How to Measure Anything

About an year and a half ago, I was struggling with a measurement problem. Being a Six Sigma Black Belt it was clear that in order to make sustainable process improvements, I need to quantify process performance and establish a sound measurement system around it. In a continuous physical process, where you are making a product or part, it can be done relatively easily. But in a transactional environment it is not easy to normalize a measurement and establish a simple, yet sound metric.

Then, I came across this great book, "How to Measure Anything: Finding the Value of Intangibles in Business". And no wonder this became one of my favorite books. A few important things which I learned about measurement are:

Concept of Measurement:
Measurement is a set of observations that reduce uncertainty where the result is expressed as quantity. Note that the uncertainty has to be quantified, but the subject of observation might not be a quantity itself.

Object of Measurement:
Using a short series of connections, called Clarification Chain, we can see intangibles becoming tangibles:
1. If it matters at all, it is detectable/observable.
2. If it is detectable, it can be detected as an amount (or range of possible amounts)
3. It it can be detected as a range of possible amounts, it can be measured.

Four Useful Assumptions:
1. Your problem is not as unique as you think.
2. You have more data than you think.
3. You need less data than you think.
4. There is a useful measurement that is much simpler than you think.

These concepts sound very theoretical, but will become more clear in the context, once you read the book and the accompanied text. Whenever, I get into the measurement quandary I think of these things and it helps me to look at my problem in an entirely new light. In my experience, most important of these are the four useful assumptions. In a normal day-to-day business operation, I come across so many situations, where "we have no data" is the "root cause" of the "problem" we are seeing. Come on, that can't be possible. Look at all the data/IT systems we have built around us in last 10 years. I force my thinking as "we gotta have this data somewhere"!

And this is how I now look at my measurement related problems.

Iconoclast

Iconoclast: A Neuroscientist Reveals How to Think Differently by Gregory Burns was my first read on the interesting concept of neuroscience to get an idea of how our human brain works. An Iconoclast is defined as the person who attacks settled beliefs and perhaps, we all are aware of this definition. Now, interestingly, I found that there is a a neuro-scientific approach to explain this iconoclastic behavior which made me look at this behavior in a positive way.

Per this research, our brain has three natural roadblocks that hamper the innovative thinking:

Flawed Perception.
Fear: Fear of failure/public ridicule/unknown.
Inability to influence others.

I thought about my past experiences, when I couldn't make an iconoclastic (or bold, out of the box) decision and found that a good majority of the times, at least one of the above roadblocks was at work. I will try to summarize some key takeaways from this book to remove these roadblocks. But remember that you would need to read the book as the research experiments and the detailed examples will enable you to grasp these takeaways :

• In order to think differently, try to perceive things differently. And remember that vision is not same as perception. Perception is a product of mind and brain, not eyes.
  


• The most likely way you will perceive something, will be consistent with your past experience. So provide your brain something it has never processed earlier to force it out of predictable perceptions.


• Imagination comes from the visual system.


• Brain takes shortcuts to preserve the energy, also called efficiency principle.


• Repetition of same tasks/activities/places leads to diminished neural responses by our brain, called repetition suppression. So, keep bombarding your brain with new experiences to force your brain out of its categories.


• Brain remodels itself under stress and remembers the unpleasant experiences. ('So, while time heals the wound, as far as brain is concerned, scars remain")


• Use cognitive reappraisal technique to regulate the expression of fear. "This simply means reinterpreting emotional information in such a way that the emotional component is diminished." Essentially, it means manage the situation through your EQ.


• Fear interacts with the mind's perceptual system and alters the decision-making process. Especially, "the fear of social isolation is deeply woven into human brain."


• The Law of Large Numbers: "The human brain is so susceptible to the opinions of others that it is willing to disregard its own visual inputs." How to deal with this: Isolate yourself and think independently, associate with like-minded individuals, develop a tough skin, don't force yourself to come to a unanimous decision.


• Networking with non-iconoclasts: Social intelligence has two key aspects: familiarity and reputation."Increase the world's familiarity with you and develop a reputation so that people are drawn to you." E,g.: Small World Experiment. Know the connectors of the society and use your networking skills to gain public exposure. "Iconoclast eventually needs to make his audience comfortable with his idea".
  

