The document discusses lessons learned from a company that makes beads. It describes jobs they are hiring for including 3 workers, 1 inspector, and 1 chief inspector. It mentions quality standards and process improvement initiatives they have tried like incentives, motivational posters, and having a CMMI process. The document reflects on what managers could do to improve things for workers and identifies "red beads" or problems in the company. It discusses lessons around blaming workers, numerical targets being ineffective, and management variation causing more problems. Later sections discuss the theory of variation and statistical process control charts.

1. JOAKIM SUNDÉN

2. BODEN

6. Everyone Loves Music

8. David P.
Joyce
W Edwards
Deming

9. The White Bead Co.
ITIL
WE LISTEN TO
OUR PEOPLE
CMMI5
ISO9000
Only at their annual appraisal

10. 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.
1 inspector. 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.
ABOVE AVERAGE WORKERS
ONLY NEED APPLY

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

13. 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?

14. 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

15. Theory of Variation

16. The First Principle of the Theory of
Variation
We Should Expect Things
to Vary,
They Always Do

17. My performance
✓
Performance
✗
Time

18. Statistical Process Control
Charts
Upper Control Limit
✓ Average
Lower Control Limit
Performance
✗
Time

19. The Second Principle of the Theory of
Variation
Understanding Variation
Will Tell us
What to Expect

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

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

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

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

24. Setting a Target
Upper Control Limit
✓ Average
Lower Control Limit
Performance
✗
Time

25. “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

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

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

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

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

30. The Fourth Principle of the Theory of
Variation
Understanding Variation
Tells you When Something
has Happened

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

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

33. SPC for comparison
Team B
Team A
Team C

34. Joakim Sundén
Twitter: @joakimsunden
joakim.sunden@spotify.com
www.joakimsunden.com