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Another Look at Objectives
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Posted by: ccochran

Howdy, all:

Here's a new article of mine entitled "Another Look at Objectives." It is a follow-up to one I wrote for the November, 2000, issue of Quality Digest, just before ISO 9001:2000 was published. The current article is scheduled to be published in next month's issue of QD, so this an exclusive preview. I'd love to hear what you think about it. The article includes some thoughts on Deming and my angle on his support for the correct use of objectives. I expect (hope) to generate some interesting responses.

Talk to you soon,
Craig

Posted by: Rachel

Craig,
As always - your stuff reads like (insert something smooth here). Great read - I really enjoyed it. I'm going to print it off and save it for a rainy day (or until I've been here long enough to pass stuff like this around without everyone saying "who the heck does she think she is?!?!?!").
(My only criticism - give it a quick read for grammar and such - there are some unnecessary words in between - but hey, I'm anal like that.)
Cheers,
-R.

Posted by: ccochran

Rachel,

Thanks a lot. Yes, I have a grammar problem in general that I refuse to address. Wes Bucey tried to help me with it, but my head is very hard. Hopefully the editors at QD will scour the article for problems before it goes to press.

This article has interesting history. I had been trying to get my leadership article published for over a year, to no avail. Quality Digest had asked me to write a piece on continual improvement, so I sent them the leadership article. They responded last Friday with, "Uh, this isn't exactly what we were looking for." I said I'd write something different and get it to them by Monday if they'd finally publish the leadership piece. They accepted the bargain. So, I wrote this article over the weekend as a ransom of sorts. The deal is that the leadership article will run in October and this one will run in September.

Hope you're doing well in Ontario.

Craig

Posted by: Steve Prevette

Of course, since you have invoked Dr. Deming's name I must reply. I will state my interpretation was that Dr. Deming was against ALL numerical targets (get 3 red beads!) whether or not the means is stated. So I was all set to rant and rave, but as I read the rest of the paper, there was no specific use of numerical targets. So yes, of course I believe in objectives (or aim, as the good Doctor preferred). And I can even tie an objective to a quantitative measure, such as "achieve a statistically significant improvement in . . ."

Good paper.

Posted by: Greg B

Hi All,

I have just lifted myself off the floor....Steve has agreed on the Deming Issue

Seriuosly:

Craig ,yet again, you have written an excellent piece. Your summary says it all. You know I am a fan so please keep the fantastic and informative work coming.

Greg B

Posted by: ccochran

Steve & Greg,

Here's the truth: I put the mention of Deming in the message body as bait, hoping it would entice Steve to take a look at the article. It worked! I'm very proud that you don't want to chase me with a pitchfork, Steve. Thank you and Greg both for your kind remarks. That book "Out of the Crisis" is a source of much inspiration and occasional bedevilment for me. If you look at a book for long enough, you can always find something that backs up your way of thinking.

Craig

Posted by: J Oliphant

I disagree with a statement in your article

"When Deming demonized the philosophy of Management by Objectives, he was really criticizing the use of objectives without a plan to achieve them. "

I think Deming is criticizing is the use of blind measures to indicate the attainment or failure to reach objectives. blind measures are those where statistically significant improvement/degradation is NOT separated from random predictable fluctuation.

though nothing in your text is precisely instructing the company to use and be accountable for simple numeric target, nothing in your text WARNS us companies not to hold us accountable to such metrics.

Steve P's paper lays the problem very clear. say the bar chart information he portrays is some measure of whether a strategic objective has been obtained (and high results are bad). then we must assume poor lauren would be posting the frown face card three months in a row and management would be bracing to hold people responseable.

what is so important about the data though is at the very end. It is Generated from a random number generator. The rising trend Means Nothing! The numbers are from a random number generator and the differences are 'statistically insignificant'

I really hate to be critical craig, but MBO as practiced above is practiced widely here (in my company). It is someones problem when the process does randomly bad and someone's brownie point when the process randomly improves.

