This website or its third-party tools use cookies which are necessary to its functioning and required to improve your experience. By clicking the consent button, you agree to allow the site to use, collect and/or store cookies.
Please click the consent button to view this website.
I accept
Deny cookies Go Back

Intelligent Management

Deming and Theory of Constraints for CEOs and Executive Teams for the Age of Complexity. Ess3ntial Critical Chain Project Management

  • Home
  • about us
    • the founders
    • Dr. Domenico Lepore
    • Intelligent Management Success Stories
    • Our Books
    • Clients
    • Expanding Spiral of Positive Systemic Results with Intelligent Management
  • Decalogue Methodology
    • Decalogue Methodology for Whole System Management
      • How to adopt systemic organization management
    • Management Must Evolve Fast – 15 Days to Radically Improve Company Performance
    • 10 Steps for Transformation
    • Systemic Organization Management
    • Resource Library for Systemic Management
    • Our Education Modules for Systemic Management
  • Contact
  • Our Whole System Blog
  • Intelligent Management Italia
You are here: Home / Systems Thinking / Intelligent Emotions the Statistical Way

Dec 02 2012

Intelligent Emotions the Statistical Way

All processes, human and non, whether we are aware of it or not, are affected by variation. If we want to be able to predict the outcome of our processes, i.e. manage them, we need to understand, measure and manage the variation in those processes. The alternative is to manage by the seat of our pants. To function in a healthy and successful way, organizations do not need heroes of firefighters, they need managers that understand how to manage variation. Less glamorous, much more sustainable.

 

 

Intelligent Management and Statistical Process Control (SPC)

Let’s start by getting one thing straight: SPC is NOT a technique; it is a way of thinking, a mindset. SPC is foundational for Intelligent Management.

All processes, human and non, whether we are aware of it or not, are affected by variation. If we want to be able to predict the outcome of our processes, i.e. manage them, we need to understand, measure and manage the variation in those processes. The alternative is to manage by the seat of our pants. To function in a healthy and successful way, organizations do not need heroes of firefighters, they need managers that understand how to manage variation. Less glamorous, much more sustainable.

Intelligent emotions

The tool used in Statistical Process Control to measure variation in a process is commonly known as a control chart or process behaviour chart. These charts provide insight into processes and trigger rational thinking. After many years of relentless application of Shewhart’s charts, we can safely say that they are a powerful tool to manage intelligently the emotions triggered by the analysis of a process. We would discourage anybody from managing organizations using probability theory; what we suggest here is to leverage some basic, well proven, scientific ideas concerning the intrinsic variation of any human and organizational activity to take decisions that have an economical value.

In control and out of control

The way we deal with variation in a system is totally different in the case of ‘in control’ and ‘out of control’.

When a process is in control, it is working with the minimum variation possible given specific conditions of use. If these conditions remain stable, the process is in the best possible state as its behaviour is predictable over time.

In order to further improve this process we can only try to reduce its variation with the following actions:

  • Stratify the data by dividing them into categories based on different factors and analyze how the data fall into subgroups
  • Separate the data by dividing them into various categories and treating them separately from the others
  • Gain experience by applying the Deming Continuous Improvement Cycle (PDSA): plan, do the experiment, monitor its results, learn from the effects observed and act

When a process is out of control, there is not a lot we can say about it.

Indeed, its behaviour is not predictable over time. It is subject to unpredictable jumps and all the data relating to it lose their predictive potential and become ‘historical’ data.

What to do when things are out of control

In order to act on an out of control process, i.e. try to bring it into control we must:

  • Gather data as quickly as possible to identify rapidly the special causes that generate instability in the system
  • Activate an emergency solution to limit damage
  • Find out what made the special cause occur
  • Implement a long-term solution

There are at least two excellent reasons for not wanting a process to be out of control. The first is connected to the impossibility of predicting which often makes it impossible to plan and carry out programs.

The second is linked to the costs associated with activities in a company that confuses common causes with special causes of variation.

Indeed, performance that seems good will often disguise poorly optimized use of resources.

