Great leaders know there’s no one-size-fits-all formula. In this episode, Bill Scherkenbach and Andrew Stotz discuss practical lessons on how to connect with people on physical, logical, and emotional levels to truly get things done.  Discover why balancing “me” and “we” is the secret to lasting results—and why empathy might be your most powerful leadership tool. Tune in now and start rewriting your own leadership playbook. (You can view the slides from the podcast here.)

TRANSCRIPT

0:00:02.1 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 Scherkenbach, a dedicated protégé of Dr. Deming since 1972. Bill met with Dr. Deming more than a thousand times and later led statistical methods and process improvements at Ford and GM at Deming's recommendation. He authored The Deming Route to Quality and Productivity at Deming's behest, and at 79, still champions his mentor's message, "learn, have fun, and make a difference." And the episode today is Getting Things Done. Bill, take it away.

 

0:00:41.5 Bill Scherkenbach: Okay, Andrew. We will get 'er done today. The reason I put that on there is that in many of his seminars, Deming said that, "I am not a businessman and not trying to be one." But you need to think about these things. And his approach really was to improving organizations was to put people who he thought were masters of his teachings into organizations, and they would be there full time to facilitate the transformation when he wasn't there, such as Ford and GM and a few other companies. There were a few of us who he trusted to be able to be there to get things done. And I'm reminded of the philosopher, the Asian, Chinese philosopher, Mencius, and I'll read it there. It says, "Don't suspect that the king lacks wisdom. Even in the cases of things that grow most easily in the world, they would never grow up if they were exposed to sunshine for one day and then to cold for 10 days. And it's seldom that I have an audience with the king. And when I leave others who exposed him to cold arrive, even if what I say to him is taking root, what good does it do?"

 

0:02:35.7 Bill Scherkenbach: And quite honestly, that's the lament of every consultant trying to get stuff done in today's world, in Western style management. And so one of the things in this slide, the framework for getting things done, for having fun learning and making a difference, is one of the two, I think, major contributions I do say that I've made to the profession of quality. And that is using this Venn diagram to be able to show that even though other people have used other terms for physical, logical, and emotional, that there usually have been holy wars being fought by people who say, "Well, emotional is better. That's how you get stuff done." And other people saying logic and other people saying physical. And in fact, I think in the last time we spoke, the three major gurus of quality were those ships sailing in the night. Dr. Deming was the epitome of logical thinking, whereas Phil Crosby was looking for the wine and cheese parties and the emotional sell part of it. And Joe Duran was looking at physical, how are you going to organize to get stuff done? Now, they all had their followers who were pretty much on those frequencies, and they reached people in other frequencies. I came up with this idea for the Venn diagram to show no hierarchy, I guess back in 1987, something like that.

 

0:04:49.3 Andrew Stotz: And for the listeners out there, we're looking at a diagram that shows one circle that says physical, that's interlocked with another one that says logical, and then there's a third, a Venn diagram, that third is emotional. And so those are the three pillars that Bill's talking about. All right, keep going, because you got stuff in the middle too, which is interesting.

 

0:05:16.1 Bill Scherkenbach: And the thing is that I based it primarily at the time in the mid-60s, there was a theory of brain structure called the triune brain. Now, and it was the limbic system, the neocortex, and the R-complex. And pretty much followed the logical, emotional, physical words that I'm using. Now, our understanding of the brain in the decades up through now, it's a little bit more complicated than that. But physical, logical, and emotional is in all of us. In our body, I mean, the latest looks at neural connections extend to your gut. And nerves are just about everywhere and connected, and that the way the brain works is still not even fully, not begun to be fully understood. Having said that, in order to get stuff done, this Venn diagram shows very, very simply that the intersection of physical and logical, I put as science. It's the logical explanation of physical phenomenon. And the intersection of logical and emotional is psychology, logic of the soul. And the intersection of emotional and physical is art. All art is is the emotional interpretation of sensory input, whether it's a great meal, whether it's a Mona Lisa picture.

 

0:07:27.9 Bill Scherkenbach: But what will make one person absolutely swoon will make another person barf. So it's all personal, but it's physical, logical, and emotional is in all of us. And in the center, we're looking at what Eastern philosophies call harmony, where all of these are working together. And Western philosophies would call them peak experiences. And it's where the whole can be a lot greater than the sum of its parts, but with some slight changes can be a whole lot less than the sum of its parts.

 

0:08:14.3 Andrew Stotz: Great. I like the harmony in the middle. That's the challenge, really. Now, just out of curiosity, is harmony the goal? Is that what you're thinking with that being at the center? Or what is the meaning of harmony being in the middle?

 

0:08:28.0 Bill Scherkenbach: Yeah. When I apply this to the individual, harmony would be the goal. When I'm applying it to an organization, the larger an organization grows, the more you really need to use this overarching approach. And the reason I say that is, and it doesn't happen all the time, but most of the time when we're starting up a company, you want to surround yourself with fine people just like yourself. And so if you have a particular way of getting stuff done, you're going to hire people or surround yourself with people that are just like that, and everything is fine. But the more you grow the company, the more you're going to get people that are absolutely vital to your organization that aren't on those frequencies. And certainly, if you're in international business, you're trying to sell things to the world that in the larger the group of people, the more you have to be broadcasting on the physical, logical, and emotional frequencies. I mean, one of the first things that I did at GM when I joined was looked at the policy letters that Alfred Sloan wrote. And Sloan, it was very interesting because in any policy, Sloan had a paragraph that said, "make no mistake about it, this is what we're going to do."

 

0:10:31.8 Bill Scherkenbach: That's a physical frequency. In the Navy, it's shut up and fly wing. And so make no mistake about it, this is our policy. The second paragraph had, well, this is a little bit why we're doing it. And to be able to get the, and I don't know whether he was thinking that, but to my mind, it was brilliant. He was explained things. And the third paragraph or so in the policy letter was something that would instill the GM spirit, that there's something to do with the values. Hugely, hugely prescient in my viewpoint, but he's Sloan, I'm me, so he knew what he was doing.

 

0:11:29.9 Andrew Stotz: For people that don't know Alfred Sloan, he took over and was running General Motors at the time when Ford had, I don't know, 50% of the market share by producing one vehicle. And part of the brilliance of Sloan was the idea of building a lineup of different brands that went from the low all the way up to the high of Cadillac. And within a short period of time, he managed to flip things and grab the majority of the market share from Ford at the time, as I recall. Now, I don't recall it from being there, but I recall from reading about it.

 

0:12:12.3 Bill Scherkenbach: There you go. There you go. Yeah, having saying that, he offered those by buying the various little auto companies, littler auto companies to put that conglomerate together. But as people who have read my works, specifically my second book, The Deming's Road to Continual Improvement, this change philosophy is in there. And as I said, that's one of, I think, my major contributions to the field of quality. The other one being in a process model back in '86, we also were learning about Taguchi, Genichi Taguchi's approach to customers and the loss function, and he used the title or the terminology voice of the customer. And it occurred to me in our process definition, there was something called the voice of the process to go along. And so the voice, I introduced the voice of the process, and the job of anyone is to reduce the gap between the voice of the customer and the voice of the process. And I mentioned that because this matrix that we're showing now has physical, logical, and emotional, and the various process states that you could be in, there's a dependent state where you're completely dependent upon your customers or suppliers.

 

0:14:00.9 Bill Scherkenbach: There's an independent state where it's just you and an interdependent state. And I have that cross-reference with physical, logical, and emotional. In dependent state, it's essentially feed me, teach me, love me, do it for me, teach me, and love me. Now, in the independent, it's, I do it, I understand what I do, and I take great joy in doing what I do. And in the interdependent is, we do it. I understand how what I do helps optimize our process, and I take great joy in belonging to this team. And joy is the ultimate goal of what Dr. Deming had said for years, the ability to take joy in one's work. Now, I mean, every one of us starts out in life as dependent. It's feed me, teach me, love me, newborns, parents have to do everything. When you're a new employee, you might have some skills and understanding and emotion or pride, but this is how we do it in this company. And so you're dependent upon how you are introduced to that organization. But everyone tries to get out of that. Now, having said that, a pathology is there are givers and takers in this world, and some of the takers would just be very happy for other people to feed me, teach me, love me.

 

0:16:18.8 Bill Scherkenbach: My point or my philosophy is you've got to get out of the dependency and you have to balance that sense of independence and interdependence that is in each of us. Whether you're doing it or whether you're doing it in your family, as part of a family or a company or a motorcycle gang, whatever your group is, you're looking to blend being a part of that. Every human being looks to balance that sense of me and we. And in the thing we're finding in Western cultures, obviously, especially in North America or the US, we celebrate the me. It's the individual. And the team, we talk a good game about team, but mostly we're celebrating the me. In Eastern philosophies, they're celebrating the we. It's the team. It's not necessarily the, well, not the individual. The point is that in the Western philosophies, if you can't feel a part of a family or express that part, what we see in the US, there's a whole wave of people volunteering to belonging to organizations, whether it's sports teams, whether it's volunteer teams, whether the family balance. If you can't be a part of a family at work, you're going to go offline and do it.

 

0:18:24.9 Bill Scherkenbach: And the problem is your life suffers because you can't fulfill yourself as a person. In the Asian cultures, if you can't feel important as an individual, you go offline. Golf is huge in Japan and elsewhere, and it ain't a team sport. Calligraphy isn't a team sport. Karaoke isn't a choir event. There are ways to be able to express yourself offline if you can't feel important as an individual in your group. And so my philosophy is every human being needs to find that balance for each individual to be able to lead a fulfilled life.

 

0:19:28.7 Andrew Stotz: I'm reminded of a book by Dr. William Glasser called Reality Therapy, brought out in late '60s, I believe. And his philosophy was that part of the root cause of mental illness was that people didn't have one person they could trust. And that all of a sudden sets up all kinds of defense mechanisms that if prolonged end up leading to mental illness. That was a very interesting book, but the thing I took from it is that people want to connect. They want to belong. They want to be a part of it. They may act like they don't sometimes and all that, but we want to be in this interdependent position. And I'm looking at the bottom right corner of the matrix where it says, "I take joy in belonging to a team or this team." And that to me is, you know, that book helped me understand that it's not just the idea of, "Hey, we should all get along and work together." There is true value for a human being to be able to feel good about being part of a family or part of a business or part of a team. Something that just reminded me of.

 

0:20:53.7 Bill Scherkenbach: Yeah. Where I'm coming from is that everyone needs to balance that pride that you take as an individual and as you take as a member of a team or a family. That the independence is not, the interdependence is not the preferred state. Everyone, even people who are celebrating team need some time out to be alone, to do whatever they need to do to hone their skills, improve their knowledge, get excited about things that they also do as individuals. So it's a balance that I'm pushing for.

 

0:21:51.4 Andrew Stotz: Okay, got it.

 

0:21:53.3 Bill Scherkenbach: Okay. So with that as a framework, I think there are a couple of mistakes, well, there are many mistakes that leaders make, but the two big ones are, is don't think that what works for you must work for everyone. Okay. And don't even think that the sequence that works for you has got to work for everyone. Change is not a predictable hierarchy. And I'll explain that further. Let's see here. Yeah, I can do it on this next one here. I've got the matrix again, and of physical, logical, emotional, and physical, logical and emotional. And if a physical person is talking to another physical person, they're communicating on a similar frequency. And so a physical person is going to say, "Okay, this is the policy." The mother will say, "Because I said so." However, that physical person is communicating, the physical person receiving that communication is going to say, "Aye, aye, roger that, consider it done."

 

0:23:43.6 Andrew Stotz: Loud and clear. 

 

0:23:45.3 Bill Scherkenbach: Okay. If a physical person is telling a logical person, using those same things, these are the policy, you could be a dean at a college and you're telling your professors, "This is what we're going to do," a logical person would say, "They're ignorant suit." 

 

0:24:11.3 Andrew Stotz: Suit, what do you mean when you say suit? You mean an ignorant executive? What does it mean suit? 

 

0:24:16.4 Bill Scherkenbach: Yeah, executive. Over here, they're called suits.

 

0:24:19.5 Andrew Stotz: Okay.

 

0:24:22.3 Bill Scherkenbach: So, no, but I'd be interested, you're logical, what would a logical person respond to a physical person who said, "Do this"?

 

0:24:34.5 Andrew Stotz: Yeah, I think without any logical backing, it's rejection maybe is what I would say is that ignorant, this guy doesn't know what he's talking about, he thinks just do it.

 

0:24:51.0 Bill Scherkenbach: Yeah. Yep, yep, yep. Okay. So, and again, if that same physical leader is saying, "Well, get this done," to an emotional person, that person might say, "You Neanderthal, you don't, you don't feel what the value system is." Okay. So, I'm trying to come up with sayings or whatever that these particular people would be saying. So if the logical person tells the physical person, "We've got to do this," it could be, well, the physical person is going to say, "That's too academic, spray some paint on it so I can see it." So, and that's the diss. Logical person talking to another logical person, "Yep, I got it, I understand it, it'll be done." A logical person talking to the emotional person, "You're heartless," or, "Quit mansplaining," as they say over here. So, and again, an emotional person trying to talk to a physical person to get stuff done, the physical person's going to say, "There's no crying in baseball." And so, and the logical person will say, "That's too touchy feely," and the emotional person reacting to the emotional signal, "Oh, they really like me." So, I'm trying to use movie quotes there to express the feelings and the understanding and the, what to really get done.

 

0:27:04.4 Andrew Stotz: So, people really come from different places, and if we don't take that into consideration, we may, it's one of the things I teach, Bill, when I teach a course on presenting, and I say, "Are you more of a logical person or are you more of an emotional?" And half the audience will say logical, half the audience will say emotional, let's say. And I said, "If I look at your presentations that you create, they're going to be based around what you are, logical or emotional. The problem with that is that you're only going to connect with half the audience. So, you need to build the logical and emotional aspect into your presentation to capture the whole audience."

 

0:27:50.8 Bill Scherkenbach: Well, I would argue that you're missing a third of it because you didn't check for the physical folks. I mean, in the story I tell about what we were doing at Ford, our vice president of supply purchasing was listening to Dr. Deming and said, "Well, we need longer term contracts." And so he had his people talk to the buyers down through the ranks and we need longer term contracts. And at Ford, a longer term contract was a contract that was more than one year. And so, yep, there were classes. It's important to get it done. Everyone's enthused. We look at it six months later, no change. A year later, no change. And so we looked at, because some people react to physical stimuli. And so we looked at the policy. And in order to get a long term contract, then you had to go through three levels of supervisory approval. No person in their right mind is going to go through that hassle. So we changed one word in the policy and it changed overnight. So now if you need a contract that's less than a year, you need to go through three levels of supervisory approval.

 

0:29:48.5 Bill Scherkenbach: And the long term contracts were magically appearing. So there are physical people. That is not a pejorative. I know that the educators are saying, "Well, the logical and emotional, but physical is a very viable way of getting stuff done." That should not be a pejorative.

 

0:30:14.1 Andrew Stotz: So I think now when I'm looking at my teaching in presentation, when I think about physical and presentation, there's people that really like props. They like having physical things to bring up on the stage. They like people, "Hey, stand up and raise your hands," or "Turn and talk to the person next to you," or something like that. So maybe that's what I need to do is bring that physical into my thinking and teaching.

 

0:30:44.0 Bill Scherkenbach: Yeah, I would recommend that. Find a way. There are many dimensions of physical. But you've got my second book. There are a bunch of ideas. 

 

0:30:58.9 Andrew Stotz: Right here. 

 

0:30:59.8 Bill Scherkenbach: Okay. Yep, yep, yep. Let's see here. Now we're going to go that transformation is not hierarchical. And this is hugely, hugely important. Again, if it works for you, don't make the mistake that it's going to work for everyone. And one of the sequences is everyone knows form follows function, form follows function. Physical form follows logical function. And in the automobile industry, if an automobile is to be fuel efficient, that's the function. It's got to have a jelly bean form. It's got to be aerodynamic. If the function of the vehicle is to carry passengers in comfort, the form has got to be a shoebox. Okay. And so that certainly form follows function. A screwdriver, whether it's the tool or the drink, the form follows function. If the function is to, no matter what the screw head is, you need to be able to screw it in or unscrew it, the form of it, you're going to give that head some leverage to be able to turn it.

 

0:32:36.9 Bill Scherkenbach: And if the function is to relax, you need to have a good vodka in the screwdriver, in the drink anyway. So if we look at how animals have evolved, a bird's beak is a prime example of over the years of whatever you want and whatever you want to say happened, the beaks went from blunt to very peaked so that they could get into a particular flower and be able to feed themselves. Dr. Deming used the example of what business are you in and the carburetor people went out of business because they only thought in terms of form. But if the function of the carburetor was, as Dr. Deming said, provide a stoichiometric mixture of air and fuel to the combustion chamber, then you might expand the number of forms that could be useful. So a number of examples of form following function, but function also follows form. The logical follows physical. And we're looking at it in the US government today. If your headcount is cut in half, you can't keep doing the same functions you were doing.

 

0:34:43.4 Bill Scherkenbach: You've got to figure out what your function is. So your function is going to follow form. Logical is going to follow the physical because you don't have the resources. In other times, when I was in Taiwan, I used the example of, if the price of petrol gets to 50 new Taiwanese dollars, the function of the automobile is to sit in the parking space because gas is too expensive to go anywhere. And again, the function of, I mean, if the function is security on the internet, one of the forms is the CAPTCHA. You have to identify, click the picture of all of the cars in this picture to prove you're a human. Next week, I'm going back up to Michigan to be with some of the grandchildren, but my daughter has toddlers, twins, that are 19 months old now. And whenever she is lying on the ground or on the floor, the twins sit on her. And I keep thinking of these large language models who are, that are in the AI approach to, she could be classified as a chair because her function is something for babies to sit on.

 

0:36:43.3 Bill Scherkenbach: And so it even applies in the AI generation. Okay, so now we come to seeing is believing. Physical leads the emotional. In Christianity, the doubting Thomas must see for himself. Some people don't really appreciate, it's not necessarily believing, but the emotional impact of going to our Grand Canyon or seeing something that is so indescribably beautiful and vast is, you have to see it to believe it or appreciate it, actually. The use of before and after pictures, if unless I see the before picture, I don't believe you did lose 150 pounds or whatever the before and after is, seeing is believing. Other, who is it? Thomas Kuhn in The Essential Tension wrote of Foucault. There's something called Foucault's Pendulum. It's a weight on maybe a 20 meter wire that back in the 1850s, he really was able to unequivocally get people behind the Copernican view that the earth really is rotating because that was the only explanation that this big, huge pendulum and the figure it was tracing in the sand, he had a spike at the end of it. Absolutely, okay, I believe the earth is spinning before the space shuttle.

 

0:39:07.4 Bill Scherkenbach: So, and yet, okay, seeing is believing, believing is seeing. Emotional leads the physical. Many times our beliefs cause us to use or see or miss seeing something I've said or quoted a number of things. The greatest barrier to the advancement of knowledge has not been ignorance, but we think we already know it. And so we're not going to even consider another perspective. Our friendships, our like of someone or dislike of someone can blind us to other qualities. The placebo effect, conspiracy theories, they're all believing is seeing. You believe in UFOs or unidentified aerial phenomena now, you're going to see a whole bunch of them based on your belief. And then there's feeling should drive reason. Emotional drives logical. You use your gut or intuition to make decisions. I mean, impulse sales, what's on the cap in any grocery store. You're going to buy the sizzle, not the steak. At least that's what they're selling, the sizzle. Political battles often play on the heart. So rescuing someone, emotional drives logical. If you see on YouTube, but even before that in the newspapers. I don't know if anyone remembers newspapers, but yeah, they would show pictures of someone running into a burning building and try and rescue someone or a crashed car getting them out before it explodes.

 

0:41:30.3 Bill Scherkenbach: If you had to think about it, you wouldn't do it perhaps, but the spur of the moment, the feelings driving over reason. Choosing a career for fulfillment and not the money. A lot of people do that and that perfectly fine. None of these as I go through them are a pejorative. They're perfectly, everyone uses, well, all of these at various points in time in your life. And last but not least, reason should prevail over passion. That logical rules the emotional, make a decision on the facts. Don't cloud your decision with emotions. Some of the ending a toxic relationship or diet and exercise. You're using reason. I've got to stick to this even though I'm hungry and sore. I've got to do this. And hopefully investing. You're not going to go for the latest fad. And there hopefully is some reason to investment strategies.

 

0:43:04.7 Andrew Stotz: And when...

 

0:43:06.8 Bill Scherkenbach: Go ahead.

 

0:43:09.1 Andrew Stotz: Let's just take one just to make sure that we understand what you want us to take from this. So seeing is believing and believing is seeing. And I think in all of our lives, we have some cases where we don't believe something and then we see it and then we think, "Okay, I believe now." And there's other times where we have a vision of something and we believe that it can occur and we can make it happen. And eventually we get it, we get there. So seeing is believing happens sometimes and believing is seeing happens sometimes in our life. And then some people may be more prone to one or the other. So what is the message you want us to get is to recognize that in ourselves, we're going to see it. It's going to be one way sometimes and another way and other times. Or is it to say that we want to make sure that you're aware that other people may be coming from a different perspective, the exact opposite perspective? 

 

0:44:04.5 Bill Scherkenbach: Yeah, it's the latter. This whole thing is really what management, how is management going about communicating. And if they think if what works for them is form follows function or feelings should drive reason, then they have to be aware that other people need to, might look at it the other way around and approach their communication. Again, and this goes to the voice of the customer and the voice of the process. Every one of us has an individual voice of the customer. And people, psychologists would say, "Well, that's internal motivation or motivation's internal." Many of them do. Having said that, it's management's job who manages the process to be able to, if someone is motivated by money, that's important to them, then management needs to talk on that frequency. If they want retirement points or time with their family or recognition in other ways, what will, and Deming mentioned it, what will, he gave a tip to someone who just wanted to help him with his luggage getting to the hotel room and gave him a tip and completely demoralized him. And so management's job is to know their people, they're the most important customers that management has if you're going to satisfy whatever customer base your organization is trying to meet. And so how to get stuff done, getting things done, this applies to all of it.

 

0:46:15.5 Andrew Stotz: Fantastic. All right, I'm going to stop sharing the screen if that's okay?

 

0:46:19.9 Bill Scherkenbach: Yeah.

 

0:46:20.6 Andrew Stotz: Okay, hold on. So an excellent run through of your thinking, and I know for listeners and readers out there, you've got both of your books, but one of them I've got in my hand, Deming's Road to Continual Improvement, and also the other one, which we have right here, which is The Deming Route to Quality and Productivity, both of these books you can find on Amazon, and you go into more detail in it, in particular in The Deming's Road to Continual Improvement. Is there anything you want to say either about where people can go to find more and learn more about it, and anything you want to say to wrap up this episode?

 

0:47:04.1 Bill Scherkenbach: Yeah, the first book, my second edition, is in e-book form on Kindle. You can get it through Amazon or Apple Books. And in Apple Books, that second edition has videos of Dr. Deming as well as audio. And a whole bunch of stuff that I put in my second book. And that's in e-book format, immediately available from Apple or Kindle.

 

0:47:37.0 Andrew Stotz: So let's wrap up this episode on getting things done. Maybe you can just now pull it all together. What do you want us to take away from this excellent discussion?

 

0:47:49.6 Bill Scherkenbach: As we began, if what works for you doesn't necessarily work for everyone else. And the larger your span of control, the larger your organization, you have to understand to be broadcasting on physical, logical, and emotional levels, as well as trying to help people balance their sense of individual and their sense of team and family.

 

0:48:22.5 Andrew Stotz: Great, great wrap up. And the one word I think about is empathy, and really taking the time to understand that different people think differently, they understand differently. And so if you really want to make a big change and get things done, you've got to make sure that you're appealing to those different aspects. So fantastic. 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. And also, you can find Bill's books on Amazon. And as he mentioned, on Apple, where there are videos in that latest book. You can get them on Kindle, on printed books. I have the printed books because I love taking notes. And so this is your host, Andrew... 

 

0:49:12.0 Bill Scherkenbach: Yeah. But old people like that.

 

0:49:15.4 Andrew Stotz: Yes. We like that. So this is your host, Andrew Stotz, and I'm gonna leave you with one of my favorite quotes from Dr. Deming. And that is, that "people are entitled to joy in work."

What is your data trying to tell you? In this episode, John Dues talks to Andrew Stotz about why most leaders misread data, overreact to single results, and miss the real story. Discover how Deming thinking exposes when change is truly happening and how to use a process behavior chart to listen to the real story. Plus, find out why nine years of ‘stable’ results may still demand transformation. Tune in and rethink data-driven leadership! 

 

0:00:02.2 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 John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is understanding variation is the key to data analysis. John, take it away.

 

0:00:27.8 John Dues: Andrew, it's good to be back. Yeah. So, we've just started the school year in Ohio, so I thought doing a session on goal setting would be a good place to kick off the year. And I was thinking a lot of leaders, school leaders and leaders in general, are setting goals around this time period. And I was really thinking about having this Deming lens. I was thinking, how did I set goals before I sort of started understanding this approach? And it's, you know, this is one of those things where if you really stop and think about it, goal setting is a lot harder than it seems at first glance. Things like, how do you set a reasonable goal? And then once you've gotten to that place, how do you know if things are improving? How do you know if things are getting worse? And I was thinking how powerful this understanding variation method is for folks that may be struggling with those questions.

 

0:01:32.9 Andrew Stotz: Yeah. In fact, that's a great question for the listener and the viewer. Like, how do you set goals? How did you set goals in the past? How have you improved that? And I was thinking when you were speaking, I didn't set goals. I gave proclamations. You know, 20% of I want to see this and that. And they were just stretch targets without any means or methods. So yeah, interesting.

 

0:01:55.2 John Dues: Yeah. How do you set the target? Was it arbitrary? Is it based on some standard that you heard somewhere? A lot of times you have no idea sort of what's behind that target or you've sort of associated it to something that's familiar. Like in my case, we often sort of set goals that sort of mimic the grade scale. So, you know, 80% is a common goal for something like test scores, you know.

 

0:02:23.7 Andrew Stotz: But they don't even call them goals anymore. They call them, let me remember, I think it's called KPIs.

 

0:02:30.0 John Dues: KPIs, targets, you know, lots of different things for sure. And I think what I've seen is that a lot of the reason that goal setting is so hard is because you, well, one, you misinterpret your data in the first place. And a lot of that misinterpretation, at least in the education sector, is because leaders don't have the knowledge. They don't know about natural variation. They're typically making comparisons between some current performance level, some previous value. But those two things, those two data points don't show you, don't convey the behavior of that data across time. So, what we do and what I did before I sort of discovered this method is you overreact to a single data point. Probably less frequently, you underreact to the data because you don't have this understanding of, you know, how much is the data moving up and down sort of naturally almost no matter what you're doing. Now, that's not always the case, but that's the case that I've found in a lot of situations. And so until you start to take that into account, those natural ups and downs, then you just misinterpret the data over and over again, usually by overreacting is what I've seen.

 

0:03:54.9 Andrew Stotz: Yeah.

 

0:03:56.0 John Dues: So there's, you know, I think as a starting point, people in the Deming community will be familiar with, a lot of people. But others listening to this probably have never heard of this idea of dividing variation into, I've heard it described as like two flavors. There's the routine variation, what I call natural variation, things vary naturally no matter what you're doing. And then there's exceptional variation where things are so different that there is reason to pay attention to this. And what I found through studying this is, the key is knowing how to tell the difference between those two types of variation. And don't do that, lots of confusion, lots of wasted effort. And so that's really where the power of this methodology comes into play. And for anybody that's studied this, you sort of realize that you have to have a tool to make that differentiation. It's not arbitrary. And so that's where what I call the process behavior chart, some people call the control chart, where that comes into play because that tool allows us to tell what type of variation is present. And it also allows us to tell if the system is predictable or unpredictable. And once we have that understanding, then we can chart an improvement sort of roadmap that makes sense.

 

0:05:21.8 Andrew Stotz: Yeah. In fact, I've applied two of the things, you know, one of the things to my pass rates and admission rates, I applied the process chart, the control chart, based upon your recommendation a long time ago. And it did help me to kind of think if, you know, in my case, I wanted to break out of that standard outcome that I was getting. And so I realized, something has to change substantially in the system in order to get a different result than this variation that I was getting. That was the first thing. And then the second one, a couple of nights ago, I was giving a lecture and I was using your work that you and I have talked about, as well as Mike Rother's stuff on goal setting and having the target. And then there's that obstacle. And what I realized when I gave a little talk on it and I used the diagram and I showed the obstacle, it became kind of apparent to everybody like, oh, yeah, there's an obstacle there that we don't know how to solve.

 

0:06:27.6 John Dues: Yeah.

 

0:06:28.3 Andrew Stotz: And that's where PDSA came in. And we started talking about that, as you have taught previously. So, yeah, I'm excited to hear what you have to say today.

 

0:06:38.2 John Dues: Yeah. And the Mike Rother model, I mean, he does have this target that's this long term target that's pretty hard to hit. And you don't really know what you're going to do. But the difference there then in the situation I'm describing is that that in Mike's model, that target is knowingly outside of the current sort of capability of the system. And they're coming together as a team and saying, how do we get to that target six months from now or a year from now? And we're working towards that rather than someone has just arbitrarily set some target, without a realization that the system isn't capable of hitting that currently. Those are two completely different scenarios. Yeah. So, I think I'll share my screen. Well, actually, before I do that, I would just say, too, because I know sometimes when I introduce these things, a lot of times people get scared away because they think the math is hard. And what I would say there is that there's the creation of a process behavior chart probably takes about fourth grade level math skills. You really only need to do addition, subtraction, multiplication, and division.

 

0:07:49.3 John Dues: That's it. But the thinking, I think, actually can be taught all the way down to the kindergarten level. And I've actually seen kindergartners explain the data on a process behavior chart. So, if anybody gets scared away at this part, the math is simple and the thinking is also pretty simple and powerful once you sort of have the basics. So, I'll go ahead and share my screen so the folks that are watching have a visual to follow along on. And for those that don't, I'll do my best to describe it. When we're talking about a process behavior chart, and this one's sort of an annotated version so that things are clear. But basically a process behavior chart is just a time sequence chart. It has upper and lower natural process limits, and we plot data for some measure that we're interested in. And the chart typically has a central line so that we can detect a trend of those plotted values toward perhaps either limit. So, this particular chart, the data is the percent of students who scored proficient or higher on the Ohio third grade reading state tests from spring 2004 through 2015. 

 

0:09:06.8 John Dues: So, I've labeled sort of some of those key parts of the chart. So, just kind of call those out. Again, the red lines are the lower and upper natural process limits, sort of bound where you'd expect the data to be in a stable system.

 

0:09:21.1 Andrew Stotz: And those are 1, 2, 3 standard deviations or what?

 

0:09:28.1 John Dues: Well, this particular chart, it's what I call a process behavior chart. So it's actually, it's not standard deviation. It's based on a measure of dispersion called the moving range. And then there's a formula that smarter people than me figured out sort of how to use that moving range to set the red lines. But the important thing to know about the limits is that they're set empirically. And that just means that they're based on the data. And so they are where they are, not where I want them to be necessarily. I don't get to choose where they are, how wide they are, where they're placed numerically is based on the data itself. And then that green center line for this particular chart is the average of all the blue dots. And then the blue dots is each year of, again, testing data.

 

0:10:19.4 Andrew Stotz: 2004 to 2015 as the x-axis, yep.

 

0:10:27.0 John Dues: Yeah. So, you have a decade and a half or so, or sorry, a decade plus of data here. So, a good amount of data. So, you can kind of see how things are performing over time on this third grade reading test. And so the purpose of the chart, like we talked about, is to separate those two flavors of variation, the routine and the exceptional. And this chart is a really great example of just natural or routine variation. So, I'm looking for patterns in the data, like a single data point that would be outside the end of those red process limits. And you don't see that. The results for these years instead are just bouncing around an average of about 78.5%. Now there's some years where it's a little higher than that and some years where it's a little lower. But the point is none of those increases and decreases are meaningful. There's only that natural variation present. But the problem is, in the typical data analysis method, what I call the old way, the simple sort of limited comparison, is that a leader will rely on comparisons between the current figure and some previous value.

