Episodit
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Is the whole simply a sum of its parts? In this episode, Jacob Stoller and Andrew Stotz discuss what happens when you divide a company into pieces and manage them separately - and what to do instead.
TRANSCRIPT
0:00:02.5 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my conversation with Jacob Stoller, Shingo Prize winning author of The Lean CEO and Productivity Reimagined, which explores Lean and Deming management principles at the enterprise level. The topic for today is myth number one, the myth of segmented success. Jacob, take it away.
0:00:30.4 Jacob Stoller: Great to be here with you, Andrew. And yeah, before I dive into that myth, I'd like to just start with a quote by Albert Einstein. "There is no failure in learning, but there can be in refusing to unlearn." Now that's something that's gonna occur over and over when we talk about the different myths. And the fact is, as many people have observed, unlearning can be a lot tougher than learning. So I think we always have to keep that in mind. So I want to tell a little story which kind of illustrates just how deep this unlearning can go. And this was told to me by Rich Sheridan, who has a company called Menlo Innovations, they're a software development company. And very interestingly, the theme of his work has been about joy in work. Sounds familiar?
0:01:28.3 AS: I love it.
0:01:28.5 JS: Well, he didn't really discover Dr. Deming until he had already written two of his books. So it just shows to me that there's some very underlying truths behind what Dr. Deming was teaching. But anyway, the story Rich tells is that he had his family in for a wedding. And they had a new office they'd moved into, so everyone wanted to see it. So he brought his granddaughter in, an eight-year-old. And he said, well, where do you sit, pop-pop? And he said, right here. Here's my desk. Here's my computer. And the granddaughter looked at his desk and was puzzled. You know, she said, well, where's your name? You got to have your name somewhere. And so, I mean, Sheridan was amazed. He says, I thought, wow, she already has it in her head that as CEO, I should have a corner office with a placard that showed how important I am. And you know, I felt a little embarrassed. She was somehow implying that I can't be much of a CEO if I didn't have a placard with my name on it.
0:02:35.5 JS: And she's only eight. So no, here's a CEO that's just really, really, you know, ahead of a lot of people. You know, he understands a lot of the Deming principles. And he sees just how deeply people hold these myths. She believed that there's this pyramid structure and there's got to be a CEO at the top and there have to be all these departments and people reporting to various people, et cetera, et cetera. So this really, this belief she had is really, it's sort of the pyramid that Dr. Deming described. And Dr. Deming actually wrote, he said, in The New Economics, you know, his last book, he wrote, this book is for people who are living under the tyranny of the prevailing style of management. And he talks about the pyramid. And I think that kind of encapsulates everything we're dealing with in terms of beliefs. And I'm just going to read it because he was so concise about saying it. "The pyramid only shows responsibilities for reporting who reports to whom. It shows the chain of command and accountability."
0:03:55.3 JS: "The pyramid does not describe the system of production. It does not tell anybody how his work fits into the work of other people in the company. If a pyramid conveys any message at all, it is that anybody should first and foremost, try to satisfy his boss and get a good rating. The customer is not in the pyramid. A pyramid as an organization chart, thus destroys the system, if ever one was intended." So I've never seen a more pointed description of the prevailing style of management. But think of this young girl at age eight, you know, I mean, and a lot of them, what happens is they go to school and they learn. And then maybe they eventually go to business school. And then sometime, maybe 30 years later or something, this person, this young woman is being told, we're not going to manage according to a pyramid anymore.
0:04:54.3 JS: We're gonna change the whole structure. We're gonna respect people and we're gonna respect their opinions. And we're not gonna assume that all these departments automatically fit together like building blocks. We're gonna work to define a system. All these things that Deming taught, you know, how do you think she's gonna react to that? You know, we're talking about things that this person has believed, not just from training in business school, but for years and years. So I think that kind of underlines the task we all have in terms of learning and unlearning. It's just an enormous thing we have to deal with, which is why I think it's important to look at the myths and various myths. And that's why I really worked to define those. So, when we...
0:05:46.5 AS: I would just highlight one thing about, if we go back to maybe, I don't know, constructing the pyramids, it was all about power and force, you know, get things done. It was about power and force. And I think what Dr. Deming was saying at a very, you know, many, many decades ago, he was saying that power and force are just, you know, a tiny factor in the world of business. The real motivating factor is intrinsic motivation, satisfying the customer, working together. Those types of things are the forces that will bring a much better outcome in your business, rather than just having an organizational chart that just shows the flow of power and force.
0:06:30.4 JS: Exactly. You know, and I think that if you look at the pyramid structure, it's actually a great system for consolidating power. So it works that, and, you know, but if you start to look at producing quality products and services for customers, it doesn't work at all. And, you know, so we need a new kind of logic, not this kind of logic. If we really do, like I say, we want to produce excellence. And if we want to have productivity as our competitive advantage, right?
0:07:06.4 AS: And one thing I just want to, for the listeners and viewers out there that may get confused, like what is a pyramid chart? We're talking about an organizational chart with a CEO, you know, and the like at the top, and then all the different department heads and the people below them. So Dr. Deming referred to that, and Jacob's also referring to that as a pyramid chart. Let's continue.
0:07:27.5 JS: That's right. Yeah. Yeah. Thanks for clarifying that. Okay. So that gets us to myth number one, because, and myth number one is the myth of segmented success. And the idea behind it is that the productive resources, this is a myth, this isn't true, but according to the myth, the productive resources of a company can be organized as a collection of independent components. The whole equals the sum of the parts. So this is essentially the glue that holds this org chart structure together. If that myth were true, then that org chart structure would be perfect for organizing a productive organization. But it is a myth. And what we see is that when you run a company according to that, with that assumption, you get into all kinds of trouble.
0:08:20.5 JS: And I'll just give you a very simple example. We have, let's say we have a company that does heating, ventilating, air conditioning, and they're selling stuff to industry, various machines, and they're installing them, and they're servicing them, all that kind of thing. Right? So let's say there's the end of the quarter and the sales rep has to make his or her numbers. Now salespeople are rewarded based on their sales numbers. Production people or the service people are rewarded based on their numbers, on how many service calls they satisfy or whatever. So installation people are rewarded for how much installing they do. So everybody's got quotas, and they're all sort of independent like components. So you get this sort of negative chain reaction where the sales rep does a big deal to make the numbers at the end of the quarter. He brings it in, the bell rings, you know, hooray, this person's made his numbers, he gets to go to Hawaii or whatever it is. Right?
0:09:27.6 JS: But let's supposing to get that deal, that's a big deal, it's high volume. So guess what? Low margin. And guess what? Maybe the sales rep had to make a few concessions to get that deal. Maybe the sales rep didn't reveal all the fine print to the customer, you know, in sort of the rush of getting the deal. So after the deal, the next quarter, well, the service department's got problems now dealing with this order. The installation department's got problems. So both of these departments have to hire extra people, have to pay overtime. So the end of that quarter, their numbers are going to look bad. Right? So that's a classic case. But it just happens over and over and over again, because you have all these different business entities compensated based on their own separate objectives as if they were separate companies. And yet that's glorified, that's seen as entrepreneurial. We'll run our department as a business, as a profit center. But they don't consider the whole overall system. So that's the kind of the tragedy, I guess, in modern business. And again, it's assuming that everything is kind of gonna work out if you manage them independently.
0:10:53.2 AS: And I was thinking that, you know, the head of the sales department is gonna be rewarding the salesperson for what they're doing. And if the head of the manufacturing or service department could anticipate that this deal that the salesperson's closing is gonna cause a lot of problems because of, you know, they're rushing it and they're trying to give great terms to get something under a deadline. There's just a very difficult for the head of the sales department to listen to that complaint to the head of, let's say the service department as an example, because they're being judged by the numbers they're delivering in their department by their boss. And so they got to kind of let it happen.
0:11:33.5 JS: Yeah. Yeah. And this is by the way, based on a real life story. And this is a company called Air Force, I think, Air Force One, it's called actually, and it's based in Ohio. It's a heating, ventilating air condition company. I could say HVAC, but they use the acronym. And they worked with Kelly Allen. And very soon after working with Kelly, they got rid of sales quotas and put everybody on salary. And the whole thing took off, you know, as the CEO told me. They're getting better deals, customers are happier, veteran sales reps are helping the younger ones close deals. Everyone's helping everybody. And the business is really, really expanded rapidly. You know, they've, I think, doubled or tripled their revenues in the last three or four years. So yeah, these things, when you get rid of these artificial barriers, businesses can really take off. And we got all kinds of case studies showing that.
0:12:45.3 AS: Yeah. And for the listeners and viewers out there, like, wait a minute, I can't do this. You know, my salespeople, they only are gonna work when they're incentivized individually as a department. I think the first thing that I would say is listen to what Jacob's telling you, listen to the stories that you're hearing and think about it. You don't have to move on it. I think that transformation in the way that you think about, you know, things takes time. And the natural reaction, when you hear something new, you know, you started with the idea of unlearning the natural reaction, when you hear something new is to say that can't work, but just keep that open mind as we continue through myth number one. So why don't you continue on, Jacob?
0:13:25.3 JS: Yeah, well, and as Kelly Alley, Kelly Allen you know, made some points on that. First of all, he said, you don't go in with your guns blazing and just take away the sales quotas. He said they worked very carefully so that CEO understood the whole system, how all the parts interact. And then once you understand the system, then you're in a position. Often people go in prematurely, remove all the sales quotas and you get chaos because people don't understand all the dependencies that are there. So it's really, really important, I think to manage the change in a responsible way. And again, as Kelly says, you've got to understand the system and how it works.
0:14:10.4 AS: Great. And I think you have more stories to tell.
0:14:14.2 JS: Oh yeah. Well, I actually a wonderful one. It's, and it's not just sales quotas, by the way, it's any kind of rating and ranking system. And one of the real classics is the, a company called Bama, Bama Foods, which is, uses Deming's principles. And the CEO, Paula Marshall, actually might've been this little girl, eight-year-old girl who was looking for the desk of the CEO 30 years later, because she started working with Deming just by accident, really, because she had taken over the company business at a young age and she, they were trying to deal with some quality problems. And she went to a Deming seminar and Dr. Deming asked who in the audience is the CEO? And she was the only one that raised her hand. And so he said, will you come and , be part of a study group? So that's how she got to work and got to become actually today's the only living CEO that's actually worked directly with Deming, or the only active CEO that's actually worked with Dr. Deming.
0:15:32.4 JS: But anyway, she started to talk with Dr. Deming about the problems they were having and he said, and she described a rating and ranking system that they had had, and they had spent, I think millions of dollars even back then with a very, very reputable consulting firm. And it was one of these things where they rank people on a scale of one to 10. And the idea was let's make all our people accountable. That's how we're going to get quality. We'll have accountability. Everybody has to be rated by their managers and we'll create some fear and we'll create some incentive for people to work harder and solve our problems. Well, the first thing Dr. Deming told her is get rid of that rating and ranking system. So it was very, very hard for her at first, you know, she'd spent a lot of money on it. And she said, you know, but eventually she said she realized that it wasn't helping the company. It wasn't doing anything, but it was still very, very hard to let go of that idea. But eventually she did. Eventually she got on a conference call.
0:16:40.3 JS: They got rid of it and the results were just incredible. She said by the, you know, everyone had hated the system and it just turned the conversation around. I mean, instead of saying, well, here's why I've ranked you, Andrew, on, I've only given you a seven instead of a nine. We would be having a sort of a constructive conversation about the problems you're facing in the workplace, how we can make things better, how can we work together, that sort of thing. So it was, it became much more constructive and much more cooperative. And they were able to evolve to a whole system where teams of people work together to solve problems. But without taking away that system, it would have been very, very difficult to do that 'cause, you know, well, that means that person will be ranked higher than me maybe, you know.
0:17:31.2 AS: And we know very well in the area of sports that, you know, great coaches are not sitting there ranking and rating and ranking their employees and beating them over the head with that. They're trying to identify the strengths and weaknesses. How do we, you know, build this team so that we can beat the other teams? And that really requires coordination. And if you do rating and ranking type of thing, you start to destroy coordination. And for those people that are thinking, of course, you know, I'm terrified to look at this and remove my rating and ranking. One thing you can do is take, you know, five or 10 people that you respect their opinion within the company and ask them how they feel about the rating and ranking system. And you'd be surprised what you hear.
0:18:15.3 JS: Oh, yeah. Oh, yeah, for sure. Right. And, but yeah, about the sports team, I guess. Yeah. I mean, there's some documentaries on the Chicago Bulls, you know, and I think they had some very good stories about teamwork and stuff like that.
0:18:30.5 AS: Well, Phil Jackson was amazing in that the documentary on Netflix was great, The Last Dance. But what you can see and you can hear it from the players, I think Dennis Rodman was a great example where Phil Jackson understood how to deal with this kind of disruptive kind of situation and guy. How do you deal with that and get the most out of him on the court in a way that still follows the values of yourself and your team? And he just showed that very well in that. And so I think that that was a great example of how you coordinate your resources.
0:19:08.5 JS: Yeah, a great example, I think, for people to watch. Yeah, 'cause it really does. It does really show that.
0:19:15.3 AS: You know, you were talking to me about just before we turned on the recorder about Deming was a scientist and physics and all this, some things I never even thought about. But maybe you can tell us a little bit about your thoughts in that area.
0:19:28.4 JS: Yeah, you know, I mean, I think that, first of all, the when you look at the traditional pyramid and all the traditional style of management, I mean, that's really based on reductionism, cause-and-effect. Essentially, it's Newton, you know, it's Newton's golden principles. So you have a business system that's built on 17th century logic, basically. And so what I think is wonderful about Dr. Deming, I mean, we think of him as this philosopher. But here he was, Dr. Deming in the 1920s, getting his PhD in mathematical physics. So at the time he's doing his PhD, I mean, there's Heisenberg developing his uncertainty theorems, all that kind of stuff was just exploding. And the whole view that people had of the physical world was just being turned upside down. So Dr. Deming was very, very cognizant of that.
0:20:35.2 JS: You know, when it started, you know, with statistics, but gosh, you know, science of psychology was changing too. And I think Deming, you know, when you read him, he was really thinking like a scientist. You know, this is the way the world works. And was very, very sensitive about all the components of that. You know, the science of the way people think and what motivates them. You know, he knew that people aren't motivated by sticks and carrots. And we'll talk about that later. He knew that there are limits to how much you can know if you're not right there in the workplace. You know, he understood all that because of variation. But I think when he was introducing those ideas, people really weren't thinking that way. I think they are a bit more today, but he was really a pioneer in that.
0:21:33.4 AS: Yeah. In fact, I was just looking at, he got his degree in mathematical physics from Yale university in 1928. So yeah, there was a lot going on in the world then.
0:21:46.3 JS: Sure was. Yeah. So yeah. And he, I guess he's very patient with us. You know, you think of someone having a degree like that talking, you know, over everybody's heads, but I think he really developed the style of communicating.
0:22:06.5 AS: So what else you got for us on this topic? I think you had some takeaways that you mentioned some four points or some other items.
0:22:14.3 JS: Sure. Yeah. I can, I did summarize at the end of the chapter just to sort of a bluffers guide, I guess, to, you know, this myth of segmented success. But, you know, first of all, you know, as we were just saying, conventional management practices are based on an outdated view of the world that emphasizes reductionism and predictability and ignores the influence of complexity and interdependencies. So you don't see how things actually affect each other in a company. Operating companies so that interdependencies are reflected in management practices and understood by all employees enables wide engagement in improving quality and productivity. To create a strong team environment, managers need to remove barriers such as siloed incentive plans and clearly communicate the aim of the organization. And finally, recent lessons from supply chain disruptions during the COVID epidemic show how segmentation extends beyond the walls of a company and how closer collaboration with supply chain partners can prevent such disruptions.
0:23:41.3 AS: So how would you, let me ask you, how would you wrap everything up in a very short statement? What do you want people to remember?
0:23:53.4 JS: I want people to remember that just because it says so in an org chart doesn't mean that that reflects the way things actually happen.
0:24:05.7 AS: Yeah, that's a great one. And I think we're trained, and this is where Dr. Deming used to say that, you know, what we're being taught in management schools, you know, is the wrong thing. And this is exact type of thing where we're talking about this concept of the, you know, the org chart and the way power flows and all of that stuff. So yeah, great points.
0:24:28.4 JS: Yeah. Not only in management school, but in grade school, you know, when we're rating and ranking kids before they even know how to learn and read, even before they know how to read and write.
0:24:41.2 AS: Yeah. And that brings us back to that first story where a kid walks in and what has she seen? She's seen the teacher and the principal with the name tag at the front, in front of the class.
0:24:53.4 JS: Exactly. Yeah. Yeah. And I don't know if we can keep talking, but you know, Rich Sheridan also discovered a drawing, which is actually, it's a diagram in The New Economics, but it shows how people's creativity and joy in work and stuff are systematically destroyed throughout their lifetime. They're constantly put down by teachers, principals, and they go to college and university and there's competition. And then they go into the workplace and they're rated and ranked. And it just destroys the natural of joy in work that people have and the enthusiasm people could have in the workplace.
0:25:39.5 AS: And for those listeners out there who used to listen to The Wall by Pink Floyd, Roger Waters was talking about how the school system was just pounding out any creativity, any fun, any joy. And so it's not unusual. And it's the case in many educational systems around the world. And so I think, you know, this is a good reminder of, you know, joy in work. And also this idea of segmented success. I think you had a statement that you said to me just before we started, which I thought summed it up perfectly, which was the whole doesn't equal the sum of the parts.
0:26:18.3 JS: Yeah, that's exactly. And we can basically reduce it all to that.
0:26:28.4 AS: Yeah. So I'm going to wrap up there. So for ladies and gentlemen, I think that's a great description of myth number one in Jacob's book, but I think ending it with this, the whole doesn't equal the sum of the parts, helps us all to realize that, you know, just bringing competition between different people and different units within an organization does not bring the optimum output. Jacob, on behalf of everyone at Deming Institute, I wanna thank you again for the discussion and for listeners, remember to go to deming.org to continue your journey. You can find Jacob's book, Productivity Reimagined at jacobstoller.com. And this is your host Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming. We've been talking about it today. "People are entitled to joy in work".
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What can Dr. Deming's famous Red Bead Experiment teach us about quality? What happens when you only focus on the bad, and ignore the good? In this episode Bill Bellows and Andrew Stotz discuss acceptability vs desirability in the context of the Red Beads and a few of the 14 Points for Management.
0:00:02.1 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussions with Bill Bellows who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. This is episode 5 of the Misunderstanding Quality series and the title is "The Red Bead Experiment." Bill take it away.
0:00:30.4 Bill: Thank you, Andrew, and welcome back. Welcome back to our listeners. One thing I want to say is, one is I listen to every podcast two or three times, listening for, is there a need for clarification, reminding myself, thinking, oh, I should have said this. Or sometimes I say, oh, make sure you make this point, and I do or I don't. And. so one is, nothing comes up from the last one that I thought I missed or mispronounced, but what I do want to clarify is, I'm viewing the target audience as quality professionals in your respective organization or people that want to become a quality professional that are learning, that are trying to apply these ideas in their organization, are fascinated with it. Could be quality professionals who are consultants looking for new awareness of the Deming perspective. So, that's...
0:01:35.8 Bill: And so, some of what I have in mind is, and the examples is, things you can try at home. In fact one thing I encourage... What I encourage my students to do, undergraduate and graduate students, even the clients I consult with, companies I consult with, is develop the ability to explain these ideas, any of them, to people outside of work. So, that could be a spouse, a brother, a sister, a mother, father, son, daughter. And, why outside of work? 'Cause I view that as a safe audience. You say, hey, I just listened to this podcast. Somebody at work may not be as safe. And why are we having this conversation? So, I would say, it could be a college classmate, but one is, try explaining these things to people outside of work and then when whoever that is looks at you and says, I have no idea what you're talking about, or this makes sense, then as you develop that confidence then you're refining your explanations. And that puts you in a better position to apply, to explain it at work.
0:02:54.9 Bill: And why is that important? I'd say there's a lot you can do on your own. I mentioned that a month or so ago, my wife and I were in New England, and I met my doctoral dissertation advisor, who's 86 years old and lives in the middle of nowhere. And one of the things is the wisdom he gave us way back when it was so profound. One of the things he said, we were poor starving college students making seven bucks an hour, working 20 hours during the semester as Research Assistants or 40 hours during the summer. And what a life. Living in... This is poor starving college students. And he would say to us... We'd get together now and then, there'd be a keg on campus and we'd be... Which it wasn't all that often, but anyway, he'd say to us, "These are the best years of your life." [laughter] And we'd look at him like... Now again, I mean, we were... I wouldn't say we were poor starving college students, but I mean, we made ends meet. Now our classmates had gone, undergraduate, gone off to work and they were making real money, and we just stayed in the slum housing and doing... Just living cheap.
0:04:20.3 Bill: Then he says, "These are the best years of your life." We're looking at him like what are you saying? And what he said was, you're working on your research projects either undergrad, masters or PhDs. He said, "You will never have the time you have now to focus on one thing and not be distracted." Now a few of the classmates were married. Most were not married, but he just said this is... I mean, what a dream situation. You're in the laboratory every day. That's all of your focus. Your tuition is covered, blah, blah, blah. But it was just like, yeah, okay. So, when our daughter was in graduate school I shared that with her and she laughed at me. I said, "Allison, these are the best years of your life."
0:05:14.4 AS: If only we listened.
0:05:15.5 Bill: Right. So, that's... And well, I wanted to bring up... But the other thing I want to bring up aside from that story is, he'd say to us, when you go to work, he said trust me. He said "there will be more than enough time to get your job done. You'll have a lot of... You will have time to..." And he said, 'cause he used to brag about he'd be given a task and he can get it done in a fraction of the time that was allocated. And why I mention that is that every job has latitude. And so, to our listeners I would say, think about how to use the latitude you have to practice, to do a small scale Plan-Do-Study-Act thing. Now I really think that's what it's going to come down to is, either experiment at home or whatever, but just practice. And then as Andrew always reminds us at the end of each podcast, you can reach out to me on LinkedIn. And that's led to a number of people I'm meeting with once or twice a month.
0:06:31.8 Bill: And they are exactly who I hope to meet, is young quality professionals wanting to know more, to know more, to know more, and they're either in the States or they're living in Europe. All right. So, before we get into the Red Bead Experiment I wanna go back and talk more about acceptability, desirability which will be a focus of the Red Bead Experiment as well. But in the first series we did, there were 23 episodes before we got into the Misunderstanding Quality, and somewhere in there we discussed, you may recall the paradigms of variation. And the paradigms are labeled letters A, B, C, D and E. And we will look at them in this series. So, for those who don't know what I just said, don't worry we'll cover you. And for those who heard it before, okay, we're going to review it. And I mentioned that because paradigm A, the only one I want to talk about tonight, is paradigm A, is does it meet requirements? That's what acceptability is. Is it good? 'Cause we have this binary world in quality. Part of paradigm A is a binary world. It is good or it's bad. We talked about last time is, if it's bad can we salvage it? Which means we can rework it.
0:07:52.3 Bill: Now some of the rework means it could be we can rework it and use it. And in the aerospace industry what happens is, maybe we can't put it in a flight engine. When I was at Rocketdyne maybe it doesn't end up in a Space Shuttle Main Engine, but maybe it ends up in a test engine and a test stand, so it doesn't fly, but we're still going to use it, or it's scrapped. We have to throw it away. But paradigm A is acceptability. Another thing I want to mention is, I was commenting on LinkedIn the last couple of days over process capability metrics. And there's Cp which stands for capability of the process. And, then there's Cpk which is a little bit different. And I don't want to get into those equations tonight, maybe in a future episode. But what I want to say is, if you're looking at a metric such as yield, people say the yield is 100%. What does that mean? It means everything is good. What if the yield is 50%? That means we have to... 50% is good, 50% is bad.
0:09:06.2 Bill: So, yield is an acceptability metric. Why do I say that? Because the measure is percent good. What is a good versus bad? Also say that indices that involve the requirements. And we've talked in the past about a lower requirement and an upper requirement, the idea because we expect variation we give a min and a max. And so, if the equation for the metric you're using includes the tolerance limits, then that's a clue that that's an acceptability-based metric. Now, I don't care whatever else is in the equation, but if those two numbers are in the equation, then the inference is, what you're talking about is a measure, some type of measure of acceptability.
0:10:00.5 AS: Right.
0:10:02.6 Bill: But even if people talk about... If the metric includes the middle of the requirements, well, as soon as you say middle of the requirements, as soon as you say requirements we're back to acceptability. So, these are things to pay attention to is what we're talking about acceptability and desirability, 'cause what we talked about last time was I was trying to give everyday examples of both. And so, acceptability is when people talk about... In fact I listened to about an hour long podcast today on quality management. And one of the comments was, if you follow the steps correctly you get the right result. Well, that's acceptability. Right? If things are right as opposed to wrong. So, again, when you're in this world of good, bad, right versus wrong, that's acceptability.
0:10:58.7 Bill: Again, the reminder is this is not to say acceptability is bad, but it's not desirability. Which one is it? And then what we talked about in the last podcast number four was choose. Do we wanna to focus on acceptability or do we wanna focus on desirability? Where desirability is saying, of all the things that are acceptable, I want this one. I want that orange. I want that parking spot. I wanna date that person of all the ones that meet requirements in my search... You know, in the dating app. And so, that's acceptability. What got me excited by Deming's work in the early '90s was, I was spending a whole lot of time at Rocketdyne focusing on things that were broken. I'm trying to apply Dr. Taguchi's ideas to go, to take something that used to be good but then slipped into bad, and now we're focusing on the bad stuff to make it good. And now the good news is it kept me busy.
0:12:06.5 Bill: I was having a lot of fun. These are high visibility things and the solutions. We got the solutions working with some really wonderful people. But that led me to start asking questions. And I was once at an all-day meeting in Seattle at Boeing. Rocketdyne had been sold to Boeing Commercial Airplane Company. I got invited to a meeting up there. And it was a monthly all-day production meeting. I don't know 50, 60 people in the room. And they asked me to come up. So, I went up. And what time does the meeting start? You know 8 o'clock, 9 o'clock, whatever. And I said you know put me on a few hours into the meeting. Well, why then? Well, I want to listen to the first couple of hours of the meeting. Because in listening, now we're going back to what we talked about with Edgar Schein. And I've developed the ability... You know, I can hear are we focusing on acceptability, desirability, I can hear things you know with a Deming lens. People think of a lens as seeing, well, there's a Deming ear set as well.
0:13:10.7 Bill: And so, I listened for the first two hours and exactly what I expected. So, when I get up to speak at last I said before I got to the slides, I said, "How much time do you spend every day discussing parts that are good, that arrive on time?" And a couple of people in the front row made a circle with their fingers, zero. And I said, so why is that the case? And one of them says, if it's not broken don't fix it. And wherever I go that's what people say. I went to a big Boeing customer doing... Because they were a customer we sold them rocket engines of some size. And I was briefing that slide, had 110 people in the room for a lunchtime presentation. Before I could read the slide, the room erupted in laughter. And so, I share that because if we're spending all this time focusing on the bad but not the good, what is that? That's acceptability. That's what happens, is the economics of acceptability says, only focus on the bad to make it good. But we don't focus on the good because... And that's what we're gonna look at towards the end of tonight is, why don't we focus on the good? And so, next, I had a co-worker at Rocketdyne got a job in Chicago at a toy factory. They bottled soap bubbles. And as a kid's toy with a little wand inside and blowing bubbles and all that.
0:14:56.0 Bill: And she dramatically turned the place around, did some amazing, amazing work. She went from being the senior manufacturing engineer to the, I think plant manager. So, she called me up as she'd been promoted to plant manager. And the question was now that I'm plant manager what should I focus on? So, I said... I had known her for four or five years at that time. I had been mentoring her and the mentoring continued in that capacity. So, I said well, what do you think you should focus on? And the comment was, I think I should focus on all the things that are broken. Well, that's acceptability once again. And I said, so you're focusing on being 100% reactive. And she said, well, yeah. And I said, what you're doing then by focusing on acceptability, you're saying the things that are good I ship, the things that are bad I got to work on. But without understanding that there's actually variation in good... I mean, go back to the Boeing folks when the guy says to me if it's not broken don't fix it. My response to that was, if you use that thinking to drive your car when would you put gas in it? When it runs out. If you use that thinking relative to your plumbing system, your water system at home when would you call the plumber? When it breaks.
0:16:25.5 Bill: When would you go see the doctor? When... So, the downside of not working on things that are good and not paying attention to things that are good is that they may bite you. So, part of the value proposition of acknowledging from a desirability perspective that there's variation in good. If you pay attention to the variation in good there's two upsides. One is, you can prevent bad from happening if that's all you want to do. And two, the focus of a future episode is by focusing on things that are good and paying attention to desirability in the way that Yoshida, Professor Yoshida was talking about. That offers opportunities to do things that you can't do with an acceptability focus, which is improve how things work together as a system. And the idea being when you move from acceptability which is a part focus to desirability, which is a system focus, you can improve the system. Okay, more to follow on that. All right. So, I got some questions for you Andrew, are you ready?
0:17:37.4 AS: Uh-oh. Uh-oh.
0:17:39.8 Bill: So, Dr. Deming had how many points for management?
0:17:42.9 AS: Fourteen.
0:17:46.3 Bill: All right. Okay.
0:17:48.3 AS: I'm being set up here. I just feel it. You start with the easy ones.
0:17:52.8 Bill: All right. And...
0:17:54.3 AS: Listeners, viewers help me out.
0:17:56.9 Bill: All right. And which point, Andrew, was cease dependence on inspection to achieve quality? What number was that?
0:18:09.6 AS: I'm gonna say four or five, or six. I can't remember.
0:18:14.2 Bill: Three. Three.
0:18:14.6 AS: Really? Three. Okay. That was close.
0:18:16.1 Bill: I would not have known. That was number three.
0:18:19.1 AS: Yeah.
0:18:20.1 Bill: And it's followed by Dr. Deming saying, "Eliminate the need for inspection on a mass basis by building quality to the product." So, the first question is what point was it? And again, I had to look it up. I know it's one of the 14. Second question, Andrew, is, if Dr. Deming is saying cease dependence on inspection to achieve quality, would you think of that as an acceptability focus or a desirability focus?
0:18:55.1 AS: I don't know if I can answer that. I mean, I can only think about what he was saying, which was design quality in from the beginning and get everybody involved in quality, not just having an inspector at the end, but I'm not sure.
0:19:11.4 Bill: Yeah. No. And even as I asked the other question, I'm thinking... Well, this is great because if in the audience you think of quality from an acceptability perspective, right?
0:19:24.2 AS: Mm-hmm.
0:19:24.9 Bill: So, if you're working for Boeing, which is all about acceptability or most companies, and you hear step three, then you're thinking, cease dependence on the inspection to achieve..., you're thinking acceptability. If that's what you're used to, if you're used to quality being doesn't meet requirements...
0:19:42.9 AS: Okay.
0:19:43.2 Bill: Then what you're hearing is Deming talking about acceptability. But if you've been exposed to Yoshida's work and Dr. Taguchi's work and you're understanding that within requirements there's variation of things that are good, so it's kind of a trick question. The idea is it depends. Alright.
0:20:02.4 AS: Yep.
0:20:05.5 Bill: I got two other of 14 points to ask you about. Alright. Which of the 14 points is in the practice of awarding business on the basis of price tag alone? Instead, minimize total cost. So, first which point is that?
0:20:26.9 AS: I think it was also... I would say then four.
0:20:32.1 Bill: Yes.
[laughter]
0:20:33.6 AS: Yeah.
0:20:34.1 Bill: Yeah.
[laughter]
0:20:34.5 AS: You'd think I know. I wrote a book about it.
[laughter]
0:20:39.3 Bill: Alright. So, that's point four and...
0:20:42.1 AS: Okay. So, I got... I don't wanna be rated and ranked, but I got one right at least. Okay. Let's keep going.
0:20:49.1 Bill: Okay. And, so, is that acceptability or desirability? Let's say this. Is awarding business on price tag acceptability or desirability?
0:21:02.1 AS: Probably acceptability.
0:21:04.6 Bill: Yeah. 'Cause then you're saying...
0:21:06.5 AS: Can you hit this number? It's okay.
0:21:11.2 Bill: Yeah. Or you contact your insurance company and you say, I'm looking for a heart surgeon, and you say, and I found one, blah, blah, blah, blah, blah. And they call you up and say, yes, that person is a heart surgeon, but we prefer you use this one. [chuckle] What's the chance they're thinking about a cheaper option? Right? Alright? So, you're looking at from desirability perspective...
0:21:38.5 AS: This guy's really cheap on kidneys.
0:21:40.7 Bill: Right? And so you're thinking you've done a bunch of references. You've asked your friends. And why are you asking? Because all the doctors out there that meet requirements, you're blindly saying, I'll take any one. That's acceptability. And you're saying, I want this one. That's desirability. But the insurance company says, no. We consider them all to be the same in our policy. That's acceptability. Alright. Okay. And here's the last point we're gonna look at tonight. Which of the 14 points is "improve constantly and forever the system of production and service to improve quality and productivity and thus constantly decrease cost"?
0:22:23.5 AS: Isn't that number one? Constancy of... That's...
0:22:28.0 Bill: That's constancy of purpose. That's number one.
0:22:28.8 AS: Okay. Constancy of purpose. So, improve... Don't know. No. No.
0:22:39.4 Bill: That's number 5.
0:22:40.5 AS: Okay. Five.
0:22:44.5 Bill: And I was looking at, so I know those are three and one, and I thought, oh, that's three, four, and five. Alright. So, what I wanna do there is, we're gonna look at that a little bit later. So, I don't wanna ask you about acceptability, desirability, but I just wanna lay that on on the table. Alright. So, now we're gonna look at what Dr. Deming referred to as his chain reaction. The Deming Chain Reaction. Alright. So, what do you remember about the Deming chain reaction? It wasn't a motorcycle chain or a bicycle chain, right? What did Dr. Deming call his chain reaction?
0:23:31.3 AS: I can't... I mean, I'm thinking of the flowchart.
0:23:34.9 Bill: Yeah. We'll get to that. We'll get to that. The chain reaction...
0:23:36.5 AS: But that I can't remember.
0:23:39.6 Bill: And this is likely Out of the Crisis. The Deming chain reaction is, "if you improve quality, you will reduce scrap and rework, thereby reduce costs." And then he goes on to, by reducing costs, you can increase sales and expand the market. That's the chain reaction.
0:24:01.9 AS: Yeah.
0:24:02.2 Bill: So, when I ask students, again, in my either graduate, undergraduate classes is, talk about the Deming Chain Reaction, then I say, is the Deming Chain Reaction... Within the Deming Chain Reaction, Deming says, if you improve quality, reduce scrap and rework, lower cost, is that explanation of quality, acceptability, or desirability?
0:24:31.9 AS: I don't know. I'm fearful to answer nowadays because I'm not getting these right.
0:24:37.4 Bill: No. You are. You're on a roll. [chuckle] Again, the Deming Chain Reaction, if we improve quality, we reduce scrap and rework, thereby lower the cost thereby sell more and expand the market.
0:24:52.2 AS: I would say that's desirability.
0:24:56.1 Bill: Okay. One more time. If we improve quality, we reduce scrap and rework.
0:25:03.2 AS: Yep.
0:25:04.3 Bill: So, the clue is scrap. Is scrap something we talk about with acceptability or desirability?
0:25:12.1 AS: That's acceptability.
0:25:14.1 Bill: And rework.
0:25:18.2 AS: Well, we're trying to make it acceptable.
0:25:20.1 Bill: Exactly. And the reason I point that out is, I'm not sure... And I think we talked last time about things we agree with Deming or disagree with Deming. I'm not a big fan of the Deming Chain Reaction because I think... Again, if I'm in the audience and I'm working for a company that defines quality and in terms of acceptability, and he says to me, if you improve quality, reduce scrap and rework, that's what I'm used to. And my concern is, in other ways he's explaining quality in terms of constantly improving. Well, how can you constantly improve quality once you get to 100% yield? So. if all the product is good, which is acceptability, if there's no scrap and no rework, can you improve quality? Not if you're focusing on acceptability. And so, what I'm saying there is, that if Dr. Deming is in one hand defining the chain reaction and using the term quality in reference to scrap and rework, then he's projecting quality as acceptability. But if he's talking about improving constantly and forever, and then we get into, can you improve the quality forever? That's what he's saying.
0:26:49.1 Bill: What if you get to 100% yield, which is the maximum value of acceptability? Well, only if you shift to desirability can you improve forever quality, if you think it's worthwhile to do. So, that's why I wanted to go back and look at those things. One is revisit acceptability, desirability, and point out what I think are some opportunities for confusion in trying to explain Deming's work. Alright. Now we'll talk about the Red Bead experiment, which is, the very first time... I remember reading about it in the earliest books I read. I think, who is it that wrote the first books on Deming management, Deming management? She's a...
0:27:42.8 AS: Killian?
0:27:44.3 Bill: No, no, no. Cecilia Killian was Deming's admin.
0:27:48.9 AS: Mary?
0:27:50.5 Bill: Yeah. Mary Walton.
0:27:51.6 AS: Mary Walton.
0:27:52.5 Bill: Mary Walton. I remember reading a Mary Walton's book, that's when I first got exposed to this Red Bead experiment. So, The Deming Institute has a dedicated webpage, so, if you go to deming.org, or just do a Google search for deming.org Red Bead experiment, it's one of the most popular pages. I think that might be the second most popular, most visited page past the 14 Points. In there you can find short videos. There are longer videos, but there's enough on there to follow along with what I want to explain. So, Dr. Deming and the Red Bead experiment would take from the audience, and it could be four willing workers, six willing workers. He'd be the manager of the White Bead Company, and he would explain to them, he would share with them. He had a bowl, and in the bowl were 5,000 beads, maybe an eighth of an inch in diameter, small plastic beads, and there'd be 5,000 in the bowl, 4,000 white, 1,000 red.
0:29:00.6 Bill: And then there was a paddle, and the paddle could be roughly two inches by four inches, and the paddle had a little handle, and it had holes in it. So, the instructions he would provide to the willing workers, the production workers, is to take this paddle at a given angle, slide it in flat into the bowl, even the back of the beads. The beads are in one container, they get poured into another container.
0:29:27.7 AS: In a pan.
0:29:28.1 Bill: It's a mixing process, and then he pours them back in. So, just pour them from one to the other, and he would be very persnickety on pour at 45 degrees, tip from the corner. You pour back and forth, put the paddle in, and you'd end up with 50 of the beads would fill the paddle, and then you'd go to the inspector number one. And the inspector number one would count how many red beads, which is not what the customer wants. What the customer wants is white beads, but the raw material includes both. So, you go to inspector one, and they may count five beads. You go to inspector number two, and they quietly see five. The numbers get written down. Ideally, they're the same. And then you go to the, I think, the master inspector, and they say, five beads, and then "dismissed." And then write the five on a flip chart, and then the next person comes and does it, and the next person comes and does it. So, all six come up and draw beads, and then we count the number of red ones. The number of red ones go into this big table. Next thing you know we've done this over four different days. I've done this. This could take an hour. And even when you watch the videos, there's a fast forwarding.
0:31:00.1 Bill: I've done the Red Bead experiment, I think, just once, and I did it with a former student, which worked out really well, 'cause there was a lot of dead time, and the audience was watching, and so I was able to get conversation going with her. So, for those wanting to do this, boy, you've got to be pretty good on your feet to keep the audience entertained. To get to the point where you've got a table on the whiteboard, or on the flip chart, and on the table are the six willing workers on the left-hand side, and then day by day the red beads... Looking at the number of red beads. So, what are the red beads? Well, the red beads are not what the customer wants. What the customer wants are white beads, but in the production process, because the raw material includes red, well, then the red ends up in the output. So, I ask people, so, if the white beads are what the customer wants, what are the red beads? And typically, people say those are the defective, defects, scrap.
0:32:03.2 Bill: And, so now you get into this model is based on acceptability. The beads are either good, white, or bad, red. And so I would ask the students in class, in a work setting, what might the red beads be? I, in fact, asked our daughter. She said, is just moving from being a junior high school English teacher to a senior high school English teacher. Her undergraduate degree is from Cal State Long Beach.
0:32:34.3 AS: There you go.
0:32:34.3 Bill: So, her first day of school was today. She's also the varsity swim coach, which is way, way cool. Mom and dad are proud of her. So, I remember asking her a few years ago. So, I said, Allison, what are the red beads in the classroom? She said, well, the stapler doesn't work. The door doesn't close. The projector screen doesn't come down. The computer doesn't work. These are red beads in the classroom. So, I said, okay, Allison. What are the white beads?
0:33:01.1 Bill: Geez. So, we get so used to talking about the red beads are the defects or things that... Well, the white beads, by comparison, are the things that are good. So, I said, Allison, if the computer works, that's a white bead. If the door closes, that's a white bead. If you can close the window, that's a white bead. If you can pull down the screen, that's a white bead. So, the red beads are the things around us that are defects, broken, and the white beads are the others. And so, I wanna throw that out to do some stage setting. And ideally, this is a review for our listeners, and if not, you've gotta go watch as many videos as you can in The Deming Institute website. There's a lot of great content there. Watching Dr. Deming do this is pretty cool.
0:33:49.0 AS: He's a funny guy.
0:33:51.6 Bill: And I was very fortunate to be in Dr. Deming's very last four-day seminar. I did not participate in The Red Bead Experiment. I let somebody else do that, but it was classic. Well, the next thing I wanna get into is, and I would say to audiences many times, so we know... Well, a couple things. It's so easy to look at that data on a spreadsheet and say, Jill's the best performer. She has the minimum number of red beads. So, on the one hand, we can look day by day, and it could be Jill's number started off low. And we gave her an award, and then it went high, and then we started blaming her. So, there's variation in the number of beads, worker to worker and day to day. So, a given worker, their scores go up and down. So, that's called variation.
0:34:43.4 Bill: And so one of the aspects of the System of Profound Knowledge, which we haven't talked about too much, but ideally our listeners know Dr. Deming was really big about the value proposition of understanding variation. So, what Dr. Deming would talk about in his four-day seminars, and ideally anybody presenting this, is you take the data, you draw the usual conclusions. We're looking at data from an acceptability perspective. We look at the spreadsheet, and then voila, we turn it into a run chart and look at that data over time, calculate control limits, and then find that all the data is within the control limits and draw the conclusion that the process is in control. And then you move from in a non-Deming environment, looking at this data point versus this data point and drawing these conclusions that the white... The number of red beads is due to the workers.
0:35:33.7 Bill: So, the punch lines you'll find at Deming Institute webpage is that the workers are trying as best they can, that the red beads are caused not by the workers taken separately, but by the system, which includes the workers. A lot of great learning there. And a very significant piece is, in a Deming environment, where Deming's coming from is, again, this is before we go further in this in future sessions is, he's proposing that the majority of what goes on in the system relative to the performance of anything you measure is coming from the system. And if that is really, really understood, then you're hard pressed to blame people in sales for lousy sales or dips in sales or you look at grades of students in a classroom. So, for people looking at Dr. Deming's ideas, perhaps for the first time, realize that what he's talking about is coming from The Red Bead Experiment is a great eye opener for this is that, let's stop blaming the workers for the production issues and step back and look at our procurement system.
0:36:39.6 Bill: Do we have a procurement system where we're buying on price tag? If you buy on price tag, you end up with buying a lot of red beads. So, one aspect I wanna leave our listeners with today is, as you're studying this, realize there's a psychology aspect to The Red Bead Experiment. Not only the idea that there's variation up and down, but what are the implications of realizing that we can't be blaming the workers for the behavior of the system. The system includes the workers, but it also includes things that are well beyond their control. Well, where I wanna go next with this and then we'll next time get in and go further is, in appreciation of point five, "improve constantly forever the system," what I would ask audience is, so we know the red beads are caused by the system. We know the number of white beads goes up and down. But if we were to improve the system by not buying red beads or pre-sorting them out and get fewer and fewer red beads in there, then we get to the point that all the beads are white, perhaps. We have continuous improvement.
0:37:47.2 Bill: We end up with a 100% yield. Well, then we get into, again, and I've kind of set the stage in prior comments, what I would ask people is, what Dr. Deming's talking about trying to achieve zero red beads everywhere in the organization? Is that what we're striving for with the Deming philosophy, is to go around the organization, I want every single process to produce no red beads to make it to a 100% white beads? And if that's what Dr. Deming is talking about, then what does point five mean about continuously improving? Now we get into what I mentioned earlier is, you can improve the speed of operation to produce more white beads, so, we can do them faster, we can do them cheaper, but can we improve the quality of the white beads under that model? And the answer is no, because acceptability stops at a 100%. So, what we'll look at next time is, if you look at the beads and look closely, you'll see they have different diameters, different weights. They're not exactly the same color white. So, what is that Andrew? That's called variation.
0:39:00.9 Bill: And now it brings us back to desirability. So, what I encourage people to do, most of the times I see people presenting The Red Bead Experiment, they present it from an acceptability perspective. That's the starting point. But what I encourage our listeners to do is go through all that, and this becomes a great opportunity to move your audiences from acceptability focus to desirability by talking about the inherent variation in those beads. Again, we'll talk about the value proposition economically in future sessions, as well as the other paradigms of variation before we get there. So, that's what I wanna cover.
0:39:43.2 AS: Wow. Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. If you wanna keep in touch with Bill, just find him on LinkedIn, and this is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. It never gets old. "People are entitled to joy in work."
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Puuttuva jakso?
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In this episode, John Dues and Andrew Stotz discuss the first part of John's path for improvement model - setting the challenge. Using an example from United Schools Network, John explains their aspirations for cutting chronic absenteeism rates.
TRANSCRIPT
0:00:02.4 Andrew Stotz: My name is Andrew Stotz. And I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. And the topic for today is "set the challenge." John, take it away.
0:00:24.6 John Dues: It's good to be back, Andrew. Yeah. Last episode, we kicked off this new series. I introduced this improvement model that we can use to help us set ambitious goals backed with a sound methodology. I think I made this disclaimer last time. I'll make it again that this is sort of like showing listeners a peek behind the curtain because we're sort of talking about this as this model is being built and used for the first time in my network of schools here in Columbus in United Schools. So I think that caveat's important, and I think maybe starting with just a quick review of the model we looked at last time would be a good refresher for this episode for those that are reviewing and I'll talk through it for those that are only listening. I'll go ahead and share my screen quick. You see that all right?
0:01:17.1 AS: Yep.
0:01:18.4 JD: All right. Yeah, so this is the model we kind of stepped through kind of an overview last time. I think it's important to remember a few things. One, basically the core idea of the improvement model is it gives us the scientific way of thinking so that we can work in a way that makes sense to close the gap between our sort of current conditions in our organization and sort of our aspirations. So we frame those two things as the voice of the process, as current conditions, what's happening right now. And then the future aspirations, that's the voice of the customer. That's sort of what we or someone else wants those conditions to be. And what we're doing throughout this process is stepping through the four steps that you can see displayed in the model. So kind of just stepping through those quick.
0:02:06.5 JD: The first thing is that we set the challenge or the direction, and that's gonna be... We're gonna dive deeper into that step today. Then the second step over on the left hand side of the model, for those that are viewing, you work to grasp the current condition, so what's going on currently in your organization. And then the third step is we establish the next target condition. So think of that as like the intermediate goal that we're working towards sort of on a more proximate timeline. And then fourth, what we're doing is once we understand those things, then we're experimenting to overcome obstacles or impediments. And so all of those things we talked about, doing that with a team that includes someone or people working in the system, in our case students, a lot of the time, those with the authority to work on the system like the teacher in a classroom or the principal of the school building. And then that System of Profound Knowledge coach that has that awareness of the System of Profound Knowledge and sort of brings that lens to the improvement efforts. So that's sort of a quick rehash of the model that we went over in episode one. And then I'll stop. Well, you want me to leave that up or I can stop sharing?
0:03:29.9 AS: Either way. I don't mind.
0:03:31.0 JD: Okay. Well I'll stop sharing for now and then we can always pull it back up if we want to. Yeah. So with that sort of in mind, what I thought would be helpful is then do this deep dive into step one. And so kind of what we'll do through the next several episodes is focus on each of the steps. So we'll take this deeper dive into step one. Set the challenge or direction. So last time I mentioned that in step one of the model we asked this primary question, where do we want to be in the long run? And this is... Think about this as a overall challenge or direction that's set by organizational leadership typically. So senior leaders, the CEO, typically the board, they're gonna be the ones framing this challenge, setting the direction for the organization.
0:04:27.2 JD: And we can also think about it as a sort of a longer range goal that if we accomplish it, it will differentiate us in our case from other schools or if you're in the business community, it would differentiate you from competitors in some way. But even though it's something that we're striving toward currently we're setting this in a way that it's gonna stretch us and right now it almost seems impossible to accomplish this thing far out into the future. And this direction or challenge, I think it's fairly typical. Sort of set this on a six month to three year timeframe. So that kind of gives you a sense of sort of how far out we're looking and the timeframe we're looking to sort of achieve this challenge is. And last time I shared an example from our most recent strategic planning where we're trying to reduce our chronic absenteeism from the current state, which is 52% chronic absenteeism. We're trying to take that down to something closer to 5% chronic absenteeism.
0:05:44.4 AS: Seems nearly impossible.
0:05:44.5 JD: It does if you're on the ground in schools right now, especially schools like ours, it really does seem nearly impossible to sort of cut it at that large of a rate. So.
0:05:55.6 AS: I have an ethics class that I teach here, an ethics and finance class here in Bangkok. And I tell the students it's not mandatory to attend class from my perspective. School may require you, but it doesn't matter to me. My job is to make it so exciting and interesting that you wanna be here. That's hard.
0:06:16.7 JD: Yeah. That's a good frame. That's a really good frame. We have, unfortunately we have so many obstacles that our kids are going through to get to school. Even something as simple as consistent transportation from yellow school buses is a major impediment to school attendance here in Columbus. So there's all kinds of obstacles that... Challenges in front of us that we're gonna have to improve and solve to get down to that 5% rate.
0:06:43.0 AS: When I was growing up in Ohio, in Hudson, outside of Cleveland, the farm that I worked on in the summer, Barlow's farm. Mr. Barlow was our bus driver because there wasn't much going on in the wintertime. And so, yeah, he never missed [laughter] I don't ever remember a bus not arriving in my whole youth.
0:07:07.6 JD: Yeah, yeah. It's something in many places you take for granted. And then in a number of other places, it is a major, major challenge for sure.
0:07:13.0 AS: Interesting.
0:07:14.8 JD: That's certainly the case in Columbus where we are, for sure. So when we think about this challenge it's this... I kind of think about it and this is why it needs to a lot of times be set at the leadership level or the senior leader level is it's this new future condition and it serves as a sort of compass for us to follow. And that's important 'cause we don't have an exact roadmap for how to get there. So it's sort of like a general direction, but the specifics are what we're gonna have to be filling in as we go through some of those other steps. Some of those intermediate goal setting, some of the experimentation that I talked about. But think about this direction or challenge is it's really the purpose behind our efforts. And then when you sort of put together the tough challenge and then the scientific thinking, that's really powerful. And those two things together can really sort of move you into this new territory. I think that you're looking to... I think this map territory compass metaphor is really sort of spot on for this particular model. Oh, go ahead.
0:08:29.8 AS: I had a question because I have a client of mine and one of their objectives is to list their company on the stock market here in Thailand. Like many companies, but in some ways that's kind of an owner's goal. Like we've talked about some of their other goals, like being the leading company in their field in asia, Southeast Asia or something like that, and/or maybe to have a happy workforce or whatever. And I'm just curious, like how do people think about goals? What is a good way to think about it? Is there such a thing as like an internal or a higher level goal versus a goal for the company versus an external goal? How do you guys think about those types of things and target conditions?
0:09:17.2 JD: Yeah, I mean, I think... I don't know the exact answer. I mean, I think when you set a goal at the leadership level, then you're gonna... Well, one, you're gonna have to explain it throughout the organization, whether it's a 100 people or a 1000 people or 10,000 people. And then depending on the size, there's probably gonna be different types of goals that are in different business units, I'm guessing by business type. We're a pretty small organization and so we're pretty close to the... In fact, our office... My office, it is on the ground floor of one of our middle schools, so we're very proximate compared to like a bigger company. So I think this can look different in different places. I think the consistent thing is it's gotta be clear, it's gotta be spelled out, it's gotta be clearly communicated. It has to be something that you're talking about frequently. Otherwise you're obviously not gonna move in this direction.
0:10:11.2 AS: Yeah, I mean, that kind of answers it too. 'cause I thought... When you said that, I also thought about how people care about with them, what's in it for me. And so, as you said, you gotta explain it and you're gonna have to do a lot of talking about it. So people need to see that that goal is something that's gonna bring them value, otherwise they're not gonna be excited to go do the hard work that it takes to get there.
0:10:37.0 JD: Yeah. Maybe in that respect, like sometimes in education is... Some of the goals that we have set are so self apparent that there's just sort of immediate buy-in 'cause like who's against kids coming to school? Almost nobody. So that's I think a fairly easy one to get buy in. And maybe in other settings more time needs to be spent on the buy-in part, the explanation part. Maybe... This can be kind of hard, but who's involved in setting the goals in the first place? Maybe there's ways to get more people involved in that process.
0:11:10.6 AS: Well, and maybe the kids aren't involved in the buy-in.
0:11:13.8 JD: Yeah, that's true. That's true. Although, yeah, like the yellow bus thing that's out of their control. And I'd say that's actually a major obstacle. But I think...
0:11:26.5 AS: That's true. Nowadays, I'm sure there's plenty of kids that wanna be there.
0:11:29.5 JD: Oh yes for sure.
0:11:30.9 AS: But there's obstacles all over the place for them.
0:11:34.3 JD: The vast majority wanna be there, actually, I think. But your point is good, and that goes back to that team they're the ones working in the system and so they're gonna be the best at identifying the obstacles. So to stay in our setting, they certainly need to be a part of the experimentation that happens to improve the chronic absenteeism rate. One other important caveat to point out at this step in the process, and we've talked about this a little bit but I got this little chart that I think will help sort of explain when we were setting this direction or challenge, it's what I would call like an improvement goal. And it's not an accountability goal. And I think it's really important to be explicit about the difference between those two things.
0:12:24.4 JD: 'cause they often get conflated. And so I had built this chart for another improvement project, but I think it does a really good job. So I'll share my screen again. I think it does a really good job of sort of outlining the difference. And it's not that one is necessarily better than the other, it is just really important to know what's the purpose of this particular type of goal and what's it used for. And so I was just gonna take a moment to kind of run through this. So on the left you have sort of some key questions that are answered either by... And here it says measurement for accountability, but you can sort of replace that with an accountability goal and improvement goal over there on the right. So you have measurement for accountability or accountability goal, and then improvement goals or measurements for improvement.
0:13:20.7 JD: And you have some questions that that particular type of goal or measure will answer. Then you have in the next row their specific uses. And then why quality measurement matters. So just starting with accountability goals or measurement for accountability what those types of goals are gonna do is answer questions about merit or status or accomplishment of someone or something. Who's performing well, who isn't, who should be considered knowledgeable enough to do X. We're talking about end of line outcomes, like end of year outcomes. They're often... Goals for accountability often happen once a year. So I've talked about this repeatedly, but state tests would be a very good example of an accountability goal. The point of doing that is to separate the good from the bad basically, when you look at state test. Down there in the use sell for those that are viewing, it says the purpose of, or the use for accountability goals is to determine the applications of rewards or sanctions. Right? And so it's none of this really has to do with improvement.
0:14:38.8 AS: Sanctions, what a word, [laughter]
0:14:40.4 JD: Sanctions, right? Yeah. I mean, this happens in schools all the time. Schools can be sanctioned depending on what the law is at the time as it relates to state testing and accountability system.
0:14:50.9 AS: I thought we only sanctioned Russia [laughter] Okay. So there's even sanctions in schools. Okay, got it.
