Is quality simply a matter of two categories: good and bad? But then how do you get to "better"? In this episode, Bill Bellows and Andrew Stotz discuss categories and continuum thinking.

TRANSCRIPT

0:00:02.4 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 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. And today is episode six, Category Thinking and Continuum Thinking. Bill, take it away.

0:00:27.9 Bill Bellows: Welcome Andrew great to see you again. All right, so in podcast five, I went back and it was just posted by The Deming Institute. And I just wanna clarify again on the topic of acceptability and desirability. Where we're going tonight is looking at acceptability and desirability in a little bit more detail, a little bit differently, but those are still the prevailing themes. And again, I just wanna reinforce that none of this is to imply that desirability is better than acceptability. What's important is to be aware of when I'm using acceptability thinking. And when I'm using desirability thinking and use the one that makes the most sense in that situation. We were talking earlier about companies whose products we enjoy using and we're loyal to them. And I mentioned that my wife and I have developed a loyalty to Toyota products.

0:01:40.4 BB: Going back to 1989 was our first Toyota product. And I knew I wanted a pickup truck. 'Cause I was borrowing a pickup truck from a number of friends and I thought, I really like a pickup truck. There's a lot you can do with a pickup truck. So, I knew I wanted a pickup truck. And I knew from having worked in my father's gas station, I had reason to believe I wanted a Japanese pickup truck and not an American pickup truck. So, I then it was a question of is it a Mazda, Toyota.

0:02:11.1 AS: Nissan.

0:02:13.2 BB: Sorry Nissan. And I looked at all of them and yeah I just all I knew is I was gonna be one of those. And I think the major reason I went with... My wife and I went with a Toyota... I don't think the prices were that different. But it just had a, it was the styling was a little bit better. But I did not... That's why I bought it.

0:02:46.5 AS: The loyalty wasn't built yet.

0:02:49.0 BB: No I knew to stay away... I knew I had seen plenty of examples of... Well, I had traded in my first car that my father, my parents got me when I was in college was a 1975 Chevy Nova. Four door Chevy Nova. And the reason four doors is important is a... If it was a two door, the door would be longer. But it was a four door. By the time I gave that car to a friend, the engine was running beautifully but the body was falling apart. And, so, by the time I sold it to get the pickup truck, in order to get out of it, I'd have to throw my shoulder into the driver's door. Why? Because the door droop was so great that when you close the door, I mean the door drooped and this is not a four door, this is a two door. So, imagine if it was a two door the door would be even heavier. So, on a four door, the door drooped. And, so, when you closed it, you'd had to lift it and then close it in order to get out you had to... Oh, it's just my wife couldn't drive. It was just a nuisance.

0:04:17.6 AS: And, that in '75 was just about when the Japanese were really starting to go after the US car makers. And but I want to tell you just a quick one. I can't remember if I've told you, but I used to have a 1963 Lincoln Continental here in beautiful Bangkok. And I owned it for 10 years. And then eventually I sold it. But what a beautiful car. And people always ask me the same thing and they said, isn't it hard to take care of? And I said, you gotta remember back in those days, cars were simple.

0:04:49.1 BB: Yeah, yeah. So, the... So, with... So, the experience of 14 years or so, with the '75 Chevy Nova. And the door was like the straw that broke the camel's back. It just done with this, all right. So, we're gonna buy Japanese, bought a Toyota. That was the first one. And I think I've mentioned in the first podcast I mentioned that we had a 1998 Toyota Sienna, which is their first, it was their Toyota third attempt at a minivan. The first one I think was underpowered, the second one... And we knew we wanted a minivan. It was time, the kids were getting a little bit bigger. It was time for minivan. And just as we were ready to go buy it, they had a... I think a competitor came out with dual sliding doors. Dual sliding doors. And, so, instead of Toyota coming out with a one sliding door, they stepped back. I think Chrysler came out with two sliding doors. And they figured we can't come to market with one sliding door. They've got two sliding doors. So, then we waited another year and they finally came out and given all of our delight with the Toyota pickup truck, boom, that's what we wanted. And then the transmission failed, six months later with 10,000 miles in the car.

0:06:18.5 BB: And I have a photo of that. Not only did the transmission fail at 10,000 miles, but it failed on Christmas morning on our way to see friends about an hour away. And this guy, people were going to see, he knew I loved Toyota. And when he drove to pick us up, we transferred everything from that to his Ford F-150. He says to me... So, then we had to have the car towed on a flatbed to his house and the next day to the dealership, what a nuisance headache. But when he showed up, he looks at me knowing that I like Toyota. And he says, how's this data point change your theory about Toyota?

0:07:06.5 AS: I thought he was gonna say, if it was me, I would've said pop in the back.

0:07:12.6 BB: And I was like, yeah, that really hurts. Well when I shared that story with students at Northwestern's Business School, the Kellogg Business School, their advice and these are students that had worked in all different industries from Coke to banking, and a number of 'em have worked in the auto industry. And their advice was, I said, Professor Bellows never buy anyone's first model year, even Toyota. Now I have a friend who he and his wife bought the same model year Toyota Sienna. They did not have a problem.  Oe did. When I met at a Deming conference, a guy who worked in Georgetown, Kentucky which is where the Sienna was made. And, so, I met him at a conference and when he said he worked for Toyota, I said, oh, my wife and I buy nothing but Toyotas. He says, oh. And I said, we have a first model...

0:08:08.6 BB: Year Sienna. And everything was good. And then I'm thinking, I'm gonna ask the guy a question. And I looked straight in his eyes. We were pretty close together. And I'm about to ask him a question. I'm looking straight in his eyes and I said, we got a Toyota Sienna. He says, how do you like it? And I looked right at him and I said, the transmission failed at 10,000 miles. And he rolled his eyes. And I said, so, you know about this. It wasn't a look of shock. It was, yeah, all right. So, I said, all right, all right. Your expression just told me that you know something about this. I said, what's up? He says, we tried. This is so cool. He says, we tried to save a few pennies on a bearing.

0:09:00.8 BB: I said, you did but what you did cost me more than you saved. So, yeah you guys saved a few pennies on a bearing and cost my wife weeks of aggravation to have it towed from where it happened to the place we were going because it Christmas Day, it broke. Everything's shut down on Christmas days. You can't have it right? And, so, we had it towed, had to get a rental car. Then they're complaining about, we had... Who authorized this rental car? We only pay... It was just headache after headache. But we still buy Toyota Andrew. We still buy Toyota. Why? Because I'm afraid to buy from anybody else. Well, part of the reason I wanted to share that with our audience is I buy Toyota products based on value. And I believe that the best value we get in transportation, personal transportation is the money we spend buying a Toyota most often brand new. We've also bought some used, got great use out of them, never had a problem, anything like what I just shared with you. And that's having owned five or six different Toyotas. I mean, right now in our family we have three of them.

0:10:16.7 AS: I think I need to correct you.

0:10:19.1 BB: Go ahead.

0:10:19.9 AS: You buy Toyotas on value and values.

0:10:25.7 BB: Yes!

0:10:28.2 AS: You're aligned with their values and therefore you're willing to look beyond the mistakes and problems that it comes with every product, every service, every company, because you're aligned with their values.

0:10:42.2 BB: Well, what's funny is when we bought the Sienna and we're talking with 'em, doing the driving and signed agree to buy it, that's the color we want. We want these seats, blah, blah, blah. And then you go talk to the closer and the closer's a guy, the gal at the dealership that wants to add on the undercoating and the this and the this and the this and the this. And he wanted to sell us at a premium price, this extended warranty and I dunno what it costs, but I said, I've done a whole lot of research. And he says to me it's so funny. He says, when these things break down, a circuit board breaks and that'll cost you this and this and this, and, so, I'm gonna sign you up for the insurance policy, the extra coverage. And I said, no, and he is going on and on. And I said, look it, I've done a lot of research into how they're made and I said, and the values of that organization. So, I said, the reason we buy Toyota is that I have an understanding, a pretty damn good understanding of how they manage the product, the pieces and how it all comes together. And he's pushing back at me. Finally, I said, I teach university courses on how Toyota operates and their quality system.

0:12:14.8 BB: So, we didn't get the extra coverage. Now it was still covered under warranty, so, it was kind of laughable that. But anyways, the reason I bring that up is that...

0:12:27.3 AS: Before you do that, I want to just say for the listeners and viewers out there, what is the messaging from a corporate strategy perspective? And that is have values that you stand for. Communicate those to the market, stay loyal to them and the customers who align with those values will stick with you through the hard times that you're gonna definitely have. There's a quote by Alexander Hamilton says, "those who stand for nothing, fall for everything." If you do not stand for a clear set of values that the market can perceive, then people are gonna fall away from you as soon as times get tough.

0:13:07.2 BB: Oh yeah. And I...I, I. It's about that and that's why I've read lots about Toyota. How they operate written by people outside of Toyota trying to explain it, people inside of Toyota and their explanations. But part of the reason I bring this up is my fascination, my interest in Dr. Deming's philosophy, is a great deal to do with his system is based on an incredible appreciation of the difference between acceptability and desirability. All other quality management systems, whether it's the quality management within Lean is acceptability based, good parts and bad parts, Operational Excellence, Six Sigma Quality. In fact, there's a quote at the end of chapter 10 in "The New Economics". And chapter 10 was the original last chapter until the third edition came out. In which case there's chapter 11 written in large part by Kelly Allen, a good friend.

0:14:15.1 BB: And when chapter 10 was the end I thought it was pretty cool that at the very end of chapter 10. The last few pages of chapter 10 of “The New Economics” are about Dr. Taguchi's loss function. And this is what turned me on to Dr. Taguchi, was finding “The New Economics" in a brick and mortar bookstore. I knew from ASQ Quality Progress that this was coming out. So, I remember when it came out, this was before Amazon, going to the bookstore. Going through it and saying what does this guy think about Taguchi? Because Taguchi was my, the one I really idolized. And I opened it up and I turned to chapter 10 and it's all about the loss function, the problem and I thought this is way cool. So, the closing quote... The closing... The last sentence in chapter 10 which again was the original last chapter until third edition came out, is the following "Conformance to specifications," that's acceptability, "zero defects," that's acceptability. "Six Sigma quality," which is acceptability "and all other specification-based nostrums all miss the point, ,stated by Donald J. Wheeler."

0:15:42.6 BB: So, then I looked up, but what is a nostrum? And Dr. Deming not Dr. Deming a nostrum is defined as “quack medicine.”  So, "Conformance to specifications, zero defect, Six Sigma quality, and all other specification-based nostrums all miss the point." And, so, I wrote an article about this, gosh, 20 years ago. I said, what's the point? And my explanation, the point is, all of them are about managing parts in isolation. Looking at things in isolation. Again that's acceptability. And as I said earlier, I'm not saying acceptability is bad, I'm just saying acceptability is not desirability. And the other thing I wanna add is, why do I... My wife and I love Toyota products. I've got reason to believe through a lot of research and talking, sharing the ideas that we talk about in these podcasts with people within Toyota. And they have a desirability focus that nobody else... That I'm not aware of anybody else has.

0:16:54.9 BB: And, that's having presented around the world doing classes, at Kellogg Business School, at university. Yeah, the Kellogg Business School Northwestern University. I teach online classes at Cal State Northridge, Southern Utah University. I've lectured at many universities. And I never had anyone come to me working in industry saying, Bill, what you're talking about, we practice where I work. No. And, so, for those that are pursuing the Toyota Production System stuff. My response is, I don't buy Toyota products because they use the Toyota Production System. Now, that may help with getting the car to market faster. But I don't believe the Toyota Production System is why people buy Toyota products. I believe Toyota's quality management system... At least I buy Toyotas because I believe their quality management system, inspired by Dr. Taguchi, inspired by Dr. Deming, is providing something that nobody else has in many industries. All right. So, I wanted to get that out.

0:18:06.7 AS: So, are you saying Toyota Production System is more of a tool that is in their toolbox of quality management system?

0:18:18.4 BB: Um, the Toyota Production System is classic Industrial Engineering.

0:18:26.8 AS: Right.

0:18:27.0 BB: It's how to...

0:18:28.3 AS: It's a natural.

0:18:30.5 BB: How to improve flow, how to improve throughput by minimizing number of steps, by minimizing inventory. It's highly credited to Taiichi Ohno, who was mentored by the founder of the Toyota Motor Company. And it's all about, they don't have a lot of money. So, we need minimal inventory, minimum steps. So, it's like... So, the Toyota Production System is an efficiency based system based on, we don't have a lot of money, we're not gonna buy a lot of inventory. But the quality aspect of the Toyota Production System everywhere, everything I've written, everything I've read by people describing the Toyota Production System it's all explained by acceptability. So, that they may be moving things closer together so people don't walk so far.

0:19:27.8 BB: But what I'm looking at with Dr. Deming's work inspired by Dr. Taguchi is what is it about the quality system that causes those parts to come together so well and the products to perform so well? So, it's not just having the parts when I reach out, the part is there, but those parts integrate better. I've mentioned in the first podcast series that Toyota had 100% snap-fit pickup truck in 1969 at a time when Ford was banging things together using rubber mallets to get the parts together. They took apart and assembled a Toyota pickup truck twice 'cause they didn't believe the results the first time the parts went together without mallets. That's what I'm talking about, that within that system, the ability for the parts to come together to work together cannot be explained by an acceptability based system. And, so, having spoken with people and having the opportunity to share with people within Toyota the ideas we talk about inspired by Dr. Deming, I've learned that they do desirability in a way that nobody... I'm not aware of anyone else having done.

0:20:48.5 BB: All right, so, what I want to get into, add to the discussion tonight, relative to category thinking, is this idea of category thinking, continuum thinking. Category thinking quite simply is putting things in categories. So, in acceptability we have two categories, good or bad, or maybe three categories. It's good or it's scrap or it's rework. So, category thinking is generically putting things into categories. And so, we could look at category... Categories could be... There could be two categories, three categories.

0:21:27.1 BB: It's been a while since I've gone to see a movie, but I believe they still have a rating system of PG, PG-13, R, R-17, maybe X. Those are categories. Fruits and vegetables. Those are two high level categories. Within each of those categories, we have types of, we have apples and oranges, and within them we have types of apples. That's all category thinking. You go into a supermarket and every aisle... There's the cereal aisle. That's a category. There's the canned goods, those are categories. Religions - talk about categories. So, every religion you look at is its own category. And, then within those categories they have subcategories. How about music? How many categories in music are there Andrew?

0:22:18.9 AS: Well, it gets all messed up on my iTunes where I'm like, that's not heavy metal. That's rock.

0:22:28.6 BB: Yeah. And then there's types of rock. In the beginning it was rock and roll, and then there's types of rock and roll.

0:22:34.0 AS: Progressive rock.

0:22:34.0 BB: Progressive rock. And then we have people... So, what category would we put... I think somebody asked Lucinda Williams, we're going to see her in a few weeks. So, what category? Well, she doesn't fit a category. So, that's category thinking. Category thinking is putting things in categories. We could say, where did you go to college? That's a category. These are USC grads, those are Cal State grads. And, part of the point I want to make is that we use category thinking all the time. Putting people in categories is what we do. Such as you and our daughter are Cal State graduates.

0:23:17.6 BB: And, so, what degrees do they have? Those are categories. So, I don't know what we would do if we couldn't put things in the categories. So, I don't think category, putting people in category is not a bad thing. Now, when you start to associate values with the categories, now we're getting into racism or sexism and then, okay. But this idea that putting people in categories is a bad thing, I'd say category thinking is our simple way of organizing everything around us and these little file cabinets. Now added to that is when you put four or five things into a category, then what you're implying is that they're all the same. And that gets into acceptability.

0:24:12.8 BB: So, if this is a good part, that's a good part. That's a bad part. That's a good part. So, all the good parts go into the good part category. Then we say, oh, these are all good. Then we get into the sense of, and they're interchangeable. Well, maybe not. And that has to do with what I call continuum thinking. All right, so before we get to continuum thinking, Andrew, remember the question. What do you call the person who graduates last in their class of medical school?

0:24:43.3 AS: I don't remember that.

0:24:45.2 BB: Okay, so take a wild guess, Andrew, putting the pressure on, what do you call the person that graduates last in his or her class in medical school?

0:24:55.7 AS: Surgeon general.

0:24:56.9 BB: What's cool is that's a question I've been able to ask all around the world. Now, depending on where I go, I can't talk about baseball because they don't understand baseball. Or depending on where I go, I can't say soccer or I have to say football. Then if I say football, I have to say, well, I mean your football, not American football. But what's neat about this question, what do you call the person that graduates last in their class in medical school, that's "doctor." That's also acceptability thinking. From the first in class to the last in class, they all met requirements. Andrew, you know what that is? Acceptability. So, category thinking is a form... Acceptability is a form of category thinking. All right. Now I'm gonna give you three numbers and I'm going to ask you which two of the three are closest to being the same. You ready?

0:25:58.0 AS: Yep.

0:26:01.7 BB: 5.001, 5.999 and 6.001.

0:26:11.1 AS: 5.999 and 6.001.

0:26:17.6 BB: Are close to being the same?

0:26:18.8 AS: Yeah.

0:26:20.2 S3: That's what most people think. Okay. But...

0:26:25.7 AS: One's a six and one's a five. That's a problem.

0:26:29.5 BB: All right. And, so, again, the numbers were 5.001, 5.999 and 6.001. And the question is, which two of the three are close to being the same? And, what most people will say is 5.999 and 6.001, which infers that what does same mean?

0:26:48.5 AS: The integers?

0:26:49.1 BB: If you answered.

0:26:49.9 AS: I looked at the integers at the end rather than the whole number at the beginning.

0:26:56.7 BB: But is it safe to say you chose those numbers by saying they were closest together?

0:27:01.6 AS: Correct. Yes.

0:27:03.2 BB: So, in your case you're saying, if I plot those numbers from zero to infinity. Then those two are really close together. That's one definition of same is proximity. But, same could also be, they begin with five, in which case the first two are close to being the same. 'cause they both begin with five or they're both less than six. Or, I could say 5.001 and 6.001, because they both end in .001. So, it turns out there's three answers to the question. But the answer of the last two and proximity is what category is what continuum thinking is about. On a continuum these two are closest together. All right.

0:27:51.2 AS: And I have to tell you, we're gonna be running out of time, so we gotta wrap this up.

0:27:55.4 BB: All right. So, when I asked you the question, what do you call the person who graduates last in their class of medical school? And you said doctor, that's category thinking. If you used... Well actually the thing is, if I ask, what do you call the person who graduates last in their class at the United States, US Army's Military Academy, known as West Point, one answer is Second Lieutenant. 'cause they're all Second Lieutenants. But West Point uses continuum thinking to define the very last person in their class. So, it's the last person in class is not called second lieutenant. The last person in the class is called goat, as in the animal.

0:28:43.2 BB: And a very famous goat at West Point, who from my reading, was very proud to have graduated last because there's... I think Mike Pompeo, who was Secretary of State under president Trump, was first in his class at West Point, first in his class. A very famous, I wanna be the last person in my graduating class at West Point was George Custer. You've heard of him?

0:29:14.3 AS: Yep.

0:29:15.5 BB: And, he was deliberately lazy, so he wanted to be the very last person in his class. But that's, but the idea is that category thinking says they're all Second Lieutenants, they're all doctors. Continuum thinking is when you say this is the first, this is the second, this is the third. And when you come up, when you start to order them and say, the last one is goat, that's looking at things on a continuum, which is continuum thinking. Well, given that most quality systems, including Boeing's Advanced Quality System, are based on category thinking and category thinking, you have good parts and bad parts. When I ask a question as I brought up in the podcast five. I said I go to audiences and ask, how much time do you spend discussing parts which are good, that arrive on time? And the answer is none. And I say, well why is that? 'Cause in that system they're focusing on taking things from bad to good. And then what? Stopping at good.

0:30:20.0 BB: Well, part of the thing I wanna get across in this episode is the reason we're stuck in that model of stopping at good is because the quality system is based on category thinking of bad and good. And in a world of good and bad, there is no better. In a world of short and tall, there is no taller. And, so, continuum thinking allows us to go beyond that. And, so, going back to Dr. Deming's quote, conformance requirements, which is category thinking, zero defect, Six Sigma quality, those are all category based systems, which means it's good parts and bad parts. But then I come back to how does a system which is based on good parts and bad parts deliver such incredible reliability in the products? And, I believe it's because they're using continuum thinking. Not... And again not continuum thinking everywhere, but I think they have very judiciously figured out where to use continuum thinking and that is their differentiator. In my admiration for Dr. Deming's System of Profound Knowledge is, I've not come across any other type of management theory, which has that level of fidelity to explain that. And, in order to practice continuum thinking, implement it, you have to work together.

