China’s Next Generation of Leaders and the Implications for the Future of China


The following is my summary of the webinar put on by the Economist Intelligence Unit on Tuesday, November 20th. For more detailed information, go to the Economist Intelligence Unit website and register for a download of the report on which the webinar was based.   Most of the presentation was done by Victoria Lai.   I apologize in advance for any errors I may have made in compressing what was a very information-defense presentation into my brief summary.

1. Introduction

In China, the Central Committee of the Communist party changes its leadership of the Politburo every 10 years. On November 8th, the 18th National Congress of the Communist Party of China met, chose delegates and on November 15th the Central Committee chose the 7 members of the Politburo Standing Committee. This webinar was given to discuss the implications of who was chosen and who was not on the future direction of Chinese domestic and foreign policy. This decision comes at a pivotal time in China’s development.

2. The Chinese Communist Party and the State apparatus

In China, the Communist Party and the State are parallel structures that are connected through the PLA (People’s Liberation Army) or the military. Here are the levels of the Communist party, with the Politburo Standing Committee or PSC (currently 7 members, used to be 9) at the top, followed by the Politburo, the Central Committee, and the local and provincial (grassroots) members.

and here are the levels of the State, from the State Council or Cabinet, the Ministries and Department (the equivalent of the executive branch) the National People’s Congress (the equivalent of the legislature), and the provincial authorities.

The military or People’s Liberation Army (PLA) is the link between these two structures.

3. The Politburo Standing Committee (PSC)

The 7 members of the Politburo Standing committee are the top rank of the Chinese Communist Party or CCP. They are the ones that will set the general direction for the country in the years to come.

The following is a list of the 7 members of the Politburo Standing Committee. They were ranked by the EIU in terms of their political leaning, from most conservative to most liberal. Then their ranking within the power structure, with Xi Jinping being 1st as President, going all the way down to the 7th ranking member, Zhang Gaoli. Victoria Lai gave some details regarding the members background or interests.

Fig. 1. 7 Members of 18th Central Committee PSC

Political

Ranking *

Power

Ranking

Notes

Zhang Dejiang

1

3

Newcomer to PSC; supports state-run enterprises

Liu Yunshan

2

5

Newcomer to PSC; fairly conservative in outlook/

Yu Zhengsheng

3

4

Newcomer to PSC; propaganda and media chief; champion of state-led development.

Zhang Gaoli

4

7

Newcomer to PSC; champion of state-led development.

Xi Jinping

5

1

Was in 17th Central Committee; China’s new President; princeling**. Affable, but controversial (wife is famous singer in PLA). Good at balancing factions, associated with economic liberalism.

Li Keqiang

6

2

Was in 17th Central Committee; relatively liberal economically, backs World Bank report on China. Focused on wealth distribution, climate change.

Wang Qishan

7

6

Newcomer to PSC; supports liberalization of financial sector/

* Political ranking means from most conservative or supporting status quo to most liberal or supporting reform.

**A “princeling” is considered someone who is a descendant of prominent or influential senior Communist party officials.

4. Economic Agenda

On the domestic side, urbanization, increasing consumption by the middle class, and wealth distribution issues are important. Promotion of high tech is a priority, but there is pressure from grass roots regarding environmental issues related to local air and water pollution.

There is a consensus regarding interest rate, exchange rate and capital account liberalization. This will cause a lot of volatility in the economy and inflation will be far more of a problem than it was before. In addition, the “demographic dividends” that China has enjoyed in the past 3 decades will be coming to an end as its average population ages.

5. Foreign Policy Agenda

China’s moves in the South China Sea and the Senkakus/Diaoyutai Islands are upsetting the regional status quo. Xi Jinping is a nationalist and this trend will most likely continue.

However, one of the main challenges of the PSC will be to create a foreign policy that positively furthers China’s interests and is not just trying to counter whatever the US is trying to do at the moment.

6. Upside and downside risks of PSC

According to the Economist Intelligence Unit, here are the three negative risks and three positive opportunities that the PSC will face in the next few years. The risks are in orange, and the opportunities are in green.