In every forum, where we touch upon the subject we should point out the danger of this approach. Though your article does not precisely set up a negative Management by Objective system, the simplest approach using what you have written would almost certain be a negative Management by objective system. The scorecard approach could create a numeric target (with no recognition of common cause variation), a work quota, a meaningless target for production groups,and lastly a source of fear as individuals are held accountable for the measures of objectives, which are more based upon the way the system is set up and random fluctuation.

To summarize I think the world is full of businesses with "objectives and a clear plan to achieve them" and nevertheless have very negative, harmful managerial system.

I mostly think your article is incomplete. many of the details a right-- improve processes, have plans, even measureable objectives (as opposed to plattitudes), involve everyone. all this is right. but you forgot to preach against a system that translates this to numeric goals and doesn't separate random fluctuation from positive or negative changes to the process.

feedback would be interesting. Did I misread your article? Do others disagree with what I think Deming opposed? Do you disagree with my opinion??

Posted by: J Oliphant

BTW, I am in no way trying to create a Steve P versus C Cochrain discussion. the point here has very little to do with a comparison of each paper. The point is that Craigs paper could support a negative MBO system, and in which as Steve shows in his paper, random variation could cause fear and accountability when in fact no statistically valid changes are occurring.

Posted by: J Oliphant

(slightly)

I little while back I use to belong to an organization called toastmasters. The purpose of the organization was to promote public speaking skills. It did this by providing a forum, a program of 10 speeches, and having someone else in the group give your feedback as you go through your program of speeches.

Giving feedback wan't easy. Everybody knows that pubic speaking is a hard, difficult experience and there is reluctance to bring up issues the evaluator may have seen. Also at times, as an evaluator you find yourself evaluator the expert speakers of the club. Imagine trying to evaluator a polished professional whom just has given an incredible public speaking experience you could not imagine personnally repeating.

Nevertheless, you learn to trust your instinct. Yeah you may stutter incessantly, but for the polished speaker the last little tidbit of hesitation in an otherwise flawless presentation is his personnal boundary, where he is yet struggling to perfect the art. you mention it within the group setting knowing that even a master in public speaking will listen carefully to it, and it could yet help him/her improve to even greater skill.

It is in the tact, that I offer any feedback for Craig. He is clearly a master communicator, extremely well versed in quality and an exceptional writer. but novice that I am I feel the article is not complete until he fully warns businesses NOT to implement destructive numeric-based Management by objective. of the many aspects of good advice regarding business objective, it seems conspicuosly missing. I also think he needs to more clearly express what Deming criticizes regarding Management by objective. (opinion: I don't think it has very much to do with lack of plans).

I show my weakness (I think) when I go to succintly summarize what Demmings main criticism of Management by objective. Although I have been experiencing deeply the fruit of this destructive managerial practice; I struggle to communicate it.

If I could communicate it-I would almost certainly post it in the user articles, for I think the message is not written enough in articles done within the quality field.

Posted by: ccochran

J. Oliphant,

Thanks for your valuable feedback and kind words. I agree with you that the article is incomplete. I was given a numerical target (!) of 2,500 words. Within those bounds, I wrote as much as I could about objectives from my point of view. I agree that the issue of the statistical significance of data was not addressed in the article. It should have been; I just ran out of room. I’m going to blame it on the quota of 2,500 words, which I came very close to, by the way. This last statement is part humor, of course, but also very telling in that it supports exactly what you said about numerical targets.

Basically, the whole article could be summarized by a few key points:
• Objectives are communication tools, nothing more;
• The mere presence of objectives does not make anything happen;
• Platitudes as objectives are worthless;
• All objectives must be matched with improvement plans for changing underlying processes within the organization;
• Most employees truly don’t have the ability to contribute to achieving objectives in a significant way through their normal day-to-day tasks, because the established processes pretty much dictate the outcomes;
• Communicate progress against objectives in order to get people thinking about them;
• The creativity of employees is limitless and they can often propose changes to processes that will help achieve objectives.

Some reasonable points, but far from complete. My CI book does address statistical significance of data on objectives, by the way (p.41). The topic doesn’t get much coverage, but at least it’s mentioned.