 

0:11:48.9 John Dues: And probably the most common and why I chose this data, at least in my world, is a leader will compare last year's test scores and this year's test scores. That's very, very common. But the problem is, again, that what I'm calling a limited comparison, the comparison between two years of data, it doesn't take natural variation into account. So, what happens is we try to ascribe meaning to those increases or decreases between data points when in reality there's often no difference to be found. And I have a really great example of this. Let me switch my screen here. So, there's a lot of information here, but it's pretty simple to understand. So, this is a snapshot from 2017/2018 state test results. And so this is a document that was published by our Department of Education here in Ohio back during those school years. And the thing is, it may be eight or so years old, but it's as relevant today as when it was published eight years ago. We're still making the same sort of mistakes. So, we're basically, when we look at the data in this chart, we're basically being led to believe that there's been this meaningful decline in performance in third grade ELA.

 

0:13:16.4 John Dues: That's what's signified by that red arrow in the first row of the table. So, you have the ELA data says that in '16/'17, 63.8% of our third graders were proficient. And in the following year, 61.2% were proficient. And there's this red down arrow to say, oh, things got worse this school year, at least when it was published. But then if you look at the blue box, the text for those that have video, in the text it says we're not supposed to worry because, "third grade saw decreases this year, but has maintained higher proficiency than two years ago." So. Then you start to think, well, which is it? Should I be worried about my third grade ELA state test scores because of the most recent decrease, you know, as of when this was published? Or should I not worry because the scores are better than they were two years prior to that?

 

0:14:21.7 Andrew Stotz: And that depends what side of the argument you're on.

 

0:14:24.4 John Dues: Depends what side of the argument you're on. What story do you want to tell with this data, right?

 

0:14:30.3 Andrew Stotz: So, it's bad enough to be potentially misled by this probably common variation, but then to have both sides of an argument be misled at the same time.

 

0:14:41.0 John Dues: Right, yeah. Ultimately it seems like what they're trying to do is show improvement because you have this big headline up here that says, Ohio students continue to show improved achievement in academic content area.

 

0:14:55.2 Andrew Stotz: Yay!

 

0:14:58.5 John Dues: But there's a way to actually answer these questions definitively using this method, right? And so what I did was I took the data from the three years of the state testing for third grade ELA from this state education department publication, and I just plotted it on a process behavior chart. And then I continued plotting it for the more recent data that's happened since this, because three data points isn't a lot, so I kept plotting it. And so now we have, going all the way back to the first year of data in this state testing document, we have 2015/2016 data, and of course now we have data all the way up through the end of the last school year, 2024/2025. So, we have nine data points. So I plotted it, right? It looks like this. So, here's those same data as the first three data points, spring 2016, spring 2017, spring 2018.

 

0:15:58.3 John Dues: That's from the table from the previous slide. And then I've continued plotting things for, you know, spring of 2018, '19, '21, '22, '23, '24, and '25. So, now we have nine years of data. And what we can see is, just like what I would have predicted, even if I had only had those three years to work with that were from the state testing document and not the more recent data, but there's no evidence of improvement. It's definitive. And so you see these nine data points. They're just simply bouncing around this average of 61%. That's what the green line shows. It's almost perfectly balanced, in fact. So, three of the points are actually below the average. One point is almost right on the line, the average line. And then there's five points above. And if you follow it from point to point, it increases, then decreases, then increases, then decreases, then increases very slightly for a couple or three or four years in a row. Right? But there's no signals or patterns in this data to indicate any changes of significance. Right? So claims like, you know, yeah, we've declined in this most recent year from that testing document or, oh, we shouldn't worry too much because it's better than two years ago. All of that is nonsense.

 

0:17:24.6 Andrew Stotz: So, the title should have been nine years of no improvement. 

 

0:17:29.7 John Dues: Nine years of no improvement. Nine years of stable data. And the thing is, a lot of data looks just like the state testing data over time. Not only in education, but in other things. And how I've heard this described by people that use this methodology is that, claims of improvement are often nothing more than writing fiction. And I think that's a very good description for what we see here. And the thing is, is like, I'm not trying to throw the person that wrote that document under the bus. All I'm saying is that there's a better way to be looking at data like this, a way that makes more sense. 

 

0:18:24.9 Andrew Stotz: It made me think of the Mark Twain quote, rumors of my demise are greatly exaggerated.

 

0:18:39.9 John Dues: Give me one second here. My screen switched on me. There we go. Okay. So, when I think about this data, there's no real decline in performance, there's no real increase in performance. It's just stable performance. I think the key for leaders, systems leaders especially, is that this system, the way we would describe it is it's producing predictable results, and it's performing as consistently as it is capable. And so it's a waste of time to explain the natural variation in a stable system. Because what people would say is that there's no simple single root cause for this noise.

 

0:19:24.5 Andrew Stotz: And I think it's even better way of saying it. It's not a waste of time, it's a waste of your career.

 

0:19:32.6 John Dues: That'd be a very apt way of describing this.

 

0:19:36.0 Andrew Stotz: It kind of goes back to the point that Dr. Deming said, which was that, a manager could spend his life putting out fires and never improve the system. And every little thing above and below was a little, little mini emergency or a response was made every year because of the under or over, you'd just spend, you know, it would just be whack-a-mole.

 

0:20:01.9 John Dues: Yeah. But I think the thing for people to understand is I'm saying this system is performing as capable as it is, or as the performances is what this particular system is capable of. But that doesn't mean just because it's stable and predictable, like this one is, you know, it's up above 61% one year, and then it's down below it a little bit or right on the line. That doesn't mean that stable means acceptable. It doesn't mean stable is satisfactory.

 

0:20:37.1 Andrew Stotz: I'm thinking that this is neutral, you know, it's an observation rather than a judgment.

 

0:20:42.5 John Dues: Yeah. It's just what is. It's the process is producing what you would expect it to produce because it's stable and predictable.

 

0:20:49.8 Andrew Stotz: I want to just mention that my mind's wandering because I know that you help people with these types of charts. And when I was working with a hospital here in Thailand, they had a great room that they set up that was all blacked out and it was full of these great computer screens and guys in their technicians, like 10 of them in this room. But the room was dead silent, blacked out 100%. And they were radiologists and all the x-rays, MRIs, and everything that were being done on the machines outside were coming into them and then they were making their judgments on it. And then they would submit that and then the doctors would very quickly get a read on that. And I was just thinking, imagine being a person that just all day long looking at these types of charts. Like just any system can be described by the... And then what's your judgment on this? Yep, common cause. That's it. 

 

0:21:50.9 John Dues: Yeah. And I think it obviously doesn't mean that there isn't work to be done. Like in this case, even though it's stable and predictable, so if I was putting a bet down on what the results are for spring 2026, at the end of this school year, I'd put my money somewhere between, let's call it 55% and 65%. And I'd be right almost every single time, I think, as long as nothing changes. But that doesn't mean, like I said, it doesn't mean there's not work to be done because when you look at this, this means that about 60% of third graders are proficient in any given school year on this Ohio third grade state test, which means that two in five students are not reading proficiently. So, the improvement roadmap, there has to be some fundamental changes to how we do third grade reading instruction, curriculum, assessment. Something fundamental has to change if we want to get a different set of results.

 

0:22:54.8 Andrew Stotz: And one of the things that I've kind of come to believe in my life, right or wrong, I'm not exactly sure, but it's like having traveled to so many countries and seen so many places, I kind of feel like people get what they demand. Like the population of a country, if they don't demand certain behavior from politicians, they don't get it. And so on the one hand, this is a neutral thing, but I think you can also make a judgment that the population of Ohio is not in a continuous uproar to see this change.

 

0:23:39.0 John Dues: Yeah. Well, I would say very few people even have this picture in their head, whether it's educators or the general public, because every time we get one of these state testing reports, it usually has only two or three years of data. So no one even remembers what happened.

 

0:24:01.9 Andrew Stotz: I agree that they don't have clarity, real good clarity like you're bringing us here. They have an understanding of what's happening generally. And this is what, so the reason why I'm mentioning that is because part of the benefit of trying to understand the state of a system is to understand that the level of change or work or new thinking that has to go into saying, modifying, let's just say that the population was in an uproar and they decided that they wanted to get to 90% proficiency from 60%. The level of rethinking is such a huge thing. And I think what this chart tells me is like, that's kind of what's set in stone. And in order to move beyond what's set in stone, there is a whole lot of work and a whole lot of new thinking that has to go into that. And it must be continuous. And that's part of the constancy of purpose. And you do it for three years and then a new guy comes in and he changes it. And then next thing you know, it's not sustained.

 

0:25:17.4 John Dues: Yeah. I mean, yes, you'd have to do something significant and then you'd have to stick with it. That constancy of purpose phrase is right on because you'd have to, first you'd have to develop the right plan and then you'd want to test it. But then once you started seeing some evidence of improvement, you'd have to stick with that plan for a decade or more to see those types of results. And that's really hard when the political will shifts, the focus shifts, you have a pandemic, whatever the thing is, you have less money for school, whatever that thing is or any combination of that, it makes it very challenging to sustain.

 

0:25:57.8 Andrew Stotz: And the reason why I'm raising this point is because it just kind of really hits me that take away Ohio, take away education, take away all of those things and just produce a control chart on any process in any business, in any school, and you're gonna see the current state.

 

0:26:17.3 John Dues: Yep, absolutely. Yeah. You can use this in any setting, any data that occurs over time, you could use this methodology.

 

0:26:24.8 Andrew Stotz: And one of the questions I have in my mind as I was thinking is like, why change it? The level of effort required to sustainably change that is just incredible. And you could argue that, okay, there's companies that build a competitive advantage by saying, that's not the status quo that we want to exist in and therefore we're gonna create a whole new business built around something different that produces a result that's considerably better than that. But it happens for sure, but we're much more likely in our lives if we were to see that to just let it be.

 

0:27:03.6 John Dues: Yeah. Yeah. And when you get it down, when you sort of zero in and get down to the sort of local level, there are schools that sort of performed in this sort of general fashion that made changes at the building level and then got significantly different results. So, it becomes a little easier. It's not easy, but it becomes easier when you're talking about a single school building and coordinating the efforts there versus trying to do that across all the school buildings.

 

0:27:32.9 Andrew Stotz: And I think this is what, when Dr. Deming talks about leadership, this is what he's talking about.

 

0:27:39.1 John Dues: Yep. Yep. And I think, you know, the good thing is here, if this is resonating with you, whether you're a school leader or the leader of some other type of organization, you know, you've probably struggled to interpret your most important data. So, before I discovered this method, I didn't really have a method per se. I'd put numbers in a table and then try to look at them and try to sort of ascertain what was happening on. And so I think it's, you know, if you've never heard of this, it's totally fine. Most of us were never taught how to understand variation in our data. But I think there's two sort of big ideas I would take from this as we've talked about this. The first is just taking natural variation into account. Just meaning plot your data over time, plot your dots, and look at how it's moving up and down over time. So, that's the first big idea, this idea of natural variation. Things are going to move up and down just naturally, no matter what's happening, even if nothing of significance has occurred.

 

0:28:47.6 John Dues: And then big idea two is that you can use this chart, this process behavior chart methodology to differentiate between those two types of variation that I talked about, the routine or natural variation, and then the exceptional variation. And then once you do that, you're gonna get some very powerful insights into what your data looks like, because people are gonna say, oh, I know why that happened. I know why that looks like that. Now that I see it like this, I have an understanding for why the patterns look like they do. And then you can start to turn that sort of type of analysis into better outcomes. And that's really the point of doing this is that you, you know when to react, when not to react, you are making sound decisions based on a logic, a logical model, a logical data model. And the best part is it's very simple. Like I said, a fourth grader can do the math required to create the chart. And I've seen kids as young as five or six interpreting the data in a chart. So, that means that we can all do it for sure. It's not actually that difficult.

 

0:30:00.6 Andrew Stotz: Yeah. And I was just thinking of Newton's law of inertia, meaning an object stays at rest until acted on by an outside force.

 

0:30:12.7 John Dues: Yeah.

 

0:30:13.8 Andrew Stotz: And I think what you're showing is the state of inertia.

 

0:30:18.5 John Dues: Yeah. Yeah. Yeah. The state of inertia. And I think it's just, you know, you don't know what you don't know. But once you see this and, I did some of the figuring this out on my own reading about it, listening to other people talk about it, but I talk to a lot of people and got a lot of guidance. So if this has piqued your interest, my suggestion is reach out to somebody that has done this before, at least at the start. Because there are a lot of, you know, while I am saying you can create a chart with fourth grade math and I've seen kindergartners analyze the charts, there is some learning, there is some technicality to it. And so I think if you have a coach, even better because you're gonna learn it so much faster and be able to sort of turn that learning into results so much faster.

 

0:31:07.0 Andrew Stotz: And maybe the starting point is trying to figure out of all the different measures that I've got in my business, in my school, in my life, what's one that I get regularly? And I like data that comes out more than annual because then it's just such a long process. So if I have daily data, weekly, monthly, you know, those types of data points, then from that, you know, and what's one thing in your life that would be a data point that you'd like to look at? And I would even argue the first step is just to start collecting it into, let's say, an Excel file and just collect that raw data. And you can make a chart of that raw data. And the benefit of the process, you know, control chart and the process chart is that what you're seeing is, you know, tools within that chart to help you interpret. But even if you just start by figuring out what data point you wanna look at, start collecting it, do a month or two of getting that data, and then you can start saying, okay, now I'm gonna apply these tools, nothing wrong with that.

 

0:32:21.2 John Dues: Yeah. And you wanna show it to people, like whether that's teachers or students, you wanna show them the data that you're collecting because they're gonna be a part of that improvement process, no matter what type of data that you're looking at, at least in schools, you're always gonna want the front line people to be a part of that process.

 

0:32:39.4 Andrew Stotz: And the way I did that in my area of research when I was an analyst and I had a research, was I wanted to see the data of the output of our research operation. How much did we produce? I didn't have a strong opinion as to whether we should produce more or less or whatever. I just wanted to understand them. And so I started plotting that data on a weekly basis, and I labeled it pretty well. And then I just put it up on the wall, and I didn't talk about it. And I put it up, and people looked at it, and I didn't go and explain it, and I didn't put control limits or anything like that. I just put the data up. And I remember a Thai lady that worked for me came to me, and she said, I figured you out. And I was like, what are you talking about? And she said, I was out to lunch with a friend of mine, and she asked me, how many reports do you publish a month? And she said, my employee said, I publish six reports in a month. And my friend said, what?

 

0:33:45.4 Andrew Stotz: And she said, how many do you do? She said, I only do two in a month. And she said, what are Andrew's targets for you? My God, to get six reports. And then my employee said to her, he doesn't have any target for me. And then that employee of mine came back to see me after that lunch, and she said, I get it. You just put it up on the wall, and it raised the awareness for all of us, and we all looked at it, and then it influenced the way we thought about our job without you telling me, get four or six or two. And so sometimes, and I did that exact same thing when I worked at Pepsi when I was in 1989 when I joined Pepsi in the factory in Buena Park in particular, where I would put up on the wall, here's everybody's error rates from last night. And I would post that, and then the employees would just look at it and go, that's wrong. Okay. Fine, great, tell me. Let's look at the data.

 

0:34:44.8 Andrew Stotz: And I kept all the underlying data that was manual in my hands in stacks, and then they would go, oh, okay, so I did get that wrong. Let me fix that. And then I fixed it and put it back up, but it didn't look much prettier after I fixed it. And then all of a sudden, people started looking at it, and then they started having new information they never had. And I hadn't studied with Dr. Deming by that time, so I didn't even understand anything to do with the chart, but just putting up the chart without any major commentary is fascinating.

 

0:35:12.9 John Dues: Yeah. It starts those conversations, starts getting people sort of more involved, more engaged with the work. Yeah, I think those are all really smart moves that we often don't do.

 

0:35:25.2 Andrew Stotz: And I think that was why my boss suggested I go to a Deming seminar, because he saw me starting to do that, and then he had heard about Deming and knew a little bit, and then he was like, yeah, this guy could be suited for that.

 

0:35:36.6 John Dues: Yeah. It sounds like it was fate or something like that.

 

0:35:41.6 Andrew Stotz: Yeah. Definitely. So, I'm going to wrap up just by saying that, for the listeners and the viewers out there, I think a big takeaway is figure out that one data point, just one. You don't need five, just one that comes out consistently, daily, weekly, monthly, you know, something that's relatively regular, and then start collecting that data. Write it down on a, you know, I do have times that I just write it down on a manual chart, in my notebook. Write it down there. You don't even need Excel. Just start collecting that data and thinking about the collection of the data, what time of the day you get it or what time of the week or what time of the month, and then start collecting it. Then the second stage is start to, you know, obviously, if you can go to an expert, someone like John or others, reach out to them, LinkedIn or other place, you know, and say, hey, I've got this data. Can you help me? And then they can easily do the calculations and then send you back the Excel file and say, here it is with all the calculations, which you did to me on one of mine, and that was great. And then get that help, and then start to move yourself slowly into the process because I think one of the things that I take away from it is that this really is the present, and it is an accurate representation of what the system is capable of.

 

0:37:10.2 John Dues: That's right. Yeah.

 

0:37:10.8 Andrew Stotz: And if you don't understand that, then you're just going to be beating your head against the wall. So, anything you would add?

 

0:37:18.9 John Dues: No, just beat your head against the wall and you make stuff up about what is happening. That's often what happens. Yeah.

 

0:37:27.0 Andrew Stotz: Then you become AI. You're hallucinating.

 

0:37:30.1 John Dues: Yes.

 

0:37:31.0 Andrew Stotz: Well, John, on behalf of everyone at the Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And you can find John's book, Win-Win: W. Edwards Deming, The System of Profound Knowledge, and the Science of Improving Schools, on amazon.com. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, and that is that people are entitled to joy in work.

Discover how Andy Novins turns business challenges into big wins! Andy shares with host Andrew Stotz how he uses Deming strategies to outsmart competitors, watch for market shifts, and win loyal clients in one of the toughest industries around.

TRANSCRIPT

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 here with featured guest Andy Novins. Andy, are you ready to join and share your Deming journey?

 

Andy Novins: I sure am. Yep.

 

Andrew Stotz: We've done a lot of prep for this, had some good conversations, and I'm looking forward to it. Let me introduce you to the audience. Andy first got introduced to the teachings of Dr. Deming more than 30 years ago and has been hooked ever since. He attended Dr. Deming's four-day seminar in August of 1993, only four months before the passing of Dr. Deming on December 20th of 1993 at the age of 93. Andy was a co-owner of a women's athletic apparel company, which was eventually purchased by Warren Buffett's Berkshire Hathaway. For the past 23 years, he's been applying Dr. Deming's philosophy to his work in real estate, which traditionally has operated in what could be described as in opposition to the teachings of Dr. Deming. Andy, why don't you tell us a little bit about what you're doing right now and maybe a little bit about how you got into what you're doing now, and then later we're going to talk a little bit about your experience with Dr. Deming and all that. But just let us know, where are you at? What are you doing?

 

Andy Novins: Okay. Well, I am in Northern Virginia, just outside Washington, D.C., and after my partners and I sold the company that Andrew just referred to, I had to decide what I was going to do. And I had about six months to do that because part of the contract required me to help the purchaser, which originally was Russell Corporation, a big athletic, they made all the Major League Baseball uniforms and everything. We had to transfer my company's systems to their systems, and that was one of the worst six months of my career, watching everything we had done, which was really all Deming-based, being sort of dismantled and worked into another Fortune 500 company at the time. It was, somewhat, actually it was a few years later that Berkshire Hathaway bought it, and it was because Russell was not doing very well. It was a rescue-type purchase by Berkshire Hathaway, which sort of had some satisfaction in mind that their systems weren't all that good. So that's where I got into Deming, and I've taken a lot of what I learned from the apparel company into real estate, which, as Andrew just mentioned, is very volume-centric, volume-focused, and focusing on processes as opposed to systems.

 

Andrew Stotz: And in the real estate world, for those people that don't know, let's say real estate, what position are you in? For instance, my sister is a mortgage broker in Maine, and that's a different place within the whole sphere of it, but maybe you can explain exactly where you are in the value chain.

 

Andy Novins: Okay. We focus on residential real estate. What we call in real estate farm, okay? I send out 5,000 newsletters a month that show to eight different areas, really, but they're all within, believe it or not, two miles of my house. And those news, I've been doing that for over 20 years. I've never made a cold call. I will never call anybody and say, are you thinking of selling or anything like that. Yet, using this process, which is all really Deming-based, I've done about 10 times the volume of any other realtor in the 5,000 homes that I service. It's the process... I don't want to use process. The system we used is based on Michael Porter, his concept of competitive advantage. And it's a system that's focused on a value chain, things that we do that other people can't do. For example, there are close to 300 sales a year in my 5,000 home market. I see every one of them. And when you see a house that's on the market, you know a lot more than anybody else does by looking at pictures. If you've ever been to an open house and after seeing it on the internet, it's a lot different than what you saw in the pictures. No other agent can do that because most agents in my area focus on Northern Virginia, which would be about 20,000 transactions a year, not 300. So they can't even try to compete with me in my area. So that's the whole concept of it is doing things. As Michael Porter would say, you have a value proposition. That's my expertise in my local area.

 

Andrew Stotz: Porter talks about different strategies. One, he says, is the low-cost leader. Another is the differentiation. And the third one he talks about is focus and where you're focused on a niche in the market. And then I guess I always kind of think that really he's talking about two, because with focus, you're picking a niche, but then you're going to either be a low-cost leader or probably a differentiator in that focused area. But when you talk about Porter and what he's teaching, can you explain a little bit more for those people that don't know what he talked about?

 

Andy Novins: Sure. Yes. Basically, yes. I mean, I'll never forget. My partner and I were at a breakfast, realtor breakfast at one point, and there was an agent sitting across the table from us and he said, I just got this listing. And he said, but I had to go down to 1%. And he's, you know, for commission. And at that time, commissions were pretty much 3%. And he kind of looked at us and said, that's better than nothing, right? And that's the low-cost. Low-cost producers will never win. It'll always be somebody else. And Porter says, you can't be the best either. Okay. There's no such thing as the best realtor. There's always going to be somebody else. So the concept for real estate is picking a niche, that for me, it was farming. I'm a pretty good writer. So I write a newsletter, and people call me when they're ready to sell their house. And it's worked beautifully for... I started that in 2003. Okay. But there's people that focus on luxury, the luxury market or people that focus on first time buyers, or people that focus on... There's all kinds of different niches downsizing or upsizing. And so you can become an expert in anything. And that's how you differentiate yourself in real estate.

 

Andrew Stotz: And that concept of not competing to be best that Porter talks about is great because it also forces you to think. You're focused on the wrong thing if you're focusing on how to beat the competitor. And I always enjoyed the fact that Deming was so focused on the customer.

 

Andy Novins: Yes.

 

Andrew Stotz: And that, I think with Porter, I like that. But with Deming, I just really love the idea that he saw quality in the eyes of the customer. He saw innovation and continuous improvement in relation to the customer as primary over trying to benchmark off of some competitor.

 

Andy Novins: Exactly. And if I go back to my apparel business, the name of our company was Moving Comfort, and we just made women's apparel. Nobody else ever stuck to just that. We were the only company. Just, everybody broadened out to try to get more. So again, it's the same concept of a niche. Okay. But one of the policies, I guess, we've developed, it was a Deming related policy, which was fun, okay, was when we made a mistake, which we often did, whether we shipped somebody the wrong thing or we did other things, our objective was to make the, delight the customer, as he would say, make them happy we made the mistake. And that didn't matter what that cost to do that, sending them free stuff, doing whatever. And I think that's a Deming concept that we used in the apparel business aside from many, many others. Back to real estate, that's, I don't know anybody else in the Washington area that does what we do, because nobody's willing, that's the so-called trade-offs. Nobody's willing to say, I'm just going to focus on 5,000 houses.

 

Andrew Stotz: Yeah. It's scary.

 

Andy Novins: They can pick whatever they get.

 

Andrew Stotz: Yep. Yep. And maybe why don't we now go back to August of 1993. How did you find yourself in a four-day seminar? And I'm kind of jealous because what... My seminars I went to in '90 and '92 were two-day seminars.

 

Andy Novins: Really? Okay.

 

Andrew Stotz: And I had thought that he... I had thought by that time, maybe he was only doing two days, but then I learned that he was still doing four days. But what got you to that seminar? Where was it, and what got you there?

 

Andy Novins: Okay, I was going on vacation. Okay, this was in 1990. We were going to go to Cancun. And there's this, I guess they're still around, but there was a bookstore in DC on K Street called Reiter's. And it was all business and science. And I used to go there because pre-Amazon or anything like that. I think it was even pre-Borders. But I used to go there and spend an afternoon looking at books. And I found Out of the Crisis. And I brought it home and I said to my wife, by perusing through it, I didn't know anything about Deming at that point. But perusing through it, it just struck me as something I really wanted to read. And I went home and I said, I'm taking this book to Cancun, and I'm going to sit on the beach and read it. Well, I actually didn't read it till got home. But I got completely enthralled with it.

 

Andy Novins: And being in suburban DC, we're like eight miles from the White House. The Deming Study Group was very active in DC. Dr. Deming lived in DC. And there were just a lot of very well-known, famous speakers that would be part of our group, including Deming at one point, but I wasn't. But I think it was before I joined the group. So I read the book, joined the group, and after about three years, I had heard enough about the seminar that I wanted to go. And I went to that in Chicago. It was the first or second week of August of '93. And one of the things that I never really understood that Dr. Deming would say a lot was talking about being transformed, or the transformation that you get when you're studying his philosophies. And I always kind of said, well, that's not going to happen to me. It just was foreign to me. That third day of the seminar, I was transformed. I don't know how to describe it, but ever since then, I look at the world through his eyes and see things and think in systems and variability. And you get all that when you first get exposed to them, but you're not transformed. Somehow it all comes together. I couldn't describe it, I never thought it was, but that happened during that seminar.

 

Andrew Stotz: And what Dr. Deming talked about was the idea is that the person who's leading the organization has got to go through a transformation in order to truly implement this.

 

Andy Novins: Exactly.

 

Andrew Stotz: What was it like there? How many people were in the room? And what was your... You walked in knowing a bit. I walked in knowing nothing, basically. And it was just like, whoa. But I'm just curious, what were your first impressions? For those people that have never and never will have a chance to go in, give us a feeling about how it went.

 

Andy Novins: I don't know if I mentioned it was in Chicago.

 

Andrew Stotz: Yep.

 

Andy Novins: Okay. Which is a great city, and it was in the summer, which is often hot. But I was amazed because at that point, and I may be wrong, but I think it cost $1,000 to go. Okay. And he had 500, and I'm pretty sure that's about what it cost. And do you remember what yours was?

 

Andrew Stotz: Mine was about 500 people, for sure. I didn't pay for it, so Pepsi paid for it but I would think it was even more than that. But who knows? But maybe mine was a two-day, so it was less, I don't know.

 

Andy Novins: But it was 500 people. That's what I remember, because being a numbers person, I translate that to 500,000 for the four days. And so that kind of stuck in my mind. And he did a lot of them. And one of the things, too, that he did a lot of them, and I think, geez, he's making a lot of money doing this. He lived in a little tiny house on a street in Washington, and he worked in the basement. One of the things that happened to me after that, again, with the Deming Study Group, was his son-in-law, Bill Ratcliff, okay? Somewhere shortly after the four-day seminar, he called me and he said, I'm getting a lot of feedback, you guys at Moving Comfort are doing a lot of using Deming's theories and everything. Could I come and visit the company and you show me what you're doing? And I said, sure. I mean, any more exposure to any of the people interested in Deming at that point was fascinating to me. And so he came and he spent a good part of the day at the company. And then I'm not even sure if at the time I knew that he was Deming's son-in-law, but then we went out, his wife was Linda Deming Ratcliff, okay? And so he and Linda and my wife went out to dinner a couple of times after that. And it was fascinating to hear both of their stories about Dr. Deming. What I remember is Bill would say, we used to go over there on Sunday mornings and read the newspaper, and Dr. Deming would be down in the basement working. And he'd come up periodically and say, how are you doing, Bill? In his voice, and then go back down and work. And he constantly was focused on his work. And so those relationships just tied me into Deming forever, especially after the four-day seminar.

 

Andrew Stotz: Yeah. I think it was a discussion with Bill Scherkenbach when I asked him about what it was like in the basement. And Bill was telling me, I don't think we got this recorded, but Bill was telling me that somebody asked him why you have all of this stuff around you and in your office. And he said, I'm desperate. I'm absolutely desperate. And with the idea that he was on such a mission. And I just feel like when I went to the seminar, the first one was in Washington, and then the second one was in Los Angeles. I didn't know how significant he would be in my life at the time, and I didn't understand the transformation I was going through. But what I did later really come to understand is that he inspired me to have a mission. And like, why am I doing what I'm doing? It's one thing for all of us to be busy, working really hard, doing all kinds of stuff and bringing value to our clients. But for what? What's the mission? And was a huge, that's a much bigger takeaway for me now than it was then. But what I witnessed was this man who is very old, just conveying an incredible message. So, yeah.

 

Andy Novins: Yeah, it was, and he was... Well, DemingNEXT, if anybody is involved in that and can see a lot of the videos with Dr. Deming, especially during the years that I was interested in watching and everything else, he just had a unique way of presentation, but he did have a sense of humor. And it was a dry sense of humor, I guess, maybe going with his dry martinis.

 

Andrew Stotz: Yeah, tell us that story about Deming Martini.

 

Andy Novins: Yes. As one of the sessions at the four-day seminar ended, apparently this Deming Martini is famous or was pretty well-known at that point. So he described how he loved martinis and he acted out the process of making one. And again, he's 93 and just you could tell this is just part of his life he loved. And he, so he kept his vermouth in the freezer, okay? And it was, and so he demonstrated how he poured the gin, and then he acted out like he went into the refrigerator freezer and took out the vermouth. And then he would not open the bottle, but he would wave the bottle around the glass and then he'd put it back in the freezer, and he'd say, this is the best martini you can make. And he had a lot of stories that added a lot of spice to it.

 

Andrew Stotz: So when you left that seminar, what changed in the way that you were operating? And obviously you had already had awareness of the teachings, but did that inspire you to go to a different level or what did it cause?

 

Andy Novins: Yes, and I'm not sure at what point the so-called transformation took place in the four-day seminar. You knew that that's how you were going to think for the rest of your life. That wasn't, you were going to think in systems and variation and predicting from the system and all those things. But so I can't really remember what years we did it, but as an apparel, our company basically, we designed, manufactured through separate factories and sold women's athletic apparel to specially sporting goods stores around the country. Nordstrom's was a client, one of the bigger ones, L.L. Bean and those kinds of things. And so one of the things we implemented that was really a Deming concept was improving our shipping, the picking process, which is filling an order. And we automated that with a carousel, which brought the product right to the picker, the warehouse person, and barcodes and scanned the order, and it brought the thing right to them. It incredibly reduced our error rate in shipping. And at the time, this would have been like 19, this was '91 or somewhere early on that. And at the time, we were way ahead of other companies.

 

Andy Novins: Even Nike, they would get an order, they'd walk around and pick their orders. And so that was a Deming-inspired process or way of improving our system. With apparel and you're designing 100 different styles or sizes and styles and everything else, the design development group, the functional silos that, I don't know if Dr. Deming used that term, but the system that every department has to hand off is working for the next department. In apparel, it's really complicated. And that was the biggest Deming issue we would focus on. It never went away. You really had to always, because our designers would put bells and whistles into a garment. We were very high-end and it either wasn't practical price-wise or it wasn't practical in the factory or we didn't have a good source for where we were going to put it, where, what factory we were going to put it in, that type of thing. So that's where really the Caribbean Basin Trade Initiative at that point came out. That's where we had factory, up until about 1990, all our production was in the United States.