0:31:43.9 AS: And I'm gonna wrap this up by... One of the revelations that I come upon when I listen to what you're saying is. That's also what makes Deming's teachings sometimes hard to grasp, because there is no clear category and there is no clear beginning and end. There is no certification and therefore it's just hard for us who are used to being in categories to grasp. And that's my conclusion what I draw from everything you've just said.

0:32:16.6 BB: Well and let me add to that, really appreciate you saying that. Let me add to that,much of what I was doing at Rocketdyne... When I began to appreciate that the reason I was focusing on solving problems, solving problems and the problems we didn't solve were the problems where the customer, NASA said, we're gonna take this work and take it to the company down the street because you guys can't make it happen.  And, that scared the hell out of me that we're gonna lose this work to competitors because... And when I looked at it, was why are we stuck?  And I looked at Dr. Deming's work, the reason we're stuck is we're... 'cause our quality system is based on good parts and bad parts. We're waiting for trouble to happen. And, so, but still what I found is, and when I started to focus on... I went from being 100% Taguchi to more about Dr. Deming's work and trying to come up with everyday examples to make Dr. Deming's work more accessible.

0:33:16.9 BB: So, in Dr. Deming's work, you're not gonna find category thinking, continuum thinking. So many of the concepts we talk about in this series, in the prior series are... I refer to them as InThinking Concepts, just trying to make it easier for people to begin to absorb the brilliance of Dr. Deming's work. Because, I think absent that, when he says quality, what kind of quality is he talking about? Acceptability quality, desirability quality. So, I'm with you, I think the work is brilliant. I'm just hoping through our conversations and these podcasts that we can make his work far more accessible.

0:33:56.4 AS: Yep. Well, I think we're doing that. And Bill, on behalf of everyone at The Deming Institute and the audience, I wanna thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. Of course, if you wanna keep in touch with Bill, just find him on LinkedIn. 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 work."

Is your financial bottom line the true story of your organization? In this episode, Jacob Stoller and Andrew Stotz take on the myth of the bottom line - maybe it doesn't tell you what you think it does.

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 Jacob Stoller, a Shingo prize winning author of "The Lean CEO" and also "Productivity Reimagined" which explores how to apply the Lean and Deming management style at the enterprise level. The topic for today is myth number two, the Myth of the Bottom Line. Jacob, take it away.

0:00:32.7 Jacob Stoller: Thank you, Andrew. Great to be back here with you. Yeah, the myth of the bottom line, it is widely believed that if you look at the financials, that tells you everything you need to know about the productivity in your organization. And it's almost when you think what we talked about last time, so that the pyramid, the idea that the whole equals the sum of the parts, I think the myth of the bottom line is really kind of flows naturally out of that. If you believe in this pyramid that Dr. Deming was so critical of, the myth of the bottom line seems to make sense. Just that dollars flow through, you save a dollar here, it's all going to add up.

0:01:23.8 JS: So the problem with that is that productivity as we've learned from Dr. Deming, is actually determined by lots of non-financial factors. And what the bottom line gives you is a kind of an oversimplified, I guess, aggregated view. So you take the total sales of a company and you divide it by the number of employees. You can call that productivity, but it's not really productivity, 'cause productivity, strictly speaking, comes from making increasing output with a set of inputs. So you go from time A to time B, are we making more while keeping all our fixed costs constant? So there are things that get in the way of measuring that and one of the big ones is something called price recovery. So if you look at profitability, it's really a combination of price recovery and productivity. But price recovery would be any change in cost, any kind of financial cost during or between the two periods that you're measuring.

0:02:45.7 JS: So if you've got say the cost of labor, cost of materials, facility costs, energy costs, all these things can change between two time periods. And at the same time, maybe your selling price changes. So it turns out that factoring all those things out is much more difficult than you would think. It doesn't come easily using ERP systems in those things. And one of the pioneers of Lean accounting [0:03:16.8] ____ explained to me how he, when he first realized this, how much work it was to actually just separate all these price recovery factors from the total that contributed to productivity. So it's not that easy to even get to productivity and really get an accurate figure on it.

0:03:39.1 AS: It's interesting. I'm a financial guy, so I look at the P&L all the time of so many companies. So I think I've got some fun stuff that we can talk about, but was there something more you were gonna wrap that up with?

0:03:51.9 JS: Well, yeah, I think what happens with that is you get a sort of a cultural divide, because executives, I'm told, typically see operations as a black box. They'll say, well, okay, someone worries about process and manufacturing process, or it could be in any field. It could be medical, it could be something else, but that's something that operations worries about, so we'll let them do that. So they're left, these executives, with only one language, and that's financial language to understand things. And that's basically the iron law there is you get what you pay for. So we wanna get better quality, okay, we invest in it, that costs money. We wanna get faster delivery times, well, we'll pay money for that. And we wanna lower cost, well, then we better get rid of some people.

0:04:51.7 JS: So these things are all looked at sort of transactionally from the outside, not inside this black box of process. But inside that black box, that's where all the magic happens. That's where the Deming chain reaction happens. The fact that when we invest in quality, costs are gonna go down, but you tell that to an accountant, they'll tell you you're nuts. So it's really, I think there's a big challenge there of getting people to understand that the laws of that really determine productivity are not purely financial. And people need to... I think a lot of people need to broaden their thinking to understand that.

0:05:43.0 AS: Maybe out having looked at the financial statements of thousands of companies and have valued thousands of companies in my life, let's look from a top down, first of all. So people organize, people give money, give capital to companies, because they expect to get some return from that capital. Some people care about what that company does, others don't care, but that's the first step. And so the company gets capital that they deploy and they organize their business however they want, and ultimately they generate revenue. Now, revenue is price times quantity. And I think the first thing that supports what you're talking about is that, if a manager of a company says, our revenue went up 20% last year, and it was all driven by increasing prices only, well, that's... If you could sustain that, that would be fantastic, but it's quite likely when you increase prices, you're gonna have a knock on effect of your demand falling as your competitors have lower prices. But then, what you could say is that that company really didn't change anything about the way it's operating, it's output, it's productivity. Would that be correct in saying that in your mind?

0:06:56.9 JS: Yeah, it would be correct, and I think that a lot of the companies that are protected from... We got stories about this that are protected price wise and are able to kind of raise their prices at will, actually get very sloppy with their operations, and they don't increase their productivity. So I would say to your clients or whoever when you're analyzing that, that what productivity growth will give you is sustainable improvement over time. Productivity is the one thing that every company has control over, and you can control it year after year, but it's long term. It's a long term prospect. So that's... If you're managing quarter by quarter, that's maybe not gonna be so attractive.

0:07:52.0 AS: Yeah. So I think that's a great point about the long-term nature of trying to improve your productivity, because anybody can be a one hit wonder and increase price, let's say, and then tell everybody, "hey, we got more revenue, or we got more profit." Now let's look at the other side. So the P&L, the profit and loss statement, or the income statement is revenue minus costs, equal profit. There's a second aspect, is that a top level executive who come in and say, "I'm slashing the marketing budget, and I'm slashing the cost related to our operations and all that," and in the end, they would get an increased... Increase in profit. But they may get that at the sacrifice of future growth of let's say the image, the brand image of the company as an example, which doesn't necessarily have to do with the black box of actually making the product, but does have to do with creating a bottom line that looks great, but sacrificing the future bottom line. What are your thoughts about that?

0:08:55.1 JS: That's a great point. Yeah, of course, Dr. Deming would tell us to look at the system. They're all interdependent, marketing, sales, production and everything. But when I said black box, I mean, yeah, it does conjure sort of an image of manufacturing, but that same black box thinking, I think needs to spread through the entire company. And some of these really mature companies, Lean companies and Deming companies too, they're thinking everything as within that operational framework. Because it's operations within that, that you have your complex adaptive system. Financial, pure finance is not really in the same way... The laws of finance are not... Don't reflect that kind of complexity.

0:09:45.0 AS: I would like to just define this black box, because what you're... When we think of it of a black box, we think, okay, people just look at it, and they don't really know what's going on inside. But you're saying that that's the way a senior executive oftentimes comes in and they don't even know what's really going on. I remember when I worked for Pepsi in the factory, that the factory manager was even out of touch with what was happening on the floor. He wasn't out there all the time. So when you're talking about black box, you're talking about kind of people looking from the outside in, but inside that black box is where all this productivity work is being done of how do we get more efficient in what we do, use less resources, and get a better outcome? How do we hit the specifications or the desire product that the customer needs. Which is one of the great things about capitalism is that you're actually trying to reduce the resources that you're putting in to create an output.

0:10:43.4 JS: Yeah, exactly. Well, I would expand the black box again. It can be anything, it can be in your accounting department. So the black box really is process. It's the whole concept of process. So it's not a physical entity at all, or a plant floor, it can be everything in the company, but yeah, you can look at... You can take same kind of principles and say, "how come it takes you 10 days to close our books at the end of the month? Can we shrink that down to three?" So we can use the same principles anywhere in the organization. And similarly, we can use these principles in healthcare and services industries and just about anything. So yeah, so the black box is a very conceptual idea.

0:11:33.4 AS: The process, the systems.

0:11:33.4 JS: Yeah.

0:11:37.0 AS: The other thing I always tell my finance students on first day, the first thing I put up on wall, on the board is, "finance adds no value." Which is a very disappointing thing for undergrads in finance. But what I try to show them is that, finance is a feedback. It's a tool for feedback. And the feedback in this case is financial feedback. And with that financial feedback, it's information that the management team can use to create value, to make better decisions, ultimately about the business and what they're doing. And so for those people that think that finance is something that creates value in a business, I always say it's a support function. And when it's done really well, it's a fantastic support function to give feedback of, here is the big picture of what we're producing, whether that's looking at the cost accounting on a production line, or whether that's looking at the overall company. So finance adds no value is one of the things I always say to kind of wake my students up to see that really, finance can be great if it's supporting the CEO and the management team at making good decisions.

0:12:47.8 JS: That's a great point, Andrew. And of course that's said often in the Lean world. When they separate out, muda, which they call waste, they have... Well, they have necessary waste and unnecessary waste. Unnecessary waste is too many steps in a process or whatever, but the necessary waste is things like finance, and it's not just finance, but it's things like having an HR department. Because HR is not actually making any products for your company. So all these support functions, administration, even executive management would be considered to be not adding value in that framework. So I think what you're saying makes perfect sense.

0:13:38.4 AS: I came across a company when I was a young analyst here in Thailand, and it's a factory. And I was looking at the financials, and I was seeing that the profitability was rising quite fast, and the cash conversion cycle basically went negative, which I've never seen a factory have negative cash conversion cycle. So I called up the company and asked if I could come out as a analyst. I went out to visit the CEO and the management team and went around and I asked him, "how did you get your cash conversion cycle to be so low?" He said, "well, we focused on reducing an inventory in our business." And I said, "how long did it take you?" He said, "it took us about five years." And he said, "but I really gave the responsibility to each team leader and each team to think about how they could reduce the inventory in their area."

0:14:27.4 AS: And that was, first of all, a lesson in focus. If you focus on one thing and it's the right thing, let's say, let's assume that was the right thing at that time, you can get there. But the reason why I'm telling you this story is 'cause he told me another thing that was interesting. He said, "we have a... Each area we have a profit and loss statement for, and we try to get people to think about that." But I said, "how do you handle the overhead of management, the cost of management?" He said, "we list out the exact cost of management and we post it on the wall, and then we calculate it per area so that everybody knows how the management cost is hitting their P&L. And then we challenged them to help push us to drive down that overhead." And I was like, that's pretty transparent, I thought, in a Thai factory.

0:15:18.2 JS: Well, that is interesting and I'd be curious. A lot of companies use standard cost accounting and what often happens is inventory actually... When they reduce inventory, that's an asset right? On the balance sheet, and they take a hit from reducing inventory. So I'd like to know how your client dealt with that, or if they had to deal with it.

0:15:42.1 AS: I am not sure how he did the accounting, but I know that many, many companies in Thailand do not use standard cost accounting, just because it's a pretty advanced thing. And I think that they're pretty simple in some of their operations. Not all, but yeah.

0:16:00.8 JS: Yeah. Okay. Well, no, standard cost accounting is just not a good way if you're interested in maximizing your productivity, because it basically hides the... It hides the true cost of inventory. It postpones them to a later year. So when you sell the product, then you're paying the carrying costs of the inventory, which is crazy. So somebody overproduces, they don't take the hit for that.

0:16:25.3 AS: Right. One last thing from me, and then maybe we'll wrap it up by thinking about the takeaway of what we want the listeners to be able to do from this discussion. But I just, since it's myth number two, the myth of the bottom line, I wanna address another myth that I always talk to about my students, and that is that the goal... This is the myth, "the goal of the management is to maximize profit." And I teach my students that if we wanna look at the financial goal of the management of a company, it is not to maximize profit. And if anybody says that, I always stop them and say that "actually, the goal of the management is to maximize value. And value is a function of profit and risk in the calculations that we use in the world of finance." So you can... A manager, two managers of different companies, but let's say competing companies, they could be, one could be getting a huge amount of future cash flows coming in, but they could be doing it through bribery, let's say.

0:17:28.8 JS: Yeah.

0:17:29.6 AS: And that is raising the risk secretly behind the scenes. And so the ultimate, the value that's being created in that company is going to disappear. Another good example is Amazon. When Amazon listed in the stock market, it went seven years with losses. So was it doing the wrong thing? No, it was creating value even though it had loss. So ultimately, the importance is to create value, maximize value, not maximize bottom line. That's kind of me from the top down finance perspective, but what are your thoughts about that?

0:18:08.6 JS: Well, value is tricky. Because it's determined by the customer. So a bunch of things. I always give the example of ballpoint pens because I scribble a lot on my calls with a ballpoint pen, but supposing I'm making 10,000 of these an hour or something, and I up that by 10%, well, that's fine. And with all my machinery, maybe I'm running it faster and I'm using all the same plant, I figured out a way to do that. But what if the productivity, or sorry, the productivity will show as an increase, but what happens if some of those pens skip? I have a quality problem as a result of picking that up. Well, if the pens are not really acceptable to my buyers anymore, then I haven't gained anything. So it shows...

0:19:01.6 JS: So you can't just do a productivity calculation based on numbers that are turning out. You have to maintain that quality and that's not that easy to do. 'Cause it might be that my quality problem is that, I have to increase by 10%, but it's only skipping one out of 10,000 pens or maybe one out of 5,000, but the customer might not care about that, or they might not... They might rather pay a little bit less and have that slight defect. So it's a tricky business, I think, with value, you have to constantly be getting customer feedback, and knowing what the customer needs, what level of quality they need, and making sure that you consistently deliver that. So value, yeah, absolutely.

0:19:55.8 AS: It's a good time to come back to point number one of Dr. Deming's 14 points, which is, "create constancy of purpose towards improvement of product and service with the aim to become competitive, and to stay in business and to provide jobs." And the idea of focusing on improving product and service is the holy grail. If every day, you are working as an organization, as teams, as groups to improve product and service, it's just amazing, and I think that that's where Toyota has been a great example of just relentlessly pursuing that. But let me ask you, how would you sum up what you want people to take away from the myth of the bottom line number one, and what action do you think that they should take as they go back and look at their business or look at their department?

0:20:52.1 JS: I would say stop. First of all, stop pretending that you know everything based on the financials. Go look at, go study Deming principles or learn about what actually happens and how the value is created. Go onto the front lines where value is created. Whatever your company is, study that and start to learn what some of their problems are, and how that affects value. I think there's this... They've said that... It's often said that it's much harder to unlearn things than it is to learn new things. So I don't think it's an easy... I don't think it would be an easy thing to do. It's very convenient to believe that the finances tell you everything, especially if you're outside the company. If you're an investor or you're Wall Street or whatever, and you're providing guidance on companies, telling them that they don't really understand what's driving the value of that company is not a very welcome message. So I think it's it's not easy.

0:22:05.8 AS: I was just reading a book called, "The Six Month Fix" by Gary Sutton, which is a great book about turning around companies, but he has a chapter talking about Hewlett and Packard, the two gentlemen who started Hewlett Packard, but he talked about how they just... They were constantly walking around out in the production area. They were in the maintenance area, they were on the loading dock. They did it at evenings, they did it on weekends, they did it on day... They were just constantly out there. So part of what I'm hearing from you is step back from the financials and get into the operations, see what's happening in the processes, and helping support people to work towards improving the product and service, so that you get a consistent growth in your business that's driven not by like raising prices, but by getting more efficient in what you're doing. That would be kind of how I would summarize the takeaway.

0:23:02.3 JS: Yeah. I think you have to acknowledge that there are people out there on the front lines that are creating the value in your company. And there's a lot you can do to help them as a leader. You can remove roadblocks. And if the company's been running purely on financial metrics, you can bet there are tons of roadblocks and frustrations that these people are seeing. But you can also... Eventually you can create a kind of a culture where people work together. Because as I think we see with Deming, the productivity is a team sport. You really wanna have team productivity, and people working together, not knocking each other down, as we talked about in the sort of the pyramid structure is what people do. You want them working together and leaders can do a great deal to kind of create that culture and lead by example and all those things.

0:24:03.9 AS: Well, that's inspiring. And I know for all of us, the myth of the bottom line, we can get trapped into it at times, particularly when the bottom line's not that strong and times tend to get focused in on it and maybe at the cost of other things, but this is a good reminder for everyone. I'm gonna wrap it up there.

0:24:24.9 JS: Okay.

0:24:26.3 AS: Jacob, 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. You can find Jacob's book "Productivity Reimagined" at jacobstoller.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."

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."

In our 6th Interview episode, Plant Manager Dan Vermeesch and Quality Manager Brain Hoff discuss their Deming Journey. Topics include a discussion on variation and getting the Deming Philosophy into the education.

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Deming Institute Podcast Interview

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Micron Manufacturing

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History of Micron Manufacturing

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Dan Vermeesch

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Brian Hoff

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Dr. Deming at Micron

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Variation

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Eliminating Performance Reviews at Micron

[00:11:07]
Struggles of Working with the Deming Philosophy

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Micron Gives Advice on Adopting the Deming Philosophy

[00:23:46]
Shingo Silver Medallion

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Variation a Key to Micron Improvement

[00:31:33]
Deming Needed in Education

Tripp: [00:00:12] In this Deming Institute interview, I speak with Dan Vermeesch and Brian Hoff of Μ Manufacturing in Grand Rapids, Michigan. We discuss the history of Μicron, their improvement journey and how the Dunning philosophy is affecting this journey today.

Tripp: [00:00:35] Hi, I'm Tripp Babbitt, host of the Deming Institute podcast. Our guests today are a couple of gentlemen from Micron Manufacturing, Dan Veermsch and Bryan Hoff. Welcome, gentlemen.

Dan: [00:00:48] Hi, Tripp. Thanks for having us.

Tripp: [00:00:50] Very good. So first of all, micro manufacturing I'm not familiar with it. Won't want to share a little bit about what Micron Manufacturing does and a little bit about both your gentlemans role in Micron churn, Micron manufacturing as it was using machine products company in Grand Rapids, Michigan.

Dan: [00:01:10] It's been in business since 1952, Ed and Jackie Preston founded it back then and until just a few months ago, Jackie Preston still came in every day, five days a week. She just turned ninety one a couple of weeks ago and she hasn't been in in a few months. But she was here every day until then. And it was great because her son currently is the president at Micron. And we have a niece and nephew that work here. And the nephew has a 5 year old daughter that comes in on Saturday and plays on a computer. So one of the best parts of the story of Micron is we have four generations in this building every week.

Dan: [00:01:51] And it really is part of the story that's important because there's a lot of family focus here at Micron that that's important to us. So I am the plant manager, have been the plant managers since 97 and also the lean champion that has tried to be the architect of some of the various improvements systems that we have had since the year 2000 is when we really begin implementing our transformational change. So I'll let Brian introduce you.

Tripp: [00:02:26] Okay.

Brian: [00:02:27] I'm Brian Hoff. I'm a quality manager at Micron. This would be my twenty second year with Micron. And as Dan said, it's around 2001. We began to be to transform our journey from kind of an old school business model to trying to adapt what is the best way to make change and improvement. And it's been an amazing journey. And lately we seem to have encountered Mr. Deming once again. And I guess I'm mature enough to understand it better than I did 20 years ago. And I'm using him almost daily to try to influence the decisions I make each day.

