Every once in a while IT companies need to make important decisions. Often many participants don’t know why these decisions were even made. It would be great if criteria existed before hand that would allow participants to reflect on why a particular path was forged. By “new thinking” we mean attempting to create a new model that makes decisions transparent. Let’s begin.
Let the planning begin
You might know the Deming model from the Kaizen area as well as from the KVP of continual improvement success. The phased plan is comprised of “do, check and act” and makes up a cycle which has the goal of standardizing a task. Even the decision making process can be divided into phases. Let’s start with the planning phase, i.e. with the Deming phase called “plan”. We will be looking at the company. The 8 basic concepts of excellent organizations in the EFQM (European Foundation for Quality Management) is helpful¹:
- Striving for balanced results
- Creating value for clients
- Leading with vision, inspiration and integrity
- Managing using processes
- Being successful through staff members
- Encouraging innovation and creativity
- Forming partnerships
- Taking responsibility for a sustainable future
Importance and urgency
The 8 fundamental concepts are very helpful in assessing the importance of the tasks facing companies. And because we always have to deal with time constraints we are going to look at urgency in this context.
Importance I, where I is an element consisting of N
Urgency U, where U is an element consisting of N
And N = number of positive natural numbers between 1 and 10.
So if you sketch I on the y axis and urgency U on the x axis of a set of coordinates then we get a spread of points. And we remember the good old Eisenhower method² for effective work – with its classic separation into 4 quadrants. Now we have a few possible scenarios¹:
- Oh my God, that needs to get done. Immediately.
- Open a calendar and see where to put that.
- I won’t do that. Who could do this well? I would like to delegate it to them now.
- It’s a good thing that my trash can is next to my desk. And yes. That is going in there.
I’m not so sure whether you should really follow through on those recommendations because there are other factors that need to be taken into account as well. Let’s continue.
The term effectiveness begins with the word effect. It refers to what we want to achieve when we do something. And if we can assign these to the 4 Eisenhower quadrants then it becomes a mathematical function F (I,U). The result of the function produces a number which is helpful in qualifying our task in advance.
In various companies based in different industries – and even in various sections of the IT industry – sometimes the urgency aspect will be primary and sometimes the effectiveness aspect will be foregrounded. Lots of parameters play a role in the business’ planning. And different product lines can distinguish between the two aspects. So in principle we can write the following when referring to effectiveness:
Effectiveness = F (I,U) = I* a + U* b
a and b are elements of N
Where N = all positive natural numbers between 1 and 10.
Note: In linear algebra the function creates a line in the classical X/Y coordinate system. Importance in combination with the factor a corresponds to the gradient. The urgency in combination with the factor b corresponds to the movement of the line in the remaining positive area of N. The Eisenhower principle refers to a line because it only contains points. The thinking expressed by saying “We have a straight line” indicates the strategy of the prioritization in the company.
Effects are nice to have but we need a plan to create the effects. And these plans are available in most companies. Checklists, workflows. These are all things that lead to efficient work. Very possibly in the company’s quality management system.
Efficiency thus is a general estimation of how quickly a company can perform a task. This term answers the following question: How quickly can I perform the task while ensuring the desired quality?
And because speed is increasingly important in today’s business world – not just in IT companies – this aspect also needs to be included in our formula. It would look like this:
Efficiency E* F(I,U)
With E as an element of N
Where N = all positive natural numbers between 1 and 10.
In a medium-sized software company (45 employees) things can get crazy. Customers complain because the new version of the business software does not yet contain functionality that was promised 10 months ago.
The reason: 6 months before the release of the new version the management decided that “forming partnerships” is more important and urgent than “creating value for the clients,” although the company has little experience (=efficiency) in this area.
Estimate 6 months before the release of the new version:
Create value for customers: Importance = 5 and Urgency = 4 and Efficiency =7
Creating partnerships: Importance = 7 and Urgency = 8 and Efficiency = 3
In a simple model with multiplication on the effectiveness and efficiency sides the emphasis in the company was put on “creating partnerships”, expressed numerically as 7*8*3 =168 which is greater than 5*4*7=140. In discussions with powerful possible partners new avenues for the software were viewed and the development department was burdened with more requirements.
The development department’s perception 4 months before the version is to be released:
Create value for clients: Importance = 6 and Urgency = 5 as well as efficiency =7
This perception by the development department of 6*5*7=210 is much larger than 168 “creating partnerships” which was deemed an acceptable risk in a management meeting and considered an acceptable loss in the non-realization of “standard requirements” in the new version.
In this way, after the release of the new version the company experienced “crazy” times as mentioned above.
This article illustrated that it is possible to integrate terms like importance, urgency, effectiveness and efficiency into a simple formula. This formula can be used to prioritize tasks for the company – especially the decisions about whether or not a task should be performed. The necessary parameters can be defined beforehand and they can be carried out in the context of pursuing continual improvement.
After the planning – the Deming phase called “plan” – comes the doing phase and the evaluation of results. The individual evaluations from the formula described can be considered in greater detail. And the parameters in the formulae can be adjusted if necessary, parts of the formula can also be varied. Even just thinking about the terms mentioned above will help companies a lot.
Eight basic concepts of the European Foundation of Quality Management Model pose a big challenge for companies. They were taken as the basis for decision making. I am aware that it is not always possible to consider this high level of operative activity as a leader in the IT – or any other – industry. Tip: Use it as a model and apply a decision list that suits you.
If you would like to try out the mechanisms called “The new way of thinking “then go to 42 denker. There you will find the simplified article “Die neue Denke der Führungskraft” (German only). And there you can find a simple Microsoft Excel 2003 file. Highly simplified with the parameters a = 1 and b = 1 as well as the multiplication of Importance and Urgency as Effectiveness can be tried out as an introduction to the simple model.
 The EFQM model for business excellence is a model that is based on self-professed strengths and areas of improvement aimed at increasing business success. More information about the EFQM model can be found at https://de.wikipedia.org/wiki/EFQM-Modell
 The Eisenhower method is much quoted way of putting tasks into categories. The most important tasks get done first and the least important ones are filtered out. There is no evidence that the US president Dwight D Eisenhower actually practiced or taught them. More information about the Eisenhower method can be found here https://en.wikipedia.org/wiki/Time_management#The_Eisenhower_Method