Category: Book Depository

Charles Duhigg’s book creaks under the examples he throws at the wall to support any observation. They are wearisome after a while. This book could have been stated just as effectively as a pamphlet, so here it is.

TRIGGER → ROUTINE → REWARD → ROUTINE → REWARD …

The habit loop is what happens when a sensory trigger precipitates a routine, which then leads to a reward of some kind. Over time, neural connections that link the trigger to the routine are strengthened in anticipation of the next reward, until the routine happens without conscious thought. Animals can be trained to follow surprisingly complex routines by exploiting the habit loop.

A keystone habit is a single change introduced into a daily routine. It exploits the habit loop to precipitate a small change. The reward from this can be used to power ever-larger changes.

Putting a piece of fruit on your desk to trigger a health regime, so you don’t go searching for snacks, is a simple example. Keeping a register of things you eat is another. At the company level, as Paul O’Neill did with Alcoa, you might be able to focus the organisation on one goal because that goal necessitates other changes you want to see. In the case of Alcoa, the goal was zero accidents. This required transformations in the chain of command and in industrial processes that enabled Alcoa to become much more successful and less wasteful, without these being explicit goals.

Exploit the habit loop when you can. Reduce the change you want into one keystone habit, or to improve one metric, or to make one difference.

In the long term, self-discipline has more influence on long-term success than intellectual ability. Willpower is like a muscle:

1. It develops and improves with practice;
2. It can tire through overuse, leading to a speculative explanation for high-flying businessmen and senior politicians regularly making spectacularly poor decisions in their personal lives.
3. You can burn it out altogether for a while, after which it’s weakened and slowly recovers.

Willpower, like habit, is fed through positive reinforcement. It requires a personal reason for applying it to complete the habit loop. Any kind of reward will suffice, but you need a carrot even if you already have a stick.

Willpower is vulnerable to pressure. To form new habits under hard conditions, train with those conditions in mind. Rehearse particularly stressful encounters or difficult situations that upset you. Plan for when you struggle with willpower and replay successful scenarios like videos in your mind’s eye. They will become a better habit.

Starbucks sees its service as more important than the quality of its coffee. It trains employees, some of whom have anger problems, using the LATTE method (listen; acknowledge; take action; thank the customer; explain). This serves a social purpose too. Using this method, staff write a plan about how they’ll deal with an abusive customer, and it helps them to maintain their professionalism under fire.

In An Evolutionary Theory of Economic Change (Nelson and Winter), the case is made that companies aren’t families, but battlefields in a civil war. A functional equilibrium is established with a network of truces between ambitious people. These may work when it’s business as usual to the extent that they’re impossible to change. However, they are too rigid for organisational improvement, and may break down entirely in a crisis. Disaster is then inevitable. The 1987 King’s Cross fire, and the Fennell Report after it, illustrates a dysfunctional organisation in a crisis, and a way to transform it. Desmond Fennell fanned a media circus and allowed people to be shamed in public. It can be worth stirring up a catastrophe rather than letting it die down because, when people are vulnerable, it is rare opportunity to face failure, make changes, and establish new rules and habits.

Some social movements succeed while others fail. Three things are needed: friendships between individuals, a community with specific, identifiable interests, and leadership that is able to divest power to the ranks as it inspires. Rosa Parks, The Montgomery bus boycott and Martin Luther King are the archetypical example. Rosa Parks was not the first black woman to be arrested on a bus, but her high social standing, combined with a creeping awareness of the Civil Rights movements, was enough to trigger change. Leadership of such a movement has to be able to establish a strong culture, and then stand back so that it can be owned and led by its people.

If you can include a core of religious faith, as the Civil Rights movement did, and as Alcoholics Anonymous does, you provide a stronger way of displacing destructive cycles of habit with helpful, community-focused ones.

Weak ties, soft power, and peer pressure are how individuals advance themselves. Weak ties are acquaintances and friends of friends: these networks get people their next job or their customers. Soft power is power that influences rather than coerces: the kind that makes you attend an event because you think that certain people will expect you to.

