It's Time to Rethink Continuous Improvement

Six Sigma, Kaizen, Lean, and other variations on continuous improvement can be hazardous to your organization's health, writes Ron Ashkenas, managing partner of Schaffer Consulting and author of the new book Simply Effective.

While it may be heresy to say this, recent evidence from Japan and elsewhere suggests that it's time to question these methods. In the past year Japan's major electronics firms have lost an aggregated $21 billion and have been routinely displaced by competitors from China, South Korea, and elsewhere. Looking beyond Japan, iconic six sigma companies in the United States, such as Motorola and GE, have struggled in recent years to be innovation leaders.

3M, which invested heavily in continuous improvement, had to loosen its sigma methodology in order to increase the flow of innovation. Ashkenas recommends three new ways to approach continuous improvement: customize how and where continuous improvement is applied; question whether processes should be improved, eliminated, or disrupted; assess the impact on company culture.

That said, when referencing Japan, the author should have noted the extreme exchange rate challenges manufacturers in Japan have faced -- especially when selling to US customers. Read more at the HBR blog.

How Can American Express Help You?

Jim Bush was put in charge of call-center customer service for American Express. His basic insight was that breaking with industry orthodoxy by transforming those conversations into less structured, more human engagements would pay off.

Instead of evaluating service reps mainly by how quickly they got customers off the phone, as many companies still do, he switched to the net promoter score developed by Bain's Fred Reichheld. It's based on one question: would you recommend this company to a friend? AmEx's score has risen significantly under Bush's direction, and he was right - it pays off.

Customer spending is up, attrition is down. As AmEx's executive VP of world service, he oversees some 20,000 employees, about a third of the company's total. In a Q&A with Geoff Colvin, he talks about how the company has changed the way it trains service employees, the power of personality, turning collection calls into positive experiences, and much more.

Read the CNN article (so cool). 

Banking in the developing world: the poor are different

The Bill and Melinda Gates Foundation with the World Bank just published the Global Findex dataset. It fills a huge gap in the understanding of why the poor save and how they save. Read the Economist article. (Thanks, Sarah!)

The New Diamond Con

Edward Jay Epstein, author of "Have you every tried to sell a diamond?" followed-up in 2000 with a new piece on De Beers in the WSJ.

It's about De Beers' business strategy to maintain the control of diamonds -- even when moving out of conflict areas. (Thanks, Ross)

Have you ever tried to sell a diamond?

"An unruly market may undo the work of a giant cartel and of an inspired, decades-long ad campaign."

This Atlantic article from 1982 (!) is a classic. (Thanks, FA)

Why Does a President Need a Wife?

Could you imagine a president getting elected in the US as a bachelor or with a "live-in partner"? It's much more common in Europe. Check out the New Yorker article. (Thanks, Claire)

Paths Are Made By Walking

2012's Baccalaureate speaker at the University of Pennsylvania was an unconventional choice for an Ivy League school. To address their newly-minted graduates, aspiring to dazzling careers, they picked a man who has never in his adult life, applied for a job.

A man who hasn't worked for pay in nearly a decade, and whose self-stated mission is simply "to bring smiles to the world and stillness to my heart". This off-the-radar speaker launched his address with a startling piece of advice. Following up with four key insights gleaned from a radical 1000 km walking pilgrimage through the villages of India.

As he closed his one-of-a-kind Graduation Day speech, the sea of cap and gowned students rose to their feet for a standing ovation. Read full transcript of the talk by Nipun Mehta on the Daily Good. (Thanks, Jess and Neil)

The Opposite of Loneliness

Tragically Marina Keegan passed away over the weekend in a car crash. One of her last essays in the Yale Daily News has regained life -- and is spreading quickly over the internet. Take a chance to read it. It's haunting and touching.

Learn more about Marina's life in the NYT Dealbook.


(Thanks, Caroline, Claire and Alessia)

Consumer is queen

Ashok Alexander describes his experience as the Indian director of the Bill & Melinda Gates Foundation (and McKinsey alum). He talks about his "clients" and what "products" they are looking for to escape an HIV and violent reality. Read more in the Hindustan Times.

Fracking Is Flopping Overseas

With all the buzz over fracking - and the 86 percent drop in US natural gas prices the boom has helped cause - you'd think the rest of the world would crash the party. Yet shale development in China, home to the world's biggest unconventional gas resources, has been slower than predicted.

