Blog My Brain

Today I went to Barns & Noble and dig up a book I read two years ago, The Goal. Three hours gone by and I re-read some of the most interesting chapters. Hats to Goldratt, Good books like this one is hard to come by. It is a great inspirational story with down-to-earth insights. Most importantly, it tackles on theoretical challenges of management with common sense techniques. Now let me write down some great ideas so I don’t forget:
  
  
1. All processes have bottlenecks that determines the throughput of the whole system. Regardless how efficient you can run the non-bottleneck segments, the system performance would not improve. Put it simply, 10% improvement in the efficiency of the bottleneck = 10% of improvement in the whole system. And 10% improvement in non-bottleneck = 0% improvement of the whole system.
  
  
2. A sign of problematic bottlenecks is a long queue in front of it and the idleness of non-bottlenecks. Therefore, do not blame the subordinates who are idle, their idleness is inevitable when they are not the bottleneck.
  
  
3. Always use critical thinking to challenge tradition. The goal of a business is to make money. From my own experience, managers often lose focus on this issue. For example, automating manual processes is great, but does it improve the bottom line if the manual labor savings do not translate to reductions in payroll? I can help tons of people do their job more efficiently, but that just gives them more time to be idle if they are not the bottleneck.
  
  
4. The continously improvement of efficiency can be achieved by:

1. Identify the bottleneck.
2. Utilize all resources possible from non-bottleneck processes to improve the throughput of the bottleneck process.
3. Evaluate if the bottleneck problem is resolved.
4. Go back to step 1.

Since I am writing about continuous improvements, here is the cycle for improving quality:

1. Define the quality requirements demanded by the customer or market.
2. Measure the performance of the core processes.
3. Analyze the cause of quality issues and identify opportunities to improve.
4. Improve the processes with innovative solutions.
5. Control the change to it does not go back to the old way.

 
  
5. Managing life is not much different from managing a company.
  
  

admin :: Feb.11.2008 :: Business/Management :: No Comments »

After some discussion with my friend M and some more thinking,  I’ve decided that what I’ve learned in playing starcraft beats many eduction I’ve received.
 
 
Here are my reflections on the wisdom obtained by playing starcraft:
 
 
1. Getting Rich.   One of the most useful concepts in the book Rich Dad, Poor Dad is the way to financial freedom can be achieved by building a portfolio of passive income streams.   Being a starcraft player, I’ve known this concept for years.  How do you get a lot of resources (being rich) in starcraft?  You build a Probe/SCV/Drone, and it goes to mine resources.  Then you use what he mined to build another  Probe/SCV/Drone.  Soon, you realize you are rich.  The Probe/SCV/Done in Rich Dad’s term is “income generating assets”.  You use the income generated by these assets to acquire more such assets, and soon you will be filthy rich.
 
 
2.  Quality Management. As much as my management professor stresses on Deming’s PDSA cycle,  nothing teaches the continuous improvement concept better than starcraft.  PDSA is Deming’s model for constantly improving quality through Plan (Define the problem and create an improvement plan), Do (Execute the plan), Study (Study the results), Act (Standardize or Improve the process).   In starcraft, we improve our skills using the PDSA cycle unconsciously.  We think about why we lose, hypothesize a way to improve out game, try it out in battlenet, study the impact, and use it in future games if it works great.
 
 
3.   Finance & Investment.   Each starcraft game involves a series of financial and investment decisions.  When you spend money to build a unit or building, you are putting down money in expectation of future benefits.  In essence, in playing starcraft, we learn to deal with uncertainties and risks.  For example, when we decide to build a science facility rather than defensive units, we are taking risks that if we get rushed, this investment would render useless.   On the other hand, when we decide to rush the opponent, we are risking the development in exchange for a high chance of winning the game.   After all, managing risk/reward is the core of finance and investment.
 
 
4.  Team Work & Leadership.   When playing in battlenet, starcraft players form different teams in games.  Therefore to win online battles, team work is extremely important.   We have all learned what is good team behavior, what is bad ones, and how to deal with bad team players.  The coordination, cooperation and execution involved in a good starcraft battle is exactly what leadership classes teach us to do.
 
 
5.  Economics.   In a starcraft game, there are supply and demand of resources, science, military power, strategic positions, etc.  Whatever action you make, you learn to ask yourself, “is it worth it?”  We learn to constantly make cost/benefit analysis and optimize the allocation of limited resources.
 
 
6.  Business Management. Starcraft shows us that a good strategy is not enough to win.  To carry out the good strategy, we need good execution.  A high-speed execution involves the efficient use of various keyboard shortcuts.   Many companies fail not because they have the wrong strategy, but because of their failure to execute the strategy due to the lack of coordination or skillsets.
 
 
7.   Grand Perspective. When playing starcraft, we learn to think like the CEO or upper management.  The military units represent the people work under us (middle management, project teams, professionals).   They are just replaceable parts of the system.   At the time of crisis, we are all dispensible at the benefit of the company we work for.
 
 
8.  Psychology of Aggression & Competition.   Starcraft brings us the following psychological experiences:  rushing pleasure of winning,  team bonding in the face of a common enemy, the positive relationship between caring about something and the time/energy/emotion invested in it, etc.

admin :: Dec.15.2007 :: Business/Management, Finance/Investment, Psychology, Strategy :: No Comments »

Today I come across the following comic in the internet.  All I can say is “it is pure brilliance”.   The problems depicted are beyond mere miscommunication.  It shows the behavioral nature of each stakeholder, as well as the lack of cross-functional business units and talents.   

If you see your business having the above symptons, it is time to review and integrate your departmental goals and create cross-functional teams.

admin :: Nov.07.2007 :: Business/Management :: No Comments »

Weeks ago I read the book Fooled by Randomness. Besides the interesting stories on financial trading and risk management, the core message of the book is the fallibility of human knowledge. The fallacies that we often make are:

1. Overly associative. As my favorite quote in the book states, “Symbolism is the child of our inability and unwillingness to accept randomness.” We human like to assign meanings to anything, even when there are none. Religious people look at a Jesus-looking cloud and think it is a sign from God. Literature students discuss about symbolisms they find in books that the authors haven’t even thought about. In quality management, W. Edwards Deming noted that managers panic over common causes of variation which are just noises in the business process. Managers see a drop in revenue and demand explanation when in fact it is just a random event.

2. Survivorship Bias. We tend to see things that are special cases and mistake them as the norm. For example, newspapers report violences everyday. We read them and think that we are living in a horrible world. In a TED talk by Steven Pinker, he objectively analyzes historical data of violence and find that we are now living in the most peaceful time of human history. We read The Millionaire Next Door and think that education is not important to getting rich. It is true that highschool dropouts can be successful, but that does not mean they have the same chance to succeed as a college graduate.

3. Abnormal Distribution. Every process have a distribution of its outcomes. Fat tails in financial markets are common. If you have 99% chance of winning $1 and 1% chance of losing $100, the odds are against you even if you are to win 99% of the time.

4. Other Monte Carlo paths. In studying history and past events, people tend to judge a decision base on what happened instead of what could have happened. If a manager spends $1000 and wins a lottary that pays $1,000,000 when the odds of winning is 1 in 1,000,000, he is likely to get promoted for “making a smart move” or “taking some good risk” instead of getting fired for making a stupid bet.

admin :: Nov.05.2007 :: Business/Management, Psychology :: No Comments »