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> But those systems were built by large government contractors, and they focused on satisfying the law and the rules. They focused on completeness, on perfectio

> But those systems were built by large government contractors, and they focused on satisfying the law and the rules. They focused on completeness, on perfection, on conformance to spec. Gets me to thinking about 'large enterprise' stuff in general. In the situations I've been on large enterprise projects, most of them were just modifying existing processes ('streamlining', etc), but there was no huge payoff at the end. In most cases, whether the end users could use the system at all, or 10% faster, or 50% faster, no one's job was going to be significantly changed. The 'enterprise' as a whole wouldn't change all that much. I worked on a different system - years ago - creating a web-based ordering system. Previously, the company had orders faxed or mailed in, then keyed in to a system. This process took 2-3 weeks per month to get all the orders 'in'. We put up a web system, and they had all their orders in, in electronic format, in 18 hours, with no need to bring in temp workers to key in orders. That was transformative, but... even though the new system is vital, there's not much more that can be done with it - reducing 18 hours down to, say, 9 hours, won't have any effect on the company's operations. Going from 3 weeks to 1 day was transformative - they could make different supply chain decisions, better scheduling for materials/staff/etc. At some point, many 'enterprise' system changes may not deliver transformative benefits, just incremental, and it may be harder to get anyone to care about incremental changes.

wpietri 7y ago
I get that for sure. But one of the lessons I take away from Toyota's history is that continuous improvement can make a big difference if it's tackled systemically. There's a graph in one of Mike Rother's books, probably Toyota Kata that shows per-worker productivity of major automotive manufacturers. Toyota started behind; they were catching up from Japan's decimation in WWII. the US Big 3 eventually leveled off. Toyota caught up and then just kept going, allowing them to produce much better cars for much less. At some point a US automaker in trying to understand it ordered parts from a Japanese supplier. When they received the parts, they did their standard QA checks, measuring part size and variance. Except they couldn't measure the variance, because their instruments weren't precise enough. That high precision allowed downstream improvements: higher quality, lower cost. So sure, the local optimization of order entry from 3 weeks to 1 day removed a bottleneck, improving the whole flow of the system. But it's not like the system had no bottlenecks. As always, the bottleneck just goes somewhere else. And even when a given process isn't the bottleneck, removing waste is always beneficial. The problem isn't that the change isn't worthwhile. It's that a company's threshold for "significant" is too high.
- mgkimsal 7y ago
  > removing waste is always beneficial. The problem isn't that the change isn't worthwhile. It's that a company's threshold for "significant" is too high I don't disagree in theory. But convincing someone to spend time money on something with a low ROI is usually a challenge. A bunch of low ROI projects, coordinated over time, can provide a larger ROI when viewed strategically, but you have to have the right people in place to take that view.
  - wpietri 7y ago
    Definitely! And I think that's often symptomatic of other organizational issues. E.g., A lot of American business culture focuses on local incentives and optimizations. If a manager is being evaluated and paid based on metrics A, B, and C, how much can we expect them to ignore that and solve systemic problems? The standard MBA solution to this is that higher-level managers must design ever more elaborate systems to correctly measure the right behaviors. But a) that's somewhere between hard and impossible, b) the people filling those positions are only human, and c) the average CEO tenure is ~5 years, and executive tenure in a given position is even lower, so there's not a lot of incentive for anybody to create a system optimized for long-term value.

wpietri 7y ago

I get that for sure. But one of the lessons I take away from Toyota's history is that continuous improvement can make a big difference if it's tackled systemically. There's a graph in one of Mike Rother's books, probably Toyota Kata that shows per-worker productivity of major automotive manufacturers. Toyota started behind; they were catching up from Japan's decimation in WWII. the US Big 3 eventually leveled off. Toyota caught up and then just kept going, allowing them to produce much better cars for much less. At some point a US automaker in trying to understand it ordered parts from a Japanese supplier. When they received the parts, they did their standard QA checks, measuring part size and variance. Except they couldn't measure the variance, because their instruments weren't precise enough. That high precision allowed downstream improvements: higher quality, lower cost. So sure, the local optimization of order entry from 3 weeks to 1 day removed a bottleneck, improving the whole flow of the system. But it's not like the system had no bottlenecks. As always, the bottleneck just goes somewhere else. And even when a given process isn't the bottleneck, removing waste is always beneficial. The problem isn't that the change isn't worthwhile. It's that a company's threshold for "significant" is too high.

mgkimsal 7y ago
> removing waste is always beneficial. The problem isn't that the change isn't worthwhile. It's that a company's threshold for "significant" is too high I don't disagree in theory. But convincing someone to spend time money on something with a low ROI is usually a challenge. A bunch of low ROI projects, coordinated over time, can provide a larger ROI when viewed strategically, but you have to have the right people in place to take that view.
- wpietri 7y ago
  Definitely! And I think that's often symptomatic of other organizational issues. E.g., A lot of American business culture focuses on local incentives and optimizations. If a manager is being evaluated and paid based on metrics A, B, and C, how much can we expect them to ignore that and solve systemic problems? The standard MBA solution to this is that higher-level managers must design ever more elaborate systems to correctly measure the right behaviors. But a) that's somewhere between hard and impossible, b) the people filling those positions are only human, and c) the average CEO tenure is ~5 years, and executive tenure in a given position is even lower, so there's not a lot of incentive for anybody to create a system optimized for long-term value.