Tripp: [00:03:13] Very good. And where are you guys located?

Dan: [00:03:17] Grand Rapids, Michigan. OK. We're on a dead end street in the northwest corner of Grand Rapids, Michigan. So that's that's always part of my favorite part of the story here is we're kind of located on the edge to nothing. And despite all that, our folks here have made so many great changes over the years that we've had thousands of people from, I think, 26 states and eight countries that have come to visit us to see the systems that have been put into place over the years. And we're only a 40 person company. Twenty eight thousand square feet. So we're just a small about on the map that that over the years have made a big ripple in the pond. The precision machining industry. And it is exciting that we've got such a great group of folks that have not only made change, but we've made a lot of improvements over the years. But part of our story that we'll get into and will allow is we're making a lot of change, but we kind of lost sight of whether or not some of that was improvement. So we could see a lot of change around here. But the dials stopped moving after awhile. And so we had to go back to the drawing board. And that drawing board was Dr. Demings work.

Dan: [00:04:35] Okay, very good. Well, let's pick it up from there. So how did you guys come across Dr. Demings work? It sounds like maybe you initially knew Dr. Deming then kind of got away from it. So once you share a little bit about your journey there.

Brian: [00:04:52] So this, Brian, and back when I was a young 20 some year old, I happened to go to a statistics course, and during that course the instructor had mentioned Juran and Deming. So I began with Juran and in Juran Zone books, he mentioned Dr. Deming, so once I completed listening to the doctor, Mr. Grant, I read out of the crisis and.

Brian: [00:05:18] I don't know that it made complete sense to me at the time, but it did. The thing that got me was the study of variation. But so I spent five or six years diving kind of deep into statistics and I made some headway that wasn't I wasn't at Micron at that time. I was I was in the plastics industry. So when I joined my Mike Brown back in ninety one and.

Brian: [00:05:46] We were able to use some of the statistical tools so that in a way I was holding on to some old blood. Dr. Deming talked about variation. But I wasn't I wasn't truly knowledgeable about profound knowledge and the way to think of all of that. And then I admit to somehow I lost track of Dr. Deming for a decade or more. And then later, when Μicron started doing its deep transformation, Dr. Deming started coming to my mind more often. So I re-read the books again. And since then, it seems as though. There was a trajectory of adopting a little more of Dr. Deming, and then recently we seem to have found a new gear in regards to appreciating what he said.

Dan: [00:06:41] So a number of years ago, maybe the early 2000s. Brian and I have had a lot of conversations over our years of transformation. We always called it our lean journey. And that's that's how we knew it. But he would bring up regularly his views on variation. And then I asked, would you come up with all this? And we mentioned Dr. Deming and I need to learn more about this.

Dan: [00:07:07] Never, never really put forth the effort to do so. Until I was at a conference in Columbus, Ohio, I think about eight or nine years ago, and the speaker talked about the 14 points. It seems like I've heard of those in the past. Any you talk further about the doing performance evaluations and the disrespect that came from it. It just so happened to be the high end and pushing performance reviews here created a very in depth system. We're doing them quarterly. We're doing all this stuff and I hated every minute of it. And I couldn't put my finger on what was it that I felt that was wrong with it until I heard the speaker say just how disrespectful Dr. Deming felt that they were and why that day.

Dan: [00:07:58] I decided before I left that meeting, we were never doing another one. And I came back and I told our management team it's called team strategy. I apologize for pushing it so hard for so many years and shoved it down everybody's throat. And today we stop. I. I wish I would have gotten a picture of the room on that day, because I think the shock phase, after pushing it so hard that doing a complete 180, but it truly was like like seeing the sun come up because it put words to the feeling that was growing in me, that this is just wrong because half the people were walking out of the room feeling they were below average. Right. Who do you want to feel that way? And that was the day that I thought, I need to learn more about this guy.

Tripp: [00:08:46] Very interesting. So. So, yeah, go ahead.

Dan: [00:08:50] Oh, I'm sorry. So I was a few years after that that I don't and I can't recall right now how I caught wind of the Deming research conference in Fordham University in New York. And we've done a lot of presentations, like I mentioned earlier, sharing our lead story. And so I thought I'll submit and see us there is interested in her interest in hearing our story at the research conference. And then I was honored to be selected to do that. And.

Dan: [00:09:23] It was then that I met Dr. Demings, daughter and grandson, great grandson, and and heard everybody else that was speaking there, it truly became inspired by what I heard. And and Brian joined me on that trip and I brought my 15 year old daughter at the time and I thought because the story was about this whole story of Μicron. And I just wanted. I thought she needs to hear what grandpa and grandma created because I didn't mention earlier, I'm the son in law of the founders, but so I brought her with me.

Dan: [00:09:58] And it turns out she was the youngest attendee at a DME conference, I think, in the history of the den. And so Kevin and his wife is her name's Judy, I think, right? Yep. Yep. So they embraced her so much. I was really touched by that. So when the conference came to Michigan State University, where my daughter attends now at the conference, we walked in and she was just going to visit and say hi and whatever. And they made her so welcome. And got her a badge and invited her to attend a conference and everything. And it was really touching that they had a remembered her and they have really embraced a young person. And she's brought it up so many times. And and it's just that to me, that whole story just adds flavor to what I believe is the Deming community that I'm beginning to learn more about. So it's not just about the things he taught, but it's I'm beginning to see that the people that truly understand them are beginning to it. It's a group that we need to hang out with more. Right.

Tripp: [00:11:06] Very good..

Tripp: [00:11:07] So so let me ask you guys, when you started in to the Deming philosophy or as you've worked with with it, what things have you either personally struggle with or maybe even the organization has struggled with?

Dan: [00:11:23] So for me, I mentioned it again today in our strategy meeting to Brian and others that my 2019 transformation that came earlier this year when Dennis Sergent was the instructor of our Deming CQ Academy is what he calls it. And there was so much reference to improve it. So I love the statement. All premier requires change. Not all change results in improvement. So that was great to hear her have heard that before. But. I am a numbers guy. True and true on the facts and figures and dates and deadlines, you gotta go. You know, maybe that's part of being a plant manager. I don't know, but I begin to understand that.

Dan: [00:12:18] And then we've done a great job recently with our team strategy meetings. We are going to take a step in the right direction every day. And we we don't hold our feet to the fire like we used to about by this date. This thing has, you know, those kinds of things that the made up numbers of.

Dan: [00:12:35] You got to hit this goal by this day. We still have some of that. But there's far less focus on that than there was coming into 2019. And I struggle with it every day, every day that I bite my tongue and say, don't kick a no, don't create a no, don't push a number. Push the improvement and true change towards what we are looking to accomplish.

Dan: [00:13:01] And it's it's liberating, to say the very least. And again, it's humbling. It's almost like that day came back and say and said, when I do another performance evaluations offered me by longshot that because it's such a one idea who I am.

Tripp: [00:13:18] Interesting. Brian. Brian, how about you?

Brian: [00:13:22] Well, first, I want to attest to watching Dan's struggle with Martin.

Tripp: [00:13:28] Okay, so you've witnessed it. Okay, I got it. I think me.

Brian: [00:13:36] Oh, recently I encountered a. A customer had a problem, and normally if if we have material here that we asked to re-inspect, we learn how to do it. And we show another person how. And we call that a training system.

Brian: [00:13:53] And for some reason, and this particular incident, I decided instead of training the way I always have, I'm going to do it different. Because Mr. Deming said you should look harder at your training systems. There are likely problems there. And so I decided what would be a better way. And when I was done, it literally opened my mind to the amount of variation in a training system.

Brian: [00:14:22] Either doesn't pay attention to or creates all by itself, and so that would be a thing that recently happened to me in regards to understanding better, something that Mr. Deming talked about.

Tripp: [00:14:39] Very good. So here's a question for both of you. And it does matter what order that you respond. But if you were if you're a manufacturer, it's, say, listening to this podcast episode and you were thinking about this. What are some of the maybe, I don't know, pointers that you might give them about going to this philosophy, Will? What are the steps that you think they might go through or what advice might you have?

Dan: [00:15:10] That's a very good question. I think that as in most things, learning has to take place. And for me and for Brian, that fact he's got out of the crisis in his hands now, I've got some sticky notes in it.

Dan: [00:15:25] I get it. I always give Ryan a little ribbing because I call his Brian Dowling Bible here because he carries with him everywhere. I don't think I'd recognize him if he came to work about the thing in his hands. I think you have to start there. And I didn't start there. I just read the New Economics. In fact, I just got done with it in recent ago. First book I ever read.

Dan: [00:15:52] And then I have a long time ago, before I went to the Research Council that I read online, I learned more. I loved the history. I loved the fact that he grew up in a farming area and studied. How should it be? Because I grew up on of farm in Michigan here. So that really all resonated with me. And as I began to learn his story and his half life begins to patch together a lot of thoughts about how this may have all developed for him. And I want the history part of it. That's great. So I would suggest people be read about him and listen to these podcasts for sure.

Dan: [00:16:33] Look online if the educational beginning. But it was instrumental earlier this year. After all this time, haven't taken the Dennis Surgeons CGI Academy that really gave us this. It's what we did, guys. And I have to believe these types of sessions are all over the United States for people to be able to learn more and participate in groups. Exactly. And implement exactly what he's what he's trying to implement. And so through that, one of the things that's occurred to me this year is I began to have a greater recognition and appreciation for. Let's go back to our founders, Ed and Jackie Preston. You know, back in 1952, they they started this business.

Dan: [00:17:18] And so when I came on board in '96. There was a a few things that stood out to me. A phone never rang more than three times because it was disrespectful to the customer to make them have to listen to the ring on the phone more than three times. It was just a thing. Everybody here still knows by the time that there is a fourth ring, everybody in the plant is running for a form because it shouldn't ring more than three times. That system still by Mr President from the beginning.

Dan: [00:17:46] The other thing is when we have meetings here and we have a lot of meals at this company, the first an Ed or Jackie Ed's passed away now. And anytime we had a meal, they always eat last. They always insisted everybody else. You go first. We go laugh. Simon Sinek wrote a book. Leaders eat last. And when I read that, I saw Jackie. But I still believe it's all part of what Deming. His respect that he had for people. And and I saw so much of that and have seen so much in adding Jackie over the years that respect for people to make sure that the people in this company are taken care of first.

Dan: [00:18:30] And how so? So I would read, learn and then recognize and appreciate what already exists around you. And then I would start, I think, trying to implement the things that you were there.

Tripp: [00:18:43] Brian -do you have something to add.

Brian: [00:18:46] Not really know that.

Tripp: [00:18:50] No, that's fine. So let me ask you. Just kind of a broader question. I guess it looked like you guys sell globally, correct?

Dan: [00:19:00] Mostly in the United States. OK. If something goes outside of the United States and through our customers, not not directly from us to a customer outside the United States.

Tripp: [00:19:12] Ok. So has the environment changed much? I mean, there's a lot going on economically for your company. Is it gotten a lot better or is it kind of been stable all along or what's it like out there as far as manufacturing goes?

Dan: [00:19:28] So this year there's been a softening in general across pretty much all of the industries that we serve.

Dan: [00:19:37] And we we serve a number of them. Most of our business is relatively local. About 70 to 73 percent is in Michigan and the rest is either in southern Indiana or Texas. Shooting down that quarter in general have softened. And I just saw the numbers today that manufacturing in the third quarter actually went up a touch, which surprised me because we haven't seen it and I haven't heard that from our suppliers, to be quite honest with you. But one of the things that we've tried to do over the years, as we called our lean journey or on our shifting gears and to we actually trademarked a year or two ago the term system, Micron, because the reason people come here, the reason three thousand people visited are to see our systems. We had fire departments, health care, the company that created the resistor. And A we've had people from all over the world come to see how we schedule production.

Dan: [00:20:39] We have no mid-level management, how we have total flex time. People can decide which days they work, what hours they work. The whole nine yards. And and so people have come from all over to see how well how can we manage a company to where there are no bosses. There's a movie that tells people what to do. Brian, are the managers of quality in manufacturing and there's there's an engineering manager. We're responsible for the systems and making sure the people, the resources are there, of course. But it's it's really there's so much autonomy that people have. And and this year, really, over the last three or four years that we've been using the Toyota car, it really began to teach us a better understanding of the kind of calls PDCA.

Dan: [00:21:31] And that PDSA. So we use that language mostly because of that. But because of that, we began to emphasize every conversation. What did we learn? What did we learn? I think if I were to look back in the three last three years, the number one question that we ask yourself is what did we learn? Fill in the blank on whatever the heck it is that we're talking about. So I would I would dare say that the Deming philosophy is all about what have you learned? And we've embraced that.

Tripp: [00:22:04] And you guys have mentioned the lean journey that you kind of started on before you kind of got into Deming. What do you see as kind of the differences between them or or how did they maybe synergistically and engage with each other as you work through this or or what's happened with this this lean journey still continuing that as the Deming philosophy, enhance it. What's your view?

Dan: [00:22:34] So. I think that. Like most things in life, it's the perspective you choose. And I think that you can and perhaps many companies have chosen the perspective of Lean as the elimination of waste. And of course, that's an element of it.

Dan: [00:23:00] But I believe and we've used that language here a lot, but I believe truly that what we've tried to do with our lean journey is to best use our resources. So Dr. Deming talks about optimization of processes, right? We haven't used that language exactly a lot, but that's what our journey has been about. How do we optimize what we do? How do we create standards, stick to improve the standard and make things the lives of our people better?

Dan: [00:23:28] And that from day one, when we are first meeting about why are we going to take this lean journey? Way back in August of 2000, our management team said it is for one reason and that it is to make the lives of our people better and.

Dan: [00:23:46] From that day on, I felt as long as we have that focus. We're on the right path. And and so as we went through our lean journey, we were. Awarded the Shingo Silver Medallion for operational excellence back in 2008 93. And it's referred to as the Nobel Prize of Business or Manufacturing by Business Week. And that was nice to get. It was kind of a confirmation that we're on a good path, but the best thing about us told us all things we could do better. And so we tried to embrace them. And so on. As we learned more about the teachings of Dr. Deming, here's a thing that we weren't using properly our entire lean during that we're only now starting to learn and use much better.

Dan: [00:24:39] And that is the understanding of variation that Brian mentioned earlier or in control charts and we hadn't used. I don't know if we used a control Chart. Fifteen years probably that are 20 0 0 0. And now we really are. We're embracing the heck out of that. And we're beginning to understand where we have to measure data and where you continue on.

Dan: [00:25:02] Probably the greatest weakness, though, for us, the difference between how we treated women and what we're learning from Dr. Deming, though, is we are making a lot of change and we're necessarily tracking whether or not that change was an improvement towards the saying we needed improvement on. Right. Yeah. In that corner of the planet might look better now, but is it truly improving anything that's going to help the customer? And we lost sight of that for a while, I believe. And I think we're getting on back, Brian, to everything else then was pretty good a.

Brian: [00:25:37] The appreciation of a system as as we did the room. I think we learned more about systems because you have to diagram them out and understand the interactions between them. And so that kind of opened our eyes and just happened to fit in with a kind of reconfirms that Dr. Deming needs says. You should understand your system as good as you can. I think it also psychology. You know, in the beginning there are resistors because change is scary. And I'm sure some people wonder if you truly mean it. Or is that just the passing thing this month? And so you understand as you push that journey through and you get the buy in from people that that were once resistors. OK, that's cool. You get to watch and growth in your own people. You learn how to achieve that growth faster. Either by learning from your mistakes or the occasional times we we somehow did it right. So I thought all of that. There is a consistency between Lean and Dr. Deming. I think I can see that.

Tripp: [00:26:50] Okay. And Brian, you have to ask, because you mentioned that you kind of got into variation, you know, years ago or maybe even a couple of decades ago. And we're using it, you know, in what's different today, what it what it sounds like. You started into it kind of got away from it and then went back to it. What would take me a little bit on that journey?

Brian: [00:27:13] Long ago when I was when I first was introduced to it, we were trying to everything classic's and we wanted to learn how to build Dai's better. So is there a way to design a dye with more success by the time you're done, by the time you're finished? And I couldn't believe how much statistics help you in design. So that was kind of low hanging fruit and. So it's fun to play with.

Brian: [00:27:43] But we didn't necessarily use it in day to day production at that facility I worked with.

Tripp: [00:27:49] OK,.

Brian: [00:27:50] So then I. I moved on to Micron and that was my first attempt. OK. We don't use it to design our process, but we do use it to monitor our process. And back then, it was sort of driven by customers. They were requiring statistical data. And that's fine. But what's more, fighing are more fun to actually learn that you can predict your process. But I find that fascinating every day.

Brian: [00:28:19] So we're into that pretty deep for about four or five years. And for some reason, the customers decided to let those requirements go. And somehow that that seemed to be it took the wind out of the sails of that process.

Brian: [00:28:37] And so for some time, we didn't use statistics for quite some time. And then I would say in the last five or six years. We are doing more and more statistical studies and realizing once again the benefits of doing so. And now we're actually applying it to management processes rather than just parts or machines. And we're finding that. That is even more fascinating than than going out new in capability studies out next to a fancy.

Dan: [00:29:10] I think though, one of the stark differences between then and now is we did it because the customer demanded it and the sooner they stop demanding it, we stop doing it tells you how mature where I am right now.

Dan: [00:29:27] Now we go this beginning. We realize, as Brian said, it's helping us understand our management systems in ways we never would have dreamt before. And we're doing it because it's the right thing to do and you're learning from it. And we're the kind of company that there's no doubt in my mind that sometime very nearly down the road, we're going to be pushing this to our customers to try to do the same thing as we did that with our lean systems. When when we first started Dileep Journey by time 2003 rolled around, we had made a lot of changes and we realized that one of our customers had any idea what lean was. And we we began to bump up into. We can only improve our systems so well if we can't tie it to where our customers are demanding or needing from us. So we went on this magical mystery tour out to our customers for three years to try to see how can we link what we're doing to what you might need. And pretty soon, all of our customers want to delinked their systems to ours. And we went from like 16 percent of what we built was on some kind of pulse system to 68 percent within those three years. And it was an amazing thing because when they began to recognize what it could do for them and it helped us help them, it was great. So we were still and we began then to take what we've learned and what we knew and share it with the customer. So here's just another thing that as we learn more, I can see that we're going to share it with the customers because it will help them help us.

Tripp: [00:31:07] Very cool. So my last question for you guys is, is my typical one, which is. Is there anything that we've talked about or that you've responded to that you'd like to make a clarification of? Or is there any question I didn't ask that you wish I would have?

Dan: [00:31:28] That's really that's a great question.

Dan: [00:31:33] I know that they're the Deming Institute is reaching out to educational organizations across the country. I'm not aware of any of that in Michigan. There are individuals, like I mentioned Dennis a few times now that is trying to help industry. But it's important that we believe that the school systems are help. Few years ago, Mike Rather, the author of The Toyota Kata, was gracious enough to stop that. Mike Brown wandered through the plant. And then I was so bold as to invite him to teach the school that my kids went to grade school or how to do the participate in the Kata, which of course, as I mentioned, includes the whole PDCA cycle of improvements. And he did so and I thought it was a fantastic session. And it began the thinking, how can we get more AUTHERS? How can we get more people helping teach the schools that teach students how to be more critical thinkers? So I think that that would be something of. All certain interests of manufacturers all over the country. Here, as we try to help, you know, he knows the skills gap all the time, right?

Dan: [00:32:53] Mostly is a critical thinking gap in our opinion. We can teach the skill. So anything like that. We would love to see and hear more about it as time goes by.

Tripp: [00:33:03] Very cool, Brian. Thoughts? Last thoughts.

Brian: [00:33:07] Yeah, I don't remember who you were talking to and one of your podcasts, but your guest. You ask the question of them and I'm going to paraphrase. Do you think the Deming Philosophy is growing or shrinking or remaining the same. And he said he did not believe it to be growing.

Brian: [00:33:29] My guess, I was disappointed. Whoever your guest was, it seemed like a person that would probably know that answer better than I did. And that made me sad to think. And so I am curious, as Dan just said, you know, not only getting to the local school systems, but also the business schools. What is what is coming out of the business schools now? The people that we're going to hire soon?

Brian: [00:33:56] And then how do we get even further ahead, as Dan said? And get this all the way down to how do you teach young people to think in a better way? And.

Dan: [00:34:08] It's important for us. So earlier this year, Ryan and I both referred to CQI Academy that we had taken to learn more about Dr. Demings work, and I had coordinated through an organization called Discover Manufacturing here in West Michigan.