Risks/

Opportunities

Item Explanation
Opportunities 1. Judicial reform Increasing accountability for party officials

 

2. Civil society liberalization Growth of NGOs

 

3. Local fiscal reforms Control of abuse by corrupt local officials favoring developers and industrialists and ignoring popular concern about pollution

 

Risks 1.Conservative balance Heavily weighted towards those supporting state-run enterprises, which will slow pace of financial reform. Two potential members of PSC that didn’t make the cut were more liberal or reformist.

 

2. Reform Major financial reforms will face strong opposition from entrenched interests.

 

3. Political volatility Inequality between provinces and experiments with relative local autonomy will cause increasing political volatility.

The PSC will be steering China through an increasing complex landscape of financial and political changes not only within the country, but throughout the world. I appreciate the Economist Intelligence Unit giving their opinion on the future of China’s leadership and how it will affect the future of China.

Gain a New Attitude through Gratitude—The Psychology of Giving Thanks


“If we study what is merely average, we will remain merely average.” Shawn Achor

I originally posted about Shawn Achor’s TED talk on gratitude and its link to a positive mental attitude back on June 4th. I tried his journal-based program for 21 days and had good results. In the past almost 6 months now it has become an integral part of the fabric of my life that I thought I would update this post on a day devoted to the giving of thanks.

Shawn Achor is a psychologist who is the CEO of Good Think, Inc. After attending Harvard University and getting a degree in psychology, he helped students at Harvard for the next 8 years as a counselor. He gave a talk about the relationship of an “attitude of gratitude” and positive psychology at a TED talk  in May 2011.   His talk is informative, but also very fast-paced and, incidentally, very funny as well. (As a member of Toastmasters, I appreciated his speech delivery very much.) Here’s the link to his talk.

http://www.ted.com/talks/shawn_achor_the_happy_secret_to_better_work.html

I outline his talk below which he concludes with a methodology on how to press the “reset” button for your mindset so that you are more optimistic.   The only equipment you need to follow his method is to buy a journal to keep notes in.

At the end of the talk, I will relate the results I had in using his method.

1. Escaping the law of the average

Social scientists make pronouncements about trends based on averages within populations, but people have to realize that when you are dealing with the potential for individual happiness or creativity, you need to escape the “law of the average”. When psychologists strive to make people “normal”, then if they succeed, people will continue to remain merely average.

I can illustrate Shawn Achor’s point with a story.  A friend of mine who was taking economics in graduate school, and I saw him one day in a coffee shop looking a little glum. “What’s wrong?” I asked him. “Oh, it sounds silly, but I’m a little bummed. My statistics professor said that up to 50% of us in the class would end up doing below average on the test.”

Intellectually, he knew that this was of course true because it hinges on the technical definition of the word “average”. However, it was the implication that he had only a 1 out of 2 chance of escaping mediocrity that was a challenge to his self-esteem.

2. Studying outliers

Shawn Achor has studied those individuals who have higher than average potential to find out what their secret is in order to be see if some of those secrets can be passed on to the rest.  Instead of a psychology model that tries to drag everybody down towards being average by making them “normal”, or focuses on bringing the lower than average up towards the average, he wants to have a positive psychology model that brings up  average.

3. Changing the lens

We view the world through the lens of the media, which selectively captures negative events and brings them to our attention, with the news hour occasionally ending in a positive story. This has an effect on us where we start to assume a false picture of the world where that same ratio of negative events to positive events is replicated throughout the world.

4. External circumstance does not determine inner attitude

Shawn Achor related how the students he counseled at Harvard University should have been happy to be at such an elite school, but they sought counseling because they concentrated on the negatives of the workload, peer pressure, etc. He realized that no matter how good the outer circumstances, there were some people who have a negative attitude internally. He found that the external circumstances only account for 10% of a person’s happiness over the long term; the other 90% are determined by the way in which that person views the world.

In the work environment, he found that only 25% of job successes are predicted by a person’s intelligence level. The other 75% are accounted for by your optimism levels, your social support levels, and your ability to see stress as a challenge rather than as a threat.

5. How can you change your mindset?
Here’s the kernel of what Shawn Achor came to talk about. Most schools and workplaces have the mindset “if you work hard, you will be successful. If you are successful, then you will be happier.”  This theory of motivation is backwards.  If you have a success, then the workplace or school simply changes the goalposts and you have to achieve even better success the next time. If happiness is thought to be on the other side of success, your brain never gets there, it pushes happiness over the cognitive horizon.   Just remember that one of the definitions of a horizon is “an imaginary line that gets farther away from you the closer you get to it.”

