Quality Management Journal Book Reviews - July 2000 - ASQ

Quality Management Journal Book Reviews - July 2000

Contents

From Worst to First: Behind the Scenes of Continental’s Remarkable Comeback.

Gordon Bethune, with contributions by Scott Huler. 1998. New York: John Wiley & Sons. 294 pages.

Reviewed by Mary E. Blanco, St. Mary’s College of California

From Worst to First is a remarkable story documenting the resurrection of one of the nation’s 10 largest airlines, Continental. It describes how a corporation with more than $6 billion in sales revenues operated in the red for a full decade with more than $200 million in annual losses; how its downward spiral was halted; and how it became one of the nation’s top airlines. The book reveals how a dysfunctional organization, which for 10 years could not retain a CEO longer than one year, was pulled out from under its pending doom on the verge of its third bankruptcy, and amazingly became a symbol of success that other airlines strive to emulate.

Under the reigns of an entirely new management team, this organization went from $200 million in the red to $200 million in the black, and doubled that in the following year. Continental went from being a company that hadn’t made a profit in 10 years to one that managed to have 16 straight quarters of profit.

The author, Gordon Bethune, became Continental’s tenth CEO in a 10-year period, and with the help of a hand-picked management team, led this failing airline into a 360° turn. However, Bethune is the first to remind anyone who believes he was born a successful executive, that his roots are those of a boy raised by a single mother and the son of a hardworking crop duster. Success was not handed to him on a silver platter. He suffered many hard knocks in his climb to success.

Desiring to escape his boring life in San Antonio, Texas, Bethune dropped out of high school at the age of 17 to join the Navy. While there, and through the course of his early adult years, he found he tended to gravitate toward airplanes. His first real job in the Navy was that of an airplane mechanic. In his desire to avoid the bottom-of-the-barrel onerous work assignments, he continually took special classes that provided him opportunities for promotions. After 19 years of Navy duty, Bethune had risen from seaman to lieutenant, and had returned to school to obtain his high school diploma. Following his Navy years, Bethune completed community college and was enrolled at Texas A&M when his first airline call came.

Bethune’s purpose for writing this book is to encourage others to cope in similar situations–whether it is a broken corporation or any dysfunctional situation. Bethune implores readers to learn lessons from reading his book, what it took him years to learn, and to be able to help fix what is broken.

He believes that one cannot expect employees to be top performers without showing them respect, being truthful, and rewarding them for their accomplishments. He strongly believes in teamwork, and maintains an “all for one and one for all” mentality, and that when the company is successful, everyone succeeds and is rewarded. On the other hand, he also believes that when the company is not meeting its goal, everyone fails. His reward system is set according to this criterion.

Bethune’s management style is unique. He is honest and does not hesitate to speak his mind. He strongly believes that whether the news is good or bad, it must be honestly shared. He believes that problems as well as successes should be laid out for all concerned parties. Through this management style of communication, Bethune took a group of 40,000 people, who had thoroughly lost faith in the company, its leadership, and each other, and turned them into reliable, dependable, and faithful satisfied employees.

Throughout the book Bethune carries a repetitive theme of “what gets measured gets done.” His path to improving the process, or product, is to first determine its key. Once the key is discovered, the objective is to focus on that key until goals are clearly defined, and then to clearly communicate those goals in as many ways as possible, to all concerned, in a manner that brings forth voluntary acceptance of those goals. He strongly believes that it is crucial to have a tool in place to measure the attainment of the goals and gratefully reward those who achieve them.

This is not a typical management book. It is evident that the author’s maturity and seasons of experience provide a unique way of illustrating his message. He includes some rather interesting stories to illuminate his point. He is quite a storyteller. Throughout the book he shares many humorous stories, and is extremely descriptive and openly speaks his mind. In fact, he shares several of his personal life experiences, where his stubbornness and outspokenness placed his career in jeopardy.

The Disney Way: Harnessing the Management Secrets of Disney in Your Company.

Bill Capodagli, Lynn Jackson, and Fred Wiersema. 1999. New York: McGraw-Hill. 221 pages.

