Management Stories

Rabbi Haim of Romshishok was an itinerant preacher. He traveled from town to town delivering religious sermons that stressed the importance of respect for one’s fellow man. He often began his talks with the following story:

“I once ascended to the firmaments. I first went to see Hell and the sight was horrifying. Row after row of tables were laden with platters of sumptuous food, yet the people seated around the tables were pale and emaciated, moaning in hunger. As I came closer, I understood their predicament. Every person held a full spoon, but both arms were splinted with wooden slats so he could not bend either elbow to bring the food to his mouth. It broke my heart to hear the tortured groans of these poor people as they held their food so near but could not consume it.

Next I went to visit Heaven. I was surprised to see the same setting I had witnessed in Hell – row after row of long tables laden with food. But in contrast to Hell, the people here in Heaven were sitting contentedly talking with each other, obviously sated from their sumptuous meal. As I came closer, I was amazed to discover that here, too, each person had his arms splinted on wooden slats that prevented him from bending his elbows. How, then, did they manage to eat?

As I watched, a man picked up his spoon and dug it into the dish before him. Then he stretched across the table and fed the person across from him! The recipient of this kindness thanked him and returned the favor by leaning across the table to feed his benefactor.

I suddenly understood. Heaven and Hell offer the same circumstances and conditions. The critical difference is in the way the people treat each other.

Source: Various, but this comes from The Hasidic Masters’ Guide to Management by Moshe Kranc

No Comments » Posted by Administrator / Miscellaneous and Organizational Behavior / HR

The EOQ formula dates back to the Industrial Revolution and a 1913 article by Ford Whitman Harris, a self-trained engineer at Westinghouse Electric Company, in Factory: The Magazine of Management, a relic of another era. The article showed how to balance the fixed cost of ordering or producing a batch of goods with the cost of carrying the inventory between order periods. Graphically displayed with cost on the vertical axis and “lot size” on the horizontal axis, the elegantly simple solution occurs at the intersection of the upward sloping straight line (for inventory carrying cost) and the downward sloping curved line (which reflects the decreasing “setup” or “one-time ordering” costs spread over the batch size). The formula allowed a manufacturing manager to find the optimal lot size given the input parameters of per-unit carrying cost and per-batch fixed costs.

Today, many practitioners think that the EOQ embodies a way of thinking that’s no longer relevant. In reality, however, the trade-off between inventory carrying cost and setup cost remains. Taichi Ohno, father of the Toyota production system, knew that — as does anyone with a deep understanding of “factory physics.” Ohno’s innovation was to reframe the equation to solve for setup time rather than lot size.

Inspired by American grocery stores where consumers “pulled” products from a shelf that was continuously replenished, Ohno concluded that the optimal lot size was one unit. So, instead of trying to find the lot size that balanced setup cost and inventory carrying cost, Ohno sought to drive down setup cost to a low enough level to justify his ideal of a single unit for the lot size. To achieve his vision, Ohno turned to his industrial engineer, Shigeo Shingo, and challenged him to find a way to reduce a stamping press setup time of 12 hours to less than 10 minutes. Shingo and his team succeeded — and, as they say, the rest is history.

Source: Reframing Your Business Equation by Tim Laseter and M. Eric Johnson | strategy+business, Summer 2009

No Comments » Posted by Administrator / History and Management and Miscellaneous and Operations

Charles Steinmetz was once called out of retirement by General Electric to help it locate a problem in an intricate system of complex machines. Having spent some time tinkering with and testing various parts of the system, he finally placed a chalk-marked ‘X’ on a small component in one machine. GE’s engineers promptly examined the component, and were amazed to find the defect in the precise location of Steinmetz’s mark.

Some time later, GE received an invoice from the wily engineer – for $10,000. Incredulous, they protested the bill and challenged him to itemize it. Steinmetz did so: “Making one chalk mark: $1,” he wrote. “Knowing where to place it: $9,999.”

