Professor irvin silverman https://www.linkedin.com/pulse/anatomy-aturn-around-professorirvin-silverman?trk=prof-post "The Anatomy of Turn-Arounds" Prepared Expressly for Linkedin members by: Professor Irvin Silverman: Visiting Professor Business Communications at Hanoi University, Vinh Phuc, Vietnam Chapters:Case Studies One to Four • Case Study One:Boutique Ad Agency avoids Bankruptcy Court: • Case Study Two:Mergers and the new Digitization in the Advertising Business: • Case Study Three:Vertical Markets with installed Flat Organizational Model Versus Tall Models • Case Study Four:American Statistician W. Edwards Demings teaches the Koreans and the Japanese and the result is 'Just-in-time' Supply Train Logistics: Professor Silverman has maintained a reputation as a solid resource to assist managers who are performing under extraordinary stress and under performing because of that very same stress condition.We may already know that 'eustress' or the type of good stress that drives people to better performance is not the negative energy- draining 'garden variety' stress that saps creativity and drive. As an American who has been heavily involved with under performing companies and managers in the United States and in Asia, he has largely avoided dispensing largely formulaic answers for client problems. Moreover he seeks to solve what in the clients 'view' are their 'unique problems' and it can be argued that most Managers really do think their problems are totally unique. The first" turn-around" was brought about in one particular failing smaller Advertising agencyin New York City known as a 'boutique.' In the lore of the Advertising industry the actions taken by the consulting team could be categorized as a step-by-step 'on how-to avoid Bankruptcy Court. Here the Professor came in as a youngish, Global Marketing and Organizational consultant and solved their main problems and thereby avoided the Reorganization that would have been dictated by a United States Bankruptcy Court.The Professor than stayed on for twelve more years as a Senior Vice President and Board member. Case Study One:Boutique Advertising Agency Avoids Bankruptcy Court: The resale of enormous 80+ story skyscrapers and other Investment Grade properties such as Resorts, Marinas and Hotels all over the Globe up until 2000 had invariably required a formal book type presentation before a group would be able to sell such properties. It should be noted that books like these had never been placed online;the year was 1999 and the Nook and other self-focused readers had not even been dreamed about and at best were at the earliest prototype stage. The first Online of a one hundred page book went 'beta' for a group of 'Resellers' called Rockwood Realty; Rockwood Realty was the 'Broker-of-Record' who was representing the owners of just such a Skyscraper in New York City. When the first 'beta' test went extremely well everyone was starting to see how placing a whole Offering Memorandum Online was going to mainly do away with 99% of all book printing to assist in the marketing of huge buildings. Yes some small number of books will always need to be made available in order for folks like George Soros, Donald Trump and the Foreign Nation Wealth Funds of Brunei, the House of Saud and the Chinese, to be gifted with the one hundred page books for their desks. However their analysts would now only see an Online, highly interactive version two weeks before the books went to print. With these buildings being placed Online for sale the need for speed of dissemination became extremely important;when a buildings total book was flashed in PDF in 1999 around the world, a first in electronic publishing for assets of this magnitude inaugurated. Now Financial Analysts in far-flung capitals in places like Dubai, Rome and Qatar as well as domestic buyers in Los Angles would be able to view the book in real time, interactively in living color and bid or no-bid as they so chose. With this new ability to interactively analyze the financials of an Investment Grade realty asset this now allowed the Financial people to see the whole story of the asset instantly and interactively. The whole bidding process underwent an unprecedented change in just how long it would take to dispose of these assets; more importantly to the owners they were becoming elated by how much higher selling prices were for these assets.There is nothing like thirty to forty bidders to inflate the final sale price of a building and now owners of these assets were 'giddy' with the increased sale prices their buildings were now drawing. Now that analysts could see and Interactively manipulate a one hundred page book that 'read like a book' this was considered just extraordinary. Now books online would be replete with colorful graphs, specialized high definition cartography and floor by floor lease expiration dates. Now the analysts could draw upon their analysis of the assets for R.O.I.[return on investment] and R.O.A.