Reviewed by Pamela C. Rudy, St. Mary’s College of California

Walt Disney built his company on four pillars: dream, believe, dare, do. Legend has it that Walt Disney explained his success as: “I dream, I test my dreams against my beliefs, I dare to take risks, and I execute my vision to make those dreams come true.” Walt Disney started his company with a $500 loan from an uncle that insisted on being repaid in cash rather than taking an ownership interest in the company. Had he opted for stock in the Disney Company instead, the return on his $500 would have amounted to almost a billion dollars from 1923 to the present.

Capodagli, Jackson, and Wiersema introduce 10 principles that exist in the heart of the Disney legend that can be and have been adapted to other companies to fit their specific needs. Those principles are as follows:

  1. Give every member of your organization a chance to dream, and tap into the creativity those dreams embody.
  2. Stand firm on your beliefs and principles.
  3. Treat your customers like guests.
  4. Support, empower, and reward employees.
  5. Build long-term relationships with key suppliers and partners.
  6. Dare to take calculated risks in order to bring innovative ideas to fruition.
  7. Train extensively and constantly reinforce the company’s culture.
  8. Align long-term vision with short-term execution.
  9. Use the storyboarding technique to solve planning and communication problems.
  10. Pay close attention to detail.

In addition to using examples from Walt Disney’s productions and theme parks, the authors also incorporated President John F. Kennedy’s 1961 challenge to America to put the first man on the moon. Kennedy had a dream that he firmly believed could become a reality; he dared to make such a commitment and to embark on the space project. In doing, the world not only saw man walk on the moon, but the scientific community also reaped tremendous benefits that have affected the entire planet.

Capodagli, Jackson, and Wiersema demonstrate in great detail how Disney was able to challenge and promote enthusiasm among his Imagineers. One of the examples is Disney’s use of storytelling, which can be a powerful tool for focusing an organization on a particular problem or project and for unleashing employees’ creativity by giving them the power to dream. An example of using the storytelling technique was when the Disney Company set out to build an additional water park at Disney World. The team met in the office of the team leader to get the project under way. The office had many items of personal memorabilia, of which several were snow globes. Picking up one of the globes and shaking it, the vice president said, “Too bad we can’t make a park out of one of these.” Another team member asked “Why not?” From that point, the team took off on the theme of building a ski resort in the sunshine of central Florida. One artist sketched a picture of an alligator wearing earmuffs; another drew a whimsical rendition of a winter resort enclosed in a snow dome. Realizing that this was impossible, the team turned to the storytelling method so popular with Disney. The result was Blizzard Beach–melted ski runs that turned into water rides. This technique united team members around ideas that inspired their creative playfulness and drew them completely into the project’s vision.

The authors were able to translate the 10 basic principles on which the Disney Company is based into generic terms that could be applied to management on any level in any forum. Not everyone is challenged with creating fresh new animated films or theme park attractions, but we are all challenged with finding fresh new approaches to effectively manage. Capodagli, Jackson, and Wiersema suggest that successful, innovative companies define what is important and then communicate those values to their employees. By encouraging everyone to live those values day to day, a secure, familiar atmosphere arises in which employees at every level feel comfortable breaking down traditional barriers and participating in a worthwhile way.

Managing Upside Down: The Seven Intentions of Values-Centered Leadership.

Tom Chappell. 1999. William Morrow & Co. 220 pages.

Reviewed by Vivian Louie, St. Mary’s College of California

Tom Chappell, founder and owner of Tom’s of Maine wrote this book, where he describes the seven intentions of value-centered leadership, a program that he has created and taught to several CEOs, managers, and all his employees. This program is designed to allow people to open themselves spiritually, and from the inside, so that they are able to channel their purpose to their business effectively. The program creates changes in people’s lives, how they do business, and establishes a community of workers. It will turn “talkers into listeners, egomaniacs into collaborators” (p. xvii). This book was written because of the success of Tom’s of Maine. It does not discuss the financial success of the company, but the success of the people who run the company and work within and around it.

Managing Upside Down is about reorienting the way managing is handled. It is about the style, structure, and mindset of managing and leadership. It is about “abandoning the corporate hierarchy... establish(ing)...values, and commit(ting) yourself to them without compromise” (p. xvii). The book is sectioned into chapters by each of the seven intentions. Each chapter is designed to explain and teach how to take each step, and explains how and why the intention worked for others. There are examples and stories from people who work at Tom’s of Maine that benefited from the value-centered leadership program.

