- Principled definition, imbued with or having moral principles (often used in combination): high-principled.
- Distributive Law. The 'Distributive Law' is the BEST one of all, but needs careful attention. This is what it lets us do: 3 lots of (2+4) is the same as 3 lots of 2 plus 3 lots of 4.
Operating a product development process near full utilization is an economic disaster.
—Donald Reinertsen
3.1 History, Globalization, and Values-Based Leadership; 3.2 Case in Point: Hanna Andersson Corporation Changes for Good; 3.3 Ancient History: Management Through the 1990s; 3.4 Contemporary Principles of Management; 3.5 Global Trends; 3.6 Globalization and Principles of Management; 3.7 Developing Your Values-Based Leadership Skills. Makes it easy to create animated and interactive user interface designs. Whether you’re designing the flow of a multi-screen app, or new interactions and animations, Principle lets you create designs that look and feel amazing. Focus professional 1 11 0 6. Distributive Law. The 'Distributive Law' is the BEST one of all, but needs careful attention. This is what it lets us do: 3 lots of (2+4) is the same as 3 lots of 2 plus 3 lots of 4. So, the 3× can be 'distributed' across the 2+4, into 3×2 and 3×4. And we write it like this.
To achieve the shortest sustainable lead time, Lean enterprises strive for a state of continuous flow, which allows them to move new system features quickly from ‘concept to cash’. Accomplishing flow requires eliminating the traditional start-stop-start project initiation and development process, along with the incumbent phase gates that hinder flow (see Principle #5 and Lean Budgets).
Three primary keys to achieving flow are:
- Visualize and limit work in process (WIP)
- Reduce the batch sizes of work items
- Manage queue lengths
Visualize and Limit WIP
Overloading teams and programs with more work than can be reasonably accomplished is a common and pernicious problem. Having too much WIP confuses priorities, causes frequent context switching, and increases overhead. It overloads people, scatters focus on immediate tasks, reduces productivity and throughput, and increases wait times for new functionality. Like a highway at rush hour, there is simply no upside to having more work in a system than the system can handle.
The first step to correct the problem is to make the current WIP visible to all stakeholders. A Kanban board is a simple way of doing that. Figure 1 illustrates an example.
The Kanban board illustrates the total amount of work in process and the state of each work item. It also serves as an initial process diagnostic, showing the current bottlenecks. Often, simply visualizing the current volume of work is the wake-up call that causes practitioners to start addressing the systemic problems of too much work and too little flow.
The next step is to start balancing the amount of WIP against the available development capacity. This is done by establishing—and continually adjusting—WIP limits for the relevant states. Simply, when any workflow state reaches its WIP limit, no new work is taken on. This matches demand to capacity and increases flow through the system.
Limiting WIP, however, requires knowledge, discipline, and commitment. It may even seem counterintuitive to those who believe that the more work you put into the system, the more you get out. That can be true up to the point of nearly full capacity, but thereafter, the system becomes turbulent and throughput decreases. There is no substitute for effectively managing WIP.
Reduce Batch Size
Another way to reduce WIP and improve flow is to decrease the batch sizes of the work—the requirements, designs, code, tests, and other work items that move through the system. Small batches go through the system more quickly and with less variability, which fosters faster learning. The reason for the faster speed is obvious. The reduced variability results from the smaller number of items in the batch. Since each item has some variability, the accumulation of a large number of items has more variability.
The economically optimal batch size depends on both the holding cost (the cost for delayed feedback, inventory decay, and delayed value delivery) and the transaction cost (the cost of preparing and implementing the batch). Figure 2 illustrates the u-curve optimization for batch size [1].
To improve the economics of handling smaller batches—and thus increase throughput—teams must focus on reducing the transaction costs of any batch. This typically involves increasing the attention to and investment in infrastructure and automation, including things such as continuous integration, automating the build environment, automated regression testing and more. (This is a primary purpose of implementing DevOps.)
Manage Queue Lengths
The third method of achieving flow is to manage queue lengths. Little’s Law—the seminal law of queuing theory—tells us that the average wait time for service from a system equals the ratio of the average queue length divided by the average processing rate. (While this might sound complicated, even the line at Starbucks illustrates that.) Therefore, assuming any average processing rate, the longer the queue, the longer the wait. Simply, reducing queue length decreases delays, reduces waste, increases flow and improves predictability of outcomes.
For solution development, this means that the longer the queue of committed work awaiting implementation by the team, the longer the wait time, no matter how efficient the team. So, for faster service, the length of the queue must be reduced or the processing rate must be increased. While increasing the processing rate (more efficient development and test practices, automation, etc.) is a consistent and common goal, the fastest method to reduce wait time is to reduce the queue length. As illustrated in Figure 1, visualizing the work helps immensely.
Here are some additional tips:
- Keep team and program backlogs short and largely uncommitted. This allows new, higher priority work to enter and leave the system with less wait time.
