Profound Knowledge for Lean Leaders

Asked of Dr. Deming by an EDS Division President on the GM
Account

State of Quality Management Today
“The average lifespan of a company listed in the
S&P 500 index of leading US companies has decreased by more than 50 years in the last century, from 67 years in the 1920s to just 15 years today,” according to Professor Richard
Foster from Yale University. Today's rate of change "is at a faster pace than ever", he says.”
3

State of Quality Management Today
The U.S. Department of Labor, Bureau of Labor Statistics publishes a sobering chart that shows the diminishing
“Survival rates of establishments, by year and number of years since starting.” In the period 1994-2010 the data show survival rates of:
62.4% at 3 yrs since starting,
49.3% at 5 yrs,
34.7% at 10 yrs and
24.6% at 17 yrs.
4

“Most companies embarking on a lean journey soon become frustrated with kaizen events and isolated improvement projects that yield great short-term results but have no sustainability.
They are searching for something more.”
Lean Enterprise Institute
Accessed: 2015-08-07

A common disease that afflicts management and government administration the world over is the impression “Our problems are different.” They are different, to be sure, but the principles that will help to improve quality of product and of service are universal in nature.
W. Edwards Deming, Out of the Crisis.
“Our problems are different.”

Please find a partner
(preferably someone you don’t work with)
• Some of our learning this morning will depend upon work you will do in pairs
• On the top of your handout, write a sentence or two about a key issue or problem that exists in your work as a lean leader and/or learner
• Introduce yourself and your issue to your partner
• Name
• Issue
• Why the issue is important to you

Q: Why are we here?
A: Good question
A: Learn something about Dr. Deming’s System of Profound Knowledge
A: Have fun while we relate what we are learning to something in our life
A: Discover a way we can make a difference

14 Points for Management
• Find the 14 Points for Management in your handout
• Read through the principles and select one that you want to share with your partner
• Discuss why you selected what you selected and how it might apply to your issue

The whole is not simply the sum of the parts added up

What is a system?
A system is a network of interdependent components that work together to try to accomplish the aim of the system.

Organization Chart for a Typical Organization
President
Vice President
Accounts
Asst. VP
Savings
Asst. VP
Checking
Asst. VP
Mktg
Vice President
Commercial
Accounts
Asst. VP
Loans
Asst. VP
Services
Vice President
Customer
Relations
Vice President
Loans
Vice President
Administration
Customer
Rep 1
Customer
Rep 2
Asst. VP
Loans
Sup. State Sup. Federal
Asst. VP
Services
Sup.
Maintenance
Asst. VP
Accounting
Asst. VP ATM
Asst. VP
Employees
Lt. Security

Organization viewed as a system
Stage 0:
Generation of ideas
C
D
A
B
Suppliers of materials and equipment
Receipt and test of materials
Design and redesign
Production, assembly, inspection
Test of processes, machines, methods, costs
Distribution
Consumer research
Customers

“The world is being ruined by best efforts”

“The world is being ruined by best efforts”

What happens when we try to reconnect our improved pieces of the foam ball?
What has happened to the characteristics that make the foam ball a foam ball?
What implications do you see for managing an organization?
Please write yourself a note about a lesson you could take away from the Foam Ball Exercise

Deep Purple to a sound tech during a sound check

A system is a network of interdependent components that work together to try to accomplish the aim of the system.

With your partner,
Discuss how Deming’s definition and view of a system could be applied to your issue using the following questions:
If you were to declare an aim for your issue, what would it be?
To what system does your issue belong?
Regarding your issue, what system interactions—between people, processes, departments, constituencies, etc.—are most influential?

Information is not knowledge


What is knowledge?

How does one acquire it? (“we modify theory and thus we learn”)

What are the substitutes that people commonly use instead of knowledge?