Thanks again for your insightful thoughts. Your feedback was well-done and quite supportive, by the way. I appreciate you taking the time to send it.

Craig

Posted by: Greg B

Craig and J,

Very well stated cases, on both parts. I still have to side with Craig (yes, I realise we don't want to start a us v them thread as this topic has been covered). As Craig stated Objectives are meaningless unless supported (read my tag line re visions) Both of Craig's summaries IMHO express my opinion very well.
I have a business plan, from a few years ago, and I counted 30 objectives of which none were ever met because we constantly changed them to suit the process. No one took the time to evolve the process to fit the objectives. I often ask our marketing gurus how they come up with their forecasts and they reply that they just added 5% from last year to keep the Board happy. I then ask them HOW are we PLANNING to achieve this increase? They never have an answer so it is left to the Production Staff to revaluate the process to ascertain if we can achieve the targets set....but we have come, almost, to our limit without major capital expenditure. So IMO this highlights both the pros and cons of objectives. If they are not achievable or have a plan then they are worthless, however, if a process improvement takes place alongside a plan of attack then a new objective may well be achieved.

J
I agree with the miss representation of data and that it can be used for EVIL as I stated in my reply to Steve P's article. People often manipulate the data to suit their cause or to shift/provoke blame.

Greg B

Posted by: Masculinie

Quote:

Originally Posted by ccochran

Howdy, all:

Here's a new article of mine entitled "Another Look at Objectives." It is a follow-up to one I wrote for the November, 2000, issue of Quality Digest, just before ISO 9001:2000 was published. The current article is scheduled to be published in next month's issue of QD, so this an exclusive preview. I'd love to hear what you think about it. The article includes some thoughts on Deming and my angle on his support for the correct use of objectives. I expect (hope) to generate some interesting responses.

Talk to you soon,
Craig

Craig has addressed a number of shortfalls in the current ISO 9001:2000.

From the days of reactive complaint or recall handling.... to a stage of setting up a self-regulatory system - for lessons learned from pro-active (1)non-conformity discovery to now (2)driving for objectives - ISO 9001:2000 has come a long way....

ISO 9001:2000 does not call for the need of a Quality Management Programme (or Action Plan) as yet - hence the aspects of who/how-to/by when to meet the performance standards.... is left to the conscience of the implementing organizations. For an organization chasing for an additional piece of paper (a certificate) as a collector's item to aid its own glory.... in a business world - there is really nothing the Auditors could do about it....

The need to include a Quality Action Plan - like the Environmental Management Programme in ISO 14001 - surely will enhance the value of having 'objectives'.

However, this could be seen as additional 'paperwork' to a business man opting for a 'minimalist' approach - not unless the objectives to please 'interested parties' are aligned also to the Key Performance Indicators or the Balanced Score Card. Hence harmonization of the interests between say 'customers' and 'the organization' is pertinent to successfully secure the 'buy-in' of the organization management.

Policy is usually a broad-brush statement committing to pleasing the 'interested parties' with regards to their interests on the particular risk-free issue - this may not change over the years.... so long as it is a true free market exerting pressure on risk-free performance other than just making profit.

Objectives may be more specific to the high-risk (in particularly the legal)areas specific to the organization - as revealed by various risk assessment means - such as
FMEA for quality, HACCP for Food, SEA evaluation for Enironment and Risk Evaluation for OHS.... - which may change over time and location....

Targets may be made measurable - and be charted for early warning signals.

By not meeting the targets charted say on monthly basis - management can be encouraged to lead the 'unlearning - relearning' process to devise smarter 'how-to' (methods) without changing the who/the performance standard/the when - leading to new experience or knowledge or operational wisdom as documented.... to form a basis for procedural revisions - to reflect the changing circumstances....