Dan: [00:34:26] They coordinated and I see it an industry led collaborative where four of our companies, 19 different people or 20, went to this class and one was in carbon composites, another one furniture, and there another machining company like ours.

Dan: [00:34:45] And it didn't matter that we were basically different industries and different walks of life. It was somebody from shipping to, you know, my position, brines as managers and everything in between. And it was a fantastic way to learn these collaboratives of different companies. So we're intending to do it again this next spring. I'm signed up as the co-lead for Discovery Manufacturing and make sure you do. And that's that's our contribution to try to make sure that we're spreading the teachings of Dr. Demings in West Michigan here, because regardless, I'm not sure what else we can do other than it here. We have tours every two or three weeks and people who come see it and we're trying to help this. I'll see more companies learn about it. So I hope that your listeners and companies that are getting involved open the doors and bring people in and show what they're learning. It doesn't matter how minor it is. Teach what you're learning and then try to get other companies together to do the same.

Tripp: [00:35:53] And that's sage advice. We appreciate it. Well, Dan and Bryan, we certainly appreciate you being part of the Deming Institute podcast.

Dan: [00:36:04] Well, thank you, Tripp. Greatly appreciate it.

Tripp: [00:36:08] Thank you for listening to the Deming Institute podcast. Stay updated on the latest blogs, podcasts, programs and other activities at Deming dot org.

In our 5th interview podcast of 2019, Alan Winlow, MBE, former Managing Director of Yorkshire Brick Company, Continuous Improvement Director at Marshalls PLC, and 2019 ASQ Deming Medal Recipient, offers insights on his efforts to lead a Deming transformation.

(This is Tripp's first interview with Alan)

Highlights include:

• Opening quote from Myron Tribus, “If you continue to do what you’ve always done, you will continue to get what you’ve always got”
• In the late 1980s, while serving as Managing Director of the Yorkshire Brick Company (YBC), employment in the UK brick industry plunged from 14K to 8K employees and plants were closing
• Question at hand, "How to survive in a labor-intensive business?"
• How had the Japanese captured critical UK business segments?
• Started to read about Dr. Deming and attend British Deming Association conferences
• Discovered sources of variation and PDSA, plus the importance of data
• Found the majority of variation came from manufacturing equipment and raw materials for the bricks
• Discovered how to change the brick manufacturing process to improve brick uniformity
• Began to meet regularly with YBC's production team to continue to improve brick uniformity, savings in water use, energy use, and discarded bricks
• Discovered mental models, including the Taguchi Loss Function
• Explored how to remove barriers within workforce, everyone came on staff
• Began to understand what his job was, including reading books and seeking new learning
• Alan led consulting visits to China in 1987 to assist in developing the Land Fill Gas business.  The Chinese were extremely interested in the landfill gas abstraction at YBC and sent no less than 8 delegations to visit the Yorkshire site. Alan was invited to visit by the Mayor of the city of Anshan.
• Teaming with local schools and universities, a local jail, and a county council to share lessons learned within YBC, including environmental projects
• Yorkshire Brick was honored in 1991 for contributions to environmental causes
• In 2000, Alan was honored by Queen Elizabeth as a Member of the British Empire for his leadership within YBC
• Never met Dr. Deming at BDA events; met Myron Tribus on many occasions
• Comments on challenges in implementing the Deming Philosophy
• Continued relevance of the Deming Philosophy today  

In our 4th interview podcast of 2019, Donald Berwick, co-founder and former President and CEO of IHI, the Institute for Healthcare Improvement, shares his Deming Journey.  Dr. Berwick, who presented at The Deming Institute's 2018 Conference, is one of the nation's leading authorities on healthcare quality and improvement. 

(This is Tripp's first interview with Dr. Berwick)

Highlights include:

• His training as a pediatrician
• His efforts to apply quality management, before his introduction to the Deming Philosophy
• Co-Founded IHI in 1989 as a non-profit organization
• Appointed by President Obama, in July 2010, to the position of Administrator of the Centers for Medicare and Medicaid Services (CMS), which he held until December, 2011
• Ran for governor of Massachusetts in 2014
• 4 children and 7 grandchildren
• Attended a Four-day Seminar with Dr. Deming in 1986, leaving early and then returning
• Prior to meeting Dr. Deming, serving as "VP of Inspection"
• In the world of inspection, everything stayed the same
• Waiting times of 2 minutes for x-rays were reported to him (with falsification) by the radiology department 
• "Do something about it"
• Question: What is the pushback that you see today in healthcare?
• The Red Bead Experiment was "electrifying," including triggering a vicious cycle of blame by management and withdrawal by willing workers.
• The workforce (willing workers) wants to do well
• The influence of Dr. Deming, and others, on IHI
• Prescriptions for fixing healthcare - "It takes leadership"
• General tone of healthcare today; "measure enough, yell enough, things get better"
• Continued focus today (backsliding) on measurement for inspection
• Question: What are physicians learning today about management? Answer: "Heroism as the route to excellence"

In our 3rd interview podcast of 2019, Wendi Middleton, Director of Continual Quality Improvement, from the Aging Adult Services Agency within the State of Michigan’s Department of Health and Human Services, and Dennis Sergent, President, Sergent Results Group, share reflections on the "Challenges and Opportunities in Applying the Deming Philosophy in Government."

(This is Tripp's first interview with Wendi and Dennis)

Highlights include:

• A 5-year history of applying the Deming Philosophy within the State of Michigan's Department of Health and Human Services (HHS)
• The development of Aging and Disability Resource Centers
• Learning "Who are our partners?"
• Where to start? / Who does what to whom?
• Family services and a cat
• First exposure to the Deming Red Bead Experiment
• Getting to know each other better within Michigan's HHS
• Creation of the BOLD ("Building Options for Long Term Decision-Making") Council
• Acronyms as an art-form
• Detailing the processes - Where to start and where to integrate?
• Exposure to control charts within the Bell Telephone System
• Education and steps to move forward
• Creation of the BOLD ("Be OLD") Councils
• Acronyms as an art-form
• Grant funding provided consulting help
• Process steps, including road blocks and issues
• Subject Matter Experts (SME) and Design Teams
• A focus on quality improvement, not change
• Policy changes, with improvements
• Living at home, using improvements in non-emergency transportation services
• Weekly Stand-and-Deliver meetings to review ongoing PDSA efforts
• Continual Improvement efforts are not always “linear,” with forward improvement (sometimes they go backwards)
• State government is a culture all by itself
• People sometimes become their job (position)
• Getting people on board with improvement; not always happy fits, some move on to other positions
• Managing “Level-of-Care Determinations”
• When facing system obstacles, take inspiration from Eleanor Roosevelt, Don’t take a “No” (answer) from someone without the authority to say “Yes”
• Setting new standards for working with state vendors
• New skills by Design Team members
• “Everything is designed around getting money from the federal government”
• Design Team roles are about improving access to state services, not finding sources of funding
• Effectiveness (doing the right thing), before efficiency (faster, better, cheaper)
• Cost savings have been measured, yet the bigger impact is serving more people for a given budget allocation
• Reducing the waiting list for services
• Instead of asking for more money, ask if the existing process can be improved to provide better service
• Discovering a mindset that if some don’t have a problem with a given process, others won't as well (meaning, the process is deemed to be OK as is, while it may well need improvement) 
• Impact on Design Teams after attending The Deming Institute’s “Me vs We workshop” 
• Getting over self-interest issues
• T-Shirt idea, “The Status Quo is Not an Option”
• Avoiding doing better what needs not be done
• Design Teams need ongoing support, including starting with on-boarding and ground rules
• Emergence of self-respect and respect for others

In our 2nd interview podcast of 2019, Steven Haedrich, President of New York Label & Box Works (NYLBW), shared reflections on his continued admiration and application of the Deming Philosophy.

(This is Tripp's second interview with Steven.  Link here for the first interview.)

Highlights include:

• Update on NYLBW
• Immersed in the Deming Philosophy every day
• Everything is moving much faster; quality has been a selling/differentiator
• Also, a focus on innovation
• Deming Chain Reaction, less rework/fewer mistakes/creating good paying jobs; the ONLY way to survive!
• Continual improvement on a daily basis
• Impact of a Total Cost focus?  NO!   Lowest price still gets the bid
• Interaction with your peers in sharing the Deming Philosophy; sharing it every day with both private and public companies – explaining the old ways of sale commissions, performance appraisals, etc.
• Other obstacles; clients and vendors adverse to partnering
• Steven’s 2014 podcast – Deming is it!
• Wonderful opportunity to join the board of directors of The Deming Institute
• Deming Online – worldwide access to online learning with the potential to reach millions of students of the Deming Philosophy
• How to get the word out on the Deming Philosophy
• Steven’s speaking engagements – Graduate School USA, Conestoga College, upcoming printing conference
• People are beginning to realize the limits of the prevailing system of management
• People are beginning to see the prospects of a changing world and the need to be more effective with management systems
• Where to start – The New Economics, 3rd edition, with Chapter 11 by Kelly Allen
• The world is finally realizing that the old ways that we have accepted as the standards of thinking are no longer going to prepare us for the complexities, for the challenges, for the true globalization of the world.  
• The Deming Philosophy captures the essence of collaboration and cooperation and teamwork and systems thinking and continual improvement; including joy in work!
• The Deming Philosophy allows for a different end of the day experience; allowing us to make the world a better place!

In our January 2019 interview podcast, his 8th session with Tripp, Superintendent David Langford reflects on the state of education, the system, and how its set up, including various ways in how schools are working to move from “theory to practice” in their understanding and application of the Deming philosophy.

Highlights include:

• The short term thinking which Dr. Deming warned us of, whether looking at profit or test scores
• Longer term strategies are sacrificed for short term results
• People get creative when driven to “show the numbers”
• Myths about charter schools being able to select their students
• Lack of a level playing field
• The strength and will power required to absorb the impact of a special cause being treated as a  common cause
• Rare to find Profound Knowledge
• Fear manifests itself in many ways
• Dr. Deming encouraged David to consult for education systems
• The right to joy in work and joy in learning
• Blaming the individuals vs. the system in which they operate
• How to change the system to all for joy in learning
• The role of rewards in narrowing one’s focus
• The fears and motivations of a school board
• Possible agendas of school board members
• An onboarding process for board members
• There are pockets of excellence in education systems

For more information about David's current work with Ingenium Schools, please visit ingeniumfoundation.org

In our second interview podcast of November 2018, Doug Hall provides an overview of his latest book, “Driving Eureka!: Problem-Solving with Data-Driven Methods & the Innovation Engineering System”

(This is Tripp's third interview with Doug.  Link here for the first interview and here for the second.)

Highlights include:

• Inventing “big ideas” for clients, as they entered the “Killing Zone”
• Applied innovation, using the Deming Philosophy
• How to “Find, Filter, and Fast-Track” big ideas
• Happy clients, paying big money, but the ideas did not happen
• Half the potential value of the big ideas is lost in internal development efforts
• The independent parts of organizations work to promote their own silo
• The average new product idea has a 95% failure rate in the market place
• What’s wrong with project management?
• Innovation projects have uncertainty
• Problem solving with data-driven methods
• Big ideas are easy – making them real is hard
• A major obstacle is a reliance on opinions vs data
• Shifting innovation from an art to a science
• What to take away from this book?
• All products follow a life cycle, from birth to death
• Innovation for extending product life
• How to create an innovation culture
• Innovate or die
• Obstacles to innovation – Lack of Leadership and Lack of a Process
• Brain Brew Whiskeys for mass customization
• Don't feel you need to do "all" of the Deming Philosophy
• Just get started!
• How to receive a special gift from Doug - go to gift

In our November 2018 interview podcast, his 1st session with Tripp, Mike Tveite reflects on his interactions with Dr. Deming, beginning with attending a Four-Day Seminar in 1986.  Mike went on to help Dr. Deming with 25 of his Four-Day Seminars, and to follow him around while he consulted with a division of General Motors.  

Highlights include:

• Mike's career, beginning as a Professor of Statistics
• First "World Shake" upon meeting Dr. Deming
• Dr. Deming in the MIT lecture series
• Learning statistics from Dr. Deming
• "Pond" statistics and "Stream" statistics
• Enumerative (pond) and Analytic (stream) Studies
• On what are you taking action?
• Mike's 2012 Deming Institute Conference presentation
• 14 Points for Management
• Management in a "pond" vs a "stream"
• The System of Profound Knowledge as a lens
• Production Viewed as a System
• The interdependent components of a system
• A single aim for the whole system
• Forces at work which undermine the aim of an organization
• Maximizing shareholder value
• Optimizing the system over the long term
• Data is like garbage, the need to know how to use it before collecting it

In our latest podcast for October 2018, Tripp interviewed Southern Utah University Professor Ravi Roy and Department of Aviation Director, Michael ("Mike") Mower, following their presentation at The Deming Institute's 2018 Conference.

Highlights include:

• Changing aviation training through the Deming Philosophy
• Mike meets Kevin Cahill during a visit to SUU to deliver a convocation lecture
• Not always a fun message of valuing collaboration
• Shifting away from a conflicting public / private partnership in the Department of Aviation
• A management style of using carrots and sticks
• Moving away from management by fear, with zero creativity
• A feeling of being entrenched in the prevailing system of management
• Applications beyond Department of Aviation
• Reaching graduate students from the public sector with the Deming Philosophy
• The reaction of staff members to the adoption of the Deming Philosophy
• The world of aviation is dynamic, while university environments are more static
• The impact of short memories; Deming – Now More Than Ever!
• The mindset for embracing the Deming Philosophy
• Support from SUU President Scott Wyatt while facing eminent failure
• Investing in the future
• The Deming Institute’s incubator at SUU
• The 3rd annual Bryce Canyon Society Forum, April 4th, 2019
• Leading by example, spreading the Deming Philosophy beyond SUU
• Seeking change with a march on Washington, DC
• Success in having the Senate and Congress pass a Maintenance Training Modernization Bill inspired by SUU, with details at this link
• With this new bill, SUU will be the first in the US to change 60-year old aircraft maintenance training and practices
• Moving from fear of the future to hope in the future

In our second interview podcast of July 2018, Doug Stilwell shares lessons learned on his transition from a public school administrator to a professor of education at Drake University, once bitten by the Deming philosophy. 

(This is Tripp's second interview with Doug.  Link here for the first interview.)

Highlights include:

• Continued impact of new education methods in the Urbandale Community School District

• How to bring more of Dr. Deming’s ideas into higher education?

• How to impact the next generation of leaders in education?

• Drake’s Continual Improvement Network

• What happens when students leave Doug’s classes?

• Network improvement communities

• “The system always wins”

• Moving away from the A-F grading system

• Shifting from a “time rigid / learning flexible” system to a “time flexible / learning rigid” system

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."

In our July 2018 interview podcast, his 7th session with Tripp, Superintendent David Langford reflects on the efforts of the entire staff of Ingenium Charter Schools to move from “theory to practice” in their understanding and application of the Deming philosophy.

Highlights include:

• David’s (new) role as superintendent
• Ingenium operates with 6 schools across Los Angeles, CA
• Restoring joy and meaning to learning as Ingenium’s constancy of purpose
• Meaningful and relevant learning
• Moving from theory into practice
• 5 areas of practice (focus): SoPK, intrinsic motivation, continual improvement, neuroscience, and (project-based) quality learning experiences
• Student involvement
• Dashboards for monitoring joy in work
• Students learning about common and special causes of variation
• Student feedback on their experiences within Ingenium schools
• Neuroscience research

For more information about David's current work with Ingenium Schools, please visit ingeniumfoundation.org

In our June 2018 interview podcast, his 1st session with Tripp, Jean-Marie Gogue reflects on his interactions and memories of working with Dr. Deming, beginning in November 1978 in Tokyo.

Highlights include:

• Inviting Dr. Deming to speak in Paris in 1980
• Dr. Deming's commentary on leadership
• Use of control charts
• Attending Dr. Deming's Four-Day Seminar in Switzerland in 1993
• Attending first Four-Day Seminar in the UK in 1987
• Starting the French Deming Association in 1988

In our May 2018 interview podcast, his 4th session with Tripp, Kevin Cahill, Executive Director, reflects on the 25th anniversary of The Deming Institute..

Highlights include:

• Latest news from The Deming Institute
• Creating the future of the Institute
• Use of ED software, from Acquate
• 2018 Deming Institute Conference at Bryce Canyon National Park
• Southern Utah University's W. Edwards Deming Incubator for Public Affairs (WEDIPA), under the direction of Professor Ravi Roy, has become the Quality, Innovation & Leadership Incubator
• Recent visit to Ingenium Schools
• The Deming Institute's 25th Anniversary Conference, October 5-6, 2018, Manhattan Beach, California (4 miles south of LAX)
• 3rd Edition of The New Economics, including a new chapter (#11), set for release in the fall of 2018
• Ongoing partnership with Aileron
• A new initiative to create greater access to the Deming philosophy

In our November 2017 podcast, his 3rd session with Tripp, Kevin Cahill, Executive Director, reflects on the first 24 years of operation of The Deming Institute, founded by Dr. Deming before his passing in 1993.

Highlights include:

• A brief history of The Deming Institute
• The restated aim, "Enriching society through the Deming philosophy"
• 46 interview podcasts and an ever-growing reach
• Plans ahead for The Deming Institute
• Resource development
• Moving from an internal focus to better serving constituents
• Partnerships and engagements
• Presentation at TEDxSUN
• New workshop - Shifting from "Me" to "We" Thinking and Action
• Jim "Mattress Mack" McIngvale and Hurricane Harvey
• Moving from crisis to cooperation
• Future of The Deming Institute
• Biggest challenges
• Expanding reach
• 25th Anniversary - 2018
• Operating as a 501(c)(3) non-profit, not a foundation
• Amazon Smiles
• New website - expanded capability
• How to donate
• Legacy

In our October 2017 podcast, his first session with Tripp, Joshua Macht, Executive Vice President, Product Innovation, and Group Publisher of the Harvard Business Review (HBR) Group, shares his goal of how to recast management ideas to those new to management, with a focus on innovation, strategy, and core principles of leadership.   

Long before he traveled to Gothenberg, Sweden in 2016 to attend an international healthcare conference, Josh was aware of Dr. Deming as an "old friend" of management, much the same as he assessed Peter Drucker.   Yet, upon witnessing Dr. Don Berwick conduct the classic "red bead experiment," he quickly joined the ranks of those deeply struck by the revelation that the performance of willing workers in any organization is largely governed by the system itself, far more than the performance of the workers taken separately.   So began his desire to review a series of videos and books about Dr. Deming, leading to his HBR article in 2016, a 6-page tribute to Dr. Deming, "The management thinker we should never have forgotten."

In parallel, he also wrote about Dr. Deming in a 2016 article for the Boston Globe.

Interview highlights include: 

• What’s happening at the HBR – expansion, podcasts, innovation, new and expanded audience
• Thinking systemically
• Needs of young professionals
• New HBR product launched in India, ASCEND
• Lasting impressions of the red bead experiment, including whimsical measures of quality
• Now, more than ever, the need for a refresher on Dr. Deming
• Layoffs and the erosion of trust
• How good people fall prey to a bad system
• Dr. Deming’s world of human nature
• Efforts that obliterate trust
• Barriers to success
• How workers treat each other in ways that are counter-productive
• Taylorism vs. Deming management
• HBR and the Watertown (Massachusetts) Arsenal, an early site of Taylorism
• Organizational undercurrents of “Us” vs “Them”
• Passion for innovation and a role as a digital renegade
• The need to be useful and feel valued
• The joy of learning

In our September 2017 podcast, her first session with Tripp, Lori Fry, a business management consultant from Columbus, Ohio, shares her inspiration for launching her "Dignity (at work) Project."   Through a partnership with The Deming Institute, every month, beginning in June, Lori will share posts from her website, www.dignityatworkproject.com.

From her website, Lori is "on a mission to bring dignity back to work in the American workforce.  To transform our economy, we first must transform ourselves and our companies.  Our aim is to bring dignity and joy back to work. The work of Dr. Deming and others who have contributed to expanding his body of work over the years provide the basis for what’s to come."

Lori adds "Our dysfunction with skilled labor is the tip of the iceberg. Below the surface are the symptoms of a workforce that’s been robbed of dignity in the name of greater productivity and short-term profits. More than 30 years ago, W. Edwards Deming foresaw our current condition, and in 1982 he published Out of the Crisis, a theory of management declaring American companies require nothing less than a transformation of management. American management failed to listen. The economy was expanding; business was booming – until it wasn’t – and we know what has happened since."

As a 20+ year student of Dr. Deming's theory of management, Lori brings a passionate voice for the possibilities of teamwork and collaboration available to all organizations.  

