are still relevant? Note: Ackoff says these five assumptions are wrong.
You can find more information about Russell Ackoff at

“How Numbers Can Trick You”
“Why Government Numbers Don’t Add Up”
“The Top 10 News Stories of 1997” / Question 2.4: We in America have a very strong belief that because there is freedom of information we are getting the real news. How do—or how should—your organization and you monitor global factors that may influence you? Ten years ago we wouldn’t have cared if the Thailand financial system collapsed; today we do.
Look at the differences in what was perceived as being most important in different countries. Note that the U.S. view of the world has a different frame.
Chapter 2 continued
Articles and Readings / Questions/Thoughts
* / “Life Cycles” / The S-curve discussed in “Life Cycles” is introduced in Chapter 5, ModelingCreating Knowledge (with Regression Analysis in the section on Least Squares Technique), and studied in greater depth in Chapter 12, Regression Analysis (with Polynomial Regression).
The equation: y = b1x3 + b2x2 + b3x + a, where b1 is a negative number will produce as part of the graph of this equation, the S-curve:

* / “Future Imperfect” / When one extrapolates (extends a graph into the future), it is critical to understand the y/x (slope) for the model used.
For a linear model, y/x is a constant. For nonlinear models (all other models), y/x will have different interpretations.
For example, y/x may increase at an increasing rate, or it may increase at a constant rate, or it may decrease at an increasing rate.
Each model must be closely studied to understand the y/x of the model.
See Chapter 5. What Does It Tell Us?
* / “Reserve Space in Your Tool Box for Low-Tech Measurement”
* / “Work-Measured Labor Standards - The State of the Art”
“Attack of the Data Miners”
Chapter 2 continued
Articles and Readings / Questions/Thoughts
“Malcolm Baldrige National Quality Award Management Grid” / You can find more information (methodology, frequently asked questions, recipients, application criteria, etc.) about the Baldrige Award at:

• UST Web Databases: IAC SearchBank in the General Business File

You can also see how Malcolm Baldrige National Quality Award recipients performed compared to the S&P 500.
“The Baldrige: It’s About More Than Quality” / This article addresses similarities and differences among the Malcolm Baldrige National Quality Award, ISO 9000, and the Deming Award.
“Road Map to Successful ISO 9000 Registration” / If you want to sell products internationally, your company will have to become ISO 9000 certified. A criticism of the ISO 9000 process is that too much effort is spent on documenting how you achieve quality.
“Landon Keeps Digest Poll Majority” / Probably the worst mistake made in survey research was done when THE LITERARY DIGEST published the result of its Presidential Poll (postcards were mailed to 10 million people and more than 2.1 million people responded) and projected Landon would defeat Franklin D. Roosevelt. The Gallup Poll only looked at 1,500 people to project the winner. A great example of sampling error.
“Raising Kansas City - Democracy and the Next Generation”
“Accountants Are Expected to Require New Fiscal Data” / Unfortunately different disciplines create different vocabularies. This article points out the importance of the reliability of the data. Reliability is repeatability: An asset worth $300 million in 1990 may not be worth $300 million in 1998, but accounting rules require many assets to be listed at their purchase price in lieu of at their “fair market value.”
“Benchmarking and the Bottom Line: Translating Business Reengineering into Bottom-Line Results” / Benchmarking is an attempt to “calibrate” cost numbers one has arrived at. If one’s cost for a specific operation is recorded to be $830, how does one know this is accurate? By comparing one’s cost to another’s cost on similar “items,” one is attempting to “calibrate” the cost. Frequently the benchmark for comparisons is the cost that the best 10% exhibit.
“Income Dynamics”
Chapter 3
Articles and Readings / Questions/Thoughts
* / “Measurement for Management Decision: A Perspective” / See “thoughts” preceding the article.
* / Article by Accounting Critic Robert Kaplan / Robert Kaplan and David Norton wrote the book The Balanced Scorecard: Translating Strategy into Action (1996). It is an interesting book that discusses how to measure cost and share this information with “everyone” in the organization. Too often an employee has no idea how what they do impacts the bottom line.
* / “Measure Costs Right: Make the Right Decisions” / Question 3.1: Your company provides health care services for Company X. Be a systems thinker and argue why in marketing your services to Company X you would want to measure the hours of lost labor due to sickness that Company X employees experience.
Question 3.2: Identify and discuss how an invisible number negatively affects your organization because it is not recognized and dealt with.
Activity-Based Costing (ABC) is a great example of trying to see things that other organizations don’t see. One of the reasons for the slow acceptance of ABC is that it takes a lot of time and effort.
“Fuzzy Cognitive Maps: Fuzzy Pictures of the World” / More and more software is being created that will “solve” the problem (crunch the numbers) if you can draw the picture. You will read more about Fuzzy Logic.
Fuzzy logic is a concept that has been around for over thirty years. In the last ten years it has become more popular. It is used in the design of anti-skid brakes and voice recognition software. This article shows a different application. The software PrecisionTree allows you to do influence diagrams. Reference: Making Hard Decisions: An Introduction to Decision Analysis by Robert T. Clemen.
Reflect on the use of spatial thinking to help you see interconnections. Are fuzzy cognitive maps related to mind mapping?
As the software gets “friendlier and friendlier,” it will take the picture and create a symbolic description of the picture.
This will become apparent when you study decision analysis and use PrecisionTree.
“STATISTICS: The Great Quality Gamble” / The article is a great example of why we say Chapter 3 is the most important chapter of the Decision Making Book.
Chapter 3 continued
Articles and Readings / Questions/Thoughts
“Neural Net Gains” / Neural nets have been studied for over thirty years. In the last ten years they have grown in importance and acceptance.
When studying regression, recognize it is simply a technique that looks for patterns in our experiences. A neural net does the same; it summarizes our experiences but uses different logic than regression.
You will study a neural net called Braincel; it is an add-on to Excel.
Question 3.3: Are any of you presently using Neural Nets to help you “create knowledge”? Should they be? How are your creatively staying up with new software pertinent to your area that is being developed?
“Using Neural Networks to Analyze Baseball Statistics”
“How Would I Recognize a Neural Network if I Saw One?”
“A Manager’s Guide to Neural Networks”
“NNUGA: Neural Network Using Genetic Algorithms”
“Using Neural Nets to Analyze Global Markets”
Chapter 4
Articles and Readings / Questions/Thoughts
* / “Aristotle vs. the Buddha” / As the global economy grows, one must understand the fundamental differences in how cultures make decisions. Kosko argues very interesting differences in our thinking that are rooted in the past.
Question 4.1: Our ability to generate answers is certainly a system problem.
Input  System  Output
“Facts”  Brain  Answer
Frequently we see very “dirty facts.” By this we mean numbers that are highly questionable going into a “Logical Process” that has flaws, and the result is a very clean answer. If we follow the Fuzzy Logic view that everything is a matter of degree, the answers we generate should not be clean, but “really dirty.” Why do we demand clear answers to questions such as, “What will your budget be for next year?” Answer: $1,213,610. Is there something about the American culture that requires us to have the “answer”?
* / “Zero Defections: Quality Comes to Services” / Question 4.2: Has zero defections come to your organization? Should it?
The article is a great example of a sampling error that many companies make when evaluating customer satisfaction. They measure only their current customers; common sense would indicate they would generally be satisfied. By surveying ex-customers, companies will learn far more. The population they select from is often wrong, hence the data is not valid. It does not tell you what you want to know
Question 4.3: How does your company measure customer satisfaction and loyalty?
“Six Sigma: Realistic Goal or PR Ploy?” / Question 4.4: If your organization said it was implementing a six sigma quality plan, would you support the effort?
It is our opinion that the major impact of six sigma is not the creation of new goals with the result being few defects. What is important is the need for a systems change in who is in control.
Old
System: / Design Engineer Creates Design