Early enthusiasm faded in Poland after studies pegged drilling costs at three times higher than in the US. In 2011, Britain's Cuadrilla Resources stopped fracking after some minor quakes were linked to its drilling in northwest England. The practice has been banned elsewhere. US gas deposits within shale fields are among the world's cheapest to exploit, thanks to accommodating geology.

European basins tend to be smaller and occur in shapes that are less cost-efficient to access. That's bad news for ExxonMobil, Chevron, ConocoPhillips, and other companies that grabbed 109 licenses in Poland in recent years in hopes of a US-style gas gold rush. The relatively slow development of shale abroad should benefit the US. Japanese utilities were paying $20.87 per million British thermal unites (BTUs) for Yemeni gas in January - eight times US gas prices at the time. The bigger the price gap, the greater the profit for shippers of gas from the US.

Read the BusinessWeek article.

Before Leaping, Listen to a Giant

What does Harry Markowitz, one of the most influential economists of all time -- and creator of "portfolio theory." think of Facebook's volatile stock price? Find out in the NYT article. (Thanks, Tom)

How Women Can Get Ahead: Advice from Female CEOs

In response to recent comments by former General Electric CEO Jack Welch at the Wall Street Journal's Women in the Economy conference, the newspaper approached the 18 women who are CEOs of Fortune 500 companies for their opinions.

Welch had critiqued mentoring programs and support groups, saying that women executives should focus instead only on their own performance. The Wall Street Journal asked the CEOs what factors, personal or in the workplace, fueled their careers and what myths about the advancement of women they encountered along the way.

Eleven gave their thoughts and practical advice, echoing much - but not all - of what Welch had to say, albeit with a bit more nuance and finesse. Along the career path, the CEOs say, pursue new skills relentlessly. Change jobs after you've mastered the current one. Be willing to tack sideways on the career track, or even backward, to pick up key expertise or command a business unit. In contrast to Welch, the CEOs endorse the idea of mentorship, which was key to many of their careers.

Read the WSJ article.

Hope springs a trap

An absence of optimism plays a large role in keeping people trapped in poverty.

Read the WSJ article. (Thanks, Sarah)

The Flight From Conversation

We live in a technological universe in which we are always communicating. And yet we have sacrificed conversation for mere connection. We’ve become accustomed to a new way of being “alone together.”

Read the full NYT article. (Thanks, Neil)

Europe Agrees: Greece Is the Laziest, Most Incompetent Nation in the EU

The first line made me laugh: "Greece is the hardest-working country in the EU, according to Greece -- and only Greece."

Read the (unintentionally?) hilarious article at Yahoo! Finance. (Thanks, Claire)

Sheryl Sandberg Addresses the HBS Class of 2012

Check out the full text of the commencement speech at Poets and Quants.

Obama’s Barnard commencement speech

"President Obama delivered a commencement speech on Monday at Barnard College, a woman’s college in New York affiliated with Columbia University, where he attended and earned a bachelor’s degree after transferring from Occidental College. Obama’s sister, Maya Soetoro-Ng, is an alumna of Barnard."

He is a phenomenal speaker. Check out the Washington Post article with the text of the speech. (Thanks, Jules)

Axis of Awesome

(Thanks, Jamie)

The rise - and fall - of Zoe Cruz

It's from 2008: the story of Zoe's career at Morgan Stanley, and her almost-CEO title. Read the New York Magazine article.

It's long, but worth it. The power struggle on page 5 is fascinating.

(Thanks, Joyce)

Leeds on Finance... on Facebook

"Americans, on average, now spend 20 percent of their online time on FB."

Impressive. Read the Leeds on Finance post.

The Service Patch

As college graduates consider their career prospects, they should think about how to be as much as they think about what to be.

This is all over my inbox / newsfeed! Check out David Brooks article if you haven't seen it already. (Thanks, Griffin!)

Segmentation for Innovation: Understanding the Financial Service Needs of the Poor in Mexico

This is a fantastic infographic to understand why low-income populations need credit products. Check out the CGAP blog for the post behind the image.

Hospitals prepare for a plus-size future

Hospitals, clinics making changes to accommodate heavier patients, reduce the risk of injury to staff.

Stretchers that can transport 500-pound patients. Wheelchairs designed for people who weigh 700 pounds. Toilets made to support half a ton. Read more in the Houston Chronicle. (Thanks, Alessia)

More American Workers Outsourcing Own Jobs Overseas

More American Workers Outsourcing Own Jobs Overseas - The Onion

They figured us out. (Thanks, Connor)

A Generation Hobbled by the Soaring Cost of College

 

Taking on debt has become a central part of the college experience for many students. Read more in the NYT. (Thanks, Dad)