Interview highlights include: 

• her experience in "human capital management"
• her corporate training background and the lingering questions, notably "What if we train our people and they leave the company?" and "What if we don't (train them) and they stay?" 
• taking a break from business management consulting to support her family's farming business
• her introduction to Deming management
• as she learned more and more about Deming management, what stood out to her
• where change begins
• feedback on her first post, Don't Gamble with Your Company's Future
• reflections on her post about her son's education system, Tree climbing or life-long learning – what’s the real AIM of our education system?
• her blog audience
• general blog feedback 

In our August 2017 podcast, Francis Petit, Associate Dean for Global Initiatives and Partnerships for Fordham University’s Gabelli School of Business in New York City, shares highlights of a recent visit to Japan with Executive MBA students.    Of particular interest is his feedback on the students’ exposure to the influence of Deming management during their travels.   Having presented lectures in Fordham’s Deming Scholar’s MBA program, Francis thought to include a visit to the offices of Japan’s Union of Scientists and Engineers, also known as JUSE, and use this opportunity for the MBA students to learn about Dr. Deming’s influence on Japan through the eyes of JUSE members.    He was delighted to be hosted by JUSE’s Secretary General, Ichiro Kotsuka, who provided an explanation of the origins of the Deming Prize, his experience in collaborating with Dr. Deming, as well as insights on the selection process for the Deming Prize.

Interview highlights include:

• an explanation of the role of this trip to Japan in a “capstone” course for the MBA students
• demographics of the students
• first impressions on arriving in Japan and the systems awareness experienced within Narita Airport
• how the students prepared for visiting JUSE
• the impact of Dr. Deming’s theory of management on Secretary General Kotsuka’s personal and professional life 
• the contrast the students found between a longer term approach for business growth in Japan, with the shorter term focus in their respective organizations, including pressure for quantum growth 
• the students’ experience with variable compensation systems, including bonuses and commissions
• training received by the students to maximize their personal performance during performance appraisals
• why sales managers are less likely to be amongst the students in Fordham’s MBA programs
• impressions of the commitment of Japanese companies towards their employees

In our July 2017 podcast, his first session with Tripp, Bill Cooper shares stories on his 11-year relationship with Dr. Deming, starting with being one of 22 attendees in a 1982 Four Day seminar with Dr. Deming. At the time, Bill was serving as the Senior Executive at the North Island Naval Air Station, with Phil Monroe serving as the senior naval officer.   A few years later, Phil, as Commanding Officer of North Island, approved funding for Bill to attend an intensive, year-long, “quality management for executives" seminar, led by Myron Tribus and held at MIT.  Guest lectures were provided by Kosaku Yoshida, a doctoral student of Dr. Deming, and Yoshikazu Tsuda, former counsellor at the Union of Japanese Scientists & Engineers (JUSE).

As a student of management and leadership theories, ranging from Ken Blanchard to Peter Drucker, Bill met Dr. Deming at a time when he (Bill) was providing in-house leadership classes at North Island, as well as for the National Graduate School, a local private university. 

Inspired by Dr. Deming, all the while trying to get his mind around his theory of management, Bill partnered with Laurie Broedling to launch the first “Deming User Group” in the US, based in San Diego.  

Bill’s motor home served as a convenient dinner venue when Dr. Deming was in southern California and Bill would drive to the latest site of Dr. Deming’s ever popular Four Day seminar.   He has warm memories of Dr. Deming’s fondness for clam chowder, martini’s, and ice cream.

Interview highlights include: 

• Leading a staff of 4400+ employees, who worked “with” Bill, not “for” him
• The difference between parenting with 1 kid and 2 or more kids
• Can you teach an old dog new tricks?
• His role with the launch of the TQM movement, including Dr. Deming’s views on TQM
• Why Bill was intrigued by Dr. Deming’s focus on continuous improvement
• Dr. Deming’s response to an invitation from Lee Iacocca to consult for Chrysler
• Hosting “Round Table” interviews with Dr. Deming and his role as “the perfect foil,” as well as “straight man,” for Dr. Deming
• Dr. Deming’s Socratic style in his 1-on-1 meetings with Bill, including his introduction to the Law of Extreme Values
• Myron Tribus’ 85/15 rule and the difference between “working in” and “working on” a system
• Improving organizations by improving systems
• Struggling with the question of “Who owns the system?”
• The vital need to share a vision
• Fear vs. anxiety
• Answers to his favorite question, “What is the improvement strategy that your management team is articulating?”
• Bill’s thoughts on the difference between management and leadership
• Retiring from North Island in 1988 to form a “Deming” consultancy, with Phil Monroe as his partner

In our June 2017 podcast, his first session with Tripp, Phil Monroe shares stories on his introduction to Dr. Deming, leading to his personal transformation as a naval officer and later a post-Navy career as a quality management consultant, city council member, and, currently, board member of a hospital in Coronado, California.

Beginning with meeting Dr. Deming in 1983, while serving as the Commanding Officer of the Naval Air Rework Facility at North Island Naval Air Station, Coronado, Phil reminisces about his first exposure to Deming management.  The meeting was arranged by Bill Cooper, Tripp’s next podcast guest (our July 2017 edition), and the senior civilian at this 6,000+ person Navy operation. 

Highlights include: 

• What caused Dr. Deming to "look down his nose" at Phil, in front of 350 supervisors
• Phil’s transformation moment, captured on film, including which of the 14 Points Phil was in violation of, according to Dr. Deming
• Being challenged by Dr. Deming on his MBO style of management
• Applying Deming management to an incident involving a Metropolitan Transit Service (MTS) bus carrying school children.  Phil was serving as an MTS Board member and thought the wrong people received disciplinary punishment; i.e. time off without pay.
• What is top management’s responsibility?
• The influence of Phil’s academic background at Cornell University
• Shifting his thinking on problems from “Who did it?” to “What in the process caused this to happen?”
• World-wide Quality Management consulting with Bill Cooper
• Numerical illiteracy
• Impressions of the status of the practice of SPC today
• What is a statistician’s job?
• The theory of variation of as the cornerstone of Dr. Deming’s System of Profound Knowledge
• The "Phil Monroe" change

In our May 2017 podcast, his sixth session with Tripp (1st, 2nd, 3rd, 4th, 5th), David Langford, author, consultant, President, Ingenium Schools, and, 2017 ASQ Deming Medal Recipient, offers insights on his efforts to lead a Deming transformation within Ingenium Schools.

In his latest podcast, David reflects on 31 years of learning and applying the Deming philosophy to enrich society, with a focus on advancing education systems.   Beginning with his first conversation with Dr. Deming in 1986, when he personally answered David’s phone call from Sitka, Alaska, he has been on a personal learning journey, including mentored from Dr. Deming.   With encouragement from Dr. Deming, David reached out to Myron Tribus, who traveled to Sitka to learn more about David’s efforts to bring Dr. Deming’s theory of management to his high school education system.   Soon thereafter, David and Myron were speaking together at conferences about their efforts to improve education systems, using a Deming lens.

Fast forward to 2016, when David was selected to serve as president of Ingenium Schools and shift from “living vicariously as a consultant” (with Langford Learning) to “get back to the laboratory” of an education system in a full-time capacity.  In this month’s podcast, David goes down memory lane with Tripp to explore topics such as: 

• His first phone call with Dr. Deming
• Collaborating with his mentor, Myron Tribus
• A 25+ year career as a consultant with Langford Learning
• An offer from founder and previous president, Glenn Noreen, to join Ingenium Schools
• Daily Innovation at Ingenium Schools, with 160+ employees
• Have the fundamentals in education changed?
• Finding meaning in the Pythagorean Theorem
• Profound Learning Experiences
• Looking for the smallest things which can have the biggest impact
• Making decisions in a school system, both with and without the System of Profound Knowledge
• Running meetings with "our" agenda vs. "the boss's" agenda
• What teachers can do in a class room, in the absence of pre-determined answers to their questions
• When teachers shift roles from managing behaviors to mentoring
• Shifting from 1-way to 2-way conversations
• “Ingenium Huddles”
• Receiving the 2017 Deming Medal from the American Society for Quality

For more information about David's current work with Ingenium Schools, please visit ingeniumfoundation.org

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.

In our second podcast in April 2017, Ed Baker, author, consultant, and former corporate director, Quality Strategy and Operations Support for the Ford Motor Company, offers insights on his latest book, The Symphony of Profound Knowledge (W. Edwards Deming’s Score for Leading, Performing, and Living in Concert).

Nearing 20 years with Ford, including the last 10+ years guiding the tactical and strategic influence of Dr. Deming’s theory of management across Ford, Ed was asked by Dr. Deming to write a book to offer his own understanding of his System of Profound Knowledge.   For those who have heard Dr. Deming say "You can learn a lot about ice and know nothing about water," he credited Ed with this point of enlightenment. 

Ed met recently with Tripp Babbitt to share highlights from his book (in one of Tripp’s longest interviews to date), as well as inspirations from Dr. Deming, covering topics including: 

• Ed’s first contact with Dr. Deming

• Dr. Deming’s first visits to Ford

• Ed’s role in choreographing Dr. Deming’s visits across Ford

• Dr. Deming’s early impact on Ford

• The pace of change within Ford under Dr. Deming’s influence

• Ed’s book, Scoring a Whole in One

• Deming management, TQM, Six Sigma, and Lean

• Tom Johnson’s influence on his thinking

• Mechanistic and random sampling

• Is the map the territory?

• Joy in work

• Strong support for The Symphony of Profound Knowledge from Clay Mathile and the entire staff of Aileron

In addition to this podcast, link here to watch a recent interview with Ed (and here for a full-length interview), also with a focus on his book, The Symphony of Profound Knowledge.   Link here to listen to a radio interview.

In our first podcast in April 2017, Doug Hall, Eureka! Ranch CEO and Founder, shares ruminations on leadership from his wide-ranging conversations with business leaders, as he stretches his imagination to ask "What is the new talk track to engage a leadership person who is feeling chaotic?"

With a 30+ year background in Deming management, Doug well appreciates the potential for "joy in work," yet asks "Where's the joy (to be found today)?.   In his meetings with senior executives, he finds tell-tale signs of broken interactions, systems likely to fail slow and expensively rather than "fast and cheap."   Upon probing them, he learned "they have no idea" what to do when the existing platforms (systems) are not working.   Worse yet, he finds executives overwhelmed by the speed of change in the world today, often consumed by chaos.

On the bright side, he hears of a need for systems that enable workers, not control them, as executives ponder "What the new type of leadership needs to be?" and the need, now more than ever, for openness to change, with women leading the way, per Doug's experience.   

For those having similar thoughts on helping leadership and change in a rapidly changing world, with ample opportunities for infusing Deming management, Tripp's latest podcast offers serious food for thought from a master innovator.

In our January 2017 podcast, Tim Higgins, President of the In2:InThinking Network, www.in2in.org, and Quality Engineer for NASA, based in Los Angeles, California, shares insights from his 30+ years of studying, applying, and illuminating The Deming System of Profound Knowledge®.

Following a brief career as an educator in a public school system, Tim shifted careers and joined the rocket engine industry, employed by “Rocketdyne” (a division of Rockwell, then Boeing, followed by Pratt & Whitney, and now integrated with Aerojet). Along the way, Tim was introduced to Dr. Deming’s theory of management and, upon reflection, realized his inclinations against grades in school, while serving as a teacher, could be explained through his appreciation of Profound Knowledge.   For a short time, Tim was a member of Rocketdyne’s TQM Office, where he was introduced to the thinking of Genichi Taguchi and partnered with peers to create Rocketdyne’s pioneering “InThinking Roadmap” curriculum.   The subsequent focus on thinking modes led to his contributions as a co-founder of the In2:InThinking Network, a non-profit for which he now serves as president.  

In 2009, Tim crossed the employment bridge from the contractor side (“Rocketdyne”) to the customer side (NASA), inspired the proposition of assuming a role that would help Rocketdyne become a better contractor.

Guided by his extraordinary experiences as a quality advisor, Tim has led study sessions for Dr. Deming’s The New Economics for the past 12+ years, under the sponsorship of “Rocketdyne”.    Beginning in 2017, these sessions, comprised of six 90-minute conference calls, are being sponsored by The Deming Institute.   Led by Tim, participants share their interpretations and questions of The New Economics, chapter-by-chapter, covering 2 chapters in each 2-hour session.    A few highlights from Tim’s musings with Tripp on the study sessions follow below:

• Why he believes Deming (management) is about learning
• The popularity of the question "Why doesn’t everyone get “Deming management”?"
• Why being conscious of context is essential
• Why, when dealing with a difficulty in perception, using logic is no help is helping others see things differently
• Issues associated with extrinsic motivation – punishment and rewards
• Some challenges of letting go of “patting others” on the head
• The widespread similarity of organizations
• What would happen if “rating and ranking” systems were used at home?
• Lessons from transforming his manager
• Feedback from his VP’s administrative assistant on rewards systems
• His realization that the system we have is perfectly designed to obtain the results we’re getting
• Why asking for different results requires a different system
• Some implications of empowerment

In our December 2016 podcast, Skip Steward, Chief Improvement Office (CIO) for Baptist Memorial Health Care Corporation in Memphis, Tennessee shares lessons from the “Baptist Management System,” including reflections from his 25+ year continuous improvement journey.    Guided by his introduction to Dr. Deming’s vision of continuous improvement, Skip “migrated” from an early career in manufacturing to his current career in healthcare.   One year ago, he was promoted from System Director for Continuous Improvement to serve as Baptist Health Care’s first-ever “CIO”, with an “I” for Improvement.

In addition to his explanation of the Baptist Management System, (“a holistic approach to managing that puts a focus on purpose, people and process. We care about the purpose, how to improve the process, and how we develop the people to improve the process.), Skip emphasizes his “infant stages” role in leading the shift in thinking within Baptist Health Care.   In doing so, Skip explains the holistic nature he captured and distilled from Dr. Deming’s management method and what he is doing with this wisdom to challenge and limit the otherwise “business as usual” tendency towards event-driven and episodic improvements.   While crediting the tools of Hoshin Planning, Design of Experiments, Statistical Process Control, Value Stream Mapping, and Pareto charts in both clinical and non-clinical settings, Skip is quick to acknowledge the role of placing a priority on being guided by a Deming lens before proceeding to the “faster-better-cheaper” efficiency of tools.  

In our November 2017 podcast, Ravi Roy, Professor of Public Administration for Southern Utah University (SUU) in Cedar City, Utah, reveals the status of evolving efforts to share his appreciation of Dr. Deming’s System of Profound Knowledge® with his Public Administration students, strongly aligned with his role as the inaugural Research Fellow of The Deming Institute.

Beginning in the 1920s, with his employment by the U.S. Department of Agriculture, Dr. Deming worked closely with students to share his research into statistical theory.  Along the way, he was introduced to Professor Harold Hotelling, who Deming would later reference with the following comment, “As Harold Hotelling once said, “He who does no research has nothing to teach.””  Inspired by Dr. Deming’s passion for research, The Deming Institute recently unveiled a fellowship program to engage researchers who share a desire to both expand and deepen the understanding and application of Dr. Deming’s management philosophy among a new generation of students and scholars.  Link here to learn more about this Research Fellow program.

In this month's episode, Ravi shares reflections from his Deming research journey and his passion for guiding his student’s understanding and application of Dr. Deming’s management method. As the former director of SUU’s Masters in Public Administration program, Ravi is progressing to a role as director of the Deming Incubator for Public Affairs for Southern Utah University, a new partnership with The Deming Institute.    Under Ravi’s leadership, SUU students will soon have the opportunity to engage him in applying Dr. Deming’s “new economics for industry, government, education,” with an emphasis on government.

In this week’s podcast, David P. Langford, CEO of Langford Learning, Inc., focuses on “Joy in Learning” and how to bring joy back into the education system.

In answering why students aren’t experiencing “Joy in Learning” David starts by quoting Dr. Deming, “are we trying to create a system that teaches students to answer tests or are we trying to create a system that teaches them to think?” The current education system continues to focus on test scores, to the detriment of learning and the loss of elements in the system (like fine arts programs) that brought enjoyment. Dr. Deming was the first person David encountered who believed students have a right to joy in learning. 

What can you do to change the system?  David tells us that restoring joy begins with your “circle of influence” and connecting with those who want a better way to do things. Teachers can start by simply asking students, “what drives you to have joy in learning and what prevents it?”

David shares that there is no recipe for using the Deming philosophy, unlike other education movements. Often these methods don’t work because there is no understanding of variability between communities, states, cultures and the background of students. Once it’s decided to change the system, real learning happens, performance goes up and joy returns!

For more information about David's current work, with Ingenium Schools, please visit ingeniumfoundation.org

Travis Timmons, owner of Fitness Matters and Kelly Allan, Senior Associate of Kelly Allan Associates and Chair of The Deming Institute's  Advisory Council.

Travis and Kelly share the Deming journey “From Chaos to Process” of Fitness Matters, starting with Travis’s introduction to The System of Profound Knowledge® (SoPK), and systems thinking. The focus then shifts to psychology and caring for people, and how they have driven our fear and removed barriers all while creating “joy in work”.  He ends with how using the Plan Do Study Act (PDSA) Cycle has helped them grow and thrive.

Travis discusses how he was introduced to the Deming philosophy and areas that first resonated with him - including using a systems approach, and how to think differently and put processes in place to make better decisions. One of the most powerful aspects for him was how SoPK makes you look at how you care for people inside and outside the organization.

Travis and Kelly then talk about how the psychology element and the team mindset has been game changing.  These have led to less fear, less stress and more joy within the organization, leading to positive outcomes and win-wins for everyone (including the competition).

Lastly, Travis shares a few examples of PDSA’s and the aha moments they discovered along the way. From getting new referrals to finding tampering in the scheduling system, PDSA’s have been a very effective tool in moving them light years ahead in working together as one system and having fun while they do it.

Read more about Dr. Deming's work in his books, Out of the Crisis and The New Economics.

Cliff Norman and Ron Moen, of Associates in Process Improvement (API) discuss the history of the Plan Do Study Act (PDSA Cycle) and their research on the subject. 

Cliff and Ron start with how the underpinning of Deming's philosophy was the idea of "continuous improvement", with the PDSA Cycle underlying that philosophy. They discuss the PDSA Cycle of never-ending improvement and learning, and how the iterative nature of the cycle fits with The Deming System of Profound Knowledge®. As Ron shares, Dr. Deming believed that "business is more exacting than science" as businesses must continually learn and improve to survive.

Next Cliff and Ron delve into why they wrote a paper on the PDSA Cycle. Ron explains that the quality movement in America began after the NBC White Paper, If Japan Can..Why Can't We? aired in 1980. This raised interest in the Japan and the Plan Do Check Act (PDCA) cycle, which originated there.  Although Dr. Deming never spoke of PDCA, it was connected to him in the early 80's. That incorrect attribution was the inspiration behind the paper. 

Cliff and Ron discuss the evolution of the PDSA Cycle, starting hundreds of years ago with the theories of Galileo and Aristotle. Listen as they take you through the progression, from the Shewhart Cycle, through the Deming Wheel and ultimately the PDSA Cycle as we know it today.

Tripp Babbitt: [00:00:14] In this episode of The Deming Institute Podcast. Ron Moen and Cliff Norman of API are our guests. Ron and Cliff will discuss the history of PDSA and some of the research they've done on the subject.

Tripp Babbitt: [00:00:35] Hi, my name is Tripp Babbitt, I am host of the Deming Insitute podcast. My guests today are Cliff Norman and Ron Moen.

Tripp Babbitt: [00:00:44] Welcome, gentlemen.

Ron Moen: [00:00:46] Thanks, Tripp. Glad to be with you.

Cliff Norman: [00:00:47] Thank you. Thanks.

Tripp Babbitt: [00:00:49] I wanted to start out with our subject today is going to be kind of the history of plan, do study act. But for those in the audience that maybe are quite familiar with the Shujaat cycle and the history of Plan D0 Study Act, can you tell us a little bit about how it fits into the broader Deming philosophy?

Cliff Norman: [00:01:09] This is called the underpinning of Deming's philosophy was the idea of continuous improvement. And the PDSA cycle is kind of underlies that idea. Once we start improving has to be never ending.And the idea that learning and improvement are never ending underlying that under theory of knowledge.

Cliff Norman: [00:01:29] And as we'll discuss, having was heavily influenced by pragmatists out of Harvard University and the idea of inductive, deductive and inductive learning and the innovative nature of those two ideas are built in to the PDSA cycle. So it really fits up under the theory of knowledge in terms of a system of profound knowledge. What to add to that?