Chappell begins by discovering the values, beliefs, vision, and reason for being that will become the heart and soul of the business. These values must be more than making money; they must be for the common good of the company, employees, and community. Thus, managers must add the employees’ and community’s views of what is important to formulate a perspective beyond that of only market and consumers. Chappell talks about “reversing the values of American business by making social responsibility a pre-requisite of being in business” (p. 15). He discusses why it is beneficial to the company and people if the work environment and people of the company, not just the board, but all employees are considered vital and important.

Collaborate leadership and teamwork is effective and efficient for business. “Leadership is a process, not a person” (p. 26). Chappell shows how to create an organization where group leaders replace managers and bosses; how the program has allowed employees to become “accountable for four things: the company’s statement of beliefs, mission and reason; their teams; their immediate team leader; and their own personal growth” (p. 26). The author believes that if the company believes in and is responsible for its employees and the community, then the employees become more dedicated and productive. Tom’s of Maine takes managing one step further by caring about its employees while they are working, and recognizing that they have a life outside of work and that family and health are vital too.

It is refreshing to know that there are companies that look beyond the bottom line and that is what Tom’s of Maine does. Companies do have to make a profit to survive, but not at the cost of their employees. Management style does not only have to be authoritative, but can also be friendly. It is clear from this book that caring, honesty, and trust are not only for personal relationships, but for business relationships as well. Managing Upside Down invites a new way of running a business and managing people.

Peter Drucker–Shaping the Managerial Mind: How the World’s Foremost Management Thinker Crafted the Essentials of Business Success.

John E. Flaherty. 1999. New York: Jossey-Bass. 420 pages.

Reviewed by E. Alexis Dees, St. Mary’s College of California

This book is a summary of the contributions Peter Drucker has made to the business world and to society in shaping management as professional practice. The author intended this book for an audience of business executives, social organizations, academics, and senior managers responsible for strategic planning.

The development of management and the history of modern business practice and management, as well as modern management techniques, are woven together in this book. There is virtually no separation among these elements, but the focus is clearly on Drucker’s contributions to all of these areas as well as his philosophies on business and management and their impact.

The author begins by taking readers through Peter Drucker’s personal history, and reveals that the forces that shaped Drucker are the same forces that shaped his philosophies on management and ultimately management itself.

Aside from the biographical aspects of the book, the author packs in a great deal of information regarding Drucker’s technical contributions to the business world along with the history and evolution of modern business practices. Of particular interest is the focus Drucker brings to the need for corporate social responsibility and environmental awareness, and that profit in and of itself is woefully inadequate as a measure of success.

The information contained in this book about business history, the history and social evolution of management, and Drucker’s thoughts, criticisms, and contributions to the field is wide ranging, interesting, and informative. The author takes readers through Drucker’s early life, his written works, and the simultaneous evolution of management practices in business. This is followed by a thorough historical section that shows Drucker’s impact on strategy, entrepreneurship, and executive effectiveness.

There is a great deal of technical information in this book. The author provides Drucker’s step-by-step processes in a number of areas as well as key concepts for managing change in the business environment, embracing risk in strategic decision making, the true meaning of entrepreneurship, and executive effectiveness.

I was impressed with the adoration evident in Flaherty’s book and with the concepts that were attributed to have originated or been synthesized by Drucker, especially the emphasis on the need for corporate social responsibility. I am often skeptical of such a completely enthusiastic slant on an individual’s contribution to society, but I was especially impressed that Drucker acknowledges Mary Parker Follett’s contribution to the discipline of management theory. If Drucker’s other contributions to management were not sufficient to speak for him as a man, this acknowledgment speaks volumes.

This book not only gave a thorough overview of Drucker’s contribution to business and society, but it also incorporated an impressive amount of technical information about management processes and corporate thought. This book whets the appetite for more information on business practices, and in particular those that originated or were espoused by Peter Drucker.

Six Sigma: The Breakthrough Management Strategy Revolutionizing the World’s Top Corporations.