What are the substitutes that people commonly use instead of knowledge?
• Tables of data
• Information of all types – the more sources the better
• Tests and other labor saving devices
• Books, dictionary
• Gossip or the opinions of others
• Results
• Present style of management
• Benchmarking, copying

“From your courses in the theory of knowledge you know… there is no meaning in any statement, no meaning in any conclusion, nor in any sentence, unless it has temporal spread, to enhance your degree of belief in something in the future or something in the past….
One enhances his degree of belief as he learns...”
W. Edwards Deming
October 12, 1985

Simple plans, assumptions, decisions

Method for Developing Knowledge - PDSA
Adopt, Abandon, or Re-
test. What is our conclusion? Based on what we learned, what actions should we take.
Should we adopt the change or abandon it?
Should we re-test in another area or on a larger scale?
What did we learn?
Study the results. Look at the data and try to see what happened. Did we run the planned test?
Were our predictions confirmed? What do we now know?
Ac Pla y o
Design a test & make a
prediction. What are we trying to accomplish? If we make a specific change, what will be the result? What observations will we make and what data will we collect? How will we evaluate the test? What will be our next test?
An Operational Definition of a Prediction:
Recorded prior to running a test in this form:
“If I do X then Y will result.”
Run the test you
designed. Preferably on a small scale, try out the plan or test while collecting data or making observations.
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How might we use the Theory of Knowledge?
• Regarding your issue, “What is a change, aimed at improvement, that you could make next week, that you could implement and learn from?”
• Make a written prediction:
“If I [make this change], I will [observe
these results.]”
• Make the change and record your observations
• Compare your observations to your prediction – what are all the things you could learn from this test?
• Choose what to do next
Ac Pla y o
PDSA Cycle aka Shewhart cycle

How do we know that a change is an improvement?
All improvement requires change
Not all change produces improvement

What is meant by the following terms:
Better, on-time, complete, safe, disabled?

How could he not know?
“TQM?
I don’t know what that means.”
W. Edwards Deming
Detroit Area Deming Study Group

“Butter must be 80% butterfat, or more”

“Butter must be 80% butterfat, or more”

“Butter must be 80% butterfat, or more” on the average?
of your purchases during a year?

“Butter must be 80% butterfat, or more” on the average?
of yours and other’s purchases during a year?

“Butter must be 80% butterfat, or more” on the average?
How many pounds would you test for calculation of the average?

“Butter must be 80% butterfat, or more” on the average?
of the production of all butter in a year?
from one dairy?
all dairies i n a state, region, country?

Operational Definition:
Defining a definition

WHAT MUST BE INCLUDED IN AN OPERATIONAL DEFINITION?
A clear statement of what is considered acceptable, communicable, and understood by all parties
An agreed upon method of evaluating, testing and measuring the characteristic
A repeatable criterion for a "yes" or "no" decision of whether the requirements have been met
 Repeatable
 Method
 Agreed on by all parties
W. Edwards Deming,
Out of the Crisis, Chapter 9
“The operational definition of any (process) is not what you intended it to be, but what resulted when the process was operated.”
Bill Scherkenbach
41

Animal Crackers Activity
A group exercise providing practice in:
• Generating an operational definition
• Using an operational definition generated by others
• Evaluating the variation that arises due to differing operational definitions
Counting Team 1
1
4
5
2
3
6
2 3
Table
4 5 6
42

At your table:
1. Write an operational definition of a
“Defect-free animal cracker”
1. On a piece of paper, record: a) Table number b) Count of Defect-Free animal crackers
2. When asked, leave the operational definition at your table and go to the next table
3. Using the operational definition at that table, record on the same tally sheet a) Table number b) Count of Defect-Free animal crackers
4. Repeat 2-3 until all tables have been visited
5. Document your results
Budd Performance Group
43

With your partner,
“How could we know?”
“By what method?”

“If I had to reduce my message for management to just a few words, I’d say it all had to do with reducing variation.”
46

How do we reduce variation?
What questions might we ask?

How can we recognize or see variation?