In an appendix, Goldratt explains how the Toyota Production System [TPS] was created especially for Toyota, transforming the business into an international phenomenon. The system’s not for everyone, though. If you manufacture something other than cars, in a different country, with a different pattern of market demand, TPS will probably cause as much trouble as it solves. To run a factory successfully it may be unhelpful to import Toyota’s system wholesale. Copy Toyota’s methodology, not their methods. Think like them. Apply the same reasoning through which Taiichi Ohno conceived and created TPS over two decades.

The Goal is a didactic novel. It was 1984 when it was first published, and the book portrays a man’s world. It jars today: you wait for the narrator to get castigated when he absentmindedly lights a cigar in his boss’s office. Then you remember how everybody smoked, everywhere, all the time. When he drives home under the influence of alcohol, it seemingly portends a life-changing traffic accident, but nothing of the sort happens. It’s the Eighties; that’s just what people did. 

In the Eighties, it would take hours to track somebody down when they were away on business, and you might never have a true picture of what a friend did for a living. Such details are central to the original plot, but now come across as nostalgic: the availability of instant answers today must be a curse to the novelist.

Conclusions arrive in a series of lessons and revelations to Rogo, the production manager of a struggling factory in a Midwestern town. From the start, Rogo’s plant is in a state of permanent crisis, with stacks of late orders, unpredictable output, perpetual panic on the factory floor and union disputes, and his whole division is the same. His boss, Mr. Peach, is about to close the factory unless dramatic improvements occur within three months. Meanwhile, at home, Rogo’s marriage begins to break down as the pressures of his career bite into his personal life.

Corporate politics and the powerful grip of established practices hold Rogo back until a chance encounter at an airport with a former physics professor called Jonah Author-Surrogate begins to set him, his colleagues, and his factory on the path to redemption.

The lessons of this book are initially specific, dispelling fallacies common in manufacturing in the 1980s. First, an excess of unsold goods is bad because it impacts on cash-flow, representing money spent without income. It needs to be stored and eventually becomes obsolete, decreasing in value the longer it’s kept. The same is true of unfinished materials, because they cannot be sold but still incur a maintenance and storage cost, and are therefore a liability. The best way to manufacture is thus strictly to order, to satisfy immediate demand.

Limiting inventory and finished goods determines how a factory must work. The factory is now a system, and must be optimised as a whole rather than a series of stages. Optimising the efficiency of individual processes is not useful unless it improves the predictability and control of flow of finished goods. In fact, it is important to have some idle workers and machinery, as they can cope with statistical variations in other parts of the system. If people and machines must sometimes stand idle for the benefit of the whole, average labour per part is not an important measurement of the quality of factory management: only overall operational cost.

The process with the lowest capacity is a bottleneck, dictating the factory’s maximum throughput. Bottleneck processes can often be found by finding the places on the floor where work in progress accumulates. These can be pernicious, and it is sometimes economical to outsource particular stages of manufacture, or use more expensive techniques, to keep the rest of the factory productive and to prevent a pile-up of work in progress.

Upstream of the bottlenecks, considerable excess capacity may be required in order to allow a constant amount of work to be queued at the bottlenecks, and to allow this to be replenished quickly if it is ever depleted.

As Rogo applies these processes, his factory improves dramatically. Not every step is an improvement, though: some hit the diplomatic buffers or just aren’t appropriate. They are tested and rejected; they sometimes work initially and then become counterproductive later on. More dangerously, some changes work well but the company’s measurement techniques are wrong, and don’t show the actual improvement.

Rogo’s team starts to use computers to predict throughput so that lead times can be determined whatever the state of the current order book and work in progress. Then comes the revelation that marketing and sales are part of the factory system: demand is a component of the production process, and can be used to optimise the factory. In many cases, small batch sizes might often prove more economical than large ones in spite of the extra outlay in materials and machine setup times because they speed up the flow of goods between processes. This results in shorter lead times. Short lead times make the company more competitive and can be used to generate additional sales, whilst further reducing the necessary inventory of finished goods. This explains why Japanese factories take considerable pains to reduce their machine setup times.