I recall landing in China in 1993.... as a lead consultant to assist a manufacturer in its pursuit for ISO certification - the MD made his younger brother a GM pasting at least 20 charts for objective control.... right onto the wall in front of the latter's seat in his office.... - true enough after all charts were updated on daily basis the production was out of control.... the subsequent fire-fighting in many objectives rendered the management process next to impossible. We simplified the objectives into the main five - and deleted all others that could be correlated to the main five objectives but of minor significance or only have to .... and taught the GM when to act and when not to act.... and train the GM how to imrpove operating methods from lessons learned leading to updated documents and slowly keep the operations all within his personal control. It was done out of the original text of ISO 9001:1987 or its FDIS: 1994
version.... since they were already into the objective charting game.

To me - a system for management actions to assure risk-free performance shall encompass POLICY, PROCEDURES & PROGRAMME for PERFORMANCE STANDARDS....

Stop here.... as a newly registered member - I just have to urge to talk and share....

Any opinions to polish up the OBJECTIVES issue are invited.... to keep the interesting topic ongoing....

Love Craig's contribution - in many aspects.... we share the same direction....

Masculinie

By adopting a Policy - Objectives - Targets approach - this is more in line with the ISO 14001 than ISO 9001.... but with higher clarity in implementation....

Posted by: ccochran

Masculinie,

Thanks the kind words and great insights. And welcome to the Cove!

Craig

Posted by: Masculinie

Thanks Craig for the great encouragement of this wary start of mine....

I've wedged into your objective dimension from the restrictive ISO 9001 window - cannot help it but find many common perceptions with your insights from a practitioner's viewpoint....

Many a time Objectives are not achieved.... coz they are of no 'relevance' to the executional activities or interests - though they are of high strategical priorities to the leaders....

ISO 14001 is by far a more complete and comprehensive management map.... in that risk assessment need to be conducted (by say the operational level) before a plan is rolled out.... so that 'objectives' are linked to the probable risks of lack of activities and their control thereof in the plan.... to assure result by Objectives and measurable Targets....

I don't want to run into a risk of filling in a small window following my thinking flow.... but ended up having a long text on display on your web - like what happened yesterday.... - even I was shocked facing the final display....

Masculinie

Posted by: ccochran

Masculinie,

I agree with you completely. The standard writers really dropped the ball by not including the requirement for “programs” from ISO 14001 into ISO 9001:2000. In fact, there’s really no mention at all of the organization determining the responsibilities, means, timeframes or anything else for achievement of objectives in ISO 9001. That’s one of the most powerful requirements in ISO 14001, and a real disappointment of ISO 9001:2000.

Not only does ISO 9001 not include the piece that comes AFTER objectives (programs for achieving objectives), it also doesn’t include the piece that comes BEFORE objectives: Strategic planning. Clearly, objectives don’t just rise out of the mist. They come (or should come) from the organization’s strategy. ISO 9001:2000 makes no mention of strategy or strategic planning. That’s a huge omission in my opinion.

Here’s how it should have fit together:
1. Strategic planning, which leads to…
2. Measurable objectives, which lead to…
3. Programs for achieving objectives.

ISO 9001:2000 got the middle part right, but neglected to include the first and last pieces. These missing elements are what keeps ISO 9001:2000 from truly being a comprehensive management system standard. Maybe next time around.

That said, ISO 9001:2000 is an enormous improvement over earlier versions of the standard. Great insights, Masculinie. How’s everything in Singapore?

Craig

Posted by: Masculinie

Hi Craig.... you have a 3-points summary without having the objectives to stand alone.... - that's great !!!

Between Policy and Performance.... there are lots of missing gaps to be bridged....

Yes, Policy shall be followed by strategic planning, measureable objectives leading to a management programme - ready for management actions to assure result by Performance....

Risk-free Programme is just part of the system.... risk-free Procedures that detail who manages/how-to manage (QM/QP) and who works/how-to work (WI) to handle daily routines without re-inventing the wheels is another.

Handling of Programme by a series of Projects - is what the American quality scene is strong at.... with your TQM and Six Sigma tools....

Handling of Procedures by a series of planned Process - is what ISO was strong at.... with its system approach to prevent re-inventing the wheels....

A typical corporate life will need both Projects and System - to handle non-routines and routine management.work towards company objectives.