 

Andy Novins: After that, it got too expensive, labor, sewing labor in the United States. That's when most companies started going offshore. We did a lot in the Caribbean. And when you're manufacturing apparel, back at the beginning, you would ship, we would buy the fabric and we would ship it to the Caribbean factory that we were using and they would sew it, and put it together. And then trade agreements came out where the factories could buy the material. And essentially, instead of they being just a sewer, they would be making a finished product for us. That had huge implications on simplifying the system and transferring responsibility to the people that really needed it. But now maybe I'm getting too much into apparel, but...they haven't been doing it for 23 years.

 

Andrew Stotz: So let's talk about what you're doing about your application of Dr. Deming's teaching in real estate. And I know you've also brought something along to share and go through, but maybe you can just talk a little bit about how you're applying that in the real estate business.

 

Andy Novins: Yeah, and that's the control chart concept. And all real estate statistics are lagging indicators, whether we're talking median prices or active listings, or I guess active listings are the only one that's not a lagging indicator, but almost virtually every month's supply of inventory, all those things are lagging indicators. So they tell us as realtors what happened. And in my market here, it bottomed out after the 2008 recession in March of 2009. And until this year, it's gone straight up for 16 years. So most realtors, virtually no realtors... Well, most realtors haven't experienced a shift in the market, which is what we're going through now, where the market goes from being a buyer's or seller's market for all those years. And I'm talking about a strong seller's market. A seller's market is defined by the National Association of Realtors as any market where the months' supply is less than six months. And our supply was hovering around two to three weeks. And it's now almost two months, but the market has shifted and it's incredible how many people don't realize that.

 

Andy Novins: Everybody knows there's something going on, but the media takes care of that. But all the statistics we get are, again, median prices are still very high, okay? But using control charts, you can plot, for example, a couple of months of live inventory. That started going down in April, okay? I mean, that went out of the control limits in April, okay? That's telling us that something's happened. It tells us directly that the market shifted, okay? The other thing that I watch is price drops, okay? How many price drops? That went out of the control limits in, I think, June, they started out, okay? And we're looking at that weekly, and that's showing us every week, the number of price, it's so far out of the control limit right now, it's amazing. There's no... You can't... You can look at price drops, and you can look at months' supply on a graph, okay? But it doesn't tell you that the system's now out of control. But control charts do tell you that, so...

 

Andrew Stotz: Should we look at your control chart? Maybe that's a good time to do that.

 

Andy Novins: Sure, yeah. And before we do that, one of the things in real estate is seasonality, okay? And that hides a lot of problems because prices go up in the spring, down in the summer, down in the fall, up a little bit, then down. But let me bring those up and talk about them. Okay, you can see this?

 

Andrew Stotz: Yep, and for the listeners out there, I'll just describe. You've got a line chart up here, and a line that's going up and down, and then recently is going up a lot. And it starts in July of 2023, and it goes to June of 2025. And so why don't you take that away and help us understand what you've got here?

 

Andy Novins: Okay. So the control limits, the upper and lower control limit are the red lines on this. And going back to July of '23, everything was stable. And if we went back long before that, it would also have been stable.

 

Andrew Stotz: Yeah, and by the way, just to make it clear, it's monthly supply, or month supply, sorry, of housing.

 

Andy Novins: I'm sorry.

 

Andrew Stotz: Can you explain what it means, month supply?

 

Andy Novins: Yeah, month supply is the number of active listings at the end of a month divided by the average monthly sales for 12 months, the 12-month average. So it's basically saying if you've got 10 active listings and the average is two a month, that you've got a five-month supply of listings. Okay?

 

Andrew Stotz: And the average on this is one month supply.

 

Andy Novins: The average, right. And you can see where during the pandemic, we've had times where it went down to just a number of weeks, which is pretty incredible, but that's our market. So again, this chart is telling us that... Well, there's another thing, other ways that Dr. Deming would look at this. We've got several months where it's going, the month supply is just going up. So starting in December '24, you can see that the supply keeps going up. And then it went out and broke the upper control limit. So what he would say in this, looking at this chart is that up until really of March 2025, the system was in control, it was predictable, okay? And then starting in March or April 2025, it was out of control, it was not a stable market, and the market is a system.

 

Andrew Stotz: And it went up above the upper control limit of 1.6 roughly or 1.55. And now the highest it went up in May was about one point, almost, yeah, 1.8.

 

Andy Novins: 1.8, okay. And so Dr. Deming would say that number one, it's a shift in the market, number two, the market is no longer predictable. Okay? Clients don't like to hear that, but using these charts and explaining it to them, they do understand it. And in real estate, one of the most important things when markets are changing, or always actually for that matter, is managing client expectations, okay? And using Deming's theories and control charts, it makes it... And I'll get into that a little bit more in a minute, but managing their expectations becomes more of a science than scripts, which is what...

 

Andrew Stotz: One of the things I learned from Dr. Deming was be skeptical of data,  and I know I've spent my career as a financial analyst manipulating tons of data. And every time I see something out of control like we see here, the first question I ask is, is there an error in the data? And then the next question is, okay, so what's going on out there that the chart is one thing, but can you just talk briefly about what's going on? What do you think is behind this? What's causing it? What is that shift that you're seeing?

 

Andy Novins: Well, if you were asking me this in 2008, I could have told you. The irresponsible lending and all kinds of other things. Today, the market is in our market more than others is impacted by uncertainty. Okay. Uncertainty surrounding the impact of tariffs. Okay. But especially in our area, the impact on federal workers job security. Okay. In our area, which is an expensive area, almost any couple that is buying a house is buying it on two incomes. And if one of those, one of the members of the couple is, works for the federal government or is a government or works for a government contractor or is affected by any, in any company that may be impacted by government cutbacks, they're not buying a house right now. They're waiting. So they don't want to buy on one income. And so they pulled out of the market. And that's, that's the biggest reason for the increase in the supply. The other is,  people do want to move. People want to downsize and upsize. Well, most people have a 3% interest rate or better or slightly around there. So with the impact of low, you know, of rising interest rates and everything else, there's people that want to downsize. And if they move, they'd be paying more for their smaller house than they were for their house they're staying in. So they stay.

 

Andrew Stotz: What are, what are mortgage rates right now? Roughly.

 

Andy Novins: That's  675, 6.75. 30 year. But what's interesting on that, and I haven't done it, but it would be an interesting exercise is when I began my career as a CPA in New York, I moved down here in 1982 to be part of the company that I talked about before, the apparel company. I, when I said to her, when I had that opportunity, I said to my wife, what do you think about moving down to Washington? We lived in Westchester County, New York, and she said, well, sure, but, and at that point, I was treasurer of a bank in the New York metropolitan area, and she was willing to take the risk. It was a risky move, but she said not, but not, we can't sell our house. We have an eight and a half percent mortgage. We'll rent it, and if it doesn't work in Washington, we can always come back to it. So that eight and a half percent mortgage back in '82 was not something you got rid of, and people don't realize that the average mortgage rate in the past 50 years is eight percent. So at 6.75, it's not that bad, but it's relative to the three percent interest rates we had. It's making it tough for people to move.

 

Andrew Stotz: So just talking now, I just want to wrap up on the chart by saying, so once you use, you're demonstrating using a control chart in the industry of real estate, and you're discussing the fact that right now, you've got three points that have breaking out of the upper control limit, which now tells us, as you said, it's unpredictable at this point. What else, what do you take from that, and how does that drive your actions when you see this chart? How does that impact you, and in other words, how are you applying Deming's teachings once you've now done this?

 

Andy Novins: Great question. When you price a house to sell it, you use what we call comparable sales. When a market is going up or stable, comparable sales are a good indication of what you're probably going to price it at if it's going to go on the market soon. What realtors do is what we call a comparative market analysis, and that's comparing at least three homes to their home. There's all different ways of doing that, which is part of a Deming system too. But when you go to somebody and say, well, we got these three homes and they sold it at 800, but if you're going to put your house on the market next month, we're probably looking more like at 750. And most people would say, well, I'm not going to use that guy. This other realtor says 800 is the way to go. And using the control chart showing that the market has shifted and that those comps are no longer valid is one of the most valuable uses of control charts in real estate because, again, it's evidence that the comps aren't valid anymore.

 

Andy Novins: The other thing is comps represent, even if it closed yesterday, it went under contract a month ago. So the comps are just not necessarily good if the market is shifting, and this is pretty powerful evidence to a potential client that pricing is really important and you can't just use past comps. I'll go to the next chart, which is price drops. And this is something, again, our market really just shifted recently, so this is something I'm actually doing actively right now looking at. But you can see that this is weekly price drops. Okay, it started off monthly because I can't go back and get that data. But if I go back to a stable year, last year is the base. You can see that price drops were pretty stable process in the pricing system. They were...

 

Andrew Stotz: So what does that mean? Just so we understand, let's say the average is 25% projected monthly price drop. What does that actually mean?

 

Andy Novins: That's saying that every month that of the active listings on the market, 25% of them are reducing their price. That month.

 

Andrew Stotz: So in other words, 75% are either keeping it the same or raising it.

 

Andy Novins: Say that. Yes, right.

 

Andrew Stotz: The opposite of that. Okay.

 

Andy Novins: Right. And that's each month. That doesn't mean somebody didn't lower their price on that same house the month before. But it's registering the number of drops that homes on the market are doing.

 

Andrew Stotz: And that would mean it's like a pretty good seller's market again when only a quarter of listings need to drop their price in order to get the sale.

 

Andy Novins: Yes, exactly. Yep. Exactly. And you can see this...

 

Andrew Stotz: And let's just talk about the January 2024 to December of 2024. So for the year of 2024, what's your observation of the data?

 

Andy Novins: It was stable. It's not a change in the market.

 

Andrew Stotz: Yep. Okay. Normal variation.

 

Andy Novins: Yeah, normal variation. Okay. But when it starts to go up like it has, and it's even worse because what I'm using is an average for these weeks. The next week starting tomorrow will have the four-week average. They're actually quite a bit higher, the last two, than what they show here because they were averaged down. But when you see rampant price dropping, that's out of control, so to speak.

 

Andrew Stotz: Right. So it's gone from a mean of 25 up to 60-plus percent of monthly price drop. I'm just curious. It says on your y-axis, it says projected monthly price drop. Does that mean somebody's making some estimate on that, or what does that mean?

 

Andy Novins: That's because right now I'm doing it by the week.

 

Andrew Stotz: Okay. Ah, okay.

 

Andy Novins: Okay. And I'm averaging the week. And then when I get the month, it'll be like the earlier ones.

 

Andrew Stotz: So the most recent ones are the projected, and the other ones are the actual month.

 

Andy Novins: Yeah.

 

Andrew Stotz: Okay.

 

Andy Novins: And right, I'm using, I'm multiplying them times four the week. So it's right now I'm projecting what July will be, basically, the total, but it'll be up around 60%.

 

Andrew Stotz: And this chart corroborates the conclusions that you made in the prior chart, or are there any other additional...

 

Andy Novins: Yeah. And the month supply chart is more of a leading indicator of a market shift, because this is the reaction of sellers and realtors to a market they didn't anticipate properly. And so this is a much more now type of thing. And again, if I go back to a client and say, you know, all the comps are 800, but we're going to recommend 750, this is pretty convincing evidence that basically almost everybody in the market is reducing their prices.

 

Andrew Stotz: Yeah.

 

Andy Novins: And in a falling market, the worst thing you can do is chase the prices, chase it down.

 

Andrew Stotz: Yeah. And what this doesn't show, it shows that 60% are dropping their price. It doesn't show what the remaining 40% are. And that composition of that could just be, there could be no price increases. We don't know from this data whether that's holding the price the same or increasing it.

 

Andy Novins: Right. But it doesn't mean that there aren't homes in those active listings that didn't reduce their price, that reduced their price. They may have reduced their price last month. Okay. So it's really just showing the panic that's out there.

 

Andrew Stotz: Okay. Got it.

 

Andy Novins: But it's a great leading indicator from that standpoint.

 

Andrew Stotz: Okay. So two charts that show us the application of control charts and Deming's teachings there in real estate and making a note of the fact that these are now out of control. Interesting.

 

Andy Novins: Yes. And again, the most important thing you can do, I think, in real estate is accurately manage your client's expectations. Yeah. Because, and I'm going to back up for a second, that's another real benefit of having a niche practice. And again, like the competitive advantage Michael Porter concept. And for me, writing a newsletter, which gives them what we hope to be useful information for the 5,000 homes that get it. When they're ready to sell, again, I don't call them, they call me. And they call me because they trust me. They believe I know what I'm doing. And so part of a system that would be outside of what Dr. Deming talked about, but part of the system is your clients, the quality of your system is going to depend on the quality of your clients. And so having a niche, again, what I'm doing in terms of that so-called farming and the newsletter is I'm attracting clients that will trust me. Okay. That's so much a Deming concept in terms of the overall system and how it affects it. We see all the time when buyers that are buying one of our listings and they have all these problems and the other real estate agents, their buyer's agent says, I know they're crazy. I can't wait till this is over because their buyer clients aren't listening to them and they're asking for unreasonable things or whatever. So a critical part of the system in real estate is getting clients that will listen to you because theoretically we know what we're doing.

 

Andrew Stotz: And if we look at this chart, one of the things that some people may ask is what about forecasts? And I know I spent my career as a financial analyst in the stock market forecasting earnings. And then when I worked on my PhD for my dissertation, I decided to calculate the accuracy of analysts in earnings forecasts. And as I said, the title of my dissertation was analysts were only 25% wrong. And in other words, here is the highest qualified people to forecast the earnings of these companies and they get it wrong by 25% on average. And so for those people that say, well, what about your forecast and all that? I always say, I live on the cutting edge of history. Don't try to go too far out in the future. Just make sure you understand. And that's where this chart shows July 19th to July 25th that you could say that's pretty much, and if you get the data out the next day, that's the cutting edge of history.

 

Andy Novins: Yeah, yeah, exactly. And in the past, people say, well, should I wait?  At this time of the year, they might say, should I wait and put the house on the market next spring? Or should we do it after Labor Day? And in the past, I would have said, wait till next spring because things were going to be better. You could... Everything was stable and rising. What these charts show, and they do require some explanation, is that the market is out of control right now. You can't predict it. And then if so,  then it becomes a decision that a client makes based on what they really need. Do they want to move yet? Do they want to wait? Do they... But these control charts are showing that you can't predict. Whereas in the past, you could be pretty safe.

 

Andrew Stotz: Yeah. And the point of that, too, is that a control chart can't solve every problem. It tells you where things are, so you understand things a lot better. But then, how you're going to actually use that information, well, somebody may use it to say, I need to sell my house now. Somebody else may say, I'm going to wait because I think this is bad and it's going to get better later. And somebody's going to say, I'm going to sell now desperately because I think this is going to get much worse, right? That's the hard part.

 

Andy Novins: Yeah.

 

Andrew Stotz: But if you don't know what's actually happening, which the control chart gives you that information, then there's none of that.  It's just, there's no basis in fact of what you're doing.

 

Andy Novins: Exactly. Right. They provide a window into the market that I have never seen anybody use this or talk about it.

 

Andrew Stotz: And do you have any more charts? Was that it?

 

Andy Novins: No. Yeah, I got more.

 

Andy Novins: Okay. Whoops. Oh, but before we get to that, okay, so this is a concept, and if I'm going too long, cut me off.

 

Andrew Stotz: No, no. Go ahead.

 

Andy Novins: So in a falling or stable market like we're in, okay, in a rising market, you pick a price, and if you're good, you're going to do well. If you do it right, they're going to bid it up. That's the way it's been for five years since COVID. Okay. Now the market is not rising. It's falling or even in a stable market. So the PDSA cycle that Deming talked about is absolutely so on target for what we're going through right now. So I'll just briefly go through this. The plan part is you price using comps or adjusted comps based on what the control charts are showing where the market is going rather than where it was. Okay. And then you put the listing on the market in the MLS. And then what we do, okay, is we study what's happening, okay? And again, the market is not in control. It's not a stable system. So we monitor and we subscribe to special services that most agents don't get. They cost money, but they give us a lot of information. We can see the number of views all over the internet that a house is getting that's on the market. And we can subscribe to another service that shows all the showings that are comparable houses in our zip code or any way we want to do it are getting. And then we use the control charts and we look at feedback and everything else.

 

Andrew Stotz: So do you have more charts, Andy?

 

Andy : I sure do. This isn't actually a chart. It's one of the core tools that Dr. Deming used. And it's what he called the PDSA cycle. And that is the most important tool that we use with the data we get from the control charts. So I'm going through an example here of pricing. And so the PDSA is plan, do, study, act. And the planning section of this process is we price using comps, like I've described. But we also use the control charts to let us adjust the comps for what's happening in the market right up to today, basically. And the do is just in real estate is just simply putting the listing in the real estate market, MLS, and listing it so people can see it. The study, though, is what's really important. And that's where a lot more data comes in. We subscribe to services where we can monitor all the views all over the Internet of our listings. And we can monitor showings that our listings are getting, which we know, but other listings. We can monitor what they're getting in terms of competitive listings, similar prices, and that type of thing.

 

Andy : And we also monitor what houses, if any, are going under contract since our property went on the market. And that provides what we talk. So we have to act on that data. And that's the A of the PDSA cycle. And so we use feedback loops. So just as an example, I won't necessarily go through all these. If we have a lot of views, high views, and high showings, we know the price is right. We're going to get offers. On the other hand, if we have high views and low showings, we know buyers are interested in it, they like it, but they're not ready to come and look at it. They're waiting for that price to go down, which in this market, it probably will. So we advise our clients based on the data we're getting, and then we either reprice or we don't. There's also some other things we use to monitor, but I won't go into those at this point.

 

Andrew Stotz: What's interesting about that is it's like every single listing is a test.

 

Andy : Exactly.

 

Andrew Stotz: That's cool.

 

Andy : Yeah. And that data is so important. And when you tell a client, you're getting all kinds of... You're getting... And we compare it to the other listings. We give them charts, which shows the other houses. And we say, look, you're getting twice the views of these other houses, but nobody's coming to your house, or very few are coming. And the other listings are getting less views and more showings. People think you're overpriced. And it's very convincing to a client.

 

Andrew Stotz: Is there one of these that you're aiming for? And if you are close to that in your listings, you're hitting the right spot? Or what are you aiming for?

 

Andy : High views and high showings. That's the best. Everybody's looking at it. People are coming. Okay. There's other tests down the road because traditionally if you get 16 to 18 showings and nobody makes an offer, you're still probably overpriced, but that's very unlikely. Okay.

 

Andrew Stotz: And is price the only factor that you can adjust here, let's say high views, high showings could be just the type of house, the location, but you don't necessarily control those things?

 

Andy : No, the one down near the bottom. Low views, high showings. It's ikely a niche piece of property. Not many people are looking at it, but the people that want that niche, whatever may be different, it's a unique piece of property, they'll get a lot of showings relative to their views, because most people aren't interested. But there isn't much else we can do because we spend... We pay for staging. We don't pay for it. We do it. We have our own inventory and staging. We have contractors that we've used for years to help get a house ready. So the product itself, the house, and the presentation, there's never much more we can do to make that better.

 

Andrew Stotz: And quality in the eyes of the customer is the best price sold quickly, I guess.

 

Andy : Yes. Yeah. That's right. There's a saying which not everybody agrees with in the real estate industry, but you want to make the most amount of money in the least amount of time with the least amount of hassle.

 

Andrew Stotz: I think that's everywhere.

 

Andy : That's true.

 

Andrew Stotz: Yes. I want that. Great.

 

Andy : That's what everybody wants, but some people say, well, if it's too fast, you didn't... But that's usually not true. Fast is usually good as long as it's priced right. The next chart I have is a whole other way we use control charts, and that's to evaluate our own performance, which is what this is doing. And it's using sales-to-list price ratios. In other words, what percentage of the list price was the sales? And here we're using a long base period, and I'm just going to back up for a second. In some of the two recent, the ones I did on price drops and supply of inventory, we only had a year worth of, for the base line. And normally it's better to use more than that, but those two years I used were stable, and we didn't go back further because the Fed had been raising interest rates, and that created a... That was not a stable market when they did that, so we didn't want to use that as a history.

 

Andy : So this is showing our performance, and you can see starting with the pandemic, we went way above the control limits a lot of times. But what you do when you're looking at or using a chart like this for your own improvement is you want to narrow the upper and lower control limits, the two red lines. The closer they get together, the less variation you have, the smaller your standard deviation. And for us, it's 0.2. And our range between what... That's normal is between 95% and 107% of the sales price. And just to how we use it and how we get better at it is we focus on pricing. We focus on improving negotiation, which is a big deal, especially in the last few years. We are always looking to improve our client base. We're always looking to improve our preparation and presentation. We think we got that pretty well down pat. And the other thing is to stay within your area of expertise, because when you go out of that, okay, if I was to work on a house out of my market, okay, I wouldn't get this kind of performance. So that's going to lead me to the next and really the final chart. And that's another group, okay? And I'm using this group because... Just to...

 

Andrew Stotz: Sorry, when you say another group, what do you mean?

 

Andy : It's not my team, no offense industry...

 

Andrew Stotz: So it's a competitor or it's...

 

Andy : This is a well-known group. It's led by two Ivy League graduates. And it's a much bigger team than ours. Their standard... And it's the same base period, 2017 to '19. Their standard deviation is three times what ours is. Their range of what they do within the control limits is 78% to 114%. And that... Why do we do this? Why do we care? It's always nice to benchmark yourself. But most of all, with groups or agents that we compete with, if these guys put a house on the market, okay, and we thought it was overpriced, or let's say we thought it was underpriced, okay, and it was competing with one of ours, we wouldn't tell our client to reduce their price to match their price, okay, because we know they probably are underpricing. In this case, we'd say let it go. Likewise, if we're working with a buyer who's buying one of their houses and we think it's overpriced, what their listing is overpriced, then we will probably make a lower offer knowing that they also know that their pricing can be way off. So understanding your clients and where they fit on these control charts is useful information.

 

Andrew Stotz: And I can imagine that some people, let's say, at another firm, as an example, may say, oh, I don't care about this variability because one side of the mean is more favorable than the other, so I'm just trying to get to that other side. Whereas what you're saying is I'm trying to reduce variation around the mean.

 

Andy : Yes, and that'll take me to this last section I have here. If we compare the two groups, what are the major differences? Number one, if it was a million-dollar listing, okay, we would probably get $43,000 more than they would based on these control charts. Most of all, the biggest difference...

 

Andrew Stotz: The selling price of your customer would be $43,500 more?

 

Andy : Well, our average selling price is a little over 100%. Their average selling price is 96%. So on average, they're getting $43,000 less on $1 million house than we are. But the most important thing in this is the consistency and the predictability of when you lower those control chart limits, you're making your performance much more predictable, and it's an important part to all of our clients. I mean, Deming had a... One of the things he used to say is quality is in the customer's eyes, not your eyes. So I can say we do all this great stuff and all that. It all boils down to what does the customer think. And when a group's working on volume, which is pretty typical in our industry, that's what we're taught, how to get more volume, how to get more volume, that's... The customer doesn't care. The client doesn't care about what kind of volume they do. What the customer cares about is service. And you can see some of the other things, consistency over time, process control and all that. I'll get out of here now and say that that's really what control charts and Deming's philosophy and the PDSA, it all focuses on quality in the customer's eyes, consistent performance, better service, and not a lot of guesswork. We're using data that other agents don't even know exists. And that's unfortunately not an exaggeration, really. I've never talked to anybody that knew about this.

 

Andrew Stotz: When Deming talked about quality, he often referenced the idea that you could have a quality system in place and still go out of business if you weren't looking at quality in the eyes of the customer and being completely connected to the customer. And I have a little story on this from my coffee business. Many years ago, we had a restaurant chain in Thailand that's a global chain come to us and we won the bid. And they said, we chose you over all these other suppliers for coffee and we're going to come to your factory and when we do, we're going to do an audit, we're going to ask 600 questions and if you get below 75% or whatever, you're fired. But, hey, I knew Deming and I knew all of this stuff and we cared about quality and we never had quality problems, so we thought we're in good shape. And they came out and they said, your score was 68, you're fired. You have six weeks to fix it or you won't be our supplier. Well, we learned something very quickly there, which was to them, paperwork was quality.

 

Andrew Stotz: And that was a quality system to them that meant that we had quality. And so we had a passion for quality, but we didn't have the paperwork system that they wanted. So luckily, when you have passion for quality, it's pretty easy to overlay a paperwork system on it, if that's what the customer required. I would hate to be in the opposite situation where you go and do like many people when they go and get certified or ISO or whatever and they build a paperwork system without that commitment to quality. Now, that's a disaster. But the point is that we had to realize that in order for us to satisfy that customer's needs, we had to appeal to quality as they saw it. And so we've got to always keep the customer in mind as we're working on our quality.

 

Andy : I got another story. My wife reminded me today that sometimes in probably early '80s, maybe mid '80s at the latest, I looked up in the... I wanted to find a statistician and I looked him up in the yellow pages, which a lot of the listeners may not know what that is. And I wanted to... What I wanted to do was find a way to improve, optimize our inventory and try to approach just-in-time inventory because we had factories all over the place and we were getting stuff in. And we never did it. And I imagine with Dr. Deming, we could have done it, but we never did it because exactly the quality's in the customer's eyes. We were shipping to specialty restock stores primarily, and if we couldn't stock their shelves, okay, they went somewhere else. Didn't matter how much they liked us, they had to have those shelves full. So we decided it wasn't worth the risk of just-in-time and optimizing our inventory at the expense of having maybe too much inventory, but satisfying our customers. And it's just so true.

 

Andrew Stotz: Yeah. Yeah. In the story that I told, that particular chain never ran out of product and certainly never ran out of coffee. And I know myself, being a customer of that chain, never in my life did I walk in there and they ran out of a particular product. And they made that very clear. That's quality to us is that our supply chains are never broken. And for 16 years, we never broke their supply chains. It was never the case. So in the eyes of the customer, well, on behalf of everyone at the Deming Institute, I want to thank you again for this discussions and for listeners, remember to go to Deming.org to continue your journey. But I thought I would leave the closing comments to you to maybe wrap up and give the audience what you think should be their main takeaway from this discussion.

 

Andy : I think probably the main takeaway would be that Dr. Deming's philosophy, the Profound Knowledge, everything he taught is as relevant to real estate, okay, pricing, probably most markets as it is to a factory or production or anything like that. I think that it took me a while, after I became a realtor, it took me a while to realize, wow, all these things we can use. And we have more data to play with than anybody. So that's a good takeaway for anybody, especially realtors.

 

Andrew Stotz: Yeah, I think, and I'll just add on, I enjoyed the conversation because I love Michael Porter's stuff and talking about figuring out where's your niche and trying to bring a differentiated offering to the market. And that differentiated offering could be based on what I like to say from my study and teaching of corporate strategy is there's kind of two main corporate strategies. One I would say is the type that engineers build, which is an operational corporate strategy. And another one is a differentiating strategy that a sales type of person would build, which is about the interaction with sales, with the product and all of that. And so with Dr. Deming, one of the benefits we get is the process part of our business can just be improved forever. And then we can overlay that with whatever we want from what we bring to the market. And I think you've given us an example of how you can apply Deming's principles to the process of your business and do that in a niche area or an area that you've defined and dominate. And so I love that.

 

Andy : Yeah, and one of the things, just a last thought, is something you and I had talked about, is you don't have to have a PhD in physics or you don't have to get a doctorate in something to understand Deming. And he even says it in his book. You don't have to be an expert in any of it. You just have to understand it. And that's the beauty of it. Anybody can do what I'm doing with just nowhere near the effort you'd have to do if you were going to be a physicist or something else like that. And that's something people can take away.

 

Andrew Stotz: And on that hopeful note, this is your host, Andrew Stotz, and I'm going to leave you with one of my favorite quotes from Dr. Deming. I always repeat it because it's such a great quote, and that is, "people are entitled to joy in work."

 

 

 

Step into a treasure trove of rare stories, photos, and audio clips as Bill Scherkenbach shares his decades with Dr. Deming. From boardrooms to sleigh rides, discover the moments, minds, and memories that shaped modern quality thinking, told by someone who lived it. A powerful blend of insight, humor, and history you won’t want to miss. (You can see the slides from the podcast here.)

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 Scherkenbach, a dedicated protégé of Dr. Deming since 1972. Bill met with Dr. Deming more than a thousand times and later led statistical methods and process improvement at Ford and GM at Deming's recommendation. He authored 'The Deming Route to Quality and Productivity' at Deming's behest and at 79 is still championing his mentor's message. Learn, have fun, and make a difference. Bill, take it away.

 

0:00:41.2 Bill Scherkenbach: Well, thank you. Thank you, Andrew. It's an honor to be asked back. Many places don't.

 

0:00:48.7 Andrew Stotz: I really enjoyed our first discussion, and particularly towards the end of it, it got a little personal and emotional, and I appreciate that you shared your journey. That was amazing.

 

0:01:00.9 Bill Scherkenbach: Thank you. Thank you. It is personal.

 

0:01:05.2 Andrew Stotz: Yeah.

 

0:01:05.4 Bill Scherkenbach: But today, along that wavelength, I brought some pictures or photos and letters and audios of my association with Dr. Deming. So, if you might bring them up, we can start the commenting.

 

0:01:27.9 Andrew Stotz: Wonderful. Well, hopefully you see a screen now up.

 

0:01:34.8 Bill Scherkenbach: Yes. Yep.

 

0:01:35.8 Andrew Stotz: Okay. And for the audience, just to let you know, for the listeners, we're going to show these and I'll try to explain a little bit about what we're talking about because you're not going to be able to see the pictures. But the first thing is the title is An Insider's View of Deming. Learn, have fun, make a difference. And we see a great picture on the left-hand side, and then I threw in a picture of a Lincoln Continental, which we're going to talk about later, which is kind of fun. But maybe you can take it from there, Bill.

 

0:02:07.2 Bill Scherkenbach: Yeah. Well, we can talk a little bit later on on that, but this is a picture of me and my wife, Mary Ellen, with Dr. Deming having fun. We were at a restaurant in Northville called Elizabeth's, and it's something that he enjoyed to do just about every evening.

 

0:02:31.3 Andrew Stotz: Great. Well, what a kickoff. So let's go to the next one. And you guys all look great in that photo.

 

0:02:38.2 Bill Scherkenbach: Thank you. Thank you. Thank you. Yeah. This is a letter that I received from Dr. Deming back in May of '85, auspicious because the letter dated 13 May, that's my birthday. But for those who cannot read it, should I read the letter for you?

 

0:03:05.2 Andrew Stotz: Either you or I can read it for you. You tell me.

 

0:03:08.3 Bill Scherkenbach: Okay. Well, yeah. Why don't you read it?

 

0:03:10.9 Andrew Stotz: Okay. So, the letter is addressed to a particular person. It says, this is written by Dr. Deming, this acknowledges your kind letter of the 29th April. He that depends solely on statistical process control will be out of a job in three years. The record is clear, the record is clean, no exceptions. A whole program of improvement of quality and productivity is necessary, and it requires that top management learn what their job is. No part of the program will by itself suffice. Your letter does not describe your program, hence comment is difficult. I am happy to learn that Bill Scherkenbach will work with you. His achievements are renowned. He is excelled by nobody. I am sure that you will follow his guidance, not only while he is there with you, but from that then on out. I send best wishes and remain yours sincerely, W. Edwards Deming.

 

0:04:19.2 Bill Scherkenbach: Yes. I did spend a week with this organization, and as Deming said, and in many, many cases, the local management or local part of the organization get very enthusiastic, but the top management did not buy in. And so very little happened there, unfortunately.

 

0:04:53.9 Andrew Stotz: Yeah. And I missed that the top right-hand corner in handwritten, it says Portland, 20 May 1985. Dear Bill, I neglected to hand this to you in San Francisco, W. E. D.