0:14:58.0 JD: Definitely sanctions in schools. And then we can juxtapose the accountability measures with the improvement measures over there on the right or improvement goals. When we're talking about improvement goals or setting the challenge, we're really talking about questions about specific changes as potential improvements to systems like our systems. So we're thinking about questions like, are the changes I'm making leading to improvement? How are my changes affecting other parts of my system? And what's measured is outcomes and processes relevant to the object of change. You know and how often are we doing this? Frequently. Much more than once a year, like the state test. And the whole point is to learn our way to a better system, right. And so with chronic absenteeism this could be both a measure for accountability and a measure for improvement, depending on how it's framed.
0:15:57.8 JD: Chronic absenteeism is actually reported on state report cards, but in this case, I'm talking about an internally created goal that we have for ourself that we've created for ourself that our organization is gonna work towards. And there's gonna be various things that we do to see if things that we're trying as interventions, experiments work in improving those rates, basically. So I think it's really important to call this out that when we are talking about this particular improvement model and the four steps, we are not talking about accountability goals at all. We're talking about improvement goals, two very different things.
0:16:37.6 AS: Interesting. And the improvement goals is the type of thing that it seems like is not as common as the accountability. Like everybody's trying to, you do this, you've gotta achieve this, that type of thing. Whereas this is such a bigger picture.
0:16:51.3 JD: Yeah. I mean, I think the key difference is because you could actually have an internal accountability goal. You could set up a similar system internally as what the state does when they're looking at schools. And if our mindset was, we're gonna set this goal and you people over here go do this, figure out how to do it, that would be much more like an accountability goal. But our mindset is like hey, this is something we all gotta take a look at. This has to get better. This isn't working for kids, so what are we gonna do? How are we gonna figure this out? That's really the key difference, you know? You're not doing this for some other group of people. You're a part of that group that's trying to make this thing better.
0:17:36.5 AS: So I'm just curious too, as I think about the listener or the viewer out here is how do they get started in this concept of setting the challenge or direction and maybe there's people at the top of the company. I mean, the first thing that I thought when you started talking about it is Oh, there's so many target conditions, there's so many challenges. Like there should be this one and that one. And all of a sudden I started coming up with like three to five challenges. And then I thought, oh no. Now this is overwhelming.
0:18:11.8 JD: Yeah. So in our strategic plan, we have 13 of these key metrics. And each of one of those could be its own challenge or direction, but they are divided up sort of roughly in like different department areas. And so some of 'em have to do with our fiscal responsibility raising funds and stuff like that. And there's a specific team that does that. And that would be different from like an academic team or a school-based team that was working on something like chronic absenteeism. So there is sort of a divide and conquer. The CEO maybe our superintendent are focused on all 13, but there are different teams that are actually running the experiments and working towards improving these things. And then there's someone like me that's sort of serving as the System of Profound Knowledge coach across multiple teams that are working on each of these key metrics basically. But in terms of where to start, I think that's a good segue. I mean, I think we've answered the question or we've said that basically that this strategic challenge answers the question, where's our organization going next? And I think one good... One simple way to start is to think of completing this sentence: Wouldn't it be great if we could dot, dot, dot.
0:19:37.0 JD: What is that thing or what are those things in your organization? It's, again, going back to it seeming nearly impossible, it's something we can't achieve with our current systems and processes. It's not easy, but not impossible. We think it's achievable even if we're not quite sure how we're gonna get there. It's something that's gonna be measurable. So we know if and when we get there. And another thing is that, especially when you're talking about, you were talking about like communication of these challenges across the organization, these challenges or directions are often expressed as some type of catchy statement. So just a quick statement that brings to mind this entire sort of area of work. And so I was kind of brainstorming because we've been talking about this chronic absenteeism example and I think we can just kind of keep that going throughout these episodes. So I was thinking of something like, every student every day, and then everybody knows that we think it's important for every student to be at school every day. And we're sort of working to get back to that post pandemic.
0:20:52.3 AS: Yeah. I was thinking, wouldn't it be great if every parent was fired up.
0:21:00.1 JD: Yes, absolutely.
0:21:01.2 AS: About every student every day. Like, that's the way I was just thinking about it 'cause I think that, and I just like the kids. I'm sure there's plenty of parents that say, I want my kids to get a good education and I want them to get more than what I got, but I can't reach it or I can't do it. I got too much on my plate. But if somehow they were a party to this.
0:21:26.1 JD: Yep. I think, similar to the students, I mean, I think parents absolutely can be a part of an effort where you work. And in fact almost have to be, especially 'cause we're a K-8 system and certainly at the very least at the K-5 level, kids are almost entirely dependent in most cases on parents getting them to school. So, certainly parents...
0:21:49.2 AS: What is the catchment area of your schools? Like what's the farthest?
0:21:57.8 JD: Yeah, we have pretty, because we don't have a specific geographic assigned area assigned to our school buildings, like a traditional public school district would typically. So we have much wider areas. So let's say, a 15 mile radius around a building would catch the vast majority of the kids that attend. So, yeah. Yep. Well, I think, let's look at an example. Let's look at chronic absenteeism as our focus here. So, I've mentioned, we've just updated our strategic plan it includes these 13 metrics, and there's this one focused on chronic absenteeism. And when we sort of outline the key metrics in the strategic plan, each metric has four pieces of information that we're listing explicitly right in the strategic plan. The voice of the process, the voice of the customer, the operational definition, and then some type of visualization of the data, basically.
0:23:04.4 JD: So those four things go with each of the metrics. So just as a refresher, a lot of people know this, and we've talked about this, but I think it's good to refresh. The voice of the process is the metric that tells us how we're currently performing. The voice of the customer is the direction or challenge we have set, so that's the step one. The operational definition for the metric puts communicable meaning into the concept and includes a method of measurement or test, as well as a set of criteria for judgment. So basically we wanna make it clear to anybody that's looking at chronic absenteeism, that they know exactly what it is we're measuring, and they could come up with that same measurement independently. And then the fourth thing is this visualization that illustrates the performance of the metric over time, because that time factor is really, really important. So I'll share my screen one last time so that people that are viewing this can see what this actually looks like in our strategic plan.
0:24:07.4 JD: And I'll kind of walk people through this visualization for those that are just listening. So you sort of see this chart over on the left or on top of the chart it says key metric three student success, chronic absenteeism rate. So that's the metric. The voice of the process is 52%. So that means that 52% of our kids are chronically absent and the voice of the customer is 5%. So that's that far off thing. That's six months or probably more like three years off that we're working towards. And we're not quite sure how we're gonna get there right now. And then we have the operational definition of the concept of chronic absenteeism. So this says "a student is considered chronically absent if they miss at least 10% of instructional time for any reason. Our chronic absenteeism rate is the percentage of students at United Schools who are considered chronically absent."
0:25:08.9 JD: Now, this particular definition was fairly simple because there's already a sort of a federal and state definition of chronic absenteeism. And then down below the operational definition, you have the data that we have thus far charted over time. So in this case, we only have three years of this particular type of data 'cause that's when it sort of started getting measured at the state level. And so the y axis is the chronic absenteeism rate, the x axis is the school year. So this chart has 2021/2022, 2022/2023, and 2023/2024 school year data. And you can see the data is fairly similar across those three years. Not too unexpected, but it's right around, 53%, 54% in the '21/'22 school year, maybe 52% in the '22/'23 school year. And then slightly less than 50%, let's say 48% of kids were chronically absent.
0:26:11.5 AS: Just outta curiosity, where was that before covid? Let's say 2018/2019.
0:26:17.9 JD: Yeah. Lower. Definitely lower. I think going back historically, if we had that data, I would guess, and I'm sort of guessing based on overall attendance rates compared to what overall attendance rates are and like what chronic absenteeism probably was, it was down probably closer to like high 20s, low 30s, that type of thing. And obviously a chronic absenteeism rate of 52% is very high. But when you look at even the school district buildings that are sort of around these schools, generally speaking, their chronic absenteeism rates are even higher. They're in the 60, even into the 70% range. And so not that this is like a comparison, but you can kind of get some context there that these rates are even higher in the neighborhood schools that are closest to our campuses.
0:27:16.7 AS: It would be a bit shocking for someone in Asia, like myself in Korea, Japan, China, Thailand, who's, it's a much different view of education. But just for the purposes, for someone who doesn't know much about what's happening in the US, what are these kids doing? Are they out working or are they at home?
0:27:40.6 JD: It's hard to know exactly. I think one thing is, is that in some cases, older siblings, like in our middle schools, are often taking care of younger siblings for various reasons. I think that can be a common way, but I think it's hard to just pin on one or two things. I think this is a very complex problem with lots of causal things, causal variables that are going into this. So I think that's why it's so important to study it in our context and try to figure out besides the things that we already know, like busing being inconsistent, those types of things. What else is it that's contributing to this? And so that's sort of what the process that we're starting now is trying to figure this out.
0:28:32.3 AS: And would you equate the voice, is voice of the customer equate it to target condition? Or is there a difference between that?
0:28:42.1 JD: Well, in this case, the way I'm framing it is like the voice of the customer is that direction or challenge, that's step one. So we had to, because this is an internal improvement goal, we decided for ourselves, like what do we think that vision, that purpose, that challenge is out there on the horizon that we're not sure how to get to, but we want to get to in the next two or three years. So I would equate those two things in this case.
0:29:07.1 AS: And who is the customer in the case of a school, how would you view that?
0:29:15.0 JD: Well, so that can be a little tricky based on how you're asking the question. Just from the point of who's the customer and the voice of the customer. Well, it's the leadership that set this like a customer with a capital C, that's the voice of the customer in terms of who's the customer of the school system it depends on exactly what aspect of the school system that you're talking about. But in general, our families and our students, are customers of the school system. But then so are the high schools that we feed our eighth graders into. Those are also customers of the system. But in terms of who the customer was that set this challenger direction, that was our senior sort of leadership team.
0:30:00.7 AS: Okay. And the voice of the process where we're looking at the 52% absenteeism rate, would you call that the current condition?
0:30:11.5 JD: Yes. Yes.
0:30:14.0 AS: So voice of the process, current condition, then you have to have some operational definitions so that we know what we're really talking about. And then a visualization that helps people see kind of where things are at.
0:30:28.3 JD: Yeah. And ideally we would have more data than this, but this is the data that we have. And you can actually see there's this note here 'cause right now it's just a run chart. It's just the data points with a central line running through. But there's this note that says the natural process limits are not included until we have at least five data points. And so we won't include the control limits until we have more data, basically.
0:30:50.4 AS: And for the person looking at this from outside, they're like, so wait a minute. You gotta wait a full year before you get that. But I guess there's a lot of data underneath this that is input data that will eventually drive this output.
0:31:07.8 JD: Yeah, I mean, I think what we do with any data like this that comes once a year, you have to find some proxies. So some proxy outcome data that maybe you're measuring on a every other week or maybe on a monthly basis. And then you have some process data that you're measuring, here's the things that we think will move the outcome needle, and are we doing those things? So you set up different types of measures, sort of intermediate outcome measures, process measures that are sort of measuring the different things that you're trying. And then usually a sort of a third component to that measurement system is a balancing measure where you're making sure that other things in your system aren't, [laughter] going astray because you're putting all your focus on this chronic absenteeism concept. So it's complicated. It can be complicated.
0:31:54.2 AS: It is. And in the area of education, you're under so many different constraints set by government. I was having fun in my mind imagining like when we were young, the Keystone cops, and they were kind of funny, crazy cops. But I was imagining getting an old ambulance with a flashing light and arriving at student's homes and saying, we gotta get you to school urgently. [laughter] And all the fun things that you probably can't do.
0:32:27.4 JD: Yeah. Yeah. Well, that as a brainstorm is not too far off from some of the things that we're thinking about as possibilities in terms of different forms of transportation, taking more control over the transportation where we can 'cause this is a service that's provided by the school district.
0:32:51.0 AS: One thing I did with Google Maps many years ago is I uploaded the zip code or address of my students, and so that I could see clusters of where they were. And then from those clusters, I started recommending, Hey, why don't the five of you guys form a group here and you're in the same area? And then that would help them to make a connection that they may not have made themselves.
0:33:24.9 JD: Yeah, that's a great idea. We have the geo mapping already. Yeah. We.
0:33:29.1 AS: And there's pods basically. So pods are out there of 50 students in this area. So when one has a problem you've got 20 of them that got a problem. If a bus doesn't arrive, is there a way we can get those 20 students communicating with each other and say, we want to get to school, how do we do?
0:33:50.0 JD: Yeah. We said we have some beginning of the year challenges right now with busing and we were making some calls to some of the families, and one really awesome grandma actually said, I'm gonna look into how much it costs to rent a bus and I'm gonna go round. And so that type of problem solving is certainly happening on the ground. It's how to sort of make that systematic and consistent. That's the tougher thing.
0:34:12.5 AS: Yeah. Exciting. Great one, and I look forward to the next one. I'm learning a lot and I know the listeners and viewers are learning a lot. Is there anything you would just add to wrap this one up?
0:34:25.6 JD: Yeah, I mean, I just a couple points maybe to bring it home on set the challenge, I think, one thing is we have to have this model to bridge a gap between current conditions and future aspirations. So that's this improvement model as a whole. There's always gonna be this gap between current conditions and our aspirations. And I mentioned this improvement model has this combination of scientific way of thinking and working to close the gap. And what we did in step one was ask where do we want to be in the long run? And this overall challenge that we set is really set at the sort of senior leader level, becomes a key priority. And I'm really thinking about this. If we can figure this out and some of the other key metrics, it's gonna really differentiate us from other schools. And so I think that's sort of those four or five things are the key frames for "set the challenge."
0:35:19.9 AS: Exciting. Well, I'm looking forward to the next one. Well, on behalf of everyone at the Deming Institute, I want to thank you again for this fun and interesting discussion and really opening up what you guys are doing there and the challenges that you're facing makes it even more real for the listeners and the viewers, and for the listeners and viewers, remember to go to deming.org to continue your journey. You can find John's book Win-Win W. Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools on amazon.com. This is your host, Andrew Stotz, and I'm gonna leave you with one of my favorite quotes from Dr. Deming. People are entitled to joy in wo
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Continuing their discussion from part 3 of this series, Bill Bellows and Andrew Stotz talk more about acceptability versus desirability. In this episode, the discussion focuses on how you might choose between the two.
TRANSCRIPT
0:00:00.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today is Episode 4 of the Misunderstanding Quality Series, and the title is Quality, Mind the Choices. Bill, take it away.
0:00:31.3 Bill Bellows: All right, Andrew, welcome. So podcast three, I think the title was Acceptability and Desirability. And one correction there, when I went back and looked at the transcript the concept of... At least the first person I heard tie together acceptability, desirability, at least in the Deming community, was a professor, Yoshida, Y-O-S-H-I-D-A. He was a PhD student of Dr. Deming, I believe at NYU but I mispronounced or misspelled his first name. I thought I've heard people refer to him as Kauro, perhaps spelled K-A-U-R-O, maybe that's his nickname, and maybe I just didn't remember properly but his proper first name is Kosaku, K-O-S-A-K-U and he at one point in time was in Greater Los Angeles at Cal State Dominguez Hills. And then I think sometime in the mid '90s, early '90s, last I heard he moved to Japan.
0:01:51.1 BB: I've never met him. I've watched videos of him, there's a classic presentation. I don't know if it's got, it might be online someplace of he did a guest lecture. There was a... Dr. Deming was speaking in Southern California and needed an emergency surgery, had a pacemaker put in, so this would've been '92 timeframe. And Professor Yoshida was called in to give a guest lecture. And that ended up being something that I think was sold eventually. The video, the lecture was sold by Claire Crawford Mason and so he is... I don't know how much of that is online, but anyways.
0:02:38.4 AS: Is Kauro, Kauro wasn't that the name of Kauro Ishikawa?
0:02:43.7 BB: That may be where I... Yes that was a Kauro. There's two Ishikawas. There's a father and the son and I... So I'm not sure if Kauro was the father or the son, but anyway correction there. In the first series we did, going back to '23, 2023, I mentioned the name Edgar Schein, but I don't believe I've mentioned his name in this series. So I wanted to throw that, introduce that in this series today and give some background on him for those who have not heard his name or not aware, did not listen to the first series and Edgar Schein, who passed away January of this year. He was an organizational theorist, organizational psychologist, spent the greater part of his career at MIT. And one of the concepts I really like about what he talked about is looking at an organization in terms of its artifacts. So if you walk around an organization, what do you see? What are the artifacts? That could be the colors, it could be the artwork on the wall, but the physical aspect of the organization Schein referred to as the artifacts. And what he also talked about is if you dig beneath the artifacts, they come from a set of beliefs, and then the beliefs come from a set of values.
0:04:23.9 BB: And again, the first series we did, I talked about Red Pen and Blue Pen Companies, and Me and We Organizations, and Last Straw and All Straw organizations. And those titles should make it easy for our listeners who are not aware to go back and find those. And what I talked about is, this imaginary trip report, if you visited a Deming organization, if we could think in terms of two simple organizations, a Deming organization, and a non-Deming organization in this very simple black and white model. And I had people think about the physical aspects of both, if they were to go visit both. What I then followed up on in our conversation is what you see physically comes from a set of beliefs. Now, they may not be articulated beliefs, what Schein would call espoused beliefs. And then you have what they really believe and I forget the term, I use this for that, but it comes from a set... But anyway, the physical comes from the beliefs, the beliefs come from the values.
0:05:39.0 BB: And part of the reason I bring that up for our listeners, and I'm thinking in terms of the people that have a responsibility in their respective organizations. They could be consultants, internal consultants, working in quality likely, given the focus of this series. First of all, you have to start where you are. But even added on, included in start where you are, is you have to start where your management is. So, if your management is tasking you with an improving scrap and rework, then that's what you better be talking about. Now, you don't have to be guiding your actions based on acceptability because the other aspect is scrap and rework are typically associated... Well, not typically, they are associated with acceptability. The lack of acceptability, acceptability is the idea that this is good, it is acceptable, it meets the requirements, defines...the quality requirements that are defined.
0:06:52.0 BB: If it's good, it is acceptable, if it's bad. There's two categories of bad, bad could be I have to throw it away, that's scrap, which means I can't recover it or rework, which means I can do something with it and perhaps salvage it. And so if your management is tasking you with improving scrap and rework, then first of all, where they're coming from, quite naturally, is acceptability. And why do I say that? Because everywhere I've gone, that is the deepest foundation of quality in every organization I've ever met, worked with, I have met people that work from whether it could be... Whether it's clients that I've worked with, whether it's students, my university classes. Acceptability, scrap, and rework, all go together. And, so if that's where your management is, then they're asking you to focus on improving acceptability.
0:08:05.6 BB: But, you may find it invaluable to shift your focus to desirability to improve acceptability. And that will be a focus, well I get into some of that tonight and others or today, and then on a future podcast later. But, I remember once upon a time at Rocketdyne, the executives were, the VP of Quality was task master asking for improvements to scrap and rework and also things called process capability indices, Cp’s and Cpk’s. And if you've heard of a Cp or a Cpk, great, if you haven't all I could say is I find them dangerous. I find them, well I say they're all about acceptability. And what makes it, reason I would encourage people to stay away from them because they appear to be desirability, but they're really acceptability.
0:09:15.7 BB: We'll save that for later. But anyway you have to start where they are. So if people are asking for improvements in scrap and rework, then, instead of fighting them, you go with it. And then what we'll be talking about tonight is, is it worthwhile to shift? Well, what does it mean to improve acceptability and the difference between acceptability and desirability? And relative to the title tonight, Mind the Choices is being aware that there's a place for acceptability and there's a place for desirability. And going back to Yoshida in episode three, what I was referring to is, in presentations he was doing from the early '90s, maybe even going back to the '80s, he talked about Japanese companies are about desirability. So, he presented this model of acceptability and desirability. And then, his explanation of what makes Japanese companies, again, back in the '80s, Japanese companies were viewed as those setting the quality standards.
0:10:20.5 BB: And, he was trying to say that the way they're doing that is that they don't rely on acceptability as other companies in other countries do. They have a higher standard. And that's what I wanted to introduce in our last episode, Episode 3. And, what I wanted to do tonight in this Episode 4, is to put some, add some more to that. But, also reinforce I'm not saying that there's anything wrong with acceptability, it's a question of what does the organization need at that point of time? And, really it has to do with... Really, it has to do with how big a system you wanna look at. So if you're looking at something in isolation, which is, I mean, when you look at something and saying it's good or bad, that is the epitome of looking at something in isolation.
0:11:17.5 BB: You're looking at a pen and saying it's good. You're looking at the diameter of a hole and saying it's good. That is not looking at what goes in the hole, that is not looking at how the pen is being used. So by definition, that's what Ackoff would call analysis, which is looking inward. It's not what Ackoff would call synthesis, which is looking outward. And how far outward you look is all according... I mean you could look, it comes down to how big is the system. And I wanna introduce the name Shel Rovin, Sheldon was his full name. Shel was his nickname. I met Shel through Russ Ackoff in 2006. Shel was, he was in charge of the Chief Nursing Officer program, which was a two-week immersion program at the University of Pennsylvania.
0:12:14.5 BB: And he was doing that in the, 2003, 4, 5, timeframe when I met him. And Shel was a dentist by background. He was Dean of the School of Dentistry at University of Kentucky and University of Washington. And I met him through Russ and invited him to Rocketdyne on numerous occasions. And Shel spoke about relative to looking at a system, 'cause people talk about, well "Andrew, we've gotta look at the whole system," but how big is the system? And, so people say, well, systems thinkers look at the whole system. Well, how big is that? Is that 1,000 foot view? And people say, oh no, Bill, it's bigger than that. Is it a 10,000 foot view? Is it... How big is the system? Well, Shel's perspective, and the word I wanna introduce from Shel is relative to systems is boundarylessness.
0:13:12.7 BB: Say that a few times fast. 'Cause systems have no boundaries. So I'm sure our listeners... I'm sure you have heard, I don't if our listeners have all heard, Dr. Deming would say to executives, does your system include the future? He used to ask questions such as what business are you in? What business will you be in five years from now, 10 years from now? Well, why not 15 years from now? Why not 25 years from now? Native American Indians, associated with Native American Indians is the idea of looking at the seventh generation after you when you're making choices. And so what I would ask people is, well, why seven? Why not eight? Why not nine? Why not 10? I mean, within an organization, we could be working with our supplier to try to get across these quality ideas to our suppliers.
0:14:05.5 BB: Well, that's looking at the system. Well, wait a minute. Do our suppliers have suppliers? Yes. Do their suppliers have suppliers? And so relative to boundarylessness is this idea is when people start talking about the whole system, I don't know what "whole" means. What I'd rather look at is what size system are we looking at? That's a choice. That's a choice. So we could decide to look at our suppliers. We're gonna go one step, we're gonna look at procurement. Who do we buy from? Now, we may educate them and give them the responsibility of looking at their suppliers on... But that would be a way of managing quality. Likewise, we can look at the impact of our work on our customer and give them heads up as to how to look at the impact of their work on their customers. But that's looking at the system in an X, Y, Z, physical coordinate, add onto that, the time dimension. And so, again, all I wanna throw out there is that when it comes to making choices on acceptability, desirability, a lot of it has to do with how big is the system that we're looking at. Some everyday examples of acceptability.
0:15:23.5 BB: Again and what I wanna get across is, in part the difference to help people make choices. And so when we were on a vacation in Europe recently, I took a number of photos of people making choices. And,` when I travel, anywhere I travel, especially out of the country, I love walking into supermarkets just to see what they sell that perhaps is not sold in the States or in California. I know there are things you can't find in California that you can find on the East Coast. That's one thing. But I like going into supermarkets just to see what products are there. I mean, you can go to England and find in the refrigerator section, hard cider, apple cider, you know, alcoholic cider that I got exposed to going to a Deming conference in 2000. I've become a fan of it ever since. Well, in the States it's pretty hard to find hard cider, period. You go to England and you'll find, a dozen different brands and each brand may have a number of different types.
0:16:44.9 BB: And so that's, but anyway, relative to that when you walk into a supermarket, if you're looking at canned goods, or just look, well, looking at cider, we can look at this cider versus that cider. We treat a can as a can, whether it's buying tomato soup or cider, we treat all those cans as interchangeable, interchangeable parts. But when we go to into the bakery section, that's where I was taking photos in Amsterdam and I was watching people sort through the pastries. And yet what was laid out were a bunch of pastries of the same style. And yet people were, I want this one, I want that one.
0:17:26.0 BB: Well, part of acceptability is treating all those pastries as the same as we would treat all those cans of tomato soup as the same. Now relative to tomato soup I know you live with your mother, and I'm willing to bet your mom, early, early on when she took you to the supermarket, taught you how to buy canned goods, right? And she says "Andrew when you buy a can of something you pick it up, you're looking for dents," right?
0:17:55.1 AS: Mm.
0:17:56.0 BB: Because if it's dented, that's bad. And if it's not dented, that's good. I know my mother taught me that. So I know when it comes to buying canned good we look for dents. If dented, that's bad. If it's not dented, it's acceptable. But I don't see people sorting between cans of tomato soup made by the same manufacturer. They're just, we treat it as they're acceptable. Acceptable implies either one, the differences don't matter or I don't see differences.
0:18:33.0 BB: Desirability is, you wanna see a great example of desirability, go to the produce section and again, either watch people sort through pastries that are all acceptable, and yet they're looking for the biggest one, or... And when it comes to fruit, we're looking for the ripest banana, or maybe we're looking for bananas that are green because we're not gonna use them for a while. So acceptability, again, I'm trying to give everyday examples of acceptability is going in and saying, looking at all the fruit there, and just taking five peppers, whatever it is, and throwing them in the bag and saying, I need five 'cause my spouse said, go get five. And I throw them in the bag. And it could be time-wise, I don't have time to sort through them, or I quite frankly don't care that they're different. That's acceptability. So acceptability is either acknowledging they're different and saying, I don't care. Or...
0:19:29.6 AS: Seeing them as the same.
0:19:32.4 BB: Or pretending they're all the same. And I had a guy in class years ago, and I was asking about buying fruit and I was trying to use the example of we go into the supermarket. We sort through the oranges looking for the ripest one, and this guy says, well, I don't sort through the oranges. I said, well, how do you buy the oranges? I buy them by the bag. I said, do you sort between the bags? He says, no, I don't sort and his arms were crossed. I don't sort, I don't sort. So then I noticed that he had a ring on his left hand, a wedding ring on his left hand. So I said, I see you're wearing a wedding ring. And he said, yep. I said, did you sort?
0:20:15.2 AS: I don't sort.
0:20:15.3 BB: Meaning... I don't sort. And so when you're looking at things that meet all the requirements and saying there is no variation or the variation doesn't matter, that's acceptability, Andrew. When you look at all the things that meet requirements and you see them as being different and saying, I want this one, that's desirability. And so that could be, when it comes to selecting a spouse, when it comes to selecting an orange, when it comes to selecting a parking spot, in a university, you're looking for the, an ideal, the best professor for Thermodynamics II, and there's 10 professors the university says are acceptable. And you talk to classmates and you find out, oh, no, no, no, stay away from that one. What are you doing? You're sorting amongst things that meet requirements, that are acceptable and saying, that's not good enough for me in that situation.
0:21:17.2 BB: Well, what I wanna say then added to that is, this is not to say desirability is better than acceptability. It really comes down to is desirability worth the effort? Because when it comes to desirability, I am looking beyond, I'm looking at a bigger system. So I'm looking at the fruit in terms of how I'm using it. If I'm aware of that, I'm looking at the parking spots in terms of: I'm gonna be in the store for an hour and I want the most shade, or these parking spots have a little bit different distances between cars, and I want a spot with a little bit more width so somebody doesn't ding my car. So what I'm hoping is with these examples, people can appreciate that every day we make choices between acceptability and desirability.
0:22:11.3 BB: Every day we're making a decision based on saying, this is okay, code word for acceptable, or I'll take that one, that's desirability.
0:22:27.6 AS: That's quite a breakdown.
0:22:28.1 BB: Well, and the idea being... The other aspect of it is when you're choosing to say, I want... When you decide that acceptability is not worthwhile, my proposal it's because you're looking at a bigger system. You've got a bigger system in mind. You're not looking at that fruit in isolation. You are somehow saying, there's something about how I plan to use that, which is the reason for this decision. And then it gets into how big is the system that you're looking at? Are you looking at the person downstream of you at work, which that could be an internal customer. People used to use those terms. Are you looking at the person after them, two down from them, three down from them? And that gets into a choice. So what I would tell the folks I was mentoring at Rocketdyne is that they were designing things or going to see how they were used. And I'd say, first of all, nothing requires you to go see how that's used. Your job as a designer, whatever it is in engineering you design it, you give it to manufacturing. But you don't have to go downstairs and see how they're using it.
0:23:47.5 BB: I said, but if you do, you might learn a lot. And then they might say, "well, so I should go talk to the person who's first using it." Well that might be helpful. And then what about the person after that? Well, that might be helpful. And then what about the person after that? Well, that might be helpful. And I was trying to get across to them, we hire really bright people and if we just turn you down to don't look beyond, just deliver the thing, complete those drawings, do whatever it is, pass it to the next person. I said, the system may not require you to go look to see how it's used.
0:24:31.9 BB: But what Dr. Deming is proposing is, the better you understand how it's used, the better you can serve the system. But then you get into the question of how big is the system that you want to be thinking about? And there I would tell them that there's no right answer. I mean, you wanna be and this is what I would tell them is we hire really bright people and then we condition you to believe that it doesn't matter. What I'm proposing guided by Dr. Deming is that there's a possibility that it matters anywhere from a little to a lot, but you won't know unless you go look.
0:25:12.2 AS: Yeah. It's funny.
0:25:12.3 BB: And so what I wanna get... Go ahead Andrew.
0:25:14.4 AS: When I was a supervisor at Pepsi in Los Angeles at our Torrance factory, they asked me to help... Could I figure out how to quicken the pace with which we got 80 trucks or 100 trucks out the gate every morning because it mattered. If you got trucks out an hour late on the LA freeways, now you have overtime and all kinds of trouble. So, what I did is I climbed up... At 4:00 AM I climbed up on top of a building, one of our buildings.
0:25:54.1 BB: Wow.
0:25:54.9 AS: And I had a clipboard, which I always have. I have extra clipboards always with me, here's one right here. And I had paper and then I just observed, and I took a lot of notes. And what I was seeing was all these drivers were, they were checking their trucks and they were spending a lot of time with their trucks. So, after I observed it that morning, the next morning I went down and went around and I asked them, what are you doing? And they said, well I'm checking that the quantity that's on the paper is the quantity that's on the truck. And I said, how could that not be? And they said, the loaders at night don't fill it up right. So, the next night I went and talked to the loaders and I said, drivers are saying that you guys are making errors.
0:26:40.4 AS: No, we're not making any errors. Okay. So, now I gotta dig deeper into the loaders. And then I start to see, okay, the loaders are making errors. So, I went and talked to one loader and said, why are you making this error? He said, well, the production are supposed to put this particular Pepsi item in this spot. But they didn't, they put it in another and I got confused, but it's just 'cause it's normally always there. So, I go to talk to the manufacturer, hey guys come on, why did you put that stuff in the wrong spot? He said, well, sales told us to produce so much that we were overloaded. We didn't have any place to put all of this products. So, we had to basically put it anywhere we could as it's racing off the line and on and on.
0:27:27.9 AS: And then you start to realize like, okay, the system is bigger. Now I went and focused on the loaders and said, how do we make sure that when the loaders load that we can lock the truck and then tell the drivers, you must not open this truck. How do we build the trust between the loaders and the drivers that they're loaded correctly and that they can go, because the drivers don't want to get to San Bernardino or wherever they're going and find out, oh, I don't have what this particular customer wanted and it's supposed to be on here. So that's just a little bit of a picture of kind of a very narrow start that starts to bring in more of the system.
0:28:06.8 BB: Oh, yeah. Oh, that's a brilliant example. And also what you're talking about is a term we used the first series, which is the value of synchronicity. That those handoffs are smooth. And they disrupt...
0:28:26.7 AS: I love that word handoffs, by the way. I was just talking with a client of mine. We were talking about the core processes of the business. And I just now realize that what I was missing and what we were missing in our discussion was how do we make sure that the handoffs work.
0:28:43.6 BB: Well, then the other thing, again a concept you may recall from the first series is, I liken it... I think in terms of two types of handoffs. And, actually, I think in one of the first, maybe in the second episode we talked about this, is associated with acceptability. When I hand off to you something, my report, whatever it is I'm assigned to delivered to Andrew by 5 o'clock tomorrow, you look at it, you inspect it, and you're making sure before you accept it that it is acceptable, that it has all the content. And, if anything's missing a figure, a graph, a label, you send it back to me and then I go through and massage it and then send it off to you. And, part of acceptability is when you say, that's good, then the handoff we're talking about is physical.
0:29:51.6 BB: Right. I mean, there's nothing wrong with a physical handoff. I give it to you physically. And what you may recall me mentioning, I think, again likely episode 2, podcast 2 of this series is I would demonstrate this with people in the class. And I would say, if, if what I give you is not acceptable, what do you do? You give it back to me and you say it's incomplete. And then I go through, massage it. If I now give it to you and all the requirements have been met, it's acceptable. Now what happens? What do you say? And I would kid them and so now you say, thank you. But what I'd also point out is that part of acceptability in a non-Deming organization is the handoff is physical and mental. I mean, physical is: It is yours, not mine.
0:30:38.5 BB: Mental is that if you have trouble with how that fits into what you are doing with it, because that report does not exist in isolation, you're doing something with it. Right. So you're doing your things with it. Now we're looking at the system. And if in the system of you're using it, you have an issue and you come back to me, in non-Deming environment, acceptability is my way of saying "Andrew I'm not sure why we're having this conversation because what I gave you is acceptable." But in a Deming organization, the handoff is physical, but not mental. What does that mean? It means, I'm willing to learn from what you just said and the issues you're having. And now I'm beginning to wonder, there's two possibilities. Either one, what I gave you is not acceptable. There's something wrong with the inspection.
0:31:34.3 BB: Or two, what's missing is desirability, that there's some... What I give you is acceptable, but there's something about how it's, it's um, there's a degree of acceptability, and so instead of viewing it as it's good or it's bad, black and white. Now we're saying there's degrees of good. Desirability is degrees of good. And, so in a Deming environment, when I hand off to you and you have an issue with it, you come back the next day and say, "Bill, somehow this didn't get caught in the control chart." And I said, "well, let me take a look at it," and I may find there was something wrong with the inspection, or I may find that there's a degree of good I'm not giving you that I need to be giving you. So, that can either be an acceptability issue or a desirability issue. I'm willing to have that conversation with you in a Deming environment. So, in a Deming environment, the handoff is physical but not mental. And the learning, as you're demonstrating, the learning that comes from the ability to have those conversations, improves the system. That's a lot more work.
0:32:53.8 AS: So, if you were to sum it up, was that the sum up or would you add anything else to your summation of what you want people to take away from this discussion?
0:33:05.6 BB: Yeah, that's it. I'd like to say one is that there's, acceptability is fine. Choose acceptability, if that's all the situation demands then you've chosen that. But pay attention to how it's used, pay attention to the ramifications of that decision, which may show up an hour from now, may not show up until a year from now. And, the possibility that hiccup a year from now could be either it wasn't acceptable, in which case there's an inspection issue or it was acceptable, which means there's a degree of good, which means it's a desirability issue. And, that gets us into future conversations, talking about degrees of good and the whole idea of variation in things that are good. That's desirability, variation in things that are good.
0:33:57.6 AS: All right. Bill, on behalf of everyone at T he Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And if you wanna keep in touch with Bill, just find him on LinkedIn. He responds. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. "People are entitled to joy in work."
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In this new series, Jacob Stoller and Andrew Stotz discuss five major management and productivity myths and how Lean and Deming thinking solve them. This first episode offers an overview and Jacob shares his journey from traditional management to a better way.
Jacob Stoller is the author of The Lean CEO: Leading the Way to World-Class Excellence and Productivity Reimagined: Shattering Performance Myths to Achieve Sustainable Growth.
TRANSCRIPT
0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'll be talking with Jacob Stoller, who is a journalist and Shingo prize-winning author of The Lean CEO, which provides a boardroom perspective of Lean initiatives. Now, he connected with Dr. Deming's criticism of command and control management and recently wrote Productivity Reimagined to explore the reasons why organizations fail to apply the Lean and Deming style of management at the enterprise level. Jacob, welcome to the show.
0:00:37.8 Jacob Stoller: Well, thank you, Andrew. It's great to be here.
0:00:40.5 AS: Yeah it was actually really fun to talk to you before we even turned on the recorder to kind of really help people understand where you come from and why you are here. So maybe you can just explain a little bit of your journey of how you got to this point in relation to Deming.
0:00:58.2 JS: Okay, well, interestingly, I started out in sales. I was a corporate sales rep selling services and software and all that kind of high-tech stuff. And I did that for quite a while. But what I liked best about corporate sales was the dialogue that I had with customers, being able to talk to people and ask questions and explore topics. So fortunately, I was able to turn that into a career. I left that profession about 2001 and became a writer, journalist, did research projects, gave talks, did some training, did all the things I wanted to do. And through that, I discovered Lean by accident. And that, I think, wasn't probably till about 2010. And I was writing for a magazine, and someone told me to write about this Lean thing. What is it? And I started to ask questions and talk to people and eventually discovered this wonderful way of running companies. I was totally impressed, not just with how efficient they were and all that, but how they treated people. I thought, this is, boy, I would have liked to have worked at some of these companies.
0:02:14.6 AS: And for someone who's never even heard, let's just imagine someone's never heard the word Lean. What does that mean anyway? And what did it mean when you first saw it and after you really became an expert in it? What does it mean to you now?
0:02:28.4 JS: Well, I thought it was going to be super high tech. That's what I first thought. As a matter of fact, when I went to Japan to actually see it firsthand, I was expecting just flashing screens and everything. And of course, it was a very different thing. It was a lot of people, very, very people-oriented environment, people talking to each other, lots of communication. So I thought, wow. And I started to learn that it was really all about people. And so that was a gradual transformation for me. But it was very rewarding to see the human side of this. So that led me, really led me to some writing. I started working with some lean organizations like the Kaizen Institute, and I started doing writing for them, writing newsletters. I also wrote, helped Misaki Yumi the late Misaki Yumi, a very well-known Lean promoter, write the new edition of his latest book. And I did all the case studies for that. And I also helped various other initiatives. But the main thing was that I decided to write my own book, and that was The Lean CEO.
0:03:57.2 JS: And what I was interested in at the time was I saw that people doing Lean were running into all this resistance, and I was interested in exploring that a little more. And I thought, well, the people that really understand that will be the CEOs because they'll been there. They've been in the boardroom discussions. So that's how The Lean CEO came to be. And in that process, I was asking questions about management and the various practices. Now, I was expecting that there would be a sort of a standard executive playbook for Lean. That was my hypothesis, I guess. And it would have been really nice, very, very easy to write the book and neat and tidy and all that, but it didn't work out that way. They were all different. They all had different ideas. And interestingly, a lot of the thinking that went into their work, actually, they had learned before they even discovered Lean. That had been stuff that they believed in. They learned about teamwork early on, so they were somehow predisposed towards the people side of Lean. So I was really fascinated by that. But my conclusion really was that there was no one way to implement Lean, that there were just many, many different variations on it.
0:05:20.5 JS: And that's when I became and started to discover that there was a lot of the thinking that made these people successful at leading Lean outside of the Lean community. And that's where I started to get interested in some other. How the tech sector was handling change, how the sustainability people doing sustainability projects were handling change. And one speaker that spoke out loud and clearly to me was Dr. Deming, because Dr. Deming understood the fundamentals behind the thinking. I think that makes Lean successful. He understood what was wrong with conventional management and the barriers that people were running into. So, Andrew, I don't know if you remember, but the 1980s, everybody was talking about this ABC show, If Japan Can, Why Can't We? And here we are looking at a productivity crisis. I mean the US was their crown jewels in the US industry had been trounced by the Japanese. They were being outproduced two to one, right? I mean, and so this was recognized as a crisis. It was an election issue at the time. And I, they got Dr. Deming on television and they asked him what are we doing wrong? And Deming was very clear.
0:06:51.1 JS: He said you're not going to learn this, you're not going to be able to imitate the Japanese, and you're not going to learn a few production tricks. You've got to fundamentally change the way you manage. So that was a very, very strong message that I picked up when I was writing that book. And what's wrong with conventional management? What's wrong with command and control management? And why does it not why does it create companies that are so wasteful and do such a bad job at being productive?
0:07:22.6 AS: And as a devil's advocate, if I think about a Lean a company that's trying to adopt Lean, what I would assume was that at the management level, the objective of management is really to reduce resources, to reduce, if you could reduce the cost of electricity, your profit margin would go up. If you could reduce the raw materials that you have in your production process, your profits would go up, as an example, and the value of your business would go up. So how could there be any resistance to a young engineer that's picked up Lean and is bringing it through the organization? It's a little bit odd to think why would there be resistance to that?
0:08:04.1 JS: Well, the resistance is that people are used to doing what they're doing, for one thing. And Dr. Deming has identified with his knowledge of complex adaptive systems a fatal flaw in the hierarchical structures that corporations are run by. You see, if you're using corporate logic, you assume that every department and every work group is like an independent component and that if each component functions as intended and according to measured objectives, then the corporation will succeed. And Deming said that that is completely false, and he had the evidence to prove that. So what people are resisting is not that, people aren't resisting the idea of reducing costs and being efficient, but they're measuring efficiency in the wrong way. They're measuring efficiency of independent assets. And they say if these independent components produce efficiently, then the sum of the total will have an efficient corporation. But that's not true. That's only true according to 17th century logic. If you follow Newton and Newton's laws, that seems to be the case. And it's intuitively, we do tend to think that way. But if you're running a company, a company is not a simple system. It's a complex adaptive system.
0:09:38.7 JS: And it's the interdependence of all these entities and all these components that determine the success of your company. And that's what Deming was trying to teach, and that's what people didn't want to hear.
0:09:50.7 AS: So if I hear you correctly, the first thing is kind of the first wall that someone would come to at the board level or at the management level is just trying to overcome inertia. This is the way we do things. Why do we need to change? It takes effort to change. And then the second thing you're talking about is the lack of systems thinking, thinking that if we could just optimize every part, we're going to get the optimal output of this system. They didn't understand that, as you said, it's a complex adaptive system, that it's much more difficult than just saying, everybody do your best. Is there any other resistance that you saw? So the inertia is number one that I saw. The second one is a lack of systems thinking. Is there any other things that you discovered as you were working on The Lean CEO?
0:10:38.3 JS: Oh, yeah. Well, there's the elephant in the room. And this is that most large corporations anyway are focused on short-term shareholder value. Right. And the way to make your short-term numbers is not to be productive. It's not to invest in good long-term strategies to develop a long-term competitive advantage. It's to make your quarterly numbers. And that can be manipulated fairly easily. Well, maybe not easily, but it can be manipulated by creating perceptions about value, about market value and that sort of thing.
0:11:17.3 AS: And even more, even more than manipulated, it's just that if you don't follow, if all you do is just try to hit numbers on a quarterly basis, you're losing your focus on the long term.
0:11:27.1 JS: Absolutely. And there was a study, and this goes way back to 2005, but it said that corporate CEOs would sacrifice or 74% would sacrifice a long-term profitable initiative to make their quarterly numbers. They would throw it out the window. I think, if anything, that was 2005. I would think if anything, things have gotten worse since then. So we're actually talking about a slice of companies that really do want to be productive, where long-term productivity is their strategy. And that is, a lot of these are privately owned companies, manufacturers, and perhaps, there's some smattering of public companies that are doing this kind of thing, but it's rare.
0:12:24.7 AS: So let's just. So what we've been talking about is kind of the wall that you started to see, the ceiling that was Lean had a challenge, or Deming's teachings had a challenge, and that was this, overcoming the inertia, the lack of systems thinking, and this focus on short-term quality, sorry quarterly numbers. And very few companies were able to really focus on long-term goals of being productive. Now, maybe you can just take a moment to explain how your newest book, your latest book, then took what you saw from a Lean CEO and Deming and then brought it to another level.
0:13:07.8 JS: Okay, well, I interviewed about 60 people, and it's interesting. I thought it might be fairly easy, I would say. What are the basic myths? What do people get wrong? Usually, these are people that are pretty smart about Lean stuff, and people found that surprisingly hard to answer. And I think that was because a lot of these people I talked to had already been practicing this approach for a long time, so they really had to think about it. So it took some digging and a lot of interviews, but I found the thread was in five sort of primary areas, and one was the systems thinking, the pyramid that we talked about.
0:13:50.4 JS: That Deming so articulately talked about. Also, and then the other myths, I think, are somewhat derivative of that. But there's finance. The myth that the bottom line tells you what you need to know about the productivity of your company and it doesn't show up in the finances. So I did a chapter about that. The notion that the boss knows best, and that's not just the boss, it's also professionals. This idea of professional knowledge. Someone can go to school, learn how to tell people what to do, and that will accurately create the right procedures, the right kind of work.
0:14:32.6 JS: And when people follow directions from professionals, they will be the most productive. So that's a myth. Myth number four is the myth that people are motivated by sticks and carrots. And psychologists have disproved this about 70 years ago, I guess, but people still, if you look at compensation plans and you look at the way companies are managed and you look at structures, it's still assumed that people are going to be motivated by externals, by threats and rewards. So we talk about that and some companies that have dealt with that one. And then finally, there's this myth of tech omnipotence. We tend to have way more optimism about technology than is warranted, and we're seeing a lot of that in AI now. We're seeing a lot of disappointment with things not turning out the way people expected. So I really explored those five myths and how they stymie productivity and how companies can build a strategy around count.. what's the word I want? Counterattacking those myths or whatever.
0:15:45.5 AS: And then for the person who reads it, what is the outcome? So once they understand these risks, like number one, you mentioned about the pyramid and not understanding systems thinking. You mentioned number two about finance, you mentioned number three, about the professional or the boss knows best. And number four, people are motivated by sticks and carrots. And number five, tech omnipotence. Once they understand those myths, where do they go from there? How can they then apply that into their life and their work?
0:16:16.2 JS: Well, I suggest that they go into companies that are actually successful at dispelling these myths. You got to see it. But I have a last chapter, a long chapter, but I provide a sort of a roadmap for moving in. But there is really no alternative. If you want to build long-term productivity, there is no alternative to continuous improvement because you're just going to have to keep improving. And Dr. Deming explained that very well in terms of variation. It's always going to be there, and you're always going to have to be dealing with it. So you're going to have to create a culture, and it's going to be people-based. I don't care what kind of technology you have, long-term productivity gain is going to have to come from building the culture in your company.
0:17:10.1 AS: And I want to wrap up our discussion about this just so the audience understands. When you say productivity reimagined, what do you mean by the word productivity?
0:17:23.5 JS: Productivity is customarily just used as sort of a ratio. You know, people say, "Oh, yeah, I'll just take the total sales and divide it by the number of employees" or something like that. So it's seen as a sort of an indicator rather than something that you have to actually do. Right? That's something you have to actually pursue in a direct sort of way. And another, I'll make another side point, is economists like to say that take the GDP and divide it by the number of worker hours or whatever and say that's productivity. But it really, you know when you, the US government website defines productivity as increasing output with a given set of inputs. So from time A to time B, you've got to actually make more with what you have. And that's these indicators that people use for productivity don't reflect that at all. So you've really gotta... Productivity is not that easy to measure, and there's some, actually, some qualitative sides of it, right? I mean, if I'm making, say, ballpoint pens, and let's suppose I increase the production by 10% using the equivalent amount of materials and all the machinery.
0:18:51.9 JS: Well, that's great, but what if the quality goes down? You know, I haven't really gained anything. So it's kind of tricky to measure productivity. You have to get right down there in the processes to understand it. And so I would tell the finance people that it's inside that black box. You have to be in, understand what's going on inside that black box of operations to really understand whether, which direction your productivity is going.
0:19:20.2 AS: Okay. So if I hear that right, I think a lot of us could get lost in some sort of ratios or something like that and think about a measure. But in fact, what you're talking about is to really do productivity right, it sounds like you also really have to understand trade-offs. If you cut in a particular area, that's going to cause another problem, and that's going to...you may not be able to get more out of your existing resources. In addition, it's going to require work because you're organizing your company in a certain way to get a certain level of output with the inputs that you have. But in order to get a much higher level of that, you've got to rethink: How do I get the maximum out of this organization, which is a real challenge.
0:20:09.8 JS: Well, I think this is where this is, you know, it depends on how you do it, right? I mean, you can do it in a siloed way, which says, I have a quality department, I have an operations department, I have a maintenance department. And you can invest in all these and play around with your investments and see what works out. Or you can get into the process, and you can, by really, really understanding the process and letting people in the process improve it. That's where you get Deming's magic chain reaction, which is that you improve quality, and then your efficiency is going to improve and your costs are going to go down. But that's only if you're looking at productivity in a very broad way. It's not looking at quality in terms of the tolerances that I made on my grinding or whatever I'm doing. It's about the quality of the processes themselves. Right? So Deming was looking at quality with a big Q that encapsulates a lot of things.
0:21:16.0 AS: Well, I think what, what's, this is very interesting. And I know we're going to have a series that we're going to start doing, going through more detail of what you've discovered and what you want to share. So I'm really looking forward to that. And so, I appreciate this introductory discussion. And Jacob, on behalf of everyone at the Deming Institute, I want to thank you again for this discussion and for listeners, remember to go to deming.org to continue your journey. You can find Jacob's book, Productivity Reimagined, at jacobstoller.com. This is your host, Andrew Stotz. And I'm going to leave you with one of my favorite quotes from Dr. Deming: "People are entitled to joy in work."
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In this new series, John Dues and Andrew Stotz discuss John's model for improvement. This episode includes an overview of the model and how John uses it for goal-setting and planning in his school.
0:00:02.4 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is building an improvement model. John, take it away.
0:00:24.8 John Dues: It's good to be back, Andrew. Yeah, so we sort of wrapped up this last series. We had a six-part series on organizational goal setting. And we, if you remember, we talked through those four conditions that are important for organizational goal setting, especially healthy goal setting, where before we set a goal, we understand sort of how capable our system is. We understand how our data is varying within our system. We are looking at our system and seeing if it's stable or unstable. And then, of course, we want to have a method for how we go about improving. And so you kind of have to have an understanding of those four conditions before you set a goal.
0:01:03.6 JD: And I thought sort of as an extension of that, or possibly a new series, we could kind of take a look at an improvement model that would help us sort of better set ambitious goals. Because when we did those four conditions, it kind of leaves you wondering, well, how ambitious should my goals be? Should I still do stretch goals, those types of things? And I think this improvement model that we're building here at United Schools sort of addresses that. And it's something we're building.
0:01:34.4 JD: And so I think the listeners kind of get like a little bit of behind the scenes on what it looks like now. I think we'll see a version of it. And perhaps through this dialogue, through the series, we'll even think about ways to improve it.
0:01:48.4 AS: Can I ask you a question about that?
0:01:49.6 JD: Sure.
0:01:50.0 AS: One of the things, I do a lot of lectures on corporate strategy and workshops, and the lingo gets so confusing, vision, mission, values, and all kinds of different ways that people refer to things. But when I talk to my clients and my students, I oftentimes just tell them a vision is a long-term goal. And it could be a five-year or a 10-year goal. And because it's long-term, it's a little bit more of a vision as opposed to, you can see it very clearly. Like my goal is to get an A in this particular class, this particular semester. Whereas what I try to say is, a vision is: I want to be in the top of that mountain. And I want us all to be at the top of that mountain in five years. And I kind of interchangeably call that a long-term goal and a vision. And I'm just curious what your thoughts are on long-term versus short and medium as we go into this discussion.
0:02:53.8 JD: Yeah. I think as we get into the model, we'll actually see both of those things, sort of a long-term sort of goal, sort of a more intermediate thing, and then how you work back and forth between those two things. So I think that's a good segue.
0:03:08.4 AS: Let's get in it.
0:03:08.4 JD: Yeah. And so just maybe just a few other things about the model before we get right into it. So one thing to know I've come to appreciate is when when I say a model, I just mean something visually representative that helps us understand and communicate how we think things should be functioning in reality. So when I say improvement model, I'm actually like talking about a diagram on a piece of paper that you can put in front of everybody on your team. So everybody has an understanding for how you're approaching goal setting in this case.
0:03:38.1 AS: Would you call it an improvement visualization? Or what's the difference between what you mean by model and like something that I would call, let's say, a visualization?
0:03:49.5 JD: Yeah, I'd say it's a type of visualization when I say model.
0:03:52.8 AS: Okay. Excellent.
0:03:53.8 JD: Yeah, that's what I'm talking about. And I think you'll see it when we get into the model that definitely there's credit due to Mike Rother and his concept of Improvement Kata because this model heavily borrows from the work that he's done, if you're familiar with that four-step Improvement Kata process.
0:04:15.1 AS: Yeah. Very.
0:04:19.7 JD: But anytime, whatever the thing is that you call like key performance metrics, key metrics, whatever you call that thing that we all set in our organizations, there's always this gap between what we want and what we're currently getting. And this model gives us the scientific way of thinking and working to close basically that gap. In this world, the gap between the voice of the process and the voice of the customer, how do we close that gap? So that's sort of what the model is addressing. So I'll share my screen so you can see that and anybody that's watching can see what the model looks like. And I'll just kind of leave that up as I'm talking about it, put it in slideshow.
0:05:08.7 AS: Great. We can see that now.
0:05:14.6 JD: Great. So we can just start by just kind of giving an overview, especially for those people who are listening, but you can kind of picture like a path going up a mountain and that path has twists and turns. It has obstacles. In this particular diagram or model, there's rocks in the way of the path. There's a water hazard, there's trees in the way, there's a roadblock. And as you go, it's kind of strange because you're working your way up. And I'll explain this all as we go through it kind of one step at a time. But as you're working from left to right in the model, this four-step improvement model, you have a team over on the left. This team's working on a goal that you're setting. And then over on the left, you actually have step two, which is grasp the current condition. And then you have this big crack in the path that's called the threshold of knowledge. And I'll talk about what that is.
0:06:11.1 JD: And sort of the next step is actually step four, experiment to overcome obstacles as you're working left to right. You go further up this path, up this mountain. And number three, the step three is establish your next target condition. And then when you get all the way up the mountain and you have this challenge or direction. So that's what you were just talking about. So what's that long-term thing that you're trying to accomplish? We call that a challenge or direction. So the steps that you're taking actually chronologically are you're going to do number one first.
0:06:43.2 JD: You're going to set that challenge or direction, but it actually is the thing that you're working toward. That's the sort of beginning with the end in mind. So that's why it's way up on the mountain, but you're going to do that first. And the next thing you're going to do is go all the way back down to the start of the path and grasp whatever that current condition is in your organization. And then you're going to run experiments on the way to trying to get to the next sort of intermediate step, that next target condition. So four steps, and then you have this team working on it.
0:07:16.8 AS: Which I would say for the traditional American style, as from my perspective, it can be a bit confusing because you're starting with number one at the farthest point away instead of closest to you. Then you're going to come to number two. From a timeline perspective, it feels like you're kind of zigzagging back and forth in your thinking.
0:07:38.8 JD: Yep. You definitely are. And it takes a little bit to wrap your head around it, but we'll kind of work through this piece by piece. So let's start with the team. So you have these people on the left-hand side of this diagram. There's sort of three different groups within that team. And we've talked about this a number of times, but remember that there's this key concept when you're going to take a thinking systems or a systems view of an organization. That you have to have these three different groups of people. You have to have the people that are working on the system, the people that are working in the system, and then from Dr. Deming's perspective, you have to have somebody that has profound knowledge, has that lens. So again, someone from the outside that has profound knowledge. And then in our case, the people working in the system, generally speaking, are the students. And then you have to have the managers that have the authority to work on the system. So in our system, that would be teachers and school leaders. But this model is not specific to educational organizations. You could translate this to any other type of organization.