In my honest opinion.... Six Sigma has plenty of generic and quantitative how-to's that should have found its way into ISO 9004:2000.

Merger of the two quality wisdoms will be a great management-wisdom breakthrough in this new millennium - witnessing how quality or management wisdom has contributed to the corporate in the last 50 years.... from QC to QA to QM to QMS....

The Singapore economic scene has mixed signals from all directions since Y1997.... the current GNP looks good but you know what statistics means....
the stock market is synchronized to your Dow performance.... the private sector in general is not doing as well as the public sector....the Great Singapore Sales was just over.... and the Tourist Promotion Board is driving for real value-for-money packages to overseas travellers like you Craig.... housing price is rumoured to have touched the bottom and just starting to go up.... currency exchange to US$ is stable though speculators are looking at further softening of the US currency....

Under such scenario - guess we have to start selling fish without offering net.... for longer term survival - don't you think so Craig?!

Masculinie

Posted by: Claes Gefvenberg

Great writing as usual, Craig.

I broke it down into the attached mindmap in order to get an overview of it.

/Claes

Posted by: ccochran

Claes,

Great mind map! This illustrates the whole intent of the article at a glance. Do you mind if I use this graphic?

Hope all is well in Sweden for you.

Thanks a bunch,
Craig

Posted by: Wes Bucey

Quote:

Originally Posted by Claes Gefvenberg

Great writing as usual, Craig.

I broke it down into the attached mindmap in order to get an overview of it.

/Claes

Well, now you've done it, Claes! You are smarter than I am. I'm going to go sit on the deck with a margarita and sulk

Posted by: Claes Gefvenberg

Quote:

Originally Posted by ccochran

Claes,

Great mind map! This illustrates the whole intent of the article at a glance. Do you mind if I use this graphic?

Hope all is well in Sweden for you.

Thanks a bunch,
Craig

Mind? Not a bit of it, go ahead and use it. After all ,you provided the input, while I just presented it in another shape... and yes, all is well here.

Quote:

Originally Posted by Wes Bucey

Well, now you've done it, Claes! You are smarter than I am. I'm going to go sit on the deck with a margarita and sulk

Smarter than....? Naaaaah, I don't know about that, but when it comes to sulking I can think of no better place and way than on the deck with a margarita. Mind if I join you?

Cheers, Mate.

/Claes

Posted by: Steve Prevette

Quote:

Originally Posted by Claes Gefvenberg

Great writing as usual, Craig.

I broke it down into the attached mindmap in order to get an overview of it.

/Claes

You do start treading on some thin ice with the Deming and systems thinking folks when you assert that you should pay employees for their contribution to the goal. This is when things really start getting distorted, at least in my opinion.

Posted by: Wes Bucey

Quote:

Originally Posted by Steve Prevette

I sometimes wonder if the folks who dream up "performance pay" have EVER even heard of the Red Bead Experiment.

I can contribute countless cases of unfair "performance compensation" programs. Every one is ultimately attributable to management making poor choices from ignorance or venality.

Some folks say "commission sales" is ALWAYS fair, but they neglect to consider the downside of a bad territory, a bad product, or poor manufacturer support.

There may be a fair way to compensate folks based on individual performance, but I haven't seen one yet. The best one can hope for is compensation which is sufficient to keep working under the prevailing conditions. In terms of Quality thinking - there are lots of "special causes" out there which interfere with fair compensation. All those special causes are opportunistic, based on various levels of awareness of management.

Posted by: ccochran

Steve and Wes,

Here's the part to focus on from my article (page 8, 2nd paragraph):

"When you start to put money into everyone’s pocket as a result of meeting organizational goals, then they really get engaged. Just make sure that everyone gets the same additional compensation. No function can be claimed to have contributed more than another, so no function or person should get more benefit."

The sentences in red are key. There's nothing distorted about rewarding everyone equally for helping to make the organization more successful. It's just common sense.

Craig

Posted by: Wes Bucey

Quote:

Originally Posted by ccochran

Steve and Wes,

Here's the part to focus on from my article (page 8, 2nd paragraph):

"When you start to put money into everyone’s pocket as a result of meeting organizational goals, then they really get engaged. Just make sure that everyone gets the same additional compensation. No function can be claimed to have contributed more than another, so no function or person should get more benefit."