 

0:05:08.1 Bill Scherkenbach: Yeah. We went to, we. Dr. Deming and I were in San Francisco to meet with Shoichiro Toyoda and his wife. It was a social call. Shoichiro was in town. I don't know where his brother Tatsuro was. Tatsuro headed up NUMI, but Shoichiro was head of it all and was in the US. And wanted to just have a dinner with Dr. Deming. I'm embarrassingly cloudy. We met in a hotel and I can't tell you which one, but it was a nice, relaxing dinner. The English was a bit stilted, but Soichiro wanted to have a dinner with Dr. Deming and to express his appreciation. 

 

0:06:31.3 Andrew Stotz: And he was a titan of industry at the time and in 1985 was really making a beachhead and a real expansion into the US market. Why did he want to meet with Dr. Deming? What was the connection there? Maybe for those that don't know.

 

0:06:55.2 Bill Scherkenbach: He was in town and Deming was nearby in town and just wanted to express his appreciation. I guess, Tatsuro, his brother wasn't there, and Tatsuro headed up NUMI, the partnership between GM and Toyota. But Shoichiro was there and just wanted to express appreciation.

 

0:07:35.1 Andrew Stotz: Great. Okay. So shall we continue on?

 

0:07:40.0 Bill Scherkenbach: Yeah. We have a Where is Quality Made? Famous talking from Dr. Deming, and hopefully the audio translates well.

 

0:07:55.3 Andrew Stotz: Yes, we'll see. Let's go.

 

0:07:59.5 Dr. Deming: Where's quality made? Answer is in the top management. The quality of the output of a company cannot be better than the quality directed at the top. The people in the plants and in service organizations can only produce, at best the design of product and service prescribed and designed by the management. Job security and jobs are dependent on management's foresight to design product and service [that] will entice customers and build the market.

 

0:08:31.6 Andrew Stotz: So where did that come from? And tell us more about that.

 

0:08:36.2 Bill Scherkenbach: Well, I'm not exactly sure which particular seminar or meeting that was, but over the years I have, have, we've made a number of audio recordings and videos of Dr. Deming in his meetings. And so we're looking to get them to the Deming Institute so they can process them and distribute. 

 

0:09:11.8 Andrew Stotz: And why is this so important? He's talking about quality is made at the top where we can see many people think that quality is made by the worker. Do your best. Quality is your responsibility. Tell us more about why you wanted to talk about this.

 

0:09:32.9 Bill Scherkenbach: Well, it's a common, it's a common, very common mistake. He learned back in 1950, and I think I mentioned it in our first talk, that he gave a number of courses at Stanford during the war and people learned SPC. But when the war was over, over here, because management didn't buy in, nothing really happened. And he learned in his visit in 1950 when he was able, as we said, Mr. Koyanagi was able to get a meeting, a number of seminars done with top management in Japan after the war. And he thought that that, he saw that that actually did make a difference, that management was absolutely key. And in every one of his seminars, he would make, he would make  this point, that quality is made at the top.

 

0:10:54.0 Andrew Stotz: And what was interesting is that, of course, the Japanese senior management, were very receptive. It's many times the case that Deming may have interacted with some senior management at the top of a company, but they weren't receptive or willing to implement what he's talking about.

 

0:11:12.6 Bill Scherkenbach: Yeah. I think I mentioned last time that you need maybe a significant physical or logical or emotional event. And Ford lost a few billion dollars and was then looking, is there a better way? Japan lost a war, and the tradition over there is to perhaps listen to the conqueror. But MacArthur was very astute, my understanding, that you're not going to go in and replace the emperor and really mix the place up from what their culture is, which is very, very, very astute, in my opinion.

 

0:12:11.4 Andrew Stotz: Okay. So let's continue. And we see a document now up on the screen and a diagram. And maybe you can explain this one.

 

0:12:24.8 Bill Scherkenbach: Yeah. This is one of the foils, as he called them, that he wrote on his lantern, which is the overhead projector for all the young people. And making another very, very important point. And that is, he's quoting John Tukey, "the more you know what's wrong with a figure, the more useful it becomes." And he also, at various times, would, would, would talk about George Gallup. And Gallup was his friend. And George Gallup would say that unless you've gone through the slogging of collecting data, you shouldn't be too quickly using data or analyzing data. Because if you go to collect it, you know that some people just aren't there. And this is primarily survey stuff that Gallup was talking about. But Tukey was talking about anything. And Deming, along the way, with his learnings from Shewhart, what I've developed is based on Deming's questions come from theory, created a theory, question, data, action cycle, similar to a PDSA. And so that you need to know what the question was before you can use the data. And Dr. Deming's example was you can't use manganese dioxide for just anything. If it's really, really critical work, then you need to know what's in it that could contaminate it or interact with the other chemicals that you're trying to mix it with. Hugely important in chemistry, hugely important anywhere. And he talked, yes, we do have some audio from Dr. Deming talking about another analogy, on I can't even wash the table unless you tell me what you're going to use it for.

 

0:15:24.0 Andrew Stotz: I remember watching a video of this with him, with Robert Reich, I think it was, being interviewed. And it was such an impactful thing because I always thought you just tell people what to do and they go do it. And so let's listen to the audio. I'm going to play it now. One second.

 

0:15:42.6 Dr. Deming: You could teach me how to wash a table. Teach you how to rub, scrub, use brushes, rags. I'd be pretty good at it. But you know, I could not wash this table, suppose you told me my job is to wash this table. I have no idea what you mean. There's no meaning to that. You must tell me what you're going to use the table for. I want to see a flow diagram, work moving. Here I am. My job is to wash this table. I do not understand what you mean. Wash this table. There's no meaning to that. I must know what you're going to use the table for, the next stage. What will happen to the table, next stage, in the flow diagram? You want to put books on it? Well, it's clean enough for that now. To wash the table, I just go through it from just here, make a look at it. If I work a little, good enough. If I clean enough to eat off of it, well, it's good enough now. Or use it for an operating table? Oh, totally different now. Totally different. Now I scrub it with scalding water, top, bottom, legs, several times. I scrub the floor underneath and for some radius. If I don't know the next stage, I cannot wash the table.

 

0:17:28.8 Andrew Stotz: Tell us your thoughts on that.

 

0:17:31.5 Bill Scherkenbach: Yep. Yep. Well, again, my theory, question, data, action cycle, if you're asking a question, you, you, if you can, and there are some confidential considerations, but if you can, you need to tell the people who are trying to answer the question what you're going to do with it. And so if you want the table washed, tell them you're going to just eat off of it or assemble microchips on it. If you, so that's the responsibility of the manager or anyone who is asking the question. So if you want to improve your questions, you got to go back up and think of, well, what's my underlying theory for the question? If this, then that, that prompts a question and the circle continues. And if you, the only reason to collect data is to take action. Both Eastern and Western philosophers absolutely have said that for centuries.

 

0:18:55.2 Andrew Stotz: Yeah. What's interesting, I didn't hear him say it in any other cases when he was talking about the next stage. I did hear him say before, like, what's it going to be used for? But you could hear when he's talking about the next stage, it's saying to me, that's saying the responsibility of management is looking at the overall system and communicating that and managing that, not trying to, you know, just give some blind instruction to one group, one team, one person without thinking about how it all interacts.

 

0:19:29.9 Bill Scherkenbach: Absolutely. Absolutely. But in the local aspect of, well, some question answers are not so local, but it's what the question asker's responsibility to let the people know what they're going to use the data for.

 

0:19:51.9 Andrew Stotz: Yep. Great lesson. All right. So now I've got a interesting picture up on the screen here. We have Dr. Deming and there's John Turkey, Tukey how do you say his last name?

 

0:20:05.6 Bill Scherkenbach: John Tukey, T-U-K-E-Y, yep. George Box and Sir David Cox. Anyone in the statistics arena knows them. We also had Stu Hunter and I believe John Hunter was there. They're not in the picture. I took the picture. But we were at Meadowbrook, which is, which is, on the old Dodge estate where Oakland University is near Detroit. And had a, we called the meeting to discuss the importance and the various perspectives of enumerative and analytic. Now, each of these men, Box, Tukey, and Cox, and all of them, all of us in the university, quite honestly, were brought up with enumerative methods. And so your standard distributional stuff and T-tests and whatever. And Deming and Tukey realized the importance of being able to not just take action on the sample, but the cause system, the system that caused the sample, or the process term, in process terms. So yeah, John Tukey was strangely enough, well, not strangely enough, but came up with a graphical method to look at data called the box and whiskers plot, with George Box standing next to him, but it's not that George didn't shave. But Tukey, very, very well known for graphical methods.

 

0:22:24.2 Bill Scherkenbach: George, well known for experimental methods. One of the Box, Hunter and Hunter book on statistical design of experiments is legendary. And Sir David Cox, logistic regression, which is hugely, strangely, well, not strangely enough, but huge nowadays, very important in AI, in how you would be looking to teach or have your model learn what it is that you would like them to learn to look for. So each of these gentlemen, very, very much a pinnacle of the statistical career. We were very, in a large company like Ford, we were very lucky to be able to make big meetings like this, or meetings with very influential people happen.

 

0:23:38.9 Andrew Stotz: Yeah. That's got to be amazing because I think when most of us listen to Dr. Deming and all that, we get a lot of what he says. But I would say that the statistical aspect and his depth of statistical knowledge is what many people, you know, it's hard for many Deming followers to deeply connect with that. And I think even myself, having, you know, read everything, listened to him, learned as much as I can, the best that I probably come up with is the idea that once I started understanding variation, one of the things I started realizing is that it's everywhere and it's in everything. And I didn't understand...

 

0:24:27.3 Bill Scherkenbach: Well, I still have the cartoon of a popcorn maker that was very surprised when he said, "They all popped at once." And his popcorn stand has blown up. So yeah, variation is everywhere, a lot or a little. And the thing is that you need to be able to take appropriate action. Sometime, I can remember, I can remember Bob Stemple asking me, "What did I think of the Shainin methods, Dorian Shainin, and technical approach?" And I wrote back to him and I said, "It's no better or worse than any of the other methods we don't use here at GM." The point is, all of these methods are better than Bop-A-Mole. And one of the things, well, one of the things that concerns me is that in these tool areas, and Deming's counsel to me long ago was he remembers the fights that the technical people, the statisticians in the quality profession, would have over which one is a tenth of a percent better or more effective doing this and that. And they would publicly argue, and Deming said, "Stop. It confuses management because they don't have a clue and they're staying away from all forms of quality." So, you, and I don't know the solution in this day and age where everyone is connected. But all of these methods have their strengths and weaknesses, but you have to have the savvy to figure out which one to use to help you improve. All of, each of these four were great teachers, and I have a comment from Dr. Deming on that.

 

0:27:11.7 Andrew Stotz: And just in wrapping this up, it's like, I think one of the things that you realize when you see this one and what you're talking about, what I realize is what a powerhouse Dr. Deming was in the area of statistics. And in some ways, it's kind of like seeing a rock star that you love to listen to and that rock star is great. And then one day on a Sunday, you go to the church and you see he's a reverend and a very solemn man who is a very, very devout devotee of Christianity and something. In some ways, that's the way I feel when I look at this, like, wow, just the roots of the depth of that is so fascinating.

 

0:28:03.2 Bill Scherkenbach: As you mentioned that, I'm thinking back, we were in Iowa and one of the professors there, and I forget his name, but you're right. Deming was held in awe and he was riding in the backseat. I'm driving and this professor is beside me and Dr. Deming said something and I said, how do you know? And the guy thought the world was going to come to an end that I dared ask the master, how did he know? Well, it, it, it ended up fine.

 

0:28:52.9 Andrew Stotz: That was the question he was trying to teach you to ask.

 

0:28:55.3 Bill Scherkenbach: Absolutely. You don't accept it at face value.

 

0:29:02.2 Andrew Stotz: So we got this other slide now. It says, what do you mean by a good teacher? Maybe you want to set this up and then I'll play the audio.

 

0:29:10.7 Bill Scherkenbach: Yeah. This was one of his favorite stories when he studied under Ronald Fisher, who is the big godfather of statistics, well, relatively modern stuff. So, Fisher was there at University College, as Deming will describe, and Deming wanted to know, and this is where a number of you will have recognized, he wanted to know what great minds were thinking about.

 

0:29:56.7 Andrew Stotz: All right. I'm going to play the clip right now.

 

0:30:00.2 Dr. Deming: What do you mean by a good teacher? I taught with a man, head of the department. The whole 150 students spellbound, teaching him what is wrong. And they loved it. What do you mean by a good teacher? Holding students spellbound around him. What do you mean teaching them something? I've had a number of great teachers. One was Professor Ronald Picker, University of London, University College I should say, part of the University of London. In London, 1936, no teaching could be worse. A lovable man, if you tried to work with him, could not read his writing, could stand in the way of it, room was dark and cold, he couldn't help the cold, maybe he could have put some light in the room, make mistakes, Professor Paul Ryder in the front row always helped him out. He'd come in with a piece of paper in his hand the ink not yet dry, talk about it. Wonder why the room was full of people from all over the world. I was one of them. Made a long trip, at my own expense, to learn, and we learned. We learned what that great mind was thinking about, what to him were great or important problems today.

 

0:31:45.9 Dr. Deming: And we saw the methods that he used for solutions. We saw what this great mind was thinking about. His influence will be known the world over for a long, long time. He would rated zero by most people that rate teachers. Another teacher that I had was Ernest Crown at Yale, very poor teacher. We'd get together afterwards, some of us, and try to figure out what he was teaching us. He was not even charismatic the way Ronald Fisher was, but we learned. We learned what that great mind was thinking about, what he thought was the problem. We learned about perturbation. His work on lunar theory will be a classic for generations. We learned. Worst teacher there could be, but we learned.

 

0:32:49.0 Andrew Stotz: Wow. Tell us more about that.

 

0:32:53.6 Bill Scherkenbach: Well, he also had a similar story because, from great teachers at NYU, and that's where I first met him and learned from him. He was my teacher, but NYU had a, they had nominations for great teachers. And Deming was able to convince, and I forget who was the, Ernest Kurnow was the dean, and he convinced the dean to wait 10 years before you survey any of the students. And the question was, did any teacher you have really make a difference in your life? And he was able to get that done or get that process agreed to, and it was for the better because in, and I don't want to... I mean, every generation has said this new generation is going to hell in a handbasket, I mean, that for forever. That's nothing new. But what's popular, it's great to be entertained, and as he said, teaching what is wrong. And so did someone make a difference in your life? And not surprisingly, Deming was one of the people selected as a great teacher from NYU Graduate Business School.

 

0:35:15.4 Andrew Stotz: So that's your review after 50 years after the course, huh?

 

0:35:21.6 Bill Scherkenbach: Yeah.

 

0:35:24.5 Andrew Stotz: Yeah. And so the point is that, let's separate popularity from original thinking. And also he highlighted the idea that some teachers may not come across very organized, very polished. They may need assistance to help them clarify what they're trying to get across. But just because they're kind of a mess in that way, doesn't mean they're not thinking very deeply. In fact, it may be a sign that they're thinking very deeply about it.

 

0:36:01.9 Bill Scherkenbach: Yeah. Now, again, remember, and I know it's a broad brush, but Deming was eminently logical. Crosby would have loved it. Wine and cheese parties showed Juran more physical. And so I think Deming's preferences there, the key to his statement is teaching what was wrong. Some people get excited in class for a variety of reasons, but the key is what are you teaching? The method depends on the ability of the teacher to connect to the students and actually teach. So it gets you back to physical, logical, and emotional. But for Deming, Fisher struck a chord with him.

 

0:37:09.9 Andrew Stotz: Yeah. And I think for the listener, the viewer, think about some teacher that really made an impact on you. And it could be that there was a teacher that was able to connect with you emotionally.

 

0:37:25.2 Bill Scherkenbach: Absolutely.

 

0:37:26.7 Andrew Stotz: So there's different ways. But I think of Dr. Deming wasn't a teacher of mine in university, but at the age of 24 to learn from him was definitely a teacher that left me with the most to think about. And I would say there was one other teacher, a guy named Greg Florence that was at Long Beach City College who taught me argumentation and debate. And he also really encouraged me to join the debate team, which I really couldn't because I didn't have time because I didn't have money and I had to work. But he really saw something in me, and now I love to teach debate and helping young people construct arguments. And so for all of us, I think this idea of what do you mean by a good teacher is a great discussion. So, love it. Love it. Well, we got another picture now. Speaking of teaching, the City University of New York is in the backdrop. Maybe you can set this one up.

 

0:38:27.0 Bill Scherkenbach: Yeah. This was a one-day, maybe one and a half with some pre-work, but essentially a one-day meeting in New York that was able to gather some of the top educators in the US, the head of the schools in California. There were some folks from Chicago. We had, as I mentioned, Albert Shanker, who was head of the American Federation of Teachers, was sitting right beside me. Other teacher organizations and education organizations. And we got together for a very meaningful thing. We got together to try and determine what is the aim of education in America. And it turned out that everyone was looking for their mic time, and we couldn't even agree on an aim for education in America. And if you can't agree on an aim, your system is everyone doing their best, and it's all, there's not too much progress, except locally or suboptimally.

 

0:40:02.3 Andrew Stotz: Yeah. That's a good illustration of the concept of best efforts. Dr. Deming often talked about best efforts. And here you're saying, without an aim, everybody's going to just go in their own direction. And it reminds me of a story I tell people in relation to management, which was that I had a really great boss many years ago in the field of finance research in the stock market. He was very brilliant, and he hired really good analysts. I was surrounded by the best. But he never once really brought us together to say, this is our aim. And so what ended up happening was that each person did their best, which was very good as an individual, but as a group, we never were able to really make an impact. And I explain that to my students nowadays, that I believe it's because he didn't set an aim and bring us together for that.

 

0:41:09.1 Bill Scherkenbach: Now, one of the, I mean, one of the things Deming very predictably talked about, as I recall, is the grades and gold stars, which were part of his forces of destruction. And the education is the way we approach education here was part of that, even before people get to get beat further down by corporate and other organizational stuff. And the grading and gold stars, I don't know how much that was, that criticism was appreciated. But everyone had a chance to talk. And in my opinion, not too many people listened.

 

0:42:09.3 Andrew Stotz: Now, the next one is titled Mongolian Rat. What the heck, Bill?

 

0:42:17.1 Bill Scherkenbach: Well, this is part of teaching what good teaching would be. You've got to listen. It's one of my favorite stories of his.

 

0:42:30.3 Andrew Stotz: Well, let's roll the tape.

 

0:42:33.3 Speaker 3: I met a professor in New York. I had a dinner one time in New York with a surgeon, professor of surgery, he gave out some marbles. Had 21 students in the class. He told them describe the surgical procedure on the jaw, in which a certain breed of Mongolian rat was very helpful. The rat would eat the flesh right down the bone, cleaner than a surgeon could do it. Very important rat. Described it in detail. Students listened intently. On examination, one of the questions was to describe the surgical procedure by use of the Mongolian rat. Twenty of the students gave him back the same marbles that he doled out. Described it as exactly the same word that he had described it. He flunked them all. All the 20. One of them said, my dear professor, I've searched the literature, I've inquired around in hospitals and other teachers. I could find no trace of any such procedure. I think that you were loading us. He passed. The others had to take a new examination. They gave him back the same marbles he doled out to them. He wanted to think.

 

0:43:55.0 Andrew Stotz: Marbles. I haven't heard that expression. Tell us a little bit more about what you want us to take from this.

 

0:44:02.6 Bill Scherkenbach: Well, I think it's pretty self-explanatory. His comment on education that teachers are handing out marbles and pieces of information, not necessarily knowledge, and the testing, you're expected to give them back what the teacher said instead of how can you process it and put it in the context of other things, as well as, I mean, maybe not in the early grades, but in the later ones, you need to be able to look at various perspectives to see who has this opinion and that opinion. And unfortunately, today, that discourse is nicely shut down.

 

0:45:07.3 Andrew Stotz: At first, when I heard him saying marbles, I thought he was kind of using marbles as a way of kind of saying pulling their legs, but now I understand that he was trying to say that he's giving something and then the students give it back.

 

0:45:24.1 Bill Scherkenbach: Yeah. Yeah. Yeah.

 

0:45:26.0 Andrew Stotz: Okay. Mongolian rats.

 

0:45:31.0 Bill Scherkenbach: Yep. Yep. So we go from learning to having fun, and here's a picture of our statistical methods office at Ford.

 

0:45:48.1 Andrew Stotz: And you're sitting in a sleigh? Is that what's happening there?

 

0:45:50.0 Bill Scherkenbach: We're sitting in a sleigh, yes, at Greenfield Village, which is where the Henry Ford Museum is, and it happened to snow, so we've got the, we've got the horse-drawn sleigh, and I was listening to your first interview of me, and I want to deeply apologize. It's Harry Artinian, and so from the left, you've got Ed Baker and Bill Craft and Pete Jessup, Harry Artinian, Narendra Sheth, Dr. Deming, Debbie Rawlings, Ann Evans, my secretary, uh ooooh, and the gentleman who worked with Jim Bakken, and then me. So, we were working and decided to have a good lunch.

 

0:46:58.5 Andrew Stotz: And it's a horse-drawn sleigh. And I wasn't sure if you were pulling our leg here because you said, I'm second from the far right. First from the far right, to me, looks like the horse.

 

0:47:09.0 Bill Scherkenbach: Yes. That's the horse's ass. Yep.

 

0:47:14.6 Andrew Stotz: That's a big one.

 

0:47:16.1 Bill Scherkenbach: It is what it is.

 

0:47:18.7 Andrew Stotz: Yep. Okay. Next one. Who's Sylvester?

 

0:47:22.3 Bill Scherkenbach: Sylvester is my son's cat. And this is one of the times Dr. Deming was in my home. And he sat down in my office at my home. And Sylvester saw a good lap and he jumped up on it and took it. And as I said, I couldn't tell who was purring louder. They both were content.

 

0:47:52.7 Andrew Stotz: Yeah. That looks beautiful.

 

0:47:55.4 Bill Scherkenbach: Yeah. It was very, very peaceful. Another fun thing, after a long day of work at Ford, we would go to Luigi's restaurant in Dearborn. I think there was a Dearborn Marriott, a big hotel. I don't know if it's there now. But that's Larry Moore, director of quality, next to Dr. Deming and me. I had a mustache back then.

 

0:48:30.4 Andrew Stotz: Yes. And we all loved soft serve ice cream.

 

0:48:34.0 Bill Scherkenbach: Soft serve ice cream. Yep.

 

0:48:38.0 Andrew Stotz: Yep. All right. Star-Spangled Banner.

 

0:48:40.9 Bill Scherkenbach: Yep. Now we're at one of my earlier houses in Northville. And Dr. Deming had written a new tune for the Star-Spangled Banner because it was an old English drinking song, Anna, the what? The Anacrocronistic Society. And he thought it was just too bawdy. I mean, you're an unsingable, except if you're drinking. So he rewrote the music for the Star-Spangled Banner. I have a copy of it here. But he, my son Matthew, my oldest son Matthew, we had just gotten one of those first Macs from Apple, Macintosh. And it had a very elementary music thing. So he put the notes that Deming had handwritten. And we put it in there and it played the tune. And so Deming was playing on our piano the Star-Spangled Banner.

 

0:50:04.7 Andrew Stotz: So he had a musical talent.

 

0:50:10.8 Bill Scherkenbach: Oh, yeah. He was a very serious study of, a student of music. Very much so. He wrote a complete Mass. He was a high church Episcopalian. And he wrote a complete Mass of the Holy Spirit with all parts. So, very much a student of music.

 

0:50:41.8 Andrew Stotz: And how did his religious beliefs, like Episcopalian, as you mentioned, how did that come across? Was he a person who talked about that? Was he a person that didn't talk about that? Like, how did that come across?

 

0:50:59.2 Bill Scherkenbach: It was more of a private thing. But then again, on every one of his books, he would begin a chapter with some quotation from different books. And many of them were from the Bible. I can remember one time in London, I'm Catholic, and so we were celebrating the St. Peter and Paul that Sunday. But he was in London and he was at St. Paul's and they weren't giving Peter any traction. But he looked up and he said, yep, you're right. It was both of those saint days.

 

0:51:58.3 Andrew Stotz: All right. Next one, Drive Out Fear.

 

0:52:01.8 Bill Scherkenbach: Oh, yeah. This was Professor Arnold. And we were having lunch in the Ford dining room, one of the Ford dining rooms. And Dr. Deming wasn't too happy of what Professor Arnold was talking about. And Professor Arnold didn't look too happy either. So, I framed the picture and put Drive Out Fear underneath it and hung it in my office. And Deming came and looked at it and smiled.

 

0:52:46.5 Andrew Stotz: And what was the background on Professor Arnold? And in this case, did they have opposing views or was it a particular thing or what was it that was...

 

0:52:58.4 Bill Scherkenbach: I don't remember the particular conversation, but Professor Arnold was head of the statistics department at Oakland University. And Ford had an agreement with Oakland University that we established a master's degree in statistics, according to Dr. Deming's viewpoint on enumerative and analytic. And no, he was very, very capable gentleman. I mean, one of the things Dr. Deming mentioned to me is if the two of us agreed all the time, one of us is redundant. So there were always discussions. This is just a snapshot in time.

 

0:53:52.3 Andrew Stotz: I love that quote, that one of us is redundant. That's powerful, powerful.

 

0:53:59.4 Bill Scherkenbach: Absolutely. Yep. This is another having fun after learning in... There were a number of restaurants we went to. He particularly liked Elizabeth's,

 

0:54:16.1 Andrew Stotz: And how was their relationship? How did he treat your lovely wife?

 

0:54:22.5 Bill Scherkenbach: Oh, I mean, very lovingly. I mean, I don't know how to describe it, but one of the family.

 

0:54:36.2 Andrew Stotz: Yeah. He seemed from my observation, like a true gentleman.

 

0:54:42.5 Bill Scherkenbach: Absolutely. Absolutely.

 

0:54:46.0 Andrew Stotz: Well, here we come to the Lincoln that we started off with. This is a great picture too.

 

0:54:51.4 Bill Scherkenbach: Yeah. That's a picture I had. It wasn't a Hasselblad, but it was a two and a quarter frame. And I had black and white film in it, but this is one of a number of pictures I took of him at the Cosmos Club. I think it was a very good picture. And in any event, it was blending learning and having fun.

 

0:55:19.7 Andrew Stotz: Yeah. And the Cosmos Club was near his house?

 

0:55:22.5 Bill Scherkenbach: Yeah. Well, it was depending on who drove. I mean, it was just, it was down a few blocks and then a number of blocks on Massachusetts Avenue. I enjoyed the drive from his house because you'd pass the Naval Observatory, which for years was the home of the chief of naval operations here. But a few decades, a few, I don't know how long ago, the vice president pulled rank on him. And so the Naval Observatory, beautiful, beautiful old house. So, the vice president lives there now. And a lot of people think Massachusetts Avenue in that area is Embassy Row. So you're passing a number of embassies on the way. And the Cosmos Club, anyone can look up. I mean, it's by invitation, members only, and Nobel laureates and Pulitzer Prize winners and a very distinguished membership, let's say.

 

0:56:39.3 Andrew Stotz: Here was another one, Making a Difference with Don Peterson.

 

0:56:43.0 Bill Scherkenbach: Yep. Yep. We're, we're, this is one of the meetings we had with Don. And it wasn't this meeting, but we were in one of them. Okay. You have it on the right there. That we periodically would have, Dr. Deming and I would have breakfast with Jim Bakken in what was known as the Penthouse at Ford. There are 12 floors, and then there was the 13th and 14th, which were private quarters, essentially. And so we were having breakfast one morning and finishing breakfast, and I'm walking a little bit ahead, and I run ahead and press the elevator button to go down one floor, and the door opens, and there's Henry Ford II in cowboy belt buckle and boots, no hat. He's going to a board meeting, he says, and Jim shied away, said, "Oh, I'm sorry, Mr. Ford." He said, "Shut up, Jim, get in here." And so we got in the elevator, and it was the small elevator. And so we're back to back, belly to belly, and Jim introduces Dr. Deming to Mr. Ford, and Ford said, "I've heard of you, Dr. Deming. God, we really need your help." And Deming had the presence of saying, "I heard of you too, Mr. Ford." It was the longest one-floor elevator ride I've ever had in my life.

 

0:58:49.1 Andrew Stotz: That's fascinating. All right. Next one, talking with workers.

 

0:58:54.1 Bill Scherkenbach: Yep. Yep. He made it a point. And this is a fine line, because you want to be able to have workers say, how, how, are they able to take pride in their work? And are there any problems and all of that? But you don't want to be in a position of then going to management and telling them because of fear in the organization. So, Dr. Deming was very good at listening and getting people to talk about their jobs and their ability to take joy and, well, pride in their work. So we had many, many meetings, different places. And this next one is with the Ford Batavia plant, I think.

 

1:00:01.2 Andrew Stotz: Yep.

 

1:00:02.4 Bill Scherkenbach: Yeah. We're riding on the tractors and having a good time.

 

1:00:11.3 Andrew Stotz: Who's driving?

 

1:00:14.2 Bill Scherkenbach: The plant manager, Ron Kaseya, was driving.

 

1:00:16.9 Andrew Stotz: Okay.

 

1:00:17.9 Bill Scherkenbach: And so I absolutely do not recall what we were laughing at, but we were having a good time. And the Batavia transaxle plant, a number of people will recognize as where Ford, it really made the point that doing better than spec is really what the job is. And it's a very powerful video that's been out there and people would recognize it as well, because we were producing the exact same transaxle in Mazda. And Mazda was influenced a lot of by Genichi Taguchi and looked to reduce variation around the nominal and not just be happy that we made spec. And John Betty, who was head up of powertrain operations and then went to the Department of Defense as assistant secretary of defense for procurement, I think, because of the quality expertise. Betty is in the front of the video saying he's absolutely convinced that this is a superior way to look at manufacturing, to look at the management of any process. You want to get your customers to brag, not just not complain.

 

1:02:10.3 Andrew Stotz: Yeah. Courage.

 

1:02:11.8 Bill Scherkenbach: And all of this takes courage. And especially in his seminars in London say, the Brits had the advantage. You guys can take courage every day. We can't get that in the US anymore. Or it's very rare to be able to buy it here.

 

1:02:36.3 Andrew Stotz: For the listeners, there's a logo of the John Courage beer, premium beer.

 

1:02:45.7 Bill Scherkenbach: Yes. Yes. It's an amber pills.

 

1:02:49.8 Andrew Stotz: Okay.

 

1:02:52.4 Bill Scherkenbach: And last but not least, well, not last, but we're looking for, and I ran across this quote from Yogi Berra, and it's very applicable right now. And Yogi Berra said, I never said... Well, what did he say?

 

1:03:19.2 Andrew Stotz: Never said most of the things I said.

 

1:03:21.4 Bill Scherkenbach: Most of the things I could have said. I never said most of the things I said. Yeah. And every day online, I see people saying Dr. Deming said this, and he said that. And if he did, I've never heard him say it. And not that I've heard him say everything. But if he did say something like, if it's not measurable, you can't manage it. He would have followed it with, that's not right. The unknown and unknowable. And so you've got a lot of people misunderstanding what Dr. Deming said. And you've got to go with, I never said most of the things that I said.

 

1:04:24.0 Andrew Stotz: Well, that's the great thing about this discussion is that we're getting it from the horse's mouth, someone that was there listening and being a part of it.

 

1:04:32.1 Bill Scherkenbach: Well, I'm glad you saw the other end of the horse.

 

1:04:37.5 Andrew Stotz: Yeah. So, I'm going to close out this by just sharing a little personal connection. And that is, I'm showing a picture of me in my 1963 suicide door Lincoln Continental, which I owned for 10 years in beautiful Bangkok, Thailand. And much like being kind of wild taking a ride to the Cosmos Club with Dr. Deming driving his Lincoln Continental, you could imagine how odd it looked seeing this American guy driving this 1963 Lincoln Continental on the streets of Bangkok. But I just thought I would share that just to have some fun. So, yeah.

 

1:05:14.3 Bill Scherkenbach: That's beautiful. Absolutely. Yeah. I didn't think the streets were that wide.