0:08:50.4 JD: So if we were a hospital, then perhaps the people working in the system, depending on the improvement project, could be nurses. And then the managers that have the authority to work on the system, maybe the hospital management team. And then someone from outside with profound knowledge could be either someone internally that has familiarity with the System of Profound Knowledge or someone that they bring in externally, like a consultant to help out. So the point is, is that, again, this team, whoever's working in the system is going to differ by the organizational sector that you're working in. But it translates in the system basically.
0:09:31.0 AS: It's interesting that I've seen this type of diagram or concept about work on the system, work in the system and a System of Profound Knowledge coach. But it just kind of clicked for me to think about it. It obviously, like when I work with a company, I'm working with the owners and the top management. And when I do that, we're working on the system.
0:09:58.5 JD: Yep.
0:10:00.2 AS: And I have the knowledge of the System of Profound Lnowledge. So I'm coaching them about the system. And then within the system, they have the employees who are executing on what they're trying to improve and do, but it just perfectly explains it. So I love that diagram.
0:10:17.8 JD: Yeah. And I have the same experience. And I think we've mentioned on this podcast before that in my world, we often have school or district-based improvement teams. And it's typically leaders of the organization, sometimes teachers, but almost never is it students working in the system that are a part of, or, providing significant input into the improvement. So, I think if you can combine, in our case, students working in the system, because they have things that they can identify in terms of how they experience the system that are different than the people that work on the system. And then having that third group that, or that person that has that outside profound knowledge, if you put all the three of those things together, I think you have a much better chance to improve. But I think in schools, that's probably never happening. I'm assuming that's the same in other industries as well.
0:11:08.3 AS: And this also explains why when Dr. Deming would see slogans and things like that, encouraging the workers to do better and higher quality, he was like, they don't have the authority to change the system.
0:11:22.5 JD: Right.
0:11:24.1 AS: And what you've said is the group that's working on the system has the authority or the ability to change the system.
0:11:35.4 JD: Yeah. This is one...the makeup of this team that's using this four-step process, that's one innovation that we've done to this model that would be different from the Improvement Kata. So in the Improvement Kata, there's just coach and learner. Usually sometimes there's a coach of the coach, a coach and a learner, depending on how it's represented, but this is in my view, an innovation where you have the work on the system group, the work in the system group, and then the System of Profound Knowledge coach. I haven't seen that in this model.
0:12:07.4 AS: And could that be because when Mike Rother was writing his book, he was particularly referring to Toyota.
0:12:18.7 JD: Could be. Could be.
0:12:19.5 AS: Where the workers have more authority to impact the system. Whereas in the typical American system, the worker doesn't really have the authority to stop the production line or something like that to the extent of the Japanese. So interesting point.
0:12:36.1 JD: Yeah, that's a really good point. My understanding of Mike Rother's work is he sort of derived this improvement model by watching, observing, working with Toyota over a very long period of time. So that very well could be the case. Cool. So we have the team, so let's go to step one, that's the challenge or direction. And I really like that because again, when we did that six part series on Goal Setting is Often an Act of Desperation, one thing that I did think was missing was like, well, still as an organization, we want to move forward. We want to improve. We want to be ambitious in how we're setting our goals, but I don't think that fully came through in the four conditions. And so I think layering this model on top of the four conditions really helps because I think it is important to be ambitious, especially when we're talking about like a mission driven organization, we need to be setting ambitious targets for student learning, coming to school, those types of things.
0:13:39.6 JD: So really what we're doing in step one of the model is we're asking the question, where do we want to be in the long run? So this is a long term goal. This is a longer range goal that would differentiate us from other schools if we achieved it. But currently when we think about this goal, it actually seems nearly impossible because it's so far from where we are currently performing. We don't know how we're going to get there. So an example in my world is, schools have been paying much closer attention to chronic absenteeism, which is when a student misses 10% or more of the school year. And those numbers basically skyrocketed towards the end of the pandemic and then for the last several years. So that's something we're focusing on as an organization. So our chronic absenteeism rate is really high, like 52%, something like that over the last several years. And we want to get that down to 5%. So there's this huge gap.
0:14:53.6 AS: That's a huge move.
0:14:54.5 JD: Huge gap, order of magnitude, right? To go from 52%, that's the voice of the process. That's what's actually happening. And the voice of the customer, what we want is 5%. And we really don't know how to get there. And that's going to be the case at the point where you're at step one, but you're doing that first. You're setting that challenge or direction. And that really is something that needs to be set, in my view, at the leadership level, at the management level. So, that's step one.
0:15:22.9 AS: And you just said something that's interesting is we really don't know how to get there.
0:15:25.6 JD: And we really don't know...
0:15:26.9 AS: I mean, if we knew how to get there, we'd probably be there.
0:15:28.6 JD: Yeah. Yep. Yep. So that's step one. That's why if you're able to view the model and you're watching the podcast and you can see the video, that's why number one happens first, even though it's on the far right hand in the upper right hand corner at the top of the mountain in the model.
0:15:45.8 AS: And is there a reason why it's a relatively vague thing, right? Challenge or direction.
0:15:54.0 JD: Yeah.
0:15:55.5 AS: Why is it vague as opposed to specific target, goal or saying something like that?
0:16:03.7 JD: Yeah. I mean, I think, I like challenge or direction. One, it fits on the page. And it sort of conveys that it's going to be a challenge. And it also, if you're going to work in this way to achieve something like that, that it's actually setting the direction of the organization, the direction that the organization is moving toward. So.
0:16:24.0 AS: In other words, is it acknowledging that we really won't, we really don't know that target. We think we know it, we see that mountain, but as we go closer to it, we want to go in that direction, but as we get closer, it'll become more clear exactly where we're going to be or want to be.
0:16:44.7 JD: Well, I think this would be something that... I think in my view, we're still learning. But when we set that challenge or direction, I guess I could see some circumstances where we would come off that, but I think we kind of want to set it in a way that really pushes us. Right. So I'd be, I mean, I think you could learn some things that would say, okay, maybe that wasn't the exact right number to set, but I'd also be careful about just adjusting it because it's hard.
0:17:13.2 AS: Okay. So you mentioned 5%.
0:17:17.9 JD: Yeah.
0:17:19.1 AS: Would that be, would you state it as achieve 5%?
0:17:25.9 JD: Yeah. 5% or less of our students are chronically absent.
0:17:30.4 AS: Okay. Keep going. I don't want to slow it down. But listeners may get it faster than I do. I'm a little bit slow and I have a lot of questions as we go along.
0:17:37.0 JD: No, no. And I think what we could do in future episodes is dig into each of the steps a little bit more too, and use this as an overview session.
0:17:46.9 AS: Yep.
0:17:48.3 JD: So that was step one. So now what's going to happen in step two, you're going to come all the way back down. Now you're at the very start of the path.
0:17:56.6 AS: Back to reality.
0:18:00.6 JD: Back to reality, step two. And the first thing you have to do, okay, we've set the target, this very challenging direction we want to head into because it's the right thing to do. The next thing we're going to do is grasp the current condition. And so in step two of the model, we're going to ask, where are we now? So we know the long-term goal and now we need to study the current process and how it operates basically. So basically this study represents our current knowledge threshold about the process. And then it's going to contribute to how we define the next target condition we've set that sort of intermediate step on the way to the challenge. And so a lot of that six-part series on goal setting is often an act of desperation, a lot of that learning is right here at what we're doing at step two, because we're creating a process behavior chart in a lot of cases, and understanding how our data is performing over time in this particular area. That's what grasping the current condition means.
0:19:02.6 JD: So part of it, it's a data thing. So in this chronic absenteeism example, what I'm gonna do is I know where I want to be. Now I need to understand where are we historically. And then also as a part of grasping the current condition, I may wanna do some things like interview students and families that are chronically absent, then sort of dig into why that is. Interview teachers about why they think that is. There's a number of things that you could do at this step on the ground where the work happens to grasp the current condition. And I think there can be a sort of quantitative component to that and a qualitative component to that. Also, we sort of understand like how are things actually working on the ground that contribute to us not being where we want to in this particular area.
0:19:56.7 JD: So that's step two. That's what we're gonna do next. After we've set the challenge or direction, we wanna sort of understand the situation on the ground, grasp the current condition. And then next what we're gonna do is step three, which is establish your next target condition. So in step three of the model, we ask where do we want to be next? So we know we can't make this leap, from 52% to, 'cause we wanna decrease it down to 5%. We know we're not, that's too big a step that we're just gonna get there somehow magically. So our target condition, then it's our next goal, usually within a time bound, achieve by date. In Mike Rother's work, he suggests something on a pretty short term scale. Something like one week or one month. So something like chronic absenteeism, I think one month would be sort of where I would set the next target condition. Just having experience with something like attendance rates.
0:21:07.0 JD: And at this point we don't exactly know how we'll achieve the next target condition, but it also, it doesn't feel as impossible as the challenge. So it's a step towards the challenge. So we're gonna do that next. So we set the big challenge that may take us three years to get to. Then we understand the current conditions on the ground and we use that knowledge to set our next target condition. So that's step three. And then the fourth step is we're gonna experiment to overcome obstacles.
0:21:45.9 AS: And before you go to fourth, let me just ask a question about establish your next target condition. One of the things that's missing from that, obviously is, you know, coming from a different perspective, is that when we say, all right, here's where we want to be, and let's go back to reality, and here's where we are. Sometimes, when people work like myself and others, work with people who say, okay, let's map out all the steps to get to that vision. What are the next five things we have to do? Whereas here you're saying, let's focus on the next target condition rather than the next five.
0:22:25.4 JD: Yep. And keep in mind when I say establish the next target condition, what I literally mean is what's our next intermediate goal that we're gonna shoot for? So if we're trying to get all the way down to 5% from 52, remember decrease is good in this case, establish my next target condition, maybe over the next month, I wanna see if I can get that from 52% down to 35% or down to 40%. Part of what I would look at when I set that next target condition is what did the variation look like when I was charting in step two? So the magnitude of that variation will give me some indication of what would be a reasonable sort of next step target for step three basically.
0:23:11.9 AS: And maybe just explain for those people not familiar with Mike Rother's work and, you know, terminology that you're using, why do you say establish your next target condition?
0:23:28.0 JD: I think, I don't know. I think that, you know, really what I mean is just establish the next target, establish the next intermediate goal, basically. Now, I think using the word condition is because when you think about something like chronic absenteeism, there's conditions that probably contribute to that and part of that condition may be the things that you wanna work on. So I kind of think of like, you know, 'cause when you look at step four, you're gonna experiment. So you're creating a new set of realities, a new set of conditions in your organization. And so sort of that coincides with the metric that you're shooting for. So it's not just the metrics, it's also like what are the conditions surrounding that metric. If that makes sense.
0:24:15.8 AS: Yep.
0:24:16.9 JD: Cool. And then step four then is experiment to overcome obstacles. So basically in step four of the model, we move toward the target condition with experiments. And by experiments, what I'm talking about is Plan, Do, Study, Act cycles or PDSA cycles, which uncover obstacles we'll need to work on. So the path, and that's the path in the model is windy 'cause it's this path to the target condition is not gonna be straight line, but it's gonna require this rapid learning to move in that direction basically. And so let's say we've set that next target condition to be one month from now, that's what we're shooting for. And we're gonna run a series of experiments. Maybe it's four one-week PSDA cycles, maybe it's two, two week PSDA cycles. Maybe it's one one month cycle. It depends on sort of the nature of the Plan, Do Study, Act cycle. But running these cycles where we make a plan, including a prediction, run the experiment, and then study what happens and see if it's moving us in the direction of the target condition.
0:25:40.0 JD: And so in that way, we're rapidly learning what it's gonna take to hit that next target condition. And the other important part of this, you'll see in between the grasping of the current condition at step two and running those experiments, there's this huge fault line, this huge crack in the path that you can't just jump over. And it's kinda labeled there, it says Threshold of Knowledge. And basically it's the point at which you have no facts and data to go on. That's the threshold of knowledge. There's always a threshold of knowledge. And so to see further beyond that threshold of knowledge, that's where you conduct your next experiment.
0:26:28.7 AS: Interesting.
0:26:29.8 JD: So because you, like you were saying, we wanna outline these five steps that we're gonna do. So with chronic absenteeism, I read somewhere a Harvard study where if you text parents what a kid's attendance rate is on a regular basis, they're then more likely to come to school on a frequent basis. So you could see where a school system would spend all this money to get a texting system, maybe even allocate a person or a half of a FTE of a person to run this system. And they faithfully implement this texting system, and it has no impact at their school to impact those chronic, because it had nothing to do with what the actual problem was in that context. And you've spent all this money. And that was just a hypothetical.
0:27:21.2 AS: And you could have done a pilot test of 10 parents or 20 and done it manually and sent out some messages and just tested a little bit.
0:27:31.1 JD: Yeah. You run a test with 10 chronically absent kids. Just to see if you can improve their attendance for a week. And maybe you learn something or for a month and maybe you learn something. And then if the early evidence is pointing in the right direction, then you can run that experiment with more kids or for a longer period of time or under slightly different conditions. Those types of things.
0:27:54.6 AS: So an example that I would say in relation to this for one of my clients is that we've identified that they need to get a higher gross profit margin.
0:28:04.7 JD: Okay.
0:28:05.5 JD: And their gross profit margin is about 23%. And I know that the average is about 30 in the industry. And so my work with them is how are we gonna get that profit margin to be 30 or 35%? 35 would be showing that you've really got pricing power because of something that we've done. And so, I'm pounding away that we've gotta improve this, but you know what? We don't have data to understand the current condition. And this week we've... It's taken us about a couple months to pull that data together. But now we have absolutely comprehensive data that my team has calculated on the profitability of every product, the profitability of every customer, and the profitability of every process. We know the capacity utilization of each part of the production process. So now we have the knowledge that we didn't have before that's gonna, that once get, digest this knowledge, it's gonna give us the indication of what to do next. Which is it's gonna be shut down a particular production process or increase price there. We may lose customers, but it's not worth doing it at this low price or so, but without that knowledge, we're just, it's a dream.
0:29:21.4 JD: Yeah. It sounds like you guys have done step one and step two in that process.
0:29:28.0 AS: Yeah. Which is exciting. 'Cause now Friday's meeting is gonna be about, all right, how do we take this huge amount of data and effort that we've put in and now it's time to come up with what are the steps that we're gonna take?
0:29:40.4 JD: Yeah. And I think even just in that situation, even just acknowledging that there's the threshold of knowledge. Even just getting people to acknowledge that in a room that they actually don't know what's gonna happen. That's the power of the PDSA because it makes you predict, okay, you say this thing is gonna work and when you put in this plan in place, this is your prediction. And then when you come back next week and it doesn't work, then you have to explain that, you know, it's not a gotcha, but it very quickly makes you think in a different way.
0:30:13.0 AS: It keeps a record so someone has gone back, well, I didn't think it was gonna work, you know, for sure.
0:30:18.8 JD: Well, right. And it's usually very like, some of the things that I found in that is when people are off on their predictions, it's very mundane things that they didn't account for. We're in student recruitment season and we set a goal for the number of calls we're gonna make to prospective families. And then hypothetically a recruitment director could fall short and it's like, well what happened? It's like, well, oh, the two part-time people that we had, I forgot they are actually out two days last week right? And so it's usually things like that are actually getting in the way of us accomplishing these grand targets that we have set.
0:31:05.5 AS: By the way, where does the threshold of knowledge fit? We've got number one challenge or direction, number two, grasp the current condition. It's after the grasp the current condition that we come to the threshold of knowledge.
0:31:17.7 JD: Yeah. Because, well, we have somewhat of an understanding of the condition on the ground, but we don't know what's gonna improve it until we run the experiments. So we start running the experiments and we try to sort of narrow that knowledge gap basically. And this is sort of the final part is basically like what do you do when you get to that experiment and when you hit that target condition, when you reach that by the achieve-by date, well now there's a new condition and you repeat the four steps because you haven't reached the challenge or the direction. You just met that sort of intermediate goal. And you basically keep running this four step cycle until that learned long-term challenge is achieved.
0:32:12.5 AS: Okay. Great. So we've got the establish your next condition down where it could be one week, it could be one month, in some cases it could be longer, but it's really our next intermediate goal. Where do we wanna go next? What's the next right step?
0:32:28.5 JD: Yeah. Well, so you go back to step two 'cause you're not gonna change the challenge or direction. Now there's a new set of conditions 'cause you've moved ahead, right? And now you're gonna go back and say, okay, what are the current conditions like? And now we're gonna, okay, let's say we move from 52% to 42%. Now we go back and sort of understand the experiments from that last cycle. And we're gonna set that next target condition. So maybe now we wanna get it down to 25%. And we're gonna run another round of experiments in a certain amount of time to see if it hits that next target condition. And basically you're just gonna keep doing this over and over again. That's really the continual improvement model that we're operating under.
0:33:22.7 AS: So how would we wrap this up?
0:33:24.4 JD: So the big thing for me is, you sort of have to have a model to bridge that gap between current conditions and future aspirations. Beause there's always a gap between those two things. And what this model does is it gives us a scientific way of thinking and working to close this gap. It's a more powerful model than I've ever sort of seen anywhere. And then literally you put it on a piece of paper like this and then you have to explain it to people over and over and over. And then you have to actually do it with people. So we're actually doing this, getting people excited about running PDSAs. And the most important thing is that the challenge or direction, especially for leaders that are listening to this, you don't stand on this mountaintop and set it and then say, go do it. That's why this team aspect is so important. We're setting this challenge or direction as a team, and then we're working together on the ground. Putting that work in, running those experiments to try to bring this thing about, is a completely different way of working. It's not an accountability system, it's an improvement system.
0:34:39.4 AS: Yeah. That's a great overview of this system that you guys are applying and it's exciting to learn more. So I wanna thank you on behalf of everyone at The Deming Institute, John. And I thought the discussion was very interesting myself. And for listeners, remember to go to deming.org to continue your journey. You can find John's book win-win W. Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools on amazon.com. This is your host, Andrew Stotz, and I wanna leave you with one of my favorite quotes from Dr. Deming. "People are entitled to joy in work."
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Is reaching A+ quality always the right answer? What happens when you consider factors that are part of the system, and not just the product in isolation? In this episode, Bill Bellows and Andrew Stotz discuss acceptability versus desirability in the quality realm.
TRANSCRIPT
0:00:02.5 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today's episode, episode three, is Acceptability and Desirability. Bill, take it away.
0:00:28.1 Bill Bellows: Thank you, Andrew, and welcome back to our listeners.
0:00:30.7 AS: Oh, yeah.
0:00:31.4 BB: Hey, do you know how long we've been doing these podcasts?
0:00:36.6 AS: No.
0:00:40.8 BB: We started... Our very first podcast was Valentine's Day 2023. I was gonna say 2013. 2023, so roughly 17 months of podcast, Andrew.
0:00:53.4 AS: That was our first date, huh?
0:00:55.0 BB: Our first date was Valentine's Day 2023.
0:00:58.9 AS: All right. Don't tell your wife.
[laughter]
0:01:03.1 BB: All right. And so along the way, I've shared reflections from my first exposures to Dr. Deming, as well as my first exposures to Genichi Taguchi. Talked about Edward de Bono, Tom Johnson, others, mentors, Bill Cooper, Phil Monroe, Gipsie Ranney was a great mentor. Last week, Andrew, while on vacation in New England with my wife, I visited for a day my 85-year-old graduate school advisor who I worked with for ten years, Bob Mayle, who lives in, I would say, the farthest reaches of Maine, a place called Roque Bluffs. Roque Bluffs. How's that for... That could be North Dakota. Roque Bluffs. He's in what they call Down East Maine. He's recently got a flip phone. He's very proud. He's got like a Motorola 1985 vintage flip phone. Anyway, he's cool, he's cool. He's...
0:02:15.9 AS: I'm just looking at that place on the map, and looks incredible.
0:02:19.0 BB: Oh, yeah. He's uh, until he got the phone, he was off the grid. We correspond by letters. He's no internet, no email. And he has electricity, lives in about an 800 square-foot, one-floor bungalow with his wife. This is the third time we've visited him. Every time we go up, we spend one day getting there, one day driving home from where my in-laws live in New York. And then one day with him, and the day ends with going to the nearby fisherman's place. He buys us fresh lobster and we take care of them. [chuckle]
0:03:01.3 AS: Yeah, my sister lives in Kennebunk, so when I go back to the US, I'm...
0:03:08.8 BB: Yeah, Kennebunk is maybe 4 hours away on that same coast.
0:03:15.3 AS: I'm just looking at the guide and map book for Roque Bluffs' State Park, and it says, "a beautiful setting with oceanfront beach, freshwater pond, and hiking trails."
0:03:25.9 BB: Yeah, he's got 10 acres... No, he's got, I think, 20, 25 acres of property. Sadly, he's slowly going blind. He has macular degeneration. But, boy, for a guy who's slowly going blind, he and I went for a walk around his property for a couple hours, and it's around and around... He's holding branches from hitting me, I'm holding branches from hitting him and there's... Let alone the terrain going up and down, you gotta step up and over around the rocks and the pine needles and all. And it was great. It was great. The week before, we were close to Lake George, which is a 32-mile lake in Upstate New York. And what was neat was we went on a three-hour tour, boat ride. And on that lake, there are 30 some islands of various sizes, many of them owned by the state, a number of them owned privately. Within the first hour, we're going by and he points to the island on the left and he says it was purchased in the late '30s by Irving Langmuir. Yeah, so he says, "Irving Langmuir," and I thought, I know that name from Dr. Deming. That name is referenced in The New Economics.
0:04:49.1 BB: In fact, at the opening of Chapter Five of The New Economics, the title is 'Leadership.' Every chapter begins with a quote, right? Chapter Five quote is, "You cannot plan to make a discovery," so says Irving Langmuir. So what is... The guy's describing this island purchased back in the late '30s by Langmuir for like $5,000. I think it's... I don't know if he still owns it, if it's owned by a nonprofit. It's not developed. It's privately held. I'm trying, I wrote to Langmuir's grandson who did a documentary about him. He was a Nobel Prize-winning physicist from GE's R&D center in Schenectady, New York, which is a couple hours south of there. But I'm certain, and I was looking for it earlier, I know I heard of him, of Irving Langmuir through Dr. Deming. And I believe in his lectures, Deming talked about Langmuir's emphasis on having fun at work, having fun. And so I gotta go back and check on that, but I did some research after the day, and sure enough came across some old videos, black and white videos that Langmuir produced for a local television station, talking about his... There's like show and tell with him in the laboratory. And in there, he talks about joy and work and all that.
0:06:33.5 BB: So I'm thinking, that's pretty cool. So I'm waiting to hear from his grandson. And ideally, I can have a conversation with his grandson, introduce him to Kevin and talk about Deming's work and the connection. Who knows what comes out of that? Who knows? Maybe an interview opportunity with you and Irving Langmuir's grandson. So, anyway.
0:06:52.7 AS: Fantastic.
0:06:54.7 BB: But going back to what I mentioned earlier in my background in association with Deming and whatnot, and Taguchi, and I offer these comments to reinforce that while my interests in quality were initially all things Taguchi, and then largely Deming, and it wasn't long before I stopped, stepped back and an old friend from Rocketdyne 20 some years ago started focusing on thinking about thinking, which he later called InThinking. And it's what others would call awareness of our... Well, we called it... Rudy called it, better awareness of our thinking patterns, otherwise known as paradigms, mental models. We just like the way of explaining it in terms of becoming more aware of our thinking patterns. And I say that because... And what I'm presenting relative to quality in this series, a whole lot of what I'm focusing on is thinking about thinking relative to quality.
0:07:58.8 BB: And so last time, we talked about the eight dimensions of quality from David Garvin, and one of them was acceptability. And that is this notion in quality, alive and well today, Phil Crosby has created this focus on achieving zero defects. Everything meets the requirements, that gets us into the realm, everything is good. Dr. Deming and his red bead experiments talked about red beads and white beads. The white beads is what we're striving for. All the beads are good. The red beads represent defects, things we don't want. And that's this... Thinking wise, that's a thinking pattern of "things are good or bad." Well, then we can have high quality, low quality and quality. But at Rocketdyne, when I started referring to that as category thinking, putting things into categories, but in the world of quality, there's only two categories, Andrew: good and bad. This either meets requirements or it doesn't. And if it's good, then we're allowed to pass it on to the next person. If we pass it on and it's not good, then they're going to send it back to us and say, "Uh-uh, you didn't meet all the requirements." And what I used to do in class, I would take something, a pen or something, and I would go to someone in the seminar and I'd say, "If I hand this to you and it doesn't meet requirements, what are you going to say?" You're gonna say, "I'm not going to take it. It hasn't met the requirements."
0:09:36.4 BB: And I would say you're right. All the I's are not dotted, all the T's are not crossed, I'm not taking it. Then I would take it back and I'd say, "Okay, now what if I go off and dot all those I's and cross all those T's?" Then I would hand them the pen or whatever the thing was, and I'd say, "If all those things have been met," now we're talking acceptability. "Now, what do you say?" I said, "Can you reject it?" "No." I say, "So what do you say now that all those things... If you're aware that all those requirements have been met, in the world of quality, it is as good, now what do you say?" And they look at me and they're like, "What do I say?" I say, "Now you say, thank you." But what I also do is one more time... And I would play this out to people, I'd say, "Okay, Andrew, one more time. I hand you the pen, Andrew, all the requirements are met. And what do you say?" And you say, "Thank you." And I say, "What else just happened when you took it?"
0:10:45.4 AS: You accepted it.
0:10:47.3 BB: Yes. And I say, "And what does that mean?" "I don't know. What does that mean?" I said, "It means if you call me the next day and say, I've got a problem with this, you know what I'm going to say, Andrew?"
0:10:58.5 AS: "You accepted it."
0:11:01.5 BB: Right. And so, what acceptability means is don't call me later and complain. [laughter] So, I get a photo of you accepting it, you're smiling. So if you call me back the next day and say, "I've got a problem with this," I'd say, "No, no, no." So acceptability as a mental model is this idea that once you accept it, there's no coming back. If you reveal to me issues with it later, I deny all that. I'd say, I don't know what your problem with Andrew... It must be a problem on your end, because what I delivered to you is good. And if it is good, then there can't be any problems associated with it. So, if there are problems, have to be on your end, because defect-free, everything good, implies, ain't no problems, ain't no issues with it. I'm thinking of that Disney song, trouble-free mentality, Hakuna Matata.
[chuckle]
0:12:04.5 BB: But now I go back to the title, Acceptability and Desirability. One of Dr. Deming's Ph.D. students, Kauro [actually, Kosaku] Yoshida, he used to teach at Cal State Dominguez Hills back in the '80s, and I think sometime in the '90s, he went to Japan. I don't know if he was born and raised in Japan, but he was one of Dr. Deming's Ph.D. students, I believe, at NYU. Anyway, I know he's a Ph.D. student of Dr. Deming, he would do guest lectures in Dr. Deming's four-day seminars in and around Los Angeles. And, Yoshida is known for this saying that Americans are all about acceptability meets requirements, and the Japanese are about desirability. And what is that? Well, it's more than meeting requirements. And, I wanna get into more detail on that in future episodes. But for now, we could say acceptability is meeting requirements. In a binary world, it can be really hard to think of, if everything's met requirements, how do I do better than that? How do I continue to improve if everything meets requirements? Well, one clue, and I'll give a clue, is what I shared with the senior most ranking NASA executive responsible for quality.
0:13:46.4 BB: And this goes back to 2002 timeframe. And we had done some amazing things with desirability at Rocketdyne, which. is more than meeting requirements. And the Vice President of Quality at Rocketdyne knew this guy at NASA headquarters, and he says, "You should go show him what we're doing." So I called him up a week in advance of going out there. I had made the date, but I figured if I'm going to go all the way out there, a week in advance, I called him up just to make sure he knew I was coming. And he said something like, "What are we going to talk about?" He said something like, "We're going to talk about that Lean or Six Sigma stuff?" And I said, "No, more than that." And I think I described it as, we're going to challenge the model of interchangeable parts. And he's like, "Okay, so what does that mean?" So the explanation I gave him is I said, "What letter grade is required for everything that NASA purchases from any contractor? What letter grade is ostensibly in the contract? What letter grade? A, B, C, D. What letter grade is in the contract?" And he says, "Well, A+."
[laughter]
0:15:01.2 BB: And I said, "A+ is not the requirement." And he's like, "Well, what do you mean?" I said, "It's a pass-fail system." That's what acceptability is, Andrew. Acceptability is something is either good or bad, and if it's bad, you won't accept it. But if it's good, if I dot all the I's and cross all the T's, you will take it. It has met all the requirements. And that gets into what I talked about in the first podcast series of what I used to call the first question of quality management. Does this quality characteristic, does the thrust of this engine, does the roughness of this surface, does the diameter of this hole, does the pH of this bath meet requirements? And there's only two answers to that question, yes or no. And if yes is acceptable, and if no, that's unacceptable. And so I pointed out to him, much to his chagrin, is that the letter grade requirement is not A+, it's D- or better. [chuckle] And so as a preview of we'll get into in a future podcast, acceptability could be, acceptability is passing. And this guy was really shocked. I said, "Procurement at NASA is a pass-fail system."
0:16:21.9 BB: Every element of anything which is in that system purchased by NASA, everything in there today meets a set of requirements, is subject to a set of requirements which are met on a pass-fail basis. They're either, yes, it either meets requirements, acceptable, or not. That's NASA's, the quality system used by every NASA contractor I'm aware of. Boeing's advanced quality system is good parts and bad parts. Balls and strikes. And so again, for our viewers, acceptability is a pass-fail system. And what Yoshida... You can be thinking about what Yoshida's talked about, is Japanese companies. And again, I think it's foolish to think of all Japanese companies, but back in the '80s, that's really the way it came across, is all Japanese companies really have this figured out, and all American companies don't. I think that's naive. But nonetheless, what he's talking about is shifting from a pass-fail system, that's acceptability, to, let's say, letter grades of A's or B's. That would be more like desirability, is that it's not just passing, but an A grade or a B grade or a C grade. So that's, in round terms, a preview of Yoshida... A sense of, for this episode, of what I mean by acceptability and desirability.
0:17:54.7 BB: In the first podcast which was posted the other day, I made reference to, instead of achieving acceptability, now I can use that term, instead of achieving zero defects as the goal, in the world of acceptability, once we continuously improve and achieve acceptability, now everything is passing, not failing. This is in a world of what I refer to as category thinking, putting things in categories. In the world of black and white, black is one category, white is a category. You got two categories, good and bad. If everything meets requirements, how do you continuously improve if everything is good? Well, part of the challenge is realize that everything is good has variation in terms... Now we could talk about the not all letter grade A, and so we could focus on the things that are not A's and ask the question, is an A worthwhile or not? But what I was saying in the first podcast is my admiration for Dr. Deming's work uniquely... And Dr. Deming was inspired towards this end by Dr. Taguchi, and he gave great credit to that in Chapter Ten of The New Economics. And what I don't see in Lean nor Six Sigma, nor Lean/Six Sigma, nor Operational Excellence, what I don't see anywhere outside of Dr. Deming's work or Dr. Taguchi's work is anything in quality which is more than acceptability.
0:19:32.0 BB: It's all black and white. Again, Boeing's Advanced Quality System is good parts and bad parts. Now, again, I'm not suggesting that there's anything wrong with that. And I would also suggest in a Deming-based organization there may be characteristics for which all we need is that they're good. We don't need to know how good they are, we don't need to know the letter grade. And why is that? Because maybe it's not worth the trouble to discern more than that. And this is where I use the analogy of balls and strikes or kicking the ball into the net. If you've got an open net... That's Euro Cup soccer. There's no reason to be precisely placing the ball. All you want to do is get it into the net. And that's an area of zero defects, maybe all that is worthwhile, but there could be other situations where I want the ball in a very particular location in the strike zone. That's more of this desirability sense. So I want to clarify for those who listened to the first podcast, is what I'm inferring is I'm not aware of any quality management system, any management system in which, inspired by Dr. Deming and Taguchi, we have the ability to ask the question, is acceptability all that is required?
0:20:55.7 BB: And it could be for a lot of what we do, acceptability is not a bad place to be. But I'm proposing that as a choice, that we've thought about it and said, "You know what? In this situation, it's not worth, economically, the extra effort. And so let's put the extra effort into the things where it really matters." And if it doesn't... So use desirability where it makes sense, use acceptability elsewhere. Right now, what I see going on in organizations unaware of Dr. Deming's work, again, Dr. Taguchi's work, is that they're really blindly focusing on acceptability. And I think what we're going to get into is, I think there's confusion in desirability. But again, I want to keep that for a later episode. Now, people will say, "Well, Bill, the Six Sigma people are about desirability." No, the Six Sigma people have found a new way to define acceptability. And I'll give you one other fun story. When I taught at Northwestern's Kellogg Business School back in the late '90s, and I would start these seminars off by saying, "We're going to look at quality management practices, past, present, future." And so one year, I said, "So what quality management practices are you aware of?" And again, these are students that have worked in industry for five or six years.
0:22:17.6 BB: They've worked at GM, they worked at General Electric, they worked for Coca Cola, banking. These are sharp, sharp people. But you got into the program having worked somewhere in the world, in industry, so they came in with experience. And so they would say, zero defect quality is a quality management practice. And I'd say, "Okay, so where'd that come from?" And again, this is the late '90s. They were aware of the term, zero defects. They didn't know it was Philip Crosby, who I learned yesterday was... His undergraduate degree is from a school of podiatry. I don't know if he was a podiatrist, but he had an undergraduate... A degree in podiatry, somebody pointed out to me. Okay, fine. But Philip Crosby, his big thing was pushing for zero defects. And you can go to the American Society for Quality website to learn more about him. Philip Crosby is the acceptability paradigm. So, students would bring him up and I'd say, "Okay, so what about present? What about present?" And somebody said, "Six Sigma Quality." So I said, "So what do you know about Six Sigma Quality?" And somebody said," Cpk’s of 2.00." And I said, "So what's... " again, in a future episode, we could talk about Cpk’s."
0:23:48.5 AS: But I said to the guy, "Well, what's the defect rate for Six Sigma... For Cpk's or Six Sigma Quality or Cpk's of 2?" And very matter of factly, he says, "3.4 defects per million." So I said, "How does that compare to Phil Crosby's quality goal from 1962? Here we are, 1997, and he's talking about Motorola and Six Sigma Quality, a defect goal of 3.4 defects per million. And I said, "How does that compare to Phil Crosby's quality goal of zero defects in 1962?" And the guy says... [chuckle] So cool, he says, "Well, maybe zero is not worth achieving." 'Cause again, zero was the goal in 1962. Six Sigma sets the goal for 3.4 per million. Not zero, 3.4, to which this guy says... And I thought it was so cool, he says, "Well, maybe zero is not worth achieving." So, there. Well, my response was, "Well, what makes 3.4 the magic number for every process in every company around the world? So, what about that?" To which the response was crickets. But what I want to point out is we're still talking about zero... I mean 3.4 is like striving towards zero and admitting some. It is another way of looking at acceptability. It is... And again, and people claim it's really about desirability. I think, well, there's some confusion in desirability and my hope in this episode is to clear up some of that misunderstanding in acceptability as well as in desirability. And they... Let me just throw that out.
0:25:58.1 AS: Yeah, there's two things that I want to say, and the first one is what he should have replied is, for those older people listening or viewing that can remember the movie, Mr. Mom with Michael Keaton, I think it was. And he should have replied, "220, 221, whatever it takes." And he should have said, "Well, yeah, 3.4, 3.5, 3.6. It's could be around there."
0:26:27.5 BB: Well, the other thing is, why we're on that is... And I think this is... I'm really glad you brought that up, is, what I would push back on the Lean and the Six Sigma, those striving for zero defects or Cpk's of 2 or whatever they are is, how much money are we going to spend to achieve a Cpk of 2, a zero defects? And again, what I said and... Well, actually, when I posted on LinkedIn yesterday, "I'm okay with a quality goal of 3.4 defects per million." What I'm proposing is, instead of blindly saying zero defects is the goal and stop, or I want Cpk’s of 1.33 or whatever they are everywhere in the organization, in terms of the economics of variation or the new economics, is how much money are we going to spend to achieve zero or 3.4 or whatever it is? And, is it worth the return on the investment? And this is where Dr. Taguchi's loss function comes in.
0:27:49.2 BB: And so what I'm proposing, inspired by Genichi Taguchi and W. Edwards Deming is, let's be thinking more about what is... Let's not blindly stop at zero, but if we choose to stop at zero, it's an economic choice that it's not worth the money at this time in comparison to other things we could be working on to improve this quality characteristic and that we've chosen to be here... Because what I don't want people to think is what Dr. Deming and Taguchi are talking about is we can spend any amount of money to achieve any quality goal without thinking of the consequences, nor thinking about, how does this goal on this thing in isolation, not make things bad elsewhere. So we have to be thinking about a quality goal, whether it's worth achieving and will that achievement be in concert with other goals and what we're doing there? That's what I'd like people thinking about as a result of this podcast tonight.
0:28:56.0 AS: And I think I have a good way of wrapping this up, and that is going back to Dr. Deming's first of his 14 Points, which is, create constancy of purpose towards improvement of product and service with the aim to become competitive, to stay in business, and to provide jobs. And I think that what that... I link that to what you're saying with the idea that we're trying to improve our products and services constantly. We're not trying to improve one process. And also, to become competitive in the market means we're improving the right things because we will become more competitive if we are hitting what the client wants and appreciates. And so... Yeah.
0:29:46.3 BB: But with regard to... Absolutely with regard to our customers, absolutely with regard to how it affects different aspects of our company, that we don't get head over heels in one aspect of our company and lose elsewhere, that we don't deliver A+ products to the customer in a losing way, meaning that the A+ is great for you, but financially, we can't afford currently... Now, again, there may be a moment where it's worthwhile to achieve the A... We know we can achieve the A+, but we may not know how to do it financially. We may have the technology to achieve that number. Now, we have to figure out, is, how can we do it in an economically advantaged way, not just for you, the customer, but for us. Otherwise, we're losing money by delivering desirability. So it's gotta work for us, for you, but it's also understanding how that improvement... That improvement of that product within your overall system might not be worthwhile to your customer, in which case we're providing a... The classic...
0:31:18.8 AS: You're not becoming competitive then.
0:31:21.8 BB: The better buggy whip. But that gets into looking at things as a system. And this is... What's invaluable is, all of this is covered with a grasp of the System of Profound Knowledge. The challenge is not to look at goals in isolation. And even I've seen people at Lean conferences quote Dr. Deming and his constancy of purpose and I thought, well, you can have a... A non-Deming company has a constancy of purpose. [chuckle] The only question is, what is the purpose? [laughter] And that's when I thought, a constancy of purpose on a focus on acceptability is good provided all of your competitors are likewise focusing on acceptability. So I just be... I just am fascinated to find people taking Deming's 14 Points one at a time, out of context, and just saying, "Well, Dr. Deming said this." Well, there we go again. [laughter]
0:32:29.9 AS: Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. If you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."
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In this episode, Bill Bellows and Andrew Stotz discuss David Garvin's 8 Dimensions of Quality and how they apply in the Deming world. Bill references this article by Garvin: https://hbr.org/1987/11/competing-on-the-eight-dimensions-of-quality
TRANSCRIPT
0:00:02.4 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. This is the Misunderstanding Quality series, episode two, The Eight Dimensions of Quality. Bill, take it away.
0:00:30.4 Bill Bellows: Welcome back, Andrew. Great to see you again. All right, episode two, we're moving right along. So in episode one, which the title I proposed, waiting to see what comes out, the title I proposed was, Quality, Back to the Start. And that was inspired by some lyrics from Coldplay. Anyway, but this is a, it's going back to my start in quality and last time I mentioned discovering Taguchi's work long before I discovered Dr. Deming. In fact, Gipsie Ranney, who is the first president of the Deming Institute, the nonprofit formed by Dr. Deming and his family just before he passed away, and Gipsie became the first president and was on the board when I was on the board for many years. And I spoke with her nearly every day, either driving to work or driving home. And once, she calls me up and she says, "Bill," that was her Tennessee accent, "Bill."
0:01:50.5 BB: She says, "It says on The Deming Institute webpage that you infused Dr. Taguchi's work into Dr. Deming's work," something like that, that I... Something like I infused or introduced or I brought Taguchi's work into Deming's work, and I said, "Yes." I said, "Yeah, that sounds familiar." She says, "Isn't it the other way around?" That I brought Deming's work into Taguchi's work. And I said, "No, Gipsie," I said, "It depends on your starting point. And my starting point was Dr. Taguchi." But I thought it was so cool. She says, "Bill don't you have it? Don't you... " She is like, "Isn't it the other way around?" I said, "No, to me, it was all things Taguchi, then I discovered Dr. Deming." But I was thinking earlier before the podcast, and I walked around putting together how, what I wanna talk about tonight. And I thought, when I discovered Taguchi's work, I looked at everything in terms of an application of Dr. Taguchi's ideas.
0:03:29.7 AS: And one question about Taguchi for those people that don't know him and understand a little bit about him, was he... If I think about where Dr. Deming got at the end of his life, it was about a whole system, the System of Profound Knowledge and a comprehensive way of looking at things. Was Taguchi similar in that way or was he focused in on a couple different areas where he really made his contribution?
0:04:03.9 BB: Narrower than Dr. Deming's work. I mean, if we look at... And thank you for that... If we look at Dr. Deming's work in terms of the System of Profound Knowledge, the elements of systems psychology, variation, theory of knowledge, Taguchi's work is a lot about variation and a lot about systems. And not systems in the sense of Russ Ackoff systems thinking, but variation in the sense of where's the variation coming from looking upstream, what are the causes of that variation that create variation in that product, in that service?
0:04:50.9 BB: And then coupled with that is that, how is that variation impacting elsewhere in the system? So here I am receiving sources of variation. So what I deliver it to you has variation because of what's upstream of me and Taguchi's looking at that coupled with how is that variation impacting you? So those are the systems side, the variation side. Now, is there anything in Deming, in Taguchi's work about psychology and what happens when you're labelling workers and performance appraisals and, no, not at all.
0:05:37.6 AS: Okay, got it.
0:05:38.4 BB: Is there anything in there about theory of knowledge, how do we know that what we know is so? No, but there's a depth of work in variation which compliments very much so what Dr. Deming was doing. So anyway, so no. And so I discovered Taguchi's work, and I mentioned that in the first episode. I discovered his work, became fascinated with it, started looking at his ideas in terms of managing variation to achieve incredible... I mean, improved uniformity to the extent that it's worthwhile to achieve. So we were not striving for the ultimate uniformity, it's just the idea that we can manage the uniformity. And if we... And we'll look at this in more detail later, but for our audience now, if you think of a distribution of the variation in the performance of a product or a service, and you think in terms of... It doesn't have to be a bell-shaped distribution, but you have a distribution and it has an average and it has variation.
0:06:50.4 BB: What Dr. Taguchi's work is about in terms of a very brief, succinct point here in episode two is how might we change the shape of that distribution? How might we make it narrower, if that's a worthwhile adventure? It may be worthwhile to make it wider, not just narrower, but in both cases, we're changing the shape of the distribution and changing the location. So Taguchi's work, Taguchi's Methods, driven by variation comes to me, variation impacts you is how do I change the shape and location of that distribution? So on a regular basis, as I became more fascinated with that, I started thinking about, well, how might I apply Taguchi's ideas to these things that I encountered every day? Well, prior to that before discovering Taguchi's work, when I was a facilitator in problem solving and decision making training, I did the same thing, Andrew.
0:07:52.4 BB: I started looking at, oh, is this a problem? Is this a decision? Is this a situation that needs to be appraised? And so prior to that, what I was thinking about is when I was just a heat transfer analyst working on my Ph.D., I didn't look at how the heat transfer stuff affected all these other aspects of my lives. I didn't think about it when I went into a supermarket, but there was something about the problem solving and decision making that just infatuated me. And I would look at, oh, is Andrew talking about a decision or is Andrew talking about a problem? So I started hearing things. And so when I went into Taguchi's work, it was the same thing. And then shifting into Deming's work, it's the same thing. And I've... There's nothing else that I've studied that I look at things through those lenses. Anyway, so in studying, getting exposed to Taguchi, I mentioned that I had some time away from work, I went out on medical for some reasons and went and bought a book, a bunch of books.
0:09:02.4 BB: And one of the books I bought by David Garvin had come out in 1987, is entitled "The Eight Dimensions of Quality." There's a Harvard Business Review article that I wanna reference in this episode, and I'll put a link to the article. It's a free link. And so when you hear people talk about a quality product or a quality service or quality healthcare. We think in terms of it's quality as things, it's either good quality or bad quality or high quality, or somebody calls it low quality, or we just say it's a quality product. But what does that mean? So what I find is very loosely, we think in terms of categories of quality, good, bad, high, low. What we'll look at in a future episode is what would happen if we thought about quality on a continuum, which I believe Taguchi's work really demonstrates vividly as well as Dr. Deming's work.
0:10:07.4 BB: But even to back up before we talk about the eight dimensions of quality, I wanted to give some background on the word quality. The word quality, and this comes from an article and I'll put a link to this article, I wrote it for the Lean Management Journal a number of years ago, the word quality has Latin roots, beginning as qualitas, T-A-S, coined by the Roman philosopher and statesman, Marcus Tullius Cicero. He later became an adversary of this bad guy named Mark Antony. You've heard of him. Feared by Antony, this guy was feared by Antony because his power of speech led, you know what it led to, Andrew, his power of speech?
0:10:54.5 AS: What?
0:10:54.6 BB: His beheading.
0:10:55.8 AS: Oh my goodness.
0:10:56.5 BB: So for those of you with great powers of speech, watch out for your Mark Antony. But meanwhile, he introduced fellow Romans to the vocabulary of qualitas, quantitas, quantity, humanitas, humanities, essentia, which is, essence, he also is credited with an extensive list of expressions that translate into English today. Difference, infinity, science, morale. Cicero spoke of qualitas with his peers when focusing on the essential nature, character or property of an object. And this is kind of interesting. I mean, you can count how many apples do we have. And again, he came up with the term quantitas for quantity, but he is also talking about the essence of the apples. That's the quality word. And then 2000 years later when writing "The New Economics", Dr. Deming provided his definition and a little bit different.
0:12:05.3 BB: He says, "The problem anywhere is quality. What is quality?" Says the good doctor, "A product or service possesses quality if it helps somebody, it enjoys a good and sustainable market." And I said in the article, "As with Cicero, Deming saw quality as a property." And then some other background on quality before I talk about Garvin, "long after Cicero and well before Deming, quality as a property was a responsibility of guilds." Guilds. I mean, now we have writers guilds, we have actors guilds, and it's kind of cool that these guilds still exist and they are associations of artisans who control the practice of their craft, each with a revered trademark. So here in Los Angeles, we have writers guilds, actors guilds. They were organized as professional societies, just like unions.
0:13:00.2 BB: And these fraternities were developed, and within these fraternities they created standards for high quality. All right. So what is this quality management stuff from David Garvin? So this article was written 37 years ago and reviewing it for tonight's episode and I thought it fit in really, really well. I was reminded of... First time I read this article, 1989, I knew a lot about... Well, I knew, I was excited about Taguchi as I knew a lot about Taguchi, didn't know a lot about Dr. Deming. So I'm now reviewing it years later with a much deeper, broader Deming perspective than at that time. But I do believe, and I would encourage the listeners to get ahold of the article, look at it, if you wanna go into more depth, there's Garvin's book. And doing some research for tonight, I found out that he passed away in 2017, seven or so years ago.
0:14:04.6 BB: He was, I guess from, most of his career and education he was at the Harvard Business School, very well respected there. And so in the article it talks about, again, this, 1987, that's the era of Total Quality Management. That's the era in which Dr. Deming was attracting 2000 people to go to his seminars. 1987 is two years before Six Sigma Quality, two years before “The Machine That Changed The World.” And in the article, he says, "Part of the problem, of course, is that Japanese and European competition have intensified. Not many companies tried to make quality programs work even as they implemented them." This is back when quality was an era of quality circles. He says, "In my view, most of the principles about quality were narrow in scope. They were designed as purely defensive measures to preempt failures or eliminate defects, eliminate red beads."
0:15:10.3 BB: "What managers need now is an aggressive strategy to gain and hold markets with high quality," there we go again, "as a competitive linchpin." All right. So in the article, he has some interesting explanations of... Highlights. In the book is more depth. He talks about Joseph Juran, "Juran's Quality Handbook". Juran observed that quality could be understood in terms of avoidable and unavoidable costs. Dr. Deming talked about the economics. The New Economics, right? But Juran is looking at avoidable, unavailable costs resulting from defects in product failures. That's very traditional quality today. The latter associated with prevention, inspection, sampling, sorting, quality control. And so this is what I found fascinating, is 37 years later, this is still the heavy sense of what quality is all about. Avoiding failure, avoiding defects.
0:16:18.3 BB: Then he talks about Total Quality Control coming from Armand Feigenbaum, who was a big name in the '80s. Again Dr. Deming's work kind of created this big quality movement but it wasn't just Dr. Deming people discovered, they discovered Philip Crosby in a Zero Defects advocacy, Feigenbaum, Juran, sometime later. Again, mid '80s, Dr. Taguchi's name started to be heard. All right. And then the reliability. All right. Now I wanna get into the... Oh, here's, this is good. "In 1961, the Martin Corporation, Martin Company was building Pershing missiles for the US Army. The design of the missile was sound, but Martin found that it could maintain high quality only through massive inspection programs."
0:17:13.0 BB: You know what Dr. Deming would say about inspection? It's after the fact. Sorting the good ones from the bad ones after the fact. No prevention there. But Martin found that it could only do it with inspection. And decided to offer... Again, this is 1961, and this is still the solution today, decided to offer workers incentives to lower the defect rate. And in December, 1961, delivered a Pershing missile to Cape Canaveral with zero discrepancies. Buoyed by this success, Martin's general manager in Florida accepted a challenge issued by the Army's missile command to deliver the first Pershing missile one month ahead of schedule. He went even further, he promised that the missile would be perfect. Perfect. You know what that means, Andrew?
0:18:12.3 AS: Tell us.
0:18:12.8 BB: All good, not bad.
0:18:14.9 AS: All good, not bad.
0:18:15.9 BB: He promised missile would be perfect with no hardware problems or document errors, and that all equipment would be fully operational 10 days after delivering. And so what was neat in going back to this is we still have this mindset that quality is about things being good, not bad. What is bad we call that scrap, we call that rework. That's alive and well today.
0:18:45.0 AS: The proclamations are interesting when you listen to what he's saying, when you're quoting that.
0:18:52.4 BB: Yeah, no, and I remember, 'cause again, I read this recently for the first time in 37 years and I'm going through it. And at the time I was thinking, "Wow, wow, wow, this is a really big deal. This is a really big deal." Now I look at it and say, "This is what we're still talking about today, 37 years later." The absence of defects is the essence of quality. All right. But so I would highly recommend the article. Now we get into what he proposes as eight critical dimensions of quality that can serve as a framework for strategic analysis. And I think even in a Deming environment, I think it's... I think what's really cool about this is it provides a broad view of quality that I think Deming's work fits in very well to, Dr. Taguchi's work fits in very well to, and I think covers a lot of what people call quality. So the first dimension he talks about is performance.
0:20:01.4 BB: And he says, "Of course, performance refers to a product's primary operating characteristics." He says, "For an automobile, performance would include traits like acceleration, handling, cruising speed. For a television, sound and picture clarity." He says "A power shovel in the excavation business that excavates 100 cubic yards per hour will outperform one that excavates 10 cubic yards per hour." So the capacity, that could be miles per gallon, carrying capacity, the resolution of the pixels, that's what he calls performance. Okay. Features is the second dimension of quality. Examples include free drinks on an airplane, but not if you're flying a number of airlines they charge you for those drinks, permanent press cycles on a washing machine, automatic tuners on a color television set. A number of people in our audience won't know what those are, bells and whistles. Features are bells and whistles.
0:21:17.2 BB: There was a time people would say the number of cup holders in your automobile, a feature could be intermittent wipers. So these are features. So again, I mean, so performance is kind of cool. What is the capacity, is it 100 horsepower, 200 horsepower, that's performance. Features, bells and whistles. Okay. Fine. Reliability, now we're talking. The dimension represents the probability of a product malfunctioning or failing within a specified period of time. So your car breaking down, are you gonna drive to work every day and one morning you're gonna go out and it's... That's a reliability issue. Okay. That's... When I think about reliability, that's a Taguchi thing, that's a Deming thing. And looking at time between failures, okay, fine. Reliability comes down to... And if importance for the impact of downtime, if you're looking at engines not working and you're sitting at the gate, that's a reliability issue. The reliability is, it can be repaired, but it's gonna take some time, perhaps. Conformance. All right.
0:22:40.4 AS: Is number four, right?
0:22:42.2 BB: This is number four, a related dimension of quality is conformance or the degree to which a product's design and operating characteristics meet established standards. "This dimension owes to the importance of traditional approaches," it says, "to quality pioneers such as Juran." All products and services involve specifications of some sort. When new designs or models are developed, dimensions are set for parts or purity, these specifications are normally expressed as a target or a center. Now it's starting to sound a little bit like Dr. Taguchi's work, an ideal value, deviance from the center within a specified range. But this approach equates good quality with operating inside the tolerance band. There is little interest in whether the specifications have been met exactly. For the most part, dispersion within specifications is ignored. Ignored. That's balls and strikes, Andrew, balls and strikes.
0:23:51.2 BB: As long as the ball is somewhere in the strike zone, as long as the characteristic is somewhere within requirements, conformance, this gets into what I talk about in terms of the question number one of quality management. Has the requirement been met, the requirement for the performance, the dimension, is it within requirements? And there's only two answers, yes or no. That's conformance. I used to think that the American Society for Quality might be better known as the American Society for the Preservation of Conformance. I find there's a lot of conformance thinking. I'm reminded of, I'm a member of the American Society for Quality as I'm on the Deming Medal Committee, so I have to be a member of ASQ. So I get a daily or every other day newsletter with comments and conformance is a big part of the conversation. Good parts and bad parts, scrap and rework. All right.
0:25:02.3 BB: Conformance is number four. And it's not to say there isn't a place for the conformance, but conformance is then again different from what Dr. Taguchi is talking about. All right. Durability, the measure of a product life. Durability has both economic and technical dimensions. Durability is how long does it work before I throw it away? So reliability is about, I can repair it. Okay. And that's an inconvenience. Durability is like light bulbs. It runs and runs or a refrigerator and someone says, "Well, it’s time for a new one." That's a durability issue. Okay. Durability is the amount of use you get before you haul it off to the junkyard. That's durability. Okay. Serviceability. And back in the '60s, now I'm dating myself, there would be commercials for... I don't know which television brand, but what they talked about is, and these would be commercials. Commercials on television as to "our TV is easy to repair." And I thought, is that a good thing?
[laughter]
0:26:22.4 AS: Is that a foreboding?
0:26:24.4 BB: Yeah. And so... But again, the last couple of days I had to fix the sprinkler system in the backyard. And here in California we have, everybody has a sprinkler system. In the East Coast, people have above ground sprinkler systems. Here, they're all below ground. You don't have to worry about the lines freezing, at least in Los Angeles. And so anyway, one of the valves broke and I thought I was gonna buy a new one and take some of the parts from the new one to put it into the old one. And that didn't quite work. And so meaning to say, serviceability on the design was awful. I couldn't service it.
0:27:11.5 BB: I had to replace the whole damn thing, which was a lot more work than I was expecting. Anyway, however they designed it, serviceability didn't seem to be a consideration in the... That's dimension number six. Again, not to say there's anything wrong with thinking about serviceability. In terms of... Yeah. Okay, I'll leave it with that. Okay, serviceability. Number seven, aesthetics. The final two dimensions of quality are the most subjective, aesthetics, how a product looks, feels, sounds, taste, or smells is clearly a matter of personal judgment. Nevertheless, there seem to be patterns, a rich and full flavor aroma.
