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For more than two decades the American Productivity & Quality Center has worked with people and organizations around the world to improve productivity and quality. It is a nonprofit organization supported by nearly 500 companies, government organizations, and educational institutions. One of its activities is benchmarking studies of issues of current interest to its members. I served as Subject Matter Expert on their fifth study on the Balanced Scorecard. I benefited greatly from that experience and will be serving in the same roll on their next study, Performance Measurement: Implementing the Balanced Scorecard, which will be starting in June, 2001.
The focus of the Centre’s activity is applied research and knowledge transfer, involving the development, application and dissemination of practical tools and concepts underpinned by high-quality academic research. Professor Andy Neely, the Centre's director, recently moved it from the University of Cambridge to Cranfield. I had the good fortune to be invited by Andy to join the Centre as a Visiting Fellow, which I enthusiastically accepted. My first collaboration was in writing a chapter on the balanced scorecard for the forthcoming Handbook of Performance Measurement (Michael Bourne, Editor, Gee Publishing). Associated with the Centre is the newly formed Performance Measurement Association - a global network for those interested in the theory and practice of performance measurement and management.
My involvement with the SDG started in the mid-1970's while I was an aerospace research scientist. I took several courses there as a special student. They profoundly changed my view of the world and triggered one of the most important events in my life: a mid-life decision to change careers. I cashed in my retirement benefits and enrolled in the one year Accelerated Masters Program at the Sloan School. My concentration and thesis were in System Dynamics and I continued as a member of its research staff for a year after graduation. During that period, I worked with Nat Mass, John Sterman and Peter Senge.
System dynamics became an integral part of my mindset and I took every appropriate opportunity to apply what I learned. I built system dynamics based forecasting and strategy models for clients while I was at Bain & Company and worked on a model that identified the cause of the end-of-quarter shipments hockey-stick (and its adverse impact on delivery performance) as well as a model of the new product development process while at Analog Devices. In each case, I learned valuable things that were well camouflaged by process complexity. These experiences led me to the conclusion (see my publications) that system dynamics simulation modeling is the only means for gaining insight into the root causes of problems in complex systems. Over the succeeding years, I have continued my "alumni" relationship with the group.
Several years ago, John Sterman contacted my about the possibility of creating a system dynamics based case study on the deployment of Total Quality Management (TQM) at Analog Devices. I readily agreed and worked closely with John and Nelson Repenning, serving as the "domain expert." The model incorporates my Half-life Method as well as the dynamics of organizational learning associated with TQM. As expected, the resulting model produced several important insights. In a nutshell, by focusing my attention on manufacturing rather than sales and product development, I helped set into motion a dynamic where productivity improved much more rapidly than did sales. The resulting drop in labor utilization led to Analog's first-ever layoff. This triggered Deming's "fear in the workplace." People associated TQM with loss of jobs and TQM deployment came to a grinding halt.
John and Nelson went on to receive a three-year NSF grant for similar studies at Lucent Technologies, Ford Motor Company, Harley-Davidson, and National Semiconductor. If you want to learn more about this and other System Dynamics research projects, please visit John Sterman's and Nelson Repenning's websites.
Last modified: August 13, 2006