The problem with this method of motivation is that our brains work in the opposite order:  if you raise a person’s happiness in the presentthen their brain experiences a happiness advantage, meaning that performs better than if it is negative, neutral, or stressed.  Every business outcome improves for an employee who has this happiness advantage: people are 31% more productive, they produce 37% more sales, doctors are 19% more accurate at diagnosis, etc.  So if our brain is more positive in the present, than it becomes more successful.

If people do the following 21 days in a row, it can rewire their brains to be more optimistic and therefore more successful.

Fig. 1 Shawn Achor’s New Attitude through Gratitude program

 

Activity

Explanation

1

3 Gratitudes

Write 3 new things you are grateful for each day

2

Journaling positive experience

… in a journal, along with one positive experience you have had in the last 24 hours.

3

Exercise

15-20 minutes of vigorous exercise, 3-6 days a week.

4

Meditation

15 minutes of meditation, 1-2 times per day.

5

Random Acts of Kindness

Write down one random act of kindness you have done in the past 24 hours to someone in your network of friends, family, and/or colleagues, or even better, a total stranger. Think of someone to whom you can send an encouraging e-mail in the next 24 hours.

6

Lessons Learned

Write down how you will take a negative experience you have had in the past 24 hours and turn it into a learning opportunity for the future.

Here Shawn gives an explanation of these 5 factors; I have added a sixth factor which I explain below.

1. Writing down the 3 gratitudes changes you mind so that it starts scanning the world for the positives rather than the negatives. It doesn’t change the ratio of positives to negatives in the outside world, but it does change which factors you focus on as being the most significant.

2. Writing about a positive experience you’ve had in the past 24 hours allows you relive it.

3. Exercise teaches your brain that behavior matters.

4. Meditation allows you to detach from the cultural pattern of ADHD which we are creating through the constant attempts at multitasking, and increases the ability of the brain to focus on the task at hand.

5. You can write in your journal about a random act of kindness which you performed in the last 24 hours for someone, meaning that you did it without consideration of being paid back by the person whom you helped.  Alternately, perform a conscious act of kindness by sending a note of support to someone in your social support network.

6. To these activities, as a project manager, I have added a sixth of my own to Shawn’s list, which is to write down your “lessons learned”. This means take a negative experience which you had in the past 24 hours, and create some lessons learned from it so that you will experience it in the future not as a threat, but as an opportunity to overcome a challenge.

CONCLUSION:

After five and a half months of using Shawn Achor’s method, I am now close to filling out my third journal. Now I also use my journal to record dreams, jot down ideas for future writing projects for this blog, and to do short-term and long-term planning. I would say about one-third of my journal is devoted towards the “Gratitude Project” as I like to call it. But it is the FIRST thing I do every morning after mild exercise (like yoga) and meditation.

What happens after you do this project for at least the 3 weeks or 21 days Shawn recommends is that your brain scans the world differently. The generic problem with our society’s view of success is that we play the “if only” game. If only I succeed (however that is defined), then I will be happy. But when we achieve a goal, we don’t take time enough to appreciate it, and our restless mind starts pursuing the next goal with the same promise that happiness is “just over the horizon.” The problem with that thought is that one definition of the horizon is “an imaginary line that gets farther away from you the closer you get to it.”

With gratitude changing your attitude, you can be truly happy and positive NOW with whatever you have. This makes your brain learn better because it is more open to new things. I am fluent in several different foreign languages other than English, but since I started Shawn Achor’s program, I decided to buy Rosetta Stone software and learn a new one, Brazilian Portuguese. Before I would have said, “I’m too busy” or “I’ve got enough on my plate” or “I’m having trouble keeping up with the other languages I know.” Now I say, “why not? It would be fun!”

Now I am not saying that you won’t have negative experiences. This program is not “magical thinking.” What will happen, however, is that your mind will not dwell on them. You will either do something about the situation to improve it, or it if is beyond your control, you will let it go and move on.

So on this day devoted to giving thanks, let us not just do it because “it’s the season”; it’s also good psychology!