Ron Moen: [00:01:57] Sure. I think the context here for Deming, at least, is that we're talking about improvement of products and services, processes and systems. So it has a business context, but it goes broader than business. But I do have a quote used to say in a seminar. He said, business is more exacting than science. And what he meant by that is that a scientist really doesn't plan to study. You set up your experiments and you share what you've learned. You do your publication. Whereas in business you actually say in business you have to continually learn continuous improvement, Kyra. But also you need to act. So it's more exacting than science business. You have to act in what you're doing. So not only have you learned, but then you have to take action as a basis for that. So you can think of that as really the plan to study act. So in that sense, I think the PDA was adaptive. The scientific method was more adapted to business and industry and a very broad context for any improvement activity.

Cliff Norman: [00:03:04] Instead of Plan Do study publish its Plan Do Study Act.

Tripp Babbitt: [00:03:10] Yes, well said. OK, very good.So when you wrote this paper on plan Do Study Act and gave a history. What was why did you choose this particular subject to write on? What was what was your what was the impetus behind it? What was the purpose behind that?

Ron Moen: [00:03:30] I think what we were seeing in the early 80s, first of all, the quality movement in the United States really was from Deming's presentation.

Ron Moen: [00:03:39] And the NBC white paper, Japan can. Why can't we? Well, that made Japan very popular, too. And so what we were seeing coming out of Japan was the Plan Do check Act and having helped Deming with multiple seminars in the 80s, he never used the term. He never lectured it, and it wasn't part of it. He talked about the theory of knowledge, how we generate knowledge and so on. But the PDCA became connected to Deming back in the early 80s. I knew that was incorrect. And so what I was really trying to do is understand how it came about. And so that's how we end up with this paper. I might add it took me over 10 years to work on.

Ron Moen: [00:04:24] Ok, because the bottleneck I had was nobody in Japan claimed authorship. They kept pointing to Deming. And then when I'd work on Deming and the four day seminar, she had nothing to do with it. So there was a disconnect there that took me quite a while maybe.

Tripp Babbitt: [00:04:42] So what's let's start down this path of the PDSA. So. So how did it evolve over time?

Ron Moen: [00:04:49] Cliff, why don't you back us up to the history of a few hundred years? I think we need to back up the scientific method.

Cliff Norman: [00:04:56] The in the article circling back, Ron and I went back quite a ways, a lot of the information that we had, the first reference in this is from a book called The Metaphysical Club. But then it goes shorefront ways back. But in Western culture, we often credit Galileo with being the father of modern science. And of course, before that used to go to Aristotle on the idea of deductive reasoning. And unfortunately, you know, Aristotle would come up with things like males and male animals and nature have more kids than females or the version of that in nature. And the poor man was married twice.

Cliff Norman: [00:05:47] And if Sir Francis Bacon had been around and he didn't get there till 15, 64 with the idea of inductive reasoning, he said, you know, we can't just have theories, we have to go test them. And Aristotle, who is married twice, he had two opportunities to test that theory. I don't know that it would have changed his mind. But in science, it only takes one observation, as Einstein said, to cause us to either revise or throw out our theory. So he would have had that opportunity. And so those those two are really when we look at deductive reasoning and the follow on by Galileo and and so Francis Bacon really coming up with inductive learning.

Cliff Norman: [00:06:29] And then it goes in in the article, we talk about the influence of pragmatism, which was an American born philosophy of learning and the rest of it, and went Deming was working with Shewhart. He was really impressed with Shewhart intellect. And he asked Suhag. And while they were having lemonade, I think I'm sure it's frankly hard, you know, what causes you to think the way that you think? And Trueheart told him that he had recently read a book by CI Lewis entitled Mind and the World Order and WCI. Lewis had done had taken what the pragmatist school from Charles Purse William James had brought forward, you know, just right after the Civil War. And from that, you know, things have to be practical. We can't just have some theories that are not tested. And so the whole pragmatist's school had a huge influence on Shewhart and Deming, and it was from that. And the short cycle was taught to the Japanese in the 1950s. And so while it's picked up there.

Ron Moen: [00:07:36] So Shewhart really, I think we should be credited with bringing the scientific method to industry and his 1939 book, which was they helped an editor that talked about the scientific method, is connected to three step. Cycle through short cycle with was basically specification production and inspection specification production and inspection. And she says that those three as a circle and they're continuously going to go round it over and over again for industry, that these are really the same thing as in the scientific method.

Ron Moen: [00:08:21] Hypothesizing, carrying out the experiment and testing the hypothesis. So she said these three steps constitute a dynamic scientific process for acquiring knowledge. So I would connect in history, sure. To bring the scientific method, which had been around for 500 years, as Cliff just said, to industry for the first time.

Ron Moen: [00:08:43] So that was the Shewhart cycle that really influenced Deming from thereon. So Deming took that Shewhart cycle, and when he lectured in 1950 to the Japanese, he made it quite different. I think he said it's a four step process. First of all, I said the old way of thinking is design something, build it, sell it. So the context here is designing new products, services. So design the product, sell it, make it and sell it, he said. Instead, you've got to add a fourth step and that's test the product and service and through marketing research and then go around the cycle again. So he made this a cycle as well. Circle it was four steps. So this was his lecture in 1950 in Japan and the Japanese called this the the the Deming wheel, not the Deming cycle they call the Deming wheel. So it was a four step wheel.

Ron Moen: [00:09:43] That was 1950. Shortly thereafter, those that attended his seminar and the next year he was there three or four times and that's two, three years.

Ron Moen: [00:09:53] They sort of evolved what was called the PDCA. And the PDCA was connected back to Deming's lecture very indirectly. The design was really the planned production was to do sales was a check and research into act. So Deming's four steps became the plan do check act kind of a leap of faith.

Ron Moen: [00:10:17] And that's where I spent most of my research time trying to figure out how those two were connected and who connected them. There's a book by Imai and I hope I pronounce that my am I on Kaizen?

Ron Moen: [00:10:35] And he says that basically that's that was the connection between the two. And but there was no name given. He just says that Japanese executives recast the Deming will wheel presented in nineteen fifty seminar into the PDCA. But who did it? How they did it wasn't clear. That's why I spent my research. This includes something in the 80s where I actually interviewed one of the participants in the 1960 lecture that was in nineteen eighty six when I met with him. And of course he was very old and I showed him the PDK in Japanese and I said, who did you, how did you learn this? And he said, We learned it from Deming. And so what I, what I, that didn't help me at all. What I've concluded is that the barrier was Japanese culture. No one wanted recognition for changing it. And so to this day, there's no name associated with the PDK. So it did evolve through the Deming wheel, which came from the Shihad cycle, which came from the scientific method. That's the connection we have. And from that then Dr. Deming's, since he had seen so many articles of PDK in nineteen eighty five, he introduced the Plan to Study Act and his seminar before the eighty six publication Under Wikinomics. I'm sorry to out of the crisis. And so that version in the paper is much like what we see today, and that is the Deming cycle.

Ron Moen: [00:12:19] He called it the Shewhart cycle for learning and improvement. So again, it was four steps. What what's most team's most important accomplishment and then plan a test or change, carry out the test or change, prefectly be on small scale, observe the effects of the change, study results, what we learn, what can we predict? That was the eighty six version. And then over all of his seminars, which he had about 10 or 12 a year between eighty six and ninety three. And the ninety three publication was the new economics there. It was much simpler. The step first step plan, a change test aimed at improvement, the second step to carry out the change, preferably on a small scale, third step to examine the results. What did we learn? What went wrong? And fourth was adopted change of management or run through the cycle again. So this was his final version, the published in The New Economics of nineteen ninety three. And of course, he died in December of nineteen ninety three. So that was his last version. However, in doing my research, I also found several other articles, Fleming responded to things. And so if we still had a little time trip, I'm going to share three of those there in the paper. One was a comment. It was a jail transcript, a roundtable discussion with Dr. Deming in 1980. By now. By now, they have the PDCA.

Ron Moen: [00:13:49] And so.He was asked at this round table. To respond to it, is this really the Deming cycle and he says he says they bear no relation to each other. They bear no relation to each other, meaning the PDCA and what he Deming called the Deming was a Deming circle, but they call it the Shewhart cycle for learning improvement.So there is no resemblance there.

Ron Moen: [00:14:17] The second one was in 1990, published a book with No End and Provo's on an experimental design.And Deming was reviewing the chapters and the very first chapter we had to plan to study at, and Deming's comment in a letter to me on November 17th, 1990. Sure. And call it the PDSA, not the corruption PDCA, the corruption PDCA. I was shocked. He was so angry about how I was seeing the PDCA being used and connecting that to his name.

Ron Moen: [00:14:59] And then finally, my third day of research was at the Library of Congress and the Archives, it was a response. Somebody sent a letter to him. And it was actually a paper and he asked Deming to comment on it, and it had the PDCA cycle in there, and he and here was Deming's response in this.

Ron Moen: [00:15:22] He said, what you propose is not the Deming cycle. I do not know the source of the cycle that you propose, how the PDCA ever came into existence. I know not. So I think the message in this that we're trying to get across is Deming's did not create the PDCA except very indirectly through his lectures in Japan, very indirectly. And so the connection probably is only back to the scientific method and connecting Shewhart work. So any other comments, Cliff?

Cliff Norman: [00:15:58] That's also I think I think it's also goes back to your first question as to what causes us to write this. This article. Ron and I took a first shot at this article in nineteen eighty nine in the fiftieth anniversary of the Shujaat cycle that was published in this book, Statistical Method from the Viewpoint of Quality Control in nineteen thirty nine. And we put it in a newsletter for the Southwest Quality Network which has been running since nineteen eighty nine. And in writing that Ron and I realized right away there's a cap and we did not understand as Ron was just articulating what actually happened in Japan relative to PDK and what the relationship was and all the rest of it.

Cliff Norman: [00:16:46] And that's what started the additional research it was just been talking about. And it's interesting to me, you know, we always used to say that history and analytic study, as opposed to numerous study because it keeps evolving. And every time we write an article just like this one, we find additional gaps, new questions, you know, and Richard Feynman, he says that science begins and ends in questions and that's alive and well here. So as long as it's discussing, we're really not sure about the authorship. And when Ron and I presented this to the Japanese junior scientists and engineers in 2009 in Tokyo, Dr. Choteau, he started to try to fill in some gaps that again, that's one man's view. And he credited Dr. Mizuno as being the creator of this. But again, we don't know that for sure. That's a new question for us, that we need to do additional research on to shore that up. So it's one man's opinion at this point, and we can't find any documentation to support that. And so in the article where we said authorship at this point is unknown, but I would hope to close that gap if we could.

Tripp Babbitt: [00:17:52] Ok, let me let me ask a couple of questions. As I was reading the article, you start with the Shujaat cycle from 1939. And I noticed that there was this Straight-line process that that Ron has already talked about, specification, production, inspection, and then it went to evolved apparently or through Shewhart reading went into more of a circular motion as opposed to a linear piece. Is that is that what mined in the world order brought to Shujaat is the the circle type of specification production inspection from a linear look? How does this relate?

Cliff Norman: [00:18:32] I think what Shewhart recognized and particularly from the pragmatist's, that is what what what you learn in the real world, you know, you need to act on that. And the learning is going to be continuous and updating your theories is really important. So from a theory of knowledge standpoint, I think that's what Shujaat took from a practical school Ron. What would you add to that?

Ron Moen: [00:18:58] Yeah, what he said in his thirty nine book was that the circle is three sets of dynamic scientific process for acquiring knowledge. So it's multiple iterations of it and that's how we acquire knowledge. Once again, the basis for that is Theory of knowledge, which Deming lectures on in all of its four day seminars. Really important aspect, which I assume that everybody had taken a course in college and a theory of knowledge or epistemology. But there weren't many hands that went up when they would ask that, but it was really critical in his thinking. And so the TSA is involved with Deming. Here is truly a methodology that comes directly from theory of knowledge. The acquiring of knowledge, building of knowledge is very dynamic, and that's why there should been multiple PDSA. Saifullah, now, in all fairness.

Cliff Norman: [00:19:55] They also say that his productions use a system that he shows half an inch, you know, that you once you produce a product or service, you have that structure in place in which to learn and get feedback from customers. And so all that that whole idea was built even into that diagram in 1951.

Ron Moen: [00:20:15] One and the other is the context or the overall philosophy is always making improvements. Of course, the Japanese kaizen was critical for this, but the thinking of Deming and others that we have to continually improve our products and services. So that requires an iterative nature of learning.

Ron Moen: [00:20:34] And the PDSA cycle is the best tool to do that.Ok, Tripp,

Tripp Babbitt: [00:20:40] Yeah, no, I was just as I'm listening to this, I'm going through I was looking at some of the drawings in the article, you know, with the Shujaat cycle and then the Deming wheel, which is apparently the part that seems to be the mystery, because your belief is that he showed them the Schuett cycle. It sounds like in 1950 when he met with the folks and the Deming wheel somehow emerged from that conversation. And what and who is it seems to be the question that that's unanswered. Do I have that right?

Ron Moen: [00:21:14] Yes, it is a cycle we don't know. OK, yeah, OK. And again, I could never get to it. And my my explanation is that the Japanese culture, no one wanted the recognition. They wanted to continually give Deming the credit because it came from his lectures in nineteen fifty nineteen fifty one has already published and working as a PDK with the QC circles and so on in the late 50s and early 60s I think it was so it was already around and then they would see that because he continually went back to Japan and the lecture there, he attended many of the Deming prize ceremonies, but he never mentioned the PDK. I've never seen anything other than the three references that I gave you. He was criticizing people that used him so. So I think in the United States, PDCA was in a lot of the literature and, you know, there's nothing wrong with it. But Cliff and I try to answer, what is the PDCA? It's really mostly for implementation and problem solving is to implement something. Now, Deming, when he did talk about the PDCA, he said c means check and he says in the English language check means to hold back. That's really almost the antithesis of theory of knowledge to hold back. There's no learning and holding back. So he thought this was very misleading and really didn't help build knowledge. But for implementation, I think this is fine to ask somebody to do something. They go ahead and do it. You check to see if it's been done.

Ron Moen: [00:22:53] So, you know, it's served that very useful purpose. But what Deming try to do is make it more general and not only for implementation, but for testing and early testing, prototype testing and so on for products. But it's more general than just testing products and services to.

Cliff Norman: [00:23:12] We've got we've got a lot of pushback when we presented at JUSE that they're very clear to us and they kind of own the PDCA cycle, that it was all about the implementation of a standard. In fact, I went back and looked at Dr. Ishikawa's book on total quality control, and they're very clear about it. You know, management determines goals and targets and determine the method. And then the workers say they do the plan, that the management came up with inspection checks to make sure it's OK, that we've implemented the correct standard and it's working. And if it's not working, then we take action to correct it. And Jayyousi was very clear. That's very different than PDSA, which is about the whole idea of the depth of impact of learning and people changing what they find out and developing a new path and all of that.

Cliff Norman: [00:24:04] That's that's what we found in the PDCA as practiced by JUSE.

Ron Moen: [00:24:10] So the PDSA, the PDSA, again, that plan to do is really the deductive part.That's where you set up your hypothesis and make your predictions or state your questions. The study of activity, inductive parts. So it's deductive inductive iteration which goes back to the Francis Bacon contribution and 16 hundreds. So that was really critical in Deming when he taught the PDSA. It was really kind of deductive inductive. So there is where the learning takes place so that can be used in testing anything, prototypes that can be testing a management theories. It really has very broad application.

Ron Moen: [00:24:53] So something that a broader approach, PDSA, much broader now, it can also be used with often implementation can be used for implementation.

Cliff Norman: [00:25:07] Deming would often say tourism seminars that there's no experience without a theory in which to observe it. And I walked up to him. He was having a gathering of statisticians at New York University. And and I said, you know, Ulysses S. Grant said a man has had a bull by the tail. And those a couple more things about it. The man who has it. And then he laughed. And then he said to me, Mr. Norman, don't you think you had to have some theory in order to understand which end to grab, you know? And so when we're in the PDSA cycle, we have an initial theory that we're going to go out and we're going to learn from and then from that, as Ron was just talking about, we're going to have the inductive point that kicks in and study and that we do see people running around and trying to reverse at all. They'll say, no, you start with induction first and all that.

Cliff Norman: [00:25:57] I think then we would argue with that, that when you're out trying to learn, you've already got some initial theory that's a good currency that you're going to start with.

Tripp Babbitt: [00:26:09] I guess the question we see this kind of evolution go on all the way back from nineteen thirty nine as we read the paper. And then there was the Shujaat cycle eighty six, the PDSA cycle in nineteen ninety three. Assuming that probably came out of the new economics with you guys using this all the time. Is this the end or I mean and I say that kind of tongue in cheek but has it evolved with application as you guys have continued to use PDSA. Where does it go from here, maybe is my my broader question is, is it perfect as it is or myself and our other colleagues?

Ron Moen: [00:26:54] We published a version of our version of it in 1991. We took Deming actually Deming reviewed this and liked it, but he didn't put it in his 93 book. And so the planning is really we we asked people to state the objective. What are your questions that you want to answer and what are your predictions to those questions? Then you have a plan to carry out that cycle, carrying it out. Then when you go through the to the study part, you compare your results or complete your data analysis, compare your data to your predictions, summarize what was learned. So we made this deductive inductive, which I think is more closely tied to to the scientific method and Deming dead. So I think that's a change that we made and we've been using that since 1991. So it's really the planning is you might think of PDSA as pinnings prediction and then the study part is comparing your prediction to what happened and then what did we learn from that? So it's a little bit different. Deming liked it, but he didn't put it in his book. So a lot of times with Deming, he would assume that most things are known. You don't need to be that specific, whereas I think both Cliffe and my experience is that you need to be much more prescriptive.

Ron Moen: [00:28:19] He kept it very high level plan to study at well, so we added that to it. And I think we've been using that since 1991.So it's has a lot of leverage, right, Cliff?

Cliff Norman: [00:28:33] Yeah, I think so. I could just add another angle to your question and I think really cover it quite well to me. The future is to use the method with some rigor and what we don't see with PDSA inspectors. There's article written on it in the British Medical Journal with PDSA and the authors of this deceptively simple. And so there's a lot of misuse and abuse of the idea and the name of PDSA. But when somebody wrote this down and they have to pose a good inquiry question rather than a yes and no answer and really make a prediction about what they're going to do there and then develop a data collection plan around that and be prepared to be surprised and do that. Or our pet theory isn't working out and be prepared, you know, to update our thinking and how we're going to approach the world after we've been surprised.

Cliff Norman: [00:29:31] And unfortunately, what a lot of people do is they go out, they fall into the confirmation trap, they try something one time and then a very small range of conditions and then they get the answer they want and they're done. And PDSA, if they're using the rigor that you're asking yourself the question, the what conditions, could this be different? And have I tested over a wide range of conditions here? There's a bunch of things that go along with that.

Cliff Norman: [00:29:55] And I think those authors from the British Medical Journal went on target. It's deceptively simple. And unfortunately, what we had up to now are some fairly simple and as H.L. Mencken said, usually wrong applications of PDSA as opposed to following the rigor that Ron was just talking about.

Ron Moen: [00:30:14] The British publication was only last year, wasn't it? Yeah. That January this year problem tenure is so.

Cliff Norman: [00:30:22] Yeah. Wonderful. Wonderful article.

Cliff Norman: [00:30:25] Ok, and what was the name of the article again. Problems with PDSA,

Tripp Babbitt: [00:30:30] Problems with PDSA.

Tripp Babbitt: [00:30:32] Ok, well, and I think this might yeah, I think this may fit into kind of my my last question.

Tripp Babbitt: [00:30:37] And, you know, we know, you know, organizations out there. You know, we're talking about scientific method and things of that sort. But we know organizations out there are pretty good at copying each other. It's a cultural thing. You know, they have the certain assumptions and beliefs. And and so when you guys are out there using PDSA, how does that how does that work in or filter into, you know, the existing kind of style of managing organizations where you just you're basing everything off of assumptions and beliefs, you know, how do you get get the scientific method to take hold when people are so used to just, you know, you make a decision? Oh, the corporation I worked for before, you know, did it this way. And so it'll work for us type of thing. How are you guys breaking those habits using PDSA so?

Ron Moen: [00:31:32] Well, they come in and at first we have what's called a model for improvement. And so on top of the findings, study act for any organization. They have three questions called the model for improvement. What are we trying to accomplish? Second question, how would we know a change is an improvement? And the third question is, what changes can we make that will result in improvement?