The sentences in red are key. There's nothing distorted about rewarding everyone equally for helping to make the organization more successful. It's just common sense.

Craig

I'll go back and reread tonight. Are we talking about compensating everyone in the organization or just the team? Are we talking same dollar amount or same percentage of salary? How do we deal with the guy who gets a "free ride" on the backs of his coworkers just because he happens to be in the right place at the right time? How do we deal with the coworkers who may harbor resentment about the free ride?

I'm not pointing fingers and saying, "Tsk! Tsk!" here. I'm merely commenting that the darn special causes keep rearing their ugly heads!

Posted by: ccochran

Wes,

You raised some very good points. Here are my thoughts:

*** Everyone in the organization would get additional compensation, not just members of a particular team or project group.

*** Everyone gets the same dollar amount, regardless of their salary or wage.

*** The additional compensation has to be tied to a macro measure, like profit or cash flow.

*** “Free-riders” will get the additional compensation, just like everyone else. It’s the job of management, though, to identify people who need help and make sure they get it (or make sure they’re headed out the door).

If an organization went down this road, they would have to clearly define all the details of the system. Basically what I’ve described is nothing more than profit-sharing. Any thoughts? Steve—did the Great Deming have anything to say about profit sharing per se?

Craig

Posted by: Steve Prevette

Quote:

Originally Posted by ccochran

If an organization went down this road, they would have to clearly define all the details of the system. Basically what I’ve described is nothing more than profit-sharing. Any thoughts? Steve—did the Great Deming have anything to say about profit sharing per se?

Craig

Let me adjust the channel . . . ah, there we go . . .

In the New Economics, page 26 there is a discussion of merit pay:

"Whom to raise? Everybody within the system (see the top of page 118 in the book Out of the Crisis). There will not be No. 1, No.2, No. 3, No. last, as there will be no ranking. Anyone outside the control limits is in need of special help."

This and other quotes do seem to indicate that if a company wants to give raises (profit sharing isn't specifically addressed) then give them to everyone who is within the system and within the control limits (3 standard deviations). Consider them as special cases.

Alfie Kohn has some good writings on performance pay at http://www.alfiekohn.org. One quote I will lift from his site:

I recommend that employers pay workers well and fairly and then do everything possible to help them forget about money. A preoccupation with money distracts everyone -- employers and employees -- from the issues that really matter.

(http://www.alfiekohn.org/managing/fbrftb.htm)

Posted by: ccochran

Steve,

I may be crazy, but it almost sounds like we're all reading off the same (or at least similar) sheet of music.

Craig

Posted by: Steve Prevette

Yep, we're close. Perhaps the phraseology was simplified in the mind map.

On a personal perspective, I would rather my employer pay me a salary for what I do. If the company fails, I should still be paid for my work, at least up until the point the company decides I am neither working for them, nor being paid by them. And hopefully the company succeeds, and makes more value from my work than what they pay me. Thus is the whole idea of a company, the company is absorbing risk and paying me a flat rate.

If my pay basically could go up or down more than a few percent each year based upon how the company did, I would personally find that more frustrating than motivating.

Posted by: Wes Bucey

Quote:

Originally Posted by Steve Prevette

Yep, we're close. Perhaps the phraseology was simplified in the mind map.

[deleted for space]
Thus is the whole idea of a company, the company is absorbing risk and paying me a flat rate.

If my pay basically could go up or down more than a few percent each year based upon how the company did, I would personally find that more frustrating than motivating.

Actually, I don't see this view as being supported by Deming. The chore, or course, is avoiding "freeloaders" from riding on a good worker's back. However, when you are on a flat wage or salary, you are supporting freeloaders in the company who draw a wage, regardless if they input value to the organization. Absent the freeloaders, you would have a right to expect higher wage compensation.