[return on asset ] 'rapidly' and allow allow for representation to be made nearly instantly to the analysts owner or management Committee.Bidders who might have been located in Dubai, New Delhi or Washington D.C. could now have the ability to "bid or no bid"all in a couple of hours. Investment Real Estate:Steps to Market an asset: But first we must back up because the whole scenario of how such large Investment Grade assets are resold has to be outlined first. Rockwood Realty had to compete for the sole rights with Cushman and Wakefield, Credit Suisse, Wells Fargo and others, to represent the owner of this one hundred story building in New York City. However this asset could just as easily have been the Carlyle Hotel or the Plaza Hotel and or a recently remodeled resort Hotel like the Sheraton on Sanibel Island off the coast of Florida. After Rockwood Realty had won the rights to help sell the building they would be the exclusive broker.Once they were the broker of record they had to create and run the marketing campaign.Now they would require a professional advertising agency that could exclusively create that sophisticated Marketing campaign, write the books and ultimately would produce a very professional hard bound book to go Online. But first the books first had to be written and placed together with all the Financial information;maps,stacking diagrams color-coded to show lease expirations, engineering drawings and aerial and interior photography; this all needed to come together to make up just one book. A high technology Advertising agency who could put all of these diverse pieces of the puzzle together would be entering at 'Stage right' and of course this would be my client CommercialARTS. If the truth be known, at any one time there are only roughly one thousand investor entities worldwide that would have an interest in owning a $100,000,000USD asset like this building. As the story unfolds you will see precisely who these entities are and be able to judge for yourself the pedigree of the biggest buyers of these type assets. Again The raw buying power of certain groups and individuals was and is considered awesome and ranges from Donald Trump the billionaire Realtor and other Private Investors like George Soros and the Koch brothers .This would than progress all the way up to the Sovereign Nation Funds of the House of Saud, the Sultan of Brunei and The Peoples Republic of China. Every large deal required books; Rockwoods books would now be going online and hardly any books would be printed and bound as in the past.Leading banking houses like Goldman Sachs and Company and Credit Suisse also requested to have their books online and soon these clients drew in other clients like ill-fated Lehman Brothers and Wells Fargo. Summary: The online analysis of the books or we should say the skyscraper priced at $100,000,000USD in New York City, revolutionized how big buildings would be shown to Qualified Investors around the Globe. Before CommercialARTS started placing the completed first drafts of the books online in 2000 no one had accomplished this electronic feat. After the books had been loaded online and made interactively available to Financial analysts in other countries no matter where they were located....all of these far-flung prospects could decide to bid or no bid at whatever fair buy-price owners or management decided was right for them. Case Study Two:Mergers and the new Digitization in the Advertising Business: Too often advertising agencies are guilty of disingenuous change, simply acquiring perceived relevance by buying younger, growing companies with the new skills sets while remaining unchanged themselves. While this may be an effective growth strategy in the short term and maintains the illusion of relevance, clients are increasingly aware that many of today’s advertising agencies are out of touch with the audiences they are trying to reach The Demise of Creativity: The unique and very specific problems faced Post-Merger with small, highly creative 'boutique'Ad Agencies joining giant Global Agencies are many and weighty. When large Global Advertising firms become purchasers of smaller 'boutique' Advertising agencies their size tends to legislate against maintaining their newly purchased 'boutique's creativity. These 'boutique' smaller agencies gain fame for their wonderfully creative Advertising 'jingles' and hard-hitting Advertising campaigns. So arguably this potent creativity becomes sought after through merger by the 'giant' agencies. Most people just look at the above and say smaller agencies just clearly are the superior copy writers compared to the larger firms; what they do not see that this is all 'part and parcel' of a carefully crafted master plan called the Flat or Horizontal Organizational Model. In analyzing smaller "Boutique"agencies where the Flat Organizational Model is most prevalent, it is now universally accepted that smaller 'boutique' agencies simply do the best creative work in Advertising. Unfortunately the creativity which drove the big firm to do the acquisition will often times end up much reduced after the switch over from the Flat Organizational Model to the Vertical or 'Topdown'Model. With the slowed flow of information found in the 'up and down"of the Military Organizational model, the boutiques creativity can possibly go away and ultimately their new copy and Campaigns arrive 'stillborn'. It is not guaranteed that failure will always comes after merger however after the merger with some their 'magic' diminishing because of the change-over from Flat to 'Top-down' the acquiring firm usually sells them back to the original owners at a loss or 'spins' them off for whatever price it can draw. Again we are brought back to the essential truth that the smaller the 'boutique' Advertising firm the more likely they are to incur problems owing to transition into a global ad firm.This has to be watched carefully because in that very