Source: IT and Business Alignment: Finding the Mark by Ruby Gates | BetterManagement.com, July 23, 2004

1 Comment » Posted by Administrator / Humor / Amusement and Miscellaneous

A Violinist in the Metro

A man sat at a metro station in Washington DC and started to play the violin; it was a cold January morning. He played six Bach pieces for about 45 minutes. During that time, since it was rush hour, it was calculated that thousand of people went through the station, most of them on their way to work.

Three minutes went by and a middle aged man noticed there was musician playing. He slowed his pace and stopped for a few seconds and then hurried up to meet his schedule.

A minute later, the violinist received his first dollar tip: a woman threw the money in the till and without stopping continued to walk.

A few minutes later, someone leaned against the wall to listen to him, but the man looked at his watch and started to walk again. Clearly he was late for work.

The one who paid the most attention was a 3 year old boy. His mother tagged him along, hurried but the kid stopped to look at the violinist. Finally the mother pushed hard and the child continued to walk turning his head all the time. This action was repeated by several other children. All the parents, without exception, forced them to move on.

In the 45 minutes the musician played, only 6 people stopped and stayed for a while. About 20 gave him money but continued to walk their normal pace. He collected $32. When he finished playing and silence took over, no one noticed it. No one applauded, nor was there any recognition.

No one knew this but the violinist was Joshua Bell, one of the best musicians in the world. He played one of the most intricate pieces ever written with a violin worth 3.5 million dollars.

Two days before his playing in the subway, Joshua Bell sold out at a theater in Boston and the seats average $100.

This is a real story. Joshua Bell playing incognito in the metro station was organized by the Washington Post as part of an social experiment about perception, taste and priorities of people. The outlines were: in a commonplace environment at an inappropriate hour: Do we perceive beauty? Do we stop to appreciate it? Do we recognize the talent in an unexpected context?

One of the possible conclusions from this experience could be: If we do not have a moment to stop and listen to one of the best musicians in the world playing the best music ever written, how many other things are we missing?

Source: A Violinist in the Metro

4 Comments » Posted by Administrator / Miscellaneous and Organizational Behavior / HR

Almost one thousand years ago, in Moslem Spain, there lived a Jew named Rabbi Samuel the Prince. He was very wise, and rose to great power, becoming the Sultan’s treasurer. This aroused the jealousy of the other ministers, who planted rumors that Rabbi Samuel was embezzling money from the royal treasury.

The Sultan decided to put Rabbi Samuel to the test. One day, without warning, he called for Rabbi Samuel, and asked him to make a complete accounting of his personal wealth. Rabbi Samuel was taken aback, but he could not refuse the Sultan’s request. He sat at a table, asked for a quill and parchment, and began writing feverishly. After half an hour, he stopped, reviewed the list silently, and handed it to the Sultan.

The Sultan read the inventory carefully, and slammed it down angrily on the table. ‘Why, this is only a fraction of your wealth. I personally have given you far more than what you list here as your salary. This is a brazen lie! My advisors are correct – you have been dishonest with me in your monetary affairs. I shall personally confiscate everything you own. Guards, take this man away!’

‘Your Majesty’, responded Rabbi Samuel, ‘you asked me for an accounting of my wealth. As you can plainly see, my worldly possessions are not truly mine. At any time, they could be taken from me by robbers, war or natural disaster. In fact, your Majesty has just taken them from me with a single command.’

‘The only possession I truly own is that money which can never be taken from me – the money I have given to charity. You see, a Jew is commanded by the Torah to give one tenth of his income to those in need. The figure I gave you, your Majesty, was the total of all the moneys I have given to charity. That is my true wealth, for the benefit from that money remains mine forever, and can never be taken from me.’

The Sultan was impressed by this profound truth, and promoted Rabbi Samuel to even greater power in his kingdom.”

Rabbi Samuel has hit upon a fundamental aspect of human nature – we are easily confused between what is truly ours and what others grant us. The same is true of corporations. Our stock price is soaring, but that is something that is granted by investors, and could be taken away from us tomorrow by those very same investors, based on factors that are entirely out of our control. What, then, is truly ours? It’s our loyal, highly skilled employees, and the passion and innovation that they bring to their jobs. They are our true strategic assets, and they are what will keep us successful for years to come.