- Establish WIP limits for each process step. This means that the length of the queue in front of any one state is limited to the WIP limit.
- Be especially careful of large, long-term commitments. It’s always tempting to look into the future and make a long-range commitment which seems to satisfy the need for certainty about the future. But very long-term commitment increases the response time for new opportunities. In other words, every long-term commitment decreases the agility of the enterprise.
Summary
These three primary mechanisms for implementing flow—visualizing and limiting WIP, reducing the batch sizes of work, and managing queue lengths—increase throughput and accelerate value delivery. Implementing them gives people a sense of control over the process, and triggers fast and measurable improvements in customer satisfaction and employee engagement.
Learn More
[1] Reinertsen, Donald G. The Principles of Product Development Flow: Second Generation Lean Product Development. Celeritas, 2009.Last update: 29 September 2019
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Learning Objectives
- Why might global trends influence management principles?
- What is the GLOBE project, and why is it relevant to management?
- What is a cultural dimension, and how do cultural dimensions affect business dealings and management decisions?
Globalization and Cross-Cultural Lessons
Despite the growing importance of global business, Fortune 500 companies have reported a shortage of global managers with the necessary skills (GMAC Global Relocation, 2008; Gregersen, et. al., 1998). Some experts have argued that most U.S. companies are not positioned to implement global strategies due to a lack of global leadership capabilities (Hollenbeck & McCall, 2003)
It’s easy to understand the problem: communicating and working with people from different countries can be a challenge—not just because of language issues but also because of different cultural norms. For example, in the United States, we tend to be direct in our communication. If you ask a U.S. manager a question, you’ll tend to get a direct answer. In other cultures, particularly in southern Europe and Japan, the answer to a question begins with background and context—not the bottom line—so that the listener will understand how the person arrived at the conclusion. Similarly, in some cultures, it is considered rude to deliver bad news or say “no” to a request—instead, the speaker would give a noncommittal answer like “we’ll see” or “we’ll try.”
Figure 3.7
Our places of work are more diverse than ever before.
Oregon Department of Transportation – Diversity – CC BY 2.0.
Country-by-country differences are so prevalent that a worldwide team of scholars proposed to create and validate a theory of the relationship between culture and societal, organizational, and leadership effectiveness. Called the GLOBE Project, it included 170 researchers working together for 10 years to collect and analyze data on cultural values and practices and leadership attributes from more than 17,000 managers in 62 societal cultures. In its 2006 report, GLOBE identified the following nine dimensions of culture (Javidan, et. al., 2006).
Performance Orientation
Should you reward people for performance improvement and excellence? In countries like the United States and Singapore, the answer is yes. Organizations in these countries use employee training and development to help people improve their skills and performance. In countries like Russia and Greece, however, family and background count for more than performance.
Uncertainty Avoidance
Life often brings unpredictable events, and with them anxiety. Uncertainty avoidance reflects the extent to which members of a society attempt to cope with anxiety by minimizing uncertainty. Should you establish rules, procedures, and social norms to help your employees deal with uncertainty? In countries where uncertainty avoidance is high, like Brazil and Switzerland, the answer is yes. People in such societies want strict rules, laws, and policies to eliminate or control the unexpected. Employees in these countries tend to seek order, consistency, and structure. Countries with low uncertainty avoidance, in contrast, are less rule-oriented. They tolerate a variety of opinions and are open to change and taking risks. Countries with low uncertainty avoidance include Hong Kong and Malaysia.
Assertiveness
How assertive, confrontational, or aggressive should you be in relationships with others? In highly assertive countries like the United States and Austria, competition between individuals and groups is encouraged. Managers may set up incentives that reward the best idea, even it it’s contrary to established practices. People in less assertive countries, like Sweden and New Zealand, prefer harmony in relationships and emphasize loyalty and solidarity.
Power Distance
Power distance reflects the extent to which the less powerful members of institutions and organizations expect and accept that power is distributed unequally. Should you distribute decision-making power equally among the group? In high-power-distance countries like Thailand, Brazil, and France, the answer is no. People in these societies expect unequal power distribution and greater stratification, whether that stratification is economic, social, or political. People in positions of authority in these countries expect (and receive) obedience. Decision making is hierarchical with limited participation and communication. Australia, in contrast, has a power distance rating that is much lower than the world average. The Australian view reinforces cooperative interaction across power levels and stresses equality and opportunity for everyone.
Gender Egalitarianism
Should you promote men rather than women? Counties with low gender egalitarianism are male dominated. Men hold positions of power to a much greater extent in low-gender-egalitarianism countries like Egypt and South Korea. Companies operating in more gender-egalitarian countries such as the Nordic countries, Germany, and the Netherlands encourage tolerance for diversity of ideas and roles regardless of gender.
Principle 3 6th Edition
Institutional Collectivism
Institutional collectivism refers to the extent to which people act predominantly as a member of a lifelong group or organization. Should you reward groups rather than individuals? In countries with high institutional collectivism such as Sweden, the answer is yes. Countries with low institutional collectivism, such as in the United States, emphasize individual achievement and rewards.