0:28:01.0 BB: That's got nothing to do with Dr. Taguchi's work. I mean, you can go off and do market research, find out what is the most appealing flavor, the most appealing taste, the most appealing aroma. And this is what I used to tell students is, and once you understand that or that vivid color that attracts the customer, then you could use Dr. Taguchi's work for, how can I reliably, predictably recreate, week after week, day by day, car by car, that aroma, that flavor, but Taguchi's work is not gonna tell you what it is. And then the last dimension of quality, you ready, Andrew?
0:28:45.8 AS: Give it to me, Bill.
0:28:47.7 BB: Perceived quality. "Consumers do not always have complete information on a product's attributes and direct measure is maybe their only basis. A product's durability can seldom be observed." And so we talk about perceptions of quality. Again, this is 1987, he says, "For this reason, Honda, which makes cars in Marysville, Ohio, and Sony, which builds color TVs have been reluctant to publicize that their products..." Ready? "Are made in America." Because the perception in 1987 is we want them to be made in Japan. And then we could talk about the perception of Cadillac quality, the perception of Jaguar quality.
0:29:35.7 BB: My father's gas station back in the early '70s, it was a block away from the nearby hospital. So a lot of our customers were doctors and they came in in their Cadillacs and Mercedes. And it was just a lot of fun. It was pretty cool. And one doctor against all of his peers' recommendations bought a Jaguar XJ12, V12, 12 cylinders, and they told him again and again, they said, "It'll spend more time in the shop than you driving it." No, no, no, he had to have one, he had to have one. And sure enough, it spent most of the time in the shop, but I got to drive it now and then, which was pretty cool. But that's perceived quality.
0:30:27.5 BB: So I just wanted to, in this episode, throughout those eight dimensions of quality. Again, I encourage our listeners, viewers, I think to get a broader sense of quality before you just look at quality from Dr. Deming's perspective, quality from anyone else's. I think that Garvin has done a really good job covering eight bases, if I can use that term, of quality. And then what I think is neat is to look at which of these tie into Deming's work, which of these tie into Dr. Taguchi's work? And that's what I wanted to cover in this episode.
0:31:01.8 AS: Fantastic. Well, let's just review that for the listeners and the viewers out there, eight dimensions. The first one is performance, the second one is features, the third one is reliability, the fourth one is conformance, the fifth one is durability, the sixth one is serviceability, the seventh one is aesthetics, how it feels and all that, and then the eighth one is perceived quality. Woah, that was...
0:31:29.4 BB: All about... Yeah. And it is reputation. You either have a great reputation or not.
0:31:38.3 AS: All right. Well, Bill, on behalf of everyone at the Deming Institute, I want to thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. And if you wanna keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."
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Where did your "quality journey" start? In this first episode of a new series on quality, Bill Bellows shares his "origin story," the evolution of his thinking, and why the Deming philosophy is unique.
TRANSCRIPT
0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey in the teachings of Dr. W Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. This is a new series called Misunderstanding Quality, and the topic for today is Quality Management, what century are we in? Bill, take it away.
0:00:35.7 Bill Bellows: Thank you, Andrew. [chuckle] All right.
0:00:39.5 AS: Exciting. I'm excited to hear what you've got going on in your mind about this Misunderstanding Quality.
0:00:45.6 BB: Well, first let me say that whether you're new to quality or looking for ideas on quality and quality management, quality improvement, quality management, the aim I have in mind for this podcast series is to improve your ability to manage quality through deepening your appreciation of the Deming philosophy and how to apply it. But specifically, a focus on quality, time after time, which is where most people heard about Deming, was through Quality, Productivity and Competitive Position. For example, the title of his first book. And relative to the title, what came to mind is an anecdote shared with me by two mentors that both spent a good deal of time with Dr. Deming. The first, Gipsie Ranney, who was a professor of statistics at University of Tennessee when she met Dr. Deming, went on to become a senior statistical consultant to GM and the first president of the Deming Institute, when Dr. Deming and his family, shortly before he died, formed a nonprofit called The Deming Institute. Gipsie and I used to speak literally every day, driving to work, driving home, we... "What's up, what's up?" And we always... It was so cool. I wish I had the recordings. Anyway, she once shared that she once asked Dr. Deming, "What do they learn in your seminars? What do attendees learn in your seminars?" To which she said Dr. Deming said, "I know what I said, I don't know what they heard."
[laughter]
0:02:26.0 BB: And along those lines, in the same timeframe, Bill Cooper who just turned 90, he and my wife share a birthday. Not the same year. Bill turned 90 last November and he was senior civilian at the US Navy's aircraft overhaul facility in San Diego, known as North Island. So as aircraft carriers are coming into San Diego, which is like the... I think they call it... It's like the headquarters of the Pacific Fleet. So as aircraft carriers are coming back, planes for which the repair work cannot be done on the carriers fly off to North Island. And Bill was in charge of, he said, some 5,000 civilians. And his peer on the military side, Phil Monroe was in charge of all the military people, and they got exposed to Dr. Deming's work in the early '80s, went off, left there, became Deming consultants. Anyway, Bill said he once asked Dr. Demings, says, "What percent of the attendees of your seminars walk away really understanding what you said?" And he said... Bill said Dr. Deming said, "A small percentage."
[laughter]
0:03:44.0 BB: And so what I had in mind in this series is... One is, what makes it hard to understand what Dr. Deming is talking about? And so for the listeners, what I'm hoping we can help you understand, what might be some invisible challenges that you're having in your organizations trying to explain this to others. So maybe you think your understanding is pretty good, but like Dr. Deming, maybe people are having a hard time understanding what you're saying. And I know what it's like to be in a room, presenting to people. And I had that same experience. I had one Rocketdyne executive... Rocketdyne was sold a few times. Every time it got sold, our Deming transformation efforts got set back a few years. So when the latest management team came in six, seven years ago, I met with one of the very top people, was explaining... Trying to explain to him for the first time what we had accomplished with some, I thought, absolutely amazing work by managing variation as a system. And he said something like, "So are people rejecting what you're saying?" And I said, "No, that's not it." He says, "So they're accepting what you're saying?" I said, "Well... " he said, "What's the problem?" I said, "What they accepted is not what I said." [laughter]
0:05:19.5 BB: I said, we're not in disagreement, but what they think they heard is... And that's when I found that I've experienced that. So anyway, so I wanted to get some background. So my first exposure to quality circles, and this is like... So I was living in this parallel universe, a heat transfer engineer working on rocket engines, and Quality comes into the organization. And unbeknownst to me, there's this quality movement going on, inspired by Dr. Deming, and we're on this wave. I had no idea. All I know is all of a sudden, we got Quality Circles, quality teams, every department...
0:06:03.8 AS: What year was that, roughly?
0:06:06.1 BB: 1984.
0:06:08.9 AS: Okay.
0:06:10.5 BB: Yeah. And I remember a book I was... I remember there was a pamphlet... You mentioned that. The company was AVCO, A-V-C-O, the Aviation Corporation, which is nearly as old as the Boeing Company. So it was one of the... So, Boeing gets into airplanes, the Wright Brothers get into airplanes, people are... Investors getting in, and AVCO, A-V-C-O, was formed by someone you likely heard of, Averill Harriman, major Wall Street guy at the time. And so anyway, I remember there being an AVCO book on quality circles. As you mentioned, I remember seeing that. And I remember just going along for the ride. I'm new to corporations, I'm just a subject matter expert in gas turbine heat transfer, and we're going to the... We got these things called quality circles, whatever. And I remember our department formed... Our department was a team, we had goals, and I remember going to these quality meetings, and let's say the goal would be that we read an article about heat transfer or something. I was just kind of fumbling with this thing called quality circles.
0:07:28.6 BB: But I remember, looking over the shoulder of the department secretary with a IBM Selectric typewriter, and this is before PCs, so we're using IBM 3270, dumb terminals. And I remember being over near the secretary, Kathy, and she's typing away the weekly activity reports, Friday morning kind of thing. And on a routine basis, I'd be over there and she'd be typing along. And then on the very last page, under the title, "Quality Circles," she would type in "Quality Circles are progressing as planned." [chuckle] 'Cause then these would be distributed to people in the department. So I'm watching her now create the next original. And it dawns on me, two things. One is, it's the very last topic in the meeting, in the weekly minutes, and two is it's the same damn thing every time, "Quality Circles are on plan." And I remember saying to her, "Why don't we just have that printed into the stationary?" [laughter]
0:08:39.5 BB: This is before I knew... For me, quality was just a seven-letter word. I don't know. So this is my exposure. And I remember thinking one of the quality goals we're thinking of in our department is... I think somebody even really brought this up, is we're gonna answer the phone by the second ring. That's gonna be our quality goal. And then, I remember we're negotiating for cleaning services. The floors were a mess. Tile floors, they were just a mess. And I remember in our department, we were lobbying to get better janitorial services, have the things cleaned more often. And next thing, we're negotiating with the VP of Engineering relative to, "Well, if your quality circles are on track, then I'll think about that." And it was just like... So it's some really ugly memories [chuckle] of this whole quality thing.
0:09:34.3 BB: But then I got into... I mentioned on the very first of our previous podcast, getting involved as a problem solving decision-making facilitator. I was hanging out with the HR training people, they had some... Their director of training, our director of training was a very astute guy and he was... I'm convinced, having met many people in that role, he knew what was going on. He knew a lot of the names in quality, not so... He knew of Deming's name, he knew of De Bono's name, Kepner-Tregoe, but he seemed to know his stuff. He's a fun guy to be with. And so, that's likely where I first heard Deming's name and that first book would've been Quality, Productivity and Competitive Position, which is... It's almost impenetrable, but I can remember at some point looking at that.
0:10:29.7 BB: But anyway, but in the fall of '87, I started being assigned a taskforce as helping... 'cause now I'm a problem-solving facilitator. But I still don't know... I don't know what quality is. All I know is I get invited to help solve problems. And we were looking at a very bad wear problem, these gears wearing each other out, enormous visibility to the Pentagon, because the tank engines we were making, 120 a month, were being shipped to the tank plant. And then, these tanks with these engines were being sent... The majority of them, sent to Europe. And they were the frontline of defense in Western Europe. This is the Cold War, Andrew.
0:11:17.4 AS: Right.
0:11:19.2 BB: And so the problem that came up was that a couple of these tanks had these gears wear through each other within 50 hours. And I've never been on such a high visibility taskforce because the Generals concern was that every one of those tanks was likely to not operate. And that might be the opportunity for the "Russki's" to launch World War III, because, what a great time, the tanks... If they knew these tanks weren't working. So it was a lot of stress, a lot of pressure. And after months of slow progress, the Army said, "Hey, why don't you guys go look at this Taguchi thing. The transmission people from General Motors who make the tank transmission, anytime they have a snafu like this, they use this Taguchi stuff." So I got assigned the action to go look at that. And I remember, this is pre-internet. And somehow, I did a literature search. I remember it was through something called Nerac, N-E-R-A-C. And out comes these pages. And the thing on Taguchi was... So first of all, who is this Taguchi guy?
0:12:29.0 BB: What is this quality stuff? I don't know. I'm a problem solving guy. And then I remember the first article on reference to Taguchi says, "Quality is the minimum of loss imparted to society by a product after a shipment to the customer." And I thought, "What does that mean?" So I don't know what... I mean, minimum of... I'm thinking... And I thought, "This can't be anything." So anyway, went out to General Motors and got exposed to what they were doing, and a few years later, realized it wasn't exactly Taguchi, but it was... There's some nuances there. But anyway, they exposed me to Design of Experiments and what's known as fractional factorial testing. And coupled with shifting how we look at the measurement process, we solved this problem within weeks, a problem that had been going on for months. So then I got excited about... This Taguchi thing's kind of cool. I'm liking this. And it was a lot more exciting than what I was doing. And I thought, "I think I wanna do this." So the following year, I went to the Taguchi conference. So we had the application and I was so excited, Andrew, that I was turned down for funding. The Army would have paid for me to go to this conference, 'cause the Army, by that point, had invited me to work on at least two problems.
0:13:54.4 BB: Once we solved the first one, when problems came up, the Army literally turned to the program management people at Lycoming and said, "Do a Taguchi study, get Bill Bellows involved." So I was walking on water. I thought it was kind of cool. So I wanted to go to this Taguchi conference, and it was turned down. And they said, "It's not your job." So I told my boss when they told me it was gonna be turned down, I said, "I'm going to this conference." I said, "Whether the company pays for it or not, I am going." So I drove 14 hours each way to Detroit. And in the room are all the US experts on Taguchi's ideas at the time. I didn't know who Deming was at the time. I still didn't know what quality was, but I walked outta there thinking, "This is what I wanna do." And then, where I'm getting to is, a few months later, I was gonna go out on medical I had surgery planned.
0:14:53.1 BB: I was gonna be out for about two months. So my wife and I lived in New Haven, maybe 10 miles north of Yale. And I remember going to the... Again, this is pre-Amazon. I mean, talk about dating ourselves. What century are we in? So I remember going with my wife to the Yale bookstore, the Yale co-op bookstore, and every book they had on quality, I bought. And I'm gonna sit home for two months and read all these books. And I remember buying books. I'm pretty sure I got books about Deming, some about Taguchi, some by Phil Crosby about Zero Defects. Six Sigma Quality entry was a year away.
0:15:35.7 BB: And so I sat down... I got out of the hospital, I'm resting at home, sitting on the couch every day and reading, and also calling the Taguchi people that I had met, I think, at the previous conference. I met some big names. So I'm reading the books, calling them up. And again, these are like my personal professors. And I remember saying to a few of them... What blew me away, and I don't... It somehow dawned on me, I was naive. In the world of engineering, we use... Most of my exposure, at least in heat transfer, we use the same terms the same way. We talk about radiation heat transfer, conduction heat transfer, convection heat transfer. So many of the terms are the same terms, so we can have a conversation. So I'm thinking the same thing applies in quality, that we're all like the heat transfer people. It's easy to communicate 'cause we got the same models. We're using the same words the same way. Then I started thinking, I'm no longer... And this is a real shock. I'm no longer thinking we're using the same words the same way, hence my introduction to misunderstanding quality, [laughter] or I would say, the beginning of a journey to better understand the... I think there are incredible opportunities for people in quality organizations, or people that wanna get into quality.
0:17:08.3 BB: I think it's an ideal opportunity to introduce Deming's ideas. And I say that because everybody else is doing their own thing. Engineering's off designing, Manufacturing's off producing, and Quality has an incredible opportunity to bring together Deming's sense of a systems view of quality. Nobody else has that charter. So my hope is in our conversations, we can help people that are trying to do some things, whether it's jumpstart their continuous improvement program or get their quality program out of what it currently is. In fact...
0:17:52.4 AS: By the way, I wanna...
0:17:55.9 BB: Go ahead, go ahead.
0:17:56.0 AS: I wanna ask a question about that, because what you've mentioned is interesting, that the systems aspect... Is that unique? Would you say that's unique to Deming? I mean, if we think about Taguchi and I think about the Taguchi Method, I'm thinking about a really powerful tool for understanding variation. But explain what you mean by that.
0:18:24.0 BB: A couple of things come to mind when you ask that question. One is the predominant explanation of quality. And if we have time, I wanna talk about that. The term quality, "qualitas," comes from Cicero, a Roman in ancient times. But by and large, in manufacturing, in corporate quality, in corporations, the operational definition, what do we mean by quality? This thing is... What are Quality organizations doing? And what I find they're doing is calling balls and strikes. They're looking at a given quality characteristics, whether it's the fuel economy of an engine, of a gas turbine engine, the performance, the thrust level of a rocket engine, the diameter of a hole, and asking, "Does that characteristic of surface roughness diameter, does it meet a set of requirements?"
0:19:30.4 BB: And the requirements are typically set... There's a lower one and an upper one. We don't say the meeting is gonna start at 10 o'clock, because if you understand variation, we can't get exactly 10. We can't get exactly 1.00 inch thickness for the plate, for the hole diameter. So then, we define quality. Typically, this is what people do in organizations. This is what I... I didn't know anything about this until I started... Well, what are quality people doing? They're asking, "Does this thing meet requirements?"
0:20:07.4 BB: And even towards that end, I remember asking a... I had a coworker who's a quality engineer, I've got many friends who are quality engineers, and this one guy came into a class one day that I was doing, and he's just beating his head against the wall over... I said, "What's...what have you been doing lately." He says, "All I'm doing Bill is dispositioning hardware, dispositioning hardware," which translates to trying to find out why something doesn't meet requirements and coming up with a corrective action, or buying it as is. So either changing the requirements or explaining why we can use it as is. But he's just like, "That's all I'm doing lately. I'm just getting overwhelmed with all this." So I said, "Well, what if overnight, by some miracle, you were to come in, and beginning first thing tomorrow morning, everything meets requirements." And that's the goal of quality in most organizations, is that everything meets requirements. So I said, "If everything beginning tomorrow morning, through some overnight miracle, meets requirements, hence forth, how would your life change?" He says, "I wouldn't have a job." [laughter]
0:21:26.9 BB: I said, "What other changes would you begin to see throughout the day, the coming days?" He says, "My boss's job wouldn't exist." I said, "Okay, keep going, keep going." He says, "Well, the whole organization will have no reason to exist." [laughter] And that's not farfetched. And I throw that out, the challenge to our listeners is, seriously, if everything in the organization beginning tomorrow morning met requirements through some... Dr. Deming would say as you know, by what method? Let's say the method exists, what would change? Now, I'm not saying these people necessarily get laid off. Maybe they get moved elsewhere. Maybe we set our sights higher and try to do things we've never done before, 'cause now everything's gonna be a home run. But that's what I find in corporations, I think, a very extremely commonplace 21st century Andrew explanation of quality is, "Does it meet requirements?" And that goes... And this whole idea of setting requirements, setting a lower and an upper, allowing for variation, that goes back to the early 1700s. And I've also read that it might go back even longer in China. We were talking earlier about China.
0:22:58.2 BB: And so if it goes back longer, all the better. And the point being, fast forward to today, that's largely where we are today, in this early 1700s. Does it meet requirements? Yes or no? And what Dr. Deming is talking about is not acceptability. First of all, he would say there's a place for acceptability. There's a place for meeting requirements, maybe based on the circumstances, all that matters is that it meets requirements. So if you're a pitcher and you're throwing a ball and the batter can't hit the ball, and as long as it's somewhere in the strike zone, or if you're kicking the ball into the net in a football match or otherwise known as soccer in the States, maybe the goalkeeper's so bad, all you gotta do is... They'll jump out of the way.
0:23:49.7 BB: Now, on the other hand, there may be a different batter or a different goalkeeper where you've gotta go where they aren't. And that gets into understanding variation and where we are in meeting requirements matters. And what I find is most organizations I've ever interacted with, and this is through Rocketdyne, as owned by Boeing, going to many different divisions of Boeing around the country, doing seminars across England, across New Zealand, university classes and university lectures, hundreds of them. I've never come across... With rare exception have I ever come across anyone who says, "Bill, in our organization, quality is more like what Dr. Deming is talking about." Meaning, "We are doing more than meeting requirements, we are focusing on where the ball is placed in the strike zone, where the ball is placed in the net, and we specialize in that because we have seen great advantage." Most people I present this to don't even know that's a possibility, don't even know it's anything to lobby for.
0:25:12.0 BB: And so to that I'd say, whether you're looking at Operational Excellence, which is kind of a hybrid of Lean and Six Sigma or Six Sigma alone, or Lean alone, everything I've studied in all of those go back to the question of quality being... Quality's defined Phil Crosby-wise, which is striving for zero defects, striving for everything meeting requirements, and then we're done. And when I joined The Deming Institute, part of my excitement was helping the organization differentiate Dr. Deming's ideas over these other quality management ideas and other management ideas as uniquely positioned to differentiate, to understand that there's an opport... There are incredible opportunities for realizing that everything that meets requirements is not the same. And how do we put a value on that? And one is, the better we understand that, the better we can minimize scrap and rework problems if we're paying attention to where we are, if the process is in control, if we can use that concept from variation. And then simultaneously, another...
0:26:35.7 BB: There's two opportunities. One is, I think the better we manage variation, the less likely we're gonna have scrap and rework. Wouldn't that be great? And two is that that buys us time to think about... 'cause now that we're not in that constant firefighting mode, now we can start to think about how to manage variation of the system and to improve how things integrate. And we did both of those at Rocketdyne. But I've yet to find many organizations who say, "Been there, done that. Been there, done that."
0:27:12.1 AS: So, if we think about the takeaways for someone listening or watching this, you've talked about Misunderstanding Quality, you've talked about everything meet requirements, you've talked about, what century are we in? So, what should they take back to their business from this discussion that can give them a foundation of a starting point of this series and what you're saying on this point? What do you want them to take away?
0:27:40.3 BB: First, I would say I wouldn't necessarily go tell anybody about this yet. [laughter] I'd say, "Hmm, this Deming stuff. There's something to this. What I'm hearing from Bill is there's something here that I can't get elsewhere." You can listen to our prior sessions. There's 22 of them. We're gonna be adding new aspects to that...
0:28:07.9 AS: Okay. So, let's talk about that for a second. So, learn on your own first. Maybe it's a personal transformation. Start with that?
0:28:09.9 BB: Yes.
0:28:14.8 AS: Okay.
0:28:16.1 BB: Absolutely... Yes, absolutely...
0:28:18.1 AS: What would be number two that you want them to get away from this?
0:28:22.9 BB: Well, my advice is, you're not crazy that there's things about the Deming philosophy that are unique, that are... I think so much... There's a lot of people excited by what Dr. Deming's offering. I think there's more than meets the eye. I mean...
0:28:46.1 AS: Okay, so let's talk about that for a second. So, there's unique things about Deming, and one of them that you talked about is the systems thinking?
0:28:54.6 BB: Yeah. I mean, imagine... What I liken it to, instead of zero defects being the goal, which is what most organizations are striving for, and their quality systems are about, "We wanna get zero defects over here, over here, over here." We're juggling all these places, trying to get to zero defects all over the place. What if they saw zero defects as not the destination, but the starting point? That, to really understand continual improvement, zero defects is not the goal. Imagine that as the starting point. At least, imagine the ability to go across that apparent finish line and realize... Or the analogy I would use is, go through the door called "zero defects is the end," and realize there's a lot more, there's so much more to do when you start to look at things with a Deming view. And so, instead of thinking, we're striving for zero defects and then we're done, to me, that's the starting point to really begin to appreciate what it means to look at systems.
0:30:07.7 AS: Okay. So we've got, start with your own personal transformation and learn the material, and understand that there's some unique things about the Deming teachings, in particular, systems. And understand that... I kind of visualized while you were talking, a person walking along with no knowledge of many things, but they're inquisitive, and what they find is a wrench. And then they start to find that there's ways to use this wrench in their daily life. And then later, they find that there's other tools like a screwdriver. And all of a sudden, they found this world of tools, and now they have this amazing toolbox. But then all of a sudden, they meet someone that's taking those tools and creating a car, or a this, or a that. And then they realize, maybe the tool has gotta be the starting point, or is a starting point. But what the tools can create and what additional tools can create is so much bigger than just that first wrench that you picked up.
0:31:14.2 BB: It's the appreciation. And I'm glad you brought those points up. Dr. Deming talks about tools and techniques. A control chart is a tool. A run chart is a tool. Design of Experiments are... These are tools. And so that's a tool. A technique is, how do we create a control chart? That's a technique. What I try to do with audiences, whether it's clients or university classes or whatever, is help them differentiate. Tools and techniques are about improving efficiency, doing things well. Doing something faster or cheaper... What's unique to Dr. Deming is not the tools you'll find him talking about, but the concepts he's talking about, and the idea of looking at things as a system. Dr. Deming defines quality, and it can be obtuse for people. I find it fascinating. He says, "Product or service possesses quality if it helps someone and enjoys a sustainable market." So, traditional quality is me throwing the ball to you, Andrew, or passing a football or basketball, whatever it is, and judging the quality of the pass when the ball leaves my hand. And we say, "That was a good pass."
0:32:49.9 BB: What Dr. Deming's talking about is, it's a good pass, just as if it's a good conversation, if you can hear what I say, we can go back and forth. And so, Deming's perspective on quality is not what's good for me, the producer, but it's how well does it fit you that I'm delivering something that matches... That we're synchronous, that... It has to be good for you, not just me checking off and saying, "This is good, this is good, this is good. Boom." That it's not good until you say it's good. That's a different view. It's the same thing as, "Well, I told you." Then you say, "Well, I didn't hear it." I says, "Well, then why don't you have your ears checked?" [laughter] Dr. Deming's talking about, it's not a conversation if you can't hear it. And so, when he's explaining to Bill Cooper and Gipsie that people are having a hard time, he was struggling to improve that 'cause he knew that when you begin to understand that what you're saying is not heard, Deming understood it was his obligation to try harder. And part of the Deming philosophy is understanding that it's not just me throwing it and saying, "There it is." It's listening for the feedback as to, "Did it make sense?" So, quality in that arena is a mutual phenomenon, not unilaterally my thing.
0:34:16.7 AS: Okay.
0:34:17.8 BB: And I would welcome anyone, as we've done in the past, to reach out if there are questions, comments, observation you'd like to share, and we can use that feedback in future sessions.
0:34:30.6 AS: Fantastic. Well, that's an excellent kickoff. And let's end with the idea that quality is a mutual phenomenon. I think that's a good statement. So Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."
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In the final episode of the goal setting in classrooms series, John Dues and Andrew Stotz discuss the last three of the 10 Key Lessons for implementing Deming in schools. They finish up with the example of Jessica's 4th-grade science class.
TRANSCRIPT
0:00:02.4 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. This is episode six about goal setting through a Deming lens. John, take it away.
0:00:26.4 John Dues: Hey, Andrew, it's good to be back. Yeah, for the past handful of episodes or so, we've been talking about organizational goal setting. We covered these four conditions of healthy goal setting and then got into these 10 key lessons for data analysis. And then we've been looking at those 10 key lessons applied to an improvement project. And we've been talking about a project that was completed by Jessica Cutler and she did a Continual Improvement Fellowship with us here at our schools. And if you remember, Jessica was attempting to improve the joy in learning of her students in her fourth grade science class. So last time we looked at lessons five through seven. Today we're gonna look at those final three lessons, eight, nine and ten applied to her project.
0:01:15.7 AS: It's exciting.
0:01:17.1 JD: Yeah. So we'll jump in here. We'll kind of do a description, a refresher of each lesson. And we'll kind of talk about how it was applied to her specific project, and we'll look at some of her data to kind of bring that live for those of the folks that have video. Let's jump in with lesson number eight. So we've talked about this before, but lesson number eight was: more timely data is better for improvement purposes. So we've talked about this a lot. We've talked about something like state testing data. We've said, it can be useful, but it's not super useful for improvement purposes, because we don't get it until the year ends. And students in our case, have already gone on summer vacation by the time that data comes in. And you know that the analogous data probably happens in lots of different sectors where you get data that lags, to the point that it's not really that useful for improvement purposes.
0:02:15.8 JD: So when we're trying to improve something, more frequent data is helpful because then we can sort of see if an intervention that we're trying is having an effect, the intended effect. We can learn that more quickly if we have more frequent data. And so it's, there's not a hard and fast rule, I don't think for how frequently you should be gathering data. It just sort of needs to be in sync with the improvement context. I think that's the important thing. Whether it's daily or a couple times a day or weekly, or monthly, quarterly, whatever, it's gotta be in sync with whatever you're trying to improve.
0:02:50.5 AS: You made me think about a documentary I saw about, how they do brain surgery and how the patient can't be sedated because they're asking the patient questions about, do you feel this and they're testing whether they're getting... They're trying to, let's say, get rid of a piece of a cancerous growth, and they wanna make sure that they're not getting into an area that's gonna damage their brain. And so, the feedback mechanism that they're getting through their tools and the feedback from the patient, it's horrifying to think of the whole thing.
0:03:27.7 JD: Yeah.
0:03:28.3 AS: It's a perfect example of why more timely data is useful for improvement purposes 'cause imagine if you didn't have that information, you knock the patient out, you get the cancerous growth, but who knows what you get in addition to that.
0:03:43.7 JD: Yeah, that's really interesting. I think that's certainly an extreme example, [laughter], but I think it's relevant. No matter what our context, that data allows us to understand what's going on, variation, trends, whether our system is stable, unstable, how we should go about improving. So it's not dissimilar from the doctors in that example.
0:04:06.8 AS: And it's indisputable I think, I would argue. But yet many people may not, they may be operating with data that's not timely. And so this is a reminder that we would pretty much always want that timely data. So that's lesson eight. Wow.
0:04:22.6 JD: Lesson eight. Yeah. And let's see how we can, I'll put a visualization on the screen so you can see what Jessica's data look like. All right. So now you can see. We've looked at these charts before. This is Jessica's process behavior chart for joy in science. So just to reorient, you have the joy percentage that students are feeling after a lesson on the x-axis, sorry, on the y-axis. On the x-axis, you have the school dates where they've collected this survey information from students in Jessica's class.
0:04:57.0 AS: Can you put that in Slide Show view?
0:05:00.4 JD: Yeah. I can do that. Yeah.
0:05:02.7 AS: Just it'll make it bigger, so for the...
0:05:06.5 JD: There you go.
0:05:07.8 AS: For the listeners out there, we're looking at a chart of daily, well, let's say it looks like daily data. There's probably weekends that are not in there because class is not on weekends, but it's the ups and downs of a chart that's ranging between a pretty, a relatively narrow range, and these are the scores that are coming from Jessica's surveying of the students each day, I believe. Correct?
0:05:34.2 JD: Yeah. So each day where Jessica is giving a survey to assess the joy in science that students are feeling, then she's averaging all those students together. And then the plot, the dot is the average of all the students sort of assessment of how much joy they felt in a particular science lesson.
0:05:54.7 AS: And that's the average. So for the listeners out there John's got an average line down the middle of these various data points, and then he is also got a red line above and a red line below the, above the highest point and slightly below the lowest point. Maybe you can explain that a little bit more.
0:06:15.4 JD: Yeah. So with Jessica, you remember originally she started plotting on a line chart or a run chart when we just had a few data points just to kind of get a sense of how things are moving so she could talk about it with her class. And over time what's happened is she's now got, at this point in the project, which she started in January, now this is sort of mid-March. And so she's collected two to three data points a week. So she doesn't survey the kids every day just for time sake, but she's getting two, three data points a week. And so by March, she started just a couple months ago, she's got 28 data points. So that sort of goes back to this idea of more timely data is better for improvement.
0:07:00.9 JD: And a lot of times, let's say a school district or a school does actually survey their students about how, what they think of their classes. That might happen at best once a semester or maybe once a year. And so at the end of the year you have one or two data points. So it's really hard to tell sort of what's actually going on. Compared to this, Jessica's got these 28 data points in just about two months or so of school. So she's got 28 data points to work with. And so what her and her students are doing with this data then, one, they can see how it's moving up and down. So we have, the blue dots are all the plotted points, like you said, the green line is the average running sort of through the middle of the data, and then those red lines are our process limits, the upper and lower natural process limits that sort of tell us the bounds of the system.
0:07:50.4 JD: And that's based on the difference in each successive data point. But the most important thing is that as Jessica and her students are looking at this, initially, they're really just studying it and trying to sort of see how things are going from survey to survey. So one of the things that Deming talked about frequently is not tampering with data, which would be if you sort of, you overreact to a single data point. So let's say, a couple of days in, it dips down from where it started and you say, oh my gosh, we gotta change things. And so that's what Deming is talking about. Not tampering, not overreacting to any single data point. Instead look at this whole picture that you get from these 28 data points and then talk about...
0:08:41.5 JD: In Jessica's case she's talking about with her students, what can we learn from this data? What does the variation from point to point look like? If we keep using the system, the fourth grade science system, if we leave it as is, then we'll probably just keep getting data pretty similar to this over time, unless something more substantial changes either in the negative or the positive. So right now they...
0:09:10.1 AS: And I think for the listeners, it's, you can see that there's really no strong pattern that I can see from this. It's just, there's some, sometimes that there's, seems like there's little trends and stuff like that. But I would say that the level of joy in the science classroom is pretty stable.
0:09:32.1 JD: Pretty stable. Yeah. Pretty high. It's bouncing around maybe a 76% average across those two and a half months or so. And so, they, you kind of consider this like the baseline. They've got a good solid baseline understanding of what joy looks like in this fourth grade science classroom. Did that stop sharing on your end?
0:10:00.2 AS: Yep.
0:10:00.2 JD: Okay, great. So that's lesson eight. So clearly she's gathered a lot of data in a pretty short amount of time. It's timely, it's useful, it's usable, it can be studied by her and her students. So we'll switch it to lesson nine now. So now they've got a good amount of data. They got 28 data points. That's plenty of data to work with. So lesson nine is now we wanna clearly label the start date for an intervention directly in her chart. And remember from earlier episodes, not only are we collecting this data, we're actually putting this up on a screen on a smart board in the classroom, and Jessica and her students are studying this data together. They're actually looking at this, this exact chart and she's explaining sort of kind of like we just did to the listeners. She's explaining what the chart means.
0:10:54.2 JD: And so over time, like once a week she's putting this up on the smart board and now kids are getting used to, how do you read this data? What does this mean? What are all these dots? What do these numbers mean? What do these red lines mean? That type of thing. And so now that they've got enough data, now we can start talking about interventions. That's really what lesson nine is about. And the point here is that you want to clearly, explicitly with a literally like a dotted line in the chart to mark on the day that you're gonna try something new. So you insert this dashed vertical line, we'll take a look at it in a second, on the date the intervention started. And then we're also gonna probably label it something simple so we can remember what intervention we tried at that point in time.
0:11:42.7 JD: So what this then allows the team to do is then to very easily see the data that happened before the intervention and the data that happened after the implementation of this intervention or this change idea. And then once we've started this change and we start plotting points after the change has gone into effect, then we can start seeing or start looking for those patterns in the data that we've talked about, those different rules, those three rules that we've talked about across these episodes. And just to refresh, rule one would be if we see a single data point outside of either of the limits, rule two is if we see eight consecutive points on either side of that green average line, and rule three is if we see three out of four dots in a row that are closer to one of the limits than they are to that central line.
0:12:38.3 JD: So that again, those patterns tell us that something significant, mathematically improbable has happened. It's a big enough magnitude in change that you wouldn't have expected it otherwise. And when we see that pattern, we can be reasonably assured that that intervention that we've tried has worked.
0:12:56.0 AS: And let me ask you about the intervention for just a second because I could imagine that if this project was going on, first question is, does Jessica's students are, obviously know that this experiment is going on?
0:13:08.3 JD: Yes.
0:13:09.8 AS: Because they're filling out a survey. And my first question is, do they know that there's an intervention happening? I would expect that it would be yes, because they're gonna feel or see that intervention. Correct?
0:13:25.1 JD: Sure. Yep.
0:13:25.2 AS: That's my first point that I want to think about. And the second point is, let's imagine now that everybody in the classroom has been seeing this chart and they're, everybody's excited and they got a lot of ideas about how they could improve. Jessica probably has a lot of ideas. So the temptation is to say, let's change these three things and see what happens.
0:13:46.5 JD: Yeah.
0:13:47.1 AS: Is it important that we only do one thing at a time or that one intervention at a time or not? So maybe those are two questions I have in my mind.
0:13:58.6 JD: Yeah, so to the first question, are you, you're saying there there might be some type of participant or...
0:14:02.3 AS: Bias.
0:14:03.3 JD: Observer effect like that they want this to happen. That's certainly possible. But speaking to the second question, what intervention do you go with? Do you go with one or you go with multiple? If you remember a couple of episodes ago we talked about, and we actually looked at a fishbone diagram that Jessica and her students that they created and they said, okay, what causes us to have low joy in class? And then they sort of mapped those, they categorized them, and there were different things like technology not working. If you remember, one was like distractions, like other teachers walk into the room during the lesson. And one of them was others like classmates making a lot of noise, making noises during class and distracting me. And so they mapped out different causes. I think they probably came up with like 12 or 15 different causes as possibilities.
0:14:58.7 JD: And they actually voted as a class. Which of these, if we worked on one of these, which would have the biggest impact? So not every kid voted for it, but the majority or the item that the most kids thought would have the biggest impact was if we could somehow stop all the noises basically. So they came up with that as a class, but not, it wasn't everybody's idea. But I think we've also talked about sort of the lessons from David Langford where once kids see that you're gonna actually take this serious, take their ideas serious and start acting on them, they take the project pretty seriously too. So maybe not a perfect answer, but that's sort of what we...
0:15:38.0 AS: I was thinking that, ultimately you could get short-term blips when you do an intervention and then it stabilizes possibly. That's one possibility. And the second thing I thought is, well, I mean ultimately the objective, whether that's an output from a factory, and keeping, improving that output or whether that's the output related to joy in the classroom as an example, you want it to go up and stay up and you want the students to see it and say, wow, look, it's happening. So, yeah.
0:16:11.7 JD: And there's different ways you can handle this. So this joy thing could go up to a certain point. They're like, I don't know if we can get any more joy, like, it's pretty high. And what you could do at that point is say, okay, I'm gonna assign a student to just sort of, every once in a while, we'll keep doing these surveys and we will sort of keep plotting the data, but we're not gonna talk about a lot. I'm just gonna assign this as a student's job to plot the new data points. And we'll kind of, we'll kind of measure it, but we won't keep up with the intervention 'cause we got it to a point that we're pretty happy with. And now as a class we may wanna switch, switch our attention to something else.
0:16:45.2 JD: So we started getting into the winter months and attendance has dipped. Maybe we've been charting that and say, Hey guys, we gotta, gotta kinda work on this. This is gone below sort of a level that's really good for learning. So let's think about as a group how we could come up with some ideas to raise that. So maybe you turn your attention to something else, 'cause you can't pay attention to everything at once.
0:17:07.2 AS: Yeah, and I think I could use an example in my Valuation Master Class Boot Camp where students were asking for more personal feedback and I realized I couldn't really scale this class if I had to get stuck into hundreds of grading basically. And that's when I came up with the concept of feedback Friday, where one student from each team would present and then I would give feedback, I would give a critique and they would be intense and all students would be watching, it would be recorded, and all of a sudden all the issues related to wanting this personal feedback went away. And therefore, once I instituted it on a regular basis, I went on to the next issue and I made sure that I didn't lose the progress that I had made and continue to make feedback Friday better and better.
0:17:56.2 JD: Yeah. Yeah. That's great. That's great. I'll share my screen so you can kinda see what this looked like in Jessica's class now, what the chart looks like now. So now you see that same chart, that same process behavior chart, exact same one we were just looking at except now you can see this, this dashed vertical line that marks the spot where the intervention was started that we just talked about. And what the kids are actually doing, and Jessica are running a PDSA cycle, a Plan-Do-Study-Act cycle. That's the experimental cycle in her class. And what they're running that PDSA on is, again, how can we put something in place to reduce the distracting noises. And so what the students actually said is if we get a deduction for making noises, then there will be less noises. And so in the school's sort of management system, a deduction is sort of like a demerit.
0:19:00.0 JD: If you maybe went to a Catholic school or something like that, or some public schools had demerits as well, but basically it's like a minor infraction basically that goes home or that gets communicated to parents at the end of the week. But the kids came up with this so their basic premise is, their plan, their prediction is if there are less noises, we'll be able to enjoy science class. And if we give deductions for these noises, then there'll be less noises. So some people may push back, well, I don't think you should give deductions or something like that, but which, fine, you could have that opinion. But I think the powerful point here is this is, the students created this, it was their idea. And so they're testing that idea to see if it actually has impact.
0:19:44.8 JD: And they're learning to do that test in this scientific thinking way by using the Plan-Do-Study-Act cycle, and seeing if it actually has an impact on their data. So at the point where they draw this dashed line, let's call that March 19th, we can see a couple of additional data points have been gathered. So you can see the data went up from 3/18 to 3/21. So from March 18th to March 21st, rose from about, let's call it 73% or so, up to about 76% on March 21st. And then that next day it rose another percent or two and let's call that 78%.
0:20:28.1 JD: And so the trap here is you could say, okay, we did this intervention and it made things better. But the key point is the data did go up, but we haven't gathered enough additional data to see one of those patterns that we talked about that would say, oh, this actually has had a significant change. Because before the dashed line, you can see data points that are as high or even higher than some of these ones that we see after the PDSA is started. So it's too early to say one way or another if this intervention is having an impact. So we're not gonna overreact. You could see a place where you're so excited that it did go up a couple of days from where it was on March 18th before you started this experiment, but that's a trap. Because it's still just common cause data, still just bouncing around that average, it's still within the bounds of the red process limits that define the science system.
0:21:34.2 AS: I have an experiment going on in my latest Valuation Master Class Boot Camp, but in that case, it's a 6-week period that I'm testing, and then I see the outcome at the end of the six weeks to test whether my hypothesis was right or not. Whereas here it's real time trying to understand what's happening. So yes, you can be tempted when it's real time to try to jump to conclusion, but when you said, well, okay, I can't really get the answer to this conclusion until I've run the test in a fixed time period, then it's you don't have as much of that temptation to draw a conclusion.
0:22:14.1 JD: Yeah. And if I actually was... I should have actually taken this a step farther. I marked it with this Plan-Do-Study-Act cycle. What I should have done too is write "noises" or something like that, deduction for noises, some small annotation, so it'd be clear what this PDSA cycle is.
0:22:32.1 AS: In other words, you're saying identify the intervention by the vertical line, but also label it as to what that intervention was, which you've done before on the other chart. I remember.
0:22:42.1 JD: Yeah. And then it'd be sort of just looking at this when she puts this up on the smart board for the class to see it again too. Oh yeah yeah, that's when we ran that first intervention and that was that intervention where we did deductions for noises. But the bigger point is that this never happens where you have some data, you understand a system, you plan systematic intervention, and then you gather more data right after it to see if it's having an impact. We'd never do that ever, in education, ever. Ever have I ever seen this before. Nothing like this. Just this little setup combining the process behavior chart with the Plan-Do-Study-Act cycle, I think is very, very, very powerful and very different approach than what school improvement.
0:23:33.4 AS: Exciting.
0:23:34.6 JD: Yeah. The typical approach is to school improvement. So I'll stop that share for a second there, and we can do a quick overview of lesson 10 and then jump back into the chart as more data has been gathered. So lesson 10 is: the purpose of data analysis is insight. Seems pretty straightforward. This is one of those key teachings from Dr. Donald Wheeler who we've talked about. He taught us that the best analysis is the simplest analysis, which provides the needed insight.
0:24:08.1 AS: So repeat lesson 10, again, the purpose of...
0:24:11.6 JD: The purpose of data analysis is insight.
0:24:14.7 AS: Yep.
0:24:15.6 JD: So just plotting the dots on the run chart and turning the run chart into the process behavior chart, that's the most straightforward method for understanding how our data is performing over time. We've talked about this a lot, but it's way more intuitive to understand the data and how it's moving than if you just stored it in a table or a spreadsheet. Got to use these time sequence charts. That's so very important.
0:24:42.2 AS: And I was just looking at the definition of insight, which is a clear, deep, and sometimes sudden understanding of a complicated problem or situation.
0:24:51.6 JD: Yeah. And I think that can happen, much more likely to happen when you have the data visualized in this way than the ways that we typically visualize data in just like a table or a spreadsheet. And so in Jessica's case, we left off on March 22nd and they had done two surveys after the intervention. And so then of course what they do is they continue over the next 4, or 5, 6 weeks, gathering more of that data as they're running that intervention, then we can sort of switch back and see what that data is looking like now.
0:25:28.3 AS: Exciting.
0:25:30.3 JD: So we have this same chart with that additional data. So we have data all the way out to now April 11th. So they run this PDSA for about a month, three weeks, month, three, four weeks.
0:25:47.9 AS: And that's 11 data points after the intervention. Okay.
0:25:54.0 JD: Yep. Purposeful. So what was I gonna say? Oh, yeah. So three, four weeks for a Plan-Do-Study-Act cycle, that's a pretty good amount of time. Two to four weeks, I've kind of found is a sweet spot. Shorter than that, it's hard to get enough data back to see if your intervention has made a difference. Longer than that, then it's you're getting away from the sort of adaptability, the ability to sort of build on an early intervention, make the tweaks you need to. So that two to four week time period for your PDSA seems like a sweet spot to me. So she's continued to collect this joy in learning data to see... Basically what her and her class are doing is seeing if their theory is correct. Does this idea of giving deductions for making noises have an impact? Is it effective?
0:26:44.0 JD: So if they learn, if the data comes back and there is no change, no indication of improvement, then a lot of people will say, well, my experiment has failed. And my answer to that is, no, it hasn't failed. It might not have worked like you wanted, but you learn very quickly that that noise deduction is not going to work and we're gonna try some other thing, some other intervention. We learn that very very quickly within 3 or 4 weeks that we need to try something new. Now, in the case of Jessica's class, that's not what happened. So you can actually see that dotted line, vertical dotted line is still at March 19th, we have those 11 additional data points. And you can actually see, if you count, starting with March 21st, you count 1-2-3-4-5-6-7-8-9-10-11 data points that are above that green average line from before.
0:27:45.5 JD: So originally the red lines, the limits and the central line would just be straight across. But once I see that eight or more of those are on one side of that central line, then I actually shift the limits and the average line, 'cause I have a new system. I've shifted it up and that actually is an indication that this intervention has worked, because we said... Now for those that are watching, it doesn't appear that all the blue dots are above that green line, but they were before the shift. Remember the shift indicates a new system. So I go back to the point where the first dot of the 8 or more in a row occurred, and that's where I have indicated a new system with the shift in the limits and the central line. So this, their theory was actually correct. This idea of giving a deduction for noises actually worked to improve the joy in Jessica's science class. It was a successful experiment.
0:28:52.7 AS: Can I draw on your chart there and ask some questions?
0:29:00.5 JD: Sure. Yeah.
0:29:00.6 AS: So one of my questions is, is it possible, for instance, in the preliminary period, let's say the first 20 days or so that things were kind of stabilized and then what we saw is that things potentially improved here in the period before the intervention and that the intervention caused an increase, but it may not be as significant as it appears based upon the prior, the most recent, let's say 10 days or something like that. So that's my question on it. I'll delete my drawings there.
0:29:46.3 JD: Yeah, I think that's a fair question. So, the reason I didn't shift those before, despite you do see a pattern, so before the dotted line, I considered that period a baseline period where we were just collecting 'cause they hadn't tried anything yet. So Dr. Wheeler has these series of four questions. So in addition to seeing a signal, he's got these other sort of questions that he typically asks and that they're yes/no questions. And you want the answer to all those to be yes. And one of 'em is like, do you know why an improvement or a decline happened? And if you don't, then you really shouldn't shift the limits. So that's why I didn't shift them before. I chose not to shift them until we actually did something, actually tried something.
0:30:33.2 AS: Which is basically saying that you're trying to get the voice of the students, a clear voice, and that may be that over the time of the intervention, it could be that the... Sorry, over the time of the initial data gathering, that the repetition of it may have caused students to feel more joy in the classroom because they were being asked and maybe that started to adjust a little bit up and there's the baseline, so. Yep. Okay.
0:31:01.6 JD: Yeah. And so this is sort of where the project ended for the fellowship that Jessica was doing. But, what would happen if we could sort of see what happened, further out in the school year is that, either Jessica and the class could then be sort of satisfied with where the joy in learning is at this point where the improvement occurred. Or they could run another cycle, sort of testing, sort of a tweaked version of that noise reduction PDSA, that intervention or they could add something to it.
0:31:43.0 AS: Or they could have run another fishbone point, maybe the noise wasn't actually the students thought it would be the number one contributor, but, maybe by looking at the next one they could see, oh, hey, wait a minute, this may be a higher contributor or not.
0:32:01.2 JD: Yeah. And when you dug into the actual plan, the specifics of the plan, how that noise deduction was going to work, there may be something in that plan that didn't go as planned and that's where you would have to lean on, 'cause we've talked about the three sort of parts of the improvement team that you need. You need the frontline people. That's the students. You need the person with the authority to change the system. That's Jessica. And then someone with the knowledge of the system, profound knowledge. That's me. Well, those, the Jessica and her students are the one in that every day. So they're gonna have learning about how that intervention went, that would then inform the second cycle of the PDSA, whatever that was gonna be, whatever they're gonna work on next. The learning from the first cycle is gonna inform that sort of next cycle.
0:32:51.4 JD: So the idea is that you don't just run a PDSA once but you repeatedly test interventions or change ideas until you get that system where you want it to be.
0:33:01.1 AS: So for the listeners and viewers out there, I bet you're thinking gosh, Jessica's pretty lucky to have John help her to go through this. And I think about lots of things that I want to talk to you about [laughter] about my testing in my own business, and I know in my own teaching, but also in my business. So that I think is one of the exciting things about this is the idea that we just, we do a lot of these things in our head sometimes. I think this will make a difference and, but we're not doing this level of detail usually in the way that we're actually performing the tests and trying to see what the outcomes are.
0:33:43.9 JD: Yeah I think that for school people too, I think when we've attempted to improve schools, reform schools, what happens is we go really fast and the learning actually happens very slowly and we don't really appreciate what it actually takes to change something in practice. And what happens then is to the frontline people like teachers... The reformers have good intentions but the people on the front line just get worn out basically, and a lot of times nothing actually even improves. You just wear people out. You make these big changes go fast and wide in the system and you don't really know exactly what to do on the ground because the opposite is having Jessica's classroom. They're actually learning fast but trying very small changes and getting feedback right in the place where that feedback needs to be given right in the classroom and then they can then learn from that and make changes.
0:34:49.8 JD: And again, it may seem smaller. Maybe it doesn't seem that revolutionary to people but to me, I think it's a completely revolutionary, completely different way to do school improvement that actually kind of honors the expertise of the teacher in the classroom, it takes into account how students are experiencing a change and then I'm kind of providing a method that they can use to then make that classroom better for everybody so and I think in doing so students more likely to find joy in their work, joy in their learnings, teachers more likely to find joy in their work as well. So to me it's a win-win for all those involved.
0:35:34.9 AS: Fantastic. Well, should we wrap up there?
0:35:40.6 JD: Yeah, I think that's a good place to wrap up this particular series.
0:35:45.1 AS: And maybe you could just review for the whole series of what we've done just to kind of make sure that everybody's clear and if somebody just came in on this one they know a little bit of the flow of what they're gonna get in the prior ones.
0:36:00.4 JD: Yeah. So we did six episodes and in those six episodes we started off just talking about what do you need to have in place for healthy goal setting at an organizational level, and we put four conditions in place that before you ever set a goal you should have to understand the capability of your system, you have to understand the variation within your system, you have to understand if the system that you're studying is stable, and then you have to have a logical answer to the question by what method. By what method are you gonna bring about improvement or by what method you're gonna get to this goal that you wanna set. So we talked about that, you gotta have these four conditions in place and without those we said goal setting is often an act of desperation.
0:36:49.7 JD: And then from there what we did is start talking about these 10 key lessons for data analysis so as you get the data about the goal and you start to understand the conditions for that system of process we could use those 10 data lessons to then interpret the data that we're looking at or studying and then we basically did that over the first four episodes. In the last few episodes what we've done is look at those lessons applied to Jessica's improvement project and that's what we just wrapped up looking at those 10 lessons.
0:37:23.7 AS: I don't know about the listeners and viewers but for me this type of stuff just gets me excited about how we can improve the way we improve.
0:37:33.4 JD: Yeah. For sure.
0:37:34.9 AS: And that's exciting. So John, on behalf of everyone at the Deming Institute I want to thank you again for this discussion, and for listeners, remember to go to deming.org to continue your journey. You can find John's book Win-Win W. Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools on amazon.com. This is your host Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."
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In this episode, John Dues and Andrew Stotz apply lessons five through seven of the 10 Key Lessons for implementing Deming in classrooms. They continue using Jessica's fourth-grade science class as an example to illustrate the concepts in action.
TRANSCRIPT
0:00:02.2 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. This is episode five about goal setting through a Deming lens. John, take it away.
0:00:23.2 John Dues: Yeah, it's good to be back, Andrew. Yeah, like you said, for the past few episodes we've been talking about organizational goal setting. We covered four healthy conditions, or four conditions of healthy goal setting and 10 key lessons for data analysis. And then what we turn to in the last episode is looking at an applied example of the 10 key lessons for data analysis and in action. And, if you remember from last time we were looking at this improvement project from Jessica Cutler, she's a fourth grade science teacher, and she did the improvement fellowship here at United Schools Network, where she learned the tools, the techniques, the philosophies, the processes behind the Deming theory, continual improvement, that type of thing. And in... And in Jessica's specific case, in her fourth grade science class, what she was settled on that she was gonna improve was, the joy in learning of her students. And we looked at lessons one through four through the eyes or through the lens of her project. And today we're gonna look at lessons five through seven. So basically the next, uh, the next three lessons of those 10 key lessons.
0:01:34.8 AS: I can't wait. Let's do it.
0:01:37.3 JD: Let's do it. So lesson number five was: show enough data in your baseline to illustrate the previous level of variation. Right. So the basic idea with this particular lesson is that, you know, let's say we're trying to improve something. We have a data point or maybe a couple data points. We wanna get to a point where we're starting to understand how this particular concept works. In this case, what we're looking at is joy in learning. And there's some different rules for how many data points you should, should have in a typical base baseline. But, you know, a pretty good rule of thumb is, you know, if you can get 12 to 15, that's... That's pretty solid. You can start working with fewer data points in real life. And even if you just have five or six values, that's gonna give you more understanding than just, you know, a single data point, which is often what we're... What we're working with.
0:02:35.6 AS: In, other words, even if you have less data, you can say that this gives some guidance.
0:02:40.9 JD: Yeah.
0:02:41.1 AS: And then you know that the reliability of that may be a little bit less, but it gives you a way... A place to start.
0:02:46.9 JD: A place to start. You're gonna learn more over time, but at least even five or six data points is more than what I typically seen in the typical, let's say, chart where it has last month and this month, right? So even five or six points is a lot more than that. You know, what's... What's typical? So I can kind of show you, I'll share my screen here and we'll take a look at, Jessica's initial run chart. You see that right?
0:03:19.3 AS: We can see it.
0:03:21.2 JD: Awesome.
0:03:22.3 AS: You wanna put it in slideshow? Can we see that? Yeah, there you go.
0:03:24.9 JD: Yeah, I'll do that.
0:03:25.4 AS: Perfect.
0:03:26.3 JD: That works better. So, you know, again, what we're trying to do is show enough data in the baseline to understand what happened prior to whenever we started this improvement effort. And I think I've shared this quote before, but I really love this one from Dr. Donald Berwick, he said "plotting measurements over time turns out in my view to be one of the most powerful things we have for systemic learning." So what... That's what this is all about really, is sort of taking that lesson to heart. So, so you can look at Jessica's run chart for "joy in science." So just to sort of orient you to the chart. We have dates along the bottom. So she started collecting this data on January 4th, and this is for about the first 10 days of data she has collected. So she's collected this data between January 4th and January 24th. So, you know, a few times a week she's giving a survey. You'll remember where she's actually asking your kids, how joyful was this science lesson?
0:04:24.4 JD: Mm-hmm.
0:04:27.2 JD: And so this is a run chart 'cause it's just the data with the median running through the middle, that green line there, the data is the blue lines connected by, or sorry, the blue dots connected by the points and the y axis there along the left is the joy in learning percentage. So out of a hundred percent, sort of what are kids saying? How are kids sort of evaluating each of these science lessons? So we've got 10 data points so far, which is a pretty good start. So it's starting to give Jessica and her science class a decent understanding about, you know, when we, you know, define joy in science and then we start to collect this data, we really don't have any idea what that's gonna look like in practice. But now that she started plotting this data over time, we have a much better sense of what the kids think of the science lessons basically. So on the very first day...
0:05:25.4 AS: And what is the... What is the median amount just for the listeners out there that don't see it? What would be the... Is that 78%?
0:05:33.8 JD: Yeah, about 78%. So that very first day was 77%. The second day was about 68%. And then you sort of see it bounce around that median over the course of that, those 10 days. So some of the points are below the median, some of the points are above the median.
0:05:50.4 AS: And the highest point above is about 83, it looks like roughly around that.