Design for Six Sigma—The DMADV Roadmap contrasted with the DMAIC Process


Six Sigma is a process for improvement of manufacturing or business processes. It shows how to improve processes that create an already existing product or service. But what if you want to create a new existing product or service? How can Six Sigma help on the design, rather than on the manufacturing side of things?

1. DMAIC Process

First, let’s review the Six Sigma process for manufacturing, which goes in the following steps: Define, Measure, Analyze, Improve, and Control or DMAIC.

With the principle of kaizen or continuous improvement in mind, these steps form a continuous cycle as shown below.

Here are the DMAIC steps defined for the manufacturing process.

Six Sigma Step

Definition

1. Define Define customer and organizational requirements. Select the “Y” responses to be improved.
2. Measure Measure what is critical to quality, map the process, establish measurement system and determine what is “out of specification” or unacceptable. Measure the “Y” response variable.
3. Analyze Now develop a baseline (the process capability), set objectives, identify the “X” independent variables that are the root causes of defects or “out of specification” measurements of the “Y” response variables.
4. Improve Improve the process by reducing variability in the process or eliminating the cause of the defects or out of spec measurements.
5. Control Establish a system to monitor and control the process to sustain the improvements in the long term.

2. DMADV Roadmap

In DMADV, there are actually six steps rather than five in the following formulation that has “Optimize” as step 5 out of 6 (so I guess it could be referred to DMADOV).

The DMADV roadmap steps are defined as follows, with examples of what is in each step.

Roadmap Step

Definition

1. Define Evaluate and prioritize design objectives.  Define your design project goals by doing an analysis of customer needs and general risk assessment; create design team.
2. Measure Do technical and competitive product analysis (including regulatory-based requirements.  Capture Voice of Customer (use QFD or other methodology). Refine general risk assessment, and create design project schedule.
3. Analyze Identify design priorities.  Develop Critical to Quality features or CTQs. Finalize risk assessment.
4. Design Finalize design including CTQs.  Develop prototypes, and review design in light of CTQs.
5. Optimize Review CTQs, test design tolerances, and optimize design.
6. Verify Compare product to initial design objectives, complete development documentation, send design to operations.

I mentioned QFD because it was the subject of a previous post, and the House of Quality tool shows visually the method of first developing a list of customer requirements, and then weighting the design features based on how well they fulfill these customer requirements. The top-ranking design features would therefore be considered Critical to Quality features or CTQs. The QFD approach also includes the target specifications as well (in the “basement” or “foundation” of the House of Quality).

The risk assessment mentioned in several steps above can be done with the Failure Mode and Effects Analysis, which is the subject of another previous post.

3. Conclusion

In this way there is a Six Sigma “roadmap” that can be utilized in the design phase of a product or service. I hesitate to call it a Six Sigma design “process”, because in reality a Six Sigma process on the manufacturing side of things can only be done when a process is already in control or stable. That incidentally, is the reason why some consultants I have talked to consider the use of Six Sigma in the healthcare field to be perhaps a little premature because many processes are not yet well controlled.

On the other hand, doing the DMADV (actually DMADOV, if you include “optimize” as the 5th step out of 6) roadmap will make the subsequent Six Sigma process on the manufacturing side easier, because you have already done an extensive study of the various technical requirements or design features which should make any cause-and-effect analysis of potential defects a lot easier to do.

This concludes the final portion of the Design for Six Sigma or DFSS that is part of the Six Sigma Green Belt Body of Knowledge. The next posts in this series will start covering the D or Define of DMAIC.

Design for Six Sigma—Failure Mode and Effects Analysis


1. Introduction

The previous post covered Quality Function Deployment as one of the methodologies for designing in quality, with the House of Quality being a tool of that methodology. Another way of designing quality into a product from its conception is to do what is called a Failure Mode and Effects Analysis, or FMEA for short.

There are two types of FMEA:

a) those related to the design, which calls for a breakdown of the components of the product, and then an analysis of the possible defects or failures that can occur with each. This is Design FMEA or DFMEA.

b) those related to the manufacturing process, which calls for a breakdown of the processes involved in manufacturing the product, and then an analysis of the possible defects or failures that can occur with each. This is Process FMEA or PFMEA.