Ron Moen: [00:31:56] So those three questions sort of frame the starting point for turning the PDSA cycle. So having an idea that you want to test comes out of that question number three. But the really the first one to start, what are we trying to accomplish? What is our aim? How will we know what changes, improvements? Articulate what what what would it look like if the changes were made? And then the third one, what are the ideas that we think are we predict will actually result in improvement? And that's when the PDA starts going around. So we think this model for improvement, which we published in Will, there was a clip, I think that was a little bit later the. I know it's 1996 that the improvement died right after that, but that really has helped, I think, organizations tie the PDSA cycle into what are we trying to accomplish? The first edition of the Improvement Day, 1996. Yeah. Yeah.

Tripp Babbitt: [00:32:58] Well, I think we've covered off pretty well some history and actually got a little bit into how this might be applicable to organizations. So, gentlemen, I appreciate you sharing your time with the Deming Institute podcast. And we look forward to future episodes and research that you're doing.

Cliff Norman: [00:33:17] Thanks, Tripp.

Ron Moen: [00:33:18] Thanks, Tripp.

In this week’s podcast, Kevin Cahill, Executive Director of The W. Edwards Deming Institute® and David Langford, CEO of Langford Learning, Inc., introduce The Deming in Education Initiative.  Kevin and David share how The Deming in Education Initiative was conceived, the impact of the Deming Philosophy on education, and where the Initiative is going in the future.

The initiative first began many years ago when David joined the Deming Institute Advisory Council to help with their efforts to apply the Deming philosophy in education. But the roots of Deming in Education go even further back.  As David explains, improving education was “a great love” of Dr. Deming, as an educator who taught at NY University for 40 years.  Many of Dr. Deming’s theories and teachings are directly focused on the education system.  After working with Dr. Deming from 1986 to 1993, David began implementing the concepts in his own education system, finding that students easily took to the new approach.

Over the last 25 years, David has seen the Deming teachings make a profound and lasting impact on improving school culture and the learning process in the US and around the world.  It is the only philosophy that improves all aspects of the education system.  That impact has inspired Kevin, David and The Deming Institute to commit a deeper focus on developing a long term, sustainable, systems approach to improving education for all students, through The Deming in Education Initiative.

For more information about David's current work, with Ingenium Schools, please visit ingeniumfoundation.org

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."

This week's Podcast, continues our "Knowledge in Variation Series" with Dr. Frony Ward, Managing and Founding Partner of Pinnacle Partners, Inc.

In this podcast, Frony discusses online surveys and polls. She starts by sharing the fundamental piece of every single survey. From there she delves into elections polls, and why so many election polls show different results. Lastly, she discusses two or three good things you can do to help yourself understand a poll.

Scott's story starts in 1986, as a graduate walking in the doors of P&G to be a new engineer and shift manager. He was soon perplexed by how he could contribute to solving issues associated with production and quality. During this time, P&G introduced the Deming Philosophy to the organization; a decision that would have a profound impact on Scott's professional and personal life. Scott eagerly applied what he learned, despite facing resistance to change and improvements. After three years, he decided to move to a smaller company where the Deming principles were readily embraced. Listen as Scott discusses how he leads a highly inventive engineering organization whose focus is on innovation and the advantage gained through the embrace of Deming's continual improvement philosophy. Hear his fascinating approach to hiring employees without factoring in schooling and GPA, and a discussion between Tripp and Scott on the challenge presented by ISO 9000.

This week's podcast, continues our "Knowledge in Variation Series" with Dr. Frony Ward, Managing and Founding Partner of Pinnacle Partners, Inc. Frony discusses the importance of Statistical Process Control (SPC) in all parts of an organization and why it's a barrier to many.

 Frony was first introduced to SPC (Statistical Process Control) when she was teaching at the University of Tennessee. An opportunity arose to be a part of an institute surrounding statistical process control and she jumped in with both feet, deepening her knowledge of Deming. The institute became a place for people to continue learning after Dr. Deming's Four-Day Seminar. Frony spent the remainder of her time at U of T working with automotive facilities that wanted to study variation and use SPC.

 Frony had an opportunity to meet Dr. Deming in 1982 and he completely turned her thinking upside down, especially around Acceptance Sampling Plans. Deming's theory was that the percentage of defective units in the rest of the lot is independent of the percentage of defective units in your sample. Her mind was blown when she went back and proved this herself.

 When Frony first learned SPC, it was totally new to her. At first she didn't realize the impact of knowing common cause and special cause variation. After a number of engagements it became obvious that SPC was "the name of the game". At all levels of the organization, from the inspection level to the management level, she could see instantly what was going on by using SPC. It was a powerful tool to "highlight" what people needed to know to make decision and help improve.

 Frony finds it fascinating and frustrating that many organizations are aware of SPC but don't use it. She feels that for some reason, finance systems can compromise improvement. Organizations just don't understand that the process behavior chart is the "secret sauce" to seeing their organization. 

This week's podcast features the first episode of our "Knowledge In Variation Series" with Lynda Finn, President of Statistical Insight, LLC and facilitator of The Deming Institute's 2.5 Day Seminar.  Lynda discusses the importance of moving from spreadsheets to plotting data, and the common mistakes that organizations make if they aren't charting their data.

Lynda's Deming journey began when, shortly out of graduate school, she met Dr. Deming at one of his public seminars.  From that point she has been helping spread his ideas through her own consulting company and her work with The Deming Institute.

She starts by sharing some of the hardest things for people to grasp about the Deming philosophy.  Though it varies, Lynda finds it's most difficult when Deming's ideas don't align with the practices people feel have contributed their success.

The episode centers on why organizations should be plotting their data on charts rather than just using spreadsheets.  She feels that if the number is important enough to have on a table, then it should be important enough to see it in its proper context. 

Lynda outlines the mistakes people make if they aren't charting their data, starting with not caring enough to see what the data is telling them. The most important reason for charting data is so that everyone sees the same thing and can come to a common conclusion about what's happening and how to improve.  How can you "see" what the data's telling you if you don't make a picture of it?

This week's Podcast features Dr. Lisa Snyder, Superintendent of the Lakeville Public Schools. Lisa shares how the work of Dr. Deming is influencing her as a superintendent and the rewards and challenges of adopting his philosophies. 

Lisa's Deming journey began 23 years ago, when in a new job, she was sent to listen to Dr. Deming via satellite. The experience had a huge impact on Lisa as she connected Deming's philosophy to her own belief systems. She thought - this is the framework that public schools are desperately lacking. It was then that she became a Deming follower. 

What resonated for Lisa, was the idea of systems thinking rather than evaluating and blaming people. When she started to think about abandoning the "blame game" and looking instead at flaws in the system, it was very powerful.

Listen as Lisa talks about shifting the "mindset" in public schools from working in silos to working in collaboration through systems thinking. And how, as a district seeking to create meaningful change in the public school system, they adopted a policy to lead their organization through a continuous improvement philosophy.  

Lisa explains that it was both exciting and challenging to find where schools should have high levels of autonomy and where there should be more systems alignment for efficiency and effectiveness. But the process brought more people to the leadership table and broader sense of empowerment to those who would help change the philosophy of the district.

Ron Moen and Cliff Norman, of Associates in Process Improvement (API), discuss their similar experiences where first introduced to Dr. Deming, their paper "Evolution of Deming's System of Profound Knowledge" and finally the "journey of learning" through the lens of SoPK, that Dr. Deming left the world.

Ron and Cliff start with an introduction on their first meeting with Dr. Deming; how he challenged what they knew and had learned and dramatically changed their thinking and lives going forward.

The main focus of the podcast summarizes the paper Cliff and Ron will publish next year about the evolution of The Deming System of Profound Knowledge, from it's beginnings when Dr. Deming was introduced to Shewhart in 1927 until his death in 1993. Listen as they walk us through Deming's own learning, starting with SQC (Statistical Quality Control) to SQC for Management (which he taught to the Japanese) through the tremendous growth in the 1980's after the NBC White Paper "If Japan Can...Why Can't We?" Deming's learning continued through multiple versions of the 14 points, Seven Deadly Diseases and the four elements of Profound Knowledge. Deming's work culminated with his greatest contribution, the theory and interaction between the four elements, which became The Deming System of Profound Knowledge.

The last portion of the Podcast focuses on the journey of learning. Dr Deming, said, "I make no apologies for learning" as his message changed and evolved throughout his life. The teachings continue to impact Ron and Cliff in their lives and work and this research provides fascinating insight into Dr. Deming's personal journey of learning. 

[00:00:15] This episode, Ron Moen and Cliff Norman discuss the evolution of Dr. Deming's 14 points system of profound knowledge and his learning.

[00:00:28] Hi, I'm Tripp Babbitt, host of the Deming Institute podcast. Our guests today are Ron Moen and Cliff Norman of Associates and Process Improvement. Welcome, gentlemen.

[00:00:40] Hello.

[00:00:42] Can you share a little bit about API and what you do?

[00:00:47] Ok, I'll start. This is Ron, I started in nineteen eighty five, three of us, Tom Nolan and like all those myself, we worked together and Department of Agriculture. So we left USDA and started our organization. We were doing a lot of work with academic seminars. So we started and then we we had three more members join in 1987 and 88.

[00:01:12] That would be with Norman, who on the call with us today, and Kevin Nolan and Jerry Langley. And we've basically been together now for nearly 30 years. So we just had a little celebration for 30 years.

[00:01:30] So congratulations, really.

[00:01:33] Any comments about the.

[00:01:35] I just think the is sort of interesting. We don't really exist as a business trip. We exist literally as a learning organization. My wife, Jane, when we're asked by clients, can give an example of a learning organization. She always gives API because we exist to do research and writing together and as improvement advisors and consultants if we run out of knowledge without out of work. And so it's been an organization that exists to cooperate in learning. A great example of a learning organization.

[00:02:08] Ok, great, great. I appreciate it. So how did you both come across the Deming philosophy, Ron? I'm as I mentioned earlier in a conversation, I'm familiar with you from The Reckoning and a number of the books even Out of the Crisis. You're mentioning there are a couple of times. So starting with you, how did this all develop with you and Dr. Deming?

[00:02:33] For me, it was in graduate school at the University of Missouri, I went to a American Statistical Association meeting in Montreal in 1971.

[00:02:44] Deming was there and I was in the audience and he was probably one hundred statisticians and he made every one of them mad because his topic was on athletic studies. And this is really a very important message that is carried throughout his lifetime. This negative versus athletic and statisticians never really got it. They thought that he was doing away with their profession and their theory is correct for a number of problems. That's not correct for Analytica. So I just spent four years in graduate school learning the theory behind a number of studies.

[00:03:20] My advisor was in Montreal and he said, well, how do you like working in the real world? I said, where is the population?

[00:03:28] There's no population. The world's very dynamic and enumerated problems are not appropriate. Just six words for negative. But the problem is that we work on our analytic. And so that was kind of the whole starting point. I also worked with him in ASTM 11 committee. It was called in Philadelphia. He was a member of that. I was a member of that nineteen seventy three. I took his classes at George Washington University in 79 and 80, and from eighty forward it was the NBC White Paper, the four day seminars and so on and so forth. So that was that was my start.

[00:04:03] So that's interesting. And Cliff, how did you come across the Deming philosophy?

[00:04:07] I was working at Otis Engineering and we had started to try to worry a little bit about improvement over the engineering support of Halliburton and my CEO, Mr. Pervis Strache. He asked me to go to the Deming seminar and take along our R&D manager. This is in 1981, and I was in an elevator. Academi got on. Two ladies were guiding me, man, and he looked at me and saw my George Washington University badge. And he came over and he read it and he backed away from me and he said, Mr. Norman, I'm getting ready to tell you today will haunt you for the rest of your life. And it's actually come true. And then the second thing he said to me, as young as you are at the time I was 29, is as young as you are. If if you're working for somebody and you're not learning from them, you ought to thinking about getting a new boss.

[00:05:05] And I thought, well, that's that's extremely profound. And throughout the seminar, I always had a lot of dissonance because a lot of the things I was taught, he was challenging. So, for example, sampling plants, which is a quality engineer, I'd set up lots of snaffling plans for ten years prior to that. And he got me up in front of 500 people at Crystal City and he's worked to learn. As I said, I thought God created this. He said, no, I know the people. They did put people like you out of business types learn something to sit down, you know. And so the whole week was tough.

[00:05:46] And I had a strong appreciation for the next few seminars I went to why people would get up. Some of them would get up and leave. And, you know, for example, that was Dr. Donald Berwick, who  Ron and I both have the privilege to work with. And he said after the first few hours, he got up and left and flew back to Boston and he said he was laying there in his bed that night. And he's thinking, you know, I need to go back. And something was really bothered. And he said he was glad he did. But, you know, we put him off so badly that he just got up and left. And, you know, early on we saw we saw that as we watched people, you know, say I can't stand any more of this and get up and leave. But the people who say truly it changed their thinking and it certainly did it for me.

[00:06:30] So what are the things we dove into in the conversation with you guys? Is this system of profound knowledge and even starting back after or even during World War two? And Dr. Deming's already been and met with Walter Shewhart and worked with him at the Western Electric Plant. And in nineteen forty two, I believe he he stepped up with Stanford University and started doing a number of seminars and things of that sort. Can you kind of take me from there about how this evolution has started? Because everybody talks about the 14 points in the system, profound knowledge, and maybe even during that conversation we can talk about, you know, what is the difference between those two or is there a difference?

[00:07:16] So when I tackle this problem back in January of this year, and because we felt there was such a misunderstanding and that whatever Deming said was permanent and in fact, this paper really shows the evolution of Deming's learning it really, you know, it I think it does a good job of that. So we just submitted this paper to Quality Progress for American Society of Quality and will be published next spring. We think they don't have a date yet.

[00:07:47] So that's what I would like to talk about. And I think the overall message is that, yes, it he started with Shewhart's ideas. And what year was that?

[00:07:58] When I first met Charlotte, the 1927 fall of 1927. So the name of Huntsman introduced them to Shewhart.

[00:08:08] So then what we're going to what we did in this paper was we sort of took it into three parts before 1980, 1988 and 1988 and then 1989 and 1993. And again, Deming's learning this tremendous through that span of time. And but it was suhas ideas applied to the to a Stanford University eight day course on efficacy or statistical quality control for the free world or to Stanford University. Put together this course Hemington at 22 times. So Heming started by teaching S.A.C., which basically is the understanding variation part and the understanding of separation of common and special causes that they learned from Shujaat. So that was the course in 1942. And then we moved forward to 1950 after World War Two, we took that same course and taught it to the Japanese. He was invited to teach the Japanese. So it was another eight day course. What was different and we've been out in the paper was that were managers there, it wasn't just us all quality control people, it was manager. So his message sort of changed to how do managers deal with understanding variation. And so there was an emphasis on management and several of the courses where a lot of managers in the sessions in nineteen fifty. So that kind of was the beginning of a message for management. In the paper we talk about moving up through the 70s to 1980 and of course a big milestone. There was the NBC White Paper. If Japan can, why can't we, which I think did change Deming's life.

[00:09:51] He didn't admit that. But from there on then it was a message for management. And so it was his four day seminars. We're starting then in 1980 and 1981, 82, he started saying these are things you should do and should not do.Those evolved into the 14 points, which several of those points came from a seminar.

[00:10:14] 1980 was a cliff, I believe. I think, yeah.

[00:10:19] They took notes on his seminar with HP. He he saw the notes and he said, I like these ideas. There are ten ideas. And he took those ten and added four more. That was the beginning of the fourteen points.

[00:10:33] Things to do and not do, stop doing. They start doing this shortly thereafter. There were four more. It was fourteen points that became the basis of the fourteen points. They changed almost monthly in nineteen eighty, eighty one eighty two, putting less and less emphasis on statistics and more and more emphasis on what manager should be doing and not doing.

[00:10:55] Let me ask you a question around just a couple of points of clarification. So in 1950 when they had SQC for management, that was Japanese management, correct? We're more focused. OK, OK. And then and then in 1980 with the white paper in the 14 points where the 14 points then more aimed at U.S. management, would that be fair to say, or Western management?

[00:11:23] I would say yes, because the Origin was his seminar with HP, and that very much was a Western or American audience. OK.

[00:11:33] I think he actually said that a Tripp in his book Out of the crisis. And I remember in the seminars that I went to, he would always have an asterisk next to the 14 points and then he would say for the transformation of the Western style of management. And I think that message was entirely aimed at Western management. He never taught for fourteen points to the Japanese. In fact, Iran, as part of our collusion with the Japanese Union of Scientists and Engineers, we've been working with them for a number of years through API. And Dr. Connell looked at those 14 points and he said, it seems that Dr. Deming is proposing a humanistic philosophy for the 21st century, that they really didn't recognize the 14 points even now.

[00:12:23] Ok, sorry about that, Ron. I just wanted to kind of get some clarification on things for the for the audience. So pick it up from the the development of the 14 points then.

[00:12:33] So along with the 14 points and started developing the deadly diseases, which is sort of summaries from the 14 points. But he had seven deadly diseases for the Western management, five of which were for Western management. The last two, he said, are peculiar to the industry in the U.S. and that number six was excessive medical cost. And number seven is excessive cost of liability swelled by lawyers that work on contingency fees. So those were for us specific, but the rest were all for Western management. So he stayed with that for a while. But then I think the questions kept coming. Where do these come from? How do you how do we know these are correct? You know, we should start doing these things. What's the theory behind that? And that sort of evolved in our paper to talk about this. Osaka paper, which was really what's behind the 14 points, and that was 1989, where he talked about profound knowledge that he said these really you need to know these things.

[00:13:33] And he ended up with a list of about 15 different elements. What is profound knowledge? So he had a list of 15 and that was in nineteen eighty nine, 1990. And these were presented in his in his four day seminar as a handout. And then it was in nineteen eighty nine, 1990, University of Minnesota had a two day workshop and one of the talks was by three professors and they took those 15 and they grouped him into I think it was six categories. Deming did not attend that session, but he did say the paper and the next month there was down to four and that was the four parts of profound knowledge that was then became 1990 91. And any change them slightly.

[00:14:27] And then along in the seminars, they continue to talk about a system of profound knowledge and almost exclusively avoided talking about the 14 points. So it was all about the system of profound knowledge, which became, you know, his 1993 book. So that's kind of the evolution of it.

[00:14:49] So from the research that you guys have done, have you come to the opinion then that the 14 points aren't valid anymore? Are they something that's been supplanted by a system of profound knowledge?

[00:15:02] I'll give you my opinion. Clifton can give us yours, but I think the 14 points are dos and don'ts. People understand them. And there are things that you can stop doing, not only some things you have to do. So I think they were popular. I think in hindsight, the system of profound knowledge became too abstract because it's the theory. It's a theory behind the 14 points. But for most people, it was too abstract for them to take the system of profound knowledge and to change their behavior, change their actions. So I think it was harder sell when they switched to a system of profound knowledge.

[00:15:42] Yeah, Ron pulled out of his notes, as he usually does. He has a wealth of information with personal correspondence with Dr. Deming. And one of the handouts that Ron produced that we put into the paper trip was the first version of the 14 points in early 1982. And we contrast that in our article with the version that came out in 1986 and out of the crisis. And I guess what disturbed me is I went back and I look at the list from 1982. It was far more descriptive and more useful. And I actually was working with a client who was learning about 14 points at the time. And they looked at these and I said, Cliff, this this is far better. What we've done in 86 looks like we've watered these things down. And so I think people will see that in the paper just very profoundly struck with how the 82 version in my mind was more useful than what ultimately was was published. The other thing here, and I think I think Deming sort to appreciate is when he started out with the 14 points he was playing to the social character of the American culture, which just tell us what to go do, give us a silver bullet, what we'll take care of that. And as opposed to really understanding the underlying theory. I think if you have been teaching in England, they would have demanded the theory right off the bat. And unfortunately, we've we have a tendency to feed people with things to go do. That's why when you read blogs, the most important blogs on websites are seven things for this and 10 things to take care of that.

[00:17:26] And they actually tell people if you label your blog as such, people will read it, you know, because they expect things to go do.

[00:17:34] So I think Deming listen to his own message about the importance of theory and moved into the system of profound knowledge from. What's your thought on that?

