The Red Bead Experiment

[Steve Prevette]

We have completed the Red Bead Experiment for the Fall 2005 session. Please review the following postings from last year, and add your opinions and insights. This activity is worth 2 extra credit points on the final.

See http://www.hanford.gov/safety/vpp/redbeadreach.pdf for information on the Red Bead Experiment

Also, please read and discuss the attached paper. There will be an essay question on an exam related to what you found to be important lesson(s) from the Red Bead Experiment.

[Wes Bucey]

Of all the eye openers for management, the Red Bead Experiment has the greatest impact as the various participants come to the realization that they can't beat a bad system and that only management has the power to change a bad system. I've seen some old line managers practically in tears as they remembered past injustices to workers when the system was the only thing at fault.

Too bad Deming wasn't around for the Pharaoh in biblical times

So, Pharaoh ordered that they gather their own straw for bricks, and he made it difficult for them to do even that, and beat them when they failed.

[Caster]

Originally Posted by Steve Prevette

The first night's class (on October 6) included The Red Bead Experiment. Also, please read and discuss the attached paper. There will be an essay question on an exam related to what you found to be important lesson(s) from the Red Bead Experiment.

Steve

Your paper says

...most fire-fighters fall into the trap of being so caught up in the fire fighting that they allow other fires to start....

This is one of my favorite topics/examples when teaching SPC. I'd like to expand on it a bit.

I grew up in a town where after the fire chief retired, the number of fires declined. It was a well known secret that he lit many of the fires.

Here is some interesting research on fire fighter arsonists

http://www.usfa.fema.gov/fire-service/techreports/tr141.shtm

I think in business we have the same addiction, even if there isn't a fire, we'll make one for the challenge and fun. It fills up the day, and it's all we know how to do.

Compare this to the fire jumper, who parachutes in way behind the flames (and the TV cameras). They work hard and long to make a fire break. When the fire gets to the break it goes out. They get little credit/recognition since they are not as visible/heroic as the fire fighters at the fire front.

Reaction - firefighter/arsonist - typical manager
Prevention - smoke jumper - SPC user/statistician

This discussion always gets a good reaction from people.

Wish I could attend your course, it sounds like fun, and it looks like you have some interesting students.

Caster

[sowmya]

Hello,
For the past one week i am hearing Red bead experiments from number of persons.
Can anybody explain me,
What is red bead experiment?
What is the scope of it?
What is the result?
The attachment from Mr.Steve gave a view, but I am unable to understand in depth.
Thanks / Sowmya

[Al Rosen]

Originally Posted by sowmya

Hello,
For the past one week i am hearing Red bead experiments from number of persons.
Can anybody explain me,
What is red bead experiment?
What is the scope of it?
What is the result?
The attachment from Mr.Steve gave a view, but I am unable to understand in depth.
Thanks / Sowmya

If you Google the red bead experiment, you will get over 25k hits. Here are two of them.

The Red Bead Experiment

The Red Bead Experiment

[Wes Bucey]

Originally Posted by sowmya

Hello,
For the past one week i am hearing Red bead experiments from number of persons.
Can anybody explain me,
What is red bead experiment?
What is the scope of it?
What is the result?
The attachment from Mr.Steve gave a view, but I am unable to understand in depth.
Thanks / Sowmya

I'm really interested in your thoughts AFTER your introduction to the "Red Beads."
Did it help you understand WHY defects are more likely to be a fault of the process than of the worker?

The Red Beads are an iconic touchstone for Quality professionals. They help make an unforgettable lesson for everyone from CEO down to raw recruit.

In my opinion, the Red Beads should be mandatory in every MBA course of study, not just for us Quality geeks.

[wealthbuilder]

I have been in the Insurance sales business for over 12 yrs now and I am still fustrated with the performance review and reward systems that companies use to determine an agent's value and/or if they are going to keep their jobs. I have seen many good agents quit the business just because they were told to produce more.

One company I use to represent is now out of business because they could not keep "good" agents. They were a multi-line company selling auto, home, life and investment products. However, they only based the agent's performance on Life commissions issued. They did not take into account any of the other products or the number of life applications submitted. It all boiled down to what was issued and the actual commissions generated in life policies.

For example: Agent-1 submitted 10 apps. in a production period that issue with only a $1000 in commission, and Agent-2 only submits 4 apps in the same period and those generated $4000 in commission. Agent-2 is considered the "good" agent, and Agent-1 is considered "not performing to required standards." Agent-1 is put on probation or terminated.

Another example: same scenario Agent-1 submits 10 apps, but only 7 are issued and produce $1200 in commissions, and Agent-2 submits 4 apps. that all are issued and produces $4000 in commissions. A similar performance review of the agents - Agent-1 is either put on probation or terminated and Agent-2 is praised for having a higher production result.

In either case Agent-1 is consistantly seeing more people and making more sales, but his/her net commission is lower. Whereas, Agent-2 is seeing fewer clients and has poor time management and other agent skills, but is praised for her/his net commission results.

The Insurance Industry is plagued with this type of performance evaluation. Most companies only count the net commission earned and not the other factors affecting the sales and issue process. It doesn't matter that an agent has great sales, marketing, time management and other business skills, if the net commissions generated are not to the levels the company is requiring. It doesn't matter that the agent makes the sale to the client and the client is declined for any number of other factors. The agent did his/her job in selling, but other factors outside of the agent's control come into play: underwriting issues, client was untruthful as to their health, client changes their mind for any reason - lost job, died, etc....

These performance and reward systems focus on only one factor - the net commissions. They do not take into account the other abilities of the agent. The "Red Bead Experiment" brought to light what I have personally felt and experienced, as well as seen happening to many of my colleagues.

What have you personally experienced that was brought to light or clarified by the "Red Bead Experiment"?

[Anita Alston]

I had already Googled the Red Bead experiment, prior to class; so, had some knowledge of it already. However, I found it humorous that the experiment added the signage that is so prevalent in many workplaces, as "incentive" for improvement. I have worked, over 40 years, in many hospital systems across the country; and, each one had their own "coined" incentive phrases, posters, motivational educational seminars, etc. etc. Many healthcare corps. changed from one "innovation" to another, trying to encourage a good morale, helpfulness, etc. If their productivity or patient satisfaction numbers declined, they often changed tacts. Currently, I work for one that has utilized all the bells and whistles of the "FISH philosophy".....you know, the "choose your attitude....play....have fun..... be there for others, etc."
And, there are FISH cards you can use to expound on someone's above-and-beyond-the-call-of-duty helpfullness. The cards go in a fish-bowl; there is a drawing monthly for some extra little goodie, and email recognition. But, essentially, this does not change the work environment and costs the corporation $$ in obtaining materials and utilizing this copywritten "philosophy". What we really want is some attention to the problems at hand, validation of our concerns, extra help on units that are short-staffed, and a general environment of teamwork. Does management really listen to our concerns and act? Does the FISH philosophy really change the work environment for the better? What about our annual performance evaluations that are "mandatory" per Human Resources, but not connected to any incentive bonus? What good does all this do for the worker, or the workplace? My guess is, as demonstrated with the Red Bead experiment, there is not much correlation between management's choice of incentive phrases and materials and actual (measurable) results.
Anita