crucial transition into the larger firm, many vital types of actionable information have a tendency to become lost or barely visible. That said, creative types want answers rapidly but even though the parent firm may have tolerated 'plodding' movement on actionable information in the past, this can really stifle the newly acquired 'boutique' unit. Firms like Burson-Marsteller and Hill+Knowlton would prefer to leave their newly merged smaller acquisitions agencies as they found them, still operating in their world of the Flat or Horizontal Organizational Model. Over the last fifty years the big Advertising firms have made literally thousands of acquisitions of little Advertising firms. Unfortunately for the large acquirers, all of the small 'boutiques' than have to go through the process of assimilation into the parent unit. That is when problems creep in to the mix;for example in order to fit within the framework of larger Advertising firms, the small firms mode of operation has to be switched from their uniquely creative Flat Organizational way of operating.Than we need to move to some workable variation of 'Top-Down' or 'modified top-down' or risk failure in the post-merger period. The new owners rapidly find out that unfortunately these highly creative smaller agencies they acquired must become assimilated into the bigger firms overall 'Top-Down' model. ‘So it might be said success in growing an Advertising business isn’t just about doing the right things at the Agency— it’s about doing the right things at the right time at the Agency’. All 'boutique' firms do not fail after being acquired however fully one third to one half will suffer the experience of significant operating problems after merger as a result of transition from Flat to the Military Control or Vertical. Advertising Agencies and the new Neural Networks: How do they do it? It comes from learning more about optimizing digital advertising through analytics. There are three keys to digital marketing success in an age of analytics: • Know Your Audience –Use big data to understand the preferences of your c a fingerprint that’s yours to interpret. Have the right tools and know-how to understand those insights, and use them to make your marketing more effective see consumers as individuals. Every click leaves a history! • Everything is Better Together – Analyzing “big data” in a silo is a risky and incomplete strategy. When you combine what your enterprise already knows about your consumers with the unique behavioral insights offered by big data analytics, your organization can create a 360 degree view of your consumer and put your analytics to work. • Tailor, Target, Execute, Repeat – Marketing is an endless cycle of defining your audience, honing your message, executing and repeating. In the world of digital marketing, these changes and learnings happen fast. An analytics driven approach allows you to monitor success or failure in near real time, so you can correct and enhance your marketing approach on demand. Without an analytics driven approach, you lose time and money. The goal of a successful digital marketing optimization strategy is to simplify. Simplify how you learn about your consumers. Simplify how you execute against your marketing goals. And, simplify the path to success. When tackling digital marketing optimization, don’t be led astray by 22 million suggestions about piecemeal solutions and approaches to solving the problem. Start with the data, and let those analytics insights about your customers and campaigns pave the way. Information that your neural systems have gathered will than clearly be more valuable to the individual as it has been designed for that individual reader. Rather than 'batch' mailings, the more we know about individuals the more valuable we can make that individuals information.For example: If I have something of real value for you, than the real driving catalyst here is that the power has now changed over from me as the deliverer person, to you as the designated "receiver”person. Advertising executives are only now fully starting to understand how to best utilize the newest technologies and their awesome raw power. Now that they are becoming singularly successful in merging personal information into powerful neural networks we find ourselves in an exciting era of customized advertising.Information is no longer sent to the targeted individual 'shot-gun' style but very discretely targeted, tailored and delivered to a waiting and very possibly interested demographic. To move forward with this type thinking Advertisers should be thinking where they store this vital data. Huge amounts of analytics culled by the neurals ability to track each customer and their unique individual behaviors is wonderful for marketing but it’s even more valuable when it goes into action when and where 'actionable' data is most needed. For example Auto sellers could be providing an exquisitely customized experience and only when it is most propitious 'timewise' for the potential customer who for example has seen his or her car pass the 70,000 to 80,000 mile mark they would than be contacted Case Study Three: Vertical Markets with installed Flat Organizational Model Versus Tall Models: C.E.O. Installs Flat Organizational Model at leading Retailer in New York City, Saks Fifth Avenue Retailer C.E.O. Stephen Sadlove claims that he saw his people at Saks Fifth Avenue 'literally working in silos' Case Analysis: First Tier Retail: Saks Fifth Avenue A prime example of a Flat Organizational Model being successfully introduced at a large New York City retailer occured when Stephen Sadlove, former C.E.O of Saks Fifth Avenue attempted to create more creativity at this Retail giant. Sadlove claims that he saw his people at Saks Fifth Avenue literally working in silos and in becoming siloed;they were working independently and not sharing. The change to the Flat Organizational model Sadlove deployed at Saks Fifth Avenue and according to Sadlove eventually turned itself into a ''Horizontal and Organizational Success" story. New York Times, Sadlove,Stephen, Chief Executive Officer."Horizontal and Organizational Success" May 10, 2010 How Flat Organizational Stuctures Operate: Flat Organizational Models work more efficiently because by reducing the "red-tape"found in bigger Advertising or Retail firms we open up the flow of communications 'up and down'. Flat organizations can offer more opportunities for employees to excel while promoting the larger business vision. For flat organizational structures to work, leaders must share research and information instead of hoarding it. If they can manage to be open, tolerant and even vulnerable, leaders excel in this environment. Flatter structures are flexible and better able to adapt to changes but we do see problems creep in when the business successes lead to structures becoming too Tall. How Tall Organizational Structures Operate: Tall means the way the Military 'top-down' governs their armies and navies and directly below we elaborate in detail. In the corporate world most industrials function with a structure similar to the Military. In a tall structure, managers form many ranks and each has a small area of control. Although tall structures have more management levels than flat structures, there is no definitive number that draws a line between the two. Tall Structure Pros And Cons: The pros of tall organizational structures lie in control. The Automotive and Defense industries occasionally try to implement Flat or Horizontal on smaller or "Project Forward" experiments. Both General Motors and General Dynamics have experimented with Modified Flat Modeling ''on and off' over the last five decades. The reason is to deal with the inadequacies that occur when companies over deploy the 'Top-Down' Model to the exclusion of Modified Flat approaches. During the time span from 1975 until 2000, both General Motors and General Dynamics found that without that narrow "span of control"in place that allows for closer supervision of employees, the experiments always seemed to 'spin' out of control and seen as failures. Tall structures continue to provide clear, distinct layering with clear lines of control and an unfettered promotion structure.On the downside that level of layering is precisely where Tall Structures weaken and come apart;challenges begin as soon as a structure gets too tall. Case Study Four: W. Edwards Demings teaches the Koreans and the Japanese and the result is 'Just-in-time' Supply Train Logistics: Modifed Flat Structure Pros and Cons:Supply Chain Improvements made by Koreans: The Kia Inventory Control Problem: Kia Revaluates 'Top-Down' and temporarily Installs Modified Flat Model, Yancheng City, the Peoples Republic of China, 2010: Another example of a similar problem but focused directly on 'Justin-Time' Inventory Systems, was related to me by a Kia executive when I was teaching Global Marketing at Yancheng University in Jiangsu Province near Shanghai.I was extremely fortunate to have had the largest Kia plant in China just three blocks from my University. I became very friendly with some of my Graduate students who in some cases were Kia C-Suite executives. Over lunches and numerous plant visits I learned two things about Korean Auto makers. 1. Korean Industrial engineers at Kia had altered and demonstrably improved upon the Japanese Model taught by W. Edwards Demings. 2. They were trying hard to out perform Hyundai the larger of the two Korean auto makers. Demings 14 Rules were expanded upon by the Koreans with Kia and Hyundai having made significant alterations related to the Sigma 5 in the Supply Chain area that they religiously practice.The Korean approach to Inventory Control Systems is just now starting to be incorporated Internationally. Unquestionably in the 1960's the Korean Auto makers were modeling themselves after the 'Big three' of "Japan Incorporated" Toyota, Honda and Nissan. However the Koreans have never had any real compunctions about aggressively improving upon "Japan Incorporated" in Inventory Control Systems. The Supply Chain that Korea uses today is an improvement over Japanese Models: In the Korean Model of Inventory Control, they have allowed for more "free-wheeling''of up and down' information exchanges in bulding the reliabilty of the overall Supply Chain. By aggressively reworking Supply Chain the Koreans have been able to place themselves slightly ahead in improving "Just-in-Time" Inventory Control Systems. According to my insider sources, this may even have made Kia and Hyundai, 'car for car' produced, slightly more profitable than the Japanese over the last ten years.When Kia experienced their problems in 2009-10, their plant controls planners started paying extremely close attention to the 'up and down' free flow of key Inventory details.Control systems were improved and the overall Supply Chain was noticeably tightened. As a result shipping and production were returned to some modicum of synchronicity by the end of 2010 with those Supply Chain 'fixes'.But during the same time period, Toyota, Honda and Nissan according to 'insider' information from the Kia plant in Yancheng, resisted tightening up the lines of communication. In fact they instead returned to the Tall Organizational approach. This came about as a result of C-Suite Executives in Tokyo and Yokohama pushing to meet increasingly heavier production schedules. 