However, this does not mean that ‘out of control’ is always bad. When you have a stable process, let’s say a sales data series which predictably oscillate within the upper and lower control limit, and we are trying to enforce a plan to increase sales, we actually hope to see the system going OUT of control on the upper side, so as to detect that an ACTION caused a shift in the system toward the desired direction, namely an increase in sales. By the same token, a process in statistical control is not necessarily a desirable process; oscillation limits that are too wide are often the result of poor understanding and execution of the process and force unnecessary costs on the system.

Again, the analysis must be performed with intelligence and common sense, and the charts have always to be read considering the operational context.

For further information on Intelligent Management’s approach to systemic management see our website www.intelligentmanagement.ws and our latest book ‘Sechel: Logic, Language and Tools to Manage Any Organization as a Network.

Written by angela montgomery · Categorized: Systems Thinking · Tagged: cause and effect, change, complexity, Comstock Mining Inc., conflict, conflict cloud, conflict resolution, constraint, core conflict cloud, critical chain, Deming, digital cowboys, Domenico Lepore, economics, education, entropy, fear, future reality tree, Goldratt, hierarchy, human resources, information system, innovation, intelligence, Intelligent Management, interdependencies, leadership, learning, Lepore, Management Training, meaningful, mining, negative branch reservation, network, Network Theory, new economcis, new economics, organization, organizational design, physics, post-digitial, Prerequisite Tree, process, project, project management, Quality, statistical process control, sustainability, synchronization, Systems Thinking, theory of constraints, Thinking Process Tools, transformation, Transition Tree, variation

Search Form

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Sign up for our Blog and receive our White Paper ‘Out of the Crisis – A New Kind of Science for Management’

Sign up for our blog here to receive all our blog posts by e-mail.

Search Form

Recent Posts

  • What Does it Take to Be a Leader in Today’s Complex World? January 21, 2021
  • A New Economics for Sustainable Prosperity – Out of the Crisis Series Part 7 January 13, 2021
  • Identifying Assumptions to Unlock Innovation and Move Beyond the Crisis – Out of the Crisis Series Part 6 January 6, 2021
  • Learning to Think Systemically to Make Informed Decisions and Pre-empt a Crisis – Out of the Crisis Part 5 December 30, 2020
  • How to Manage Decentralized Work – Out of the Crisis Series Part 4 December 23, 2020
  • Vital Insights from Managing Variation and Constraints – Out of the Crisis Series Part 3 December 16, 2020
  • What’s Wrong with Organizational Structure – Out of the Crisis Series Part 2 December 9, 2020
  • A Serious Knowledge Gap Affecting Leaders and Executives – Out of the Crisis Series Part 1 December 2, 2020
  • How to Prevent Chaos in Any Project or Initiative November 26, 2020
  • The Words We Use Can Change Our Reality – Shifting to a Systems View November 20, 2020
  • The Human Constraint – Going Beyond What We Think Is Possible November 11, 2020
  • Building Company Culture with Process flow November 6, 2020
  • Scheduling a Project – The Most Critical Activity For Every Business October 30, 2020
  • Transforming to an End-to-End Operating Model with a Whole System Technology October 22, 2020
  • How to Improve Company Culture and Performance with a Transformation Based on Competencies October 15, 2020

Social Icons

  • Facebook
  • Google+
  • RSS
  • Twitter

Archives

  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • March 2014
  • February 2014
  • January 2014
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • March 2013
  • February 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011

Recent Posts

  • What Does it Take to Be a Leader in Today’s Complex World? January 21, 2021
  • A New Economics for Sustainable Prosperity – Out of the Crisis Series Part 7 January 13, 2021
  • Identifying Assumptions to Unlock Innovation and Move Beyond the Crisis – Out of the Crisis Series Part 6 January 6, 2021
  • Learning to Think Systemically to Make Informed Decisions and Pre-empt a Crisis – Out of the Crisis Part 5 December 30, 2020
  • How to Manage Decentralized Work – Out of the Crisis Series Part 4 December 23, 2020

Connect with us on LinkedIn and Twitter

  • LinkedIn
  • Twitter

Sign up for our blog

  • Home
  • Blog Theory of Constraints & Deming
  • Library
  • How to adopt systemic organization management
  • Knowledge Base for ‘The Human Constraint’
  • Contact Us

© 2020 Intelligent Management Inc. Canada

Privacy Policy