Coversational Capital: Lessons

As an Amazon Vine-Voice reviewer, I get an opportunity to review their products. Recently I read and reviewed Conversational Capital: How to Create Stuff People Love to Talk About. This was my first read on marketing and brand management. And it was certainly an interesting one too.

Key Take-Away: In order to be successful in today's competitive world, any product or service has to go beyond mere customer satisfaction. Designers, producers, manufactures have to keep the fact in mind that it is not the just the key attributes which matter, but rather it is the whole experience of using that product/service which matters to the customer. And it is this valuable experience which results in the best publicity for any product or service, i.e. the word-of-mouth publicity. It happens when your customers themselves become your brand ambassadors.

The experiential delightment which a customer gets from using your product or service. Authors have packed eight such "experience amplifiers" together and named them "Engines of Conversational Capital". These are more or less, the concepts which we already know, but packaged together and linked to each other. Citing examples from various brands and their marketing techniques, authors have done a good job in explaining their point.

1. Rituals
2. Exclusive Product Offering
3. Myths
4. Relevant Sensory Oddity (RSO)
5. Icons
6. Tribalism
7. Endorsement
8. Continuity

Examples of some successful brands through such word-of-mouth publicity: Apple iPhone, Cirque Du Soleil, IKEA, Hermon-Miller Aeron chair, Black AmEX card, Toyota Scion, Ben & Jerry, Nokia, and numerous others which are used in this book.

Overall, I would recommend reading this one to understand how the brands and their marketing folks try to entice us, the customers, towards their product.

The Six Sigma Way by Peter Pande

Read it thoroughly! yes, that is the best way I can describe this book.

"The Six Sigma Way" by Peter Pande is THE best book on Six Sigma. Peter Pande has done a great job in explaining the concept of Six Sigma through this text. If you are Black Belt, or Master Black Belt, or just someone thinking to go that path, this book will prove to be a very useful source of information. Most companies provide their own training material for Six Sigma. However, such material is only good to know the various tools, their examples and how to use them. In order to be successful in this profession, you need to go beyond that material to understand the philosophy of Six Sigma. This book talks about all those "behind the scenes" things, which one needs to understand in order to properly implement Six Sigma and manage multiple projects. I found it useful on top of my training material and classroom training. Moreover, the authors have an extensive experience with Six Sigma, which brings a practical aspect to their writing and language, a very necessary attribute to enhance reader's understanding.

This book is divided into three parts:

I. Executive Overview - Understanding of Six Sigma and why it works. It is also good to build your pitch to convince your leadership team.

II.How to Prepare for Implementation - what are key roles in Six Sigma, how to select right people for those key roles, and how to get buy-in of key stakeholders.

III. Roadmap: Steps on how to actually implement Six Sigma. tells you how to select the processes and projects to make a solid impact on your business.

In my personal opinion, as a Six Sigma professional, you will always learn something new, every time you go through the pages of this book.

CQE Primer for ASQ Certification

CQE Primer from Quality Council of Indiana is, in my opinion, the best study book to prepare for the ASQ CQE exam. It covers the Body of Knowledge (BOK) in required depth with solved examples and unsolved questionnaire at the end of each section. The depth of each section covered depends on the depth as needed by the BOK (Remember, Evaluate, Analyze & Apply).

Non-statistical topics are well explained using bullet-lists and organized as significance, advantages, disadvantages etc. Statistical topics are covered in ample detail showing the basic calculations process in solved examples. If you are familiar with the basic terminology either from your job or from school (years ago), you will not need any other Statistics textbook.

Biggest advantage of this Primer is that it is a three-ring binder and hence, very convenient and easy to find stuff in there as compared to other bound handbooks. I purchased another handbook initially, but ended up using the Primer thoroughly.

Lessons from The Goal

The Goal by Eliyahu M. Goldratt is one of the book, which has influenced my thinking a lot. This book introduced the Theory of Constraints to the world of business and has made its way to B-Schools as a textbook. Eliyahu Goldratt has done an excellent job in explaining his theory using a novel-style writing. It is a story of a struggling plant manager to improve his plant's performance and save it from closure. The expert in this story provoked the main character to "derive his solutions by supplying the question marks instead of exclamation marks".