'The Just-in-Time' Inventory Control System: Professor W. Edward Demings contribution to the rise of PostWorld II Japan: • "The present style of management is the biggest producer of waste, causing huge losses, whose magnitudes cannot be evaluated, cannot be measured“The New Economics” 1994 – • “…The prevailing system of management has been created by best efforts, without the knowledge…”“The New Economics” 1994 • “Hard work and best efforts will not by themselves dig us out of the pit.”“The New Economics” 1994 • “…most troubles and most possibilities for improvement add up to proportions something like this: • * -94% belong to the system (the responsibility of management) • * – 6% are attributable to special causes.“The New Economics” 1994 – Just-in-Time Inventory Control Systems were American Professor W.Edwards Demings ‘gift' to the Asian Automotive industry. He originally proposed to bring his approach to help make the 'Big Three' Detroit Auto makers more profitable;suprisingly the"BigThree" were emphatically and unilaterally uninterested and rejected Demings and his theories. By following the principles of the Demings management method, Dr. W. Edwards Deming, a statistician and management consultant, had proposed after the Second World War, a thorough reformation of the way American managers should choose to manage. W.Edwards Demings conviction was that America in the Post- World War II period could accelerate their production methods in a major way with Supply Chain innovations. The major Auto makers in Detroit resisted employing his methodology and Demings entreaties to change or suffer the consequences,"fell on deaf ears" in America. However Demings theories proved to be extremely successful in Japan during that Post-World II period; soon American Auto makers would be filing requests for relief from 'crushing' vendor debt under the nations Bankruptcy Reorganization filings. The "Big Three" rejected Deming's theories outright and by now the American Auto industry had sunk into a steep and precipitous three decade decline. That said, this brought on the spectre of multiple bankruptcies and the need for emergency Government bailouts. Apparently when firms like Chrysler ran out of money for plant and material and workers were being laid off by the thousands, very important stakeholders including the United Auto Workers called for reviews. Basically it was all stating to come together for "Japan Incorporated"; a defeated and largely destitute nation who's "kaizen" had been crushed by the American war machine was now building better quality into their autos and selling at thousands less per car than Detroit's cars. Not only was that being examined closely by the American car buyer but the fact that the Japanese were able to build 'better' cars at lower "sticker prices and 'run' for over 100,000+ miles was a major 'revelation' to everyone on 'Mainstreet' America. It would take another thirty years of 'pain'to learn how the wisdom of Demings had changed the Auto industry and what the real lessons of Deming's Japanese miracle had wrought upon America's Industrial economy. When the key executives of the Japanese Automotive Industry bought into Deming's whole Philosophy"Japan Incorporated" was born. Although Demings was not really well-liked or understood in his native America,the Japanese were more than willing students and absorbed Demings theories totally and than went out and proceeded to 'conquer' the Global Automotive world. The Demings Philosophy when put into practice by the Japanese car makers effectively created factories that produced, inventoried, shipped and sold at better margins than General Motors, Chrysler and Ford cars 'rolling off the line'every day in Detroit. The American "Big-Three,'' General Motors, Ford and Chrysler had typical types of Tall Model communications problems, both hampering decision-making and hindering progress. Because they 'unfortunately' did not appreciate or understand what Demings Total Quality Management was going to accomplish in Asia the 'Big Three' started in a downward spiral for the next thirty years. Basically they did not attempt to incorporate better Inventory Control Systems as did the Japanese until they had lost the Global lead in Autos to "Japan Incorporated." It became anathema in Post-World War II Detroit that when 'TopDown' controls became too long in the' Tall' stage and started to be profit-draining, they just 'looked away' and did not fix the problems. When the 'up and down" flow of Inventory shipping information became 'bogged down' and could not provide smooth effective communications both 'up and down,' Detroit simply again 'looked away.' The Japanese learned that the key to Deming's theories lay in not placing vast amounts of capital into huge warehouses full of parts until someone ordered them. Fenders, engines and frames under the new systems were available "Just-in-Time"only. The Japanese understood at an almost 'Zen' like level that by precisely