Production Engineer Receives Design
Must Build

Production Builds Product

Marketing Sells
Frequently products were designed that were impossible to build at a cost that would interest the customer.
New
System: / Key factors: Marketing must clearly understand what customers want and need and the price they are willing to pay. Designers and engineers mustwork together to design, engineer, and build something that can be built at a price customers will pay. (Another issue: See next page.)
Chapter 4 continued
Articles and Readings / Questions/Thoughts
Another issue: If one has humans taking measurements, the measurement errors (accurate) would never allow one to claim six sigma (in our opinion). We believe the systems change that has occurred makes the six sigma approach worthwhile.
“Six Sigma Quality a Must Not a Myth”
“What Is Six Sigma?”
“The Tale of a Dream, a Drug and Data Dredging” / The article is a great example of why we say Chapter 3 is the most important chapter of the Decision Making Book.
“Heart Bypass Death Rates Vary Widely” / The article is a great example of why we say Chapter 3 is the most important chapter of the Decision Making Book.
Chapter 5
Articles and Readings / Questions/Thoughts
* / “The Coming of Knowledge-Based Business” / Question 5.1: When will most of what you do be done by computer?
The knowledge-based business is not a new idea. In 1985 we began using the model:
DataInformationKnowledgeProblem SolvingDecision Making
Hopefully you are becoming more comfortable with these aspects of fact-based decision making.
* / “PASCAL: A Framework for Conscientious Decision Making”
* / “Speed and Strategic Choice: How Managers Accelerate Decision Making” / Question 5.2: There are some management gurus who advocate the “Fire, Ready, Aim” principle. What are the positives and negatives of increased “speed” in your decision making?
It is generally agreed that the speed in which one can make decisions to react to customers’ changing needs will dictate the level of success of the company.
Technology will certainly be a key to speed, but critical thinking will still control the quality of these decisions. The Decision Analysis topic encourages the anticipating of decisions that management will make and the analyzing of how these should be made.
Remember Chapters 7 and 12.
Question 5.3 How are you—or could you—change your Learning, Decision Making and Value Systems to help you REACH:
To take Responsibility
To achieve Excellence
To be Adaptable
To show Creativity
To be Honest with thyself and others
Chapter 5 continued
Articles and Readings / Questions/Thoughts
* / “Fuzzy Logic”
Seeking Guides for Committing the Mentally Ill  “Who Will Turn Violent? Hospitals Have to Guess” / As you read articles involving decisions, practice looking at the articles in terms of topics that we have studied.
Question 5.3: As you read articles and reports, are you questioning them in a different way? Hope so.
“Can Work Measurement and TQM Get Along”
“Negotiated Standards: A New Approach to Deming’s 11th Point”
“QFD and Personality Type: The Key to Team Energy and Effectiveness”
“Sounding Board Decision Analysis: A Look at the Chief Complaints”
* / “Instant coffee as management theory” / This article raises an issue that concerns us. Too often, the style of the gurus has gotten the attention rather than the substance.
“New” Management Techniques
Many techniques that appear on the surface to be new are really based on very old “building blocks.” The blocks have been given a new coat of paint, but with a little scratching, we find the subsurface is the same. The new style is useful if it catches people’s attention, but too often, thinking is not done to truly understand the strengths and weaknesses of the proposed technique.

Activity II - 1