If your organization/plant faces the classic problem of Quality, Cost & Delivery: "why can't we consistently get a quality product out the door on time at the cost that can beat the competition?" or if you have a plant manager who is "always promoting some new thing he's doing, and most of the time what he's doing isn't any different from the things everyone else is doing", then you better read this book and make others to read it as well.

The important lessons one will learn from this text are summarized below. This will be beneficial to you only if you have read this book once and would like a recap. If you have not read the book yourself, then do not expect to gain the understanding of these concepts from this post.

• The goal of an organization is to make money by increasing net profit , while simultaneously increasing ROI and cash flow.
• Three critical measurement to achieve this goal and develop operational rules to successfully run a business are: throughput, inventory, and operational expenses.
• Inventory is turned into throughput by incurring operational expenses.
• So, the real goal is to: Increase throughput while simultaneously reducing both inventory and operating expense.
• Every process is a set of dependent events...in combination with statistical fluctuations.
• What's happening isn't an averaging out of the fluctuations in our various speeds, but an accumulation of the fluctuations.
• And mostly it's an accumulation of slowness - because dependency limits the opportunities for higher fluctuations.
• Balance flow, not capacity.
• A system of local optimums is not an optimum system at all; it is a very inefficient system.
• The numbers are meaningless unless they are based upon the constraints of the system.
• Bottlenecks dictate inventory as well as throughput.

So, the Theory of Constraints is postulated as:

1. Identify the system's constraint(s).
2. Decide how to exploit the system's constraints.
3. Subordinate everything else to the above decision.
4. Elevate the system's constraint(s).
5. If in the previous steps, a constraint has been broken, go back to Step 1, but do not cause inertia to cause a system's constraint.
   

blink & Six Sigma

Looking at the image above, your adaptive unconscious might come to a split-second decision that I am comparing the message given in this book with the philosophy of Six Sigma. (Click here to see my review on blink). This time you might be right. Being a Six Sigma Black Belt, I believe in data-based decision-making and not on that divine thought or "gut-feeling". That does not mean that Six Sigma teaches one to get drowned in analysis before making a small decision. Six Sigma teaches one to improve processes by reducing variation. That variation might result in increased defects, high cycle time or something else, which is adversely affecting the bottom line of the business.

Blink is an interesting read and very grasping indeed. But, the first impression, it gives is that we can make decisions without thinking. Is that right? Can we really harness the huge potential of our mind and make split-second decisions, which are accurate? I think this topic is very debatable. When I read this book, the comparison with Six Sigma instantly popped up in my mind. But now, it feels that these two philosophies are not comparable. However, we probably can utilize the power of hindsight and unconscious, while taking action items on basis of the data analysis results. Say, when we establish y=f(x) of the process, we may use this power to take decisions on how to change x, in order to improve y. Thus, blink & Six Sigma can complemet each other.

Built to Last: A must for everyone

I recently finished reading this book, Built to Last, which I would aptly tag as a textbook for Leadership 101. This book is a must read for every career-conscious person, at any level of organizational hierarchy. The best thing about this book is that every reader will be able to get something useful and meaningful out of it. Unlike other run-of-the-mill leadership books/material which just mention stories for motivation, this book is completely based on real concrete data. Rather it is presented in the form a thesis/dissertation after about six years of research. Before reading this book, I did believe in some of the myths which are shattered in the first chapter and then proved to be only myths. The conclusions are completely data-driven.

Choosing a set of companies as visionary companies on the basis of their overall past performance (not just financial) and an another comparison company, authors, Jim Collins and Jerry Porras, cite following as the fundamental elements of a visionary company:

1. Company itself is the ultimate creation, not the charismatic leaders.
2. It is driven by a core ideology (core values + purpose), not merely more profits.
3. Core ideology is preserved, but the process to practice and manage them is continuously evolving.
4. A company has to set BHAGs (Big, Hairy, Audacious Goals) to drive progress.
5. Company maintains a cult-like culture. This helps the employees to make a relationship with the company, which consequently results in dedication.
6. Do not hesitate to try a variety of things and then embrace the practices, which work and produce desired outcomes.
7. Process of grooming leaders internally never stops or even slows down.
8. Encourage internal competition and thus help in the overall growth of employees, thus the company.
9. Everything must be aligned properly. Be it the policies, practices or operations, they must fit in properly together and achieve the growth and BHAGs.
10. The vision matters.....a lot!!!