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It is hard for anyone who is trained in Lean Six Sigma to understand the latest Toyota recall. Toyota wrote the book on quality after all. Really. Look up The Toyota Way.

Six sigma is a process improvement methodology that focuses on measuring defects and variation. Six sigmas are six standard deviations from the mean (you will have to go back to your grade 9 math text books to read about this.) And this measure of variation translates into 3.4 defects per million.

You might get 99% average in high school and 99% on your SATs and you get into Harvard, Western Ontario and Duke. But if you manufacture one million widgets that are perfect 99% of the time, you are less than 4 sigma and there are still 10000 duds in that million. You shouldn’t even get into community college with 4 sigma brains.

So imagine getting your process down to about 3 defects per million? That sounds pretty good? That’s pretty damn dear perfect. 99.99966%.

By contrast Ford estimated the defect rate on the Explorere/Firestone tires at 241 tires per million (5 sigma) and about 250 people actually died from those tires and rollovers.

But apparently six sigma it’s not good enough because Toyota is recalling over a million cars for fewer than 3 reported stalling defects.

Truth is Toyota’s reputation got burned recently so it’s good that they are getting ahead of this one. But leave them alone because they are still better than anything made by GM, Ford or that other one.

(Please note I drive a Toyota, shown below.)

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An Elin rant

Poor, poor Elin.

I am not condoning Tiger’s actions or mocking her pain but I think she’s done much better than most divorced mothers, immigrants and ex-nannies.

“I’ve been through hell,” she said. “It’s hard to think you have this life, and then all of a sudden — was it a lie? You’re struggling because it wasn’t real. But I survived. It was hard, but it didn’t kill me.”

Poor former-nanny and Swedish model Elin. We all survive divorces but most of us don’t walk way with islands and millions.

“Money can’t buy happiness or put my family back together”, she said.

That’s true, Elin. But hundreds of millions of dollars can buy lots of sex, drugs and sugar-free gum for anyone.

Although I’ve got a few posts dating back to 2005, this incarnation of the Riskczar blog had its start exactly one year ago. Since then the feedback has been tremendous and I’ve quite enjoyed bringing you my spin on risk management matters.

Earlier today I cracked the 13,000 views mark for the year. While lately I have less time to write and do so less frequently as in months past, I appreciate the 1000 or so hits I still get each month (especially on the days when I have nothing to say.) There was a time when I couldn’t believe even 6 people actually checked out riskczar.com and sometimes I am still surprised.

Thanks a lot for your support.

Trevor

Have a look at this recent post by Christine Cromarty at RSD Solutions Inc.  about how risks become issues after everything blows up. She writes:

How many times have you seen this type of situation occur?  When employees have made decisions which they feel will profit the firm and yet put the whole firm at risk?  Where top management is only brought in after it is too late?

Click here to read the entire post.

To read more Mad Men-related posts, have a look at this recent one that I wrote about risks in the 1960s.

I read a blog post titled, How a Risk Manager Could Help Your Business where the author makes the point that any small business could benefit from a well trained risk manager.

I agree.

Well trained risk managers could work for any small business to clean its toilets, to operate its forklifts or slice meats at its deli counter. It’s just not very likely that your overqualified risk manager will actually be hired by your small business to manage risks.

The blogger at ReadyInsuranceNewsletters.com submit that small businesses should consult a risk management professional because “big business entities routinely invest in the services of a risk management”.

True dat.

But as we learned from the comments of my post, Where are all the Risk Management Jobs, there really aren’t that many risk management jobs or better said, people willing to pay for it. So you’ll find great risk managers working at the Best Western in Scottsdale, the Home Depot in Battle Creek and the A&P in some other third place. (Of course there are some risk jobs, albeit not enough to make most of us independently wealthy.)

I submit that the only small businesses currently employing risk managers are those that were more recently big businesses. They are now small because some one-time-uncertainty that they never bothered to identify, assess and treat manifested itself like a bat out of hell into an issue and shaved billions of dollars off the market cap. So now they’re a small business.

I received a nice email from John Fraser the other day, thanking me spreading the good word about ERM through this website. For those of you who are unfamiliar with Mr. Fraser, he co-wrote what I consider to be the best 14 pages ever written about ERM: The Rise and Evolution of the Chief Risk Officer: Enterprise Risk Management at Hydro One. (And there are diagrams and big fonts so it’s actually less than 14 pages.)

Mr. Fraser also recently wrote a book with Betty Simkins, Enterprise Risk Management: Today’s Leading Research and Best Practices for Tomorrow’s Executives. I have not read it yet, but hope to read it as soon as I find out what happens to Lisbeth Salander.

It’s also worth pointing out that when one brings up the Fraser/Simkins book on Amazon.ca, it notes that Customers who Bought this Book Also Bought The Black Swan by Taleb. Please don’t read that one. One Amazon reviewer crystallized my thoughts on the Black Swan as follows: “This book is about 300 pages too long. Read the first 5 pages, and skip the rest. (Taleb) has a very high opinion of himself.”

So in conclusion: Fraser: Yes. Taleb. No.

Work vs Life

In a departure from my usual diatribes about risk management, I had some thoughts on work-life (im)balance.

Some argue that work-life balance is a misnomer. I read it should be called work-life management since there never is a balance. The best one can do is to manage each one.

 A recent study by the Canadian Index of Wellbeing suggests that societies, workplaces and families have changed the way they are spending their work/leisure time and has identified trends with negative consequences:

 –        Working adults are spending more time commuting between work and home. On a related point, people who travel by car are more obese, have elevated heart rates and more anxiety than commuters who take public transpiration (who walk to/from their trains or busses).