Signature Activity
1. Write your signature as neatly and clearly as you can
2. Repeat
3. Select the best signature, 1 or 2, and copy it exactly
4. Try again to copy the best signature, 1 or 2, exactly
5. Look at all 4 signatures and copy the best one exactly
6. Switch hands. Copy the best one exactly
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Please, study this data.
Week
3
4
1
2
M
12
10
12
10
T
Day of Week
W
11
13
8
8
11
13
7
9
Th
9
12
14
16
Total
F Problems
6
8
3
5
42
49
51
55
Monthly Problem Total 197
Average Daily Problems 9.85
Describe what is happening.
50

51

52

Two Sources of Variation, Two Mistakes
Common Causes
Special Causes
Mistake 1) Treat Common Cause variation as if it is Special Cause
Mistake 2) Treat Special Cause variation as if it is Common Cause

Sources of Variation
Common cause variation is distinguished from special cause variation by the following characteristics:
• Each factor contributes a small amount to the total variation.
• No one cause contributes significantly more than any other cause.
• All data are relevant for generating improvement.
• Asking “What happened?” is a low-yield and costly strategy.
54

Sources of Variation
Special Cause variation is distinguished by the following characteristics:
• Temporarily or sporadically disturb a process.
• Special cause is not always present in a process— it comes and goes.
• Different special causes affect the process in different ways—some affect one data point, others may affect many data points.
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Sources of Variation
Special Cause variation is distinguished by the following characteristics:
• Special cause has a more pronounced effect than any single common cause.
• Can be identified and is generally not a normal part of the work.
• Management asking “What happened?” is a useful strategy.
56

Signature Activity
1. Write your signature as neatly and clearly as you can
2. Repeat
3. Select the best signature, 1 or 2, and copy it exactly
4. Try again to copy the best signature, 1 or 2, exactly
5. Look at all 4 signatures and copy the best one exactly
6. Switch hands. Copy the best one exactly
7. Discuss with your partner using a knowledge of variation
57

Mistake 1) Treat Common Cause variation as if it is Special Cause
Mistake 2) Treat Special Cause variation as if it is Common Cause
A short quiz
1)
2)

Please record which Mistake, 1) or 2), you believe is being made
Mistake 1) Treat Common Cause variation as if it is Special Cause
Mistake 2) Treat Special Cause variation as if it is Common Cause

Please record which Mistake, 1) or 2), you believe is being made
Mistake 1) Treat Common Cause variation as if it is Special Cause
Mistake 2) Treat Special Cause variation as if it is Common Cause

Please record which Mistake, 1) or 2), you believe is being made
Mistake 1) Treat Common Cause variation as if it is Special Cause
Mistake 2) Treat Special Cause variation as if it is Common Cause

Please record which Mistake, 1) or 2), you believe is being made
Mistake 1) Treat Common Cause variation as if it is Special Cause
Mistake 2) Treat Special Cause variation as if it is Common Cause

Please record which Mistake, 1) or 2), you believe is being made
Mistake 1) Treat Common Cause variation as if it is Special Cause
Mistake 2) Treat Special Cause variation as if it is Common Cause

Mistake 1 or Mistake 2?
a) One employee is repeatedly late. The manager implements a tardiness penalty for the entire area.
a) Mistake 2 Treat Special Cause variation as if it is Common Cause b) Require all employees to enter their badge number before printing or copying.
b) Mistake 1 - Treat Common Cause variation as if it is Special Cause c) Rewarding a department that produced high output one week.
c) Mistake 1 - Treat Common Cause variation as if it is Special Cause d) Re-organization of departments.
e) Taking action on a single negative survey comment.
d) Mistake 1 - Treat Common Cause variation as if it is Special Cause e) Mistake 2 Treat Special Cause variation as if it is Common Cause

With your partner,
as well as,

Psychology

Restoration of the Individual
“We must restore the individual and do so in the complexities of interactions with the rest of the world.”

Restoration of the Individual
“There will be joy in work because people will understand what their jobs are. Who depends on me? Whom do I depend on?”

Restoration of the Individual
“Performance of the individual can not be measured, except possibly on a long-term basis
[15-20 years].”

Restoration of the Individual
“Some extrinsic motivation helps to build selfesteem. But total submission to extrinsic motivation leads to destruction of the individual.”

Restoration of the Individual
“The first step is transformation of the individual who, once transformed, will:
Set an example; Be a good listener, but will not compromise; Continually teach other people; Help people to pull away from their current practice and beliefs and move into the new philosophy without a feeling of guilt about the past .”