Dr. Mikel Harry and Richard Schroeder. 2000. New York: Currency-Doubleday. 281 pages.

Reviewed by Dean O. McFarren, St. Mary’s College of California

The six sigma philosophy is the brainchild of Dr. Mikel Harry and Richard Schroeder, who have developed a management program that focuses on dramatic bottom-line profit increases, increased market share, and cost reductions. These changes are realized through the use of a business process aimed at streamlining operations, improving quality, and eliminating defects or mistakes in everything a company does. Harry and Schroeder’s theory of developing and monitoring everyday business activities in ways that minimize waste and resources will inevitably lead to increased customer satisfaction and reduced costs.

The six sigma concept is based on a series of processes that end with a company in full control of its processes and costs. The word sigma stands for levels or performance targets that stand for reductions in defects of a product, thereby leading to higher quality.

The concept of quality is altered in this book to reflect a broader interpretation that does not limit itself to “conformance to standards.” The authors’ interpretation is that “Quality is a state in which value entitlement is realized for the customer and provider in every aspect of the business relationship.” Value represents economic worth, practical utility, and availability at the lowest cost.

The six sigma strategy is broken down into four linear phases. The identification stage calls for the company to recognize the products produced and how their processes affect profitability. It also calls for the company to define which processes are critical to its business.

The characterization stage looks at how the company is today. This stage includes defining measures for the key business processes and analyzing them to establish a benchmark for future changes. Measuring progress allows the company to close the gap between how things currently work and how the company would like them to work in order to align with the company’s vision and meet the particular goals.

The optimization stage identifies what steps need to be taken to improve a process and reduce the major source of variation or defective outputs. This usually includes a large number of variables and requires experts and teamwork to identify the right things to change. This is the stage where most companies start to see a payback for their efforts as product quality increases and production costs fall.

The last phase of the six sigma process is the institutionalization stage. This part of the process standardizes and integrates the changes into the way the business is managed on a daily basis. It may tie together many similar projects that can use the same components, methods, and materials that have already been optimized and that have proven their success.

The entire system works on a continual measurement and optimization system. As new variables are introduced, they are traced and recorded to determine the effect they have on the product or service process. This step ensures the product is produced in the most effective way possible, at the highest quality, and at the lowest cost possible.

I found that this book does describe the six sigma management system in an easy-to-read and easy-to-follow manner. It fully documents all phases of the strategy, and defines the different aspects and nonstandard terms. The authors combine theory and factual experiences from well-known companies such as Allied Signal, Motorola, and General Electric to substantiate their successes in the system.

The one thing that is not apparent in the first half of the book is the amount of time and financial resources needed to fund such a change. The promise of reduced costs and increased quality are repeated throughout the text, but are fully described as the result of hard work and hard choices.

I feel that this is a very good book for a person who wishes to be indoctrinated into the world of six sigma. For the most part, it requires a person to be at a high level within an organization to champion such a system. For the more modest person, total quality management and continuous improvement and kaizen improvement strategies will probably continue to be the strategies of choice.

The Minding Organization: Bring the Future to the Present and Turn Creative Ideas into Business Solutions.

Moshe F. Rubinstein, and Iris Rubinstein Firstenberg. 1999. New York: John Wiley & Sons. 224 pages.

Reviewed by Fely Gonzalez Fajardo, St. Mary’s College of California

The basic foundation of the message developed by The Minding Organization is the comparison of an organization to a living organism that embodies the brain, heart, and soul to thrive, co-evolve, and adapt (p. 179). Organizations are run by living organisms–people–and, therefore, should recognize the human factor in structure, strategic planning, and leadership. Organizations must operate on the edge of chaos and embrace uncertainty as a strategy. They must think backward and look into the future, distribute decision making so that everyone has the responsibility to be right and the authority to be wrong, and create an environment in which the human spirit can soar (p. 180).

Rubinstein and Firstenberg define minding as a process to recognize change as it is occurring and being aware that there is a process that precedes a result. If one were to analyze the successful benchmark of an industry, the efforts, false starts, errors, setbacks, and other characteristics of every human endeavor are not included. However, if the process that produced the results is considered, then the human endeavors are included; that is, new information, interpretations, tolerance for error, and false starts. Thus, a new process is created that provides meaning to the organization.

