Red Bead Experiment

1. RED
BEAD
EXPERIMENT
Maarten
Hoppen
Donderdag
5
november
2015

2. W Edwards
Deming
David P.
Joyce
Many thanks to!
J
Twitte
joakim.
Joakim
Sundén

3. White Bead
Company

4. The White Bead Co.
IIP
ISO9000
WE LISTEN
TO OUR
PEOPLE
Only at their annual appraisal
CMMI 5

5. WE
WANT
YOU!

6. We Are Recruiting!
3 willing workers. Must be willing to put in best efforts.
Continuation of job is based on performance.
No experience in making beads necessary. Educational
requirements-nil.
2 inspectors. Must be able to distinguish red from white. Must be
able to count to 20. No experience necessary.
1 chief inspector. Same qualifications as inspector. Must be able to
speak in a loud voice.
1 recorder. Precise, follow orders, writing capability, human
judgement
ABOVE AVERAGE WORKERS ONLY NEED APPLY

7. FINISHED FILES ARE THE RESULT OF YEARS
OF SCIENTIFIC STUDY COMBINED WITH
THE EXPERIENCE OF MANY YEARS.

8. SHOUT OUT YOUR COUNT
3 - 2 - 1 - SHOUT

9. FINISHED FILES ARE THE RESULT OF YEARS
OF SCIENTIFIC STUDY COMBINED WITH
THE EXPERIENCE OF MANY YEARS.

10. Lessons learned
• Did incentives work?
• Did the motivational posters help?
• Did have a CMMI standard process
work?
• What could managers do to improve
things for the workers?
• What are the red beads in your
company?

11. Lessons learned
• It’s the system not the workers
• It’s management thinking that designed the system
• Arbitrary numerical targets were completely ineffective
• Rewarding or punishing the workers had no effect
• Rigid and precise procedures are not sufficient to produce
quality
• Keeping the ‘best’ workers did not work
Management tampering creates more problems than it solves
• Posters and slogans are at best useless and can be insulting and
create resentment
• The biggest source of variation was in the system

13. Theory of Variation

14. The First Principle of the Theory of
Variation
We Should Expect Things
toVary,
They Always Do

15. My performance
Performance
Time
✓
✗
My performance
✓

16. My performance
Performance
Time
✓
✗
My performance
Performance
✓
✗
My performance
Performance
Time
✓
✗
My performancePerformance
Time
✓
✗
My performancePerformance
✓
✗
My performance
Performance
✓
✗
My performan
Performance
Time
✓
✗
My performa
Performance
✓
✗
My perform
Performance
✓
✗
My perform
Performance
Time
✓
✗
My perfor
Performance
Time
✓
✗
My perfo
Performance
Tim
✓
✗
My perf
Performance
✓
✗
My per
Performance
✓
✗
My pe
Performance
✓
✗
My p
Performance
✓
✗
My
Performance
✓
✗
Charts
Performance
Time
✓
✗
Upper Control Limit
Lower Control Limit
Average
Statistical Process Control
Charts

17. The Second Principle of the Theory of
Variation
UnderstandingVariation
Will Tell us
What to Expect

18. Signal or Noise?
10
20
30
40
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Velocity
Control
Limits
10
20
30
40
Signal or Noise?
Velocity
Reward!
No more Mr Nice Guy!
Manager
repents...
Tough management
works!
20
30
40
Signal or Noise?
Velocity
Reward! Manager
repents...
Tough management
works!
10
20
30
40
SignalorNoise?
Velocity
Reward!
NomoreMrNiceGuy!
Manager
repents...
Toughmanagement
works!
20
30
40
SignalorNoise?
Velocity
Reward! Manager
repents...
Toughmanagement
works!
Signal or Noise?
Reward!
Manager
Repents
No more Mr Nice guy!
Tough Management
works!

19. Signal or Noise?Signal or Noise?
10
20
30
40
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Velocity
Control
Limits

20. Signal or Noise?
10
20
30
40
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Velocity
Control
Limits
What to expect
10
20
30
40
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Velocity
Average
What to expect

21. What to expect
10
20
30
40
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Velocity
Average
Expectations...
10
20
30
40
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Velocity
Expectations

22. Setting a TargetPerformance
Time
✓
✗
Upper Control Limit
Lower Control Limit
Average
Setting a targetSetting a TargetPerformance
Time
✓
✗
Upper Control Limit
Lower Control Limit
Average

23. “I recently asked a colleague [CIO] whether he would
prefer to deliver a project somewhat late and
overbudget, but rich with business benefits, or one that is
on time and underbudget but of scant value to the
business.
He thought it was a tough call, and then went for the on-
time scenario.
Delivering on time and within budget is part of his IT
department’s performance metrics.
Chasing after the elusive business value, over which he
thought he had little control anyway, is not.”
Cutter Sr. Consultant Helen Pukszta

24. If you give a manager
a numerical target, he’ll
make it, even if he has to
destroy the company in
the process.

25. The Third Principle of the Theory of
Variation
Work on the Causes of
Variation,
Which are Always Found
in the System

26. Majority of Performance is Down
to the System
Majority of Performance is
Down to the System
A bad system will
defeat a good person
every time.
System
Individual
95%
5%

27. System Conditions
Work Design
Policies
Measures
Structure
Roles
Procedures
Information
Job skills
Knowledge
Business Cases
Funding
Poor requirements
Inspection
Compliance

28. The Fourth Principle of the Theory of
Variation
UnderstandingVariation
Tells you When
Something has Happened

29. Special Cause vs Common Cause
Special Cause vs
Common Cause
10
20
30
40
50
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Velocity

30. Did we improve?Did we improve?
0
10
20
30
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Change
introduced
after sprint 8

31. SPC for comparison
SPC for comparison
Team A
Team B
Team C