2. How does FMEA work?

The failure mode in every component (for DFMEA) or process (for PFMEA) is analyzed to see its effect on the other components or processes and for the required function of the product.

The effects of each failure mode are considered regarding their a) probability of occurring (OCCUR), b) their severity when they do occur (SEV), and c) ability to be detected if they do occur (DETEC). Usually each of these are expressed in terms of a 0 to 10 scale, with 0 meaning the best possible outcome, and 10 the worst.

Then these three factors are multiplied as the following diagram shows to create an or Risk Priority Number or RPN.

All failure modes are then ranked according to their RPN, and this gives you an idea in which priority to tackle either the components or processes that are contributing to the overall risk involving the product.

This is a very summary treatment of the subject, but that is all that is required for the Overview section of the Six Sigma Green Belt. More detail is gone into under the Define section, which will come in a later post.

Design for Six Sigma–Quality Function Deployment and the House of Quality


1. Quality Function Deployment

Quality control tries to reduce the defects in a manufactured product; quality assurance tries to put processes in place that will assure quality during the manufacturing process. What if quality can be designed into a product in the first place and not just assured and/or controlled during the manufacturing process?

Design for Six Sigma, then, is the third major topic in the Overview section of the Six Sigma Green Belt Certification body of knowledge, after Six Sigma and Lean Principles are introduced. One method for designing quality into a product is Quality Function Deployment, developed by Dr. Yoji Akao in Japan back in 1966. The idea behind Quality Function Development or QFD is to translate customer demands into specific technical design requirements that will, when deployed, achieve that quality demanded by the customer.

2.  The House of Quality

One tool that was developed to illustrate this method of QFD was the House of Quality, which first appeared in 1972. The reason why graphical tool is called the House of Quality is because it vaguely resembles a house. Here’s an example, and below it, I will explain the various features of the House of Quality or HOQ.

House of Quality Template

1. The left wall–VOC

This contains the customer requirements, which are sometimes called the “voice of the customer” or VOC. These are obtained through focus groups, surveys, or other methods to understand what potential customers would desire in a product or service. “Quality” in this sense simply means “what the customer wants.”    The relative importance of these customer requirements is given on the right-hand side of the left wall, usually with a scale from 1 to 5 with 1 meaning “not very important” to 5 meaning “very important”.   This becomes a factor in the “relative importance weight” of the design features which are shown as part of the foundation or basement of the house.

2. The right wall—Comparison with Competition

This contains the customer’s assessment of the competition. With relationship to the customer requirements listed in the left wall, how does the organization’s product or service stack up against the competition? Is it better, worse, or the same with regards to those requirements as compared to the competition?

3. The upper story—Technical Requirements

Here’s where the customer requirements get translated into details of the design. What are the technical requirements of the product or service? These are listed in the upper story above the main floor of the house (see paragraph 5 below).

4. The roof—Co-relationships between Technical Requirements

These technical requirements may reinforce each other, or they may conflict with each other. The price of components may be inversely related to their durability, for example. In the “roof” of the house, there are squares that relate to the intersection of various technical requirements in the upper story. Here is where you indicate whether the relationship is negative or positive, or whether it is strong, moderate, or weak.

5. Main floor—Relationship Matrix of the Technical Requirements

Here is where the Technical Requirements in the upper story of the house are ranked according to how well they actually achieve the customer requirements or elements of the VOC that are listed against the left wall.   They are usually given a weighting from 0 to 5, with 0 meaning “this design feature does not at all meet the customer’s requirements” to 5 meaning “this design feature totally meets the customer’s requirements.” It basically shows how strong the relationship is between the elements of the proposed design and the customer requirements in the VOC.   This relationship is another factor that is used in figuring out the “relative importance weight” of the design feature in the foundation or basement of the house.

6. Foundation—Target Values

The three elements of the foundation of the HOQ are distilled from the other elements. For each Technical Requirement, the following three values are derived, which are listed in the stories of the “foundation” or “basement” of the house.

1)  Relative Weight—the ranking of a) how well the Design Feature meets the needs of the customer requirement (on a scale from 0 to 5) multiplied times b) how important the Design Feature is from the customer’s standpoint.  The result is the “relative importance weight” of each design feature or “technical requirement”.  