Given the right corporate culture and everyone pulling for the same major goals (versus metric objectives) of "customer delight" and increased profit by virtue of increased sales and operating efficiency, I easily envision a company where everyone has a different basic wage and participates equally in the profit (i.e. CEO and janitor get same profit-sharing check, although base salaries differ.)

This means there is still an incentive to gain skills and experience to earn the higher base salaries available in an organization.

The problem, of course, in USA, is that CEOs of public companies feel THEY are the only ones responsible for the success of the organization and so demand a lion's share of the profits and bonuses.

Before everyone gets all political on me, this is NOT the same as socialism or communism (theoretical - not the actual kind that's been practiced in various forms for many years.) Socialism and communism often talk about EVERYONE making the same, regardless of skill or effort. Such an equal pay approach pretty much stifles incentive to become more skilled or experienced.

Posted by: Greg B

Quote:

Originally Posted by ccochran

Wes,

You raised some very good points. Here are my thoughts:

*** Everyone in the organization would get additional compensation, not just members of a particular team or project group.

*** Everyone gets the same dollar amount, regardless of their salary or wage.

*** The additional compensation has to be tied to a macro measure, like profit or cash flow.

*** “Free-riders” will get the additional compensation, just like everyone else. It’s the job of management, though, to identify people who need help and make sure they get it (or make sure they’re headed out the door).

If an organization went down this road, they would have to clearly define all the details of the system. Basically what I’ve described is nothing more than profit-sharing. Any thoughts? Steve—did the Great Deming have anything to say about profit sharing per se?

Craig

Craig,
My company has 'Wage' employees (entitled to be in a union) and working to an industry/company agreed standard wage (Enterprise Bargaining Agreement - EBA). In this document they are given a guarantee of a minimum percenatge wage increase each year over the life of the EBA. We also have 'Staff' employees that have individual contracts. It is about 50 -50 of each pay group.
ALL employees are basically tied to the EBA wage increases each year so whatever the Wage employees get so do the Staff employees. We also have a bonus scheme agreed to at the beginning of each fiscal year that is tied to several of our company KPIs (Safety, Production etc). These KPIs are scaled so that there is a chance of at least picking up some type of bonus. eg: Lost Time Injuries < 5 = 3%, < 3 = 2% etc. We do not ALL get the same but rather get the same percentage (if everyone got the same it would be effected by the different tax brackets we have in Australia). Plus, there is alwyas the RHIP (rank has its priveledges) syndrome that I don't think anyone will get rid of.

Posted by: Masculinie

Quote:

Originally Posted by Claes Gefvenberg

Great writing as usual, Craig.

I broke it down into the attached mindmap in order to get an overview of it.

/Claes

I have some time to play with the mindmap this morning....

First of all.... I renamed the subjects in the mindmap to the terminology I'm more used to under 'ISO 14001'....

1. (Objectives.Targets) - measurable & clearly defined....
2. (Risk Management Programme) - Improvement (Action) Plan
3. (Emergency Preparedness) - Contigency 1... (ID Contigency)
4. (Preparation 1 TRAINING) - Provide examples of how employees can contribute/Objectives are used....
5. (Preparation 2 COMMUNICATION) - Communication tools/Scoreborad to communicate progress....
6. (Preparation 3 EMERGENCY RESPONSES) - Contigency 2.... (how handled)
7. (Management Review) - Revise validity of objectives regularly....
8. ( --- ) - Let employees benefit from achievement....

Now I plot the complete map of ISO 14001.... an application model from risk management system perspective:

AA. SYSTEM - at strategical level
A.1 define BUSINESS.BOUNDARY.BASELINE
A.2 define issue(risk).interested parties.... leading to Policy
A.3 define work scope - define applicable Laws and others
- complete risk assessment
- define high risks with laws link
- decide risk control
- ID Emergency and preparedness
A.4 from Policy.Laws.Risks - define Objectives.Targets
- compelte Risk Management Programme
- complete Checklist.WI (Risk)
- complete Manual.Procedures (Management)
A.5 Initiate document control

BB. MANAGEMENT - at operational level
B.1 initiate PREPARATION 1 - TRAINING
2 - COMMUNICATION
3 - EMERGENCY RESPONSE