–        Childcare is not completely affordable, available or flexible, especially for people who work non-standard hours like Sundays or nights. Many daycares require children be picked up by 6 PM which means parents with long commutes have to leave work by 4:30 (and that his often a cultural faux pas).

–        More women are spending time providing care to seniors. As a result, people are taking more personal days and have less time for leisure activities.

 Many of these issues have direct or indirect downstream effects on our health and our children’s development, respectively. Families are spending less time eating dinner together and on leisure and culture activities.

 The Issues

 People want to be able to do a great job at work and still have a life. To that end, organizations need to understand the issues, root causes and downstream effects facing staff.

 I feel that the biggest issue is probably a cultural one. People in many roles are often “informally evaluated” by peers and supervisors by the length of time they spend in the office rather than the quality of their output or efforts. People are too often viewed as costs and managers seek to maximize what they get out of their expenses. While some positions like receptionists, help desk or operations require staff to be at their desk during defined times, not all people have to.

 This idea is a paradigm from the “manual work” era where people performed visible and specialized tasks during a designated time. Today, most people are “knowledge workers” who bring “productivity and invisible work” (i.e., strategic analysis, risk management oversight, etc.) to the organization; they should be viewed as assets and not costs. They can do their jobs from anyplace (often) and anytime (always).

 The irony is that we promote technologies that permit people to work from home, trains or planes – during “regular office hours” or late at night – yet somehow the efforts visible during “regular office hours” seem to be the only efforts that matter. Additionally, the technology employers provide staff has blurred the boundaries between work and home: people are “perpetually on call” which is an unrealistic expectation.

 On the other hand, many people spend too much time at their desks and should get up from their desks during the day even to have a stretch or short walk around the block. It’s simply not healthy to stare at a screen all day. In another example of irony, I submit that many people eat lunch at their desks so they can finish their work to leave a little earlier. While that is their prerogative, they probably get dirty looks from the people who took a full lunch hour, two coffee breaks and four smoke breaks during the day – when they pack up their things at 4:30 PM. After all, they arrived before 8 AM and need to pick up their kids from daycare by 6:00 PM; they will put in another three hours of work when the kids go to sleep. But since that work doesn’t take place during office hours does it still count?

 Trust Your Employees

 These Sterling-Cooper attitudes have to change and flexible hours should be promoted from the top. So long as people “deliver” on time and do not burden their co-workers and backups with their extra work in their absence, it should not matter when people arrive and leave the office or show up at all. At a minimum everyone should make themselves available between 10:00 AM and 3:00 PM for meetings or conference calls, but so long as they put in their 8 hours (or more) it should not matter where they are or when they do it. Trust your employees to do their jobs.

 To that end, give everyone the opportunity to work from home either by providing laptops or access from home personal computers. And promote it. Perhaps your employee coaches his kid’s hockey team and needs to attend a practice every Thursday at 6:30 PM. If he cannot make it to the rink in time, no matter how early he leaves the office, then he should be allowed to work from home that day. This promotes family and community and would probably make the employee work twice as hard on Wednesday. (Not to mention saving three total hours to commute that day translates into a couple of additional productive hours at home.)

 Second, the organization should do everything it can to support a bilateral relationship of honesty and trust with its employees. Some organizations allow employees a finite number of personal sick days but do not permit them to take a day off to take care of a sick child or parent; this forces the employee to lie about the reason for their absence or to take an unplanned vacation day. Trust your employees to do the right thing.

 Finally, anything that promotes health and wellbeing is recommended. How about a fitness credit towards the purchase of an elliptical machine, a membership at the local gym or a recreational soccer team? How can you encourage people to take five laps around the park across the street or attend a daily yoga or stretching class in one of your converted conference rooms?

 If you have any other ideas translate into happier and more loyal employees that can make your workplace a better place to work, please leave your comments.

This is how most people and organizations predicted Friday would turn out: Eve of destruction. The expectation was that protests would build in Toronto throughout the work week and peak on Friday. To that end, most people planned on staying home today.

Perhaps it’s quiet right now because everyone is watching the Portugal-Brazil match. (Even anarchists like the World Cup action.)

On my way in today, the commuter train was about 1/3-full and less than yesterday. The weather was nice and the police seemed to outnumber the commuters walking up Bay Street. On the northwest corner of Front/Bay there were a couple of golf carts being driven by guys in red shirts carrying cold beverages for the officers which was a nice touch. I also saw a couple of ATVs with “Police” written on them parked in front of Royal Bank Plaza. I would like to see a police chase on those!

There were two young tuffs walking in front of me as well: a couple of white teens wearing their jeans at their knees, baseball caps turned backwards, and having a smoke. Those dudes did not fit in. An officer asked them what they were up to and one replied that they were going downtown for the day. This was certainly suspicious at 8:20 AM.

Like they say, the day ain’t over yet.

Siri Agrell of the Globe and Mail reports about a man who will self-immolate at the G20 - when the PM of India is here - to protest the 1984 Sikh genocide.

The Integrated Security Unit noted that their officers are trained to react to these sorts of things.

But I bet this is the actual reason the police have added the water cannon to their arsenal.  Talk about a mitigation strategy. Every time this dude tries to light a match, the cops are gonna hose him like he was on Wipeout!

The Toronto Star reports:”Toronto police arrested a 53-year-old man on the Esplanade in downtown Toronto Thursday afternoon and confiscated a chainsaw, sledgehammer, four baseball bats, a crossbow and fuel canisters from his car.”

What!

Doesn’t this sound like the stuff you’d find in Ash’s car in Army of Darkness or Evil Dead 2?

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