The authors recommend that organizations move from hierarchies and organization charts to more dependence on the emergence of networks of people who are bound by links of mutual trust and respect to allow creativity and adaptation to occur. In order for an organization to tap into the creativity of its people, adapting and planning should be 50 percent plan for the future and 50 percent readiness to respond to that which cannot be anticipated. “It is the unrehearsed, unplanned, new movement, thought, perception, language, and emotion that is produced by human beings that is the act of creating. Movement, thought, perception, language, and emotion stored by past experiences, training and rehearsing can be reproduced from the planned” (p. 49). If organizations offer trust and respect to the employees, it will be the driving force that empowers people to successfully adapt to change.

Networks are prevalent in the early stages of the organization where creativity and innovation are new in the undertaking. Hierarchies are useful when ideas need to be implemented. Organizations must learn to balance between the two structures as it operates on the “edge of chaos,” the deliberately planned and unplanned. Human creativity needs chaos, flexibility, and looser frameworks, while the organization itself requires structure, order, and rules to function.

Rubinstein and Firstenberg describe the “state of chaos” as perceptions that are diffused and divergent and “state of order” as perceptions that are sharpened and convergent. In the state of chaos, in order to make decisions, many directions and new questions are expanded and explored, whereas in the state of order, the focus is on one direction that appears to contain the answers. When making decisions, it is the norm to jump to premature judgments, eliminate possibilities and ideas that do not immediately appear worthwhile and as a result, put too much emphasis on the decision. The authors provide IWRAM–a model for the learning organization as follows (p. 110).

  • Individual inputs, insight, intuition, and information with differing values create work
  • Work to reconcile different perceptions
  • Resolve toward a common purpose, reframing and representing the mission
  • Alignment within the organization, taking actions to meet goals
  • Monitor the process, modify as needed

The authors also address the value of distributing the responsibility and authority among a group instead of entrusting all to a single individual. In a minding organization, there is a cyclic process where activities produce consequences that are good and bad. By allowing employees to take responsibility and authority, any errors or mistakes that occur provide growth and learning.

In order for an organization to create successful working plans, the organization must look into the future, create visions of desired states, and cognitively think backward to assess the efforts that would be required to achieve the vision. Part of the planning process would include thinking what would be the last step needed to achieve the vision, and then work backward. By working backward, resources are stretched further, creative ways to do more with less transpire, and solutions to work smarter rather than harder are found. This process is chaotic by nature as it forces more problems to surface at the outset rather than at the end, and results in obtaining order at the end.

Rubinstein and Firstenberg compare and contrast leadership styles in order for the theory of minding to work within the organization. The classical leadership is committed to the status quo while the new leadership requires courage to question the present, investigates the unknown future, and challenges the norm. The classical leadership leads in a state of order, but loses control in chaos and conflict, while the new leadership thrives on leading in chaos and conflict. The leadership role creates the environment that frees the mind and taps the power of the human brain. Organizations must provide a global perspective and a sense of purpose, and develop an adaptive capacity in people to work creatively in a rapidly and constantly changing environment.

In summary, The Minding Organization focuses on human values and perspectives that organizations must recognize and utilize. Rubinstein and Firstenberg provide many examples of how organizations have utilized the theory of minding to be successful. For example, the rebuilding of the Santa Monica Freeway after the 1989 earthquake caused the freeway bridge to collapse. CalTrans predicted that the rebuilding would take 12 to 18 months, yet it was ultimately finished within 66 days. The minding theory was used.

  • Less advance planning
  • Looking to the future instead of the past
  • “Using concurrent perceptions in which the future is brought to the present and creating a team with a shared purpose–complete the project as quickly as possible.” (p. 7)

The theories presented made logical sense as they provide a forum for both the creativity of employees as well as the logical structure to keep an organization focused and solvent. It takes the revolution and evolution theories for organizations and expands on the idea that the past is indeed important but that the future needs to be addressed to prepare for unplanned chaos. The authors convey the message that it is important to cultivate mutual trust and respect as only trust can release the full potential for creativity and innovation and permit the human spirit to soar.

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