B.2 into (Plan-Do-) Check - Monitoring and Measurement
- Operational Contol
Act - Corrective and Preventive Action
B.3 Record Contol

CC. PERFORMANCE - where Operations meets strategy
C.1 Leadership - to conform (to RISK MANAGEMENT SYSTEM)
- to perform (to RISK MANAGEMENT PROGRAMME)
- to improve (SYSTEM.PROGRAM.MGT.PERFORMANCE)
C.2 Asssured Performance - at work.issue level
- at system.management level
- at business.company level (by Targets)

DD. SYSTEM CONTROL (by MR) - across AA.BB.CC
D.1 DOCUMENT CONTROL. RECORD CONTROL
D.2 INTERNAL AUDIT
D.3 MANAGEMENT REVIEW support for CONTINUAL IMPROVEMENT

EE. (MISSING) HUMAN FACTORS

It is fun mapping the ISO 14001 map against the mindmap for comparison of the 'WHAT'S' .... the people factor is completely missing in ISO 14001.... the 'tails' in the mindmap also highlighted from practical experience.... the details of 'HOW-TO'S' in better preparation of a RISK MANAGEMENT PROGRAM....

On the other hand, ISO 14001 also highlighted the following:
-.... the need for the objectives and targets to stay relevant and be linked to Policy.Laws.Issue(Risk)....
-.... the decision as to whether to run the Program as a series of system-based Projects.... hence the needs in documentation and doc control....
-.... the decision as to whether control (by way of monitoring and measurement.... operational control and internal audit) shall be instituted after full empowerment....
-.... the use of proactive 'method' improvement by control (or checking) and performance standard (or objectives and targets).... with a system in place to receive the improved methods by constant revisions - to complete the knowledgement loop and to prevent re-inventing the wheels....
-.... and many others....

For those that having constantly bashing ISO Standards without a depth of understanding.... - believe me.... living with a proven application model is better than driving everything starting from the basics.... of theories and good practices - with no offence to anyone here....

I've locked up my Apple II Plus in my closet since early 80's - without wanting to fall prey to the technology.... but I've been back to the computer technology again since two years ago - after allowing times for its developement.... having worked to my full benefits now....

Cheers fellows,

Masculinie

(Message forwarded without time for edit....)

3

Posted by: ccochran

Masculinie,

You certainly went to town on this. Nice work. ISO 14001 really does provide a strong business model (for those who are willing to deconstruct its meaning, which can be difficult).

Craig

Posted by: Masculinie

ISO 14001 must have been compiled by a bunch of technical environmentalists.... - struggling hard to want to the tough world to hear something....

What the business world could not shallow is its technical jargons and long sentences.... - in a structure of 'elements'.... without offering any process linkage.

I happen to be in the business of Integrated Management System.... and have done my research last year on 'bridging the gap between Record and Risk.Result.Relearning'.... finding no time to write a book though....

Simple mapping of maps at minimal time is affordable forturnately....

Your many 'how-to's' based on your practitioner experience.... are really the missing 'human-factor' (heartware) in the risk-management-system structure (hardware).... - and finding them a place in ISO 14004 shall be most appropriate....

Stop here for my own time discipline....

Kind regards,

TCM

Posted by: ccochran

Here is the final version of this article, as it was published in Quality Digest (Sept 2004):
http://www.qualitydigest.com/sept04/..._article.shtml

This link is supposed to remain valid for the next 5 years, but you never know...

Craig

Posted by: Bill Pflanz

Craig,

Just got my copy of Quality Digest yesterday and had not even opened it yet. Since I had it here, I just looked at your article. Great layout in the magazine. Did you select the photograph of the rowers on the title page?

Good job.

Bill Pflanz

Posted by: ccochran

Bill,

I wish I could claim credit for that nice artwork, but I can't. Quality Digest has an Art Director named Caylen Balmain who does a real nice job. If you take a close look at the graphics in each issue, you'll notice a certain consistency of style; that's Calyen.

Hope you're doing well.

Craig