2)  Benchmark Value—a measure of the specific value of the design element of the competitor’s version of the design, for example, “weighs < 5 lbs”.

3)  Target Value—a measure of the target value of the design element of the organization’s version of the design, for example, “must weigh < 4 lbs”. How much it should improve upon the benchmark value of the competition will depend on how much relative weight each element receives.

This gives a general idea of the House of Quality is laid out. It is a tool which shows visually how the customer’s requirements are mapped onto technical requirements which meet those requirements to a level exceeding that of the competition.

The next post in the Design for Six Sigma will discuss failure mode analysis.

Theory of Constraints: Drum-Buffer-Rope Methodology


Theory of Constraints: Drum-Buffer-Rope

The 5 Focusing Steps of the Theory of Constraints are summarized as follows (see earlier post for details):

Step Explanation
1. Identify system constraint Find the part of the process that limits throughput of system or rate at which goal is achieved.
2. Exploit system constraint Use incremental improvements or kaizen to the throughput by getting the most out of the system with existing resources.
3. Subordinate everything else Adjust rate of other activities in the process so that they are aligned with constraint; align organization to support decision.
4. Elevate system constraint Consider further actions to eliminate constraint, including additional investment in capital equipment and/or technology if necessary
5. Repeat process Once constraint has been eliminated, avoid inertia and search for next constraint to be removed.

One manufacturing execution methodology that utilizes the first three focusing steps is called “Drum-Buffer-Rope” after its three components:

Component Question Purpose
1. Drum What is the physical constraint or “drum” of plant? Throughput is maximized when constraint operates or “drum” beats at maximum capacity.
2. Buffer What work flows into the “drum”? Throughput is maximized when inventory feeds into the drum on a steady basis, and this system is called the “buffer”.
3. Rope When are new resources required for the “buffer”? Throughput is maximized when the signal requests new inventory to be fed into the drum on a timely basis, and this signal is called the “rope”.

Here’s another schematic comparison between the three components.

This system maximizes the throughput while minimizing both the inventory and the work flow that feeds the inventory into the constraint or “drum”.

There are actually two buffers required, one before the constraint called the “constraint buffer” (no surprise there), and then one right before the product ships out to the customer, called the “customer buffer.” Even if your factory is very efficient with regards to throughput with very little inventory feeding into the system, if your finished products stack up to the ceiling before they get shipped out to the customer, then that is another waste in the system that must be reduced.

This concludes the material on the Theory of Constraints that is expected to be known as part of Lean Tools & Techniques (chapter 2 of the Six Sigma Green Belt Body of Knowledge). The next posts will discuss the D of DMAIC, or “Define” phase of the Six Sigma process.

Theory of Constraints—3 Thinking Processes and 5 “Trees”


1. Three Thinking Processes

To remove constraints and increase throughput, the current state of the system needs to be analyzed, and the constraints identified. Then the undesirable effects or UDEs need to pinpointed, which is the answer to the question “what needs to be changed?”

Then a cause-and-effect analysis is done to find out those actions which, if taken, will result in the elimination of those UDEs. This is the answer to the question “what actions will cause the change?” Finally, the future state of the system without the constraints must be visualized, which is the answer to the question “what should it be changed into?”

2. Tools or “Trees” in Theory of Constraints

NOTE: In the terminology of the Theory of Constraints, UDEs stand for UnDesirable Effects. These three focusing questions are explored with the use of the following tools or “trees”.

Tool or “Tree”

Explanation

1. Current Reality Tree  

Shows the current state, identifies UDEs and traces them back to root cause.

 

2. Strategy and Tactics Tree Implementation plan for changes to achieve the future state (replaces old Prerequisite Tree).

 

3. Evaporating Cloud Tree Identifies changes (aka “injections”) to system in order to eliminate UDEs; resolves conflicts between alternative approaches.
4. Future Reality Tree  

Shows result of changes designed to eliminate UDEs.

 

5. Negative Branch Reservation Identifies possible new UDEs caused by changes from current reality to future reality that eliminate the old UDEs.

The result should be the elimination of the constraints or UDEs from the system.

The last post covers the way that the work flow is controlled in the Theory of Constraints, with the controlled pull system called Drum-Buffer-Rope for short.