 

1:05:22.1 Andrew Stotz: It gets stuck in traffic, that's for sure. But wow, there's so many things that we covered. I mean, I just really, really enjoyed that trip down memory lane. Is there anything you want to share to wrap it up?

 

1:05:36.1 Bill Scherkenbach: No. As I said, our last conversation, we've just scratched the surface. There's so much, so much more to talk about and preserve, I think.

 

1:05:48.9 Andrew Stotz: Yeah. Well, I really enjoyed it.

 

1:05:52.1 Bill Scherkenbach: I have done my best.

 

1:05:53.6 Andrew Stotz: Yes, you have. You have. I've enjoyed it, and I'm sure the listeners and the viewers will enjoy it too. So, on behalf of everyone at the Deming Institute, I just want to thank you for taking the time to pull that together and to walk us through it. And for listeners out there, remember to go to Deming.org to continue your journey. And of course, go to LinkedIn to find Bill and reach out and share your interpretations of what we went through. And maybe you have a story that you'd like to share also. So, this is your host, Andrew Stotz, and I'm going to leave you with one of my favorite quotes from Dr. Deming. And that is, “people are entitled to joy in work."

What was it like to learn from Dr. Deming himself -- a decade before his name became legend in U.S. business circles? In this deeply personal episode, William Scherkenbach shares with host Andrew Stotz what it was like to sit in Deming’s classroom in 1972, join him for late-night chats at the Cosmos Club, and help ignite transformational change at Ford and GM. Learn how Deming’s teachings shaped a lifetime of purpose, and why Scherkenbach, now in his 80th year, is stepping back into the arena with lessons still burning bright. TRANSCRIPT

0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm here with featured guest William Scherkenbach, and he is known as one of the men who has spent a huge amount of time with Dr. Deming, as he mentioned to me previously, starting from 1972, over a thousand meetings and many other activities that he's been involved in. So, Bill, welcome to the show. Why don't you give us a little background about you?

 

0:00:39.5 William Scherkenbach: Oh, okay. Good to be here, Andrew. Well, I'm going to start with, since it's about Deming, in '72, I was newly married in April, but had been accepted to NYU Graduate School of Business, and I don't know, I never found out who wrote the course syllabus, but whoever did wrote something that it sounded like a darn interesting course, sampling, manufacturing. I was a protocol officer at the United Nations at the time and was going to night school at the New York University Graduate School of Business. So, I said, this sounds like a good course, interesting course. Had no idea who Dr. Deming was, and I walked into the first class, and there was an old, I'm 26, so he was 72 in 1972, and he was one of the first, one of the only old person who didn't say, I used to be, and I don't want to stereotype all of my peers now that I'm 79, but hopefully I don't fall into the, well, I used to be and what happened. But he did tell, I mean, statistics can be a very technical subject, and the way he taught it, I had courses in some theory of sampling, which was one of his books.

 

0:02:52.2 William Scherkenbach: He had three, I said three courses. The other course that I took was based on his lectures in Japan in 1950, and in fact, two of them. The third course was an extension of that. So, he was, he would teach the statistics, but he was able to tell the history of the people behind all of the thoughts and the formulas and approaches, and I found that extremely, extremely interesting. And he handed out tons of papers and material, and it was just a very, very good experience. I know he had, and he had, in my opinion, a great sense of humor, but then statisticians, what's our status? Yeah, we're like accountants, in any event. .

 

0:04:12.2 Andrew Stotz: Why was he teaching? I mean, at 72, most men, you know, maybe women also, but most of us are like, it's the twilight of our years, and we now know he had 30 more years to go, but why was he teaching? And also, what's interesting is when I think about Deming, I think about his overall system of what he's teaching, whereas it's interesting to think about how he taught one relatively narrow subject.

 

0:04:43.7 William Scherkenbach: I'll get to that as to why I think he was teaching. But yeah, back then there were no 14 Points, no glimmer of Profound Knowledge. It was, not theoretical statistics, but applied statistics with a theory behind it. And he still was really expanding on Shewhart 's work with the difference between enumerative and analytic. He used his own. Now, why he was teaching, years later, probably 1987, so yeah, a bunch of years later, when I was at Ford and I had attended at the time, I attended a senior executive week-long get-together in order to get constancy of purpose or more continuity in the senior executive group. One of the people we brought in was Dr. Peter Kastenbaum. And I found as I attended his lecture in that week-long meeting, he was a student of CI Lewis. And CI Lewis, Deming learned about from Walter Shewhart and his work in the epistemology theory of knowledge. And in any event, Deming, when he was asked, and at the time it was still in the '30s, I think, when he was at the School of Agriculture, or the agriculture department, and bringing in Shewhart, he had tried to get CI Lewis to come talk. And CI said, I would love to, but I have a commitment to my students. And so I can't adjust my schedule.

 

0:07:33.9 William Scherkenbach: And the students, the people who wanted to learn were sacred. And I think that had a huge impact on Dr. Deming. I mean, he spoke about it a lot. And the way, you know, in a lot of the videos that Clare Crawford-Mason did, lovingly called the old curmudgeon. But for students, he had the greatest empathy and charity for, he just didn't suffer fools gladly. If you showed him that you weren't willing to learn, he took great joy in letting them know where they, where they stood.

 

0:08:43.1 Andrew Stotz: And one of the things when I went into my first Deming seminar in 1990, so now we're fast forwarding 30 years from when you first met him. It was almost like there was a safe harbor for workers, for young people, for people with open minds. I mean, I didn't, I watched as he didn't suffer fools, but I'm just curious, when you go back to 1972 in those classes, I'm assuming that he was pretty gentle with the students, encouraging them and all that was...

 

0:09:19.0 William Scherkenbach: Oh, absolutely. In my experience, I mean, if you were by, you know, in a student in graduate school, even though the graduate school of business in New York, down on 90 Church Street, Wall Street area, there were very few people going directly from your bachelor's to the master's program. And so these were people that had probably 10 years experience in business doing stuff. And yet by going to the class, absolutely were willing to learn, listen to different points of view, which is absolutely crucial. As you progress with theory of knowledge to be able to get different perspectives on whatever it is you're trying to look at.

 

0:10:23.2 Andrew Stotz: I would like to continue on this period of time just because it's a snapshot we don't get that often or that easily. You mentioned CI Lewis, a man who lived from about 1880 to about the year I was born, around 1964-65, and he was known for his understanding and discussion about logic and things like that. But why was CI Lewis someone that was interesting to Dr. Deming? What was the connection from your perspective?

 

0:10:59.6 William Scherkenbach: Well, my understanding is Shewhart referred to him, and Lewis was a professor at Harvard, and he was in the Peirce, I believe it's called. It looks like Peirce, but it's Peirce School of, or Chair of Philosophy, and Charles Sanders Peirce was a huge, huge influence in epistemology. And so that whole chain of thought or train of thought interested Deming, but it really was, he was introduced to it by Walter Shewhart. 

 

0:11:48.3 Andrew Stotz: There's a famous quote, I believe, by Deming about CI Lewis and his book Mind and the World Order.

 

0:11:56.0 William Scherkenbach: Mind and the World Order, yeah.

 

0:11:59.9 Andrew Stotz: Deming said he had to read it six times before he fully understood and could apply its insights. And sometimes I think maybe Dr. Deming was truly inspired by that because when I think about his work, I'm still reading it and rereading it. And just listening to the video that you did many years ago with Tim talking about reduced variation, reduced variation, what he was talking about. Sometimes when we see the big picture, there's many different components of Deming's teachings. But if you had to bring it down to kind of its core, you know, he mentioned on that video that I just watched this morning, he mentioned reduced variation, and that will get you lower costs, happier customers, more jobs. How would you say, after you've looked at it from so many different angles over so many different years, how would you say you would sum up Dr. Deming's message to the world?

 

0:13:01.5 William Scherkenbach: Well, that's a difficult thing to sum up. Back then, when we did the video, which was in the early '80s, maybe '84, again, he had his 14 Points by then, but he hadn't, it hadn't really, the Profound Knowledge part of that wasn't there. Now, he had used what Shewhart said, and he had read, tried to read CI Lewis, and when he spoke about the connection between theory and questions, that's what he got from Shewhart and, well, and from Lewis, and a bunch of other pragmatist philosophers. So, he, you know, he was influenced by it, and, well, that's all I can say.

 

0:14:27.5 Andrew Stotz: So, let's go back in time. So, you're sitting in this classroom, you're intrigued, inspired. How did the relationship go at, towards the end of the class, and then as you finished that class, how did you guys keep in touch, and how did the relationship develop?

 

0:14:51.0 William Scherkenbach: Well, that is an interesting story. I usually am, well, I am introverted. So I had, after I moved from New York, I got a job at Booz Allen and Hamilton in Washington, DC. So in '74, when I got the degree from NYU, we moved to Silver Spring. And obviously, he's lived on Butterworth Place since there was a Butterworth Place. So we were able to, one of the things, and this is, well, I will say it, one of his advice to me, although he gave everyone an A, I later kidded him, he didn't remember that he gave me a B. No, he gave me an A. In any event, but one of his piece of advice was, you really don't need to join ASQC. You know more about quality than any of those inspectors. And so he had learned from the '50s in the past 20 years from the 50s that inspection wasn't going to do it. Well, I didn't take his advice, and I joined ASQC, and I was reading...

 

0:16:36.1 Andrew Stotz:Which for those who don't know is the American Society for...

 

0:16:41.6 William Scherkenbach: Quality Control, back then, now it's just the American Society for Quality. I had recommended when we did a big recommendations and forecasts for the year 2000 that quality, it should be the Society for Quality worldwide, but it's ASQ now. Let's see.

 

0:17:07.7 Andrew Stotz: So he recommended you don't join and you didn't follow his recommendation. 

 

0:17:12.1 William Scherkenbach: I don't join, and I read an article, and it was by a professor in Virginia Tech, and he was showing a c-chart and the data were in control, and his recommendations were to penalize the people that were high and reward the people that were low, which is even back then, Dr. Deming was absolutely on track with that. If your process is in control, it doesn't make any sense to rank order or think that any of them are sufficiently different to reward or penalize. And I had never done this, but it was, I wrote a letter to quality progress. I sent a copy to Dr. Deming, and he said, "By golly, you're right on, that's great." And so I think it probably was '75, yeah, 1975. So I had been a year or so out, and he started inviting me over to his place at Butterworth, and we would go to the Cosmos Club. And that was a logistical challenge because at the time he had, well, his garage was a separate, not attached, it was in the backyard and emptied onto an alley. And he had a huge Lincoln Continental, the ones with the doors that opened from the center.

 

0:19:29.0 William Scherkenbach: And he would get in and drive and then park it in back of the club and someone would watch over it. But those were some good memories. So that was my introduction to keep contact with him. As I said, I had never done that. I don't think I've written a letter to an editor ever again.

 

0:20:04.8 Andrew Stotz: And you're mentioning about Butterworth, which is in DC.

 

0:20:12.6 William Scherkenbach: Butterworth Place, yeah.

 

0:20:14.7 Andrew Stotz: And Butterworth Place where he had his consulting business, which he ran, I believe, out of his basement.

 

0:20:18.3 William Scherkenbach: Out of the basement, yep, yep, yep.

 

0:20:21.2 Andrew Stotz: And just out of curiosity, what was it like when you first went to his home? Here, you had met him as your teacher, you respected him, you'd been away for a little bit, he invited you over. What was that like on your first walk into his home?

 

0:20:38.5 William Scherkenbach: Well, went down the side, the entrance to the basement was on the side of the house, and Seal had her desk set up right by the door. And then, I don't know if you can see, this is neat compared to his desk. It was filled with books and papers, but he knew where everything was. But it was a very cordial atmosphere.

 

0:21:25.2 Andrew Stotz: So when you mentioned Cecelia Kilian, is that her name, who was his assistant at the time?

 

0:21:36.3 William Scherkenbach: Yes, yes.

 

0:21:38.0 Andrew Stotz: Okay, so you...

 

0:21:38.8 William Scherkenbach: Yeah. For Jeepers. I don't know how long, but it had to be 50 years or so. So I don't, I mean, back in the '70s, I don't know of any other. He might have had, well, okay. He, yeah.

 

0:22:01.1 Andrew Stotz: I think it's about 40 or 50 years. So that's an incredible relationship he had with her. And I believe she wrote something. I think I have one of her, a book that she wrote that described his life. I can't remember that one right now but...

 

0:22:14.2 William Scherkenbach: Yeah. A lot of, yeah, it contained a lot of...

 

0:22:16.6 Andrew Stotz: The World of Dr. W. Edwards Deming, I think was the name of it, yeah.

 

0:22:20.6 William Scherkenbach: Okay. It contained a lot of his diaries on a number of his visits to Japan and elsewhere.

 

0:22:32.1 Andrew Stotz: So for some of us, when we go into our professor's offices, we see it stacked full of papers, but they've been sitting there for years. And we know that the professor just doesn't really do much with it. It's just all sitting there. Why did he have so much stuff on it? Was it incoming stuff that was coming to him? Was it something he was writing? Something he was reading? What was it that was coming in and out of his desk?

 

0:22:55.7 William Scherkenbach: A combination of stuff. I don't know. I mean, he was constantly writing, dictating to seal, but writing and reading. He got a, I mean, as the decades proceeded out of into the '80s, after '82, the NBC white or the '80, the NBC white paper calls were coming in from all over, all over the world. So yeah, a lot of people sending him stuff.

 

0:23:35.8 Andrew Stotz: I remember seeing him pulling out little scraps of paper at the seminar where he was taking notes and things like that at '90. So I could imagine he was just prolific at jotting things down. And when you read what he wrote, he really is assembling a lot of the notes and things that he's heard from different people. You can really capture that.

 

0:23:59.0 William Scherkenbach: Yeah. He didn't have an identic memory, but he took notes and quite, you know, and what he would do at the end of the day before retiring, he'd review the notes and commit them to memory as best he could. So he, yeah, very definitely. I mean, we would, you know, and well, okay. We're still in the early days before Ford and GM, but.

 

0:24:37.6 Andrew Stotz: Yeah. And I want to, if I shoot forward to '90, '92, when I studied with him, I was impressed with his energy at his age and he was just on a mission. And when I hear about your discussion about the class and at that time, it's like he was forming his, you know, System of Profound Knowledge, his 14 Points. When do you think it really became a mission for him to help, let's say American industry?

 

0:25:09.0 William Scherkenbach: Oh, well, I think it was a mission when Ford began its relationship with him. The ability of a large corporation, as well, and Ford at the same time Pontiac, the Pontiac division, not the whole GM, but Pontiac, was learning as well. But the attachment to Ford was that you had Don Peterson at the time was president of Ford, and he was intellectually curious, and he and Deming were on the same frequency. Now, I don't want to jump ahead, but if anyone has, well, you've read my second book there, you'll know that I have mentioned that the way to change is physical, logical, and emotional. And when you look at the gurus back then, there was Deming, who was the logical guru. You had Phil Crosby, who was the emotional guru. You go to the flag and the wine and cheese party, and Deming would say, "No," and Joe Juran, who was interested in focusing on the physical organization, you report to me kind of a thing. And so each of these behemoths were passing each other in the night with the greatest respect. But, but, and so they had their constituents. The challenge is to be able to broaden the appeal. 

 

0:27:33.8 Andrew Stotz: So we've gone through '72, and then now '75, you've written your piece, and he's brought you into the fold. You're starting to spend some time with him. I believe it was about 1981 or so when he started working with Ford. And at that time, the quality director, I think, was Larry Moore at the time. And of course, you mentioned Donald Peterson. Maybe you can help us now understand from your own perspective of what you were doing between that time and how you saw that happening.

 

0:28:13.4 William Scherkenbach: Well, I had, my career was, after Booz Allen, mostly in the quality reliability area. I went from Booz Allen and Hamilton to, I moved to Columbia, Maryland, because I can fondly remember my grandfather in Ironwood, Michigan, worked at the Oliver Mine. There's a lot of iron ore mines up in the UP. ANd he would, and his work, once he got out of the mines later on, was he would cut across the backyard, and his office was right there. And so he would walk home for lunch and take a nap and walk back. And I thought that really was a good style of life. So Columbia, Maryland, was designed by Rouse to be a live-in, work-in community. And so we were gonna, we moved to Columbia, and there was a consulting firm called Hitman Associates, and their specialty was energy and environmental consulting. So did a bunch of that, worked my way up to a vice president. And so, but in '81, Deming said, you know, Ford really is interested. He was convinced, and again, it's déjà vu, he spoke about, when he spoke fondly about his lectures in Japan in 1950 and onward, that he was, he was very concerned that top management needed to be there, because he had seen all the excitement at Stanford during the war, and it died out afterwards, because management wasn't involved.

 

0:30:42.8 Andrew Stotz: What do you mean by that? What do you mean by the excitement at Stanford? You mean people working together for the efforts of the war, or was there a particular thing that was happening at Stanford?

 

0:30:51.7 William Scherkenbach: Well, they were, he attributed it to the lack of management support. I mean, they learned SPC. We were able to improve quality of war material or whatever, whoever attended the Stanford courses. But he saw the same thing in Japan and was lucky to, and I'm not sure if it was Ishikawa. I'm just not sure, but he was able to get someone to make the call after a few of the seminars for the engineers to make the call to the top management to attend the next batch. And he was able, he was able to do that. And that he thought was very helpful. I, I, gave them a leg up on whatever steps were next. I'm reminded of a quote from, I think it was Lao Tzu. And he said that someone asked him, "Well, you talk to the king, why or the emperor, why are things so screwed up?" And he said, "Well, I get to talk to him an hour a week and the rest of the time his ears are filled with a bunch of crap." Or whatever the Chinese equivalent of that is. And he said, "Of course the king isn't going to be able to act correctly." Yeah, there are a lot of things that impacted any company that he helped.

 

0:33:07.6 Andrew Stotz: It's interesting because I believe that, I think it was Kenichi Koyanagi.

 

0:33:15.8 William Scherkenbach: Koyanagi, yes, it was.

 

0:33:17.8 Andrew Stotz: And it was in 1950 and he had a series of lectures that he did a series of times. But it's interesting that, you know, that seemed like it should have catapulted him, but then to go to where you met him in 1972 and all that, he still hadn't really made his impact in America. And that's, to me, that's a little bit interesting.

 

0:33:44.4 William Scherkenbach: Yeah, and quite, my take, I mean, you could tell even in '72 and '3 in classes, he was very frustrated that he wasn't being listened to. I mean, he had, his business was expert testimony in statistical design of surveys. He did road truck, truck transport studies to be able to help the interstate commerce commission. And made periodic trips back to Japan, well known in Japan, but frustrated that no one really knew about him or wasn't listening to him in the US. And that was, I mean, for years, that was my, my aim. And that is to help him be known for turning America around, not just Japan. But it's usually difficult. I mean, we did a great job at Ford and GM and a bunch of companies, but it's all dissipated.

 

0:35:25.9 Andrew Stotz: It's interesting because it's not like he just went as a guest and gave a couple of guest lectures. He did about 35 lectures in 1950. About 28 or almost 30 of them were to engineers and technical staff. And then about seven of them were to top level executives. And, you know, one of the quotes he said at the time from those lectures was, "the problem is at the top, quality is made in the boardroom." So just going back, that's 1950, then you meet him in 1970, then in '72, then you start to build this relationship. You've talked about Booz Allen Hamilton. Tell us more about how it progressed into working more with him, in particular Ford and that thing that started in, let's say, 1981 with Ford.

 

0:36:22.0 William Scherkenbach: Well, again, he was very enthusiastic about Ford because Peterson was very receptive to this, his approach. And again, it's, I think the British philosopher Johnson said, "there's nothing like the prospect of being hung in the morning to heighten a man's senses." So he, Ford had lost a couple billion bucks. They hadn't cashed in like Chrysler. GM lost a bunch too, but that, and Japan had lost a war. So does it take a significant emotional, logical, or physical event? For some folks it does. So he was very encouraged about what he was seeing at Ford. And he had recommended that Ford hire someone to be there full time to coordinate, manage, if you will. And I was one of the people he recommended and I was the one that Ford hired. So I came in as Director of Statistical Methods and Process Improvement. And they set it up outside, as Deming said, they set it up outside the quality. Larry Moore was the Director of Quality and I was Director of Statistical Methods. And that's the way it was set up.

 

0:38:08.0 Andrew Stotz: Were you surprised when you received that call? How did you feel when you got that call to say, "Why don't you go over there and do this job at Ford?"

 

0:38:18.6 William Scherkenbach: Oh, extremely, extremely happy. Yeah. Yeah.

 

0:38:23.1 Andrew Stotz: And so did you, did you move to Michigan or what did you do?

 

0:38:27.7 Andrew Stotz: I'm sorry?

 

0:38:29.4 Andrew Stotz: Did you move or what happened next as you took that job?

 

0:38:32.0 William Scherkenbach: Oh yeah, we were living in Columbia. We moved the family to the Detroit area and ended up getting a house in Northville, which is a Northwest suburb of Detroit.

 

0:38:49.9 Andrew Stotz: And how long were you at Ford?

 

0:38:53.8 William Scherkenbach: About five and a half years. And I left Ford because Deming thought that GM needed my help. Things were going well. I mean, had a great, great bunch of associates, Pete Chessa, Ed Baker, Narendra Sheth, and a bunch of, a bunch of other folks. Ed Baker took the directorship when I left. That was my, well, I recommended a number of them, but yeah, he followed on. Deming thought that there was a good organization set up. And me being a glutton for punishment went to, well, not really. A bunch of great, great people in GM, but it's, they were, each of the general managers managed a billion dollar business and a lot of, difficult to get the silos to communicate. And it really, there was not much cooperation, a lot of backstabbing.

 

0:40:25.0 Andrew Stotz: And how did Dr. Deming take this project on? And what was the relationship between him and, you know, let's say Donald Peterson, who was the running the company and all the people that he had involved, like yourself, and you mentioned about Ed Baker and other people, I guess, Sandy Munro and others that were there. And just curious, and Larry Moore, how did he approach that? That's a huge organization and he's coming in right at the top. What was his approach to handling that?

 

0:41:02.1 S2  Well, my approach was based on his recommendation that the Director of Statistical Methods should report directly to the president or the chairman, the president typically. And so based on that, I figured that what I would, how we would organize the office, my associates would each be assigned to a key vice president to be their alter ego. So we did it in a, on a divisional level. And that worked, I think, very well. The difficulty was trying to match personalities and expertise to the particular vice president. Ed Baker had very good relations with the Latin American organization, and, and he and Harry Hannett, Harold Hannett helped a lot in developing administrative applications as well. And so we sort of came up with a matrix of organization and discipline. We needed someone for finance and engineering and manufacturing, supply chain, and was able to matrix the office associates in to be able to be on site with those people to get stuff, to get stuff done.

 

0:43:09.5 Andrew Stotz: And what was your message at that time, and what was Dr. Deming's message? Because as we know, his message has come together very strongly after that. But at that point, it's not like he had the 14 Points that he could give them Out of the Crisis or you could give them your books that you had done. So what was like the guiding philosophy or the main things that you guys were trying to get across?

 

0:43:35.9 William Scherkenbach: Well, I mean, he had given in, I think, Quality, Productivity, Competitive Position back in the late '70s, and he was doing it through George Washington University, even though Myron Tribus at MIT published it. But it was a series of lectures, and he didn't really, even in the later 70s, didn't have the, the, the 14 Points. And so those came a couple years later, his thinking through, and Profound Knowledge didn't come until much later over a number of discussions of folks. But the, I mean, the key, I mean, my opinion of why it all dropped out is we dropped the ball in not working with the board. And at Ford, we didn't, weren't able to influence the Ford family. And so Peterson retires and Red Poling, a finance guy, steps in and, and everything slowly disintegrates. At least not disintegrates, well, yes. I mean, what was important under Peterson was different. But that happens in any company. A new CEO comes on board or is elected, and they've got their priorities based, as Deming would say, on their evaluation system. What's their, how are they compensated?

 

0:45:46.8 William Scherkenbach: And so we just didn't spend the time there nor at GM with how do you elect or select your next CEO? And so smaller companies have a better, I would think, well, I don't know. I would imagine smaller companies have a better time of that, especially closely held and family held companies. You could, if you can reach the family, you should be able to get some continuity there.

 

0:46:23.5 Andrew Stotz: So Donald Peterson stepped down early 1995. And when did you guys make or when did you make your transition from Ford to GM?

 

0:46:38.5 William Scherkenbach: '88.

 

0:46:39.6 Andrew Stotz: Okay, so you continued at Ford.

 

0:46:42.1 William Scherkenbach: The end of '88, yeah, and I left GM in '93, the year Dr. Deming died later. But I had left in, in, well, in order to help him better.

 

0:47:07.8 Andrew Stotz: And let's now talk about the transition over to General Motors that you made. And where did that come from? Was it Dr. Deming that was recommending it or someone from General Motors? Or what...

 

0:47:21.4 William Scherkenbach: Yeah, Deming spoke with them and spoke with me. And I was a willing worker to be able to go where he thought I could be most helpful.

 

0:47:41.9 Andrew Stotz: And was he exasperated or frustrated that for the changes that happened in '95 when Peterson stepped down, he started to see the writing on the wall? Or was he still hopeful?

 

0:47:55.4 William Scherkenbach: No, Deming died in '93, so he didn't see any of that.

 

0:47:58.9 Andrew Stotz: No, no, what I mean is when Peterson stepped down, it was about '85. And then you remain at Ford until '88.

 

0:48:08.0 William Scherkenbach: No, Peterson didn't step down in '85. I mean, he was still there when I left.

 

0:48:14.0 Andrew Stotz: So he was still chairman at the time.

 

0:48:17.3 William Scherkenbach: Yeah.

 

0:48:17.6 Andrew Stotz: Maybe I'm meaning he stepped down from president. So my mistake on that.

 

0:48:20.3 William Scherkenbach: Oh, but he was there.

 

0:48:24.3 Andrew Stotz: So when did it start...

 

0:48:25.9 William Scherkenbach: True. I mean, true, he was still there when Deming had died.

 

0:48:31.3 Andrew Stotz: Yeah, okay. So did the whole team leave Ford and go to GM or was it just you that went?

 

0:48:39.1 William Scherkenbach: Oh, just me. Just me.

 

0:48:42.8 Andrew Stotz: Okay. And then.

 

0:48:44.0 William Scherkenbach: Yeah, because we had set up something that Deming was very pleased with. And so they were, everyone was working together and helping one another.

 

0:48:59.5 Andrew Stotz: Okay. So then you went to General Motors. What did you do different? What was different in your role? What did you learn from Ford that you now brought to GM? What went right? What went wrong? What was your experience with GM at that time?

 

0:49:16.5 William Scherkenbach: Well, I've got a, let's see. Remember Bill Hoagland was the person, Hoagland managed Pontiac when Deming helped Pontiac and Ron Moen was involved in the Pontiac. But Bill Hoagland was in one of the reorganizations at GM was head of, he was group, group vice president for Buick, Oldsmobile, Cadillac. And so I went over and directly reported to him and each of the, I mean, Wendy Coles was in, Gypsy Rainey, although Gypsy was temporary, worked for powertrain and Pontiac and still, but powertrain was where a lot of the expertise was and emphasis was, and then Buick and Cadillac and so, and Oldsmobile. So we, and in addition to that, General Motors had a corporate-wide effort in cooperation with the UAW called the Quality Network. And I was appointed a member of that, of that and, and helped them a lot and as well as the corporate quality office, but focused on Buick, Oldsmobile, Cadillac.

 

0:51:18.6 Andrew Stotz: And then tell us about what was your next step in your own personal journey? And then let's now get into how you got more involved with Deming and his teachings and the like.

 

0:51:32.8 William Scherkenbach: Well, I mean, he would be at GM two and three days a month, and then every quarter he'd be here for, just like Ford, for a four-day seminar. And while at Ford and at GM, I took uh vacation to help him as he gave seminars and met people throughout the world. Even when he was probably 84, 85, I can remember, well, one of the, he always, not always, but he would schedule seminars in England over the Fourth of July because the English don't celebrate that, although he said perhaps they should, but right after the Ascot races. And so he would do four-day seminars. And on one case, we had one series of weeks, the week before Fourth of July, we did a four-day seminar in the US and then went to London to do another four-day seminar. And he went to South Africa for the next four-day seminar with Heero Hacquebord. I didn't go, but I went down to Brazil and I was dragging with that, with that schedule. So he was able to relish and enjoy the helping others. I mean, enjoy triggers a memory. We were at helping powertrain and Gypsy was there, Dr. Gypsy Rainey. 

 

0:53:59.2 William Scherkenbach: And she, we were talking and goofing around and he started being cross at us. And Gypsy said, "Well, aren't we supposed to be having fun?" And Deming said, "I'm having fun." "You guys straighten out." Enjoy, enjoy, enjoy, yeah.

 

0:54:40.6 Andrew Stotz: And for the typical person to imagine a man at the age of 80, 85, traveling around the world. And it's not like you're traveling on vacation in London, you're walking into a room full of people, your energy is up, you're going and it's not like he's giving a keynote speech for an hour, give us a picture of his energy.

 

0:55:09.5 William Scherkenbach: And over in London, it was brutal because the hotel, I forget what hotel we're in. When he started there, I think it was Dr. Bernard that he wanted to help. And Bernard wasn't available. So he recommended Henry Neave. And so Henry was a good student, a quick learner. So he helped on a few of them. And I can still remember, I mean, the air, it was 4th of July in London and the humidity was there. There's no air conditioning in the hotel. I could remember Henry, please forgive me, but Henry is sitting in his doorway, sitting on a trash can, doing some notes in his skivvies. And it was hot and humid and awful. But so it reminded Deming a lot of the lectures in Japan in 1950, where he was sweating by 8 AM in the morning. So, yeah.

 

0:56:30.6 Andrew Stotz: What was it that kept him going? Why was he doing this?

 

0:56:39.5 William Scherkenbach: I think he, again, I don't know. I never asked him that. He was very, to me, he was on a mission. He wanted to be able to help people live better, okay, and take joy in what they do. And so he was, and I think that was the driving thing. And as long as he had the stamina, he was, he was in, in, in heaven.

 

0:57:21.1 Andrew Stotz: So let's keep progressing now, and let's move forward towards the latter part of Dr. Deming's life, where we're talking about 1990, 1988, 1990, 1992. What changed in your relationship and your involvement with what he was doing, and what changes did you see in the way he was talking about? You had observed him back in 1972, so here he is in 1990, a very, very different man in some ways, but very similar. How did you observe that?

 

0:57:56.6 William Scherkenbach: Well, toward the end, it was, I mean, it was, it was not, not pleasant to see him up there with oxygen up his nose, and it just, there had to have been a better way. But Nancy Mann was running those seminars, and they did their best to make life comfortable, but there had to have been a better way to, but I don't know what it was. He obviously wanted to continue to do it, and he had help doing it, but I don't know how effective the last year of seminars were.

 

0:59:01.1 Andrew Stotz: Well, I mean, I would say in some ways they were very effective, because I attended in 1990 and 1992, and I even took a picture, and I had a picture, and in the background of the picture of him is a nurse, and for me, I just was blown away and knocked out. And I think that one of the things for the listeners and the viewers is to ask yourself, we're all busy doing our work, and we're doing a lot of activities, and we're accomplishing things, but for what purpose, for what mission? And I think that that's what I gained from him is that because he had a mission to help, as you said, make the world a better place, make people have a better life in their job, and help people wake up, that mission really drove him.

 

0:59:57.8 William Scherkenbach: Yeah, and it, it really did. But for me personally, it was just not pleasant to see him suffering. 

 

1:00:09.6 Andrew Stotz: And was he in pain? Was he just exhausted? What was it like behind the scenes when he'd come off stage and take a break?

 

1:00:18.7 William Scherkenbach: Yeah, yeah.

 

1:00:20.8 Andrew Stotz: And would he take naps or?