[00:17:43] Yeah, I think that's correct. And of course, in the new economics that's introduced in chapters three and four, but it did he really didn't talk about the talking points other than they follow naturally from my system of profound knowledge. What he did do in Chapter two was these are the heavy losses. So he talks in the new economics chapter to some faulty practices of management with suggestions for better practice. So here's a two columns present practice and then better practice. And then the reasons why really dig deeper into this is a system of profound knowledge. So he kind of is backed off on the 14 points. But I think is subject to to get ordinary people to understand it is here are present practices, here are better practices. And these are my reasons why in Chapter two, when introducing the system of profound knowledge in chapters three and four. So whether or not it's the right thing, I don't know. But I think most people have trouble with this applying the profound knowledge.

[00:18:43] Yes. And one thing I want to ask Cliff about that you brought up there, you said the 1982 version of the 14 points, greater clarity. I'm going to use my words, not yours. Sorry, to the ones that came out later. Can you give me an example or a couple of examples?

[00:19:00] Yeah, just consider point number five, which is improved slightly forever, the system of production and service. That's what was published. In 86, if you look at the 82 version, it says used statistical techniques to identify the two sources of waste systems, 85 percent, local faults, 15 percent, you know, strive constantly, reduce this waste. That's that's pretty specific. What to go do. We have a whole industry cottage industry of consultants that now call that lean, Tripp.

[00:19:31] Yes. OK, very good.

[00:19:35] And, you know, of course, this all goes back to Demings idea of the theory of variation. And that's how he entered the system of profound knowledge was through that window of understanding variation from Shewhart ideas. And from that he found out that if I have common cause variation, I need to understand the system and order to understand the system. I need to engage these people. Therefore, I need to understand the underlying driving needs of these folks in the psychology behind that in order to actually do this in a way that makes sense. I need to use the scientific method with the addition of act which became PDSA, so I need to understand how I'm going to develop tests and implement changes. And so through the window of variation that Demming discovers the other three parts, a profound knowledge. And so it's interesting to me that when I hang around people who have expertize in the systems area, for example, they don't get back to variation people in psychology who have been lucky to work with, they don't get back to variation. And the people who understand epistemology and theory knowledge, they don't get back to understand Gerstmann comedy special cause variation. So the variation window is huge leverage.

[00:20:45] I going to say the greatest contribution is putting those four parts together. Again, there's great thinkers in each of those four. But what Deming there to put them together as a system? And it's the interaction of the four parts that provide the profound knowledge he did that no one else said that. You know, I think that's his greatest contribution, which again, makes it more abstract because how do you look at all four of those parts at the same time? That's been the difficulty.

[00:21:15] Sure. You know, they're all four of them are deep enough. Yeah.

[00:21:21] For to give you another example, point number nine came out, break down barriers between staff areas and as API worked with our clients coming out of the Demming four day seminars, we didn't quite know how to go do that. So we went back to Dr. Deming's production, viewed as a system. And we said, well, if we switch from the organizational chart to actually understand the organization viewed as a system, we can start to break down those barriers so that what we call the linkage are processes, which has been a very valuable method for us. But Demming actually an 82 version, he wrote this. He said, reduce waste by putting together as a team the people that work on design, research, sales and production. If people had heard that message, they wouldn't be out walking around saying, how do we break down barriers between departments, he told them in 1980 to exactly what to go do. And it's interesting that Chrysler, I think, will correct me on this, but they actually put together a research center and a design center that actually did what Dr. Dean is talking about.Point number nine,

[00:22:24] And the overall method is Deming's methods change yearly, monthly. And, you know, some people come to a seminar and say, well, you said this last month, I have it. I have it on tape. And his answer was, I make no apologies for learning. Now you have this on tape.

[00:22:46] So what we're trying to do in this paper, this paper, it really just shows how his journey of learning and an impact.

[00:22:53] I think his gift to us is that the system of profound knowledge is our own journey to learning, and nothing else is really how to learn by using that lens.

[00:23:05] So so let's let's talk about that a little bit from your application of espec. And you've just kind of laid the table for Dr. Deming, you know, advanced his learning. And so Piqué is out there to advance. Everyone's learning. What have you learned?

[00:23:22] The system of profound knowledge causes us within API to operate better as a consulting group for the simple reason that we all use the same Decha theory when we look at things.

[00:23:35] We were I was once confronted by a client in the construction industry and they told me that Lloyd was in a week before and they told me what Lloyd had said. And I said, there's no way Lloyd said that. And they said, What are you talking about? I said, there's no way he could possibly make that statement. And the guy sitting across from the CEO, he said, How long? That time he about 15 seconds. And they started laughing and they said, how did you know? We didn't say that. I said, because Lloyd couldn't possibly think that way. It doesn't match his theory uses. And I know he uses and they start laughing again. And they said, well, you know, we had a big consulting firm in here last week and we test done on their consultant. They immediately switched.

[00:24:20] And I said, that's because I have a theory. They're just they're trying to be in the moment and they're trying to satisfy you.

[00:24:27] And I'm excited that we're actually interested in helping you learn. And so that's been a profound impact on API as we work together. I can follow Ron easily because I know what was going on. If he talks about something, he makes a statement. He's coming off that those four streams of theory. And if I hear something that doesn't match that, I know that he didn't say that, then he's very much like that, too. When I hear people quote Demming and I hear something that's counter to the theory of variation, for example, or what he would say about psychology, I know that that didn't happen because they just don't wander around too much from that theory.

[00:25:04] So, again, I think the word theory is scary to most people. But I think what Deming did for me personally is that theory was not scary, but it's really how we learn.

[00:25:15] And so maybe I needed a better understanding, a theory of knowledge, but this idea of making predictions and testing those predictions. And so it was really it was it created a real powerful message for learning about the world I live in. So in general, his models were just he learns every day. And I think just that in the seminars helped everybody walk away saying that. I think he called it a yearning for learning. And so for most people, they didn't learn that in school. They learned it in Demming seminars. Create a lifelong learning for a yearning for learning is a really powerful message.

[00:25:58] The other part, I think this is really important. I once had a manager on a seminar and asked me to clip this all seems like common sense. Why isn't everybody doing this? And as we went through the the workshop together about every 20 minutes, this guy would say, you know, this is hard, you know, really learning about this idea of variations hard. And by the end of the two days together, he said, I think I answered my own question. You know, this requires some study. This requires some thought. This is not something you just go to a two day seminar and then you're all finished. This is a life long learning idea and this is difficult. And I think that's part of the reason that people don't embrace Demming right away, because it does require some study and some work.

[00:26:44] Ok, and let's let's follow that line of thinking just from a guys who've worked in a variety of industries, you know, applying system of profound knowledge. And and so so from that, what are the hardest things for people to grasp? Does it vary by industry or is it kind of there's just certain things that that are very difficult for your clients to take hold of.

[00:27:10] Well, what's common to all industries is there's usually a management structure, and again, this is a theory for management.

[00:27:18] So it's easy to see the style of management in these organizations with the lens of profound knowledge. And because that's designed to bring out some of these practices of managers that are faulty. So it doesn't make any difference what industry is. As I look at education or government or industry style and management in the West and a lot of other Eastern countries and a lot of these a lot of traveling in the east and Western practices are becoming more popular, for example, in India and other countries in Asia as well. Because they're popular, they're easy. They think it's what they should do. So it doesn't make any difference what industry. So whatever industry you're in, you need to say, well, how are we managing our people? Looking at it through the lens, for example, they ranking people and why are they ranking people? What are they doing? What's the reward system there? So it doesn't make any difference what industry. And I say just as much in government and education, the ranking of teachers, the ranking, the students ranking of schools, all of its ranking is a deadly disease, one of the deadly diseases from nineteen eighty six. That's even more common today. So these faulty practices are very common across all industries.

[00:28:44] So so we haven't heeded Dr. Deming's warning about exporting our dysfunctional management philosophy to Eastern nations then, huh?

[00:28:55] No.

[00:28:56] Okay. All right, Cliff, you have something to add to that?

[00:28:59] Yeah, absolutely. The just walk around the system of profound knowledge with examples of variation rather than really understand that just one common and special cause variation. As we're looking at measures, I'm looking at measures over time, you know, as one charge or control. First, we now have a whole industry of consultants around teaching dashboards that compare this month's measure with some goal, and then they paint it red, green or yellow with absolutely no understanding of whether this measure is suffering from special or common cause variation. We have lots of examples where fundamentally the technique puts management to sleep and are missing opportunities to actually learn from the data because of these so-called dashboards, switching the organization from focusing on the organizational chart to really understand the organization of the system. That's a huge leap and understanding, unfortunately, without the methods of understanding. The organization is a system that Deming gave us the concept. Poor people don't get there, so the system is never under suspicion, which leads right to psychology. So when things go wrong, people start to work on each other instead of the system. It's just the other day being talked about and every theory of knowledge, rather than being able to pose a good inquiry question that leads us to where our ignorance is. We now have lists of tools for people to use under some alphabet soup, you know, use this tool than that tool, use another tool and really being able to pose a good question that leads us on a task where we can get the data that's going to answer that question and only use the proper tools that help us answer that question. That should be considered the first learning principle, only use the tools that are necessary to answer a good inquiry based question which underlies the theory of knowledge.

[00:30:50] Let me let me ask you guys a question that you just brought up.

[00:30:54] Are you shocked by the number of organizations that you walk into that do not use statistical process control in any form?

[00:31:04] Well, to win a Deming prize, which I think there's been 18 companies in India, the one the prize part of the Deming prize is the use of use of sugar control charge. So if you win the prize, you have to practice. Where do I say it? Outside of that is not a common kind of common.

[00:31:25] I think a lot of people are getting away from that. Using the Shewhart charts. And again, the importance of separating the common cause and special cause, I think that's I don't know. I think it is going away, but it shouldn't.

[00:31:43] It's one of the parts of profound knowledge and it's critical is what is my basis for action? Do I work on the system? I work on special causes, one of which might be on individuals or people. But to blame I always blame people for faults in the system is totally wrong. This will help you separate that. And so I think Demming said in quite a few of his seminars that it'll take one hundred years for people to appreciate the contributions of Walter Schuckert. And I think that's true. And I think we had an API meeting two weeks ago and we're still I think we're still starting to appreciate the power of that statement being made. We're still learning to understand variation. Interesting. I think that's something that we really need to bring, really emphasized to bring back, but it's one of four parts.

[00:32:33] Ok, Cliff, you have something to add to that?

[00:32:36] Yeah, I just I think one of the most frustrating things to me, Tripp, is to watch people who are out teaching and they really haven't grasped that idea that I mean, one that's about the difference between a number of analytic studies. And so we have a whole bunch of folks out right now that heard, oh, we need to teach statistical techniques. So they went back and they got the book on statistical techniques. And so now we're teaching hypothesis testing and all the rest of it. And the underlying assumptions of all those tests is that the data is going to be independent and identically distributed, so called ID. And so if those assumptions are there, then we can go use that test. He tests and all the rest of it, unfortunately, is shoehorned us that processes in nature are inherently stable and manmade processes are inherently unstable. So we have special clauses present. It destroys all those assumptions. So you would think that by now if I went to a computer program like many tab, rather than get a histogram and distribution of data, the first thing would ask me to do is to plot my data on a run charter control chart to see if I have special clauses present, because from a manmade process, the chances of that are pretty good and then learn from the special causes. And if people understood that, one basic idea would be a lot further down the road than we are right now. And unfortunately, when people hear statistical process control, they actually think that you only use the control chart once something is implemented. They don't understand that. We have to make sure that the data going into the models that we're using is in a state of statistical control before we can start using more sophisticated, so-called sophisticated techniques. Although I would offer somebody has done the work of putting their work on a control chart there along and probably most of what they need to learn about the process.

[00:34:25] My last question for you guys is, is there anything that you wish I would have asked that you'd like to expound upon or is there any clarification of anything you have said Deming were alive today?

[00:34:36] Would this be the same message? And I would say no. His system of profound knowledge is probably very different. You have different emphasis on it. And the last thing he'd want us to do is to lock into his system of profound knowledge that using those four parts, I think those need to evolve. They can be individual people can see them differently. And I think that's OK as long as we I do think the four parts together. And it's just kind of like a liberal arts degree. You have to have some knowledge and all these things. I think that's important. But the specifics which were locked in when he died and when he published in nineteen ninety three, I think those would be very different if he continued to live. So I think that's the legacy he would like to leave us, is that we need to keep adding to that better understanding and and continue to develop a system to our knowledge and the application of it.

[00:35:31] Cliff?

[00:35:32] Yeah, I think Ron's hit it right on the head. I don't think Demming would want us to be his store and worship what he did. He would want us to start building on that. And one of the things that I particularly enjoy being associated with API is a contingent learning and continue to build on what helped us try to learn. And I think the work of the institute should be in that vein, as is what can we actually do to keep moving forward and adding to the body of knowledge? Those are the kind of things that we should be talking about more. And I love history, but history only gives me a foundation to move forward.

[00:36:16] Very good. Well, Ron Moen and Cliff Norman, thank you for being guests on the Deming InSitu podcast.

[00:36:23] Thanks, Tripp. Thanks, Tripp.

[00:36:28] This is Tripp Babbitt informing you about the upcoming Demming and Education Conference on November six to be a few thousand fifty at Cedar Brook Lodge in Seattle, Washington, the Deming Institute will feature administrators, teachers and thought leaders that are challenging the status quo in education. For more information, go to the Deming Web site and select events. We hope to see you there.

This week's Podcast feature Alfie Kohn, national speaker and author of 14 books, and scores of articles, on human behavior, management, and education. 

Alfie discusses the inspiration for his books including, No Contest and Punished by Rewards, the divergent thoughts surrounding the history of education in the 20th century, and his views on standardized testing and homework. 

Alfie explains how, as a contrarian with a practice of finding issues where logic and research points in one direction and practices move in a different direction, he started thinking and writing about competition. He began debunking the common notion that "competition is inevitable because it's just part of human nature".

Next Alfie discusses the different philosophies on education in the early 20th century. As one side supported the experience of the student as the "center of gravity", the other focused on rules, curriculum, numbers and behaviors - things outside the classroom that can be measured. 

Alfie tells us how standardized testing has undermined education, even when test scores go up, and how much time has been taken away from real learning to teach kids how to be good at taking tests.

Lastly, Alfie shares what he will be talking about on November 8th, at The First Annual Deming in Education Conference in Seattle.

This week's Podcast features Jim Benson, founding partner of the Modus Institute.  Jim discusses how he was introduced to the Deming Philosophy, how his team applies it to Knowledge Work (work that can't be seen), and what he feels is the biggest fear in an organization.

Though he was initially introduced accidently on an airplane, Jim shared how he was actively looking for a set of guiding principles around what would create a human oriented, self-aware way of managing work. As he hopes everyone finds out, the four points of the System of Profound Knowledge do that in a very elegant, concise and friendly way.

At Modus Cooperendi, they apply the Deming Philosophy with three guiding principles: Respect for people, SOPK, and the One Point (summation of the 14 points). They take those principles and help companies build new Life Systems, so they can visualize their work for the first time leading to better communication, collaboration and transparency.

Listen as Jim tells us why they feel "the unknown" is the biggest fear in an organization. And how building trust within teams can remove one of the largest barriers to your company. Hear how some companies they're working with are doing just that.

Read more about Dr. Deming's work in his books, Out of the Crisis and The New Economics.

This week's Podcast features Louis Altazan, President of AGCO Automotive Corporation in Baton Rouge, Louisiana. Louis discusses his introduction to Dr. Deming and his philosophies, his "aha" moment, and the long-term thinking and trust that must be established to succeed. 

Louis starts with a brief introduction of AGCO, and his feeling that the automotive industry could be doing better. After toiling for 10 years with various philosophies, it was the 1980 NBC documentary "If Japan Can, Why Can't We" that hit home with him. He picked up the phone and called Dr. Deming. And as they say "the rest is history."

Louis began implementing Deming's 14 points right away. His biggest "aha" moment was that "I was the problem." Once he realized this, he called a meeting to apologize and things started to get better right away. Louis removed everyone from the "flat rate" pay system and put them on salary. This helped his staff change their focus from short-term thinking and profits to long-term thinking and trust. 

Louis warns that you can't apply some part of Dr. Deming's philosophy and not others - that "it's a cohesive system that all works together." Done this way you will start seeing improvement almost immediately, but the real benefits will be felt about 20 years down the road. 

This week's Podcast features Dr. Bret Champion, Superintendent of the Leander Independent School District in Leander, Texas. Bret discusses Leander ISD's journey and how they faced the challenges of a growing school district, external federal and state standards and limited resources to create a quality education system focused on the most critical component, the student. 

Bret shares his early adoption of the "Leander Way" and how he discovered it was based on the Deming teachings. At Leander, he found a collaborative environment, free from the palpable fear felt at other schools by students and teachers alike. Liberated from fear through partnership, interaction, cooperation and training, it was about a system, "not just by the book". 

Bret explains how he is drawn to messy and noisy classrooms, because "that's where learning happens". At Leander, they realized they did not know what defined a quality classroom or how to measure it. From this experience they developed their "Seven Student Learning Behaviors".

As a district of 36,000 students and 400 employees spread over 200 square miles, Bret describes the constant "battle for balance" and the road to quality as a "marathon". But they continue to work towards incremental changes on their journey of improvement, never letting go of their culture, shared vision and belief that students are "more than test scores".

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?

This week's Podcast features Gordon McGilton, Director of a Private Equity Fund with investment in multiple industries. Gordon shares the humorous and unique way he was introduced to Dr. Deming's philosophies. He provides an example of a company that is using The Deming System of Profound Knowledge with great success, as well as how one can begin their own journey.

Gordon starts with, "every business is just a system and that system delivers some change of state that customers are willing to pay for. Everything else in between is just by what method to do it."

Listen as Gordon shares the Jet-Hot, Inc. story, a real example of how he applied the Deming System of Profound Knowledge and systems thinking to a coatings company on the verge of insolvency. After three years, with the same people, the company is prospering and the employees are proud of what they do, the company they work for and the solutions they provide the customers.

We step back and hear how Gordon was introduced to Dr. Deming's philosophies while working in the auto industry in 1980, when the documentary "If Japan Can, Why Can't We" aired on NBC-TV. This is a must listen podcast, as Gordon shares the tale of his initial resistance to attending Dr. Deming's 4-Day Seminar; and his subsequent understanding that everything he had learned in management, up to that point, was wrong.

Gordon explores his Aha! Moments, the first of which was, "you can't increase someone's capability by offering them money or by threatening them." This was a huge breakthrough, as he was raised on an intimidation model believing that's how you got things done. The breakthrough came once he saw that providing employees with the instructions, tools, information and support they needed, is what actually improved their performance.

This week's podcast features Dr. Doug Stilwell, Superintendent of the Urbandale Community School District. Doug shares his application of the Deming Philosophy in education - looking at education from a systems point a view and driving out fear with trust.

Listen as Doug talks about how, after 35 years in education, he always felt that "something was not right." It wasn't until 2009 when he attended a David Langford Seminar, which applied the Deming philosophy in education, that he said "this is it, this is the stuff I have been looking for."

Doug endured 35 years of new initiatives from the legislature and Department of Education, with no changes in student achievement. It caused him to think back to Deming and that "people are not the problem, it's the system." If they did not take a systems approach they would be doomed to fail. He realized that whether you're looking at the district as a whole, or a building or even a classroom, it's a system, and the way you approach that system will have the greatest impact on student learning.

Doug shares his lifelong interest in trust, the role it plays in driving out fear, and his conclusion that, "if there is fear in an organization, that means that there is not trust." By engendering trust, Doug realized that people can be freed from fear and feel freer to innovate.

Lastly, Doug shares his recommendations for others are they begin their journey. It starts with defining an aim for thieir system and clearly communicating that with the students. A few years ago, Doug was disheartened after reading a study show that the decrease in joy for learning begins in Kindergarten. But this reinforced for him the value of systems thinking, and that teacher understanding of a systems approach in the classroom is a great place to start.

This week's podcast features David Langford, CEO and Founder of Langford International, Inc. and Deming Institute Advisory Council member.

In David's third podcast he explores ways to get started in employing the Deming philosophy in education. In many instances this requires an "out of body experience"; stop playing the blame game, stop being a victim. He tells us to stop worrying about the bigger system and start optimizing the performance of the group, which you have influence over. 

David shares an example of a student whose "new" knowledge and appreciation for a system led to a study of the most common systemic questions asked by students. Listen as he reviews what they learned - to stop wasting time on things that are not meaningful, to start concentrating on things that are and get those to a higher degree of performance and to concentrate on deep learning experiences with lasting impact.

David explores how a small group of committed people working in a consistent fashion can transform an organization. You don't have to be "all in" to create transformation. It can start with you.

For more information about David's current work, with Ingenium Schools, please visit ingeniumfoundation.org