Source: An Introduction to Hasidic Management by Moshe Kranc

No Comments » Posted by Administrator / Ethics / Integrity and Miscellaneous

In 1999, I was invited to speak in Wellington, New Zealand. … The invitation came from the Women’s Leaders Network, a group that brought together women from around the world ….

A fascinating thing happened the day before I spoke. During a Q&A session…, a woman stood up and began to tell a story about her life. When she was finished, several other women stood up and sang a short song in unison.

I asked a woman from New Zealand what the singing meant.

In the tradition of the Maori, the indigenous people of New Zealand, a song is called a waiata and to stand in support of another by singing for them is to tautoko. The women’s song was a show of support for the woman who told her story.

How perfect! Engrained in the Maori culture is the honoring of other stories.

Witnessing this custom made me realize that we all need to honor the stories of other women, but more importantly, we need to honor ourselves and our own stories. Our experiences shape our wisdom, and we pass that wisdom down through storytelling.

Source: Hold This Thought | Aliza Sherman (original source: PowerTools for Women in Business: 10 Ways to Succeed in Life and Work)

No Comments » Posted by Administrator / Miscellaneous

You are driving along in your car on a wild, stormy night, it’s raining heavily, when suddenly you pass by a bus stop, and you see three people waiting for a bus:

• An old lady who looks as if she is about to die.
• An old friend who once saved your life.
• The perfect partner you have been dreaming about.

Which one would you choose to offer a ride to, knowing very well that there could only be one passenger in your car?

This is a dilemma that was once used as part of a job application.

• You could pick up the old lady, because she is going to die, and thus you
  should save her first;
• * or you could take the old friend because he once saved your life, and this
  would be the perfect chance to ! pay him back.
• However, you may never be able to find your perfect mate again.

The candidate who was hired had no trouble coming up with his answer. Guess what was his answer?

He simply answered:

“I would give the car keys to my Old friend and let him take the lady to the hospital. I would stay behind and wait for the bus with the partner of my dreams.”

Sometimes, we gain more if we are able to give up our stubborn thought limitations. Never forget to “Think Outside the Box.”

Source: I have heard this story many times but don’t know the original source. Someone named Esha sent it to me via email though. If you know the original source, please do post it.

3 Comments » Posted by Administrator / Innovation and Miscellaneous and Thought / Decision Making

A woman approached Picasso in a restaurant, asked him to scribble something on a napkin, and said she would be happy to pay whatever he felt it was worth. Picasso complied and then said, “That will be $10,000.”

“But you did that in thirty seconds,” the astonished woman replied.

“No,” Picasso said. “It has taken me forty years to do that.”

Source: What They Don’t Teach You at Harvard Business School by Mark H. McCormack

No Comments » Posted by Administrator / Miscellaneous

In an article from FredHarriman.com, ex-Toyota Group manager Chihiro Nakao relates his experience with Taiichi Ohno, who originated Toyota’s Lean Production in collaboration with Shigeo Shingo. Here’s the punchline:

As Mr. Taiichi Ohno drove deeper and deeper in the effort to achieve Just in Time ideals among the companies of the Toyota Group, […] the struggle was to keep people from [ordering] too much too soon from their upstream process.

In one incidence remembered by Chihiro Nakao, Mr. Ohno caught someone he knew was about to pull his materials too soon and thundered: “Who are you and where did you come from?! What makes you think you have any right to this material? Show me your kanban!!” [i.e. prove your authority!]

Such incidents demonstrated the need to “show one’s kanban” when procuring material or parts. They needed some way to prove that they had followed all the rules put in place to achieve Just in Time. Since Mr. Ohno’s demand for a “kanban” left a lasting impression, the name for the cards that were issued to limit in-process inventory […] became “kanban.”

Source: Toyota Stays Lean and Green with Kanban… Kan-who? / BNET, April 2nd, 2007

1 Comment » Posted by Administrator / History and Miscellaneous