 

1:00:23.2 William Scherkenbach: In the early days, we'd go to, well, at Ford and GM, we would go out to dinner just about every night and talk and enjoy the conversation. We'd, my wife Mary Ellen, went many, many times. He enjoyed Northville, some of the restaurants there, and enjoyed the Deming martinis after the meetings at the Cosmos Club. So very, very much he enjoyed that, that time off the podium. So, but he couldn't do that in the, in the later years.

 

1:01:28.7 Andrew Stotz: And let's now try to understand the progression as you progress away from General Motors and did other things. How did your career progress in those years until when you retired or to where you are now? Maybe give us a picture of that.

 

1:01:51.4 William Scherkenbach: I tried to help. I've developed my view on how to operationalize change, worked for, was vice president of a company in Taiwan, spent a couple of, and before that had helped Dell, and would spend probably ending up a couple of years in PRC and Taiwan, and growing and learning to learn, in my opinion, there's too much generalization of, well, Asians or Chinese or whatever. There are many, many subgroups, and so change has to be bespoke. What will work for one person won't work for another. For instance, trying to talk to a number of Chinese executives saying, drive out fear, and they will, oh, there's no fear here. It's respect. And so, yeah. But that was their sincere belief that what they were doing wasn't instilling fear. But it broadened my perspective on what to do. And then probably 10 years ago, my wife started to come down with Alzheimer's, and while we lived in Austin, Texas, and that I've spent, she died three years ago, but that was pretty much all-consuming. That's where I focused. And now it's been three years. I'm looking, and I'm a year younger than Deming when he started, although he was 79 when he was interviewed for the 1980 White Paper.

 

1:04:36.3 William Scherkenbach: So I'm in my 80th year. So, and I'm feeling good, and I also would like to help people.

 

1:04:46.6 Andrew Stotz: And I've noticed on your LinkedIn, you've started bringing out interesting papers and transcripts and so many different things that you've been coming out. What is your goal? What is your mission?

 

1:05:02.3 William Scherkenbach: Well, I also would like to take the next step and contribute to help the improvement, not just the US, but any organization that shows they're serious for wanting to, wanting to improve. On the hope, and again, it's hope, as Deming said, that to be able to light a few bonfires that would turn into prairie fires that might consume more and more companies. And so you've got to light the match somewhere. And I just don't know. Again, I've been out of it for a number of years, but I just don't know. I know there is no big company besides, well, but even Toyota. I can remember Deming and I were in California and had dinner. Toyoda-san and his wife invited Deming and me to a dinner. And just, I was blown away with what he understood responsibilities were. I don't know, although I do have a Toyota Prius plug-in, which is perfect because I'm getting 99 miles a gallon because during my, doing shopping and whatever here in Pensacola, I never use gas. It goes 50 miles without needing to plug in.

 

1:07:00.6 William Scherkenbach: And so I do my stuff. But when I drive to Texas or Michigan, Michigan mostly to see the family, it's there. But all over, it's a wonderful vehicle. So maybe they're the only company in the world that, but I don't know. I haven't sat down with their executive.

 

1:07:26.4 Andrew Stotz: And behind me, I have two of your books, and I just want to talk briefly about them and give some advice for people. The first one is The Deming Route to Quality and Productivity: Roadmaps and Roadblocks, and the second one is Deming's Road to Continual Improvement. Maybe you could just give some context of someone who's not read these books and they're new to the philosophy and all that. How do these books, how can they help them?

 

1:07:58.8 William Scherkenbach: Well, the first book, Deming asked me to write in, I think it was '84. And I don't remember the first edition, but it might be '85, we got it out. But he asked me to write it, and because he thought I would, I could reach a different audience, and he liked it so much, they handed it out in a number of his seminars for a number of years. So.

 

1:08:40.7 Andrew Stotz: And there's my original version of it. I'm holding up my... 

 

1:08:47.0 William Scherkenbach: Yeah, that's a later version.

 

1:08:49.7 Andrew Stotz: And it says the first printing was '86, I think it said, and then I got a 1991 version, which maybe I got it at one of the, I'm sure I got it at one of the seminars, and I've had it, and I've got marks on it and all that. And Deming on the back of it said, "this book will supplement and enhance my own works in teaching. Mr. Scherkenbach's masterful understanding of a system, of a process, of a stable system, and of an unstable system are obvious and effective in his work as well as in his teaching." And I know that on Deming's Road to Continual Improvement, you do a good amount of discussion at the beginning about the difference between a process and a system to try to help people understand those types of things. How should a reader, where should they start?

 

1:09:42.8 William Scherkenbach: Well, not with chapter six, as in CI Lewis, but well, I don't know what... I don't remember what chapter six is. As I said, the first book, and a lot of people after that did it, is essentially not regurgitating, but saying in a little bit different words about Deming's 14 Points. What I did on the first book is arrange them in the order that I think, and groupings that I think the 14 Points could be understood better. The second book was, the first half was reviewing the Deming philosophy, and the second half is how you would go about and get it done. And that's where the physiological, emotional, and all of my studies on operationalizing anything.

 

1:10:55.4 Andrew Stotz: And in chapter three on page 98, you talk about physical barriers, and you talk about physical, logical, emotional. You mentioned a little bit of that when you talked about the different gurus out there in quality, but this was a good quote. It says, Dr. Deming writes about the golfer who cannot improve his game because he's already in the state of statistical control. He points out that you have only one chance to train a person. Someone whose skill level is in statistical control will find great difficulty improving his skills.

 

1:11:32.1 William Scherkenbach: Yeah. Well, yeah, I mean, well, you're old enough to know the Fosbury Flop. I mean, for all high jumpers did the straddle in jumping and made some great records, but many of them had difficulty converting their straddle to the Fosbury Flop to go over backwards head first. And that's what got you better performance. So anything, whether it's golf or any skill, if you've got to change somehow, you've got to be able to change the system, which is whether you're in production or whether it's a skill. If you're in control, that's your opportunity to impact the system to get better.

 

1:12:40.3 Andrew Stotz: Yeah, and this was Dick Fosbury in 1968, Mexico City Olympics, where he basically went in and blew everybody away by going in and flipping over backwards when everybody else was straddling or scissors or something like that. And this is a great story.

 

1:12:57.0 William Scherkenbach: You can't do that.

 

[laughter]

 

1:12:58.8 Andrew Stotz: Yeah, and it's a great story of something on the outside. An outsider came in and changed the system rather than an existing person within it. And that made me think about when you talked about Ford and having an outsider helping in the different departments. You know, what extent does that reflect the way that we learn? You know, can we learn internally, or do we need outside advice and influence to make the big changes?

 

1:13:29.7 William Scherkenbach: Yeah. I mean, we had a swim coach, Higgins, at the Naval Academy, and he was known for, again, following in Olympic swimming. And I'm probably going to get the strokes wrong, but there was no such thing as a butterfly stroke. And he used it in swimming the breaststroke, and supposedly the only criteria was recovery had to be underwater with two hands. But I'm screwing up the story, I'm sure, but Higgins rewrote, rewrote the book by doing something a little bit different or drastically different.

 

1:14:25.4 Andrew Stotz: I'd like to wrap up this fascinating discovery, or journey of discovery of you and your relationship also with Dr. Deming. Let's wrap it up by talking about kind of your final memories of the last days of Dr. Deming and how you kind of put that all in context for your own life. And having this man come in your life and bring you into your life, I'm curious, towards the end of his life, how did you process his passing as well as his contribution to your life?

 

1:15:08.1 William Scherkenbach: That's, that's difficult and personal. I, he was a great mentor, a great friend, a great teacher, a great person, and with, on a mission with a name and impacted me. I was very, very lucky to be able to, when I look back on it, to recognize, to sign up for his courses, and then the next thing was writing that letter to the editor and fostering that relationship. Very, very, very difficult. But, I mean, he outlived a bunch of folks that he was greatly influenced by, and the mission continues.

 

1:16:34.1 Andrew Stotz: And if Dr. Deming was looking down from heaven and he saw that you're kind of reentering the fray after, you know, your struggles as you've described with your wife and the loss of your wife, what would he say to you now? What would he say as your teacher over all those years?

 

1:16:56.3 William Scherkenbach: Do your best.

 

1:16:59.0 Andrew Stotz: Yeah, wonderful.

 

1:17:01.4 William Scherkenbach: He knows, but he knows I know what to do. So, you need to know what to do and then to do the best. But I was, I mean, he was very, he received, and I forget the year, but he was at Ford and he got a call from Cel that his wife was not doing well. And so we, I immediately canceled everything and got him to the airport and he got to spend that last night with his wife. And he was very, very appreciative. So I'm sure he was helping, helping me deal with my wife.

 

1:17:56.4 Andrew Stotz: Yeah. Well, Bill, on behalf of everyone at the Deming Institute and myself personally, I want to thank you for this discussion and opening up you know, your journey with Dr. Deming. I feel like I understand Dr. Deming more, but I also understand you more. And I really appreciate that. And for the listeners out there, remember to go to Deming.org to continue your journey. And also let me give you, the listeners and viewers, the resources. First, we have Bill's book, which you can get online, The Deming Route to Quality and Productivity. We have Deming's Road to Continual Improvement, which Bill wrote. But I think even more importantly is go to his LinkedIn. He's on LinkedIn as William Scherkenbach and his tagline is helping individuals and organizations learn, have fun, and make a difference. So if you want to learn, have fun, and make a difference, send him a message. And I think you'll find that it's incredibly engaging. Are there any final words that you want to share with the listeners and the viewers?

 

1:19:08.9 William Scherkenbach: I appreciate your questions. In thinking about this interview, we barely scratched the surface. There are a ton of other stories, but we can save that for another time.

 

1:19:26.1 Andrew Stotz: Something tells me we're going to have some fun and continue to have fun in these discussions. So I really appreciate it and it's great to get to know you. Ladies and gentlemen.

 

1:19:36.7 William Scherkenbach: Thank you, Andrew.

 

1:19:37.7 Andrew Stotz: You're welcome. This is your host, Andrew Stotz, and I'm going to leave you with one of my favorite quotes from Dr. Deming, and that is that "people are entitled to joy in work."

 

 

What if you could tackle a persistent problem without guesswork? In Part 10 of the Path to Improvement series, John Dues and Andrew Stotz discuss how John's team uses Plan-Do-Study-Act (PDSA) cycles to calm a chaotic process with precision. Discover how to shift from blame to solutions by leveraging data and Deming thinking. You'll also find out where the team stands on their path to reducing chronic absenteeism in their schools. Listen now! #EducationLeadership #ContinuousImprovement #SystemsThinking #DemingInEducation  

TRANSCRIPT

0:00:02.2 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 John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is mapping the process, part two. John, take it away.

 

0:00:23.5 John Dues: Hey, Andrew. It's good to be back. Yeah, we've now been talking about our efforts to improve chronic absenteeism for several episodes. And we've talked about two Plan-Do-Study-Act or PDSA cycles focused on where we were working with specific students and their families regarding obstacles to getting to school. And then we shifted gears, and we started running this PDSA cycle three that we talked about last time. And just as a refresher for listeners, the objective of PDSA three is to create a process map, basically. And the goal for the process map is to standardize our attendance intervention system. And I think one of the things that comes to mind when you sort of work on process maps or on important processes is this quote from Dr. Deming. He said, If you can't describe what you're doing as a process, you don't know what you're doing, which is pretty convicting when you really think about it. I think a lot of people initially will say, No, no, no, I know exactly what our process is. And then you say, Well, write it down, map it. And then it becomes much more apparent that most people most of the time have a very rough version in their head that they can't translate into an actual written process.

 

0:01:44.8 Andrew Stotz: And I'm curious why that is, because on the one hand, when I've done mapping a process, you end up with, Okay, but then there's this exception, and then there's this. And oh, yeah, but don't forget that. So there's like all these intricacies. That's one reason. And then there's another reason is why is that someone's tunnel vision on I know the process because I know the three parts of the process that I'm working with. Why do you think it's hard for people to understand the whole process?

 

0:02:11.9 John Dues: Well, I think that first reason is probably the biggest reason where there's when they actually start mapping it, there's all these things that they initially left out. And I think as soon as an organization gets to a certain number of employees and has a certain amount of complexity, or you have to add a person that's now going to do part of what you previously did because your role changed or something shifted, needs change, or whatever in the environment. And you have to bring them in. You realize pretty quickly that you can't rely on that stuff that lived in your head anymore. So I think it's a combination of all those things for why this becomes so important. And the other reason I mean, the reason you want to do this is so that there's a starting place, a standard place where people are working from so that whatever it is that the focus is that it can be improved. It's hard to do that when there's no set process to start with.

 

0:03:08.5 John Dues: Let me. I'll share my screen and just kind of as a refresher, take a look at some of that data that we've talked about so far on this chronic absenteeism front. So, you'll remember that we have this long range goal to improve chronic absenteeism. We've kind of talked about where we are now, where we want to be. So where we are now is in that sort of 40 to 50 % range in terms of chronic absenteeism. We want to be down in under 5%. We have eight years of data going back to the 16-17 school year. And the other thing we've talked about on the data front is that really we have this pre-pandemic world and this post-pandemic world when it comes to chronic absenteeism. For anybody that's watching, you can clearly see this on the process behavior chart or control chart that's on the screen where prior to COVID, we're sort of humming along around 25% chronic absenteeism, which is still high. But now, since COVID, we've since the pandemic, we've skyrocketed. So there's this clear, sort of, new reality, new system for schools like ours that...

 

0:04:23.7 Andrew Stotz: And can you, just for someone that may be just popping in and hearing this, can you just describe what is chronic absenteeism rate?

 

0:04:31.9 John Dues: Yes, chronic absenteeism is a standard federally defined level of absenteeism where kids are called chronically absent once they've missed 10% or more of the school year. So the percent of kids that are chronically absent is what's being displayed.

 

0:04:50.5 Andrew Stotz: So if a school has 100 kids, this chart is saying that 50% of them are chronically absent?

 

0:04:58.9 John Dues: Yes. Yep.

 

0:05:00.5 Andrew Stotz: Okay. Yep.

 

0:05:01.1 John Dues: And that's not since the pandemic happened. That's not atypical, especially for schools that serve a high population of students that are economically disadvantaged, basically, unfortunately. So that's the goal, sort of cut it by a significant amount, 40 to 50% down to less than 5%. So that's the goal. And we've looked at the... Last time we looked at sort of the processes that are currently in place. So just as a quick refresher, United Schools, where I work, is a small urban public charter school system. We have four campuses, and there's people from each of the campuses on this attendance improvement team. And what we've been doing lately is sort of mapping out the process that each campus is using. Each campus has their own little process for intervening with kids that are chronically absent. They have different people that are doing different parts of that process. And so we started with just saying, what is it that your process looks like?

 

0:06:09.3 John Dues: And we looked at a couple of those maps. So this first map is from one of the campuses. It's pretty simple. There's just one or two people involved. The way they represented it initially is just maybe 10 or 15 steps that they're going through to sort of identify who's having attendance issues, sending letters to families, contacting families, that type of thing. But you can see, initially, at least as they mapped it, it's a pretty simple process. And then when we looked at one of our other campuses and they mapped theirs out, it was a slightly more in-depth process. There's sort of more detail. There are more people involved in the process. I'd say there's probably a little more sophistication to sort of when and how they were intervening with parents. And a lot of the intervening is just sort of the compliance requirements. When a kid reaches a certain number of missed hours, we're required to send them a letter to their parents, for example. So a lot of the process currently focuses on sort of the legal requirements when it comes to absenteeism in Ohio's law. But these are two campuses that are about three miles apart, and you can see, even though they're following the same legal sort of requirements from the state, they have very different processes for how that work is being done.

 

0:07:38.9 Andrew Stotz: Or could you also say that this particular campus, the people involved may have a much deeper understanding of it or a desire to map it out with more detail? Or do you think it's significantly different?

 

0:07:52.3 John Dues: I think that this second one that looks like it has more steps, I think they have a person that's more of their sort of 1.0 FTEs, like more of their 1.0 FTE is focused on just attendance, whereas it's sort of like a divided responsibility.

 

0:08:09.7 Andrew Stotz: Wait, what's a 1.0 FTE?

 

0:08:12.1 John Dues: Like one full-time equivalent person. So a big part of the person's job is this attendance process. So they know this process pretty deeply. So they were able to map it in more detail, basically. So that was interesting. So part of this PDSA cycle three was, so the plan was really had sort of two steps. One, create a standardized process map for the system as a whole that everybody's going to work from. And then, once that's drafted, gather some feedback, both quantitative and qualitative feedback from our network leadership team. So that was the Plan. The Do was just make the map and then gather the input. So that's what's been happening of late with this team. But we can see pretty quickly what they did. And it certainly does help to have an improvement advisor, someone with a deep knowledge of the Deming philosophy and mapping processes, because he's the one at the meetings. He's the one sort of taking everything that the team is telling him, the process maps that the campus teams have done. And then he's putting it all together based at their input. And their input is certainly super important, but he's also very talented at building processes that are coherent and can be understood by many across our system.

 

0:09:40.3 John Dues: And so what he ended up doing using their input is he's now got a process map that includes not just the nuts and bolts like, okay, the kid has an attendance problem, and we have to send letters and do things like that. He's going back and created a process map that includes four different stages. So this first stage that if you're viewing this part of the process map is just for onboarding, which was completely missing from all of the campus maps. It wasn't on the... So the idea here is the very first thing, the beginning of this process is a new student enrolls. And as soon as they enroll, a family enrolls, there's going to be a number of things that happen, mostly on the educational side, like what is good attendance? So right from the get-go, one of the things they're going to do is they have this welcome folder that a family gets when they come for their tour or their orientation. And right in that welcome folder is going to be our attendance framework that defines what good attendance is and when, where it really starts to become an issue and impacts a kid's education. So this whole first process map, this whole first stage is about onboarding and educating the family and the student about what good attendance is, which was, again, completely missing from the process before.

 

0:11:10.2 John Dues: The second stage is attendance monitoring. So, the kid's been onboarded, school has started, and now there's a process to monitor every student's attendance, whether they have a problem or not. And this monitoring system is going to be standardized so that different notifications are being sent home to families, different sort of letters, letting them know when things are becoming a problem. So again, this whole process is about monitoring attendance after providing some of that education. And then, if through that monitoring, it becomes apparent that the student needs additional intervention, the next stage is sort of that attendance intervention plan. So this is where the full map before for each campus just focused on this part. And this is obviously, if you look at this compared to the campus maps, this is much more in detail about what's happening. I'd say, the other thing that's happening here is there's problem-solving with the family. So instead of just saying, warning, your kid has gotten to this number of missed hours, and you send that home in a letter, once that happens, you can see that there's actually Plan-Do-Study-Act cycles being run with the family and the student that are off track from attendance perspective and some individual problem solving is happening.

 

0:12:52.3 John Dues: See, we run three PDSA cycles to try to get them back on track. So that's a brand new component to this attendance system. And then from there, for some kids, if we get them back on track, then we don't have to take any further action. But for other students, there are some, again, some legal requirements. And so the last stage of that process is if we do have to file official truancy charges, sort of like what, or let the state know that the student is now truant, there's some steps that we take to make that filing. But that's far after many, many steps have been taken to educate, to run PDSA cycles with individual kids that are off track, to try to get the family and sort of the knowledge they need to understand, like how to keep their student on track when they're in school. So, there's a good chance that this will change pretty quickly, this process map, it's a good one, I think, having gone through it, it's a solid process, but it'll, as soon as it like gets battle tested, there's going to be updates. Now, that's not say you're going to change things willy nilly, but what you are going to do is you're going to learn what's working, what's not, you sort of have this hypothesis, but at least now, since everybody's working from the standard process, we can make improvements that then can go out to the entire system.

 

0:14:32.9 Andrew Stotz: Great. I'm curious, what is the definition of truancy these days? When I was in school, there was trouble in River City and it was trouble with a capital T and that rhyme with P and that stands for pool. So you had the trouble of all the kids hanging out at the pool place, but I'm just curious what's going on. What is the definition of truancy these days?

 

0:15:01.3 John Dues: Yeah, it's when they, I mean, students have to have missed a certain number of hours of instruction. And now instead of attendance being measured in days, there's basically a threshold that you hit in terms of numbers of hours missed that then you legally have to file truancy.

 

0:15:24.4 Andrew Stotz: But what does truancy mean?

 

0:15:27.3 John Dues: Truancy just means that you've missed a lot of school, basically.

 

0:15:31.1 Andrew Stotz: Okay.

 

0:15:31.4 John Dues: Yeah. Yeah. And in terms of reasons, when we did those first PDSAs, not all those kids were necessarily truant, but they all had serious absenteeism issues. I think what we talked about was that we found that there were many different issues that were sort of at the root of that, which is part of the challenge here is we have high numbers of chronic absenteeism and then lots of different reasons for that. And so how do you problem solve with all those different folks to help get them back on track? That's part of the challenge. For sure, part of the challenge. But so where the team is at now, so they've completed this third PDSA cycle. So the Do was to make the process map and then get the input from the leadership team. And now they're doing the Study and the Act. So the Study, one of the things I talked about was that the initial feedback from folks that aren't a part of the team was more education needed to happen during that onboarding process.

 

0:16:39.9 John Dues: So that was sort of like a blind spot before. Not that people didn't talk about it, but now it's systematized. Here's the piece of paper, the attendance framework you're going to give them. There's an orientation session on attendance. There's a session with students during their orientation about what's good attendance and how many days does that equate to in terms of missing school throughout the year, that types of things. Another big thing in the study was more personal touches throughout the process and not just sort of those notifications that I talked about, like the attendance warning letters. The group sort of talked about, while some of these letters are required, whether they're that effective or not is definitely in question.

 

0:17:25.1 John Dues: Another thing is we have a role at each campus that's called Dean of Family and Community Engagement. And so something like attendance is the responsibility of everybody in the school. But if there's a point person at each campus, it's that Dean of Family and Community Engagement. And so there's some worry about, like when I go back to this process, it's the Dean of Family and Community Engagement or DFCE, they're sort of the point person running these PDSAs and the PDSAs can be time intensive. So one of the concerns is, will they be able to sort of handle the workload that sort of comes with this new process? And I think that's definitely an open question, but at least it's on the radar. It's not like no one is saying, here's the process, go figure out how to make this work. That would be a bad way to do it. There's a recognition that we think we need to do some of this problem solving with individual cases, but there's also this recognition that there's going to be a time constraint for the DFCEs. And then another big X factor that was a part of this study write-up was transportation. Because we've talked about how bad transportation, yellow school buses have been in Columbus this year. We've had a lot of problems. And so what's that look like next year, and how does this factor in? When we did those interviews with students and families, it wasn't the primary reason for all families, but I think in about 50% of the families, transportation had some role in the attendance issues. So these are things that are on folks' minds as they're working through this.

 

0:19:06.5 Andrew Stotz: That's a lot of progress on this.

 

0:19:09.3 John Dues: Yeah, a lot of progress, I think. And you get questions like, is it worth all the time to do this? And it's like, is this improving anything? And if you're looking at the outcome, probably not yet. But now that there's this standardized process, I think we can actually make some inroads on this chronic absenteeism process. It would be very hard to do in the absence of this standardization that we're going through and this input from the group to put more sort of resources towards this to get some expertise in terms of putting together a process instead of leaving it up to individual people that maybe don't have this skill set.

 

0:19:53.9 Andrew Stotz: You also recently posted on your LinkedIn about the idea of a system and results. If you don't even understand the system, how are you going to get the results that you want from the system?

 

0:20:05.8 John Dues: Exactly. If you don't understand what's causing the problem, if you don't have a whole systems view, you could put a process in place that actually makes things worse, may make things better in one area, but make them worse in another area. So yeah, this is complicated stuff when you're trying to make change in a complex system like a school system.

 

0:20:25.7 Andrew Stotz: Interesting.

 

0:20:26.2 John Dues: Yeah, the last step is just the Act. So they're deciding what to do. Are they going to adopt this? Are they going to adapt it or abandon the idea? So I think we're not going to abandon it because obviously we're moving forward with this new process map. And it's, I would call this adapt though. So we're going to adapt this process map into the system, but very high likelihood that there are going to be many adjustments to it as it gets put into action. As I was just saying, it's not adopt because if it was adopt, this thing, this process map would be sort of run through a number of cycles where it had been tested, the kinks had been worked out, and it's sort of going to be, this is the way. So what we're doing now is adapt. So we're going to make some improvements based on this initial feedback we got from the leadership team. Now we'll make some additional adjustments, especially next school year because the school year is over during the initial implementation.

 

0:21:29.8 John Dues: And the other sort of part of the Act was if you read the steps in this process map from start to finish. There are a lot of artifacts that go along with this that don't exist. So for example, this attendance slide deck for new student orientation. That's a part of the process. We probably don't want to leave that up to each individual group to create on their own because what is the content of that? And so that has to be created. So there are a number of things like that, that the improvement advisor for the project is going to take on either creating himself or he's going to strongly support the creation. So those are also standardized across the network. So you see, it's a lot of work.

 

0:22:20.4 Andrew Stotz: Yeah.

 

0:22:22.2 John Dues: So that would be where we pick up with, once students come back in August, and that's kind of leaving things off at the end of this school year.

 

0:22:31.6 Andrew Stotz: That's great. I was mentioning about this little jingle that I was talking about, and it comes from a 1957 movie called The Music Man. And he says, his line is, there's trouble in River City, and it starts with T, and that rhymes with P, and that stands for pool. And it's this guy, he's a con man, a hustler, who's gone to the citizens of a town in River City, Iowa, telling them that the corrupting influence is the pool table in the town that's going to keep the kids from going to school. And he wants to start like a marching band. But for those old-timers that seen that movie, they'll love that reference. And if you haven't seen it, go see The Music Man on... I don't know. It's hard to find things on Netflix these days like that, but maybe it's on YouTube.

 

0:23:27.9 John Dues: Very classic, just like that.

 

0:23:30.2 Andrew Stotz: But I remember listening to that when I was young, because my parents always had musicals. My sisters actually played musicals on the record player. So you always was hearing the songs of musicals.

 

0:23:43.8 John Dues: Well, it seems like the truancy thing is, that's not a new problem necessarily.

 

0:23:48.1 Andrew Stotz: Oh, yeah, that's for sure. That's for sure. Well, why don't we wrap it up there? And on behalf of everyone at the Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And you can find John's book, "Win-Win: W. Edwards Deming, the System of Profound Knowledge, and the Science of Improving Schools" on Amazon. 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."

 

How can we improve attendance when every school has a different process?

In this episode, John Dues continues his exploration of Deming’s philosophy in action, focusing on chronic absenteeism. As part of their third PDSA cycle, John’s team shifts from individual interventions to process standardization—mapping how each of their four campuses handles attendance interventions. The surprising discovery? Each school follows a different process, revealing hidden variation and inefficiencies.

By visualizing these systems, the team is not only grasping the current condition but also setting the stage for a reliable, scalable, and effective process. This methodical approach highlights how understanding systems and reducing variation are key to meaningful improvement.

TRANSCRIPT

0:00:02.1 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 John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is Mapping the Process. John, take it away.

 

0:00:26.7 John Dues: Hey Andrew. It's good to be back. Yeah. For the folks that have been following along for the past several episodes we've been working towards defining this problem more narrowly in terms of this chronic absenteeism issue we've been talking about. And for the last few episodes we've been talking about how the team didn't have enough information to write that precise problem statement. And we took a look at gathering additional information by running a couple PDSA cycles in those first two cycles that we've discussed so far. We know we had zeroed in on a handful of students and ran PDSAs with them and their families about their obstacles getting to school. And then we left off talking about how we were going to shift gears in PDSA cycle three. And instead we were going to focus on standardizing our process. So creating a process map for how we intervene with kids with our attendance teams across the network. So that's what the team is currently working on. But just as a sort of quick reminder to folks, and especially if you're watching, we have this model that we've been working through, this four step improvement model where you set the challenge or direction, grasp the current condition, establish your next target condition, and experiment to overcome obstacles.

 

0:01:48.1 John Dues: And then like we've talked about several times, we're doing this with the team and that includes people working in the system, people with the authority to change or work on the system, and then at least one person with significant knowledge of the System of Profound Knowledge, like an SOPK coach. And we've been using this model that's on the screen to sort of symbolize or I guess visualize what those four steps look like. You're sort of marching up this mountain towards this challenge or direction. And we've also talked about this long range goal that we've had and we've taken a look at some data where we have our chronic absenteeism rate mapped out over the last eight years or so. We have this long range goal. So this is the direction of the challenge where we're trying to take our chronic absenteeism from above 50% down to 5%. We have the data going back to the 2016/17 school year. Then we also talked about how there's this, not surprisingly, there's this sort of pre-pandemic level of chronic absenteeism, which was again too high. It's not where we wanted it, but we have this major shift up where we've seen this significant jump in chronic absenteeism since the pandemic hit.

 

0:03:15.0 John Dues: So in those four years, 2020/21, 21/22, 22/23 and 23/24 we were up in the 51, 52, even up into the close to the 60% range in chronic absenteeism at the height of the pandemic. So for PDSA cycle three, really doing two things. So, and we're going to talk about this in the episode today. If you remember back way at the start of this series, we looked at something I called a system flowchart. So we'll kind of revisit that and then we're going to take a look at two process maps that were created by two of our school teams to sort of map their current process. And then we'll walk through, sort of we'll take that, we'll walk through what the plan is for this PDSA cycle three. So let's start by looking back at this system flowchart. I'll sort of reorient you to this. So we have up on the, and this is the current state. So up on the top we have the target system which is attendance. And then we have this aim that is sort of a three part aim.

 

0:04:42.7 John Dues: We want to define strong attendance for students and staff, make sure everybody's on the same page. We want to ensure that students, families and staff have a shared understanding of what it means to have strong attendance. And then we are working on improving and creating systems that identify and remove barriers to strong attendance for students and staff. And then over on the left hand side we have sort of inputs. So these are things that contribute or their conditions that impact our system. And then in the middle we have our core activities. So the things that are happening that impact attendance and then there's outputs, both negative and positive outputs that come out of this system. And then we get feedback from our customers, we do research on this feedback and then we make design if it's a new system or redesign if it's a current system. And some of these things, some of those contributing conditions are, Ohio has a set of transportation laws. You know, there's our school model and our the way we operate our school hours, our expectations regarding student attendance, our various intervention systems, neighborhood dynamics, how far our families live from school.

 

0:06:03.4 John Dues: These are all things that contribute to our sort of inputs into our system. And then we have these core activities. And remember, we could just zero in on attendance systems. But there are many other parts of our system that impact whether or not kids come to school. So for one, many of our families are always going to be new to our system. So for example, in our middle schools, where they start with sixth grade some number of those kids are going to be from our elementary schools. Some number of those kids are going to come from other neighborhood schools, but they're all going to be new to that middle school. So whether they're coming from our elementary school or not, you have to think about how is the student and family being onboarded to our system. Another thing we're looking at is school culture and trust. You know, how much trust is in there, in the school. Do they have a strong culture between teachers and families or teachers and students, or the principal and teachers? Then there's academic systems how engaging are classes, those types of things.

 

0:07:05.7 John Dues: Then we have the attendance intervention systems, which is obviously a core focus. We have health and wellness and changes around mindset since we went through the pandemic. And then finally the third sort of, or sorry, the third, not the third, but the sixth core activity that we talked about was transportation. So we've talked about lots of problems with our busing system this year. So that's another thing that has a big impact on attendance. And so what this group, again is working on the core activity is the attendance intervention systems. What's the process for that? But I had mentioned in an earlier episode that we have another group that's working on transportation and busing and how we can improve that. So the whole point of the system flowchart is there's many, many things that go into something like an attendance rate. And many of these things are very challenging. Some are largely out of our control, but much of it is largely in our control. And we're trying to pull the levers that we think are most important when it comes to student attendance.

 

0:08:09.2 Andrew Stotz: And just one thing on that, one of the things I just find so frustrating and it's part of this class I'm teaching tonight is how do we scale a business. And one of the ways that's critical to scaling is simplifying. And sometimes, like, when I look at all of this complexity, on the one hand, you're like, okay, well, that's our job, right? Our job is to manage complexity. And that's the reason why we don't have a thousand competitors coming in, because it's complex and it's difficult. And on the other hand, it's like the simplifier in me is like, how do we simplify this? You know, like, I'm just curious about how you see complexity versus simplification. And in particular, it may just be in this stage, you're just putting everything up there, and it's just overwhelming. Like, oh, my God, there's so much involved in just fixing one thing, you know? What are your thoughts on that?

