Taking Risks verses Taking Chances

For the most part, all of us have a robust fear of failure. We are good at counting the cost of trying and failing. We are also pretty much aware of what we don’t want to lose.  The result is that we miss opportunities due to not taking the risk of possible failure.

What we are not good at, is evaluating the risk of not trying. We decide to play it safe. Understand, though, you are guaranteed to fail if you don’t try. By playing it safe all the time, you limit your opportunity for success.
So what risks should you take? Fortunately, you are the only person who can answer this question. Do you have a plan? Do you know why you are interested in taking the risk? Is success tied in some way to your effort? These are just a few of the questions involved.
It comes down to balancing the difference between taking risks or taking chances. Taking a “calculated risk” is meaningful, but no one has ever heard of taking a “calculated chance”. A calculated risk is where you know what you need to do in order to be successful and you have some control over the criteria for success. For example, deciding to seek a Six Sigma Black Belt certification involves the risk of not making a passing grade. You control that risk with your effort.
Taking chances involves activities that put you in jeopardy in situations where no matter what you do, success is controlled by chance. For example, mortgaging your home in order to buy lottery tickets. You have hope, but understand that hope is not a plan.
The definition of an entrepreneur is someone who has a passion for seeing their dreams become reality. They live in fear of not trying. While other people fear losing something they already have, entrepreneurs fear not gaining something they want but don’t have.
So here is the point. Be an entrepreneur with your life. It is wise to be aware of the cost of failure, but at the same time be aware of the cost of not trying.

Cycle Time and Utilization

In order to improve my on-time delivery of service, do I add resources to my process, or do I try to improve my process cycle time?  The first consideration is that increasing resources increases your cost of operation. Improving cycle time does not. Another way to look at this is to compare your process cycle time with percent utilization of resources.

There is a relationship between variability in cycle time and percent utilization of resources. The source of this variation can be found in quality, rework, employee issues, etc. When variation is high, the percent utilization of resources reflects that variability and can impact on-time delivery, cost, and knowing how to allocate capacity (hiring, capital equipment, etc.).

Finding Sources of Variation

Typically, the most suspect processes or process steps for introducing variation are manual or judgment oriented in nature.  For example, if an individual applies personal judgment within a process you would expect to see bias or higher variation in the process output. Automated processes will typically have more consistent performance and lower variation.

One of the best ways to find these manual or judgment steps in a process is through the use of a process map. As a process is mapped, decision points are represented as diamonds. This becomes the first place to look for variation.

Lean and Mean Process Improvement CD and Audio Book

Lean and Mean Process Improvement is now available on CD as a PDF along with an assortment of Six Sigma Tools. Email me at walt.m@att.net for details on how to purchase this CD.

Work started last week on converting Lean and Mean Process Improvement to an audio book. This work is in progress. I will post notification about availability as soon as it is ready. If you email me at walt.m@att.net, I will notify you when it is ready for distribution.

Practical Application of Hypothesis Testing

By following a consistent format the Six Sigma team and its customers can better understand and explain hypothesis test results and conclusions. Reviewers know exactly where to look for information, which will increase their confidence in the results. This is an example format to use.

Practical Problem

This is a statement that describes the practical question to be answered by the test. It is written in process owner or customer language and states what is being asked.  It is phrased as a question.

Statistical Problem

Intuition and Data Analysis

The analysis of data is now, and always has been, problematic. We are not machines. Our thinking is affected by intuition and experience, which are not empirical in nature. In business, Six Sigma or not, the ability to see information from both an empirical perspective and from the perspective of human stake holders (not empirical), is critical to quality decision making.

Two Dimensional Thinking

 

A two-dimensional thinker sees the world as a polarized place. Who you are and what you believe becomes categorical. It is either one way or the other. These individuals can see facts, but truth eludes them because the facts are generally considered without context.
The problem with two dimensional thinkers is that they skew, or misinterpret, facts in order force them into a two dimensional framework. As a result, they frequently have “the facts”, but do not know, or are misrepresenting, the truth. This is how marketers sell their ideas, products or services. They build context around a set of facts so that the listener’s interpretation is guided to the desired conclusion. As you watch and listen to the world around you, see if you can see this take place.  How much of what you hear is fact and how much is context? Does the context pass the reality test?
Context defines truth by giving facts relevance. Conflict between people is generally the result of two dimensional thinking. This is demonstrated by the win/lose attitude of the conflicting parties. Both sides bend contextual information to fit their argument. Resolution can usually be gained by getting to a win/win attitude, which is based upon the understanding that there is an alternate solution to the conflict that the win/lose mentality cannot see. The alternate solution is typically based upon a more honest contextual framework.
All of this makes two dimensional thinkers less effective in problem resolution, listening and leadership. These areas of human thought require the ability to see things from differing perspectives. The “why” of a situation is just as important as the “What”, and the “why” is generally contextual in nature, not categorical.
Moving beyond two dimensional thinking involves accepting that most words and events in our lives have meanings that are subject to interpretation. We call this perspective.  You have heard the saying, “One man’s trash is another man’s treasure.” The world looks different from different perspectives.
Seeing the world from different perspectives involves tying facts to context that may be separate from your own reality.  One of the best ways to accomplish this is by listening. Stephen Covey stated it nicely by saying we must “seek first to understand, then to be understood.” Understanding is a continuous process, not a categorical one. Try, sometime, to truly listen to someone. Your ears, eyes and mind are open, but your mouth is shut. Allow yourself to evaluate alternate perspectives for the purpose of understanding. This is not about losing your own perspective or replacing it, although that may happen.  It is simply a matter of seeking to see a situation through someone else’s eyes.
Six Sigma, based solely upon statistics, is two dimensional in nature. It tells us the “what” but not the “why”. When contextual information is paired with statistical results, the “why” becomes a part of the dialog. By understanding contextual information, we are able tie causality to defects and improve processes. This way the human element is part of the picture.

If you Aren’t Measuring It You Aren’t Managing It

A favorite axiom in management is, “If you aren’t measuring it, you aren’t managing it”. Just as driving a car with your eyes closed will result in disaster, running a business without some sort of performance feedback will result in business disaster.

The collection and use of data is important because things are rarely what they seem to be. Data helps us separate what is really happening from what we think is happening (or what we want to be happening). When we make decisions based on how things feel or how they have always been, we are operating in the “as we think it is” world. This is a prescription for disaster. The successful business operates in the real world. We call this the “as-is” world.

Thanksgiving Notes

This will not be a post about Six Sigma or personal development. It is a time for being thankful and telling those you love how you feel.

Things I am thankful for and people I care about:

My mother and her recovery from cancer surgery.
My wife who deserves recognition for putting up with me.
My grandson Caleb who brings light into every corner of my life.
My son and the difference his life makes with others.
My daughter-in-law whom I love as if she were my own daughter.
My job and the opportunities it gives me.
My friends. Special mention: Lonnie who gave me a job, Brian and Fadi who share my burden at work.
My readers, who follow my words agree or not.

Personal Development and Six Sigma

You might ask why I write about personal development on a website that is supposed to be focused on Six Sigma. This is a question that I hear from those who are trained in Six Sigma, but I rarely hear by those who are not.