0:05:54.4 JD: Yeah. Around 82, 83%. And one technical point is at the point that it's a run chart we don't have the process limits, those red lines that we've been taking a look at and with a run chart and, you know, fewer data points, we only have 10. It's fairly typical to use the median, just so you know, you can kind of better control for any outlier data points which we really don't have any outliers in this particular case but that's just sort of a technical point. So, yeah, I mean, I think, you know what you start to see, you start to get a sense of what this data looks like, you know, and you're gonna keep collecting this data over an additional time period, right? And she hasn't at this point introduced any interventions or any changes. Right now they're just learning about this joy in learning system, really. Right.
0:06:51.8 JD: And so, you know, as she's thinking about this, this really brings us to... To lesson six, which is, you know, what's the goal of data analysis? And this is true in schools and it's true anywhere. We're not just gonna look at the past results, but we're also gonna, you know, probably more importantly, look to the future and hopefully sort of be able to predict what's gonna happen in the future. And, you know, whatever concept that we're looking at. And so as we continue to gather additional data, we can then turn that run chart from those initial 10 points into a process behavior chart. Right. You know, that's a, sort of a, you know, it's the run chart on steroids because not only can we see the variation, which you can see in the run chart, but now because we've added more data, we've added the upper and lower natural process limit, we can also start to characterize the type of variation that we see in that data.
0:08:00.1 AS: So for the listeners, listeners out there, John just switched to a new chart which is just an extension of the prior chart carrying it out for a few more weeks, it looks like, of daily data. And then he's added in a lower and upper natural process limit.
0:08:18.9 JD: Yeah. So we're still, we're still plotting the data for joy in science. So the data is still the blue dots connected by the blue lines now because we have 24 or so data points, the green line, the central line is the average of that data running through the data. And we have enough data to add the upper and lower natural process limit. And so right now we can start to determine do we only have natural variation, those everyday ups and downs, that common cause variation, or do we have some type of exceptional or special cause variation that's outside of what would be expected in this particular system. We can start making...
0:09:00.7 AS: Can you...
0:09:02.2 JD: Go ahead.
0:09:02.8 AS: I was gonna... I was gonna ask you if you can just explain how you calculated the upper and lower natural process limits just so people can understand. Is it max and min or is it standard deviation or what is that?
0:09:18.3 JD: Yeah, basically what's happening is that, so we've plotted the data and then we use that data, we calculate the average, and then we also calculate what the moving range, is what it's called. So we just look at each successive data point and the difference between those two points. And basically there's a formula that you use for the upper and lower natural process limits that takes all of those things into account. So it's not standard deviation, but it's instead using the moving, moving range between each successive data point.
0:09:52.9 AS: In other words, the data that's on this chart will always fall within the natural upper and lower. In other words it's... Or is, will data points fall outside of that?
0:10:05.7 JD: Well, it depends on what kind of system it is.
0:10:07.8 AS: Right. Okay.
0:10:09.8 JD: If it's a stable system, that means all we see is sort of natural ups and downs in the data. And we use those formulas for the process limits. The magnitude of the difference of each successive data point is such that it's not necessarily big or small, it's just based on what you're seeing empirically. It's basically predictable. Right. And if it's not predictable, then we'll see special causes. So we'll see special patterns in the data. So I think maybe last time we talked about the three patterns, or you know, in some episode we talked about the patterns that would suggest there's a special cause that goes to the study. Those three patterns that I use are, is there a single one of these joy in science data points outside of either the upper or lower natural process limit that'd be a special cause.
0:11:05.4 JD: If you see eight data points in a row, either above the central line or below the central line, that's a special cause. And if I see three out of four in a row that are either closer to the upper limit or to the lower limit than they are to that central line, that's a pattern of the data that suggests a special cause. So we don't, in this particular dataset, we don't see any special causes. So now we have... Now we have a very solid baseline set of data. We have 24 data points. And when you're using an average central line and get... Getting technical, once you get to about 17 data points, those upper and lower natural process limits start to solidify, meaning they're not gonna really change too much 'cause you have enough data unless something really significant happens. And then if you're using the median, that solidification happens when you get to about 24 data points.
0:12:07.5 JD: So when you're, you know, when you're getting to 17 to 24 data points in your baseline, you're really getting pretty solid upper and lower national process limits. So, as of this March 1st date, which is the last date in this particular chart, there are 24 data points. So you have a pretty solid baseline set of data. Right now, the upper natural process limit is 95%. That lower limit is sitting at 66%, and then the average running through the middle, that green line is 81%. So this basically tells us that if nothing changes within Jessica's fourth grade science system, her classroom, we can expect the data to bounce around this 81% average and stay within the bounds of the limit. So we would call this a common cause system because we don't see any of those rules that I just talked about for special causes. And that's important.
0:13:07.4 JD: So do we have an unstable system or a stable system? We have a stable system. A stable system means that the data is predictable and unless something happens, you know, and this could be something that happens in the control of the teacher in the class, or it could be out of the control of the teacher in the class, but unless something happens that's significant, this data is just kind of keep humming along like this over the course of March, April, May of this particular school year. Right. So once we get to this point, so we have baseline data we've collected in a run chart, we start to understand how that data is moving up and down. We got some more data and we added the upper and lower natural process limits. Now we can assess not only the variation, but also the stability and the capability of the system, all of those things, those questions can start to be answered now that we have this process behavior chart.
0:14:09.3 JD: And this brings us to the final lesson for today, which is lesson 7, which is the improvement approach depends on the stability of the system under study. So that's why one of the reasons why the process behavior chart is so powerful is because now I have an understanding of what I need to do, like what type of approach I need to take to improve this particular system. Right? So in this particular case, I have a predictable system. And so the only way to bring about meaningful improvement is to fundamentally change this science system, right?
0:14:52.6 JD: The flip side would be if I did see a special cause let's say, it was an unpredictable system. We saw special cause on the low side. I'd wanna study that, what happened on that particular day. Because if I see a special cause, let's say on February 2nd I saw a special cause, let's say I saw a single data point below the lower natural process limit that's so different and unexpected, I'd actually wanna go to her classroom and talk to her in her class and say, okay, what happened on that day? I'm gonna try to remove that special cause. Study of that specific data point is warranted. If you don't see those special causes, then those, even though there are ups and downs, there are increases and decreases. They're within that, you know, the expected bounds of this particular system. Right.
0:15:46.9 AS: And I was gonna say, I can't remember if I got this from Dr. Deming or where it came from, but I know as an analyst in the stock market analyzing tons and tons of data in my career, I always say if something looks like a special cause or looks strange it's probably an error.
[laughter]
0:16:03.2 AS: And it could just be for instance, that a student came in and they didn't understand how to fill it out or they refused to fill it out or they filled out the form with a really bizarre thing, or maybe they thought that number 10 was good and number one was bad, but in fact on the survey it was number one that was good and number 10 that was bad. And you find out that, you know, that special cause came from some sort of error.
0:16:26.6 JD: That's certainly possible. That's certainly possible.
0:16:29.5 AS: As opposed to another special cause could be, let's just say that the school had a blackout and all of a sudden the air conditioning went off for half of the class and everybody was just like really frustrated. They were burning hot. It was really a hot day and that special cause could have been a legitimate cause as opposed to let's say an error cause but you know, it causes an extreme, you know response on the survey.
0:16:56.9 JD: Yeah. And the thing is, is yeah, it could be a number of different things. Maybe she tried, maybe she had gotten some feedback about her lessons and maybe even she tried a different lesson design and it was new to her and it just didn't work very well. Maybe she tried to use some new technology or a new activity and it just didn't go well. But you know, if I'm seeing that data show up as a special cause and let's say I'm seeing that the next day or a couple days later, it's still fresh in my mind and I can even go into my chart and label what happened that day. Okay. And I... Now, okay, I'm gonna remove that thing or I'm, you know, if it's a lesson I'm trying, maybe I don't wanna give up on it, but I know I need to improve it 'cause it led to some issues in my classroom, but it's close enough to the time it actually happened that I actually remember what happened on that particular day and I can sort of pinpoint that issue.
0:17:52.9 AS: Yeah.
0:17:54.5 JD: And the data told me it was worth going into studying that particular data point because it was so different than what I had seen previously in this particular 4th grade science system.
0:18:06.5 AS: Makes sense.
0:18:09.9 JD: But in this case, we don't see that, that was a hypothetical. So all we see is sort of the data moving up and down around that green average line. So we have a stable system. So again, that tells me I need to improve the science system itself. There's no special causes to remove. So, the next question I think I would ask, and if you remember one of the data lessons is that we sort of combine the frontline workers, which is the students in this case. We have the manager or the leader, that's the teacher, and then someone with profound knowledge from the Deming lens, that's me, we're bringing these people together and we're saying, okay, you know, we're seeing this hum along this joy in science thing, hum along at sort of like an 81% average. So I think it's a reasonable question to ask, is that good enough? And should we turn our attention to something else. Now, there could be some situations where it's not good enough or some situations where that is good enough. They chose to keep moving to improve that joy in learning. But I think it'd be perfectly reasonable in some context to say, well, you know, sure, maybe we could get a little better here, but maybe it's not worth the effort in that particular area. Maybe we're gonna turn our attention to something else. You know.
0:19:23.7 AS: So you learn something from the chart and that could be...
0:19:26.4 JD: Learn something from the chart. Yeah, yeah.
0:19:27.9 AS: Because when I look at this chart, I just think hard work is ahead.
0:19:31.2 JD: Yeah. Yeah.
0:19:34.7 AS: 'Cause in order to, if you have a stable system with not a lot of extreme... Firefighting is kind of a fun thing, right? When you got special causes, you feel really important. You go out there, you try to figure out what those individual things are, you're the hero. You fix it, you understand it, you see it, whatever. But then when you get a stable system, it's like, oh man, now we got to think about how do we make some substantial changes in the system. It doesn't have to be substantial, but how do we make changes in the system, you know? And then measure whether that has an impact.
0:20:06.4 JD: Yeah. And to your point about fire... Fighting fires, like I didn't know, we had never measured joy in learning like this before, so I didn't know what we were gonna get with Jessica. And so you know what I think you also see here is a pretty well-run classroom. These are kids that are finding a pretty high amount of joy in their lessons. I think that you can kind of objectively say that, but they did choose to move on with the project and keep focusing on this particular system. And I thought it was really interesting. They actually... I'll flip slides here.
0:20:45.6 JD: They actually made this sort of rudimentary fishbone diagram, so you can, if you're viewing the video here you can see that Jessica just took a pen and a piece of paper and put this on the overhead in the classroom, and basically just drew a fishbone. And on the fishbone diagram is also called a cause and effect diagram. So out on the right it says effect. And she wrote low enjoyment, so she's meaning low enjoyment of science class. And they started brainstorming, those are the bones of the fish, what's leading to what's causing the effect of low enjoyment in science class. And so they... She did this brainstorming activity with the kids. So some of the things they came up with were why is there low enjoyment with science class? Well, the computers are sometimes lagging when the kids are trying to use them. They're mad at Ms. Cutler for one reason or another. There's a lot of writing in a particular lesson. There's a lot of reading in a particular lesson.
0:21:58.2 AS: Other teachers coming into the room.
0:22:00.7 JD: Other teachers coming into the room and disrupting the class.
0:22:02.7 AS: Stop bothering me.
0:22:04.1 JD: Yeah. I mean, you know, these are the things you don't often think about. And then they talked about classmates making noises throughout classes, another distraction. And they basically categorized these into different categories. So there were sort of things that made the lesson boring. That was one category. Accidents happening, those are like the computers not working correctly. Scholar... We call our student scholars. So students getting in trouble was one, and then distractions was another category. And so then they did another activity basically after they had this fishbone. And they basically did like a voting activity where they would figure out which of these is the most dominant cause of low enjoyment. And actually what they came up with is their classmates call, like making noises, like students making a lot of noise, making noises, random noises throughout the lesson, they identified that particular thing as the thing that they're gonna then do something like design a plan, do study around, like how are we gonna reduce the amount of noise in the class?
0:23:12.7 JD: And this is all the students coming up with these ideas. Of course, Jessica's guiding these conversations as the adult in the room, but the kids are coming up with this. Like I never would have, well, maybe I shouldn't say I would never have, but it probably wouldn't likely have been on my radar that teacher, other teachers coming into the room was a main source of distraction. You know, who knows what they're doing, dropping off papers that have to be passed out, that dismissal or coming to find a kid for this thing or that thing. Who knows why they're stopping by. But schools are certainly rife with all kinds of disruptions, announcements, people coming into the room, those types of things.
0:23:51.0 AS: It's interesting too to see mad at Miss Cutler because... I was just reading a book about or some research about how to get rid of anger and that type of thing. And they talk about meditation and I do breathing exercise before every class, when every class starts. And it's a way of just kind of calming down and separating the class time from the chaos of outside, but it also could be something that could help with feeling mad.
0:24:27.9 JD: Yeah. And I think if in certain classrooms that certainly could have risen to the top. And then what you do is then design the PSA around that. So how do you do meditation? How do you know if you're going to do... How do you know if you're doing it right? How long do you do it? You know? Does it have the intended impact? You could study all kinds of different things with meditation, but...
0:24:52.4 AS: And are you really mad or is there... Are you really mad at Ms. Cutler or are you... Are you frustrated about something else? Or that...
0:24:58.1 JD: Exactly. Yeah. Is it warranted? Is there actually something that she should stop doing or start doing? There's all kinds of possibilities there. But the main point, and I think this kind of would bring us to the wrap up is taking this approach is very different. Even just the step, Jessica's step of saying, I'm gonna work on joy in science, joy in learning in science class. That's a very different approach. And then step beyond that, I'm gonna involve my students in this improvement approach. And we have these various methods and tools for systematically collecting the classes input, and that those are improvement science or continual improvement tools that we're using. And then we're applying some of the knowledge about variation, Deming sort of data methods to understand that data, that we've systematically collected from students.
0:25:58.7 JD: And now students are involved. So they're actively coming up with both the reasons, the problems that are happening. And then they're like what we'll get into in the last few lessons is their input into the solutions, the change ideas that are gonna make things better. But all of this represents a very different approach than what's typical when it comes to school improvement. These things are not being handed down from on high from someone that has no connection to this classroom whatsoever. Instead, it's actually the people in the classroom that are developing the solutions.
0:26:36.9 AS: I just was thinking about the idea of imagining that this group of students is working really hard on that, and they come up with so much knowledge and learning about how to create a more joyful classroom. And then imagine that they've now codified that together with Ms. Cutler to create kind of the standard operating procedures. Like we put up a sign on the door outside that says, do not disturb until class is over, or...
0:27:06.1 JD: Something simple. Yeah.
0:27:07.0 AS: And that they come up with, and a breathing exercise or whatever that is. And then you imagine the next group of students coming in for the next year, let's say, or whatever, that next group who can then take the learning that the first group had and then try to take it to another level, and then upgrade how the operations of the room is done. And you do that a couple of iterations, and you've now accumulated knowledge that you are building on until in a business, you're... You're creating a competitive advantage.
0:27:40.4 JD: Yeah, absolutely. And another thing that these guys did was they didn't say we're gonna improve X, Y, or Z and then set an arbitrary goal, which is one of the things we've talked about that often happens at the outset of any type of improvement. They didn't... They sort of avoided this act of desperation. We talk about goal setting as an active... Are often goal setting is often an act of desperation. They avoided that completely. Instead, what they did was we gathered some baseline data to understand what is the capability of our system when it comes to joy in learning. That's what they did first. They didn't set the goal first. A lot of wisdom, a lot of wisdom in 10 year olds for sure.
0:28:22.1 AS: That's interesting. Well, John, on behalf of everyone at the Deming Institute, I want to thank you again for the discussion and for listeners, remember to go to deming.org to continue your journey. You can find John's book Win-Win: W. Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools on amazon.com. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, and its absolutely applicable to today's discussion. People are entitled to joy in work.
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How do you know that the learning you and your colleagues are doing is leading to changes in behavior? In this episode, Bill and Andrew discuss little tests you can do to see if the transformation you're working toward is really happening.
0:00:02.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunity. Today is episode 22, and the title is, Test for Understanding Transformation. Bill, take it away.
0:00:30.7 Bill Bellows: Hey, we've been at this podcast for about a year now, right?
0:00:36.6 AS: It's incredible how long it's been.
0:00:39.8 BB: And in the beginning you said, I've been at this for 30 years, right?
0:00:43.7 AS: Yeah.
[laughter]
0:00:46.7 BB: Maybe we should change that to 31.
0:00:48.3 AS: Oh, man, there you go.
0:00:51.2 BB: All right.
0:00:53.0 AS: That reminds me of the joke of the janitor at the exhibition of the dinosaurs and the group of kids was being led through the museum and their guide had to run to the bathroom. And so they were looking at this dinosaur and they asked the janitor, "How old is that dinosaur?" And he said, "Well, that dinosaur is 300,032 years old." "Oh, how do they know it so exactly?" He said, "Well, it was 300,000 when I started working here 30 years ago."
[laughter]
0:01:28.8 AS: So there we are.
0:01:31.4 BB: That's great.
0:01:33.3 AS: Thirty-one years.
0:01:34.0 BB: All right, all right, all right. So first thing I wanna say is, as you know and our listeners know, I go back and listen to this podcast and I interact with people that are listening too, and I get some feedback. And in episode 19, I said the Germans were developing jet engines in the late 1940s. No, it turns out the Germans were developing jet engines in the late 1930s and they had a fighter plane with a turbine engine, a developmental engine in the late '30s. They didn't get into full-scale development and production. Production didn't start till the tail end of the war. But anyway, but I was off by a decade. In episode 21, I mentioned that checks were awarded within Rocketdyne for improvement suggestions and individuals who submitted this and it could be for an individual, maybe it was done for two people, three people, I don't know, but they got 10% of the annual savings on a suggestion that was implemented in a one-time lump sum payment.
0:02:36.1 BB: So you got 10% of the savings for one year and I thought, imagine going to the president of the company and let's say I walk into the president's office and you're my attorney. And I walk in and I say, "Hey, Mr. President, I've got a suggestion. You know that suggestion program?" He says, "Yeah, yeah, yeah. Come on in, come on in. And who's this guy with you?" "Well that's Andrew Stotz." "And who's Andrew?" "He's my attorney, and he and I have been thinking about what this is worth." "Well, tell me about it." "No, well, before we get into it, we've got this form to sign here."
0:03:10.9 AS: Andrew.
0:03:11.1 BB: "Right? And you wanna see the idea or not? But we don't have to share it." But I thought, imagine people going to great length and really taking advantage of it. Well, a few of us that were involved in our InThinking Roadmap training, what we started to propose is we want a piece of the action, Andrew. So the proposal we had is that, Andrew, if you come to one of our classes, a study session on The New Economics or Managing Variation of a System, we'll have you sign a roster, right? And so if you are ever given a check for big numbers, Andrew, then we're gonna claim that our training contributed to your idea and all we ask is 10%, right?
0:03:58.1 AS: Of your 10%.
0:04:00.9 BB: I mean, I think that's fair, right? But imagine everybody in the organization becoming a profit center.
0:04:08.7 AS: Crazy.
0:04:10.4 BB: That's what you get. All right.
0:04:14.5 AS: And the lesson from that is focus on intrinsic motivation. People wanna make improvements, they wanna contribute.
0:04:23.8 BB: You start... You go down the slippery slope of incentives, which will be part of what we look at later. There's just no end to that. All right?
0:04:31.4 AS: Yeah.
0:04:32.2 BB: So I mentioned in a previous podcast that I had an interaction, met the army's first woman four-star general, and I just wanna give you some more background and interesting things that happened with her relative to this test for understanding transformation. I don't know April, May, 2008, someone on her staff reached out to me and when they first... When the guy got a hold of me, I said... From the Pentagon, he called me, I think it was like 8:00 or 9:00 o'clock at night here. Whatever it was, it was after hours in LA so it was after hours in DC. I remember saying to the guy, "How did you find me?" He says, "There's a lot of stuff on the internet." So he says, "I came across a presentation you did for Goodwill Industries." And he says, "In there you talk about... " He says, "There's some really good stuff in there."
0:05:29.0 BB: And I said, "Like what?" He said, "You have a slide in there about you can minimize loss to society by picking up nails in a parking lot." And that was an example of what I used Dr. Taguchi's work, minimizing loss to society. I said, "Yeah, I remember that slide." He says, "We don't do enough of that in the Army." And he says, "Hey, we've got a conference next week, late notice. The keynote speaker bailed out." And he's calling me on a Monday. The presentation's a week from Wednesday and he says... And also he said that the Army had an initiative called Enterprise Thinking and Enterprise Thinking was part of what we called our effort within Rocketdyne. We used the terms Enterprise Thinking, organizational awareness, and that InThinking personal awareness. We were using those two terms. So he did a search on that, found my name, and he says, "What do you think?" And he says, "We're gonna... "
0:06:24.3 BB: If I agree, we'll have a follow-up vetting call the next day. So he calls me up the next day and it's him and a two-star general. There are three people in the room, all senior officers, and he says, "Okay, so, but tell us what you do." So I shared the last... It sounds funny, is what seems to have been the last straw in their interest was having me speak, was my last straw story. Remember the executive from the European airline and... Right? So I tell that story about my efforts within Rocketdyne and Boeing about this airline executive and how this deeply resonated with this executive of this customer of this company that buys a lot of Boeing airplanes that we focused on the one cause, not the greater system.
0:07:13.2 BB: And within minutes of sharing that story, they started laughing, leading to it a few minutes later to them saying, "you're the one."
0:07:19.2 AS: [laughter] That's very interesting.
0:07:21.3 BB: You're the one. So for our listeners, I'd say, let this be a reminder of how a personal story guided by insights on how Dr. Deming's System of Profound Knowledge can open doors for you. And you can use that story, come up with your own stories, but you just never know when you're gonna be in a situation where you need a really simple story. So as an aside, they contact me, like I mentioned, 10 years later, and I think I shared with you offline that the speaker I was replacing was the great Richard Rumelt, the strategy professor from UCLA, who for whatever reason needed to bail out. And then when this podcast is posted, I'll put a link to the slides of the presentation.
0:08:05.7 BB: It's about 45 minutes long. What was not covered... I went back and looked at it earlier to say, what did I share with them that got them so excited? All I know is it fit into 45 minutes to an hour. What was not covered was the trip reports, whether Red Pen or Blue Pen, Last Straw/All Straw, Me/We organizations. But after it was done, as I'm coming off the stage, General Dunwoody in uniform comes up to me. She was thrilled. Her exact words were, "You hit it." She says, "Bill, you hit it out of the park." And I thought, well, I had help from a lot of people. She then says something to me that I'll never forget. So we're face-to-face, right? Let me just... Right?
0:08:45.1 BB: And she says to me, "Bill, you've got a real challenge on your hands. Bill, you've got a real challenge on your hands." So prompted by that, I held my hand out, my right hand, which is what you do to initiate a handshake, and then she reaches out to shakes my hand and I said, "General Dunwoody, we have a challenge on our hands." [laughter] And she erupted in laughter. And my only regret, even though we went out for drinks for the next couple of hours, but my regret was not having a photo of her and I doing a double high five as she laughed. So then I remained in touch with her for the next six to eight months when she was promoted to four-star and she looked for opportunities to get me to the Pentagon, which she did. And I was trying to get her or somebody on her staff to come to Rocketdyne to learn more about what we're doing.
0:09:38.1 BB: But I say I share this anecdote as an example of a Test for Understanding of a transformation. So what is a TFU, test for understanding? This is something I got exposed to in my Kepner-Tregoe Problem Solving and Decision Making training, which I talked about in one of the first episodes. And in our training to deliver what was then a five-day course, we were coached on how to interact with seminar attendees, including how to answer questions and how to ask questions. And one of the things we got our knuckles wrapped for was saying, are there any questions? Because no one answers that. There is... And if I had said that when I was being certified, I'd have failed. So instead we're coached on how to ask questions or make comments, which serve as a test for someone's understanding of what I presented.
0:10:27.9 BB: For example, for me to reply to General Dunwoody with we have a challenge on our hands was to test her understanding of what I said and her laughter is a response that I could be expecting with something short. As an aside, an appreciation, we've talked about Ackoff's D-I-K-U-W model data, raw data information. You turn that into what, where, when, extent, knowledge. If we convert that to how does something operate looking inside of an automobile, how do the pieces work together? Remember he said understanding is when you look outward 'cause knowledge looking inward, Russ would say, doesn't tell you why the car is designed for four passengers. That comes from looking outward. And then wisdom is what do we do with all this? Well, the Kepner-Tregoe training was Test for Understanding and now that I'm inspired by Ackoff, well in my university classes, I ask "Test for Information" classes. I have them watch videos and say, what company was Russ working for?
0:11:31.1 BB: This anecdote, that's information. Nothing wrong with those questions. I can ask for "Test for Knowledge" questions asking how something operates. So what I don't know is like, why are they called Test for Understanding? They could be Test for Knowledge, Test for Information, Test for Wisdom. And obviously TFI test for information could be true, false, multiple choice and test for knowledge and understanding could be short, but then I want to go deeper. And so what I wanna share is in one of my university courses, I share the following, true, you can't make it up news stories. It says, once upon a time a national airline came in dead last on on-time performance one month even though it had offered its employees everything from cash to pizza to finish first in the US Department of Transportation's monthly rankings. Does that sound like incentives, Andrew?
0:12:33.0 AS: It's all there.
0:12:33.8 BB: If we finish first, pizza parties. Now if they got exposed to Rocketdyne, they'd be handing out checks for $10,000. So in one of the research essays, for a number of the courses, every week, every module, I give them a research essay very similarly, giving them a situation and then what's going on with the questions is having them think about what they've been exposed to so far. And so question one in this assignment is given this account, list five assumptions that were made by the management team of this airline? And so I just wanna share one student's response. He says, "assumption one..." And also let me say this comes from the second of two Deming courses I do. So these students have been exposed to a one, one-semester course prior to this. So this is not intro stuff. This is getting deep into it.
0:13:34.3 BB: And so anyway he says, "assumption one, offering incentives like cash and pizza would motivate employees to prioritize on-time performance." Okay? That's an assumption. "Assumption two, employee morale and satisfaction directly correlate with on-time performance. Assumption three, the issue of on-time performance primarily stems from..." Are you ready? "Employee motivation or effort. The incentives provided were perceived as valuable by employees." And you're gonna love where this goes. "Assumption five, employees have significant control over factors that influence on-time performance such as aircraft maintenance, air traffic control and weather conditions."
0:14:20.2 AS: Good answers.
0:14:23.0 BB: Again, what I think is cool and for our listeners is what you're gonna get in question two, three, four, and five is builds upon a foundation where these students have, for one and a half semesters been exposed to Deming, Taguchi, Ackoff, Gipsie Ranney, Tom Johnson, the System of Profound Knowledge, hours and hours of videos. And so this is my way of Testing their Understanding. And so if you're a university professor, you might find interest in this. If you're within an organization, this could be a sense of how do you know what people are hearing in your explanations of Deming's work or whatever you're trying to bring to your organization? So anyway, I then have them read a blog at a Deming Institute link, and I'll add this blog when this is posted but it's deming.org/the insanity of extrinsic motivation. All right. And they've been exposed to these concepts but I just said, "Hey, go off and read this blog." And it was likely a blog by John Hunter.
0:15:32.0 AS: Yep.
0:15:32.2 BB: All right, question two. All right. Now it gets interesting, is that "in appreciation of Edward de Bono's, "Six Thinking Hats"," which they've been exposed to, "and the Yellow Hat, which is the logical positive, why is this such a great idea? Listen, explain five potential logical, positive benefits of incentives, which would explain why they would be implemented in a ME Organization." And so what's seen is I have them put themselves in a ME Organization, put on the Yellow Hat and think about what would be so exciting about this. And so logical, positive number one. "Incentives can serve as a powerful motivator for individuals within the organization, driving them to achieve higher levels of performance and productivity. When employees are offered rewards for their efforts, they're more likely to be motivated to excel in their roles," Andrew. Logical positive number two, enhanced performance. Explanation, "by tying incentives to specific goals or targets, organizations can encourage employees to focus their efforts on key priorities and objectives.
0:16:46.9 BB: This can lead to improved performance across various aspects of the business, ultimately driving better results." Number three, attraction and retention of talent. Oh, yeah. Explanation, "offering attractive incentives can help organizations attract top talent and retain existing employees. Attractive incentives can serve as a key differentiator for organizations seeking to attract and retain skilled professionals." Now, let me also say, this is an undergraduate class. As I mentioned, this is the second of two that I offer. Many of these students are working full-time or part-time. So this is coming from someone who is working full-time, probably mid to late 20s. So these are not... They're undergraduates but lifewise, they've got a lot of real-world experience.
0:17:44.0 BB: All right. Logical positive four, promotion of innovation and creativity. Explanation, "incentives can encourage employees to think creatively and innovative in their roles. By rewarding innovative ideas and contributions, organizations can foster..." Ready, Andrew? "A culture of creativity and continuous improvement, driving long-term success and competitive advantage." And the last one, positive organizational culture. "Implementing incentives can contribute to a positive organizational culture characterized by recognition, reward and appreciation. When employees feel valued and rewarded for their contributions, they're more likely to feel engaged, satisfied, and committed to the organization." But here's what's really cool about this test for understanding, I get to position them in the framework of a ME Organization with the Yellow Hat.
0:18:40.9 BB: Now question three, in appreciation of Edward de Bono's, "Six Thinking Hats" and the Black Hat, what Edward calls a logical negative, list and explain five potential aspects of incentives, which would explain why they would not be implemented in a WE Organization. And this is coming from the same person. This is why I think it's so, so cool that I wanna share with our listeners. The same person's being forced to look at it both ways. Negative number one, potential for... Ready, Andrew? "Unintended consequences." Oh my God. "Incentives can sometime lead to unintended consequences such as employees focusing solely on tasks that are incentivized while neglecting other important aspects of their roles. This tunnel vision can result in suboptimal outcomes for the organization as a whole."
0:19:30.7 BB: "Number two, risk of eroding intrinsic motivation. Explanation, offering external rewards like incentives can undermine intrinsic motivation leading employees to become less interested in the work and more focused on earning rewards. Number three, creation of unhealthy competition. Explanation, incentives can foster a competitive culture within the organization where employees may prioritize individual success over collaboration and teamwork. This competitive atmosphere can breed..." Ready? "Resentment and distrust among employees." Can you imagine that, Andrew? Resentment and distrust? That seems like it would clash with my previous positive thought, but it really just points out how careful management needs to be.
0:20:19.0 AS: Yes.
0:20:19.2 BB: All right. Cost considerations. "Implementing incentive programs can be costly for organizations, particularly if the rewards offered are substantial or if the program is not carefully managed. Organizations may be hesitant to invest resources and incentives, especially if they're uncertain about the return on investment if budget is of concern." And then number five, "short-term focus over our long-term goals." Explanation, "incentives often improve short-term gains rather than long-term strategic objectives. Employees may prioritize activities that yield immediate results, even if they're not aligned with the organization's broader goals or values."
0:21:02.7 BB: And then question four, here's the kicker. "In appreciation of your evolving understanding of the use of incentives, share, if you would, a personal account of a memorable attempt by someone to use incentives to motivate you, so that so many pizza parties or bringing a small box of donuts or coffee in for working a weekend I was supposed to have off." And then question five, "in appreciation of your answer to question four, why is this use of incentives so memorable to you? They were very ineffective. I often felt insulted that my boss thought that $20 worth of pizza or donuts made up for asking me to give 50% of my days off that week."
0:21:55.5 AS: Here's a donut for you.
0:22:00.6 BB: Here's a doggy bone, here's a doggy bone. I just wanted to share that this time. Next time we'll look at more.
0:22:09.3 AS: One of the things that...
0:22:10.6 BB: There are other examples of Test for Understanding. Go ahead, Andrew.
0:22:12.3 AS: One of the things that I wanted to... What you made me think about is that you and I can talk here about the downside of incentives but we have to accept the world is absolutely sold on the topic of incentives.
0:22:27.2 BB: Absolutely.
0:22:27.8 AS: A 100, I mean, 99.999% and if you're not sold on it, you're still gonna be forced to do it.
0:22:34.5 BB: Well, you know why they're sold on them, 'cause they work.
0:22:39.7 AS: It's like a shotgun. One of those pellets is gonna hit the target but...
0:22:47.7 BB: That's right.
0:22:48.4 AS: A lot of other pellets are gonna hit...
0:22:50.6 BB: And that's all that matters. And then what you get into is, you know what, Andrew, that that one person walks away excited, right? And that's the pellet that I look at. And I say, yep, and what about those others? You know what I say to that, Andrew? Those others, you know what, Andrew, you can't please everybody.
0:23:07.8 AS: Yeah.
0:23:07.9 BB: So this is so reinforcing. There's one person that gets all wrapped up based on my theory that this is a great thing to do and I hone in on that. And everything else I dismiss as, "ah, what are you gonna do? You can't please everybody." But what's missing is, what is that doing to destroy their willingness to collaborate with the one I gave the award to?
0:23:33.1 AS: Yeah, I'm picturing a bunch of people and laying on the ground injured by the pellets but that one black, or that one... Let's say the one target that we were going after, that target is down but there's 50 other people down also.
0:23:50.6 BB: No, but then this is where I get into the white bead variation we talked about early, early on, is that if all I'm doing is measuring, have you completed the task and we're looking at it from a black and white perspective and you leave the bowling ball in the doorway for the next person, meaning that you complete a task with the absolute minimum requirements for it to be deemed complete. Does the car have gas? Yes. You didn't say how much but when people then... When those people that were summarily dismissed didn't receive the award, when they go out and don't share an idea, don't give somebody a warning of something or not even maliciously leave the bowling ball in the doorway but believe that the way to get ahead is to do everything as fast as possible, but in doing so, what you're doing is creating a lot of extra work for others, and then you get promoted based on that. Now you get into... In episode 22 we talked about, as long as there's no transparency, you get away with that. And then the person at the end of the line gets buried with all that stuff and everybody else says, well, my part was good and my part was good. How come Andrew can't put these together?
0:25:26.8 AS: In wrapping this up, I want to think just briefly about how somebody... So we're talking about understanding transformation, but we're also talking about incentives.
0:25:39.8 BB: Yes.
0:25:40.5 AS: And I would like to get a takeaway from you about how somebody who lives in a world of incentives, how do they, after listening to this, go back to their office and how should they exist? It's not like they can run away from a structure of incentives. Maybe when they become CEO, they decide, I'm not gonna do it that way, but they're gonna go back to their office and they're gonna be subjected to the incentive system. Obviously, the first thing is we wanna open up their mind to think, oh, there's more to it than just, these darned employees aren't doing what I'm telling them, even when I'm giving them incentives. But what would you give them as far as a takeaway?
0:26:27.1 BB: Well, I'll give you some examples of what some brilliant colleagues did at Rocketdyne, as they became transformed, as they became aware, and one is politely decline. Say, I don't, I don't need that. Just again you have to be careful there. There could be some misinterpretations of that. So you have to be...
0:27:03.2 AS: What if you're required to put an incentive system on top of your employees?
0:27:09.5 BB: Well, first, if it's coming down to you to go off and implement this, then one thing you could do is create a system which is based on chance. Everyone who contributed an idea, their name goes into a lottery for free lunch the first Wednesday of the month, and everybody knows. So then we're using the incentive money but using it in a way that everyone deems as fair. So that's one thing. And you just say, I'll... So then if your boss asks, have you distributed the incentive money? You say, yes, but you're distributing it based on a system of chance of which everyone realize they stand an equal chance of winning.
0:27:56.9 AS: Okay. So let's address that for a second. So your boss believes in incentives. They ask you to implement this system. Now you proposed one option, which is to do something based upon chance, but now let's look at your employees under you that have been indoctrinated their whole life on the concept of incentives. And you give them a system of chance and they're gonna come back and say, wait a minute, you're not rewarding the person who's contributing the most here? Now obviously you have a teaching moment and you can do all that, but is there any other way that you can deal with this?
0:28:33.7 BB: No, it could be tough. You've got to... You may have to go along until you can create a teaching moment. And what I did with the colleagues, when there are these a "great minds doing great things" events, and an announcement would go out as to who are the privileged few that got invited to these events, and I would tell people that if you go to the event, then that's what I would say. You can decline, you can politely decline. There's some things you can decline.
0:29:17.4 AS: I guess the other thing you could do, you could also... When you have to, when you're forced to reward, you can celebrate everybody's contribution while you're also being forced to give that incentive to that one person that has been deemed as the one that contributed the most.
0:29:36.9 BB: Well, I'll give you another example that a colleague did, a work colleague. He didn't do it in a work setting. Not that it couldn't be done in a work setting, but he signed up to be as a judge in a science fair in a nearby school. It was a work-related thing. And as it got closer, he realized... It was a... It would involve... What is a science fair without the number one science experiment? And my theory is you can't get a bunch of adults and a bunch of kids together in any organized way without giving out an award that just, it's like, oh, we got everybody together. We got to find a way to single somebody out. So when he realized what was going on, instead of not going, what he did, he took it upon himself to interact with every kid whose science experiment he watched and asked them lots of questions about it, about what inspired them? What did they learn?
0:30:30.6 BB: So what he wanted by the end of the day was that they were more intrigued that someone came and really wanted to know what they learned and less inclined to listen to who won the award. And I've seen that in a work setting, again, where we had events and the next thing you know there's an award and I thought, well, what can we do? Well, we can go around and really engage in the people who's got tables set up for the share fair knowing at the end of the day, we have this. We just can't break this, we just can't break this.
0:31:08.2 AS: Yeah. All right. So...
0:31:10.3 BB: But the other thing I've seen, I've seen people who received rewards, use that money. Literally, one guy in the quality organization at Rocketdyne received an award. It might have been for a $1000. He used the money, Andrew, to buy copies of The New Economics for everyone in the organization.
[laughter]
0:31:31.7 AS: Well, that brings us to another possibility, is that you convince your boss that you at least want to give... You want to reward the whole department.
0:31:40.5 BB: Yes.
0:31:40.9 AS: Any reward that you do, you want to reward your whole department. And so that could be something that your boss would say, "Okay, go ahead and do that." And they're not gonna go against it as opposed to trying to, say, no, I won't do it this way, but...
0:32:02.1 BB: Well, towards that end, I've seen people that are rewards crazy. At Rocketdyne, there's one guy in particular in a machine shop manufacturing environment and some big program wanted to thank five out of the 50 people in his organization with t-shirts. And he said, "You either give me 50 t-shirts or no t-shirts."
0:32:27.6 AS: Yeah.
0:32:28.8 BB: And I thought that was really cool 'cause this... And I don't know to what degree his exposure to what we were doing, but I thought that's what we need more of. Come back with 50 shirts and we'll take them.
0:32:44.1 AS: Okay. Let's wrap this up by doing a brief wrap-up of why you're saying... Why you've titled this Test for Understanding and what can the listeners take away.
0:32:56.6 BB: The idea is again, if in a seminar learning event situation is one thing, but if you're involved in leading in a transformation within your respective organizations, what I'm suggesting is that you think about how to Test the Understanding of that transformation's progress with your audience. And we talked in the past about leaving a coffee cup in the hallway, see if it's still there. That's a Test for Understanding of the culture of the organization. And that's what I'm suggesting here, is there are simple things you can do such when somebody says, come see what my son did. You can say, your son? Or is it, was there a spouse involved? And just as you become aware of the nuances of this transformation, you could be looking at somebody look at two data points and draw a conclusion and they're just a day out of some seminar with you about understanding variation and they're looking for a cause of one data point shift.
0:34:13.0 BB: So it's just, what can you do day in and day out, just your little things to test the organization or test an individual's understanding of this transformation process that we're talking about, which is, how are you seeing things differently? Are you becoming more aware of incentives and their destruction, more aware of theories? That's all. What just came to mind is... And the other aspect of it was this idea that very deliberately with the foundation of ME and WE, Red Pen/Blue Pen, then you can build upon that by saying to somebody, how might a Blue Pen Company go off and do this? How might a red pen company go off and do that? And that's not a guarantee that either one of them is right, but I find it becomes a really neat way on an individual basis to say, as you just pointed out, Andrew, so how would I as a manager in a Blue Pen Company deal with that awkward situation?
0:35:19.2 BB: Well, if I was in a red pen, this is what I would do. And so it's not only testing for understanding, but also the power of this contrast. And that's what I found with a group recently, especially the students. If I give them the contrast, I think it's easier for them to see one's about managing things in isolation and all that beckon such as belief in addition and root cause analysis, and one's about looking at things as a system. So it's not just Test for Understanding, but a test of both foundations is what I wanted to get across.
0:35:57.0 AS: Okay, great. Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. If you wanna keep in touch with Bill, hey, you can find him on LinkedIn and he listens. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. I mean, I say this quote every time until I will be bored stiff of it, but "people are entitled to joy in work."
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How can you make lasting change at your organization? Recruit your friends! In this discussion, Bill Bellows lays out his experience recruiting and working with a small group to make big changes in a large company.
0:00:02.5 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunity. Today is episode 21, and the topic is Transparency. Bill, take it away.
0:00:27.1 Bill Bellows: Thank you, Andrew, and welcome to our audience. And I wanna thank a handful of people who have reached out to me on LinkedIn and elsewhere to talk about the podcast, what they're getting out of it, and which has been very interesting meeting people from around the world. And that's led me to a couple opening remarks for clarity on some of the things we've discussed in the past. And then we'll get into our feature topic. And so I say, [chuckle] is that in my early years at Rocketdyne, the Rocket Factory, a few of us started to see the synergy of what we were absorbing and integrating from, primarily from Dr. Deming and Taguchi, not just them, there were others. And we're 10 years away from really beginning to see what Russ Ackoff was able to offer us. At one point, there were eight of us. It started off with one, then another, then another. Next thing you know there's eight of us. We were what Barry Bebb and his cloud model would call advocates. Advocates of a change, of a transformation. We've been using that word. And I started to refer to us as the Gang of Eight 'cause this is the early '90's. And I think in China there was a group known as the Gang of Eight. Maybe that was the '80's. And I remember thinking, "Oh, we're like the Gang of Eight."
0:01:54.7 AS: I thought that was a Gang of Four in China, is that the Gang of Four.
0:01:58.9 BB: Well, there was a Gang of Four, then there was a Gang of Eight. There were both.
0:02:02.4 AS: Okay.
0:02:03.1 BB: But anyway, but I remember hearing that word, and then I thought, "Well, so okay, a gang of eight." We started to meet regularly, perhaps every other week, sharing ideas on how to initiate a transformation and how we operated, again, inspired by Deming. So at first we met quietly, we would meet in another building, not wanting to call attention to our efforts, not wanting to be visible for those who might have been adversaries again to borrow from Barry's model. 'Cause Barry's model was, there's, for every advocate there's a few more adversaries. So we were keeping our heads down. And this is before I knew anything about Barry, but I, we were just kind, a little bit paranoid that people would see what we're doing. And so who were the ones that were the adversary? Well, those were promoting rewards and recognition. Those were promoting individual cash incentives for suggestion programs including, as I mentioned a previous podcast, an individual could submit a suggestion award, get up to 10% of the annual savings in a onetime lump sum. They were giving out checks for $10,000, Andrew. And I would kid people, if the company's giving out checks for $10,000, do you think we've got photographs of me receiving a check for 10,000? You betcha.
0:02:03.5 BB: And there it is in the newspaper, me receiving a check, not that me, [chuckle] but somebody receiving a check for $10,000, a big smile with the President. And it's in the newspaper and did that cause issues? Yes. But anyway, it wasn't obvious for some of us that we might have been, sorry, it wasn't obvious for some time that those we might have considered the adversary to our efforts were very likely not meeting to plan how to stall our efforts. [chuckle] Right. And, but it took a while to realize this, so here we are trying to be very discreet, meeting discreetly. And then it, at some time it dawned on me and some of the others that, those of us that were inspired to learn, think, and work together on transformation efforts as we've been exploring these podcasts, we have the benefits of positive synergy. And the adversaries at best operate without synergy as they're not likely to be inclined to do much more than participate in what some at Rocketdyne called, you ready, "Bill Bellows’ Bitch Sessions." [laughter] And they come back from a class with me and they start bitching about me. And then the local people in that area would come by and tell me, and they said, "Anything we can do?" I said, "Yeah," I said, "Ask them what part of Rocketdyne moving in the direction of a Blue Pen Company do they not like." Right? It's just arrrgggggh.
0:02:04.2 BB: And I say, anyway. But once we had more and more results from our efforts, results from applying these ideas with very visible improvements in quality and costs leading to improved profits, it was all the harder for the adversaries to slow our efforts. Again, we were most fortunate to be working on challenges, we had challenges in fighting fires, but we also had challenges in designing hardware that achieved "Snap Fit" status, which translates to dramatically easier to integrate higher performing as well, as we shifted from parts to systems, challenges that required, guess what? A different lens inspired by Dr. Deming. That's, [chuckle] again, listening to the previous podcast, 'cause I thought, "Well, I wanna clarify a few things." Did we have ups and downs, Andrew? Yes, we did. We had days when we're excited, we had days when we were down. But what really worked out well, [chuckle] and the running joke was, there was variation in our excitement.
0:02:04.7 BB: So I may have been down, you'd be up, so you'd lift me up and then when you're down, I lift you up. And so the running joke we had amongst us was, thank God for variation in our moods. Because if we were all depressed at the same time, we'd go off the cliff. [chuckle] But we just took turns as to the ups and the downs. And we're very fortunate to have weekends 'cause that gave us time to not wanna choke some people. So, [chuckle] but come Monday we're relaxed. And then, but another thing that I wanted to point out from things we talked about previous podcasts, years ago, 30, nearly 30 years ago, I met a senior structural analyst from Boeing, Al Viswanathan, who was on the Boeing Commercial side. And he somehow got involved in the commercial side.
0:06:52.1 BB: Well, I don't know if it was the commercial side or military side. Anyway, Boeing had, there were both sides and one side was pro-Deming and the other side was anti-Deming. So he must have been on the defense side. And why would the defense side be pro-Deming? Because the Pentagon was pro-Deming. And so the defense side people would have been watching that. Anyway, Al somehow got involved in studying Deming's work and being a mentor within the organization. And I met him, I know when he worked there, when he retired. Anyway, Al, coming from Al, what I want to share is something he would say relative to Dr. Deming's funnel experiment. There's rule one of the funnel, rule two, rule three, and rule four. So rule one is you have a funnel and you drop marbles from the funnel onto the floor, and you get a pattern of where the marbles lay.
0:07:49.1 BB: And that's called variation. You're holding the funnel, you drop the marble, it lands in a different spot each time. And then rule two is you, if the marble is off a little bit to the right of the target that you're trying to hit, then you move the funnel the other direction. So two and three have to do with compensating. If it doesn't go where you want, then you shift it accordingly. Rule four, remember rule four of the funnel?
0:08:17.4 AS: I don't remember that.
0:08:18.9 BB: And this is... I think it's chapter eight. I know it's in The New Economics. Chapter 8, I'm sorry, rule four of the funnel is wherever the marble lands, position the funnel for the next drop. So in rule one, you keep it where it is and you get a pattern. Rules two and three, you compensate for where it lands. You either go left if it goes right and you compensate. And in compensating, it becomes worse. But what becomes really bad is when you put the funnel in rule four over where the last marble landed, and you end up getting farther and farther from the target leading to, remember the expression Dr. Deming used for that?
0:09:00.9 AS: Well, I remember the word tampering. But it meant when you get way off the target. What was that?
0:09:06.6 BB: He called it going off to the Milky Way. [laughter] And there are computer simulations where if, some people have done, you know, created.
0:09:16.0 AS: You do it in California and you end up in New York.
0:09:17.8 BB: Yep. And you, and you, and you keep getting further and further. Well, so in conversations with Al, and it could have been me and him and Dave Nave, Dick Steele and others, and at some point, Al would say, "How do we know we're not going off to the Milky Way?" Which translates to, how do we know that what we're interpreting from Deming is not getting further and further and further and further away from what he was trying to say? How do we know that we aren't wacky? How do we know? Because we think, "Oh, we're getting, we're understanding this better and better." And what I would say is, how do we know we're not going off to the Milky Way? “Actually,” I say, "We don't know." But part of having a community of people that work closely with Deming, people that know more than me about Dr. Deming's work is you can tap into that community and maybe lessen the chance that we go off to the Milky Way. Now, again, is that a guarantee? No, it's not a guarantee.
0:10:25.9 BB: But I would say, what I appreciate about Al saying that is, it's just a reminder that how do we know that what we're interpreting is true? So we're here, you and I are having these conversations, we're sharing interpretations, lessons learned, are we, is what Dr. Deming would say, "Is this worker training worker?" So, each of us are ignorant, and we think we understand Deming, and we're sharing it with others "well, I know, I know." Now, we can all be right, we can all be going off to the Milky Way. So I just wanted to say that, when I'm talking about diffusion from a point source and getting smarter and smarter and having these conversations within our organization. How do we know we aren't fooling each other? We don't know.
0:11:18.7 AS: I have a couple follow ups here. First of all, the 1991 Washington Post called it the Gang of Eight, as opposed to the Gang of Four, which was before that time, during the Cultural Revolution. And the Gang of Eight included seven men and one woman. And the Gang of Four, of course, included Mao's wife. So there's a little clarification.
0:11:44.6 BB: I wasn't sure if she was part of the four or part of the eight. I knew her name was in there somewhere.
0:11:49.0 AS: And the second thing you talked about the volatility of your feelings, your moods, right. And I just wanted to introduce the concept of volatility in finance, which is that volatility in itself is not bad. What's bad is correlation of volatility. So if all of you are upset on the same day, then it's just an absolute crash. But if one's upset on Monday and another one's happy and productive on Monday, then it starts to balance. And that's what we do in the world of finance is we combine correlation with volatility. And Harry Markowitz got a Nobel Prize in economics for coming up with the concept that risk can be reduced by understanding the correlation between assets and adding a highly risky asset to a Portfolio could, in fact, reduce the risk of the Portfolio overall, if the correlation between that asset and the Portfolio was, let's say negative or very low.
0:12:55.5 BB: Wow what you're talking about is the benefit of not being synchronous, being asynchronous.
0:13:04.2 AS: Correct.
0:13:05.1 BB: So you're up, I'm down, and I'm up, you're down, and then we can get through these periods. And yeah, and that's exactly what we're talking about. But you're right, I'm glad you brought that up because I've heard people talk about that as well. But that's exactly the point we're trying to make is, so for all those who think we ought to shrink variation to zero, I'd say, well, maybe there's value in variation, value in diversity of opinions. And also I have had people in the past say, "Well, so a Blue Pen Company is a bunch of people that go along to go along." I said, "No, it's a bunch of people that have strong disagreements on things and they share those disagreements."
0:13:49.5 BB: Now, at the end of the day by Friday, we've got to make a decision as to releasing this album whatever it is, because we've gotta ship. And we may arm wrestle, we may vote however we're gonna do it. So there can be disagreement. We have the ability to articulate where we're coming from. Borrowed from Edward de Bono, we can use a black hat and I can give you reasons why you don't think it'll work. You can call me on it and say, "Bill, how do I know it's your black hat and not what de Bono would call your red hat, which is my intuition."
0:14:26.4 AS: So if I say it doesn't work, you could say, "Bill, is that you don't feel it'll work or you know it won't work?" And I say, "Andrew, you're right. I have a bad feeling about it." I say, "Well, let's just be honest about it." But again, at the end of the day, we may vote. But we're gonna move forward. And what's not gonna happen is if you decide to take however we decide to make that decision, what there won't be a lot of room for is a bunch of "I told you so."
0:14:58.8 AS: Right.
0:15:00.4 BB: And we just we just dispense with that and just say this time, maybe the idea I had, we'll just have to wait till later and we're just gonna move on. So it's not to say it's a bunch of happiness and we're always in agreement. No, very strong relationships can have very strong disagreements. They just don't result in a civil war. Years ago, when my wife and I got married, she said I was just, it was lucky for me that she liked cats. I said that was non-starters. I said liking cats was a requirement. [laughter]
0:15:44.3 BB: So there's a few things that were non-starters. And if she didn't like cats, I'd have had a hard time with that. But on everything else, there's things we can disagree with. That's okay. All right. So given that I wanna talk about tonight is something that's come up in some other conversations recently. And it's about transparency. And then I have a quote that I've used in the past. I've once in a while attributed to Peter Senge, because I can't remember is actually Robert Fritz, a close associate of Peter Senge. And Fritz's comment is, “It's not what the vision is that is important. It's what the vision does.” And what I like about that is if you have a shared mental model of a Blue Pen Company. And I just began to appreciate how powerful it is that we have a shared vision. And relative to transparency, what I was sharing with some people is the transparency that exists in a Blue Pen Company, a Deming organization, a WE organization, an All-Straw organization and the transparency that which is as simple as me saying to you.
0:17:05.5 BB: Well, I say let's talk about the lack of transparency. I can meet a requirement, as we've talked about, an infinite number of ways to meet any set of requirements. And the letter grade is not A plus. It is not 100. It could be a D minus. I could leave for you the bowling ball on the doorway. And in a non-Deming Organization. I could meet any requirement you give me, Andrew, with the minimal amount of effort. Because all that we're measuring is that it met requirements. And so I give it to you and, and all you do is you look at the measurement and it says, "Yep, the car has gas." You're like, "Hey, I'm excited."
0:17:45.2 BB: Well, the black and white thinking allows me to hide a whole bunch of things. So if I said the car has gas. And you complain because it only has a quarter of a tank, I said, "Andrew. It has gas." But I thought in a Deming organization, I don't think we're gonna play those games. I think we're gonna have a lot more transparency relative to when I meet a set of requirements. Am I gonna leave the bowling ball on the doorway for you unilaterally? I don't think so. Maybe once I learn my lesson because I'm a new hire. I'm bringing something from where I used to work. But I think in a Deming environment, I think the transparency is gonna bring out the best in us.
0:18:33.8 BB: So I just want to throw that, that's part of where I'm coming from with transparency. You know, we don't have this murkiness as to, you know, where are they coming from? And. also we're going to be, you know, as Ackoff was, we're going to go to great lengths to be precise with language, and understand that efficiency is not effectiveness, that management is not leadership. And I think the better we have that clarity, I think that's a trademark of what that environment is about.
0:19:02.2 AS: It's interesting because, you know, the ultimate clarity is doing a run chart or a control chart on a process and seeing the outcome. And that's transparent and clear. And I've done a lot in my own management career by just getting data into a format that people can, you know, go back to and look at and think about. And just the transparency of that data can make a huge difference to the way people interpret what's going on in that unit.
0:19:38.9 BB: You're right. As opposed to the transparency of two data points, quality, I'm sorry, I think I've used this example. You can remind me of, you know, when I was at Rocketdyne once upon a time, and there was a meeting where the safety metrics, number of accidents, per employee in the first quarter was a certain level. Then in the second quarter, it went down. And I mean, the number of accidents per employee went down. Safety got better. And as you know, in this meeting with a bunch of directors and the VP and somebody says to the VP, why is safety improved? And their response was, because “We've let them know safety is important.” Well, who's the we? Who's the they? So, and, but imagine the transparency for somebody hearing that we've let them know. That's a way of saying, so you're, you're believing that because it went down, it's because of things we said, and they're not interested in safety.
0:20:45.3 BB: And then if it goes the other way, we're going to claim what? That they're not listening? So you're right. I mean, the ability, the transparency of looking at a set of data on a control chart and the realization that the process is in control. Then we look at the ups and downs and say, no reason for alarm here.
0:21:12.2 AS: The other thing that I thought relates to transparency is fear. In the sense that what is fear? Fear is, you know, a concern that something is going to happen is about to happen is in the process of happening, or, you know, something's happening to you and you're not being able to see, you know, what's going on. So I was just thinking, you know, another angle on transparency is, you know, reducing fear in an organization by being, you know, let more transparent.