calling for only what they needed for that day of car production they could turn out better quality cars for less money;now the Yen stayed in"Japan Incorporated"bank accounts. General Dynamics Reevaluates Flat Versus Top-Down The Professor as a one-time holder of a High-Security Clearance for General Dynamics, the nations largest Defense Contractor, certainly has reasonable qualifications to add some 'insider' personal observations on how "Top-down" really does work at this firm. However he maintains that his general position is that General Dynamics has always enjoyed the benefits and has learned to deal rationally with the many pitfalls from their overall use of their involved "Top-Down" Military Organizational Model. In this area the Defense Industry giant General Dynamics has found that smaller special projects also experience communication problems similar to those seen in the Asian Automotive industry. The above analysis, does indicate an overall feeling that 'Top-Down' clearly has inherent problems even when introduced in much smaller special projects, as General Dynamics found out in 1994. Here when they ran into problems with 'up and down' communications they had to rapidly introduce a Modified Flat type of internal Organizational Model in 1994 to ease the 'bottle-neck.'in the flow of information 'up and down'. Footnote: We have begun the process of researching the General Dynamics Organizational Model however the pace of the General Dynamics Case analysis has slowed;In August, 2015 Professor Silverman was appointed to a position of Visiting Professor in Communications at the Hanoi Pedagogical University in Vietnam. General Dynamics:Case Study projected for completion 12/15/2017 will encompass the following areas within the firm. 1. Engineering TBD 2. Marketing TBD 3. Inventory Control TBD 4. Research and Development TBD "Top-Down" Military Industrial Model Pros and Cons: In the corporate world most industrial groups function with structures similar to the Military. More on Organizational Structures:Tall Organizational Structures: Large, complex organizations often require a taller hierarchy. In its simplest form, a tall organizational structure results in one long chain of command similar to the military.In a tall structure, managers form many ranks and each has a small area of control. Although tall structures have more management levels than flat structures, there is no definitive number that draws a line between the two. Tall Structure Pros And Cons: The pros of tall organizational structures lie in control. The Automotive and Defense industries occasionally try to implement Flat on smaller or "Project Forward" experiments. Both General Motors and General Dynamics have experimented with Flat Modeling ''on and off' in the period from 1965 until 2000. General Motors and General Dynamics found that without that narrow"span of control" that allows for close supervision of employees, the experiments always 'spun' out of control and at best were failures. Tall structures continue to provide clear, distinct layering with clear lines of control and an unfettered promotion structure. On the downside that level of layering is precisely where Tall Structures 'come apart at the seams and noticeably weaken.Challenges begin as soon as a structure gets too tall. For example at the busiest Buick plant in Asia, located in East Shanghai, China an important 'Car of the Future' Project saw its staff communications line "bog down'. After switching to a modified Flat Organizational structure information this important project began experiencing less 'bottlenecks' and a more free flow of communications, both' up and down'. Plant executives at this Buick plant, found that a great deal of their critical communication 'up and down' began to take too long to travel through all levels because the structure became too tall too rapidly. These typical types of communication problems hamper decisionmaking and hinder progress and are unfortunately very commonplace when 'Top- Down' enters the just too 'Tall' stage for effective communications. Bibliographical: Quotes:W.Edwards Deming: 'The Just-in-Time' Inventory Control System:Professor W. Edwards Demings contribution to the rise of:"Japan Incorporated" W. Edwards Deming ‘Father’ of Just-in-Time Delivery Control Systems:On the American Management Systems See Summary Bibliographical: See more Quotes from W. Edwards Demings: “The present style of management is the biggest producer of waste, causing huge losses, whose magnitudes cannot be evaluated, cannot be measured” “The New Economics” 1994 – “…the prevailing system of management has been created by best efforts, without the knowledge"… “The New Economics” 1994 Ninety-five per cent of changes made by management today make no improvement.”“The New Economics” 1994 – “Certainly we want good results, but management by results is not the way to get good results…work on the causes of results"“The New Economics” 1994 – “But he that would run his company on visible figures alone will in time have neither company nor figures”“Out of the Crisis” 1982 – “The most important figures that one needs for management are unknown or unknowable“Out of the Crisis” 1982 – “It is wrong to suppose that if you can’t measure it, you can’t manage it – a costly myth”The New Economics” 1994 – “The ranking of people indicates abdication of management”The New Economics” 1994 – “The present style of management is the biggest producer of waste, causing huge losses, whose magnitudes can not be evaluated, can not be measured”“The New Economics” 1994 – “…the prevailing system of management has been created by best efforts, without the knowledge…”“The New Economics” 1994 Hard work and best efforts will not by themselves dig us out of the pit.”