The deductions that lead a factory to greater productivity unfold across more than two hundred pages, while the narrative keeps these pages turning quickly. Goldratt provides his protagonist with plenty of context outside the factory floor: he learns as he walks with the Scouts, plays invented games, and discusses abstracted versions of his factory problems with his colleagues and his young children. Certain points are laboured with a heavy hand, but the author hardly sets out to emulate Dickens.

The Goal concludes as Rogo is trying to establish a science of management: a set of general rules that will enable him and his team to tackle any future problem. Do new ideas proceed from inspiration alone, or from data? How much of these ideas are formulated by teams, and how much by individuals? What does philosophy say about how new theories and methods develop, and does this even help? As Rogo learns, he starts to apply these techniques successfully to his personal life, and rescues his marriage. The novel ends with Rogo’s promotion to divisional controller, widening his responsibilities and setting up Goldratt for a sequel.

Aircraft manufacturers regularly circulate checklists. Every plane contains a book of them, and each airline customises them to their own practices. They enable pilots, skilled as they are, to ensure that the many routine tasks of flying an aircraft are accomplished rigorously. Aside from those that are used for every flight, separate checklists exist to solve problems. They instruct pilots what to do if, for example, an engine cuts out in mid-flight, or a door alarm comes on. Boeing’s checklists condense thousands of hours of experience, analysis of many accidents, and testing in simulated flights, into a succinct list of check-points.

Flight checklists have saved thousands of lives. In abstracting and decentralising routine operations, they catch careless mechanical oversights that could otherwise cause or worsen accidents. Their simplicity conceals a wealth of research and experience that pilots could not otherwise access. Checklists free the flight crew to use their skill and professional judgement elsewhere. Other industries might improve their effectiveness by using checklists, ensuring that emergencies occur less often, and that people are better prepared when they do. But very few industries do.

This book describes Atul Gawande, a surgeon, leading a World Health Organisation initiative to drive the creation and adoption of three checklists for use in operating theatres around the world: one before anaesthetic, another before the first incision, and another after operation. The team encounters considerable design and social challenges. They must determine whether to adopt a read-do or do-confirm approach, work out what to put in and what to leave out, make the standardised list relevant to different types of hospital around the world, decide who should be responsible for imposing it during surgery, persuade people to use it, and test its effectiveness. His team’s final checklists, with a total of just nineteen points, were put into practice in a three-month trial involving eight hospitals. The results are significant: the checklists prevent between a quarter and a half of complications and patient deaths during surgery. But even in the light of the success of such a simple intervention, it is difficult to encourage many hospitals to adopt them.

This is a cultural problem. In general, checklists are not popular wherever heroism and the skills of the individual are celebrated and rewarded. Surgery is such a field, but Atul Gawande also considers the world of investment finance, where a handful of successful investors made their own private checklists. Surgeons are accustomed to rebutting interference and protecting their own interests, and can find the imposition of a checklist demeaning. Atul Gawande argues that this attitude can be overcome, and must be. His surgical checklist includes a stage where people introduce themselves and their roles before the operation. For psychological reasons, this is one of the most important checks: simply taking time to learn colleagues’ names can dramatically improve the effectiveness of an operating team.

Even in unpredictable situations, and even when qualified, experienced people are in control, it is usually simple oversights that cause trouble. A good checklist will prevent many problems altogether. In forcing preparation of contingency plans, it will also improve the chance of success whenever an emergency occurs, options dwindle, and focus starts to narrow. Forcing people to cross-check their work with colleagues empowers subordinates to speak up, share knowledge, and co-operate, which catches more mistakes.

At their best, checklists actively create a strong team discipline. The aviation industry, where every accident is analysed forensically, was the first to come to this conclusion. It had to transform the way it saw the world, and other organisations should do the same.