 

0:09:11.5 John Dues: Yeah, that's, I mean, that's a really good question. It's, I mean, I think it is a complex system because there's so many moving parts. And I think part of the nature of a complex system versus something like a complicated system is that when you try to impact some part of the system that has these ripple effects into other parts of the system, many of which are unattended or unintended consequences. So, yeah, I mean, I think one thing we have working in our favor is very stable senior leadership. So we're pretty good at understanding how we all work. We have a pretty good historical knowledge of how our school system has worked over time. And we have a pretty good holistic view of all of this complexity. Not that we're all able to improve it all at once, but I think we have a pretty good grasp of what's going on. And even a team like this there we could move faster perhaps, but I think we're trying to be pretty deliberate about the changes that we're making.

 

0:10:24.7 John Dues: And we're also deliberate about the levers that we're trying to pull for improvement. And these things change over time. So even something like transportation, I mean, the reason that we're working on that now and that we've chosen to work on that now is because the transportation that we're getting from the district is so untenable. Whereas 15 years ago, when I was a principal in our system, while the busing wasn't perfect, it was pretty consistent. You know, most days it dropped off at about the same time. It picked the kids up at about the same time every day. And while it was nowhere near where you would want it to be overall, it wasn't my biggest pain point as a principal. Now kids are literally missing hours or buses aren't showing up at all. And so we have to figure out a way to make this work. And to your point this was a system when charter schools were set up in Ohio, is just basically like the district, the nearby district, which is usually a big urban district, is going to do the busing for charter schools.

 

0:11:35.5 John Dues: And there really wasn't any more thought to it than that and so from the district's perspective, they they have to manage a lot of complexity. They have their own schools, they're busing for charters, which there's about 15,000 kids in charter schools in Columbus. And then they're also busing for private schools. And the district itself still has a very large geographic footprint, even though the number of students that attend there are about half what it was 50 years ago. So they have very spread out buildings, some of which are far below capacity, but they still have students attending them. So they haven't shrunk that geographic footprint. So that's a challenge as well. And at a time when it's become very difficult to find bus drivers. So I don't take lightly, like the challenges that the district is facing in this, but we got to get kids to school as a... Just as a basic starting point to be being able to do school well.

 

0:12:31.8 Andrew Stotz: Okay, keep going.

 

0:12:33.8 John Dues: I mean, it's also a really good segue. We'll take a look at a couple of the process maps. So we have our four campuses. We have something different going on. So even though our four campuses are geographically pretty proximate to each other, they have four different processes going on with their attendance intervention system. So take a look at this first process map, which is pretty simple from start to finish. What is that? 1, 2, 3, 4, 5, 6, 7, 8, 9. It's really nine steps and it really...

 

0:13:08.6 Andrew Stotz: And for the listeners out there that can't see it, he's got a process map, State Street. And what it shows is some circles and some squares and some tilted squares. I don't know what those are called.

 

0:13:23.5 John Dues: Yeah, I mean, it's just the circles are the start and end points.

 

0:13:26.9 Andrew Stotz: Okay.

 

0:13:27.8 John Dues: The squares are the steps in the process. And then the diamonds are, when there's a... Some decision has to be made in the process.

 

0:13:37.0 Andrew Stotz: Okay, great.

 

0:13:38.0 John Dues: So we're not going to go through all of these steps. But if you are watching this is a pretty simple process at one of our campuses, while there are multiple people sort of involved, it's also true that one person is driving a lot of this work. But the point is, especially for people that are watching, when you sort of walk through these 10 steps, you're going to see that this map is going to look very different and less complicated than the map at one of our other campuses. But the point is, especially if you can see things visually that you can tell just by looking at the two maps, there are two very different processes going on. And these two schools, this first one is actually an elementary school that feeds into the middle school. That is the map that we'll look at second, so this is the first process map. And then when we look at the second map, we can see very quickly, just visually speaking, there are far more steps, it's far more complicated. There's far more decision points. There's a lot more detail here, and there's a lot of interfacing between multiple people that all play a role in this particular process.

 

0:14:55.4 John Dues: And it's not that one is right and one is wrong. It's just that when you have these two campuses doing it differently, there very likely is inefficiencies.

 

0:15:06.8 Andrew Stotz: And are they mapping the same thing? And they...

 

0:15:10.6 John Dues: Yes, it's the same process. It's how they intervene as the state requires for kids that have some type of attendance issue. And there's different thresholds that mean different parts of the process kick in as a result. But they're operating within the same state process that you have to follow. But even so, you can see that they have a very different sort of illustration of what that process looks like. And if I had the other two campuses, we'd have four separate versions. And remember all these steps and you know, all these decision points. There's documents that exist. There's meetings that happen. There's agendas for those meetings. There's agendas for meeting with parents. There's letters that have to be mailed. And so you can imagine if everybody is creating separate forms, separate meeting agendas, keeping this information in different ways. There's probably a way to design this that's far more effective and efficient by pulling from the four different processes to create one process. And oh, by the way, if you do that, it makes training easier for anybody new that's going to take on some of the clerical roles or some of the interfacing with parents.

 

0:16:26.9 John Dues: And then if you have one process that you're working from, then you can also share best practices as they emerge as you're working. But if you have four variants, it's much harder to share that information.

 

0:16:43.4 Andrew Stotz: And you know, it's questionable whether this is a core function. It is an important process. Is it the core?

 

0:16:54.8 John Dues: Yeah, I mean, I would say it's a, I guess depending on how you define core. I mean, it's a required process. It's a process that the state requires and a lot of the sub steps are required components. Now, interestingly, this, the setup for this attendance intervention system came out of some legislation called Health...House Bill 410. And it's been in place for maybe five years or so, four or five years. And they're changing it right now. So there's new language.

 

0:17:30.2 Andrew Stotz: Just when we got it set.

 

0:17:32.2 John Dues: Just when we got it set. But we at least know the likely changes that are coming. So Ohio operates on a two year budget cycle. So in this new budget that will likely pass on. Well, it has to pass by June 30th. Right now there's language in there that changes this process for schools and actually gives schools way more leeway. So we'll sort of be ahead of the game because we're going to have our own process mapped and you know, we can remove some of those things that are a little more cumbersome on the school teams. And to your point, those things that were compliance related but didn't have really impact on improving attendance, we could just remove those now. We'll have some more freedom there.

 

0:18:13.8 Andrew Stotz: I mentioned about the core thing because there's a great book I read called Clockwork by Michael Michalowicz and he talks about identifying what is the core function in your business and then really focusing in on that. And it's interesting because one of the benefits of that is that if you don't do that, you can get caught up in every process like, and then all of a sudden it's just everything is seen as equal.

 

0:18:43.6 John Dues: Right. Yeah.

 

0:18:44.6 Andrew Stotz: Anyways, keep going.

 

0:18:45.9 John Dues: Yeah, it's one of those weird things and I'll stop sharing. Yeah, that was the last visual. But that's one of those things where like I said for the last five years or so these things have been required. And I think you'd be hard pressed to find a school system that would say these, the way things are outlined as requirements for schools to do on this front are not effective but people do them because they're required. And you know, I think with this updated language, we'll have some more flexibility to do this how we want to do it.

 

0:19:20.4 Andrew Stotz: And how does this, just to clarify how it fits into that mountain diagram, this is trying to assess or deal with the obstacle or is this the current state? I noticed that it said current state for the process map. But is the purpose of what you're... The original one you show. But is the purpose of what you're doing trying to overcome the, identify and overcome the obstacle?

 

0:19:46.8 John Dues: Well, I would say this is a part of grasping that current condition. You know, we did that early on in terms of that system flowchart, in terms of what the whole system looks like. And now what we're doing is learning about the processes at each individual school. Well, I'd say when you map out a process like this, and I think people would probably, my guess is, is that senior leaders would often say, well, no, we have a process and you know, everybody follows the same thing. And then if you actually mapped it like that, step by step, what you would see is tons of variation, tons of variation.

 

0:20:23.9 Andrew Stotz: So one of the benefits of that is it's not only, it's about facing the reality or understanding the true current state. Like everybody can say, no, no, no, we all know what the current situation is. No, we don't.

 

0:20:41.2 John Dues: No, you don't. And every time I sit with a team and make these process maps, we'll say, okay, what's the next step? And you know, maybe a couple people will pipe up and then someone inevitably goes, well, no, wait a second, that's not what we do. What we do next is X, Y or Z. I mean, it's... And that happens over and over and over again with this with this process just seems to be a part of it. It's not a bug. It's actually a feature of this mapping exercise.

 

0:21:08.5 Andrew Stotz: And many people try to solve these problems by just jumping in rather than taking the time to really, truly understand the current state. You know, what's the risk of the action taker?

 

0:21:22.7 John Dues: Well, yeah, I mean, I think what happens a lot of times is like when people don't really understand a process like this is they start blaming people for things that aren't going right. That's what typically happens.

 

0:21:35.8 Andrew Stotz: I want people to take responsibility around here.

 

0:21:38.3 John Dues: We have to hold people accountable, but you can't hold them accountable to a process that's unknown. Right. It's not well specified, but that's what typically happens. So, so yeah, so the objective for this PDSA cycle, so we're on this third cycle. So those first two were focused on talking to individual kids, interviewing with individual kids. And we said well let's actually look at our process for how we're intervening from a school perspective as a team at each of the schools and let's standardize that process.

 

0:22:13.1 John Dues: So that's what we're doing. We're sort of mapping it from start to finish, gathering feedback from key stakeholders as we sort of map a standardized process that works across all four schools. And really one of the things that we're doing right now is we're saying can we develop a process? And we have these four dimensions that we're looking for to sort of meet. One is functional, one is, is it reliable? Third, to your point about the business talk you're giving tonight is is it scalable? You know, does it work across the entire school and across the entire school system? And then is it effective? And we're basically, the attendance improvement team basically is going to put together the process and then they're going to put it in front of our senior leaders and we're going to rate sort of the process across those four dimensions and they've sort of predicted what they think is going to, how it's going to hold up when it's sort of tested by those senior leaders.

 

0:23:12.8 John Dues: So that's kind of what we're doing right now. So step one is mapping the four campuses and then we're going to map one standardized process, at least a rough draft. And again, so once that initial network wide or system wide map is created, we're going to put it in front of that senior leadership group. We're going to give them a brief survey, sort of a Likert scale across those four dimensions and see, see what they think basically. So that's our next step right now.

 

0:23:40.6 Andrew Stotz: Exciting, exciting. I want to tell a little story to wrap up my contribution here and that is after many years of living in Asia, I started to realize that everything's connected in Asia, people are connected. If you want to be mean to somebody, it's going to come back around to you. And if you want to push on somebody, it's going to come back around because everybody knows everybody. And I like to picture it like a circle. Let's just say a bunch of people in a circle facing the same direction. And then let's say they all put their right arm on the right shoulder of the man or woman in front of them. So now we have a circle that's connected in such a way. And if you think you're going to get something done by squeezing on the shoulder of the person in front of you, the problem you're going to face is that that's going to transmit all the way around the circle until all of a sudden you're going to be squeezed. And that is my visualization of the way influence works in Asia. Yeah, but I feel like it's the same type of thing when you just say, I want to hold people accountable and we need responsibility around here.

 

0:24:57.8 Andrew Stotz: What ends up happening is that the only choice that someone has is just to squeeze on the person in front of them. And when they do that, it just transmits a squeeze all the way around. It builds fear, it builds distrust and all of that. And so that. That was a visualization I was having when you were talking.

 

0:25:16.4 John Dues: Yeah, I mean, I think... And it can be convicting a little bit there. There's a Dr. Deming quote that I'll share to sort of wrap this. Before I do that, I think again, I go back to we... There are these unknown things about how to improve attendance. And so this PDSA, this plan, do study, act cycle, we're using one, again, was intervening with kids and trying to work with a handful of kids that had attendance issues and just see what works and what doesn't. We've shifted gears in this third cycle to something very different. But this is all part of one comprehensive effort by this team to put this new system in place. And all of these pieces of information are important, but this and this mapping, the process thing I think is a great... And I think maybe a lot of people wouldn't think about that as a PDSA to plan a new process, but you can absolutely use it in that way. But the Dr. Deming quote that I think of when I do process mapping is "if you can't describe what you're doing as a process, you don't know what you're doing."

 

0:26:21.7 John Dues: And I think that's true. Again, it's not to convict people, but I think often when we say, well, that's this thing is going wrong, we need to hold people accountable. And then you ask that person that's making that claim, well, what is the process for this thing? And they often can't tell you. Or they do, it's so vague that nobody could.

 

0:26:45.3 Andrew Stotz: Or they say, that's not my responsibility. My responsibility is to hold you accountable for getting the result.

 

0:26:51.4 John Dues: Right. Yeah. And, and, and many people, many organizations don't write these things down. You know, they don't write them down and share them with folks. So that's just some of these simple things are as part of the power making things exciting.

 

0:27:05.1 Andrew Stotz: Exciting. Well, yeah, how about we wrap it up there and so what are we going to get next time?

 

0:27:10.7 John Dues: Yeah, I think so. What we went through quickly here at the end was the plan for this PDSA cycle. So by the time we get back together, will have the process map for the system and we'll have had the feedback back and we'll be able to compare that to what the group predicted.

 

0:27:28.8 Andrew Stotz: So ladies and gentlemen, we're watching it in real time unfold the applications of Dr. Deming's principles. And isn't that what we want? You know, obviously we love theory and we love ideas, but we really need to be all thinking about how we apply these things. And so from my perspective, I'm really enjoying this series and I'm learning a lot. And as I mentioned before, I've been improving some of my thinking and some of my teaching in particular, based upon the discussions that we've had. So 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 also 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. I know you've heard it before, but I'm going to say it again. Until we have joy. "People are entitled to joy in work."

Why would any leader choose to take on a transformation that requires rethinking how they lead, how their organization functions, and how they learn?

In this episode, we dive deeper with Cliff Norman and David Williams, co-authors of Quality as an Organizational Strategy, exploring Chapter 11: “Getting Started.” They share powerful stories, practical steps, and the deep-rooted challenges leaders face when shifting from conventional methods to building true learning organizations grounded in Dr. Deming’s philosophy.

This conversation highlights why improvement cannot be delegated, why leadership transformation is essential, and how to begin the journey—with clarity, commitment, and courage.

TRANSCRIPT

0:00:02.1 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 we are going to continue our conversation with Dave Williams and Cliff Norman about their book Quality as an Organizational Strategy. I found this book fascinating because I think it's addressing something where there's been a bit of a hole and that is how do we think about the strategy of our business? And so we already had our conversation in a prior episode about the overview of the book, but today we're going to be talking about specifically, now this is kind of funny because we're going to be talking about the back of the book and that is chapter 11, getting started. Dave, why don't you take it away?

 

0:00:53.3 Dave Williams: Well, thanks, Andrew. Thanks for having us back on the Deming podcast. So, as you mentioned, part of the way that the book is laid out is that it describes kind of the foundations that are behind quality as an organizational strategy and begins sort of with an introduction that explains a good bit about how Dr. Deming had this provocation of a need for leaders to transform the way that they approach leading organizations. And part of that was to move not just from process based improvement projects, but to start to think about major systems in the organization and to pursue quality as the overall strategy and create a continuous improvement organization or learning organization. And so the book lays some of the foundation behind the science of improvement or behind profound knowledge that underpin the thinking, walks through quality as an organizational strategy, as a method of five interdependent activities. Then at the end it comes back full circle to say, well, this is great, now you've learned about these theories and methods. But a natural question for any leader would be, how do I get started? And one of the first things that we talk about in that section actually is about why leaders would want to do this transformation.

 

0:02:30.9 Dave Williams: And this actually came from a conversation that Lloyd and Cliff and I had in 2020 where we were talking about getting on this journey of building the book. And we all kind of recognized that this was really, really hard work. And we were curious or we, we didn't have a good answer of what was our theory about why somebody would deviate from the way in which they work today and embark on a transformational change of the way that they approach leadership, the way that they approach organizations. And actually I ended up going on a journey of interviewing a whole host of leaders who had been influenced by Deming, who had been involved in improvement in healthcare, folks like Dr. Berwick and Paul Batalden and Brent James. I interviewed some folks in the UK and other places, like John Seddon, and asked them, oh and I should Blaine Godfrey, who had been the lead of the Durand Institute, and I posed the question, what causes somebody to want to embark on this change? And many people actually had a hard time articulating it. But the answer that emerged, or actually Blaine Godfrey was the one that kind of framed it the best, I think, for us, was a number of things.

 

0:03:57.7 Dave Williams: Sometimes it's something like a book like this comes out and people read it and it's interesting and new. Sometimes it's an event happens, a patient safety event or a major accident or something of which causes people to have to change or do something different. Sometimes it's a discouragement with a desire that you know you could do better, but you don't have methods or know how to. So there were a host of things that we listed, and those are some of a sample of them that might invite somebody to say, the way that we're working today is not getting us to the level that we want to. And now we want to embark on something different. And we might look to something like quality as an organizational strategy as a method for us to transform the way that we're working and build on the shoulders of Deming's philosophy and the science of improvement and do it differently.

 

0:04:56.0 Andrew Stotz: And when I look at the book, you guys are bringing together a lot of different stuff. It's not just a Deming book. It's Deming is a part of this, and that's fascinating. One of the questions I have is when we look at, let's say, a business owner, a business leader is looking for answers, as you said, maybe it's an event, maybe it's a discouragement, maybe it's a feeling like we can do better. Maybe it's just being beaten by competitors. They come to a point where they start looking for answers and they find some fantastic books, authors, ideas, consultants, all this and I think about whether that's Peter Drucker or whether that's the Lean movement or whether that's, let's say Taguchi or something like that is the teachings that you guys are talking about - and I'm going to specifically ask about the teachings of Dr. Deming. Is it more or is it more difficult or less difficult to implement than other books or styles or methods that someone's going to come across?

 

0:06:08.7 Cliff Norman: I have to quote one of my colleagues here who probably knew about more about Deming than anybody in API or all of us combined, that's Ron Moen, who did, I think it was 88 seminars, four-day seminars with Dr. Deming. Dr. Deming once told him, he said, Ron, I believe you've been to more of these and I've been to. And it's kind of a joke. He had a great sense of humor. But you know, Ron told me the problem with Deming is he's asking us to change. And there's all sorts of things out there that require the management and the leadership, they really don't have to do anything different. And there are several things out there. In fact, Philip Crosby, one of the three gurus during when they launched, he was more the evangelical and had a way of talking to management so that they understood it, which that was his contribution to all that. But when Six Sigma came up and black belts and all that, and Crosby looked at him and says, that's not going to change the system. He said, all you're doing is killing a bear for management, killing a bear for management, and then you'll get a black belt.

 

0:07:19.9 Cliff Norman: You know, And I thought, wow that's pretty profound. Because the management at that point doesn't have to do anything, just have the black belt ceremony. There's absolutely no change on their part. Where Deming, as Ron says, he's kind of a pain. You've got to learn about variation, you got to learn about Shewhart charts. You've got to be able to put together a family of measures for your organization. You've got to understand your organization's system. You need to understand psychology, you need to understand theory of knowledge and how people learn how they change. And nothing else out there puts that on leaders. And so that was a question that Dave was lending back to. Why would somebody do this to themselves? You know, why would they take on this whole extra thing to learn and all the rest of it. And for the people that I know that have made that, that bridge, the pure joy that they get and the rewards they get from people who are learning and that they're leading and that they're changing and they're able to go to other organizations and repeat this and call them up and say, thank you so much for helping me learn how to be a real leader.

 

0:08:35.8 Cliff Norman: I mean, that's the reward in it. But it requires a real change on the part of the leader. And I don't know of anything else, Andrew, that actually requires that kind of in depth change. And there was one of our leaders, Joe Balthazar, he had Jane and I do four years in a row with his leadership team, teach them the science of improvement. The same curriculum, same leaders, four years in a row. And the second year I was doing it, I said, don't we need... No, no, Cliff, I want you to do exactly what you did last year. He said, it takes years for people to understand this. And I thought, wow, this is unbelievable. But on the fourth year, the VP of sales walked up to me and he says, I think I figured it out. And I thought, wow. And it does it literally... Because you've got to depart from where you've been and start thinking about how you're going to change and let go of what's made you successful up to this point. And that's hard, that's hard for anybody to do.

 

0:09:47.2 Cliff Norman: And anybody's been through that four day seminar knows when they crossed that path that all of a sudden they had to say, you know what I've been doing, I can see where I've been, the problem and not the solution. And that's tough for us. That really is tough. And Deming says you have to give up that guilt trip. And once you understand the theory of variation, once you understand systems, once you understand psychology and theory of knowledge, it's time then for you to move on and let go of the guilt. I hope that makes sense. But that's the difficulty in this.

 

0:10:17.6 Andrew Stotz: It reminds me of two, it made me think about two things. I mean, I was just a 24 year old guy when I attended the seminars that I did, and they weren't even four day. I think they were two-day ones at Quality Enhancement Seminars in, what was it, George Washington, I think. But the point that I remember, as just a young guy who I was, I pretty much admired all these business leaders. And then to see Dr. Deming really nail em to the wall and say it's about you changing. And whether he was saying that directly or whether that he was implying that through the Red Bead experiment or other things, it's about you shaping the system. That really blew me away because I had already read some books and I was pretty excited. And then it also made me think about, let's say there's a really good book, I would say Good to Great by Jim Collins that highlights some things that you can do to succeed and make your business better. And you can just buy that book and hand it to your management team and go, hey, implement what you learned from this book.

 

0:11:20.8 Andrew Stotz: Whereas with the Deming book, it's like there's just so much more to it. So I guess the answer to this is it is more takes time. There's more thinking going on. And I think that's part of the whole point of what your book does, is to help us map it out. So why don't we go through and think about this and kind of maybe step by step through what is the starting point and how do we go?

 

0:11:45.4 Cliff Norman: Andrew, I just got to add to what you just said there and go back to Joe Balthazar at Hallmark Building Supplies. He shared with me that, and he's the one that said I want you to do these four year seminars dedicated Deming's idea of Profound knowledge. And he said, Cliff, the day I made it, I knew I'd made it. Is my son Joey spilled his milk. He's about three years old. And he said, I started to do my normal leap across the table and he said I was about mid air. And I thought, oh my, this is what they do. This is part of their system. This is common. And I'm treating this like it's special. And that was so profound for him. And when, when you move beyond the Shewhart chart and you see events in your life around you relative to the theory of variation, common and special cause variation at a deep way like that, that's the kind of transformation you want to see in a leader. And Joe will tell you he's forever grateful for Deming and everything he's learned, and I think that's the reward. But people need to be willing to go on that journey, as Dave was saying.

 

0:12:53.0 Andrew Stotz: So Dave, why don't you walk us through a little bit of what you guys are teaching in that chapter.

 

0:13:00.3 Dave Williams: Sure. Well, one of the next steps obviously is if somebody, if a leadership team thinks that they want to go on this journey, there's some considerations they got to think about. As we've already sort of alluded to or touched on, this is a leadership responsibility and a leadership change. And so there's got to be will amongst the leadership team in order to say we want to work together and work hard to do this work. That this is not something that, similar to Cliff's example of say, having black belts, that we can just hand it off, somebody else will do it, and we can just keep going about our business and hope. It's important that leaders spend time recognizing and thinking about the fact that this is going to involve them doing work, doing effort, changing the way that they think, changing the way that they practice. And I like to say it's good hard work. I mean it's going to be something that's deeply rewarding. But it does require them to have that will. And with will then it's going to come time and energy, right? They've got to make the space, they've got to create regular routines and opportunities for them to learn just in terms of content, learn in terms of practice or application and learn in the process of doing the improvement work and doing the change to the way that they work in the organization.

 

0:14:38.0 Dave Williams: So there's going to be a need to build in that ability. And then a third thing is to ask whether you think this is something that you can do on your own or whether it might be useful to have help. And help may be an internal, a consultant, but likely not to promote consulting it but, but there's a good chance that you're going to need somebody that has both experience in improvement and helping people do results-driven improvement as well as somebody who has experience doing system wide change through a lens like QOS. And, and the advantage of that often is it it gives you as a leadership team to focus in on your job of thinking and looking and learning and allow somebody else to be an external intervener, somebody who comes in and creates some of the support, some of the context, some of the ways that can make it easier for you to step back and look at your organization in a different way. And so many times those are some of the things that should be considered as teams working through it. Cliff, what would you add or improve upon.

 

0:16:07.3 Cliff Norman: The idea of external help. Deming was pretty black and white about that. I was kind of surprised. I went back and read one of his quotes. He said, "I should mention also the costly fallacy held by many people in management that a consultant must know all about a process in order to work on it. All evidence is exactly the contrary. Competent men in every position, from top management to the humblest worker know all there is to know about their work except how to improve it. Help towards improvement can come only from outside knowledge." And I was reflecting on that today with Jane who's been involved in this for 40 plus years also. I said Jane, when he said that, I think it was accurate because at that time she and I were going to Duran seminars. There's only two books out there with methods. One was Ishikawa's book on Guide to Quality Control. And the other was Feigenbaum's book. And then of course you had Duran's book on The Quality Handbook, which was a nice doorstop. But there wasn't that much knowledge about improvement. And the worst part where Deming was really getting to was there's very few people you'd run into that actually under the Shewhart methods and charts and understand the difference between special and common cause variation.

 

0:17:27.0 Cliff Norman: And so you had to bring that kind of knowledge in from the outside. And frankly, we've had people go off the rails here. You know, Dr. Deming in the teaching of statistics has identified analytic studies which is focused on looking at data over time and trying to understand that and simple methods and approaches and then what he calls enumerative statistics, which is use of T tests, F tests and all the rest of it, which assumes that under the IDD principle that data is independent and identically distributed. Well, if you have any special causes in the data set, it blows up both of those assumptions and the use of those methods doesn't offer any help in prediction. And as Dr. Deming often said, prediction is the problem. And then go back to Shewhart. And Shewhart said, things in nature are inherently stable, but man-made processes are inherently unstable. So when Dave and I first do a Shewhart chart for a client, we don't expect for it to be stable. We expect for to have special causes. And as Dr. Deming said and also Dr. Juran, that when you get a stable system, that in and of itself is an achievement, that means nobody's messing around with the system anymore.

 

0:18:43.0 Cliff Norman: And you see this in the simplest things, like in an office, somebody will walk in and they think that their body is the standard for what the internal temperature should be for that room. So then they walk up and they start tampering with the thermostat. And by the end of the day everybody's irritated because we've had so many bodies up there with their standard. Moving the funnel on us here, and just leaving it alone would probably all be better off. But you have to learn that. And I think that's what Dr. Deming was saying, is that that kind of knowledge is going to come from the outside. Now the good news is is that since he wrote that in 1986, we've got a lot of people out there and some of them are in organizations that do understand the Shewhart methods and can understand the difference between common and special cause variation. They do understand the difference between a new and analytic studies and statistics and they can be of help. So the Deming Institute has a room full of these people show up, but they're at their gatherings annually. So we're a lot further along than we were in 1986.

 

0:19:45.2 Andrew Stotz: Yeah. So let's go through that for just a second. Some considerations you've talked about. You know that it's a leadership change. Right. And you gotta ask yourself, are we ready to work on this? And you know, this is not a hands-off thing. The second thing you talked about is time and energy. Are we ready to make the space for this? We have to have regular meetings. You know, we've gotta really... There's some work involved here. And then the third part you've talked about is outside help. And you mentioned about this story of Joe Balthazar and how he asked you to do the same topic over and over for four years. And imagine if he was telling his team, let's meet and try to implement some of this stuff on our own. Everybody dig into a book and then let's try. It would be very difficult to make that kind of progress compared to bringing an outside person. Which also brings me to the last thing that you said, Cliff, which was the idea that Dr. Deming had mentioned, that you need an outside person to truly change something. Everybody's got the expertise on the inside.

 

0:20:44.5 Cliff Norman: I appreciate you summarizing that because my job and working with Joe and leadership team, I was meeting with him every month. But what the four years that Jane and I spent were the next levels of his leadership. You know, it wasn't the leadership team. And I'm glad you brought that up because it was the very next level that he wanted exposed to this and the VP of sales that came in, he was new, so he had to be part of this group because he wasn't there originally. And so there was that ongoing... He wanted that next generation that was going to take over for him and the others to really understand this. So I'm glad you summarized that for me to help.

 

0:21:30.5 Andrew Stotz: Yeah. And I think one of the starting points too, I mean, the body of work, not just this book, but the other books that you guys have been involved in and produced provide a lot of the starting points for this. So there's a lot there. Dave, where do we go after these considerations? And the people say, okay, yeah, leadership says, we want to make this change. We're ready to make some time for it. We're willing to get outside support and help. Where do we go next.

 

0:21:57.7 Dave Williams: Right. Well, one thing that we typically invite a leadership team to do is to take kind of a self assessment of where they sort of see their baseline in relation to the methods and activities of QOS. So in chapter one of the book, there's actually a table that is 10 different categories. And then each leader takes it independently and they rate their level of agreement with different definitions from 0 to 10. 0 being this really isn't present, and 10 is, I'm very, very far along on this journey that in the book that's out now, there's a summarized table, it's on a page. But actually in the QOS field guide that we're working on publishing this year, there's a much more detailed version that we use in practice that has deeper definitions, but basically it works its way through purpose and leadership and systems thinking and measurement and all the things that are tied into QOS and what... And as I mentioned, we have each individual member of the leadership team take it independently and then we bring those scores together to learn together.

 

0:23:32.5 Dave Williams: And there's different ways in which you can display it. In the book, we show an example of a leadership team's scatter plot where it shows the rating and then it also shows the standard deviation amongst that exists between the leadership team. It's very, very common for leaders to not be in agreement in terms of their score in each of the different areas. You know what I said, It's a 0 to 10 scale. Typically, in my experience using the tool, people tend to be between a 2 and a 6 and hovering around a 2 or a 4. But it sort of looks like a buckshot or shotgun blast where there's a very... If you were to put dots where everybody scores, where there's variation that exists. And that's good because it's useful for the team to pause and think about why they assess the organization the way that they did. Looking at it through this new lens, where are the places that there's agreement and also where are the places that there's variation? And that helps them to be able to think about the fact that through this process, they're likely to both improve their assessment of the organization, but also increase their agreement about where they are and what they need to do to move forward and what they need to do to improve.

 

0:25:05.2 Dave Williams: And so that's a useful starting point, gets everybody kind of on the same page, and it's something that we can use at intervals as one of the ways to continually come back and evaluate progress towards the destination of pursuing quality as an organizational strategy.

 

0:25:23.7 Andrew Stotz: Yeah, I mean, I imagine that self assessment, it helps you too when you work with companies to be able to really understand, okay, here are starting point with this company is really, they just really don't know much about all of this stuff, whereas you'll have some other clients that basically, wow, okay, there's a lot of knowledge here about it, but how's the implementation and all that? So are we ready to change? Are we prepared to devote the time and energy? Are we going to get outside help? And where are we now? What's our starting point that's great to help us understand exactly how you step through it. What comes next?

 

0:26:03.5 Cliff Norman: Well, in that very first milestone, in that table, is it table three, Dave? Anyway, the very first milestone is to establish formal improvement efforts. And the reason for that is that unless people experience what it takes to develop, test and implement changes in the organizations, they really can't appreciate the structure that comes with quality as an organizational strategy. Because it's very difficult for many organizations to launch three or four improvement efforts and then bring them to fruition. And there's all sorts of stuff that happens. And then you find out very quickly whether you have managers or leaders, and organizations they've brought me in, they say, let's do some leadership training. I said, no, let's just do some improvement and then we'll find out if we have leaders or not. And one group, I won't mention who it was, but they had five people on their leadership team and they had to replace two of them because they found out they couldn't actually manage an improvement effort. And then the CEO was wondering how they actually manage their organization, which they weren't either. And so it's a rather, it's an important test in the front.