0:21:41.5 BB: Yes. And, and I can even imagine, what's funny is that, a co-worker in my office, once upon a time. And. And she was upset with a decision made by the president at that time was my boss. And so she, so for about two years or so, she reported to me, lovely lady, lovely friend, great friend. So anyway, she was upset. She comes in. Did you hear the decision made? And I said, no, I didn't know. And she says, and she was really upset. And I don't know what it was that she was upset. And at some point she said something like, “I don't know what I'm going to do. I just don't know what I'm going to do.” I turned to her and I said, if I were you, I would take this personally. Which caused her to laugh. And when I told her, again I get back to transparency, I said, "I may not agree with a decision, but I may never know the choices he had." And so in that situation, Andrew, there may be situations in a Deming company where for whatever reason, there is no transparency, we don't know the options, we don't know what was on the table, all we know is the outcome, and it could be because of, you know, Security and Exchange issues relative to, you know, stock prices, there's, there's all kinds of reasons we may not know.
0:23:03.4 BB: But in that environment, we may, we have to live with it. We just have to say, well, and when I look at it as, and I'm glad you brought that up. Because when I look at it as, there may be decisions, we don't know the choices, we don't know the criteria, we may never know. Instead of agonizing over it, I'd like to think that if we were in the room and knew what they knew and the options they had, we might well make the same decision. And that's something that I became excited about at Rocketdyne was, I didn't have to be in the room for a bunch of decisions, a whole bunch of decisions, I didn't have to be in the room. And what I thought was, if I can help people develop a better and better sense of what a Deming organization, how that operates. And then, and then practice, perhaps, you know, how might they handle a given scenario, and in fact, Kevin's mom, Diana Deming Cahill reached out to me in the late '90s, you know, late '90s, and asked if I would resurrect a Deming Study group for Los Angeles, which existed when Deming was alive, they used to meet at the LA Times.
0:24:51.4 BB: They had invited speakers. And after Deming died it dissolved, and she saw what we're doing within the Boeing sites and asked if I would, you know, work with her to resurrect that. I said sure, I said but here's the deal. When she explained to me how it used to work, invited speakers every month and I thought, that's a lot of work finding a speaker every month. And I said, and it's so easy to be, you know, sit in the back of the room and watch somebody talk I thought. I'm not, I'm not, I don't like that format. And so, a few of us spent a good deal of time coming up with a format. And we went from three hours to two hours and, and then came down to a really neat format that we held for a couple years. We met in two different sites. We met in Canoga Park. We met in the other group met in Huntington Beach where Diana would show up we first we looked at a location there LAX, that wasn't going to work. So we spent the first hour talking about reflections how we're seeing the world through a Deming lens, things that had happened since the last month that we're seeing, that we're seeing differently.
0:26:08.6 BB: That's the first hour. And then the second hour someone would introduce a topic and the topic would be, "How would a Deming organization do X." And what was neat was just to brainstorm. How would a Deming organization go about doing something, that may be way beyond our, our personal responsibility and it just allowed us to play in this space. And, and just, you know, wonder what is, what is going on there. And I throw that out in the spirit of transparency is, it was just to me it was just fun to just practice. How would you deal with, how would you deal with, how would you deal with. And that's what got me thinking that, now going back to, I think that if you get a diverse enough group of people with different experiences and perspectives I think the better they understand, yeah, where Deming and the others are coming from.
0:27:02.5 BB: I think we're going to see a lot of common decision making. And that was for me was very relaxing, that I didn't have to worry about "now they're going to make the right decision." I just thought, if they understand the process, and they use, you know, Edward de Bono's ideas to go through ideas. I thought, the best I can do is say, how did you reach this conclusion, what options did you consider who was involved in the decision making? I can ask those types of questions. I can ask, you know, did you include the supplier did you include... I can ask that. And once I understand that I'd say, if I trust the process. Then I have to trust the result, which goes back to transparency. So I no longer. I mean, that's what parents do - you trust. You raise your kids in a way that you help them develop a sense of a process. And then you just have to live with the results.
0:28:00.8 BB: And same thing as sports. You, I've seen coaches. When I was a youth referee, they're trying to micromanage every minute of the game and I thought it's too late for that you've got to do that at practice. And then once they're playing you just let them go. And that's a demonstration of how well you've prepared them.
0:28:21.6 AS: That's a great, you know, a great one. It's so, it's so amazing to see a team in action and a coach being able to kind of sit back and say now it's up to you. And, you know, I've trained you and everything I can. How would you, how would you wrap this up and provide people with how a Deming organization would apply transparency and maybe give, you know, some one or two ideas about how someone can leave this conversation and bring more transparency back to their organization.
0:29:00.8 BB: I think it's, goes back, to me it goes back to, as a point source within your respective organizations, listening to our podcast, you know, reading articles on, I mean, watching things on DemingNEXT and learning more. And, and yeah. Reaching out and finding people that are, you know, perhaps more knowledgeable than you about Deming's work or Ackoff work. And then Deming once said something about everyone's entitled to a master or mentor or someone, and I was very fortunate to be associated with some brilliant people that worked closely with Deming and Ackoff, and Ackoff himself and Taguchi. I would say, one is, what can you, what can you be doing to improve your understanding, with the appreciation of going off to the Milky Way.
0:29:51.6 BB: And then how can you then practice sharing that with others? Like we did going back to this Gang of Eight and what can be done within your respective organizations to create this group of one, group of two, group of three, group of four. And how might you work together to better appreciate what you think Dr. Deming and Ackoff and others are saying, how you might apply them? How can you support one another? And then, and at least, again, you're gonna have ups and downs, but I don't think there's any substitute for that. And many people I've mentored are solo people within their respective organizations. And what I keep telling them is you've got to find someone else to help you. You can't be the only one in that meeting lobbying for working on things that are good when everybody else is working on things that are bad.
0:30:46.4 BB: It's just gonna sound foolish but imagine being in a situation where you're lobbying for working on something which is good because you want to prevent it from going bad or improve integration. And then someone hears that remark and says, Bill, with all these challenges we have, I can't believe you're going off and doing that. Then imagine you're there in the meeting. And then after that person tries to sidetrack it, you say, "Bill, is that what you were trying to say?" And I say, "no, Andrew, that's not at all what I was trying to say." So you can come to my rescue. And when I'm being shoved aside, I've been in those sessions where I get shoved aside and it takes someone like you to be able to step in and say, Bill, did you say you wanted to do that? I don't think that's what you said.
0:31:10.5 BB: And that's what I would say is, increase the transparency amongst a small group, and then try to increase that transparency. And what becomes a lot of fun is, there are a handful of people at Rocketdyne, we can go into an office of any number of people and take turns exchanging things and reading. And we could see where things are going. And two of us, two or three of us can have a room of 10 and change the course of that conversation because we were incredibly transparent amongst each other. So I just leave it with that, Andrew.
0:32:21.8 AS: Well, Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. If you want to keep in touch with Bill, just find him on LinkedIn. As you can see, he responds. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming. People are entitled to joy in work. And, are you enjoying work?
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Can a 4th grade class decide on an operational definition of "joy in learning"? In part 4 of this series, educator John Dues and host Andrew Stotz discuss a real-world example of applying Deming in a classroom. This episode covers the first part of the story, with more to come in future episodes!
0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. This is episode four about goal setting through a Deming lens. John, take it away.
0:00:22.6 John Dues: Good to be back, Andrew. Yeah, we've been talking about organizational goal setting last few episodes. A couple episodes ago, we talked about those four conditions that organizations should understand prior to setting a goal. Then we sort of introduced this idea of trying to stay away from arbitrary and capricious education goals. And then we got into these 10 lessons for data analysis. And so what I thought we could do now is we've got that foundation in place is that we could take a look at an applied example in real classrooms of those 10 key lessons in action to kind of bring those alive. And I ran this project a few years ago with a teacher named Jessica Cutler. She's a fourth grade science teacher in our network. And she was going through something we call a Continual Improvement Fellowship. So we do this sort of internal fellowship where people can learn that sort of way of thinking, the tools, techniques, the theories related to the science of improvement. And then they actually take that right away and apply it to a problem in their classroom or their department or their school, depending on who it is.
0:01:55.0 JD: And so what Jessica was doing, what her project ended up being was she was trying to improve the joy in learning in her fourth grade science class. So it's interesting to see how that sort of project evolved. So I thought we could revisit each of the 10 lessons and how that lesson was applied in Jessica's improvement project. And we'll maybe get through three or four of the lessons today. And then over the course of the next few episodes, kind of get to all 10 lessons and think through how they were... How that went in her improvement project.
0:02:08.1 AS: Sounds like a good plan, practical application.
0:02:12.0 JD: Yeah. I mean, it was interesting too, because she didn't initially sort of consider joy as a possibility. She was thinking like, I'm gonna work on improving test scores or something like that was sort of her initial brainstorm. And then sort of pivoted to this when we kind of talked through what was possible from the Deming philosophy type of standpoint. So it's interesting to see how things evolve. But just to kind of revisit, so we talked through these 10 lessons. Lesson one was "data has no meaning apart from their context." So we talked about these questions that are important, like who collected the data? How was it collected? When was it collected? Where was the data collected? What are the values themselves represent? What's that operational definition for the concept under measurement? Have there been any changes to that operational definition as the project unfolds? And so even with a project with a teacher and her students, all of those questions are relevant. They're still important just because you're dealing with students that doesn't mean anything changes on that front. So it was important for her to sort of think through all of those things as she thought through the start of her project.
0:03:28.9 JD: And what her and her students came up with after they sort of decided that they were gonna focus on joy, they focused on this problem statement. And they were like, well, what do we want science class to look like? 'Cause that was sort of their starting point. And what her and her students...Oh sorry go ahead.
0:03:45.9 AS: One thing you started off talking about her, now you're talking about her students. So she got her students involved in this process. Is that what you're saying?
0:03:56.2 JD: Yeah. So they were working together from the very outset even...
0:04:02.0 AS: As opposed to a teacher talking through this with a principal or something in a faculty room and then thinking of how do I... Okay.
0:04:09.2 JD: Yep. That's right. Yeah. And so what they came up with is the sort of desired future state of science classes. "We are able to stay focused through science, enjoy science class and remain engaged." And so to give some context, what was happening is that she taught science and social studies and it was sort of like a back-to-back class period. And they would do science second. And so by the time they were doing science, sometimes the students were getting off task, disengaged. They weren't as engaged as either the students wanted to be or the teacher wanted them to be in that second lesson. So they, they came up with that as the thing they were gonna focus on. And then because they were gonna focus on joy in learning, they had to define what that meant. So what did joy in learning mean to that fourth grade science class? And what they came up with as a definition, which I really like, is "we wanna have fun learning, finding things we like to learn and have fun completing classwork and activities." So they came up with this operational definition. And keep in mind, these are fourth graders and Jessica's having these conversations like, what's the operational definition? That's not probably typical language you're gonna use with fourth graders. But if you walk them through these things, they actually pick up on it pretty quickly.
0:05:26.1 JD: It's actually pretty cool to see.
0:05:28.1 AS: And to them, a more simpler word sounds like was fun.
0:05:35.0 JD: Yeah, right. They wanted that to be a part of the science learning process. So basically, once they had the operational definition, they had to think through, well, how are we going to measure that concept that we've defined? And what they did was they just developed a simple survey. Jessica did it in Google Forms. just had, really just had two questions. The first question was, on a scale of 1 to 10, how much did you enjoy science class today? And then there was a second open-ended question that said, what made you enjoy or not enjoy class today? So it was fresh in the kids' minds. So basically, at the end, each kid has a Chromebook in Jessica's science class. She would just sort of share the link to the survey, and the kids would complete that as the closing activity for the lesson. So she would get two things out of it. So 1 to 10, just a real quick sort of numerical quantified value, how much the kids enjoyed science class that day. And then, because it had just happened, the students could say what they did and didn't like about the lesson. Oh, we haven't used computers in a few days. Or it'd be nice if I had a video to help bring this concept alive. Or there's a few words that you use that I don't know the definitions to. Could you add those definitions to the glossary? So just things like that, simple things like that.
0:06:55.9 JD: Right away. And then what Jessica could then do is take that information and actually adjust her lessons as she planned maybe for the next week, she could make those adjustments based on this feedback she was getting from the students. So that's sort of the application of lesson number one. So what are we measuring? How are we gonna measure it? When are we collecting this data? That type of thing. Lesson two, if you remember back from when we covered the lessons was "we don't manage or control the data. The data is the voice of the process," right?
0:07:28.9 JD: So we talked about this ideas that while we don't control the data, we do manage the system and the processes from which the data come, right? So, and this is really key conception of the system's view. You, you say you're going to improve this particular classroom. So that's the system. So you're not necessarily controlling the data. You're not controlling how the kids are evaluating, the numbers that they're putting one through 10 to assess joy in learning, but what the teacher and then the students, because of this project do have control over are the learning processes that are happening throughout science class, right? And so back to your point about you switch from talking about Jessica, the teacher to the students. And then you said "we" that's also a key conception of taking this approach, right?
0:08:24.4 JD: So what I think Deming would say is that when you're going to improve an organization, you have to sort of combine sort of three critical pieces. One thing is you need someone from the outside, from outside the system that has Profound Knowledge. And then that person or persons has to be collaborating with the people working in the system. So those are the students, they're working in the science class system. And, then you that third group or that third person is the manager or managers have that have the authority to work on the system. So in this case, Jessica has the authority to change what's happening in her science class.
0:09:10.2 JD: The students are the workers working in that science system. And then that third part is that person that has the sort of understanding of the System of Profound Knowledge and it's sort of bringing all of these parts together that really is how you begin to transition sort of conventional classrooms to those guided by the Deming quality learning principles, right?
0:09:33.1 JD: So in in the case of Jessica's project, that person that was, that had a System of Profound Knowledge lens was me. So I was sort of acting as an, the outsider, 'cause I'm outside of the science system. But I have this understanding of the System of Profound Knowledge. And I'm working with Jessica as she's working with her students, to sort of bring that lens to the projects.
0:10:00.4 AS: And what's the point of doing all that if she doesn't have the ability to make the changes necessary to test, if you're gonna if we change this, it's gonna result in something why go and do all this if you're just stuck in a system that you simply cannot change because of government regulation or whatever, maybe.
0:10:17.5 JD: Right. Yeah. So it's bringing all those pieces together. But what I found thinking about the three parts of a team that's working toward organizational improvement, what I've found in the past is, in my experience, whether it's a school improvement team or a district based improvement team, most of them are devoid of at least one parts of one of those components, usually two of those components, 'cause usually students aren't involved.
0:10:45.9 JD: And then in most school systems, there's no one with this outside knowledge, the System of Profound Knowledge lens, right. And I think it's what we're really doing is the students can identify the waste, the inefficiency, the things that aren't going well from their perspective, but we don't often ask them. Or if we do, we do it in a way where it's an end of year survey or an end of semester survey, but this is collecting that feedback in real time and then acting on it. We're not planning to do something next year with this feedback, we're actually planning to do something the next day, or maybe the next week, to adjust the science lessons.
0:11:24.8 AS: And it's one of those two things that come into my mind, what, how do you handle the idea that what's causing the impact on joy in learning could be that the student had a bad night, the night before. And I guess by doing many samples that starts to kind of wash out. And then the other question is since the students know that the teacher could likely make an adjustment, is there any possibility that they could be gaming or playing the system.
0:11:57.1 JD: Well, that's interesting, because I think, well on the first point. I think pretty quickly, my experience with this and David Langford I know you've talked to has echoed this sentiment is you know, he was working with high school students, this is an elementary project but either way. You may get some students that don't take this seriously. At first. And you may get some kind of crazy answers crazy brainstorms or crazy survey submissions, although I don't think Jessica got much of that.
0:12:30.2 JD: But in other projects I've gotten some stuff at the outset that was a little bit off the wall. But like David said to me when I first started this and then it's been my experience since is that kids, once they realize that you're actually gonna act on the feedback, as long as the feedback is in good faith. They actually start to take it seriously, pretty, pretty quickly. And so I think pretty quickly, those sort of types of worries go by the wayside. Now, I will say I did say that the...
0:13:01.1 JD: One of the components that has to be on this improvement team is the person that has the authority to change the system. So at the end of the day, even though we're gathering this input, Jessica's really the person as the teacher of that classroom that has the authority to make the changes to the system based on her judgment or, her professional judgment as a science teacher of what should happen. And so the students certainly offer feedback and inform that process, but ultimately it's Jessica that's gonna determine the changes to the system.
0:13:34.0 AS: I hear David in my ears saying, you know what, Andrew? You don't trust the students? They probably have a more honest, view of what's going on than most adults do. So yes, I hear the voice of David Langford.
0:13:49.2 JD: Yeah. Well, and interestingly, and we'll get into this towards the end, not today, but when we get to some of the other lessons, interestingly, not to give away the story, but, one of the things that was getting kids off track was a lot of noise during class, kids making noises. And they actually came up with this system where they were kind of penalizing each other. This was their own idea. And so, kids know exactly what's going on in class. And so it was interesting to see how they came up with some ideas to rectify that. But yeah, so it was really just bringing together, these three groups or, the group of students and then Jessica and then myself. It's that combination that's really where the power for improvement lies. And again, I, that type of partnership is just not typical in school improvement situations.
0:14:45.7 JD: So that's lesson two, applied. Lesson number three is "plot the dots for any data that incurs in time order." Right? So we've talked about this a lot. The idea behind the primary point of "plot the dots" is that plotting data over time helps us understand variation, and that in turn leads us to take more appropriate action. I think that what we decided to do with Jessica's project is, start plotting the points on a run chart and connect those points with a line, and then it becomes pretty intuitive as we're looking at that data, what joy in learning looks like in this science class. And then once we have enough data, we can turn that run part chart into a process behavior chart and actually add the limits.
0:15:40.2 JD: So, like I said, Jessica, once her and the class determined that what they were going to improve was join in learning, and they defined that concept operationally and created the survey, right away they started gathering this survey data as a part of the project, and usually they would gather the data maybe, two or three times a week across the course of this particular improvement project. So maybe I'll share my screen just so you can see what that initial run chart looked like. So, you have this run chart, and I left this in the spreadsheet so you could see the actual data. So as she began administering these surveys, she would send me the data and then I would create it the run chart for her, start plotting that data so that both of us could sort of see the variation in that survey data over time. And then she could actually take this, she would put this run chart on a slide, and every week or so she would actually show the students what the data looked like.
0:16:49.7 AS: And just to be clear, we've got a chart for those that are listening, we've got a chart that has a blue line and it's going up and down kind of around the level of about 79. So they've got points that are based, that are days. Some days are below that 79 some days are above. But also I'm assuming that those points are the output of all the surveys. So the average answer on that day from the survey as different from the average or median of all the day's output, correct?
0:17:31.1 JD: Yeah, that's right. So this is, the run chart from Jessica's class that's displaying the survey results. And what they're measuring is joy in science class as assessed by the students.
0:17:44.3 AS: On the first day, the students basically said, 75% of the respondents said that they had joy in science.
0:17:51.9 JD: That's right. So in this particular school year, which was two years ago, so we had done some of the project planning before kids went on winter break, and then when they came back from winter break, they were ready to start administering the survey. And we started plotting the dots, charting the data over time. So the X axis for those who are listening are the dates.
0:18:16.2 JD: The, Y axis is the joy in learning, percent of kids that the rating of the kids from one to 10. And then I just turn it into a percent. And so you have the green line, the central line running through is the median. We're using the median 'cause that's fairly typical for a run chart because typically run charts don't have as much data as a process behavior chart. And so, outliers can have a greater impact. So we're using the median to sort of control for that. Although this data's fairly tight. So on day one, like you said on January 4th of this school year 75, the kids sort of rated the joy in learning of that particular lesson as a 75% of 100. And then you sort of see it bounce around.
0:19:04.7 JD: That median of 79. And so what I'm showing is the data from the first 10 surveys that Jessica administered at the end of class. So over the course of 20 days from January 4th through January 24th, she administered that this survey 10 different times. So about two to three times a week. And so we see a high of about 83% joy in learning and a low of 67% joy in learning. And you have about half the points above the median, about half the points below the median. So even though it's only 10 data points, Jessica and her class, and then myself, we were starting to learn about what did joy in learning, joy in science class actually look like? Now that we have this definition and we're measuring it with these surveys and then plotting these data points. So again, she's actually putting this up on, on the, up on the screen so kids can actually see this. And what she said was after the 5th or 6th survey, and she's plotted this and put this up on a screen a few times, the kids are actually getting excited. And they're wanting to see their data. They're wanting to see what the results look like for each survey as she started plotting this.
0:20:30.6 AS: It's funny because I, when I was a loading supervisor at Pepsi, I started putting up the percent correct for each of the loaders in the warehouse. And I didn't make any comment or anything, I just put it up there. And yeah, people are interested when they start seeing numbers, they start thinking, they start asking questions.
0:20:54.3 JD: Yeah, and you can see too at a school, in a fourth grade science classroom, you can see all types of lessons, you can sort of build up this reading graphs, calculating percentages, using when do you use line graphs for some other type of graph?
0:21:10.2 AS: And why use median versus mean? Because a small amount of data could be distorted if you have a huge outlier.
0:21:18.8 JD: Yep, all kinds of practical lessons. So this brings us to sort of the last lesson for this particular episode. I think lesson four is two or three data points are not a trend, right? So, we've said that you should start plotting the dots as soon as you've decided to collect some type of data that occurs over time. And really when people ask me what type of data can you put on a run chart or a process behavior chart, there's almost any data that you're interested in improving in schools unfolds over time, almost all of it. Whether that's a daily cadence, a weekly cadence, monthly, quarterly, yearly, whatever it is, right? But the problem is the vast majority of data that we look at as educators and really probably most people, it's typically two or maybe three data points. But that doesn't tell you anything about how the data is varying naturally. So when we start thinking about this particular data, we start learning quite a bit. For one, as a teacher, I would have no idea how my kids would evaluate their joy in my classroom.
0:22:29.9 JD: And so I think if I was Jessica, I'd be pretty happy off of that, that the sort of average or the median rating is close to 80%, basically the rating each lesson has an eight out of 10. Right. I think a second thing is let's say we were a school district and we did systematically give our kids some type of survey that assess their satisfaction with the school. Right. Maybe they do it twice a year or annually. Right. And so after at the end of the year, you have two data points, but you don't really have any idea for what to do with that data. You have no idea if you collected three or four or five data points, what that would look like. And here she is in just 20 calendar days and a couple of school weeks. She's got 10 data points to work with already. So she's building that baseline of data. So I think what this is to me is just a very different approach to school improvement.
0:23:39.4 JD: And the tools are relatively simple. The ideas are relatively simple. But I think overall this really, the takeaway I want for folks is that this project really illustrates a very different approach to school improvement, guided by these sound sort of Deming principles for how to use data, to how to understand variation, to how to include the people working in the system, right?. We've talked about these arbitrary targets throughout this series, and you could see that when Jessica and her class would go to maybe set a goal for joy after collecting some of this data, that goal would be tied to something real. It's tied to actual data from the classroom. And you can sort of avoid goal setting as an act of desperation when you take this type of approach.
0:24:38.4 AS: Joy in the joy of bringing joy in science.
0:24:44.2 JD: Yeah, it's really all about this process, right? It's the kids getting into this process, that's the psychological part. They're involved in their educational process. And so that is completely different than what's happening in the typical classroom, I think, in the United States.
0:25:00.5 AS: You can imagine somebody not wanting to do this because they're afraid of what they're going to see.
0:25:07.0 JD: Certainly [laughter]
0:25:08.3 AS: Yeah.
0:25:08.7 JD: Certainly. Yeah. Hopefully they would be open to sort of collecting the data and being reflective as a professional. But I could see, maybe that's not, tha's not always the case. And another question, I kind of shared this project with some folks, in different settings, and one of the questions I typically get is, well, what about the science test scores? Like, this is great if kids have joy, I guess is kind of the reaction. But what... How does that impact the academics?
0:25:44.0 JD: And my response is, well if kids don't find joy in their learning and they're not engaged, what kind of results are you gonna get? [laughter] To me this is sort of like a part of the process that leads to academic outcomes, when you enjoy the things that you're doing, when you feel like you have some control over a process, maybe not the full control, but when you have some control, when you have input into something that you're doing all day long, you're gonna have more investment because, you know, because you're seeing that your input has meaning. That's really that psychological component.
0:26:18.2 AS: It's obvious, but maybe not proven.
0:26:21.9 JD: Yeah, I think so. I think so.
0:26:28.4 AS: Okay.
[SILENCE]
0:26:30.9 JD: Yeah. I think that's a pretty good spot to wrap up this opener with the... We covered those first four lessons and started to look at how this project unfolded in, Jessica's classroom. And I think, next we can kind of see as she gathered more data, what this looked like over time. And then as she sort of had that baseline in place, then the next thing we'll look at is: what did she do as a change idea or an intervention to try to make these rates go higher in her classroom?
0:27:08.4 AS: That's interesting. I mean, in my wrap up of this, I think how lucky, is Jessica to have someone from the outside? I think a lot of teachers and a lot of people in business, they don't really have anybody to go to. And the company's not providing that type of stuff or the school is not providing that. And so you just kind of make it up as you go along. And I think that's, that's one of the things, 'cause I'm, I think like probably other listeners and viewers who are, listening to this, they're thinking, I wonder if John could help me do that in my area? The idea of, we all know there's places that we could improve that we may not be. And if a school system can provide that, wow, that's a big... That's exciting.
0:27:56.6 JD: Yeah. I'd be happy to. And it was like a, it was definitely a mutual effort. Jessica put a lot of work into sort of, 'cause she has gone through that fellowship, she had to sort of learn all of these tools and then actually, turn around and put them into practice in her classroom. And she found ways to do this in a way where, she could still do the things she was required to do, like delivering the lessons that she was required to deliver and those types of things. But then she found ways to sort of incorporate what she learned in the fellowship to make her classroom better. Seeing that, seeing her openness to feedback that really made this like a, I think a, mutually beneficial experience. And I think the kids enjoyed it too.
0:28:39.2 AS: And the purpose of this series too is, the idea of how can you do this at home and how can you start doing it in your own school, in your own classroom, in your own life? And so I think I'm looking forward to the next session where we're gonna go deeper into... I've already got, a series of questions and things that I'm wondering, and then I saw some tabs in your, in your worksheet that I thought, okay, there's gonna be some more interesting stuff. So I think we're all gonna see you in that next section.
0:29:09.9 AS: And on behalf of everyone at the Deming Institute, I want to thank you again for this discussion and, taking the time to go through these steps with us. And for listeners, remember to go to deming.org to continue your journey. You can find John's book Win-Win, W Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools on amazon.com. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming, and it's particularly apropos, people are entitled to joy in work.
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Dr. Deming developed his philosophy over time and in conversations with others, not in isolation. As learners, we tend to forget that context, but it's important to remember because no one implements Deming in isolation, either. In this conversation, Bill Bellows and host Andrew Stotz discuss how there's no such thing as a purely Deming organization and why that's good.
TRANSCRIPT
0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussions with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today is episode 20, entitled, System of Profound Wisdom. Bill, take it Away.
0:00:31.6 Bill Bellows: But not just for 30 years. I forgot to say I started when I was 12.
0:00:36.6 AS: Yes. [laughter] Yes. And you've got the hair to prove it.
[laughter]
0:00:43.7 BB: All right. Now, actually, I was thinking the proposal and the title, I thought... I mean, System of Profound Wisdom is cool, System of Profound Questions. Either one of those is good. Let's see which title comes out.
0:00:57.6 AS: Yeah. And I think we'll have to also understand that may some listeners that may not even know what System of Profound Knowledge means, they've been listening. They do. But if today's their first episode, we also gotta break that down, just briefly.
0:01:10.9 BB: Yeah. Okay, let's do that. All right. Well, let me give an opening a quote from Dr. Deming from chapter three, and then we can explain this SoPK, System of Profound Knowledge, thing. But in chapter three of Dr. Deming's last book, The New Economics, the last edition, edition three, came out in 2018. And chapter three, Dr. Deming says, "We saw in the last chapter, we are living under the tyranny of the prevailing style of management. Most people imagine that this style has always existed. It is a fixture. Actually, it is a modern invention a trap that has led us into decline. Transformation is required. Education and government, along with industry, are also in need of transformation. The System of Profound Knowledge to be introduced in the next chapter is a theory for transformation." So you wanna...
0:02:15.4 AS: That's good.
0:02:16.7 BB: So let's say something. Let's just say something about SoPK. How would you explain that?
0:02:23.1 AS: Yeah. Well, actually, I wanna talk very briefly about what you just said, because it's just...
0:02:27.1 BB: Oh, sure.
0:02:29.6 AS: At one point, I thought, "It's a system of knowledge." But he just said it was a system of transformation.
0:02:38.7 BB: It's a theory for transformation.
0:02:40.1 AS: A theory for transformation. Okay, got it. I see. And one of the things that I... I look at Toyota so much just 'cause it's so fascinating and how they've survived all these years, the continuity in the business, the continuity and the profitability of the business, the continued march to become the number one auto producer in the world, and having faced all the ups and downs and survived. And I just think that what they have is a learning organization. No matter what the challenge is, they're trying to apply learning tools, like System of Profound Knowledge, like PDSA, to try to figure out how to solve this problem. And I think that many companies, including at times my companies, [chuckle] we sometimes will scramble and we'll lose knowledge and we won't gain knowledge. And so the System of Profound Knowledge, to me, is all about the idea of how do we build a base of knowledge in our business and then build upon that base of knowledge rather than destroy it when the new management comes in or when a new management idea comes in.
0:04:00.7 AS: And that's something I've just been thinking about a lot. Because I do know a company that I've been doing some work with, and they basically threw away a huge amount of work that they did on System of Profound Knowledge and stuff to go with the prevailing system of management, is like going back. And now, they just produced a loss in the first quarter, and I just think, "Interesting. Interesting."
0:04:27.6 BB: Well, a couple things come to mind based on what you said. One is I would propose that Toyota, I'm in agreement of "Toyota's a learning organization." And that'll come up later. I've got some other thoughts on learning organizations. And we know that they were influenced by Dr. Deming. To what degree, I'm not sure of. Shoichiro Toyoda, who is one of the sons of the founder of the Toyota Motor Car Company, was honored with a Deming prize in 1990. And I believe it came from JUSE, as opposed to the American Society for Quality. One or the other. He was honored with a Deming Prize.
0:05:32.0 AS: Yep.
0:05:33.5 BB: Again, I don't know if it's Deming Prize or Deming Medal. But I know he was honored. What's most important, the point I wanna make is, upon receiving it he said, "There is not a day that goes by that I don't think about the impact of Dr. Deming on Toyota." But, if I was to look at the Toyota Production System website, Toyota's Toyota Production System website, which I've done numerous times, I'd be hard-pressed to find anything on that page that I could say, "You see this word, Andrew? You see this sentence, Andrew? You see this sentiment? That's Deming." Not at all. Not at all. It's Taiichi Ohno. It's Shigeo Shingo. I'm not saying it's not good, but all those ideas predate Deming going to Japan in 1950. Taiichi Ohno joined Toyota right out of college as an industrial engineer in 1933, I believe. The Japanese Army, I mentioned in a previous episode, in 1942, wanted him to move from Toyota's loom works for making cloth to their automobile works for making Jeeps. This comes from a book that I would highly recommend. Last time we were talking about books. I wanted to read a book, I don't know, maybe 10 years ago. I wanted to read a book about Toyota, but not one written by someone at MIT or university. I didn't wanna read a book written by an academic. I've done that.
0:07:15.1 BB: I wanted to read a book by somebody inside Toyota, get that perspective, that viewpoint. And the book, Against All Odds, the... Wait I'll get the complete title. Against All Odds: The Story of the Toyota Motor Corporation and the Family That Changed it. The first author, Yukiyasu Togo, T-O-G-O, and William Wartman. I have a friend who worked there. Worked... Let me back up. [chuckle] Togo, Mr. Togo, born and raised in Japan, worked for Toyota in Japan, came to the States in the '60s and opened the doors to Toyota Motors, USA. So, he was the first person running that operation in Los Angeles. And it was here for years. I think it's now in Texas. My late friend, Bill Cummings, worked there in marketing. And my friend, Bill, was part of the team that was working on a proposal for a Lexus. And he has amazing stories of Togo. He said, "Any executive... " And I don't know how high that... What range, from factory manager, VPs. But he said the executives there had their use, free use, they had a company car. And he said Togo drove a Celica. Not a Celica. He drove a... What's their base model? Not a...
0:08:56.2 AS: A Corolla?
0:08:57.7 BB: Corolla. Yes, yes, yes. Thank you. He drove a Corolla. He didn't drive... And I said, "Why did he drive a Corolla?" Because it was their biggest selling car, and he wanted to know what most people were experiencing. He could have been driving the highest level cars they had at the time. Again, this is before a Lexus. And so in this book, it talks about the history of Toyota, Taiichi Ohno coming in, Shigeo Shingo's contributions, and the influence of Dr. Deming. And there's a really fascinating account how in 1950, a young manager, Shoichiro Toyoda, was confronted with a challenge that they couldn't repair the cars as fast as they could sell them. This is post-war Japan. They found a car with phenomenal market success. Prior to that, they were trying to sell taxicabs, 'cause people could not... I mean, buying a car as a family was not an option. But by 1950, it was beginning to be the case. And the challenge that Shoichiro Toyoda faced was improving the quality, 'cause they couldn't fix them as fast as they could sell them. And yet, so I have no doubt that that young manager, who would go on to become the chairman, whatever the titles are, no doubt he was influenced by Dr. Deming. But I don't know what that means.
0:10:23.4 BB: That does not... The Toyota Production System is not Deming. And that's as evidenced by this talk about eliminating waste. And those are not Deming concepts. But I believe, back to your point, that his work helped create a foundation for learning. But I would also propose, Andrew, that everything I've read and studied quite a bit about the Toyota Production System, Lean, The Machine That Changed The World, nothing in there explains reliability. To me, reliability is how parts come together, work together. 'Cause as we've talked, a bunch of parts that meet print and meet print all over the place could have different levels of reliability, because meeting requirements, as we've talked in earlier episodes, ain't all it's cracked up to be. So I firmly believe... And I also mentioned to you, I sat for 14 hours flying home from Japan with a young engineer who worked for Toyota, and they do manage variation as Dr. Taguchi proposed. That is not revealed. But there's definitely something going on. But I would also say that I think the trouble they ran into was trying to be the number one car maker, and now they're back to the model of, "If we are good at what we do, then that will follow."
0:11:56.8 BB: And I'm gonna talk later about Tom Johnson's book, just to reinforce that, 'cause Tom, a former professor of management at Portland State University, has visited Toyota plants numerous times back before people found out how popular it was. But what I want to get into is... What we've been talking about the last couple episodes is Dr. Deming uses this term, transformation. And as I shared an article last time by John Kotter, the classic leadership professor, former, he's retired, at the University... Oh, sorry, Harvard Business School. And what he's talking about for transformation is, I don't think, [chuckle] maybe a little bit of crossover with what Dr. Deming is talking about. What we talked about last time is, Deming's transformation is a personal thing that we hear the world differently, see the world differently. We ask different questions. And that's not what Kotter is talking about. And it's not to dismiss all that what Kotter is talking about, but just because we're talking about transformation doesn't mean we mean the same thing.
0:13:10.6 BB: And likewise, we can talk about a Deming organization and a non-Deming organization. What teamwork means in both is different. In a Deming organization, we understand performance is caused by the system, not the workers taken individually. And as a result of that, we're not going to see performance appraisals, which are measures of individuals. Whereas in a non-Deming organization, we're going to see performance appraisals, KPIs flow down to individuals. [chuckle] The other thing I had in my notes is, are there really two types of organizations? No, that's just a model. [chuckle] So, really, it's a continuum of organizations. And going back to George Box, all models are wrong, some are useful. But we talked earlier, you mentioned the learning organization. Well, I'm sure, Andrew, that we have both worked in non-Deming organizations, and we have seen, and we have seen people as learners in a non-Deming organization, but what are they learning? [chuckle] It could be learning to tell the boss what they want to hear. They could be learning to hide information that could cause pain. [chuckle] Those organizations are filled with learners, but it's about learning that makes things worse. It's like digging the pit deeper. What Deming is talking about is learning that improves how the organization operates, and as a result, improves profit. In a non-Deming organization, that learning is actually destroying profit.
0:14:51.8 BB: All right. And early, spoke... Russ, Russ and Dr. Deming spoke for about three hours in 1992. It got condensed down to a volume 21 of The Deming Library, for which our viewers, if you're a subscriber to DemingNEXT, you can watch it in its entirety. All the Deming videos produced by Clare Crawford-Mason are in that. You can see excerpts of volume 21, which is... Believe is theory of a system of education, and it's Russ Ackoff and Dr. Deming for a half hour. So you can find excerpts of that on The Deming Institute's YouTube channel.
0:15:37.0 BB: And what I wanted to bring up is in there, Russ explains to Dr. Deming the DIKUW model that we've spoken about in previous episodes, where D is data. That's raw numbers, Russ would say. I is information. When we turn those raw numbers into distances and times and weights, Russ would say that information is what the newspaper writer writes, who did what to whom. Knowledge, the K, could be someone's explanation as to how these things happened. U, understanding. Understanding is when you step back and look at the container. Russ would say that knowledge, knowledge is what you're using in developing to take apart a car or to take apart a washing machine and see how all these things work together. But understanding is needed to explain why the driver sits on the left versus the right, why the car is designed for a family of four, why the washing machine is designed for a factor of four. That's not inside it. That's the understanding looking outward piece that Russ would also refer to as synthesis. And then the W, that's the wisdom piece. What do I do with all this stuff? And what Russ is talking about is part of wisdom is doing the right things right. So, I wanted to touch upon in this episode is why did Dr. Deming refer to his system as the System of Profound Knowledge? Why not the System of Profound Understanding? Why not the System of Profound Wisdom? And I think, had he lived longer, maybe he would have expanded. Maybe he would have had...
0:17:28.4 BB: And I think that's the case. I think it's... 'Cause I just think... And this is what's so interesting, is, if you look at Dr. Deming's work in isolation and not go off and look at other's work, such as Tom Johnson or Russ, you can start asking questions like this.
0:17:45.7 AS: One thing I was going to interject is that I took my first Deming seminar in 1989, I believe, or 1990. And then I took my second one with Dr. Deming in 1992. And then soon after that, I moved to Thailand and kind of went into a different life, teaching finance and then working in the stock market. And then we set up our factory here for coffee business. But it wasn't until another 10 years, maybe 15 years, that I reignited my flame for what Dr. Deming was doing. And that's when I wrote my book about Transform Your Business with Dr. Deming's 14 Points. And what I, so, I was revisiting the material that had impacted me so much. And I found this new topic called System of Profound Knowledge. I never heard of that. And I realized that, it really fully fledged came out in 1993, The New Economics, which I didn't get. I only had Out of the Crisis.
0:18:49.9 BB: '93.
0:18:49.9 AS: Yeah. And so that just was fascinating to go back to what was already, the oldest teacher I ever had in my life at '92, leave it, come back 10, 15 years later and find out, wait a minute, he added on even more in his final book.
0:19:10.4 BB: Well, Joyce Orsini, who was recruited by Fordham University at the encouragement of Dr. Deming, or the suggestion of Dr. Deming to lead their Deming Scholars MBA program in 1990. Professor Marta Mooney, professor of accounting, who I had the great fortune of meeting several times, was very inspired by Dr. Deming's work. And was able to get his permission to have an MBA program in his name called the Deming Scholars MBA program. And when she asked him for a recommendation, "Who should lead this program?" It was Joyce Orsini, who at the time I think was a vice president at a bank in New York. I'm not sure, possibly in human resources, but I know she was in New York as a vice president.
0:20:10.0 BB: And I believe she had finished her PhD under Dr. Deming at NYU by that time. And the reason I bring up Joyce's name, I met her after Dr. Deming had died. Nancy Mann, who is running a company called Quality Enhancement Seminars with, a, at the beginning one product, Dr. Deming's 4-Day seminar, when Dr. Deming died, and I had mentioned, I was at his last seminar in December '93, she continued offering 4-day seminars. And I met her later that year when she was paired with Ron Moen and they were together presenting it, and others were paired presenting it. And at one point, as I got to know Joyce, she said, "His last five years were borrowed time." I said, "What do you mean?" She said, "He started working on the book in 19'" evidently the '87, '88 timeframe, he started to articulate these words, Profound Knowledge.
0:21:11.0 BB: And I know he had, on a regular basis, he had dinner engagements with friends including Claire Crawford-Mason and her husband. And Claire has some amazing stories of Deming coming by with these ideas. And she said, once she said, "What is this?" And he is, she took out a napkin, a discretely, wrote down the, "an understanding of the difference between intrinsic motivation and extrinsic motivation. Difference between understanding special causes versus common causes." And she just wrote all this stuff down, typed it up. When he showed up the next week, she greeted him at the door and said, and she said, he said, This is Claire. And Claire said, he said, "What's that?" He says, "Well, I took notes last week."
0:21:54.2 BB: And he says, "I can do better." [chuckle] And so week by week by week. And as he interacted with the people around him, he whittled it down. And I'm guessing it put it into some, there's a technique for grouping things, you, where on post-it notes and you come up with four categories and these things all go over here. There's one of the elements of that, one of the 16 had to, or 18 or so, had to do with Dr. Taguchi's loss function. So that could have gone into the, maybe the variation piece, maybe the systems piece. But Joyce said, basically he was frustrated that the 14 Points were essentially kind of a cookbook where you saw things like, "cease dependence on inspection" interpreted as "get rid of the inspectors." And so he knew and I’d say, guided by his own production of a system mindset, he knew that what he was articulating and the feedback were inconsistent.
0:23:01.9 BB: And I've gotta keep trying. And she said, "His last five years on borrowed time as he was dying of cancer, was just trying to get this message out." So I first got exposed to it 19, spring of '90 when I saw him speaking in Connecticut. And I was all about Taguchi expecting him to, I didn't know what to expect, but I knew what I was seeing and hearing from Dr. Taguchi when I heard Dr. Deming talk about Red Beads. I don't know anything about that, common cause and special cause, I didn't know anything about that. And so for me, it was just a bunch of stuff, and I just tucked it away. But when the book came out in '93, then it really made sense. But I just had to see a lot of the prevailing style of management in the role I had as an improvement specialist, become, [chuckle] a firefighter or a fireman helping people out.
0:24:01.5 AS: I noticed as I've gotten older that, I do start to connect the pieces together of various disciplines and various bits of knowledge to realize, so for instance, in my case, I'm teaching a corporate strategy course right now at the university. Tonight's, in fact, the last night of this particular intake. And my area of expertise is in finance, but now I see the connection between strategy and finance, and how a good strategy is going to be reflected in superior financial performance relative to peers. And of course, I know how to measure that very well. So I can synthesize more and more different areas of things that I know things about, that I just couldn't do when I was younger. So I can see, and he was always learning, obviously. So I can see how he, and also I can also see the idea of, I need bigger principles. I need bigger as you said, theory for transformation. I need, I need to be able to put this into a framework that brings all that together. And I'm still feeling frustrated about some of that, where I'm at with some of that, because I'm kind of halfway in my progress on that. But I definitely can see the idea of that coming later in life as I approach the big 6-0.
0:25:37.3 BB: The big 6-0, [chuckle] Well, but a big part, I mean, based on what you're talking about, it ended up... Previously we spoke about Richard Rumelt's work, Good Strategy/Bad Strategy, and I mentioned that I use a lecture by Richard Rumelt, I think it was 2011 or so. It was right after his book, Good Strategy/Bad Strategy came out. He spoke at the London School of Economics, and our listeners can find it if you just did a Google search for Richard Rumelt, that's R-U-M... One M. E-L-T. Good Strategy/Bad Strategy. LSE, London School of Economics. Brilliant, brilliant lecture. And I've seen it numerous times for one of my university courses. And he is like Deming, he doesn't suffer fools. And, it finally dawned on me, Deming organizations, if we can use this simple Deming versus non-Deming or Red Pen versus Blue Pen, and as, George Box would say, all models are wrong, some are useful. If we can use that model, I think it's easy to see that what frustrates Rumelt is you've got all these non-Deming companies coming up with strategies without a method.
0:27:00.0 BB: What Rumelt also talks about is not only do you need a method, but you have to be honest on what's in the way of us achieving this? Again, Dr. Deming would say, if you didn't need a method, why don't you're already achieving the results? And so it just dawned on me thinking the reason he's so frustrated, and I think that's one word you can use to describe him, but if he is talking to senior staff lacking this, an understanding of Deming's work, then he is getting a lot of bad strategies. And organizations that would understand what Dr. Deming's talking about, would greatly benefit from Rumelt's work. And they would be one, they'd have the benefit of having an organization that is beginning or is understanding what a transformation guided by Dr. Deming's work is about. And then you could look up and you're naturally inclined to have good or better strategy than worser strategies.
0:28:02.2 BB: And then you have the benefit of, profit's not the reason, profit is the result of all that. And, but next thing I wanna point out is, and I think we talked about it last time, but I just wanted to make sure it was up here, is I've come across recently and I'm not sure talking with who, but there's this what's in vogue today? Data-driven decisions. And again, whenever I hear the word data, I think backed in Ackoff's DIKUW model, I think data-driven. Well, first Dr. Deming would say, the most important numbers are unknown and unknowable. So if you're doing things on a data-driven way, then you're missing the rest of Dr. Deming's theory of management. But why not knowledge-driven decisions, why not understanding-driven decisions And beyond that, why not, right? How long... [laughter] I guess we can... Part of the reason we're doing these Andrew is that we'd like to believe we're helping people move in the direction from data-driven decisions to wisdom-driven decisions, right?
0:29:13.1 AS: Yeah. In fact, you even had the gall to name this episode the System of Profound Wisdom.
0:29:24.0 BB: And that's the title.
0:29:24.9 AS: There it is.
0:29:28.9 BB: But in terms of, I'll give you a fun story from Rocketdyne years ago, and I was talking with a manager in the quality organization and he says, "you know what the problem is, you know what the problem is?" I said, "what?" He says, "the problem is the executives are not getting the data fast enough." And I said, "what data?" He says "the scrap and rework data, they're just not getting it fast enough." So I said, "no matter how fast they get it, it's already happened."
[laughter]
0:30:00.0 BB: But it was just, and I just couldn't get through to him that, that if we're being reactive and talking about scrap and rework, it's already happened. By the time the... If the executives hear it a second later, it's already happened. It's still old news.
0:30:14.7 AS: And if that executive would've been thinking he would've said, but Bill, I want to be on the cutting edge of history.
0:30:23.1 BB: Yeah, it's like...
0:30:24.6 AS: I don't want information, I don't want old information, really old. I just want it as new as it can be, but still old.
0:30:32.9 BB: Well, it reminds me of an Ackoff quote is, instead of... It's "Change or be changed." Ackoff talked about organizations that instead of them being ready for what happens, they create what's gonna happen, which would be more of a Deming organizational approach. Anyway, we talked about books last time and I thought it'd be neat to share a couple books as one as I've shared the Against All Odds Book about Toyota.
0:31:08.8 AS: Which I'll say is on Amazon, but it's only looks like it's a used book and it's priced at about 70 bucks. So I've just...
0:31:16.2 BB: How much?
0:31:16.8 AS: Got that one down? 70 bucks? Because I think it's, you're buying it from someone who has it as a their own edition or something. I don't know.
0:31:23.8 BB: It's not uncommon. This is a, insider used book thing. It's not uncommon that you'll see books on Amazon for 70, but if you go to ThriftBooks or Abe Books, you can, I have found multi-$100 books elsewhere. I don't know how that happens, but it does. Anyway, another book I wanted to reference in today's episode is Profit Beyond Measure subtitle, Extraordinary Results through Attention to Work and People, published in 2000. You can... I don't know if you can get that new, you definitely get it old or used, written by, H. Thomas Johnson. H is for Howard, he goes by Tom, Tom Johnson. Brilliant, brilliant mind. He visited Rocketdyne a few times.
0:32:17.1 BB: On the inside cover page, Tom wrote, "This book is dedicated to the memory of Dr. W. Edwards Deming, 1900-1993. May the seventh generation after us know a world shaped by his thinking." And in the book, you'll find this quote, and I've used it in a previous episode, but for those who may be hearing it first here and Tom's a deep thinker. He's, and as well as his wife Elaine, they're two very deep thinkers. They've both spoke at Rocketdyne numerous times. But one of my favorite quotes from Tom is, "How the world we perceive works depends on how we think. The world we perceive is the world we bring forth through our thinking." And again, it goes back to, we don't see the world as it is. We see the world as we are. We hear the world as we are. I wrote a blog for The Deming Institute. If our listeners would like to find it, if you just do a search for Deming blog, Bellows and Johnson, you'll find the blog. And the blog is about the book Profit Beyond Measure. And in there, I said, “In keeping with Myron Tribus' observation that what you see depends upon what you thought before you looked, Johnson's background as a cost accountant, guided by seminars and conversations with Dr. Deming, prepared him to see Toyota as a living system,” right? You talk about Toyota.
0:33:53.9 BB: He saw it as a living system, not a value stream of independent parts. And that was, that's me talking. I mean, Tom talked about Toyota's living system. And then I put in there with the Toyota Production System, people talk about value streams. Well, in those value streams, they have a defect, good part, bad part model that the parts are handed off, handed off, handed off. That is ostensibly a value stream of independent parts 'cause the quality model of the Toyota Production System, if you study it anywhere, is not Genichi Taguchi. It's the classic good parts and bad parts. And if we're handing off good parts, they are not interdependent. They are independent. And then I close with, "instead of seeing a focus on the elimination of waste and non-value added efforts, Johnson saw self-organization, interdependence, and diversity, the three, as the three primary principles of his approach, which he called Management By Means." And so what's neat, Andrew, is he, Tom was as a student of Deming's work, attending Dr. Deming seminars, hearing about SoPK, System of Profound Knowledge, and he in parallel developed his own model that he calls Management By Means. But what's neat is if you compare the two, there's three principles. So he says self-organization.
0:35:31.0 BB: Well, that's kind of like psychology and people. So we can self-organize interdependence, the other self-organized, but we're connected with one another. So that's, that's kind of a systems perspective there as well. And the third one, diversity. So when I think of diversity, I think of variation. I can also think in terms of people. So that what I don't see in there explicitly is Theory of Knowledge. But Tom's developing this model in parallel with Dr. Deming's work, probably beginning in the early '80s. And part of what Tom had in mind, I believe, by calling it Management By Means, is juxtaposing it with that other management by, right? You know the other one, Andrew, management by?
0:36:33.8 AS: You mean the bad one or the good one, Management By Objective?
0:36:37.8 BB: Or Management By Results. Or Dr. Deming once said, MBIR, Management by Imposition of Results. But what's neat is, and this is what I cover and with my online courses, Tom is really, it's just such insight. Tom believes that treating the means as the ends in the making. So he's saying that the ends are what happen when we focus on the means, which is like, if you focus on the process, you get the result. But no, MBIR, as we focus on the result, we throw the process out the window. And so when I've asked students in one of my classes is, why does Tom Johnson believe that treating the means as an ends in the making is a much surer route to stable and satisfactory financial performance than to continue as most companies do? You ready, Andrew? To chase targets as if the means do not matter. Does that resonate with you, Andrew?
0:37:44.1 AS: Yes. They're tampering.
0:37:46.8 BB: Yeah. I also want to quote, I met Tom in 1997. I'm not sure if this... Actually, this article is online and I'll try to remember to post a link to it. If I forget, our listeners can contact me on LinkedIn and I'll send you a link to find the paper. This is when I first got exposed to Tom. It just blew me away. I still remember there at a Deming conference in 1997, hearing Tom talk. I thought, wow, this is different. So, Tom's paper that I'm referencing is A Different Perspective on Quality, the subtitle, Bringing Management to Life. Can you imagine? “Bringing Management to Life.” And it was in Washington, DC, the 1997 conference. And then Tom says, this is the opening. And so when Tom and his wife would speak at Rocketdyne or other conferences I organized.
0:38:44.0 BB: Tom read from a lectern. So he needed a box to get up there and he read, whereas Elaine, his wife, is all extemporaneous. Both deeply profound, two different styles. So what Tom wrote here is he says, "despite the impression given by my title, Professor of Quality Management, I do not speak to you as a trained or a certified authority on the subject of quality management. I adopted that title more or less casually after giving a presentation to an audience of Oregon business executives just over six years ago. That presentation described how my thinking had changed in the last five years since I co-authored the 1987 book, Relevance Lost, the Rise and Fall of Management Accounting, and the talk which presaged my 1992 book, Relevance Regained." And this is when he... After he wrote, Relevance Lost, he went on the lecture circuit, he met the likes of Peter Scholtes and Brian Joiner, got pulled into the Deming community.
0:39:45.4 BB: And then he wrote this scathing book called Relevance Regained and the subtitle is... I think our audience will love it, From Top-Down Control to Bottom-Up Empowerment. Then he goes on to say, "in that I told how I had come to believe that management accounting, a subject that I had pursued and practiced for over 30 years." Over 30 years, sounds familiar. Then he says, "could no longer provide useful tools for management. I said in essence that instead of managing by results, instead of driving people with quantitative financial targets, it's time for people in business..." And this is 30 years ago, Andrew. "It's time for people in business to shift their attention to how they organize work and how they relate to each other as human beings. I suggested that if companies organize work and build relationships properly, then the results that accountants keep track of will what? Take care of themselves."
0:40:50.8 AS: It's so true, it's so true.
0:40:54.1 BB: Yeah, it sounds so literally Tom was writing that in 1999, 2000. Well, actually no, that was 1997, that was 1997, but the same sentiment.
0:41:03.4 AS: It just makes me think of the diagram that we see and that Deming had about the flow through a business, it's the same thing as of the flow from activity to result.
0:41:20.6 BB: Yes.
0:41:21.9 AS: And when we focus on the result and work backwards, it's a mess from a long-term perspective, but you can get to the result. It's not to say you can't get to the result, but you're not building a system that can replicate that. But when you start with the beginning of that process of how do we set this up right to get to that result, then you have a repeatable process that can deliver value. In other words, you've invested a large amount in the origination of that process that then can produce for a much longer time. Um, I have to mention that the worst part of this whole time that we talk is when I have to tell you that we're almost out of time 'cause there's so much to talk about. So we do need to wrap it up, but, yeah.
0:42:09.3 BB: All right. I got a couple of closing thoughts from Tom and then we'll pick this up in episode 21.
0:42:21.3 AS: Yep.
0:42:22.9 BB: Let me also say, for those who are really... If you really wanna know... I'd say, before you read The New Economics... I'm sorry, before you read Profit Beyond Measure, one is the article I just referenced, “Bringing Quality to Life” is a good start. I'd also encourage our readers to do a search. I do this routinely. It shouldn't be that hard to find, but look for an article written by Art Kleiner, Art as in Arthur, Kleiner, K-L-E-I-N-E-R. And the article is entitled, Measures... The Measures That Matter. I think it might be What Are The Measures That Matter? And that article brilliantly written by Kleiner who I don't think knows all that much about Deming, but he knows a whole lot about Tom Johnson and Robert Kaplan, who together co-authored "Relevance Lost" and then moved apart. And Tom became more and more Deming and Kaplan became more and more non and finally wrote this article.
0:43:35.6 AS: Is this article coming out in 2002, "What Are The Measures That Matter? A 10-year Debate Between Two Feuding Gurus Shed Some Light on a Vexing Business Question?"
0:43:46.4 BB: That's it.
0:43:47.2 AS: There it is and it's on the...
0:43:47.4 BB: And it is riveting.
0:43:50.8 AS: Okay.
0:43:50.8 BB: Absolutely riveting. Is it put out by...
0:43:54.0 AS: PwC, it looks like and it's under strategy...
0:43:58.5 BB: Pricewaterhouse...
0:43:58.8 AS: Yeah, strategy and business.
0:44:00.2 BB: PricewaterhouseCooper? Yeah.
0:44:01.3 AS: Yeah.
