Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Wed Aug 08, 2007 11:41 am Post subject: Is it Time?
It is almost universally agreed that simply paying people more money will not necessarily increase the quality of work. For instance, a person unskilled at $20.00 per hour will still be unskilled at $30.00 dollars per hour.
Most would also agree, people are different as to their abilities and ethics. Some have a stronger work ethic than others. Some people are smarter than others and some have a great deal of natural talent. People with these attributes are considered desirable to most businesses. In a free-enterprise system, they can command higher wages because of the demand for the qualities they posses.
Any given person may not be any more suitable because of higher wages. Higher wages do however greatly increase the odds of attracting people who are most suitable. A service business lives or dies on the quality of its people.
I do not believe dumping more money into the current system will greatly improve things. I do believe a greatly improved system will involve much higher wages. Ironically, I also feel this may not result in much higher prices to clients.
My experience has been, cost can be lowered with highly skilled and well paid personnel. It’s simply cheaper to do it right the first time. Highly skilled and well paid people are generally more dependable, make fewer errors and have better outlook about their work.
The client inevitably bears all cost. Employee turnover, errors, damage to vehicles and shop equipment, it’s all part of overhead. The shop passes it on or goes out of business. Common practice seems to involve controlling cost by trying to control wages and does not seem to be working well.
Is it time for business to consider another approach? Thoughts?
People have visited your shop, AGCO, admired the way the business runs, learned that your employees are paid straight salary, and then implemented straight salary in their shops, expecting the same results.
Their results, however, have been dismal. Reports have come back of techs producing as little as three hours per day of billable labor.
Deming did say to take away incentive pay, like flat rate, spiffs, and bounuses. But he also said to replace all that with leadership, the other half of his point.
Deming's 14 'points' can be thought of as 'secrets to business.' It takes some time and effort to learn them, but the investment is worthwhile.
Joined: 19 May 2007 Posts: 206 Location: Camp Verde, AZ
Posted: Thu Aug 09, 2007 10:44 pm Post subject:
Bud wrote:
Deming did say to take away incentive pay, like flat rate, spiffs, and bounuses. But he also said to replace all that with leadership, the other half of his point.
Deming's 14 'points' can be thought of as 'secrets to business.' It takes some time and effort to learn them, but the investment is worthwhile.
What is leadership? I think that most owners and managers have problems with this. It is fairly easy to adjust parts margins, adjust the shop rate, or adjust the idle mix on a carburator. But working with people, that is tougher, and the results take longer to see.
We have a lack of confidence in our own abilities to get the best out of our employees. We are not sure if the employees will give their best? I think most owners started out as techs, we thought we were very good if not the best. From that mind-set it is hard to accept that other people may be as good. No one can do it as well as I can.
I do not think that leadership is one or two big things, but rather hundreds of little things.
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Tue Aug 14, 2007 11:57 am Post subject:
Bud wrote:
People have visited your shop, AGCO, admired the way the business runs, learned that your employees are paid straight salary, and then implemented straight salary in their shops, expecting the same results.
I wrote a story once about two farmers. One had a great crop, green, healthy and much higher than the other guy. The second guy painted his barn the same color as the first and even bought the same type tractor, but it just didn't help . . .
Bud wrote:
Their results, however, have been dismal. Reports have come back of techs producing as little as three hours per day of billable labor.
Deming did say to take away incentive pay, like flat rate, spiffs, and bounuses. But he also said to replace all that with leadership, the other half of his point.
Deming's 14 'points' can be thought of as 'secrets to business.' It takes some time and effort to learn them, but the investment is worthwhile.
The outcomes always depend on the inputs. Deming had 14 points and they were never meant to be used cafeteria style. All fourteen are necessary and each supports the others. Picking and choosing a few and ignoring the other points will never give desired results. This is the number one reason people fail to successfully implement the philosophy.
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Mon Aug 20, 2007 8:13 pm Post subject:
Hi Cirofpena,
Cirofpena wrote:
Bud wrote:
Hello Dave,
Leadership is a body of knowledge that can be studied and learned, just like physics, math, car repair, whatever.
Hello Bud,
Can you please be more specific? Point out to printed resources or maybe a web link.
I can't speak for Bud, but here is my interpretation of what Deming said, in Point Seven, Institute Leadership. I hope to write much more on this topic in the future, as I believe it is imperative to improvement.
Joined: 20 Aug 2007 Posts: 3 Location: Houston Texas
Posted: Tue Aug 21, 2007 1:20 pm Post subject:
louis wrote:
Hi Cirofpena,
I can't speak for Bud, but here is my interpretation of what Deming said, in Point Seven, Institute Leadership. I hope to write much more on this topic in the future, as I believe it is imperative to improvement.
Thanks, Louis. I'd sure missed your input in Iatn.
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Tue Aug 21, 2007 4:11 pm Post subject:
Hi Bud,
Bud wrote:
Many colleges offer classes in leadership.
Before his death, Dr. Deming was working on the theory of profound knowledge. He thought it was necessary for leadership. The components of profound knowledge were:
The theory of knowledge
The theory of a system
A knowledge of statistics and
A knowledge of psychology
He taught, one need not be an expert at any, but needs a working knowledge of all of the components. Heero Haquebord and Bill Baker took the work to the next level after Deming's death. Both are friends, I may be able to entice them to contribute an article on the subject.
Before his death, Dr. Deming was working on the theory of profound knowledge. He thought it was necessary for leadership. The components of profound knowledge were:
The theory of knowledge
The theory of a system
A knowledge of statistics and
A knowledge of psychology
Great. I was trying to narrow the topic so people could get a handle in it, and you expanded it again. Just kidding.
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I wrote a story once about two farmers. One had a great crop, green, healthy and much higher than the other guy. The second guy painted his barn the same color as the first and even bought the same type tractor, but it just didn't help . . .
Now that's the truth 