Restoration of the Individual
“A leader of transformation, and managers involved, need to learn the psychology of individuals, the psychology of a group, the psychology of society, and the psychology of change.”

“People are born with a natural inclination to learn and experience joy in work.”
W. Edwards Deming
One of the most profound things that a leader can do to generate joy in work is to ensure that her people are able to make daily progress in meaningful work.

“Progress in meaningful work”
A key work motivator and influencer of employee inner work life.
Completely absent from manager survey results
An unrecognized management– employee gap
From The Progress Principle, Teresa Amabile & Steven Kramer

Almost everyone is working for something bigger than the task in front of them.

Meaningful work – 5 Why’s “Why am I here?”
From a participant at a David Langford 4-day Seminar on Quality in Education
-
-
-
-
-
I wanted to learn from David Langford
Based on what I’ve seen and heard about David’s experience, I am hoping to learn from him about quality in education and learning in general
I want to become a better teacher, leader and transformation agent
I want to make our state, country, world a place where we can all experience joy in learning and joy in work
I believe that people who are experiencing joy in learning, joy in work can live together in peace

PROGRESS
CATALYSTS
NOURISHERS

PROGRESS
• Make headway
• Accomplish something
• Finish a task
• Overcome an obstacle
• Small win
• Creative accomplishment

CATALYSTS
• Clear goals
• Autonomy to solve problems, take ownership
• Resources needed to more forward
• Time (but not too much) to focus on meaningful work
• Help provided when needed or requested
• Work-related help from a person or group
• Learning from and discussion of lessons from problems and successes
• Idea flow
• Personally meaningful goals
• Visible indicators of progress toward next milestone
• Actions that directly support work

NOURISHERS
• Interpersonal, directed at the person
• Respect
• Encouragement
• Comfort
• Other forms of social or emotional support

PROGRESS
CATALYSTS
NOURISHERS
SET-BACKS
INHIBITORS
TOXINS

• Lack of progress
• Lack of accomplishment
SETBACKS
• Work difficulties
• Obstacles

• Confusion regarding long- or short-term goals
• Requested or needed help not provided
• Constraints or less freedom in carrying out the work
• Positive challenge missing
INHIBITORS
• Insufficient resources
• Lack of sufficient time to focus on meaningful work
• Failure “punished”
• Presentation or debate of ideas cut-off prematurely

TOXINS
• Disrespect
• Failure to acknowledge contributions to progress
• Ignoring ideas
• Not trusting
• Discourage
• Neglect of a person or a professional problem
• Tension or antagonism (on team, or between team and mgr.)

SETBACKS have a stronger influence on people than does PROGRESS

Developing Leader Standard Work

Developing Leader Standard Work
“How could we know how are we doing?”

Developing Leader Standard Work
“How could we know how are we doing?”
 Is the work your people are doing meaningful to them?
 How could you know?
 What does progress look like to them?
 Is progress visible and apparent when it is made?
 Was progress made today?
 What is needed to ensure progress is made tomorrow?

With your partner, discuss:

Q: “Is there hope for General Motors?”
Dr. Deming: “Sometimes you just have to wait for people to die.”

A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather its opponents eventually die, and a new generation grows up that is familiar with it.
Max Planck, Nobel Prize winner, originator of the quantum theory
Scientific Autobiography and Other Papers, trans. F. Gaynor (1950), 33.
* “Is there hope…”

“You can never change things by fighting the existing reality. To change things you have to build a new model that makes the existing model obsolete.”
R. Buckminster Fuller, visionary architect
* “Is there hope…”

In the worlds of leadership, building the new model could mean that you become the transformational leader with
Profound Knowledge.
“The aim proposed here for any organization is for everybody to gain— stockholders, employees, suppliers, customers, community, the environment—over the long term.”
W. Edwards Deming
* “ T here is hope…”

* “ T here is hope…”

With your partner,
Discuss how Deming’s 14 Points and
System of Profound Knowledge could be applied to understanding the phrase:
“You can have quality without lean, but you cannot have lean without quality.”