0:44:03.1 BB: And 'cause what's in there is Kleiner explaining that what Tom's talking about might take some time. You can go out tomorrow, Andrew, and slash and burn and cut and show instant results. Now what you're not looking at is what are the consequences? And so... But... And then... But Kleiner I think does a brilliant job of juxtaposing and trying to talk about what makes Kaplan's work, the Balanced Scorecard, so popular. Why is Tom so anti that?
0:44:37.9 BB: And to a degree, it could be for some a leap of faith to go over there, but we'll talk about that later. Let me just close with this and this comes from my blog on The Deming Institute about Profit Beyond Measure and I said, "for those who are willing and able to discern the dramatic differences between the prevailing focus of systems that aim to produce better parts with less waste and reductions to non-value-added efforts," that's my poke at Lean and Six Sigma, "and those systems that capitalize on a systemic connection between parts. Tom's book, Profit Beyond Measure, offers abundant food for thought. The difference also represents a shifting from profit as the sole reason for a business to profit as the result of extraordinary attention to working people, a most fitting subtitle to this book."
0:45:35.9 AS: Well, Bill, on behalf of everyone at The Deming Institute, I want to thank you again for the discussion and for listeners, remember to go to deming.org to continue your journey. If you wanna keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to Joy in work" and I hope you are enjoying your work.
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What happens if you transform HOW you think? In this episode, Bill Bellows and host Andrew Stotz discuss the problem of thinking in one dimension at a time (as we were taught in school) and its impact on our ability to solve problems. BONUS: Book recommendations to broaden your understanding of Deming and more.
TRANSCRIPT
0:00:02.1 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is, well, episode 19, Transforming How we Think. Bill, take it away.
0:00:29.9 Bill Bellows: And good evening, Andrew.
0:00:35.8 AS: Good evening.
0:00:36.2 BB: And, but just as a point of clarity, I view it as transforming how we think about our thinking. And that's what I've been focusing on for the, since the mid, the early '90s is not how we think, but what is our awareness of our thinking, and I think that ties in well with SoPK. So first in late breaking news, I am seeing with new eyes, Andrew. Literally, I've got new monofocal lenses in both eyes. The left eye three weeks ago, the right eye, a week ago. I was told about five years ago, eventually I'll have to have cataract surgery. And I spoke with a few friends who had it done, and they said, oh, it's easy. And what was so amazing was it was easier than they said. It was.
0:01:41.0 BB: But one neighbor who's had it done, and kind of a sad note is he claims, and I've not double checked this, he's a sharp guy. He claims 80% of the world's population would benefit from cataract surgery that they don't have access to and eventually go blind. And I don't know, I can believe, and he is in fact he's quoted me twice on that. But I am literally seeing with new eyes. The grays are now, shades of gray, are now shades of blue. When I look at the sky. My depth perception's a whole lot better. And so it ties in well with all this vision therapy stuff. So.
0:02:36.8 AS: Aren't you glad that those machines are high quality and the operations that they do are high quality?
0:02:41.6 BB: Oh, yeah.
0:02:42.4 AS: Just one little mistake on that one. And, that's...
0:02:46.2 BB: Well, and I'm signing the documents and there's a little bit of a flutter when I'm signing, in terms of the liability. And one friend's mom had a bad cataract procedure, so it doesn't always go. And I shared this with Kevin. Kevin's had the same, as likewise had the procedure done. And we shared the anxieties and then it worked out well. But yeah when I signed that form that there was in the event, and I thought, whoa, that'd be, anyway, it worked. All right, so where I want to pick up in episode 19 is where we left off with episode 18. And there near the end, I referenced from Dr. Deming. He says Dr. Deming says in chapter three of The New Economics, and he says, "we saw in the last chapter that we're living under the tyranny of the prevailing style of management. Most people imagine this style has always existed. It is a fixture. Actually," he said, "it's a modern invention, a trap that has led us into decline. Transformation..."
0:04:03.0 BB: You remember that word from last time? Okay. "Transformation is required. Education and government, along with industry are also in need of transformation. The System of Profound Knowledge will be introduced in the next chapter. To be introduced in the next chapter is a theory for transformation." So I've got some bullet points and I want to get into the additional chapters and references from The New Economics on Dr. Deming's use of the term transformation. 'Cause I think what he's talking about... SoPK is a theory for transformation. So I think it's just not enough to talk about SoPK without understanding how does that fit in with what Dr. Deming's talking about?
0:04:49.0 AS: And for the listeners who come out of the blue here, SoPK stands for the System of Profound Knowledge.
0:04:56.1 BB: Yes. And system then gets into elements and the four elements that Dr. Deming proposed in The New Economics, going back to the late '80s when he started to put these thoughts together. We need to think about the elements of Profound Knowledge are looking at things as a system and understanding of variation and appreciation of psychology. That's the people aspect. And then theory of knowledge, which gets into what he would explain as how do we know that what we know is so. So the one thing I wanted to bring up on the System of Profound Knowledge is conversations with Dick Steele. And a neat way of looking at the System of Profound Knowledge is to say, well, what if we were to look at some data points, one element, we look at variation, and we see some data the output of a process.
0:06:00.0 BB: We see it go up and down. Well, if that's the only element we have, then we can't ask what caused that, 'cause that's the upstream system. Well, that's the system piece. We cannot talk about what does this variation do downstream? That's the system piece. We cannot talk about how might we change that. That might get into the theory of knowledge or would get into the aspect of the theory of knowledge and some theories as to how we can go about changing the average, changing the amount of variation. And then what that leads us immediately to is, where do those ideas come from but people.
0:06:44.7 BB: So it's kind of, I think it's interesting. So Dr. Deming says the elements, but it's as connected to each other. So what I explain to the students in my courses is, in the beginning, and I remember when I'm looking at this, I'm looking at the elements. I'm thinking, okay, that variation, that's the Control Chart stuff. Common causes, special causes, well, it also includes variation in people. Oh, now we're talking about the people stuff. And then, so I find it interesting is it is easy to look at them as separate, but then in time they meld together really well. So it's not to say that we shouldn't start out looking at things as the elements 'cause I think that's what our education system does. In fact, there's a great documentary I watched a few years ago with Gregory Bateson, who was born in 1900 or so, passed away in the 1980s.
0:07:52.6 BB: And when I ask people have you ever heard of Gregory Bateson? They say, no. I say, well, have you heard of Margaret Mead? Yeah. Well, they were married once upon a time. That was her, he was her first husband. And so Bateson gives a lecture in this documentary that his daughter produced. And he says, and he is at a podium. You don't see the audience. You just see he's at a lectern. And he says, you may think that there's such a thing as psychology, which is separate from anthropology, which is separate from English, which is separate from... And he goes on to imply that they really aren't separate. But then he says, "Well, think what you want."
0:08:38.1 AS: Think what you want.
0:08:39.7 AS: And I thought that's what the education system does. It has us believe that these things are all separate. And so that's what's kind of neat. Yeah. And, but again, I think when you go to school, you're learning about history, then you learn about math. But one thing I noticed later on, many years later was the history people never talked about, if they talked about the philosopher who was well known in mathematics, we didn't hear that mathematics piece, nor in the math class did we hear about this person as a historical figure. We just learned about... And so the education system kind of blocks all that out. And then years later when we're outta school, we can read and see how all this stuff comes together and it does come together. So the one big thing I wanna say is that, is I think it's neat to look at something with just one of those elements and then say, how far does it go before you need the others to really start to do something?
0:09:47.0 BB: And that gets into the interactions. And by interactions, I mean that when you're talking about variation and you're thinking about people are different, how they feel is different, how they respond is different. Now you're talking about the interaction between psychology, at least that's one explanation of the interaction between people amd psychology. I wanna share next an anecdote. I was at a UCLA presentation. A friend of mine turned me on to these maybe once a month kind of deal to be an invited speaker. 70 people in the room. And these were typically professors from other universities, authors, and there is one story I wanna share is a woman who had written a book on why really smart kids don't test well in secondary schools. And there were a good number of people there.
0:10:45.6 BB: And I'm listening to all this through my Deming lens, and she's talking about how kids do on the exams. That goes back to an earlier podcast. How did you do on the exam? And so I'm listening to all this and she's drawing conclusions that these students are really smart, but they freak out. And then how might they individually perform better? As if the greatest cause by them all by themselves. And so afterwards, I went up and stood in line and I had a question for her that I deliberately did not want to ask in front of the entire room. 'Cause I wanted her undivided attention, and I really wanted to see where she'd come with this. 'Cause perhaps it could lead to an ongoing discussion. So I went up and introduced myself and I think I said something like, are you familiar with W. Edwards Deming? And I believe she said she was. I think she was a psychologist by background. And then I moved into the... Essentially the essence of what if the grades are caused by the system and not the student taken separately, which she acknowledged. She's like, yeah, that makes sense. And I remember saying to her, "Well then how might that change your conclusions?"
0:12:11.2 BB: And so I throw that as an example of... Deming's saying you could be an expert in, you know, you just look at something. Actually, when that comes to mind is Deming is saying something like shouldn't a psychologist know something about variation? Well, shouldn't a psychologist know something about systems? And I didn't maintain a relationship with her, but it was just other things to do. Next I wanna share a story. And I wrote this up in an article. Then when this is posted...
0:12:49.0 BB: Typically these are posted on LinkedIn. Then I'll put a link into the article. And it's a classic story that Russ Ackoff was very fond of saying, and I heard the story told quite a few times before I started to think about it a little bit differently. So the story is he was working for General Electric back in the 1960s. He is in a very high level meeting. And in the room is this, the then CEO of GE, Reginald Jones and all of the senior VPs of General Electric are in the room. And Russ... I'm guessing he was doing, I know Russ did a lot of work with Anheuser-Busch, and he did a lot of work with GE. So Russ says he is in the room. There's maybe a dozen of these senior VPs of plastics of all the different GE divisions.
0:13:41.2 BB: And there's, Russ said there's one of them that was relatively new in a senior VP position, now over plastics or over lighting or whatever it was. And at one point he gets up. And one by one he raises a question with each of his peers. Something like, "Andrew, I noticed last year you installed a new software system." And you would say, "yeah, yep, yep." And I said, "I noticed you went with..." Let's say Apple, "you went with Apple Software", and you're like, "yeah," "that's what I thought. Yeah, you went with Apple." And then you might say something like, "why do you ask?" And he says, "well, the rest of us use Microsoft products. And it just seems kind of odd that you would go off and buy something different."
0:14:41.0 BB: And the point, and Russ didn't get into these details, the essence was every single one of them he'd figured out over the last year had made a decision, pretty high level decision that that senior VP felt was good for that division, but not good for General Electric. And Russ said what got his attention was, he wasn't sitting in that room hearing those conversations and he hears one decision then another, now he's got a whole list. So Russ says, he goes around the room and calls out every single one of his peers. So, and Russ shared this in one phone call, the Ongoing Discussions that I've mentioned. And people said, Russ, do you have that documented? And he is like, well, I don't think I have that any anymore. But somebody else asking.
0:15:35.3 BB: And then no sooner was the call over I had some friends call me up, said, "Bill, can you ask Russ if you have that, if he can get a copy of that? It's probably on his shelf. You're in his office". I said to one friend. I said, "so you'd be surprised that a member of Parliament does what's best for his district and not what's best for the United Kingdom. You think, you'd be surprised that a congressman from Los Angeles is gonna do what's best for Los Angeles, not what's best for the country.
0:16:07.2 BB: So you're telling me you're surprised by that?" Well, "no, no, no." I said, "well then why do you have to have the documentation?" So that's one aspect of it. So I heard that story again and again. And so finally it, I said, wait a minute, wait a minute. So I said, "Russ, on that story, you being in the room with GE?" He says, yeah. He says, I know you don't have the documentation, I said, "but what happened after this guy called them all out? How did that go down?" He says, "one of the peers looks at this guy and says, so what's your point?"
0:16:42.3 BB: And the meeting moved on. And I wrote that for an article for the Lean Management Journal called, "You Laugh, It Happens". And when I look at that through the lens of the System of Profound Knowledge, is that surprising that that goes on? No, not at all. I wanna reference a couple books that I don't think I've mentioned at all. And I share these because for the Deming enthusiasts, these books have some brilliant examples of in different arenas that I think you absolutely love and you can use in your classes, use in your education, whatever. All fairly recent. The first one is "The Tyranny of Metrics" written by a historian. He is an American University historian, Jerry Mueller, and he has, I mean, Dr. Deming would just love this. Oh, bingo! Bingo! Bingo! Thank you.
0:17:48.4 AS: Yep. There it is. "The Tyranny of Metrics".
0:17:50.1 BB: Right?
0:17:50.7 AS: Yep.
0:17:51.3 BB: Right. Is that a great one?
0:17:53.2 AS: That's a great book. And you can follow him on Twitter also. He does do a lot of posts there.
0:18:00.4 BB: Now I reached out to him 'cause I relished the book 'cause the stories were just, you just can't make up all those stories. I mean the story that I shared with Russ is nothing in comparison to what Muller has in the book. I just don't believe that Muller has a solution that can... I don't think, I think the only thing missing from the book is if he had an understanding of the System of Profound Knowledge, he'd have a far better proposal as to what to do.
0:18:31.8 AS: Yeah. I read that and I felt similar that there was something that was missing there. It was, it was great stories as you say, but how do we connect that? How do we apply that? And what's the root cause here? And how do we, this, there was just... That was missing from it. And maybe that should be his next book.
0:18:53.9 BB: Oh, enormously. But it's worth reading regardless.
0:18:57.3 AS: Yeah. Agreed.
0:19:00.1 BB: But I was, I was, I wasn't surprised. I'd say this. He honestly tried to offer a proposal, but I just looked at it and said, Professor Muller, you would just love it. In fact, I believe I reached out to him. I don't know that I heard from him. Alright, that's one book.
0:19:17.1 AS: That reminds me of what Dr. Deming said. "How would they know?"
0:19:21.3 BB: Exactly. Exactly.
0:19:22.4 AS: So if he hadn't been exposed to the System of Profound Knowledge...
0:19:25.3 BB: Oh, no. No, no, no.
0:19:25.7 AS: Then it would be hard to pull it all together. Yep. Okay.
0:19:28.8 BB: Yeah. So the next book, which is somewhere behind you in your bookshelf, is "The End of Average" by Todd...
0:19:36.8 AS: Actually, I don't think I have that one.
0:19:39.4 BB: By Todd Rose, who's a research fellow at Harvard. It's a riveting book. Oh, Andrew, you would absolutely love it. Just, he goes back ages. I mean, hundreds of hundreds of years and looks at how lost we became... How lost civilizations were dealing with trying to make, deal with averages. And the book opens with the most riveting story. And I started reading this and immediately I started thinking, "Okay, okay, okay, okay." And I figured it out. So in the opening paragraph, he says, In one day in 1949, there were 17 military planes crashed. In one day. 17 military planes crashed in one day. And this was... It would have been after the Air Force separated from the Army Air Corps. And so I started thinking, okay, late '40s, planes are going faster. The US industry has German technology, and... Because the Germans had jet engines in the late '40s. So I'm thinking it's about speed. It's about something about speed, something about speed. And there's more and more planes flying.
0:21:06.6 BB: So they grounded the fleet. They had a major investigation, brought in this young guy as a data researcher. And he passed away a few years ago, I did some research with him recently. And what he found was the cockpits were designed, you're writing, Andrew, for the average size pilots. Everything in the cockpit was fixed for the average arm length, the average hand length, the average finger length, the average height, the... Everything about... All these measurements on the torso, the cockpit had, everything was fixed. And that's exactly what I thought was going on. As the planes are going faster and faster, reaction times need to be faster and faster. And they're not. So his research was, they went off and measured thousands of pilots and found out that there was no pilot met the average.
0:22:11.2 AS: Oh, God.
0:22:11.3 BB: And the conclusion was... And again, until the plane started flying faster, that was not an issue. And that's what I was thinking with all my training in problem solving, decision making, what is going on there? What is going on there? And that's what changes the... I mean, the speed was accelerating, but compounded by the fixed geometry. So the solution by the government Pentagon, to the contractors was, add flexibility to the cockpit, allow the seat to move up and down, and then the auto industry picked up on that evidently. And so this is one example of how a fixation on average and a number of other stories outside of engineering it's just fascinating.
0:23:01.4 AS: Let me just summarize. The End of Average by Todd Rose. And it was published in about 2016. It's got a 4.5 out of 5 review on Amazon with 1,000 ratings and has a very high for Goodreads review of about 4.1. So I'm definitely getting that one. I don't have it and I'm buying it.
0:23:22.1 BB: Yeah. And it's again, he, I believe in there he offers what we should do instead, which again, I think would be, benefit from an understanding of SoPK. And so, again, for the Deming enthusiast, there is stuff in those two books, which you'll just love. And the third book came out at, I think, 2020 during the pandemic, The Tyranny of Merit, that tyranny word again, by Michael Sandel from Harvard. And I believe we've spoken about him before. And it's the tyranny of meritocracy, which is the belief that I achieved my success all by myself. I earned the grade all by myself. Everything I've done, I've done all by myself. There is no greater system. And I've written... In fact I sent an email to Michael Sandel complimenting him for the book and trying to point out that everything he's talking about fits in very well with Deming's work and that the issues are bigger than that.
0:24:34.4 BB: And I have not yet heard back, but he's a busy guy. But those three books are I would say, must reads. Then I go on to say that, because I used earlier that Dr. Deming talked about we are living under the tyranny of the prevailing style of management. So then I looked. I wanted to, so what exactly is this tyranny stuff? I mean, I'm so used to the word, so I wanted to go back and get a definition. "Tyranny is often synonymous with cruelty and oppression." And I said, that's... Yeah. Yeah. Oh, absolutely. All right.
0:25:26.4 BB: So, next, I wanna talk about... In previous podcasts I talked about work at Rocketdyne, what we called an... In the beginning it was called A Thinking Roadmap. And then as we got turned on to thinking about thinking, we changed that to An InThinking Roadmap. And that constituted roughly 220 hours of training over a dozen or so courses. So we had a one day class in Edward de Bono's Six Thinking Hats, a one day class in his, in other, actually two days in some of his other. So anyways, we had a number of courses on de Bono's work. I had a 40-hour intro course to Taguchi methods and a 40-hour advanced class in Dr. Taguchi's work. We had a 9-hour session called Understanding Variation. We had a things we were trained in that were developed by others, and then things we designed ourselves.
0:26:36.6 BB: And in the courses are tools and techniques. So tools are a cell phone, a slide rule, a computer. And the technique is how do we use it? And they provide what Ackoff would call efficiency, but also a number of these courses were inspired by Dr. Deming and Russ Ackoff were about improving effectiveness. And I got into concepts and strategies. And then what I wanted to mention that I don't think I've mentioned before is the whole concept of an InThinking Roadmap, and in this thinking about our thinking, which is a big part of the theme for tonight is, as that was inspired by, in the early '90s, Rockwell, Rocketdyne was then part of Rockwell, every division of Rockwell had a technology roadmap. And that had to be presented to higher and higher levels.
0:27:33.3 BB: What technologies are developing? What's the roadmap? And so more and more and more I heard this tech roadmap, tech roadmap. And then with colleagues, we started thinking about thinking, we thought, we need to have a thinking roadmap to combine with the technology roadmap. So the technology roadmap is gonna be helping us enormously in terms of efficiency, but not effectiveness. And I thought to integrate those two is quite powerful, which is, again another reminder of why Dr. Deming's work is a brilliant foundation for the use of technology. Otherwise, what you end up doing in a non-Deming company is with a cell phone you can increase the speed of blame.
0:28:21.4 BB: All right. So then I went back since last time I did some more research into transformation and came up with some great thoughts from Russ Ackoff. Again, our dear friend Russ Ackoff. And this is from an article that Russ wrote on transformations. And he says, "transformation is not only require recognition of the difference between what is practiced and what is preached. He says a transformation called four years ago by Donald Schön in his book Beyond the Stable State," and this is a 1991 book, he said, "it requires a transformation in the way we think.” “Einstein," Russ says "put it powerfully and succinctly." He says, "without changing our patterns of thought, we'll not be able to solve the problems we created with our current pattern of thought."
0:29:08.2 BB: Russ continues. "I believe the pattern of thought that is required is systemic. It is difficult if at all possible to reduce the meaning of systemic thinking to a brief definition. Nevertheless, I try. Systemic thinking," again from Russ, "is holistic versus reductionist, synthetic versus analytic. Reductionist and analytic thinking derived properties from the whole, from the parts, from the properties of their parts. Holistic and synthetic thinking derived properties of parts, from the property of the whole that contains them." So I thought it was neat to go back and look at that. And then I want, more from Russ. "A problem never exists in isolation. It's surrounded by other problems in space and time. The more of a context of a problem that a scientist can comprehend, the greater are his chances of truly finding an adequate solution."
0:30:11.4 BB: And then, and so when I was going through this over the last few days, thinking, boy, I wish Dr. Deming defined transformation, it would've been, if he had an operational definition. But I thought, but wait a minute. 'Cause part of what I'm finding is, in my research, an article I came across years ago, Leading Change in the Harvard Business Review, a very popular article, 1995, by John Kotter, Why Transformations Fail. So Kotter uses that word and the title is Leading Change: Why Transformations Fail. And he is got establishing... Eight steps of transformation. "Establishing a sense of urgency, forming a powerful guiding coalition, creating a vision, communicating the vision, empowering others to act on the vision, planning for, and creating short-term wins." And under that step, Andrew, he's got a couple of steps, I'd like to get your thoughts on. One is "recognizing and rewarding employees involved in the improvements." So I thought, but of course this is transformation in the realm of the prevailing system of management. And so what that got me... Tossed around on it. I thought, well, wait a minute. There's a bunch of words that Dr. Deming uses that others use, but we know they mean something different. So Dr. Deming...
0:31:56.6 AS: Like I'm thinking, improvement is what he may be talking about.
0:32:02.4 BB: Well, but Dr. Deming talks about teamwork and the need to work together. Everybody talks about that.
0:32:08.1 AS: Yep.
0:32:09.2 BB: But just that we know, in a non-Deming environment, it's about managing actions, completing those tasks in isolation. I can meet requirements minimally, hand off to you, and that in a non-Deming environment, we call teamwork. So what I was thinking is, well, it's not that we need a new, 'cause I was even thinking, maybe we need a new word. Maybe in the Deming community, we should stop using the word transformation and come up with another word. Well, the trouble is, there's a whole bunch of other words that we use from teamwork to work together, to leader, quality. We talk about performance. We talk about root cause versus root causes. We talk about system. And so it's not that we need a new word, we need a new foundation. And that goes back to this notion as you read The New Economics or Out of the Crisis, you're hearing words that Dr. Deming uses that others use like John Kotter, but they're not used in the same context.
0:33:26.2 AS: How would you wrap up the main points you want people to take away from this discussion about transformation?
0:33:38.1 BB: Big thing is, we are talking about transformation. We are talking about seeing with new eyes, hearing with new ears. So the seeing, we talked about last time, is it's not just the systems. We're seeing systems differently. We're seeing variation differently. We're thinking differently about people and what motivates them and inspires them. The psychology piece, the theory of knowledge piece, we're challenging what we know. And then we have to think about all those interactions between two of them, between three of them, between four of them. And so I'd say that it's, the essence is transformation is essential. It is about rethinking our thinking. And I just wanna leave with two quotes. One fairly recent, one a little older. And the first quote, the more recent one from Tom Johnson, "How the world we perceive works depends upon how we think. The world we perceive," Andrew "is a world we bring forth through our thinking."
0:34:44.9 BB: That's H. Thomas Johnson, a dear friend in his 1999 book, Profit Beyond Measure. And my advice to people in reading that book is, do not attempt to read it laying down in bed. It's just, now you can read those other books we talked earlier. I think you can read those lying in bed. But Tom is very pithy. You wanna be wide awake. The last quote I wanna leave is from William James, born in 1842, died in 1910. He was an American philosopher, psychologist, and the first educator to offer a psychology course in the US. He is considered to be a leading thinker of the late 19th century, the father of American psychology, one of the elements of Profound Knowledge. And his quote that I wanna leave you with, Andrew is, "The greatest discovery of my generation is that human beings can alter their lives by altering their attitudes of mind."
0:35:45.2 AS: Whoa. Well, Bill, what an ending. On behalf of everyone at The Deming Institute, I want to thank you again for the discussion. For listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with my favorite quote from Dr. Deming. "People are entitled to joy in work."
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In part 3 of this series, John Dues and host Andrew Stotz talk about the final 5 lessons for data analysis in education. Dive into this discussion to learn more about why data analysis is essential and how to do it right.
TRANSCRIPT
0:00:02.4 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with John Dues who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. This is episode 23 and we're talking about goal setting through a Deming lens. John, take it away.
0:00:30.8 John Dues: It's good to be back, Andrew. Yeah, in this first episode of this four-part series, we talked about why goal setting is often an act of desperation. And if you remember early on, I sort of proposed those four conditions that organizations should understand about their systems prior to ever setting a goal. Those four were capability, variation, stability, and then by what method are you going to improve your system? And then in the last episode, I introduced the first five lessons of the 10 key lessons for data analysis. And remember, these lessons were set up to avoid what I call these arbitrary and capricious education goals, which are basically unreasonable goals without consideration of those four things, the system capability, variation, and stability, and then not having a method. So, it might be helpful just to recap those first five lessons. I'll just list them out and folks that want to hear the details can listen to the last episode.
0:01:31.8 JD: But lesson one was data have no meaning apart from their context. So, we've got to contextualize the data. Lesson two was we don't manage or control the data. The data is the voice of the process. So, it's sort of, you know, the data over time shows us what's happening and we don't really have control over that data. We do have control under that underlying process. Lesson three was plot the dots for any data that occurs in time order. So, take it out of a two-point comparison or take it out of a spreadsheet and put it on a line chart that shows the data over time. Lesson four was two or three data points are not a trend. So again, get beyond the typical two-point limited comparison this month and last month, this year and last year, this same month, last year, those types of things, this week, last week.
0:02:25.6 JD: And then lesson five was, show enough data in your baseline to illustrate the previous level of variation. So, we want to get a sense of how the data is changing over time and we need a baseline amount of data, whether that's 12 points, 15 points, 20 points, there's sort of different takes on that. But somewhere in that 12-to-20-point range is really the amount of data we want to have in our baseline. So, we understand how it's moving up and down over time sort of naturally. Sort of at the outset of those two episodes, we also talked about centering the process behavior charts, like the ones we viewed in many of our episodes. And we put those in the center because it's a great tool for looking at data over time, just like we've been talking about.
0:03:11.4 JD: And I think when we use this methodology, and when you start to fully grasp the methodology, you start to be able to understand messages that are actually contained in the data. You can differentiate between those actual special events, those special causes, and just those everyday up and downs, what we've called common causes. And in so doing, we can understand the difference between reacting to noise and understanding actual signals of significance in that data. And so, I think that's a sort of a good primer to then get into lessons six through 10.
0:03:51.2 AS: Can't wait.
0:03:53.3 JD: Cool. We'll jump in then.
0:03:56.1 AS: Yeah. I'm just thinking about my goal setting and how much this helps me think about how to improve my goal setting. And I think one of the biggest ones that's missing that we talked about before is by what method. And many people think that they're setting strategy, when in fact, they're just setting stretch targets with nothing under it. And they achieve it by luck or are baffled why they don't achieve it. And then they lash out at their employees.
0:04:31.4 JD: Yeah, there was really... I mean, that goes back to one of those four conditions of setting goal capability. You have to understand how capable your system is before you can set, it's fine to set a stretch goal, but it has to be within the bounds of the system. Otherwise, it's just maybe not an uncertainty, but a mathematical improbability. That's not good. Like you're saying, it's not a good way to operate if you're a worker in that system. So, lesson six then, to continue the lessons.
0:05:06.8 JD: So, lesson six is "the goal of data analysis in schools is not just to look at past results, but also, and perhaps more importantly, to look forward and predict what is likely to occur in the future," right? So that's why centering the process behavior charts is so important, because they allow you to interpret data that takes variation into account, allows you to classify the data into the routine or common cause variation or the exceptional, that's the special cause variation, and allows us to turn our focus to that underlying or the behavior of the underlying system that produced the results. And it's this focus on the system and its processes that's then the basis for working towards continual improvement.
0:06:00.6 AS: And I was just thinking about number six, the goal is to predict what is likely to occur in the future. And I was just thinking, and what's likely to occur in the future is exactly what's happening now, or the trend that's happening, unless we change something in the system, I guess.
0:06:16.4 JD: Yeah. And that's why just setting the stretch goal is often disconnected from any type of reality, because we have this idea that somehow something magical is going to happen in the future that didn't happen in the past. And nothing magical is going to happen unless we are intentional about doing something differently to bring about that change.
0:06:39.5 AS: And that's a great lesson for the listeners and the viewers. It's like, have you been just setting stretch targets and pushing people to achieve these stretch targets? And not really understanding that your role is to understand that you're going to get the same result unless you start to look at how do we improve the method, the system, that type of thing.
0:07:05.0 JD: Yeah. And usually when you have those stretch goals, you've looked at what happened last year, and then you base the stretch goal on last year. But perhaps, you're seeing, for the last three or four years, the data has been steadily decreasing, right? And you can't realize that if you haven't charted that over the last three or four years, hopefully beyond that. So, you have no idea or it could have been trending positively, and you may under shoot your stretch goal because you missed a trend that was already in motion because of something that happened in the past.
0:07:44.8 AS: You made a chart for me, a run chart on my intake for my Valuation Masterclass Bootcamp. And we've been working on our marketing, and I presented it to the team and we talked about that's the capability of our system based upon for me to say, I want 500 students when we've been only getting 50 is just ridiculous. And that helped us all to see that if we are going to go to the next level of where we want to be, we've got to change what we're doing, the method that we're getting there, the system that we're running and what we're operating to get there or else we're going to continue to get this output. And so if the goal is to predict what is likely to occur in the future, if we don't make any changes, it's probably going to continue to be like it is in that control chart.
0:08:42.8 JD: Yeah. And that example is, in a nutshell, the System of Profound Knowledge in action in an organization where you're understanding variation in something that's important to you, enrollment in your course. You're doing that analysis with the team. So, there's the psychological component and you're saying, well, what's our theory of knowledge? So, what's our theory for how we're going to bring about some type of improvement? And so, now you're going to run probably something like a PDSA. And so now you have all those lenses of the System of Profound Knowledge that you're bringing together to work on that problem. And that's all it is really in a nutshell.
0:09:22.2 AS: Yeah. And the solution's not necessarily right there. Sometimes it is, but sometimes it's not. And we've got to iterate. Okay. Should we be doing marketing in-house or should we be doing it out using an outsourced service? What if we improve and increase the volume of our marketing? What effect would that have? What if we decrease the... What if we change to this method or that method? Those are all things that we are in the process of testing. I think the hardest thing in business, in my opinion, with this is to test one thing at a time.
0:09:58.5 JD: Yeah.
0:09:58.7 AS: I just, we I want to test everything.
0:10:00.4 JD: Yeah. Yeah. I read in the Toyota Kata that I think we've talked about before here, which talks about Toyota's improvement process. I read this in the book, I don't know if this is totally always true, but basically they focus on single factor experiments for that reason, even in a place as complex and as full of engineers as Toyota, they largely focus on single factor experiments. They can actually tell what it is that brought about the change. I mean, I'm sure they do other more complicated things. They would have to write a design of experiments and those types of things, but by and large, their improvement process, the Toyota Kata, is focused on single factor experiments for that reason.
0:10:48.1 AS: And what's that movie, the sniper movie where they say, slow is smooth and smooth is fast or something like that, like slow down to speed up. I want to go fast and do all of these tests, but the fact is I'm not learning as much from that. And by slowing down and doing single factor experiment to try to think, how do we influence the future is fascinating.
0:11:20.9 JD: Yeah, absolutely.
0:11:22.4 AS: All right. What about seven?
0:11:23.2 JD: Lesson seven. So "the improvement approach depends on the stability of the system under study," and there's really two parts to this. But what approach am I going to take if the system is producing predictable results and it's performing pretty consistently, it's stable, there's only common cause variation. And then what happens if you have an unpredictable system? So two different approaches, depending on what type of system you're looking at in terms of stability. So you know the one thing to recognize in thinking about something like single factor experiments, it's a waste of time to explain noise or explain common cause variation in this stable system, because there's no simple single root cause for that type of variation. There's thousands or tens of thousands of variables that are impacting almost any metric. And you can't really isolate that down to a single cause.
0:12:17.5 JD: So instead we don't, we don't try to do that in a common cause system that needs improvement. Instead, if the results are unsatisfactory, what we do is work on improvements and changes to the system, right? We don't try to identify a single factor that's the problem. So what we do then is we work to improve a common cause processor system by working on the design of that actual system including inputs, throughputs that are a part of that. And to your point, you sort of have to, based on your content knowledge of that area, or maybe you have to bring in a subject matter expert and you sort of start to think about what's going to make the biggest difference. And then you start testing those things one at a time, basically. That's sort of the approach. And then if you're working in an unpredictable system and that unpredictable system is unpredictable because it has special causes in your data, then it's really a waste of time to try to improve that particular system until it's stable again. And so the way you do that is at that point, there is something so different about the special cause data that you try to identify that single cause or two of those data points. And then when you've identified, you study it, and then you try to remove that specific special cause. And if you've identified the right thing, what happens then is it becomes a stable system at that point, right?
0:13:51.9 AS: I was thinking that it's no sense in trying to race your boat if you've got a hole in it. You got to fix the special cause, the hole, and then focus on, okay, how do we improve the speed of this boat?
0:14:06.5 JD: And the key is recognizing the difference between these two roadmaps towards improvement. And I think in education for sure, there's a lot of confusion, a lot of wasted effort, because there's really no knowledge of this approach to data analysis. And so people do their own things. There's a mismatch between the type of variation that's present and the type of improvement effort that's trying to be undertaken. I think the most typical thing is there's a common cause system, and people think they can identify a single thing to improve. And then they spend a lot of time and money on that thing. And then it doesn't get better over time because it was the wrong approach in the first place.
0:14:55.9 AS: Number eight.
0:14:57.6 JD: Number eight. So, number eight is, "more timely data is better for improvement purposes." So we've talked about state testing data a lot. It's only available once per year. Results often come after students have gone on summer vacation. So, it's not super helpful. So, we really want more frequent data so that we can understand if some type of intervention that we're putting in place has an effect. I think what the most important thing is, the frequency of the data collection needs to be in sync with the improvement context. So, it's not always that you need daily data or weekly data or monthly data, or quarterly data, whatever it is. It's just it has to be in sync with the type of improvement context you're trying to bring about. And no matter what that frequency of collection, the other big thing to keep in mind is don't overreact to any single data point, which is, again, I see that over and over again in my work. I think ultimately the data allows us to understand the variation and the trends within our system, whether that system is stable or unstable, and then what type of improvement effort would be most effective. And, again, in my experience, just those simple things are almost never happening in schools. Probably in most sectors.
0:16:25.9 AS: Can you explain a little bit more about in sync with the improvement process? Like, maybe you have an example of that so people can understand.
0:16:34.2 JD: Well, yeah. So, you mean the frequency of data collection?
0:16:39.0 AS: Yeah. And you're saying, yeah, this idea of like, what would be out of sync?
0:16:44.7 JD: Well, one, you need to... A lot of times what happens is there might be a system in place for collecting some type of data. Let's say, like, attendance. They report attendance, student attendance on the annual school report card. So, you get that attendance rate, but that's like the state test scores. Like, it's not that helpful to get that on the report card after the year has concluded. But the data is actually available to us in our student information system. And so, we could actually pull that in a different frequency and chart it ourselves and not wait on the state testing date or the state attendance report card has attendance...
0:17:27.5 AS: Because attendance is happening on a daily basis.
0:17:31.0 JD: Happening on a daily basis. So, if we wanted to, daily would be pretty frequent, but if we did collect the data daily, we certainly can do that. We could see, that could help us see patterns in data on certain days of the week. That could be something that goes into our theory for why our attendance is lower than we'd want it to. You could do it weekly if the daily collection is too onerous on whoever's being tasked with doing that. I think weekly data pretty quickly, would take you 12 weeks. But in 12 weeks, you have a pretty good baseline of what attendance is looking like across this particular school year. So I think when you're talking about improvement efforts, I think something daily, something weekly, I think that's the target so that you can actually try some interventions along the way. And...
0:18:29.3 AS: And get feedback.
0:18:31.1 JD: And get feedback. Yeah, yeah. And you could also peg it to something that's further out. And you could see over time if those interventions that are impacting more short-term data collection are actually impacting stuff on the longer term as well.
0:18:49.1 AS: And I guess it depends also on what is the priority of this. Let's say that attendance is not a big issue at your particular school. Therefore, we look at it on a monthly basis and we look to see if something's significance happening. But otherwise, we've got to focus over on another idea. And if, if, if attendance becomes an issue, we may go back to daily and say, is it a particular day of the week? Or is it something, what can we learn from that data?
0:19:20.0 JD: Yep, that's exactly right. And then the next step would be in lesson nine, you then, and this is why the charts are so important, then you can clearly label the start date for an intervention directly on the chart. So, what you want to do is, once you've chosen an intervention or a change idea, you clearly mark that in your process behavior chart. I just use a dashed vertical line on the date the intervention is started and also put a simple label that captures the essence of that intervention. So, that's right on the chart. So, I can remember what I tried or started on that particular day. And then that allows the team to easily see, because you're going to continue adding your data points, the stuff that comes after the dotted line, it becomes pretty apparent based on the trends you're seeing in the data, if that intervention is then working, right?
0:20:21.2 JD: If it's attendance, I may try, I do a weekly call to parents to tell them what their individual child's attendance rate is. And then we can see once we started making those weekly calls over the next few weeks, does that seem to be having an impact on attendance rates? And then I can actually see too, we've talked about the patterns in the data, there's certain patterns I'm looking for to see if there's a significant enough change in that pattern to say, yeah, this is a signal that this thing is actually working. So, it's not just because it increased, that attendance rate could go up, but that in and of itself isn't enough. I want to see a signal. And by signal, I mean a specific pattern in the data, a point outside the limits.
0:21:17.3 JD: I want to see eight points in a row in the case of attendance above the central line or I want to see three out of four that are closer to a limit, the upper limit, than they are to that central line. And again, we've talked about this before, those patterns are so mathematically improbable that I can be pretty reasonably assured if you see them that an actual change has occurred in my data. And because I've drawn this dotted line, I can tie the time period of the change back within that dataset to determine if something positive happened after I tried that intervention.
0:21:56.7 AS: It's just, you just think about how many times, how many cycles of improvement and interventions that you can do in a system and how far you will be a year later.
0:22:12.3 JD: Yes, yeah. And "cycles" is exactly the right word because really what you're doing, I didn't mention it here, but really what you were doing at the point you draw that vertical line when you're going to run an intervention, you're going to do that through the PDSA cycle, the Plan-Do-Study-Act cycle. So that's your experiment where you're testing one thing to see what impact it has on the data. So if I was going to boil continual improvement per Dr. Deming down to two things is, put your data on a process behavior chart, combine it with a PDSA to see how to improve that data. And that's continual improvement in a nutshell, basically, those two tools.
0:22:51.7 AS: Gold, that's gold. All right. Number 10.
0:22:55.3 JD: Last one, lesson 10, "the purpose of data analysis is insight." So this comes from Dr. Donald Wheeler, but he basically just teaches us that the best analysis is the simplest analysis, which provides the needed insight. But what he would say is plot the dots first on a run chart. Once you have enough data, turn it into a process behavior chart. And that's the most straightforward method for understanding how our data is performing over time. And so this approach, I think it's much more intuitive than if we store the data in tables and then the patterns become much more apparent because we're using these time sequence charts. And again, I know I've said this before, but I keep repeating it because I think it's the essence of continual improvement to do those two things. Yeah.
0:23:47.1 AS: And what's the promise of this? If we can implement these 10 points that you've highlighted in relation to goal setting, what do you think is going to change for me? I mean, sometimes I look at what you've outlined and I feel a little bit overwhelmed, like, God, that's a lot of work. I mean, can I just set the freaking goal and people just do it?
0:24:13.2 JD: Yeah. Well, I think, this is, in essence, a better way. I mean, this is really the wrap up here is that, well, one, when you understand the variation in your chart, you actually understand the story, the true story that's being told by your data. And so many people don't understand the true story. They sort of make up, that's too strong, but they don't have the tools to see what's actually happening in their system. So if you really want to see what's happening in your system, this is the way to do it. That's one thing. I think it also... I tried many, many things before I discovered this approach, but I didn't have any way to determine if something I was trying was working or not.
0:25:07.1 JD: I didn't have any way to tie the intervention back to my data. So what most people then do is tell the story that this thing is working if you like it. And if you don't want to do it anymore, you tell the story that it's not working, but none of its actually tied to like scientific thinking where I tie the specific point I try something to my data. So that's another thing. I can actually tell if interventions are working or not or can have a... I always try to use, not use definitive language. Scientifically, I have a much better likelihood of knowing that an intervention is working or not.
0:25:47.7 JD: So I think especially the process behavior chart, I think, and the way of thinking that goes with the chart is probably the single most powerful tool that we can utilize to improve schools. And we can teach this to teachers. We can teach this to administrators. We can teach this to students, can learn how to do this.
0:26:07.1 AS: Yeah. And I think one of the things I was thinking about is start where you have data.
0:26:12.3 JD: Yeah. Start where you have data.
0:26:14.2 AS: Don't feel like you've got to go out there and go through a whole process of collecting all this data and all that. Start where you have data. And even if attendance is not your major issue, let's say, but you had good attendance data, it's a good way to start to learn. And I suspect that you're going to learn a lot as you start to dig deeper into that. And then that feeds into, I wonder if we could get data on this and that to understand better what's happening.
0:26:41.4 JD: There are so many applications, so many applications. I mean, even just today, we were talking about, we get a hundred percent of our students qualify for free and reduced lunch because we have a school-wide lunch or breakfast and lunch program. And so we get reimbursed for the number of meals that are distributed. And sometimes there's a mismatch between the number that are distributed and the number we order just because of attendance and transportation issues and things like that. But the federal government only reimburses us for the meals we actually distribute to kids. And so if we over order, we have to pay out of our general fund for those meals that we don't get reimbursed for. And so, I'm just bringing this up because we were looking at some of that data just today, that mismatch, and even an area as simple as that is ripe for an improvement project.
0:27:40.7 JD: Why is there a mismatch? What is happening? And prior, I would just say, prior to having this mindset, this philosophy, I would say, well, they just need to figure out how to get the numbers closer together. But you actually have to go there, watch what's happening, come up with a theory for why we're ordering more breakfasts and lunches than we're passing out. It could be super, super simple. No one ever told the person distributing the lunches that we get reimbursed this way. And so they didn't know it was a big deal. I don't know that that's the case or not right, that's purely speculation. Or it could be, oh, we want to make sure every kid eats so we significantly over order each day. Well, that's a good mindset, but maybe we could back that off to make sure we never... We're always going to have enough food for kids to eat, but we're also not going to spend lots of extra money paying for lunches that don't get eaten. So there's all different things, even something like that operationally is ripe for improvement project. And the great thing is, is if you can study that problem and figure out how to save that money, which could by the end of the year, you know, be thousands of dollars, you could reallocate that to field trips or class supplies or to books for the library or art supplies, whatever, you know? So that's why I think this methodology is so powerful.
0:29:02.1 AS: Fantastic. That's a great breakdown of these 10 points. So John, on behalf of everyone at the Deming Institute, I want to thank you again for this discussion and for listeners, remember to go to deming.org to continue your journey. And you can find John's book, Win-Win, W. Edwards Deming, The System of Profound Knowledge and the Science of Improving Schools on Amazon.com. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."
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In this episode, Bill Bellows and host Andrew Stotz discuss seeing organizations as holograms—3D images. Holograms show all parts from different views at once. Learn how using the lens of the System of Profound Knowledge lets you see the problems and opportunities for transformation.
TRANSCRIPT
0:00:02.5 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas, to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today, which we call Episode 18, is, Wouldn't It Be Nice? Bill take it away.
0:00:28.9 Bill Bellows: Wouldn't it be nice if [chuckle] we were older and we wouldn't have to wait so long? Okay. So Episode 18, greetings, Andrew. So as I mentioned in the past, I like to go back and listen to the past previous podcasts and as well as hear from people and their feedback on them. And I have a few points of clarity on the last one, and then we'll get into today's feature. So the last one which we refer to as Diffusion From a Point Source. And I talked about being in a bathtub, you start off at room temperature water and, or you fill the bath and you went and got distracted and came back, and now it's not warm enough, so you crank up, let's add some more water, and you feel that heat coming towards you from the... And then the diffusion equation is about how that, all the water ends up about the same temperature, and then you turn off the water and you drop back to room temperature.
0:01:41.1 BB: But another aspect of the point source that I wanted to clarify is, is if you have in the bathtub some, a source of energy, a heat source, which is not, you know, is different than the source of the water coming out of the faucet. But imagine you've got a little generator in there pumping out heat, then the bathtub, depending on the temperature of that, the amount of energy being released, then the bathtub is going to get warmer, warmer and warmer and warmer and warmer and warmer, and what keeps it going back to room temperature is how much energy is coming out of that. And that's what I was referring to as what it takes to maintain a transformation either individually within an organization, is something which continues to churn. Else you end up by the world we're in, you're watching the news, you're hearing about some accident and people are looking for the singular source, or they're looking at two points in a row, a downturn or upturn and looking at two data points to draw a conclusion. So there's all these everyday reminders of how, of the prevailing system of management at work in terms of how people are treated, how we manage systems. And our challenge is, how do you fight that?
0:03:14.7 BB: And so even within your organization, if you're trying to get people excited by Deming's works, what you have to appreciate is when they go home, the rest of their lives, they're being immersed in a culture of blame of individuals, not the system, and that's part of what we have to deal with. So I just want to mention that what I meant by that source term is, what does it take individually that we can do within our organizations to try to keep things going and not get sucked back down, knowing you've got all this normality around us that we're trying to move beyond. So the next thing I want to talk about is transformation. [chuckle] And then as that leads into, Wouldn't It Be Nice. And I was looking at The New Economics, my Kindle version, and found out that there were 73 references to transform in The New Economics, 73. And the first one is in the forward written by our good friend Kevin Cahill, and in there Kevin references, this is in the 3rd edition of The New Economics, which is the white cover if you have it in print. And it came out 2018. In there, Kevin references Out of the Crisis. And Kevin says, "The aim of the book," again, Out of the Crisis, "was clearly stated in the preface."
0:04:48.1 BB: This from Dr. Deming now, "The aim of this book is transformation of the style of American management, transformation of American style of management is not a job of reconstruction nor is it revision, it requires a whole new structure from foundation upward. The aim of this book is to supply the direction." Okay? Now back to Kevin, then Kevin says, "Out of the Crisis supplies direction for any and all types of organizations, while many people focused on its application in manufacturing, it was a call to action for every organization from education, to healthcare, to non-profits and startups of all sizes." Okay. So now we get to the preface for The New Economics. And so this is from Dr. Deming, what I just shared with you is Kevin quoting his grandfather. So now going back to 1993, the 1st edition, Dr. Deming said, "The route to transformation is what I call Profound Knowledge. The System of Profound Knowledge is composed of four parts all related to each other, appreciation for system, knowledge about variation, theory of knowledge, psychology. The aim of this book is to start the reader on the road to knowledge and to create a yearning for more knowledge." He adds to that,
0:06:07.3 BB: "What we need is cooperation and transformation... " there’s that transformation word again. "To a new style of management, the route to transformation is what I call Profound Knowledge. The System of Profound Knowledge is composed of four parts all related to each other." And I'll just pause here and I, just thinking of a friend a couple years ago is inviting me to go to his company and do an in-house program. And he wanted to know how I would start the program, would I open up with the System of Profound Knowledge? I said, "No." I said I would build up to that, and he says, "Well, why not just start with it?" I said, "Because it's a solution to a problem you don't know you have." I said, "I would rather first give a sense of the nature..." now, and he said, "Well, how are we going to start?" And I said, "I'm going to start with the Trip Report, having people compare the ME versus the WE or the All Straw versus the Last Straw. And then use Profound Knowledge as a means by which to understand how you go from one to the other." I said, "But without that understanding of the problem we face... " again, it's an elegant... [chuckle] Every time, the System of Profound Knowledge is an elegant solution to a problem you don't know you have. So I look at it as, let's first create a sense of the problem/opportunity. Okay.
0:07:38.0 BB: So we're going to come back to transformation, but now I want to go back to the title, Wouldn't It Be Nice. And what I'll do is, when this is posted on the institute webpage, I'll put a link to an article I wrote in September, 2015 for the Lean Management Journal, entitled, Wouldn't It be nice. And that article includes in the opening, it says, "My appreciation of Brian Wilson on the Beach Boys has grown significantly in the past month," okay, and this was written in 2015, "after viewing the Brian Wilson Biopic “Love and Mercy," which for you, Andrew, and everyone listening, it's a fascinating, fascinating film. And it got me turned on to Brian Wilson and all these things about the Beach Boys I really underestimated. All right, so then I wrote, "Through this blast from my past, I was reminded of another Beach Boys classic, Wouldn't It Be Nice. And the yearning "wouldn't it be nice if we were older then we wouldn't have to wait so long." And then I closed the opening with, "And reflecting on this adolescent wishfulness, I propose a wishfulness that organizations, public and private and even governments, improve their understanding of variation in how it impacts the systems they design, they produce and they operate."
0:09:00.7 BB: And so when I was going back and looking at that, 'cause I was thinking about transformation in this article, and I thought the transformation I talked about last time was the transformation... We talked about the transformation going from an observer, me as a professor used a student, I'm an observer of your learning versus a participant, and that's just a systems perspective. What Dr. Deming is talking about is not just how we look at systems, but the transformation involves how we look at variation. Do we move past two data points and look at variation in the context of common causes and special causes? A transformation of how we engage people, do we engage them with carrots and sticks? Do we understand when we blame them as the willing workers, what that creates in our organizations? And then the last element of Profound Knowledge, theory of knowledge. How do we know that what we know is so? And so I was just looking back at that article, and the article was written about, what if we had a better understanding of variation as one element of a transformation? And what I wanted to highlight today is talk more about transformation, but also look at transformation from not just one aspect of the System of Profound Knowledge, all of them.
0:10:32.2 BB: And it may well be, we're going to need another episode to go through this. But the next topic I want to do as we go down this path. Some time ago somebody made reference to a hologram, and I have seen holographic pictures, and so I went back and I was trying to think, why did that strike me? What about this hologram got my attention? And I started to remind myself of it. And Kevin and I were in Idaho a few months ago meeting with an audience. And I was again reminded by this hologram thing, because people were saying, "How come people in operations are so antiquated?" And I said, "Well, it's not just operations, it's more than that." So first, holograms, so what is a hologram? So I found a dictionary definition. "It's a three-dimensional image produced by a pattern of interference produced by a split coherent beam of radiation, such as a laser." That's for the physicists in the room.
0:11:38.5 AS: I'm not sure if that helped me but...
0:11:40.6 BB: [laughter] But I also found on a website, the Institute for the Advancement of Service, and the website is, www.showanotherway.org. And there I found something I think it's a little bit easier to digest. And the text says, if you turn a photograph over and you see a blank white surface," so far so good. "A photograph shows the image only on the front, thus only from one side, a hologram is a three-dimensional image created by interacting light sources, it shows the same image from all angles regardless of how it's being viewed. When a hologram is divided into pieces, the text says, each part still contains the entire image within it, although each new image is from a slightly different perspective." And then, again, from this website, and this leads us into the transformation piece, is "how does a concept of a hologram apply to organizational structures?" And I thought, "Okay. Now we're getting some place." "Because when people come together, share a vision for an organization, each person has his or her own unique perspective of the whole." I said, "Okay." "Each shares responsibility for the whole, not just his or her piece, but the component pieces aren't identical, each represents the whole picture from a different point of view.”
0:13:08.0 BB: “When we add up the pieces, the image of the whole does not change fundamentally, but rather the image becomes more intense. When more people share the common vision, the vision may not change fundamentally, but it becomes more alive, more real in a sense of the mental reality that people can truly imagine achieving." And to me, what I say is, the role of the ME/WE Trip Report is in part to create a common mental model, a common 3D view of an organization. But depending on who you're talking with in an organization, they see only one aspect of it, they see what it means in finance, they see what it means in HR, they see what it means in, from engineering. And the beauty of, what I have found is, is when you look at organizations from Dr. Deming's perspective, we're able to appreciate that these views are different, but it is the same thing we're looking at. So the next thing I want to get into of the work we're doing at Rocketdyne, working harder in a ME organization at a non-Deming company, working harder is the mantra, working smarter, as you and I have talked about, is what does that mean? Think about things from a Deming perspective. What does that mean? So what you get is a lot of working harder. And in which case, you have KPIs and we're working harder to achieve these KPIs.
0:14:46.9 BB: Well, I was very fortunate, Rocketdyne in the mid '90s, the Air Force came up with a brand new program for a next generation rocket with a set of KPIs that a few of us believed were impossible. Now what's the relevance of that? As long as, my theory is, as long as a non-Deming organization can achieve the KPI in how it currently operates, then just get out of the way. And they will work harder, a lot of brute force will be done to meet those KPIs. And Dr. Deming would remind us, anyone can accomplish anything if they don't count the cost. So, I mean, it will destroy people's lives and marriages and all that, but as long as those KPIs are met, just get out of the way. Well, what I loved about the Air Force requirement, was I was convinced that it couldn't be met. And part of the challenge was to convince executives at Rocketdyne that we can't get there from here. And that then, what I thought was, "This is our moment." We, so again, if you're in an organization and everything can be done, how the organization currently operates, then I say try to find something that can't be done with the current system. It can't be done in the schedule, it can't be done at the cost, but if it can be done by the current system, then that's not your opening. But for us, it was the opening. So the Air Force in the mid '90s had a couple billion dollars to develop a next generation series of rockets.
0:16:30.7 BB: And so we're, nowadays we think of SpaceX launching rockets. Well, this is the mid '90s, which is 20 years or so before SpaceX. And so the requirement was, that everything in the entire rocket, everything in the entire rocket, that's a lot of parts including the engine. Everything had to meet requirements, everything had to be a White Bead, no Red Beads. In the past, if there were Red Beads, which the Air Force accepted, and we know you get Red Beads, we know how you get Red Beads. And if they have Red Beads, then you would get paid to repair them, extra. And a friend of mine who was the brainchild of the effort within the Air Force to eliminate the purchase of Red Beads, he said, "The entire rocket will not have Red Beads." And when I heard of that I thought, "ME organizations don't know how to do that." They just, all they know how to do is create Red Beads. And the strategy we had already developed was, if we look at the variation in the White Beads, as you and I have talked about, then that's a great means to prevent White Beads, Red Beads in the first place, let alone improve integration. So we started getting senior management on board with things we have done to explain to them, here's a strategy, as we heard this flow down from the Air Force.
0:18:04.6 BB: Well, the existing system, how bad it was, was... And I learned this from the brain, this Lieutenant Colonel in the Air Force who pushed this incredible KPI, which was, everything must meet requirements. And it translated to something called "No Material Review Board, where a material review board in the industry, in the aerospace industry, is a situation where you've got a Red Bead that may be a very expensive Red Bead that the contractor wants to sell the Air Force, but it doesn't meet requirements. And then the contractor gets together with the Air Force and they schmooze over it, and what Lieutenant Colonel Ciscel explained is, you've got the contractor that really wants to sell that, even though something is not quite right. And what makes it work for the Air Force is when the contractor says, "Well, the bad thing about not using this is, it's going to take a couple of months to have a new one." And that time delay starts to bug the Air Force. Next thing you know that white, that Red Bead starts to look pretty good. But worse than that, what Dave explained is, he said, it's like going to the car dealership and finding that beautiful car you want. Then I, the sales person, tell you, "Andrew, okay, we're going to have it for you tomorrow, all ready to go."