“The New Economics” 1994 “…most troubles and most possibilities for improvement add up to proportions something like this: * -94% belong to the system (the responsibility of management) * – 6% are attributable to special causes.“The New Economics” 1994 – “Ninety-five per cent of changes made by management today make no improvement.”“The New Economics” 1994 – “Certainly we want good results, but management by results is not the way to get good results…work on the causes of results”“The New Economics” 1994 “But he that would run his company on visible figures alone will in time have neither company nor figures”“Out of the Crisis” 1982 – “the most important figures that one needs for management are unknown or unknowable”“Out of the Crisis” 1982 – “It is wrong to suppose that if you can’t measure it, you can’t manage it – a costly myth-The New Economics” 1994 – “The ranking of people indicates abdication of management” The New Economics” 1994 – “The present style of management is the biggest producer of waste, causing huge losses, whose magnitudes can not be evaluated, can not be measured” “The New Economics” 1994 – “…the prevailing system of management has been created by best efforts, without the knowledge…”“The New Economics” 1994 “Hard work and best efforts will not by themselves dig us out of the pit.” “The New Economics” 1994 Deming's approach is summed up in his famous 14 Points. Point 1: Create constancy of purpose toward improvement of the product and service so as to become competitive, stay in business and provide jobs. Point 2: Adopt the new philosophy. We are in a new economic age. We no longer need live with commonly accepted levels of delay, mistake, defective material and defective workmanship. Point 3: Cease dependence on mass inspection; require, instead, statistical evidence that quality is built in. Point 4: Improve the quality of incoming materials. End the practice of awarding business on the basis of a price alone. Instead, depend on meaningful measures of quality, along with price. Point 5: Find the problems; constantly improve the system ofproduction and service. There should be continual reduction of waste and continual improvement of quality in every activity so as to yield a continual rise in productivity and a decrease in costs. Point 6: Institute modern methods of training and education for all. Modern methods of on-the-job training use control charts to determine whether a worker has been properly trained and is able to perform the job correctly. Statistical methods must be used to discover when training is complete. Point 7: Institute modern methods of supervision. The emphasis of production supervisors must be to help people to do a better job. Improvement of quality will automatically improve productivity. Management must prepare to take immediate action on response from supervisors concerning problems such as inherited defects, lack of maintenance of machines, poor tools or fuzzy operational definitions. Point 8: Fear is a barrier to improvement so drive out fear by encouraging effective two-way communication and other mechanisms that will enable everybody to be part of change, and to belong to it. Fear can often be found at all levels in an organization: fear of change, fear of the fact that it may be necessary to learn a better way of working and fear that their positions might be usurped frequently affect middle and higher management, whilst on the shop-floor, workers can also fear the effects of change on their jobs. Point 9: Break down barriers between departments and staff areas. People in different areas such as research, design, sales, administration and production must work in teams to tackle problems that may be encountered with products or service. Point 10: Eliminate the use of slogans, posters and exhortations for the workforce, demanding zero defects and new levels of productivity without providing methods. Such exhortations only create adversarial relationships. Point 11: Eliminate work standards that prescribe numerical quotas for the workforce and numerical goals for people in management. Substitute aids and helpful leadership. Point 12: Remove the barriers that rob hourly workers, and people in management, of their right to pride of workmanship. This implies, abolition of the annual merit rating (appraisal of performance) and of management by objectives. Point 13: Institute a vigorous program of education, and encourageself-improvement for everyone. What an organization needs is not just good people; it needs people that are improving with education. Point 14: Top management's permanent commitment to everimproving quality and productivity must be clearly defined and a management structure created that will continuously take action to follow the preceding 13 points. Post Note: Top Two acquirers of small 'Boutique' agencies 1980- 2000: 1. Burson-Marsteller: USA 454,500,000 454,500,000 0.0 -- 7 7 2. Hill+Knowlton Strategies:USA 386,100,000 390,000,000 -1.0 -- 8 8 Report this • Written by: Professor Irvin Silverman Hanoi Pedagogical University, Vinh Phuc, Vietnam, June 2015 • Written by
Four Case Studies
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