Humane Orientation
Should you reward people for being fair, altruistic, generous, and kind to others? In countries such as Malaysia, this practice is more prevalent and encouraged than in low-humane-orientation countries such as Germany.
Future Orientation
Will your employees favor activities that involve planning and investing in the future for long-term payoff? Or do they want to see short-term results? Future orientation is defined as one’s expectations and the degree to which one is thoughtful about the future. It is a multifaceted concept that includes planning, realism, and a sense of control. Companies in countries with high future orientation, such as China and Singapore, will have a longer-term planning horizon, and they will be more systematic about planning. Corporations in countries that are the least future-oriented, such as Argentina and Russia, will be more opportunistic and less systematic. At the same time, they’ll be less risk averse.
Global Ventures Gone Awry
When Corning proposed a joint venture with a Mexican glass manufacturer, Vitro, the match seemed made in heaven. But just two years later, the venture was terminated. What happened? Cultural clashes eroded what could have been a lucrative partnership. To start, American managers were continually frustrated with what they perceived to be slow decision making by Mexican managers. Mexico ranks higher on the power distance dimension than the United States—company structures are hierarchical, and decisions are made only by top managers. Loyalty to these managers is a high priority in Mexico, and trying to work around them is a big taboo. Mexicans also have a less urgent approach to time. They see time as more abundant than their U.S. counterparts. As a result, Mexicans thought that Americans wanted to move too fast on decisions, and they perceived American directness in communication as aggressive (Brake, 1996). Additional vignettes on managing across borders are shared next.
Managing Across Borders
Lines on the Map Miss the Real Story
Diversity is deeper than variations between countries. Sometimes those differences appear in different regions of the same country. For example, some parts of Mexico don’t use Spanish as the primary language. Wal-Mart’s Mexico’s Juchitan store, therefore, conducts business in the local Zapotec tongue, encourages female employees to wear traditional Zapotec skirts, and does the morning company cheer in Zapotec.
Talent Abroad
With so much variation across countries, it’s no surprise that countries vary in level of talent and the supply of managerial, skilled, and unskilled labor. Companies shouldn’t assume that emerging market countries offer inferior labor pools. GM, for instance, found that 50% of its assembly-line workers in India have college degrees—a ratio much higher than in other countries.
Local Solutions by People Who Understand Local Needs
Nokia uses local designers to create country-specific handset models. The models designed in India for Indians are dust resistant and have a built-in flashlight. The models designed in China for the Chinese have a touch screen, stylus, and Chinese character recognition. Local designers are more likely to understand the needs of the local population than headquarters-located designers do.
Strategies in emerging markets conference, held by the MIT Center for Transportation and Logistics (CTL) on March 7, 2007, Cambridge, MA.
Key Takeaway
Because the business environment increasingly depends on collaboration across regional and national borders, a successful global manager needs to be culturally sensitive and have an understanding for how business is done in different cultures. In some countries, loyalty to the group is key. Other countries celebrate mavericks and rule breakers if they can get things done. Knowing how best to communicate with your coworkers and employees—whether to be direct or indirect, whether to follow strict protocol or be more causal, whom to involve in decisions—are all important considerations.
Exercises
- You’ve just been made a manager in Sweden, known for its institutional collectivism. What incentives and reward structures would you use to motivate your employees?
- How would you prepare workers for an overseas assignment?
- Your company has 12 branches in the United States and will be opening its first branch in Brazil. Your company prides itself on its self-managed teams. Will you keep this policy in the new country? Why or why not?
- You’re a manager in Japan, and you’ve just discovered that a team leader under your supervision has made a mistake that will result in a quality problem. How will you handle this mistake?
- You work in Hong Kong for a Swiss-owned firm. The Swiss are known for their high uncertainty avoidance. What differences might you expect to see from your Swiss bosses compared with your Hong Kong employees?
- What aspects of P-O-L-C would be most likely to change based on what you have learned in this section?
References
Principle Nutrition Omega 3 6 9
Brake, T. (1996). The Global Leader (p. 203). New York: McGraw-Hill. Additional vignettes on managing across borders are shared next
Global Relocation Trends Survey report 2008. Retrieved October 13, 2008, from http://www.gmacglobalrelocation.com
Gregersen, H. B., Morrison, A. J., & Black, J. S. (1998, Fall). Developing leaders for the global frontier. Sloan Management Review, 21–32.
Hollenbeck, G. P., & McCall, M. W. 2003. Competence, not competencies: Making global executive development work. In W. Mobley & P. Dorfman (Eds.), Advances in Global Leadership (Vol. 3). Oxford: JAI Press.
Principle 3 6 Math
Javidan, M., Dorfman, P. W., de Luque, M. S., & House R. J. (2006, February). In the eye of the beholder: Cross cultural lessons in leadership from Project GLOBE. Academy of Management Perspectives, 20, 67–90.