0:19:36.0 BB: And then you come back the next day and I say... And you say, "Well, where's my new car?" And I say, "Well, Andrew, I told you we were going to wash it and wax it. Yeah, well, when we put it through the car wash we scratched it." And you're like, "You scratched it." And I say, "Well, yeah but we buffed out that and we're only going to charge you a little bit more for that. We're going to charge you for this and this and this." And they said, "That's what the Air Force does." And so what he was pushing for in the mid '90s was to get rid of all of that inspired by, you're ready Andrew? Inspired by his undergraduate education that the Air Force paid for when he was an officer, and he learned about Dr. Deming's work on control charts. And so when I heard that I thought, "We've got a requirement that can't be met." This is the, this is our means, our opening for initiating a transformation. 'Cause working harder, convincing the executives was, we can't get there from here. But boy, if you can get there from here, get out of the way. So now I'm going to go back to chapter two of The New Economics. Dr. Deming says, "Somehow the theory for transformation that's been mostly applied in the shop floor, everyone knows about statistical control of quality, this is important, but the shop floor is only a small part of the total. Anyone could be a 100% successful."
0:20:54.1 BB: Well, what I want to share there in terms of the situation we were dealing with in the mid '90s, if we started to talk to the executives about statistical control of quality, control charts, common causes and special causes. Well, as soon as we started to talk about the process being "in control," to the majority of our executives that translated to "everything met requirements." And so our starting point was just for that, just what does "in control" mean? And it was just so amazing how that got translated to meets requirements. And we're like, "No, no, no. We need to have the process in control, understand common cause variation and control charts and, let alone being on target." But that was our starting point, was just trying to get these ideas across on the shop floor. And chapter three... I've got a couple of things from each chapter, at least from some of the opening chapters. We'll cover the rest later. Dr. Deming says in chapter three, "We saw in the last chapter that we are living under the tyranny of the revealing style of management. Most people imagine that this style has always existed, it is a fixture. Actually, it is a modern invention, a trap that has led us into decline. Transformation is required. Education and government, along with industry, are also in need of transformation. The System of Profound Knowledge to be introduced in the next chapter is a theory for transformation."
0:22:25.5 BB: And this is what we're trying to do with this NO MRB initiative, we are just trying to get executives to realize that if we keep doing what we're doing, we're not going to be able to achieve this goal. What I'll also say is, there was such a commercial demand for space at that time, that the Air Force didn't have to pay for the entire program. So they came in with a couple billion dollars. They asked the contractors to bring their money with the idea that these rockets would be used, like Elon Musk is using, for launching all these commercial satellites. So the Air Force excitement was, we can lay out these requirements of no Red Beads, but the reason we're going to make it work is, there's such a commercial demand for a military product. And so Dave referred to this, his push for everything must meet requirements. He called it a $2 billion ambush. And I said, "What do you mean by that?" He said, "I knew they couldn't achieve what we wanted without a transformation. And I knew they wouldn't... We knew they wanted the money. But we knew they couldn't do it without a transformation." And I was like, "Oh, that's ingenious. That is just ingenious." And he so loved what we were doing at Rocketdyne, when he retired from the Air Force, as the program was transitioning from one phase to another, he retired and came to work at Rocketdyne. And he became a huge asset for our efforts to initiate a transformation.
0:24:06.1 BB: Then Dr. Deming says, "The transformation affects family life. Parents who will not rank their children nor show special favors or rewards. Would parents wish for one child to be a loser? Would his brothers and sisters be happy to have a loser in the family? Transform the family will be a living demonstration of cooperation in the form of mutual support, love and respect." At home, Andrew, at home. All right, "The prevailing style of management must undergo a transformation, the system cannot understand itself. The transformation requires an outside view." This is chapter four. And then "The aim of this chapter is to provide a lens, an outside view, a lens that I call a System of Profound Knowledge." Well, here I want to get into the hologram. And this, so I was... Kevin and I were at a Idaho Manufacturing Alliance conference right after Thanksgiving. And we had a session with some people. And in one group I was working with, they said, "Why is that engineering just doesn't get it? It always seems to be engineering. It's always engineering." And I said, "No." I said, "Each part of the organization has their own... " And I tried to explain to them, they each fall into a different trap, but the traps are very similar.
0:25:27.6 BB: I said, "So engineering sets the requirements on each part, they create the silos. Manufacturing then runs off with those instructions and produces the parts as if they're separate, quality then inspects them, finance adds up the savings, adds up the cost." And I don't know to what degree we've discussed this yet, but addition is the belief, adding up the savings comes from a belief that these elements are separate, that if we save $10 here, save $10 here and $10 there, then as an organization we save $30. No, the savings only happen... You only get a $30 savings if those activities don't interfere with one another. So I explained to them, finance has issues. And then HR, they're the ones behind performance appraisals. And that's where this hologram thing came to mind, is that each of them might think, as they get exposed to Deming's work, that we got this figured out. But it's all of them required to tie together to transform the organization. And then more from chapter 4, the transformation. "The first step is transformation of the individual. Transformation is discontinuous. It comes from understanding of the System of Profound Knowledge. The individual transformed will perceive new meaning to his life, through numerous interactions between people. Once the individual understands the System of Profound Knowledge, he'll apply its principles in every kind of relationship." There's Siri.
[chuckle]
0:27:13.6 BB: "Once the individual understands the System of Profound Knowledge, he'll apply its principles in every kind of relationship with others. He'll have a basis for judging his own decisions and transformation of the organizations that he belongs to. The individual, once transformed," this is what we talked about last time. I said, "No. The individual, once the transformation begins...will set an example, be a good listener, but not compromise. Continually teach others, help people pull away from their current practice and beliefs and move into the new philosophy without guilt about the past." And here I just want to add. A person I was mentoring three or four years ago, and she went through a one-day program I was leading, and I then started to mentor her on a regular basis. And one of the first calls we had, she was distraught over looking at herself as being incredibly selfish. She said, "The way I treated my siblings, the way I treated my classmates when I was in college." she said, "It was all about me." And I said, so I showed her this, I said, "You have to move into the new philosophy without guilt about the past." I said, "I used to think I caused the grades all by myself," I said, "We each go through this transformation differently with this bit of... " I mean 'cause we're brought up in a world thinking that we caused the grades and all these other things, and I said, "You got to move past that." And I'm not saying it's easy.
0:28:41.5 AS: Well, we did the best we could with what we had at the time, I always like to remind myself...
0:28:45.1 BB: That's right.
0:28:45.4 AS: Myself that.
0:28:48.2 BB: So a couple of other things, then I'm going to... Then I'll just pause, we can close. But what I would tell the executives early, early on, we had from the Air Force this major program, a whole lot of money at Rocketdyne, we were developing the engines. McDonnell Douglas was acquired by Boeing. They got the contract for the vehicle. So eventually we were all under Boeing, and it was really, really cool to be able to get the engine people smart about all the things we're talking about in these calls, and then the vehicle people excited. And then there was a production schedule. We're going to ship the first vehicle X years out, and then it's going to go from a couple a month to a lot a month on and on. And one of the things I would tell the executives, if you want to know every day, how are we doing every day. So you want to know if we're making progress as an organization. So I just gave them a couple of visuals. And I said, "One thing you get... " 'Cause there's one thing, "Well, how are we doing, how are we doing?" I said, "Well, let me tell you what you can measure." I said, "Every time you walk into the restroom, count how many paper towels are on the floor next to the trash can, that can't quite get into the trash can, and let that be a measure of how we're doing on the shop floor in our ability to not deliver Red Beads."
0:30:15.7 BB: And that then becomes an everyday reminder within our respective organizations is, we can't get the trash into the trash can, we can't leave the conference room as we found it, we can't get rid of the science experiments in the refrigerators. And I don't know if I mentioned it to you, but one experiment I would have people do when they would come to class at Rocketdyne, visitors and whatnot. During a break, they need an escort to walk to the restroom a few minutes away, and I'd say to them, "Here, run an experiment to how we're doing as an organization." I said, "Take your empty cup of coffee and put it on top of a file cabinet somewhere between here and the restroom, and then see if it's still there during the next break. Or crumble a piece of paper, put it on the floor, and see how many people walk past that." And I just throw that out as everyday things people can do to get kind of a finger of the pulse. As you're trying to transform your organization one person at a time, what are the things you can look for in the organization, long before we're focusing on common causes versus special causes. What are we doing with performance appraisals? Are we looking at things in the system? There's a bunch of everyday indicators you could start to look at with a sense of, this is a hologram.
0:31:51.8 AS: So we started this off with wouldn't it be nice? And we've been through a lot of different topics in relation to that, how would you summarize the key takeaway that someone can now bring to their business or their life in relation to this topic?
0:32:08.4 BB: Well, let me, and I got some bullet points on the holograms and then the close from the article that I wrote for the Lean Management Journal. And from the hologram, holographic model from the showanotherway.org website, it says, "What do we need to be mindful of when working with this holographic model?" It said "in this model, we need to be aware of the whole, with the parts, their relationships, and the context." Okay? So that's, part of this transformation is keep looking at things and try to imagine what's the greater context for these decisions. That one part of the organization reflects the philosophy of the whole organization. So the idea that, stop thinking that it's just those people in operations that don't get it. Each part of the organization has taken the prevailing system of management and put it into their DNA. So it's everywhere, that members of the organization reflect the whole of the organization and their behaviors. And the idea is, how do we get them to think about the whole? And I think a lot of progress can be made just by sharing with people a common... Having them reveal their appreciation of the contrast between ME and WE organizations, and they'll be pretty obvious where they'd rather work.
0:33:41.3 BB: And then the, what I closed the Brian Wilson article for the Lean Management Journal with is, "wouldn't it be nice if we manage the variation in the parts as being the parts of a system. In the spirit of Brian Wilson's adolescent wishfulness, wouldn't it be nice if the great illusion of independent parts and components modules was replaced by the realism of unity and interconnectedness in amazing prospects for teamwork within any organization." And I think that's a nice way of talking about transformation, not just looking at systems, but understanding people, psychology, and the theory of knowledge.
0:34:25.1 AS: Well, that's a great place to wrap. Bill on behalf of everyone at the Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. And people wonder, why do I repeat the same quote over and over again. Try to get it through our thick heads that people are entitled to joy in work.
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Do you struggle to meet your goals or targets? Find out how you can change your thinking about goals and your process for setting them so you can keep moving forward. In this episode, John Dues and host Andrew Stotz discuss the first five of John's 10 Key Lessons for Data Analysis.
TRANSCRIPT
0:00:03.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. This is episode two of four in a mini-series on why goal setting is often an act of desperation. John, take it away.
0:00:32.3 John Dues: Hey, Andrew, it's good to be back. Yeah, in that last episode, that first episode in this mini-series, we talked about why goal setting is often an act of desperation and I basically proposed these four conditions that organizations should understand prior to setting a goal. So it's not the goals in and of themselves that are bad, but it's with this important understanding that's often lacking. So those four things that organizations should understand, one, what's the capability of a system under study? So that's the first thing, how capable is the system or the process? The second thing is what's the variation within that system or process under study? So that's the second thing we talked about last time. The third thing is understanding if that system or process is stable. And then the fourth thing was, if we know all of those things, by what method are we going to approach improvement after we set the goal, basically? So you gotta have those four things, understanding the capability of the system, the variation of the system, the stability of the system, and then by what method, prior to setting a goal. And so I think I've mentioned this before, but absent of an understanding of those conditions, what I see is goals that are, what I call it, arbitrary and capricious.
0:01:48.8 JD: That's a legal characterization. You look that up in the law dictionary. And it basically says that an "arbitrary and capricious law is willful and unreasonable action without consideration or in disregard of facts or law." So I'm just now taking that same characterization from a legal world and applying it to educational organizations and accountability systems, and I just switched it to "a willful and unreasonable goal without consideration or in disregard of system capability, variability, and/or stability." And we see these all over the place for education organizations, for schools, school districts, teachers, that type of thing.
0:02:31.6 JD: And so what I tried to do in the book and tried to do here in my work in Columbus is develop some sort of countermeasures to that type of goal setting and develop the 10 key lessons for data analysis. An antidote to the arbitrary and capricious goals seen throughout our sector. And this process behavior chart tool, looking at data in that format is central to these lessons. So what I thought we would do in this episode and the next is outline those 10 key lessons. So five today and then do another five in the next episode. And in the fourth episode of the series, what we would do is then apply those examples to a real life improvement project from one of our schools. It's helpful, I think too, to sort of, to understand the origin of the key lessons. So there's the lessons that I'll outline are really derived from three primary sources.
0:03:36.0 JD: So the first two come from Dr. Donald Wheeler, who I've mentioned on here before, a lot of Deming folks will, of course, have heard of Dr. Wheeler, who's a statistician in Tennessee, a colleague of Dr. Deming when Dr. Deming was alive and then has carried on that work to this day. The two books, two really great books that he wrote, one is called Understanding Variation, a thin little book, a good primer, a good place to start. And then he's got a thicker textbook called Making Sense of Data, where you get in really into the technical side of using process behavior charts. So I'd highly recommend those. And then the third resource is a book from a gentleman, an engineer named Mark Graban called Measures of Success. And I really like his book because he has applied it, the process behavior chart methodology, to his work and he's really done it in a very contemporary way. So he's got some really nice color-coded charts in the Measures of Success book and I think they're really easy to understand with modern examples, like traffic on my website, for example, in a process behavior chart, really easy to understand modern example. But all three of the books, all three of the resources are built on the foundation of Dr. Deming's work. They're, you know, Graban and Wheeler are fairly similar and I think Graban would say he's a student of Wheeler.
0:05:00.4 JD: He learned of this mindset, this approach to data analysis by finding a Donald Wheeler book on his own dad's bookshelf when he was in college and starting down that path as a young engineer to study this stuff. And basically what I've done is take the information from those three resources and make some modifications so they can be understood by educators, basically. I think it's also worth noting again that process behavior chart methodology is right in the center of this, really for three reasons. One, when you plot your data that way, you can start to understand messages in your data, I think that's really important. Second, you can then start to differentiate between special and common causes, special and common causes, translate that into regular language. I can translate between something that I should pay attention to and something that's not significant basically in my data. And then in so doing, I know the difference between when I'm reacting to noise versus when I'm reacting to signals in my data, so I think that's really important. So the process behavior chart is at the center of all this. So we'll go through five of these lessons, one by one, I'll outline the lesson and then give a little context for why I think that particular lesson is important.
0:06:25.4 AS: That sounds like a plan. So capability, variation, stability and method. You've talked about Donald Wheeler, excellent book on Understanding Variation, that's the one I've seen. And of course, Mark Graban's book, Measures of Success, very well rated on Amazon and a podcaster himself, too.
0:06:49.6 JD: Yeah. And if I was a person studying this and wanting to get into process behavior charts and really knowing how to look at data the right way, I would read Understanding Variation first because it's a good primer, but it's fairly easy to understand. And then I would read Measures of Success 'cause it's got those practical applications now that I have a little bit of a baseline, and then if I wanna go deep into the technical stuff, the Making Sense of Data, that's the textbook that drives everything home. Yeah. So we'll dive into the lesson then.
0:07:19.5 AS: Let's do it.
0:07:20.0 JD: Yeah. Okay. So the first lesson, and I've talked about this in various episodes before, but lesson one, the very first lesson is, "data have no meaning apart from their context." So this seems commonsensical, but I see this all the time where these things aren't taken care of. And what I'm talking about is answering some basic questions. So for anyone looking at my data, they should be able to answer some basic questions, very simply, anybody that looks at my data. First thing is who collected the data? That should be apparent. How were the data collected? When were the data collected? Where were the data collected? And then what do these values represent? So oftentimes I see data either in a chart or in some type of visualization and almost none of those things are known from looking at the data, all important questions.
0:08:18.6 JD: The second question would be, well, that first set goes together. The second question is what's the operational definition of the concept being measured? So we have to be on the same page about what it is exactly being measured in this data that I've collected. I also wanna know how were the values of any computed data derived from the raw inputs? That's important. And then the last thing is, have there been any changes made over time that impact the data set? For example, perhaps the operational definition has changed over time for some reason. Maybe there's been a change in formula being used to compute the data.
0:09:05.4 JD: So an example would be, from my world, high school graduation rates. You know, 20 years ago there was one definition of how you calculated a high school graduation rate, now there's a different definition. So when you compare those two sets of data, you've gotta be careful because you're actually, you're actually working from different definitions and I think that happens all the time. More recently here in Ohio, what it means to be proficient on a state test, that definition changed about 10 years ago. And so if you look at test results from 2024 and try to compare them to 2014, you're really comparing apples and oranges 'cause there's two different definitions of proficiency, but no one remembers those things a decade later. So you have...
0:09:52.3 AS: And then a chart will be presented where the different methodologies are shown as one line that says...
0:10:00.8 JD: Yes.
0:10:00.8 AS: That no one's differentiated the fact that at this point it changed.
0:10:04.6 JD: Yeah, at this point it changed. So first lesson, data have no meaning apart from their context. Second lesson is we don't manage or control the data, the data is the voice of the process. What we control is the system and the processes from which the data come. There's a difference there. Right? So I think this is one of the key conceptions of that system's view, that system's thinking in an organization. When we wanna make improvements in our schools, we need a few things in place. We need the people working in the system. So that would be the students for us, they're working in the system, people that have the authority to work on the system, so that'd be teachers if we're talking about an individual classroom, at the school building level, maybe we're talking about the principal. And those two things are, at least the teacher principal thing is usually in place, the students being a part of improvement projects, definitely less so, but maybe there are places where that's happening. But the third thing is someone with an understanding of the System of Profound Knowledge, I'd say that's almost always lacking in the education sector, at least. And I think the reason the System of Profound Knowledge becomes important, 'cause that's really the theoretical foundation for all the things that we're talking about when we're looking at data in this way.
0:11:38.8 JD: If you lack that conception, then it's hard to bring about any improvement, because you don't understand how to look at that data, how to interpret that data, you don't understand how to run a plan-do-study-act cycle. Because what you're gonna ultimately have to do is change some process in your system and there's some knowledge that you're gonna need to be able to do that, and that's, that third component of an improvement team has to be in place to do that. But I think the most important thing is that we're not in control of the data, we're in control of the processes that ultimately lead to the data. It's a distinction, maybe a fine distinction, but I think it's an important one.
0:12:17.5 AS: The idea of the System of Profound Knowledge and understanding what to do with the data and really understanding the whole thing, I was just thinking what would... An analogy I was thinking about is rain. Everybody understands rain as it comes out of the sky, but not everybody understands how to use that to make a pond, to make an aqueduct, to feed a farm, to, whatever that is. And so having that big picture is key, so, okay. So number...
0:12:57.8 JD: Yeah. Well, and a part of that is something really simple is constantly understanding data is the voice of the process. And so when you're looking at data, what often happens is I'm gonna walk into a meeting with my boss, and I'm looking for some data point, maybe we just got some type of performance data back or survey results or something. I'm gonna pick one of those items where the plot, where the dot from last time has improved when we look at it this time, and I take that and say, "Look how we've improved in this thing." And you need someone to say, "Well, wait a second, while there is a difference between those data points, if I look at the last 12, things are just moving up and down." And there's gotta be someone in the room that constantly points back to that, constantly. And that's where that person with the Profound Knowledge is helpful in improvement work.
0:13:54.5 AS: So the voice of the process is a great way of phrasing it that's been used for a while now and I think it's really good. I remember when I worked at Pepsi as a young supervisor, I saw some problem on the production line and I raised it to the maintenance guys. And they kept coming and fixing it and it would break and they'd fix it and it would break, and I basically got mad at him and I was like, "What the hell?" And he's like, "Bosses won't pay for the things that I need to fix this permanently, so get used to it constantly breaking down."
0:14:33.4 JD: And that's the best I can do.
0:14:34.0 AS: That's the voice of the system, here's what I can produce with what you've given me to produce.
0:14:40.8 JD: Yep. Yep. Yeah. Those guys had a very keen understanding of the system, no doubt in that example. Yeah. Yeah. And that kind of thing happens all the time, I think. That was lesson two. Lesson three is plot the dots for any data that incurs in time order. So a lot of people in this world know Dr. Donald Berwick, he started the Institute for Healthcare Improvement. He was a student of Dr. Deming's, he's done a lot of work in this area. He has a great quote where he says, "Plotting measurements over time turns out, in my view, to be one of the most powerful things we have for systemic learning." And that's what really plot the dots is all about, it's all about turning your data into a visualization that you can learn from. And the National Health Service in England has this #plotthedots. And I think the whole point is that plotting the dots, plotting the data over time helps us understand variation and it leads us to take more appropriate action when we do that. So whether it's a run chart or a process behavior chart, just connecting the consecutive data points with a line makes analysis far more intuitive than if we store that data in a table.
0:16:03.6 AS: Yeah. And I was thinking about if you're a runner and you wanna compete in a marathon, plotting the dots like that is so valuable because you can see when changes happen. For instance, let's just say one night you didn't eat and then you ran the next morning and then your performance was better. Was it just a noise variation or is there something that we can learn from that? And then just watching things over time just give you ideas about what... Of potential impacts of what something could do to change that.
0:16:42.0 JD: Yeah. And we can start with a simple run chart, it doesn't have the limits, it's just a line chart. And then once we have enough of the data collected, enough plotted dots, then we can turn it into the process behavior chart.
0:16:56.3 AS: Some people don't even want to see that, John, like when we looked at your weight chart, remember that?
0:17:03.0 JD: I do remember that. Yeah.
0:17:04.0 AS: So for the people out there that really wanna let's say, control your weight, put a dot plot chart on your wall and measure it each day and just the awareness of doing that is huge.
0:17:18.7 JD: Yep. It is huge. It really is huge. And that works for any data that occurs over time, so almost everything that we're interested in improving occurs in some type of time order, time sequence. So these charts are appropriate for a wide array of data. But the bottom line is that... Oh, yeah, sorry, go ahead.
0:17:33.5 AS: The bottom line?
0:17:35.0 JD: Well, I was just saying the bottom line, whether you're using a run chart or a process behavior chart, it's always gonna tell us more than a list or a table of numbers, basically.
0:17:44.5 AS: I was gonna explain this, a situation I had when I was head of research at a research firm, a broker here in Thailand. I, my goal was to get more output from the analysts, they needed to write more and we needed to get more out. So what I did and I had already learned so much about Deming and stuff at that time. So what I did is I just made a chart showing each person's, what each person wrote each week, and it was a run chart in that sense where people could see over time what they wrote and they could see what other people were writing. And I purposely made no comments on this chart and I'd never really discussed it, I just put it up and updated it every week. And one of the staff that worked for me, an analyst, a really smart Thai woman asked, she said, she went to... She said, "I wanna see you in your office." I was like, "Oh, shit, I'm in trouble." And so she came to my office and said, "You know I went to, so this was maybe six months after I had put that chart up, she said, "I went out to lunch with my counterpart, my competitor, and she's writing research just like me on the same sector, and she asked me how many research reports do you write in a week, and I told her my number, and she was like, "Oh my God, that's a huge number."
0:19:16.6 AS: And she said, "Oh, I didn't really even think about it. But okay." And then she says, "What is Andrew's goal or target for you?" And she had naturally had thought that I had set a target of that amount, that's where she said, "I think I really figured you out." And I was like, "Well, what do you mean?" She said, "You just put that chart up there and you didn't give us any goal, but you knew that we were looking at it, and then it would provide us information and incentive and excitement, and the fact that you said nothing about it, got us to probably a higher level of production than if you had said, "I want everybody to read my reports."
0:19:57.9 JD: Right. Yeah, that's great.
0:20:01.0 AS: The magic of data. What's number four?
0:20:02.4 JD: The magic of data. Number four, so two or three data points are not a trend. So the first thing is, as soon as you've decided to collect some set of data, plot the dots, that should start right away. And again, this really includes all data that we're interested in improving in schools. And I know before I understood this way of thinking, this way of data analysis, I often relied on just comparing two points, that's the most common form of data analysis. What did last month look like, what does month look like? What did last year look like, what does this year look like? What did last week look like, what does this week look like? So that limited comparison is the most typical form of data analysis, especially when you're talking about something like management reports or board reports, revenue over time, those types of things. What was revenue last January? That type of thing. But the problem with looking at just two or three data points is that it tells you nothing about trends, it also doesn't tell you anything about how the data varies naturally.
0:21:17.5 JD: I remember looking at attendance data at one of our schools, and they had up... Last month was 92%, and then had gone up to 94%, but then I just said, well, what did it look like... January is 92, February is 94 in this particular school year, and I just said, well, what did it look like before, and then when you plotted it, what saw very quickly is there was no improvement, the data was literally going like this, up, down, up, down, up, down, up down, right? But no one had that picture, because all you could see was, Here's January and here's February, just numbers written in percentage form, that's almost all the data that I see in schools is in a similar format.
0:22:02.7 AS: On this one, in the stock market, my area of expertise. People always see the up data, the people who have made a lot of money in the stock market, and they see that as evidence that they could make money in the stock market, or they attribute that to skill of that particular person as we want to, with Warren Buffett as an example. And I have, in fact in my class, I asked the students, "Do you think that Warren Buffet outperformed, underperformed, or performed in line with the market over the last 20 years?" And the answer to that is, he performed in line with the market, and I proved that by doing a demonstration through a website that I can do that with, but it was shocking because obviously he's gonna end up with the most amount of money because he let his money compound, and he made huge gains in the beginning years, which compounded over many years.
0:23:02.0 AS: And still he's doing very well, but the point is, is that... The reason why I say this, I also tell the story of, if you had 10,000 people in a stadium and you flipped coins, and asked them if they flipped heads consecutively or tails consecutively to remain standing, and you're gonna end up with 10 people at the end of 10 flips with 10,000, and if you've got a million, you can end up with 20 or 30 or 40 flips that could potentially be heads consecutively or tails consecutively. So my question is, given that long streaks can happen through just plain probability, what if two to three data points are not a trend, can we definitively say, what is a trend?
0:23:50.9 JD: Well, not with certainty, but what this type of data analysis does is it gives you some patterns in the data to look for that are so mathematically improbable that you can be reasonably assured that some changes happened.
0:24:09.4 AS: Right so this is enough of a trend that I'm gonna go with the assumption that there's something significant here.
0:24:21.9 JD: Yeah. I mean it's...well, think back to that attendance example that I just used, so if I went from... If I'm writing this up on, let's say a whiteboard that's in a teacher work room, it says, this month and next month, or last month and this month, and I write those attendance rates up and remember, it's a dry erase board, and I'm gonna erase the last month to put this month's up and so I'm not gonna be able to see that one anymore, I'll have two data points and I'll erase the old one, and so in that example, I used where they went from 92%. It was actually like 92.4% to 94.1%. So it wasn't even two full percentage points. And then you celebrate that as a win, as an improvement, but like I said, you didn't know what happened before, and then you didn't chart after, so you don't really know how things are just bouncing around naturally versus if you had it on a run chart and you did see, let's say, eight points in a row that are above the average attendance for that school, that's one of the patterns that suggest that something different has happened. So you just have increased mathematical probability that there has been meaningful improvement.
0:25:39.4 AS: So it sounds like what you mean in this number four is a little bit more on the end of, Hey, just a couple of data points doesn't have anything, you need to get more rather than somebody looking at a lot of data and trying to understand what is a trend or not?
0:25:56.9 JD: That's exactly right. That's exactly right. And that actually is a segue to Lesson 5, which is "show enough data in your baseline to illustrate the previous level of variation," basically. So this is gonna get a little technical for a second, but the non-technical thing is, we talked about when you have a run chart when you're starting and you have, let's say, three or four or five, six data points at a certain point, you can now have a process behavior chart, which is the addition of that upper and lower natural process limit that defines the bounds of the system, so the limits are not a part of the run chart.
0:26:34.9 JD: In making sense of data what Donald Wheeler basically says is that if you're using an average line, the mean for your central line, then those limits, you begin to have limits that solidify when you have 17 or more values, and then if you're using a median for that central line, that solidification starts to happen when you have 23 or more values. So there's a mathematical theory behind that. But the point is, at a certain point, you start to get enough data to be able to add the limits and feel confident that those limits actually represent the bounds of your current system. But that's getting fairly technical and what Wheeler does go on to say is that, in real life we often have fewer data points to work with.
0:27:31.4 JD: So you can actually compute limits with as few as five or six values, and they can still be meaningful, now they're gonna be not a solid, meaning that each individual data point for a while that you add could potentially shift those limits more than you'd like, because there are a few data points that the limits are based on. But once you get to 17, 18, 19, 20 points, they start to solidify pretty good unless there's some significant change, like one of those patterns I talked about in your data. But an important thing to keep in mind is, is we're using a process behavior chart for continual improvement, so we're taking improvement measurements, not accountability measurements. I'm not trying to paint a certain picture of what my system looks like, I'm not trying to write a fiction about what's happening in my system, I'm actually trying to improve, so I don't really care what the data looks like. I'm not worried about being judged or rated or ranked, it's not an accountability thing, it's an improvement thing. And so I'm just trying to represent the system accurately so that I actually know that what I'm trying is working or not working. It's a completely different mindset. That whole sort of like trying to look better is completely removed from the picture through this type of mindset.
0:28:55.7 AS: I'm just picturing some sort of process where there's a measurement of temperature and the temperature keeps rising, but the worker says, "Boss there's a fire." And the boss said, "There's not enough data yet to confirm that." It only seems like a small fire right now, so I need more data points. Well, sometimes you have to act without thinking about the data and make an assumption that you may be wrong. You turn on the fire sprinklers, boom, and it wasn't a fire, but the damage of letting that go for long and saying I need more data doesn't make sense.
0:29:34.1 JD: Yeah, yeah, that doesn't really work. But the idea with the baseline is, basically, if you wanna improve something, the first thing you do is before you try anything, just gather some baseline data first so you can understand the current conditions. And in that attendance as an example, maybe you don't wanna wait for monthly attendance data, maybe wanna look at daily attendance day, what you have in a school, and just plot that over 12 days, 15 days, two or three weeks, and you can start to get a sense for what this looks like on a daily basis, and then you could try to improve it and see if that improvement has an impact on the data over time.
0:30:15.6 AS: Good, well, let me summarize this, but I have to start off with... My grammar is not particularly great, and since you're more of a school teacher than I am, I may need help with what you said. I think what I got correctly was data have no meaning apart from their context.
0:30:33.6 JD: Yeah, what did I say? Let me see.
0:30:38.5 AS: I always get confused if data is plural or singular.
0:30:41.8 JD: Yeah. Well, it can be either. So in this case, I was using data as a plural, so that's my point. I think technically the singular of data is actually datum. Obviously, nobody uses that 'cause it sounds really weird, but data can be plural, I think so.
0:30:57.4 AS: That sounds awfully Latin of you, alright. Number two, the data is the voice of the process, and that we control the process, not the data, and number 3 we plot the data in time order. Number four, two or three data points are not a trend. And number five is show enough data to illustrate the baseline. Anything you need to say to wrap all this up.
0:31:20.4 JD: Yeah, I just think that... I've mentioned this multiple times. I think when you're talking about continual improvement, primary tool is that process behavior chart, it allows you to visualize your data in a way that makes sense, and then the skill set that you have to learn is how to interpret the process behavior chart. How to use them effectively, how to create useful charts and then underlying... Understanding that underlying logic of process behavior charts. There's other tools, obviously in the improvement tool kit, but I actually think that that particular chart is the most important in my view. And I think with those charts, that tool in hand, we can avoid then those arbitrary and capricious goals that are so pervasive in our sector, basically.
0:32:10.6 AS: Well, that's exciting, and I'm excited for our next session when we talk about the final five. So John, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion, and for listeners remember to go to deming.org to continue your journey. And you can find John's book, Win-Win: W. Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools on Amazon.com. This is your host, Andrew Stotz and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."
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In The New Economics, Deming said “The individual, transformed, will perceive new meaning to his life…” (3rd edition, page 63) But are we ever completely transformed? Discover why Bill Bellows believes that transformation is an ongoing process and how you can keep your learning journey going.
TRANSCRIPT
0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. And the topic for today is, in this episode 17, Diffusion from a Point Source. Bill, take it away.
0:00:29.6 Bill Bellows: And the title coincidentally, was the focus of my Master's thesis. We'll look at that later.
0:00:37.1 AS: It wasn't a rock and roll song. Yes, correct.
0:00:39.9 BB: No, not a rock and roll. [chuckle] Actually, Diffusion from a Point Source. Was that Mick Jagger or Keith Richards? Maybe it was Taylor. Maybe it was Taylor Swift. Okay. So some opening remarks, and then we'll get to today's feature. And I mentioned in the past, I go back and listen to the podcast, read through the transcripts, and it's very much like “Production Viewed as a System” - is to talk with people that have listened to it, listened to it myself and ask, have I... Are there holes in the explanation? Can I add some more clarity to it? The process I use for these podcasts is, some title comes to mind. I've got a long list that we started with at the very beginning, and then some other topics come up for any of a variety of reasons.
0:01:35.3 BB: And we'll have a title, have an outline, but then as we get involved in the conversation, something I say leads to something that you say leads to something that's not on the list. And sometimes some of those ad-libs, I go back and listen to and say, "Well, I don't know that sounded right. I just wanna add a little bit more clarity". Another thing I wanna say at the outset for those listening, is [chuckle] there is... Somebody posted somewhere on social media that one of the sessions was a total waste of time to listen to which I think is unfortunate. But what I like to say is, where I'm coming from to support The Deming Institute, as your ambition is as well, is to help individuals in respective organizations learn about Dr. Deming's ideas, try to apply them, deepen their understanding, explain them to others, and that's the target audience.
0:02:48.0 BB: So, for those who find that boring, well maybe this is not the podcast for you. And so, and the other thing I wanna say along those lines is, for the majority of my time at Rocketdyne, I had the responsibility of being a transformation agent or transformation person was part of my job. Now, I was brought in, I didn't have that job to begin with. The job I had to begin with was to lead the effort to provide training, facilitation of applications of Dr. Taguchi's ideas. And what I've shared in these podcasts is a lot of what I was doing early on was helping people put out fires.
0:03:38.2 BB: And that's not what Dr. Taguchi's ideas are about. His ideas are about improving the robustness of the performance of a product or service. Whereby what robustness Dr. Taguchi means is "it performs as an athlete incredibly well in spite of differing weather conditions." So the ability of a marathoner to run very consistent fast times in spite of the weather, in spite of the altitude. And so you're getting consistently high, or consistently faster and faster times. That's what Dr. Taguchi meant by, means by, his work means by "robustness."
0:04:16.2 BB: And what I was doing was using tools and techniques associated with his ideas to fight fires. And then, I got frustrated by that. And that led me to Dr. Deming's work, led me to revisit Dr. Deming's work. I had met him in 1990 and The New Economics came out in '93, and I had a couple of years of this frustration. The exciting thing was solving, getting involved, working with some really exciting people, and solving some very high visibility issues. But it wasn't breaking in as much as I would've liked into the, into the robustness piece. And when I came across Deming's work, I started to understand, it gave me a lot of food for thought as to why that might be the case. Now what is meant by transformation? And Dr. Deming uses that term, an individual transformed.
0:05:07.8 BB: And I had asked people that were close to him like, what is his operational definition of transformation? And when I explained it to them, I said, this is what I think he means this. And typically people say that's, they agree with that. And so my simple explanation of what I think Deming meant by transformation is as simple as, me saying to you, the professor to the student, “Andrew, how did you do on the exam?” Whereas I've said in the past, that makes me an observer of your learning to changing the question to how are, how did we do on the exam, where I become a participant? So I look at, so to me, the transformation Deming's talking about is that I no longer look around at things and see myself as separate from them. I look at myself as connected to them, and others being transformed or likewise seeing themselves as integral to what's going on, not watching it go by. Another reason I wanna bring that transformation agent piece up is part of my job, not part of my job, so I went from being mostly about Taguchi's work to mostly about Deming's work because I felt it was far more vital to focus on what Deming's talking about, the transform, how the organization and transform how the individuals operate. Another thing I wanna say there is what I think is interesting, if you look at the forward to Out of the Crisis and The New Economics.
0:06:48.1 BB: In Out of the Crisis, which I think was 1986 or so timeframe, Deming talked about the aim of this book is to help transform organizations. And then in The New Economics, he talks about the aim of this book is to help transform individuals. So he went through, he's shifted his focus from I'm trying to help organizations to I'm trying to help individuals. And that's what I'm hoping to do, interacting with you in these podcasts. So, on the one hand, I'd say to those listening, I don't know what your role is. If you're a transformation agent, that's one role. You may be an individual contributor, a senior software person, a marketing person, which means your job title does not include transforming the organization.
0:07:37.8 BB: So, what does that mean? It means some of what we're talking about may not apply to you. You may be personally excited about the Trip Report and, but it may not be your job to hold seminars within your respective organizations and go off and explain that to people. You may alienate people who think that's their job. So, I just wanna say, ask people, to be careful about what your role is in your organization. I've mentored many people and I'm used to going in and being the transformation person. And, one person I was working with, and she was all excited to wanna go share the Me-We Trip Report with her peers in this company doing software. And I said, "You can't do that". And she's like, "Well, why?" I said, "It's not your job". I said, "One is if you call a meeting to talk about transformation of the organization, or you get into that territory. I said, you're stepping on the toes of people who have that responsibility, perhaps. Or somebody's gonna say, wait, I thought we paid you to be a software engineer. Now you're over here. So, now you sound like you're astray, you're a loose cannon".
0:08:56.8 BB: Now I said, to this person, I said, now if you... There may be a place for you to say, "Hey, I wanna show you this neat solution.” If you think they're interested, ideally they ask you to show you how you did that. So, I think there's a difference when it comes to implementing these ideas, I would just advise some caution to people to not overstep their bounds and what it means to bring these ideas to the organization. So, I just wanted to say that.
0:09:32.4 AS: Yep. I just wanted to highlight the word transformation for a second. And the dictionary definition says, "transformation is a thorough or dramatic change in form or appearance. A transformation is an extreme radical change." And that's interesting, 'cause they say in form or appearance that you could have someone do a facelift that dramatically changes their face and the way they appear. But, has it been an internal transformation? Maybe, maybe not.
0:10:10.9 BB: Well, what's funny is, I mentioned that in previous podcasts, 'cause once a month for 17 years, I hosted an Ongoing Discussion where there'd be... I could have you on as a Thought Leader on a topic near and dear to you. And we send the announcement out and people would call in and it took a few years for Russ to agree to do it. And then, he eventually did, and he did it every January. Typically people would, every month be somebody different. But once I saw Russ's excitement by it, then I said, "Russ, every January we're gonna have you", we did it for four years, and every January I'd fly out to Philadelphia and be with him. So, the last time I did it with him, we were in his apartment. We were sitting pretty close together over the small desk. And in the sessions, the term transformation came up. So, the last session ends, we did four one-hour sessions over two days. The last session ends. And I turned off my recorder. And I said, "Russ, it just dawned on me that you and Deming, you and Dr. Deming both talk about transformation".
0:11:26.8 BB: And I said, "Dr. Deming talks about a personal transformation - I see the world differently.” And Russ looks at transformation as an attribute of a solution. That “we used to do it this way, now we do it this way.” And so, his is not transformation of an individual, but transformation of a solution. And I said, I just... I threw it out as I just, "You both used the word, but you use it differently". And I said something like, now I was waiting to see what he would say with that. And he looks at me and he says, "I see no value in that conversation", which followed by "let's go get lunch."
[laughter]
0:12:22.8 AS: Exactly.
0:12:24.0 BB: And so I thought, oh, I was really looking forward to exploring that space with him. And I shared that conversation with one of his peers later that night. And he said, "He said that?" I said, "Not only did he say that", he said, "You know what? I really wasn't surprised". 'Cause Russ was... It seemed to be a little bit too abstract for him. Anyway, but it's, but he would've put it, "What is this transformation stuff?"
0:12:51.0 AS: That, it's interesting because sometimes we talk about the why isn't Deming more widely accepted and that type of thing. And I think one of the things is that he's driving for transformation versus I think majority of people are providing information and here's how you do Lean, here's how you do this, here's how you do statistics or whatever, and here's all the information. And then you use that to to make better decisions. I think Dr. Deming was never about being better in our decisions but about how do we transform the way we think.
0:13:33.9 BB: Yes.
0:13:34.8 AS: And also the second part is that the idea of shifting from transforming an organization to transforming an individual. I guess an organization doesn't transform unless the leadership has already transformed or is in a process of transformation. So, therefore targeting the individuals for trying to help them get a transformation ended up being the most important or first step, I'm guessing.
0:14:00.2 BB: Oh yeah. No, I thought it was just so neat to see that shift. I don't know if we've talked that much in these podcasts about transformation. I'll have to go back and check. But what we were doing within Rocketdyne to help differentiate, 'cause language is so important. What do we mean by transform? Because it's a very casually used term and I was trying to, you know, with colleagues at Rocketdyne trying to differentiate what Deming's use of that term. 'Cause we liked the term but the challenge became if we used it did it adopt a meaning that he didn't have in mind in which case we're off to the Milky Way.
0:14:48.8 BB: But what we did was try to differentiate physical change from mental, a physical shift from a mental shift. I guess to me a big part of what he is talking about is going from seeing parts to seeing systems to seeing things as being connected to start thinking about as Edgar Schein would as Peter Senge quoted Peter Schein, Peter Senge quoted Edgar Schein, "Culture are the assumptions we cannot see".
0:15:21.5 BB: And, so I was focusing on is we talk about, there's culture, culture comes from the assumptions. The assumptions come from beliefs and that's associated with our thinking. And that's the space that I think has... is the space to be to really believe, to really implement what Dr. Deming's talking about for all those benefits we've been talking about. And so the word, so in the training we were doing in our InThinking Roadmap, we differentiated reforming and we said "reforming is a physical change. Giving things a new name, adding more steps to the process. It's change you can, it's rearranging the deck chairs on the Titanic." And there's nothing wrong. You can move people together to be closer physically but that doesn't move them together mentally. So, there's a sense of we want everyone to be in the same room physically but they're... But you can hear they're in separate rooms mentally.
0:16:22.7 BB: And we've talked about this in a Me Organization I hand off something which is good to you and if it's not good, you give it back to me. If it is good, you say thank you and I'm separated. I am physically and mentally separated and there's nothing wrong with being physically separated I have to hand off to you. But how about an environment where I am mentally, we are mentally connected because we're thinking together. So if you come back to me and say, "Bill I'm having trouble getting these things together". And I say, "Well, hey I can, I..." not only do I understand that I caused that but I can possibly do something about that. That's the mental transformation piece. So there's... I look at it as there's nothing wrong. I look at it as there's a place for transforming, reforming, moving things to be closer, minimizing number of steps. Nothing wrong with that. But that's not what Deming was talking about. He was talking about transforming which is a change of how we see the world. How we hear the world.
0:17:25.3 AS: Yeah. And when I look at the System of Profound Knowledge and we look at Appreciation for a System, look at Knowledge about Variation and Understanding the Theory of Knowledge and then Psychology, I would say the one you mentioned about Appreciation of a System is the one that brings true transformation because we are taught to look so narrowly. And when we start to look at the bigger system it just blows your mind.
0:17:58.9 BB: Well, it's...it... No, I absolutely agree. I can remember in the early ‘90s I had met Dr. Deming once and I thought that's fascinating. And, I put it aside and got buried in the Taguchi stuff and then began to see the issues as I had mentioned in previous podcasts as well as today. And I started thinking there's, there's something missing. And, in the Taguchi school it was, we need more tools, more advanced tools. That's not about transformation. There's nothing in Taguchi's work that was about the transformation that Deming's talking about. And I'm not aware of that mindset. Well, I've not come across that mindset in many places. I don't see it in all the...a lot of the traditional improvement techniques whether it's Lean or Six Sigma or Operational Excellence. I don't see that, that focus. I agree.
0:19:07.6 AS: And, I bought this book Guide to Quality Control by Kaoru Ishikawa.
0:19:11.2 BB: Yep, yep.
0:19:12.6 AS: I got it in 1990. And, but it's a great example of, the objective wasn't a transformation. The objective was understand these tools and maybe that leads to a transformation, maybe not. That wasn't what he was aiming for. He was saying, "Here's the tools and here's how you can apply them".
0:19:32.2 BB: Well, I used to debate with some co-workers and his, one co-worker in particular. And his mindset was, focus on the tools, and the language, in the conversation we're having, his theory was, "Get people to apply the tools and the transformation will eventually happen". I had the same thought.
0:20:00.1 AS: If that was the case, we'd all be transformed already because we're all applying tools every day.
0:20:04.7 BB: And 'cause we, I had heard a comment, I was at a Taguchi conference and I heard a comment. And as soon as I got back to my office, and this gentleman we're both at work really, really early, we'd go down and get coffee at a quarter to six, go back and sit in his office for a couple hours and just have some great, great, great conversations. And I shared with him, I was at a Taguchi conference and somebody said, the reference was, "You wait for the... " It was something, "The journey begins after the transformation starts". And as soon as I said that, he said, "I think it's the other way around", that the transformation happens after. And I thought to myself, I knew you'd say that, because that was his attitude. Get 'em to use the tools, get 'em to use the tools, get 'em to use the tools. And I kept looking at it as, no, that does not. Yeah. I mean it doesn't mean you don't do it, you don't do something. But I think when you begin to see the world and hear the world differently as we're trying to convey, to me that's when the rubber really begins to hit the road. That's when you move. And again, as we talked, there's nothing wrong with tools and techniques, but tools and techniques are guided by your understanding of the system and the other things. And it's just not enough to be a tool head.
0:21:48.7 BB: Other things I wanted, oh, okay. [laughter] So let's go back the cloud model from number 16. And what I did not reference again, 'cause I went back and looked at it and there's what we shared, but what I wanted to add to it was, one is the idea learned from Barry Bebb that you're an individual contributor trying to get ideas up to the cloud, the cloud being the executives in their meeting space, and the idea of handing off to somebody above you. And then the idea that that transfer is going to take a few times from person to person to get someone in the cloud transformed with an appreciation. And relative to Deming's work, it involved the transformation.
0:22:34.9 BB: If it involves trying to get Dr. Taguchi's up to the cloud, ideas to the cloud, manner involve what we're talking about relative to Deming's work, fine. But the other aspect that I then neglected to mention is what Barry's talking about is, is once it gets to the cloud, then what rains down on the organization is the beginning of, in our case, transforming the organization. That's the raining down. So the cloud is not just that place on high that things get up to, but the idea of a cycle that things then start to flow down. And so, I mentioned, you know, I got back from that very first meeting with Barry and went into my boss's boss's office and that I had had that meeting, and little did I know what I was gonna learn from Barry.
0:23:26.8 BB: And learning from Barry, you either go back to... You have to be in your organization, find somebody higher, and immediately I thought I wanted that person to be Jim for his influence. And so I would meet with him on a regular basis. And, and what I was looking for is, what could he and I do together? Because some things take time and some things can be done tomorrow. So I would go into him once a month with some ideas, give him some status of what's going on. So one time I went in and I had an idea, I'd mentioned to him that after every launch of a rocket with a Rocketdyne engine, there'd be a loud speaker announcement. And the loud speaker announcement might say, "Congratulations to the Space Shuttle Main Engine team for a job well done.” Congratulations to the Delta team for the engines made for the Delta vehicle or to the Atlas program.
0:24:24.3 BB: And what I shared with Jim is that I had mentioned that loud speaker announcement to a friend in facilities who was a manager in facilities. And I said, "How does it feel when you're in facilities and you hear that announcement?" And her comment was, "You get used to it."
[laughter]
0:24:43.9 BB: You get used to being ignored. Well, I mentioned to a friend in HR, and he shared with me every time he would hear that announcement in HR, he said he and the guy on the other side of the cubicle wall would stand up and give each other a high five and say, "Way to go", 'cause they were not in the announcement. So I went in to see Jim and I said, I mentioned the woman's name. I said, she said, "You get used to it." And he looks at me and he says, "I want everyone in this organization to identify with every launch." He said, "I don't care if you're in janitorial services cleaning the restrooms." He said, "I want everyone to identify." Well then I said, "Well, that announcement doesn't." And I said, "Could we change the announcement?" And he was about to write it down and he says, "Well, we can do that right now." I'm thinking, "Oh, baby." [laughter] So he calls up the Director of Communications who sits across the hall from him and says, "Would you mind coming to my office for a minute?" Okay. So the person comes into the office, he says, "Do you know Bill?" And the person said, "Yeah, I know Bill". And Jim says to this person, "Could we change the loudspeaker announcement to say from now on, "Congratulations to Team Rocketdyne?" And she goes, "Sure, Jim, we could do that." [chuckle]
0:26:17.9 BB: And so, I had a Taguchi class later that afternoon, and somehow I mentioned the announcement. I didn't mention what I had done, but I somehow made reference to it. And people were used to that. And I remember saying to them, so what if you aren't on one of those teams? And people just said... This is how we operate. It's part of the culture to celebrate those individual teams. And I remember saying to them something like, "Well, if that announcement ever changes, call me," or something like that. It was something like that. And sure enough, when the announcement was made within a week, but I felt it was something, I was looking for things that I could do to influence the culture. Little things that ideally could be, and you know, I was also appreciative of what could Jim do? Now, several years later, the announcements went back to what they were. I'm not quite sure why, Jim had moved on. For all I know the programs were tired of “Team Rocketdyne” where, Team Rocketdyne, it's Team Space Shuttle Main Engine. And so some of the people complained to me that the announcement had shifted, and I turned to one of them and I said, "You go and fight that battle". I said, "If you want it to change, you go, go let the communications person, you go fight for it". And the thing I'd like to, a couple other things I want to point out before we get into the features is...
0:27:55.9 AS: Just so you know, we only got, we got less than 10 minutes, it's a tight show today.
0:28:00.7 BB: Alright. Let's jump. Let's jump to Diffusion From a Point Source, Andrew.
0:28:04.2 AS: Yep.
0:28:05.4 BB: So my Master's thesis back in the, was right around the time of Three Mile Island, I was writing my Master's thesis. And for those who may not recall, Three Mile Island and somewhere in the hills of Pennsylvania was a nuclear reactor that nearly melted down and diffused. [chuckle] If things had gone worse, it would've diffused a lot of bad radioactivity downstream from a stack, from a point. And so, my Master's thesis was looking at diffusion, how very much like that. And what was funny is I would explain to aunts and uncles and family members, "What is your thesis about?" And I say, "Well, remember Three Mile Island? I said, what I'm trying to do is model how it is, how does that radioactivity spread out downstream? How does it go wider and wider and higher and higher? How does it spread like smoke does if you blow out a match and how does that spread?" That's diffusion from point source. And part of what I had in mind with that topic for the audience is for each of us being a point source on our respective organizations and how are we diffusing what we're aware of within the organization, which in part has to do with being a transformation agent or an agent of, playing a role in the organization.
0:29:32.7 BB: The other thing I wanted to point out is in, in my engineering studies, and the equations that we would use about diffusion, um, has a role here. And if you think of a bathtub, so I imagine you're in the bathtub, you've got hot water coming in and the heat from that water coming in. And I'm trying to think, yeah, imagine the water is lukewarm and you're laying in there and you want it to be warmer, so you crank up the temperature. And then you can begin to feel that hotter water hitting your toes and then spreading it - diffusing. And there are mathematical equations I was studying that have to do with that. And what the equations are about is how does the temperature at any point in the tub change, and how does it change throughout the tub? So there's two aspects of change, at a given point, how is it changing over time? And then how is that change spreading until it starts to fill the entire tub? And so it could be you've got a 100 degree water coming out or 120 degree water, and in time the entire bathtub is 120 degrees, in time, which means the diffusion has stopped because it's all the same.
0:31:04.0 BB: And then, a couple hours later, it's all about the room temperature. Well, the analogy I wanna make is imagine going off to a Deming seminar all excited by what you've learned, and you go into your organization and you try to diffuse these ideas or, or another way of looking at it is, I would be invited into an organization and present Dr. Deming's ideas. It's kind of a point source. And so the ideas come out and people feel that spread across the organization. But what tends to happen is within a week, everything's back to room temperature.
[laughter]
0:31:47.8 BB: And that's, and that's the idea being, Deming's ideas come in or whatever the ideas come in, and then they're spreading in space and in time, and then we're back to where we were before. What I was very excited about, most fortunate about, and what we were doing at Rocketdyne is that what's missing from that equation that I just explained to you is a point source. And so when you're modeling, when you go back to the thermodynamics laws that I was modeling, if in the bathtub, there's a... If you've got a source of heat, you're generating energy in that environment, then the bathtub's going to get hotter and hotter and hotter and hotter and hotter. But without that point source, that source of transformation, which is constantly going on, everything goes back to room temperature. So what we were trying to do at Rocketdyne was, how do we take the ideas we're given, integrate them with Ackoff's ideas and Taguchi's ideas and try to create...
0:33:04.1 BB: Not let things go back to room temperature, but what would it take in conversations amongst ourselves and sharing that with others, that we had a constant source of energy, which gets things hotter and hotter and hotter and hotter and hotter. When it comes to Three Mile Island, the point source was an out-of-control reaction. But what we were trying to do is create a, have an environment where a lot of energy was being created, and that led to rethinking what these ideas are about, bringing others into the room, whether it be Ackoff or others. And I find without that, eventually things just go back to normal. And so what is...
0:33:50.8 AS: And what is that back... The back to normal thing, is that, like if we think about gravity as a law, it's naturally gonna pull things back to Earth.
[chuckle]
0:34:04.7 BB: If you go back to room temperature, you go back to where you were.
0:34:09.3 AS: What is it that brings humans back? Is it the...
0:34:12.2 BB: Well, you end up, you go back to blaming the willing workers for the red beads. You go back to all the things that Dr. Deming's trying to pull us away from, and there's this natural force to pull them back to that, you end up with a change in management. Dr. Deming's 14 points of lack of constancy of purpose. And so what we're talking about with Deming's ideas is a source of ideas, energy to transform. And what we're fighting is, individually that we stop learning, individually we stop sharing, individually we stop doing something with it. And so you just unplug the point source and you'll be back to room temperature pretty quickly.
0:34:55.5 AS: So how would you... What is the main message you wanna get across to the audience about this as we wrap up?
0:35:03.0 BB: Message is, find a peer group that you can discuss these ideas with. And that's what's missing is find people you can discuss, listen to the podcast, pay attention to DemingNEXT, find people to share the ideas with, and out of it will come more energy. And, but the idea is that don't stop learning. Don't stop sharing. I am very fortunate that every day I have conversations with people around the world, and it's causing me to reflect on things that happened. And to me, it's helping me stay engaged, keep rethinking what the ideas we're talking about. And so the idea is that I think without that, then individually we go back to room temperature, we go back to where we were before we started exercising. And, but I think what I would like to think is that people listening to this podcast can find again peers to share it with and on a recurring basis. And so again, I'm talking with people around the world every week, and to me that's, part of this is what we're doing at Rocketdyne with these monthly phone calls is just staying engaged, staying in the game, staying in the game, staying in the game. So that's the diffusion from.
0:36:24.7 AS: And to bring it back to the beginning of our conversation, I think that, I guess transformation is when you don't go back to room temperature.
0:36:36.0 BB: It's an ongoing transformation. And this is... There's very few things Deming said I disagreed with. One of them is, and [chuckle] he said, "An individual transformed will create an example". I don't think there's any such thing as an individual transformed, I would say an individual, once their transformation begins but I don't... But thinking in terms of, "once transformed," and I think I mentioned on the podcast, 'cause I had a student in Northwestern years ago, and they're doing presentations at the end of the course on how the course hass impacted them, taking notes from their daily journals. And there were a group presenting that night. The other group was gonna present the next night. So one was anxious, one was calm, and I went up to one of the calm students and I said, "Yeah, so what's new?" And he turned to me and he said, "I'm fully transformed".
[chuckle]
0:37:34.3 BB: No, what we're talking about Andrew, is there's no such thing as... Because there's, if you understand the point source concept, there's no "fully transformed."
0:37:43.1 AS: Yep, that sounds...
0:37:44.6 BB: So then the question becomes, how do we enter and individually stay in that group?
0:37:51.4 AS: So transformation is an ongoing journey. Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for the discussion. And for listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work.”
- Näytä enemmän