 

0:27:22.2 Cliff Norman: But as Dr. Juran says, it's real important to develop the habit of improvement. And if you don't know what that is, if you've never experienced it, then it's hard to say to people, gee, I need a purpose that aligns my improvement efforts. I need to understand my system so I know where those improvements are going on. I need to build an information system, get information from customers outside, people inside. I need to put together a strategic plan that actually makes improvements on purpose. That's a lot of work. And once you understand how complicated it can get in terms of just doing three or four improvement efforts and then all of a sudden you got a portfolio of 30 to do your strategic plan. Now that needs some structure, that needs some guidance and all the rest of it. But I'll just go back one step further. My own journey. I was sent by Halliburton at Otis Engineering to go see Dr. Deming 1982 in February. And coming back, I had an audience with the president of our organization, Purvis Thrash. And I went on and on about Dr. Deming. He said, Cliff, you know what I'd like to have? I said, what's up, Mr. Thrash?

 

0:28:27.5 Cliff Norman: He says, if you'll take this 50 million dollar raw material problem and solve this for me, I'll be a happy man and I'll give you all the quality you want. But go take care of that problem for me first and then come back to me and talk about Deming and Juran and anything else you want to talk about. So I put together four or five people and over about three months we solved his 50 million dollar raw material problem. And then he had a meeting of all executives and I was sitting with the managers in the back row and he called me to the front and he says, Cliff, will you sign this card right here? And I says, well Mr. Thrash, what is this? He says, well, I'm giving you authority to sign $50,000 anytime you need it to get all the quality we can stand here at Otis Engineering. One of the vice presidents said, well, I don't have that authority. He said, you didn't save me $50 million. You know, but once that happens, Andrew, once you do that, then you've got people that are willing to help you. And then once that takes place, I can't tell you how important, it allowed me then to bring in Lloyd Provost to help me.

 

0:29:36.2 Cliff Norman: And they weren't about to pay out money. They didn't like consultants, in fact, they were anti-consultant. But you saved us $50 million. I gave you $50,000. And Lloyd doesn't make that much. So get him in here, do whatever you need to go do. And I just think it's so critical that we have that demonstration project that people understand at the leadership level what we're talking about when we talk about design and redesign of the system.

 

0:30:00.0 Andrew Stotz: Yeah. I mean, I appreciate in the book you're talking about this concept. I'm not going to call it quick wins, but the idea is we need to get results. You know, this isn't just about talking about stuff so that's one thing that as you just illustrated, that's one point. The second thing you mentioned, is this person a leader or a manager? You know, and I think for the listeners or viewers out there, they're probably... When they heard you say that, they're probably thinking. Okay, wait a minute. Are my team managers or leaders? How do I know? What would you say? What differentiates the two?

 

0:30:37.2 Cliff Norman: I was fortunate to hang around Dr. Maccabee, as Deming did, and I asked Dr. Maccabee that question. He said, Cliff it's actually pretty easy. He said leaders have followers, and if you have followers, you can be anywhere in the organization, be a leader, but if you don't have followers, you're not a leader. You might be a manager with authority. You're not a leader.

 

0:31:02.7 Andrew Stotz: Can I ask a little bit more on that? So I'm thinking about my own business, which is a coffee factory, and I have people that are running the business, but I also have people that are running departments like the roasting department. And that area when they're overseeing this and they're doing a very good job and they're keeping things up and all that. How do I understand in a sense you could say, are they followers? Well, not really. They're people working for them and they have a good time and so do I view that person as not necessarily a leader, but more of a manager, or how do I look at it in my own company?

 

0:31:35.5 Cliff Norman: It could be a manager, which is essential to the organization. And that's another big difference. You see, the leader can't delegate their relationship with the people who are followers. You can't do that any more than a teacher can dedicate her class to a substitute teacher. Anybody that's ever watched that knows that chaos is getting ready to break out here because that teacher has a relationship with those students. She knows them all in a big way. And when the substitute comes in is game time in most classrooms and so forth, the managers have skills and things that they're applying and they can actually delegate those. Like when I was a foreman, I could have somebody come in and take over my department and I say assign all my people tomorrow. And they could do that. Now, in terms of the people that I was leading that saw me as a leader in that department, they didn't have that relationship.

 

0:32:30.2 Cliff Norman: But management or skills and necessary things to make the organization run like you're talking about, the coffee is not going to get out the door unless I have people with subject matter knowledge and competent managers to make sure that the T's are getting crossed, the I's dotted and the rest of it. But the leadership of the organization that has followers, that's a whole different person. And I think it's important. That could be anywhere in the organization. Like I had at Halliburton, I had a VP of engineering. Everybody went to him, everybody. He had 110 patents. You know, he built that system. He built the whole organization. So the CEO did not have the followers that the VP of engineering had. And it was well earned. It's always earned, too.

 

0:33:16.7 Andrew Stotz: Yeah. Okay, that's great. Leaders have followers. Leaders cannot delegate their authority. They have a different relationship.

 

0:33:24.0 Cliff Norman: They can't delegate the relationship.

 

0:33:25.8 Andrew Stotz: The relationship. Okay.

 

0:33:27.4 Cliff Norman: Yeah. Very important.

 

0:33:34.3 Andrew Stotz: So now let's go back to what, where we were. So we were saying some of the considerations. Are we ready to change? Are we prepared to devote the time and energy? Are we ready to get outside help and where are we now? And that self assessment that you talked about helps us to understand what's our starting point. I always tell a joke with my students about this when I talk about. I'd say, imagine you go to London and you're going to go visit your friend and you call your friend up, you say, I've arrived and I'm calling from a phone booth and just tell me how to get there. And the friend says, well, where are you? And you say, I'm not really sure. Well, do you see anything around you? Yeah, well, there's lots of buildings, but I don't really, you know. Well, do you see any names of any streets? No, I don't really see anything. But just tell me how to get there. There's something missing. If we don't know where we are, it's very difficult to get to where we're going. So now we understand where we are. We got that scatter plot that you guys have that you've talked about. Dave, where do we go next?

 

0:34:26.6 Dave Williams: Well, so Cliff already mentioned one of the fundamentals. And sometimes I think this is something that people struggle with because they want to jump into something new. But one of the best starting points is to focus in on improvement. And there's a number of different reasons for that. So one is that I don't know about you all, but in my experience, if I ask people, like, hey, I want to create some improvement projects and get started on improvement, I always tell people, like, if you remember the old Stephen Covey exercise where he put the rocks and the stones and the sand into a jar and poured water. And like you would do it in different orders. And I'm fascinated that people will stare at the big rocks or the things that are right in front of them, or the things that are on their agenda, or the things that are part of their strategy. And then they'll look to the side and grab some rare event or some extra thing that isn't related to that, but they've always wanted to work on. And where we try to focus people's attention is one, what are you already working on? Can you look through your and ask around, what are the things that are currently in play, projects that exist? And sometimes we won't ask, what improvement projects do you have? Because if you do that, you get a short list.

 

0:35:51.4 Dave Williams: Those are the things that people defined as an improvement effort, or maybe use some kind of framing to decide it was an improvement project. It may be better to in the beginning of the book, in the first chapter, we talk about different ways that you improve. And there's designing and redesigning a process. There's designing and redesigning a service or a product. There's changing a whole system. And so it can be useful to say, well, what are we doing in these areas? And that may actually create a bigger list of the various things where people are working on something that's about change to the system that may lend itself to be better activated through firing it up as an improvement project. And then, of course, there's a good chance that any organization, especially if they've done some kind of strategic planning, have some strategic objectives or some strategic priorities which they've committed to or already said, these are the things we're going to work on. So kind of crowdsourcing or bringing those together helps us to potentially find the early portfolio of projects without having to look much further, without having to say, what else do you want to work on.

 

0:37:07.0 Dave Williams: And then if we've got that, if we've got that list, a second thing that we can do is invite people to use the three questions of the model for improvement and reflect on can you answer these three questions? Do you know what you're trying to accomplish? Do you know how a change will result in improvement? Do you know what changes you'll make? What's your theory about how you'll get to improvement? And so having a list of the things that are already present or existing may be one first step. Another second step in the firing up a portfolio of improvement projects is asking the three questions for the model for improvement. And then a third one, if it's an active project is we have a project progress scale that you might use that can help you gauge. So I've got a project where is it on its journey towards achieving its aim or getting results? Those three can help us to sort of get a sense of the work that is at hand and that has already been sort of started in some fashion that is already in progress and maybe to get a sense of the level of definition and the progress that exists.

 

0:38:22.3 Dave Williams: They may not be the right projects, but that's a good place to start before trying to create new ones. And I'll hand it to you, Andrew.

 

0:38:30.4 Andrew Stotz: I find that interesting. Both the story that you told Cliff about fix my raw material problem and then, Dave, what you're talking about is as you talk in the book, focus first on improvement. What are we already working on? What's an improvement project we've got? What's a problem we've got? Because a lot of times, let's say in the teachings of Dr. Deming, it's like, no, get your mind right, read this stuff, read this, figure this out, think about this, go to a seminar, talk to other people before you do anything. I feel like that is oftentimes where people get caught is they get caught up in, I need a year to think about this. And can you explain a little bit more about why once we've done our self assessment and we're ready to go, that you focus on improvement rather than the thinking process?

 

0:39:21.7 Dave Williams: Well, because we want to... Well, one, we know that in order to get results or to get a different result than what we want, we got to change the system that we got. Right. So in order to do that, we've got to do improvement. The other thing is that there's already energy that's being expended here.

 

0:39:41.4 Andrew Stotz: That's a good point.

 

0:39:42.7 Dave Williams: The risk that often I find people run into is that they then add other projects that are not strategic into that bucket and take up more energy. I'll tell you an example. I was working with the health system here in the States and we crowdsource just the things that they were calling improvement projects. The health system had 25 active teams that were just the ones that were called out as improvement projects. When we looked at those 25 teams, the vast majority of them were not actually... They had been meeting for months and doing things for quite some time, but they actually weren't doing any changes and, or they've been testing changes for quite some time. So, now just this exercise alone by only asking, what improvement projects do you have? You realize you've got 25 teams that have been resourced or are spending energy or going to meetings or focused on something. They may not be the strategic thing that matters, but that's irrelevant right now. We just know that we already have invested some interest here. The second thing is these folks have been on this journey for quite some time and are not making progress.

 

0:41:01.7 Dave Williams: So that tells me something about maybe the way that they framed it. Did they charter it well? Did they have the right people in the room or the right team? Did they have the right tools and methods to be able to break down the problem and then figure out what to test and learn? So there may be some difficulty...

 

0:41:19.4 Andrew Stotz: Or did they even just dissipate their efforts across 25 projects too? Right in their resources, yeah.

 

0:41:26.1 Dave Williams: Yeah. Or there are overlaps? So there's a number of different factors. There's actually a paper that was published by a health system in the United Kingdom, and it was really interesting. They spent a lot of attention on generating will through training and getting people in the classroom and teaching them about improvement methods. And they fired up all this energy. They had a massive explosion of the number of projects that were started or where somebody went into their software. They had a software platform. Anybody could go and start a project. Well, something like 50% of those projects never actually got to PDSA testing where they changed anything. And then there were a slew of them that were stuck in PDSA testing but never saw any movement in their process measures or their outcome measures. And only a small number actually progressed in achieving their aim. And I asked the Chief Quality Officer about this, and and he admittedly said that it was very exciting that we we're generating will and getting things going, but that alone was only getting them to maybe some early design and some thinking, but they weren't getting them to results.

                                                                       

0:42:34.8 Dave Williams: And I said, well, what about the ones that were getting results? And he said, well, those are actually ones where we've got an improvement advisor who's got some skills and ability and improvement. There are things that are resourced, there are things that were prioritized. And man, when we did all those things, they moved from planning and organizing and thinking to testing changes and moving in a direction of goodness and getting at least results in their process measures, if not their outcome measures. And so in my mind, I was like, I appreciate you're trying to build this sort of culture, but it felt like a lot of burnt energy at the front end with all these teams getting into training and firing up their software and more energy might have been strategic in copying what was getting to results. And I think that's part of what we're trying to get to, is helping people learn. You've got if you don't have a method to figure out strategic projects, let's look at the ones you got. How are they going? Where are people at? And how effective is the capability that you have within your system right now? And the leaders want to be part of that, and they can learn within that to go, oh, wow, this is our current state.

 

0:43:47.2 Dave Williams: And so maybe we're going to agree to continue on with these projects. Maybe we're going to sunset some of them, but we're going to learn together about how do we get better at getting better, and how do we learn how to move projects forward and not to have them take two years. Let's try to get them down to four or six months, whether that's through scope or execution. But let's get better at getting better. And then as we're building... Developing the early activities of QOS, we'll eventually get to a point where we'll also be able to identify more strategic projects that are going to move us towards our aim or towards our purpose better. And this will help us as we're trying to build the capability to get there.

 

0:44:32.7 Cliff Norman: You know, Andrew, early on, when Dave went down this path, he said that we got to make sure that somebody's working on improvement. They're actually making changes. And Jane and I were working with a group, and the CEO said they've been meeting a long time. Could you down there and see what they're doing? Because nothing's happening. And we started looking through their agendas and they had everything well documented, and it was all about getting ready to get ready. And then they'd assign the dessert. Who's going to bring the dessert to the next meeting. And Jane looked at him and says this reminds me of something, Cliff. I said, what's that? Can I share my screen?

 

0:45:10.9 Andrew Stotz: Yeah. Yep, go ahead.

 

0:45:13.7 Cliff Norman: I may send this to. You may know about it, but this is Dr. Deming's Diary of a Cat. And everyday...

 

0:45:20.6 Andrew Stotz: It hasn't come up yet. Hold on one second. Hopefully you've got permission now.

 

0:45:28.6 Cliff Norman: Let me go back and check here.

 

0:45:33.9 Andrew Stotz: Okay. It looks like it's coming up. One second.

 

0:45:38.4 Cliff Norman: It said every day is today. There's no theory days of the week. But today I got up some food in a bowl, it was great. Slept some too. Play with yarn, got some food in a bowl, had a good nap, slept, food, yarn, fun. Play with a shoelace. There's a big change right there. Went from yarn to a shoelace. Some people call that a job shop. And ate, slept, had a good day, slept, ate some food, yarn, so forth. So, and the team meeting looked just like that. But there's really no changes going on relative to improvement. So Dr. Deming would often share this into four days seminar to make sure that we weren't involved in the Diary of the Cat, but we were actually doing something useful in terms of making changes in the organization.

 

0:46:24.4 Andrew Stotz: That's a great one. And it helps us to understand that we could be busy all day long and not improve anything.

 

0:46:31.8 Cliff Norman: You know, or actually confuse that with improvement. In fact, we have an operational API that my team, we were embarrassed in our first, wait a second, our first improvement guide we wrote. And Dr. Adamir Pente, who's a professor at the university in Brazil, he sent us a note and he said, I know you guys and he said you're real big on operational definitions, but you've written this book on improvement and nowhere have you, you've defined what you mean by improvement. And then he put together a three part definition that there's a design and redesign system, there's system measures and the change is sustainable and lasting and so we put that definition in the second edition. But I was confronted at a university, I won't mention which one it was, but they had 30 Keystone projects for a advanced degree program for nursing and they were convinced they were doing improvement. And when I had them apply that definition, they came up out of the thirty. They only could find two projects out of the 30 where they were actually designing and redesigning the system, which, that's the first thing Dave said are we designing and redesigning and making real changes? And people think just showing up and going through motions and all the rest of it is improvement. No, it means...

 

0:48:07.8 Dave Williams: Looks like we've lost...

 

0:48:11.9 Andrew Stotz: We lost you at the last, the last statement you just made. People are going through all this stuff and thinking that they're improving, but they're...

 

0:48:22.8 Cliff Norman: Yeah, it's showing up and going through motions and you know, having the meetings and making sure we assign who's bringing dessert. But we're not really designing and changing the system. We're not getting measurable changes of improvement. In other words, we haven't tracked the data over time and we can't say that the changes that we've made are going to in fact be sustainable because we haven't known what we've done to the system to deserve a sustainable change.

 

0:48:51.4 Andrew Stotz: By the way, what a buzzword these days, sustainability, sustainable and all that. And you just think do people really think about how we're building something that's really lasting and sustainable?

 

0:49:04.8 Cliff Norman: Well, we have a checklist and actually Jane designed it for the first edition and it literally lays out what changes did you make, which processes did you change, what's going to change in the documentation, whose role statements have been changed in the organization because of this change. And once all that's answered on that checklist, which is in the book, then we can... But we're pretty certain that we've created the structure to make it easy for people to do the right thing and hard to do the wrong thing. But unless that structure's changed, probably not much going to happen.

 

0:49:40.8 Andrew Stotz: Just for the sake of time, because I think we want to wrap up in just a bit. But there's so many stuff, so much stuff that we've been through. But I know there's even more in this chapter, but how would you start to bring this together for the person who is a leader, himself or herself, and they're listening to this and they're thinking, okay, I'm ready to make a change and I'm prepared to devote the time and energy because I see the outcome and I'm open to help, whether that's through the book and other books, whether that's through a consultant, whatever that is. And I can even do a self assessment to some extent and know where our level is, which is very low. We don't know much about this type of stuff and that type of thing. We talked about the first focus on improvement. How do they pull this all together and start moving on it?

 

0:50:35.0 Dave Williams: There's three things that follow the self assessment. The first one is this focus on doing improvement work and setting up a portfolio of projects. And we just kind of talked about many of the different methods that go into that. And like I said, sometimes that when you say that out loud, leaders don't initially get excited by it because they think they have it. But actually it's a powerful opportunity for you to learn about what's currently going on in the organization and about where this opportunity is to reduce a lot of the noise and a lot of the friction that's getting in the way from you getting to results. The second thing that often happens in parallel is that the leaders need to build a learning system where they're going to be able to learn together both about these projects and what these projects are telling them about their organization, about their culture, about their people, and about their capacity to get results, but also that they can start to be learning about the science of improvement and profound knowledge and the activities of QOS that are going to be part of what they're going to work on developing over the course of the first year or two.

 

0:51:50.6 Dave Williams: And so that typically is, that's making that space and energy. It's a blend of book learning and application and practical. Trying and looking at things within the organization. It's a very applied approach, but it's an ongoing piece of their discovery. And I often argue that this is a real opportunity for leadership because they're going to be able to see their organization in a way that they haven't seen it before. And when we talk about profound knowledge, they're going to gain this profound understanding and expertise about what they're charged with and what they own and what they want to change in a way that they haven't been able to have it before. And so it's a hard work, but rewarding work. And then third is that typically where the, where we invite people to start is to focus in on the first activity, which is to develop or establish or develop their purpose. When this work was initially framed, not everybody was as... Not everybody had a mission, vision and value statement or a purpose statement that wasn't as common, but today people do. But the difference here, and you'll see this in the chapter on purpose, is that organizations that are pursuing quality as an organizational strategy are organizations that are systems that are built to constantly be trying to match a need that exists out in the world.

 

0:53:34.7 Dave Williams: And so often a learning for people is to step back and have to reflect on, well, what is the need in which we are creating these products and services to match? And if we're creating these things to match the need, how do we understand what's important, what are the quality characteristics that matter? And then how do we define what our mission is in that context? And being able to say, here's why we exist and the need that we're trying to serve, and in what way? And how do we set a vision for where we want to get into the future and what are the tenants or the practical values that exist in our organization, that we want to define how we work together in terms of building in that way. And so purpose is a big focus. It's that clarity of the need, the clarity of the quality characteristics that it takes to match that need. Understanding what are the products and services that we have. I know that sounds a little trivial, but you'd be stunned how hard it is, especially in service organizations, for people to actually describe what it is that they do, what are the actual services.

 

0:54:54.3 Dave Williams: They might have the name of the service or the class or the whatever, but to actually say this is what we deliver, and then really think about how do I use this as our organization's sort of North Star, our aim, so that everything else that follows is going to be about building a system that produces the results that we want and produces the services that match that need. So going forward, that's going to be very, very important in instructing the direction and instructing the way in which we're going to work as a community of professional people together.

 

0:55:30.8 Andrew Stotz: So after self assessment, we're talking about focusing on improvement. We're talking about building a learning system, and we're talking about revisiting or establishing or developing our purpose?

 

0:55:43.3 Cliff Norman: Yeah, I'll just add to what you just said there, Andrew. There's three basic things that have to happen when we start working. Number one is create the habit of improvement. Start improvement right away. Second thing, Dave just went through some detail on building a system of improvement. And Dave called that a learning system, which I thought was interesting because that's what Dr. Maccabee called it when he saw the five activities. Said, these are really methods for building a learning organization. And he said, I've never really seen them before, but this is what will come out of this, which is the essence of what you want. You want people continually learning, as Dr. Deming said, so they can continually improve. But the third thing that has to happen is we have to develop internal capability for them to carry this on, because we're not going to be around with them. We've never advertised. We don't advertise for clients, and we only get word of mouth. And we're only in there to do those three things, get them started on the habit of improvement, start building the system improvement so they can take it over.

 

0:56:43.4 Cliff Norman: And the third thing, start developing internal capability so they can continue it on into the future. So those three things basically take off on day one. And depending on the organization, I think this is critical. Dave, you asked this question the other day, if the context is such they've got things in front of them are so bad and so challenging that they just need to work on improvement. That's where we're going to be focused. But now if they can chew gum and walk at the same time, we're going to start building the system of improvement. And the first people I want on those initial teams, I want people on there who are going to be future improvement advisors. And more importantly, they perceive them as future leaders in the organization. I don't want a cadre of a whole bunch of improvement advisors. I want leaders in the future who actually understand the science of improvement, understand these methods, so when they go to the next department, the next organization, they can carry this on. So those three things start improving, start building a system of improvement. And the third thing, start developing internal capability. Those have got to take off almost simultaneously, depending on the situation, of course.

 

0:57:49.8 Andrew Stotz: Well, on that note, that's quite a discussion. I'm so happy that we can have this to go in a little bit deeper into the work that you guys have done. Again, the book is Quality As an Organizational Strategy. I got mine on Amazon and it sent it to me. But I wonder if you have any last words that you'd like to share about what we've talked about today in relation to getting started.

 

0:58:18.3 Cliff Norman: So, Dave, why don't you talk a little bit about. Because I think this is critical. We've just finished Andrew, the book that's going to be for the people who actually have to build this system. So Dave, just say a few things about that if you would, because you.

 

0:58:32.0 Dave Williams: About the field guide?

 

0:58:33.8 Cliff Norman: Yeah.

 

0:58:35.5 Dave Williams: Yeah. Well, so when this body of work was first created, there was the content of which you see in this book. And then there were also a lot of exercises and methods and applications and examples that existed as well. And it was a pretty thick binder. We have created two volumes. One, the book that you have, which is the description of the theory and the method and gives you some of the tools. And we're now in the process of pulling together what we call the QOS Field Guide, which is a guide that is supporting people that are going down this journey. It follows the same structure as the book, with the exception of the, the Getting started chapter that we had at the end is now at the beginning. And it walks through in great detail various ways in which you leaders and practitioners can approach getting started and building the capacity and then working through each of the activities. And it's equal in size, I mean, it's about the same thickness. But what we tried to do is to give people really pragmatic things to do.

 

1:00:01.1 Dave Williams: So there are exercises where people are simulating an idea or a concept or a particular piece. There are what we call QOS applications, which are where you're actually taking the theory or the method and applying it to your own organization. There are case studies and things that have been built that might allow you to practice. There's wonderful examples of just about everything from all, from people that we have worked with over the years across multiple different fields, from my background in emergency services and healthcare to education to manufacturing to elevator companies, all kinds of great stuff. And so that will be helpful as people are trying to think about pursuing this journey and working through that first phase of developing QOS and moving into using it. And we're in the stages of having it done to be available later this year.

 

1:01:08.6 Andrew Stotz: Exciting.

 

1:01:09.2 Cliff Norman: We've tried to make it useful, Andrew, that the people have to stay overnight with the management and actually get something done and build it without being run off. That everything is there for them to make sure that they make it successfully. That's the thing we kept in mind as we kept writing this second volume.

 

1:01:25.2 Andrew Stotz: Yeah, I mean, I would say my experience with your guys's writing is that it's applicable.

 

1:01:34.1 Dave Williams: Well, Andrew, one thing I was going to add on you mentioned a lot of different examples. There are a lot of books in which people tell you a theory, but they don't tell you how to do it. Or they tell you about their own experience, but they don't actually convey the theory. The Quality as an Organizational Strategy book is laying out the theory and the methods of this approach built on the foundations of the science of improvement and profound knowledge and the Deming philosophy. The QOS Field Guide adds to that by giving you the methods and the tools and the things. It doesn't mean that that by itself you can't just go through like it's some kind of self guided tour and all of a sudden magic happens. There's a lot of work and learning and things that have to go into going through that process. But between these two volumes, a leadership team has the tools and methods that put them in position to be able to make this journey.

 

1:02:41.4 Andrew Stotz: Right. Well, let's wrap it up there. On behalf of everyone, I appreciate Dave and Cliff. All that you're doing and you're sharing with us and taking the time to do that. So from everyone at the Deming Institute, I want to thank you again for joining this and bringing your discussion on these topics. And for listeners, remember to go to deming.org to continue your journey. And you can find this book, Quality as an Organizational Strategy at Amazon and other booksellers. Are there even booksellers these days? I don't even know. They're mainly online these days. So this is your host, Andrew Stotz, and I'm going to leave you with one of my favorite quotes from Dr. Deming, which is "people are entitled to joy in work."

 

It's time for PDSA (Plan-Do-Study-Act) Cycle 2 in John Dues' journey to reduce chronic absenteeism in his schools. His team is using PDSA to quickly test ideas and learn on a small scale. Find out what happened and how PDSA can be a powerful tool for learning.

TRANSCRIPT

0:00:02.2 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 John Dues, who is part of a new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is Powerful Learning with the PDSA Cycle, Part 2. John, take it away.

 

0:00:26.7 John Dues: It's good to be back, Andrew. Yeah, like you said, we, I think for the past three episodes or so, we've been working towards getting a better definition of our problem specific to this chronic absenteeism issue that we're working on this year. I don't know if you remember from last episode, but we have this team working and they've basically said we don't have enough information quite yet to write this precise problem statement. So we decided to gather information running the Plan-Do-Study-Act cycle. And last time we focused on the first cycle. This episode, we're gonna focus on a subsequent PDSA cycle, sort of along those same lines. For folks that are watching and perhaps just joining for the first time, I'll kind of share my screen and do a little bit of a review so that everybody can see or know what we're talking about, even if they're just listening for the first time. So we've talked about this improvement model. We're working through this four step improvement model. So set the direction or challenge is the first step. Grasp the current condition is the second step. Third step is establish your next target condition and then fourth, experiment to overcome obstacles.

 

0:01:44.3 John Dues: And we're doing all this with a team, people working in the system. People have the authority to work on the system and someone with the System of Profound Knowledge knowledge. right. And so, you know, we've talked about setting that challenge or direction. And as we're grasping the current condition, we've actually decided to skip to step four and experiment a little bit so we can get a deeper understanding of this problem that we've been working on. And you'll remember probably as well, did the screen change for you so you can see the chart now?

 

0:02:21.8 Andrew Stotz: Yeah.

 

0:02:22.9 John Dues: Yeah. Great. So I thought it'd be helpful to show this again too. So this is our process behavior chart of the chronic absenteeism rates dating back to the 2016/'17 school year. So we have eight years of data in regards to this problem. And you'll remember when we talked about set the direction or the challenge, we wanna basically cut this chronic absenteeism rate we're seeing coming out of the pandemic by a lot. So we're hovering around this 50% chronic absenteeism rate. We wanna cut it to 5%. So that means, you know, 50% or more of our kids, or right around 50% of our kids are missing 10% or more of the school year.

 

0:03:06.2 John Dues: And this is a trend that we're seeing all over the United States right now. And the other thing that we talked about is when we looked at this process behavior chart, that it's basically like there's a pre-pandemic system of chronic absenteeism, and then there's a post-pandemic system of chronic absenteeism. So, you know, before the pandemic, the rates were too high, but nowhere near to where they are now. So, you know, prior to the pandemic, we were sort of hovering around the, you know, 20 to 30% of kids chronically absent. And then, you know, coming out of the pandemic, it's been more like that, that 50% number that we've, that we've talked about.

 

0:03:49.4 Andrew Stotz: And so to reiterate for the listeners or the viewers, this is the chronic absentee rate at your school, as opposed to nationwide, which I remember last time you talked about, it's about 30% nationwide, and pre-pandemic, it was about 16%.

 

0:04:06.5 John Dues: Yeah. Right around there. So, yeah, so I'm talking about the four schools that make up our school system in Columbus, Ohio.

 

0:04:15.8 Andrew Stotz: Yep.

 

0:04:16.6 John Dues: And, you know, we have a pretty high percent of our kids are economically disadvantaged. And so the rates in schools that have that demographic tend to be more like ours, in that 40, 50% range. And then, but all schools coming out of the pandemic had much higher rates than what they had pre pandemic. No matter your affluence levels. It's just, just like a lot of things the schools with the most kids living in poverty get hit the hardest when you have these problems, basically. So, yeah, yeah. So what we were, we were studying this problem, and, you know, we have some idea of what's causing our challenges, but we've started running these PDSA cycles to dig into that a little bit more, and I'll, I'll, I'll stop sharing. So that's not distracting. And so we ran this first PDSA cycle we talked about last time, and now we're running, or we've just gotten finished running a second PDSA cycle. So for folks that are new to that, what that means is that we are basically running an experiment to test an idea, an idea about how to improve chronic absenteeism.

 

0:05:26.6 John Dues: And to do that we plan the intervention, then we do or run the experiment, we study it and then we act on that information. 'Cause that's where the PDSA comes from. So basically the objective specific to PDSA 2 is were or we designed a individualized intervention based on responses we get from interviews with kids using this five whys sort of empathy interview template. Right? And then after we do that, what's happening is that students are actually. So after the five whys is completed with the student, we move right into creating the plan of the PDSA still with that student. So they're part of the process. So that's also sort of a key, I think innovation of this particular round of PDSAs is the student is sitting there as we design the intervention. A student that has some issues with chronic absenteeism. And then basically in this particular plan, we decided we're gonna collect detailed attendance data for two weeks to evaluate the effectiveness of that.

 

0:06:39.7 Andrew Stotz: When you said this one, are you talking about the PDSA one or two?

 

0:06:43.5 John Dues: Two. The one. The one you just got done running. The one we're talking about. So the PDSA 2 ran for two weeks. So when I say experiment, I'm not talking about, you know, like a randomized controlled trial that can last a year or two years or five years before you get the results. I'm talking about something you can do in a day, a week, two weeks. My general rule is not to go over a month with these PDSA cycles. It starts to feel like it's too long. I wanna get data back quicker than that on an intervention. And so that's what we did with this PDSA cycle 2. And it was really, the plan was built around this key question. The key question was, will involving students in the design of an individualized intervention to address their chronic absenteeism lead to an increase in their average daily attendance rate during that period of intervention. So we're not taking that for granted just because we're sitting with the kids creating a plan with them. We don't know, we don't know what's gonna happen exactly. And basically step one of that plan was this five wise interviews that I talked about.

 

0:07:50.2 John Dues: So basically we had four staff members. So each one was assigned a student at their campus that they chose to work with on this initial intervention. And they took a piece of sticky paper and up top they basically wrote, here's our problem, the student's name. So let's say James is not coming to school consistently. And when students miss a lot of school, they're at risk of falling behind academically. And right below that problem statement, then they wrote, why are you not coming to school consistently? 'Cause that's the first why question. So that's sort of the first part of this five whys interview. So it's very simple. You need chart, paper and marker in about 20 minutes to do this. Step two is, then they used the information that they gathered from that five whys interview to design the intervention with the student. And basically what they did was they designed the intervention around the root cause that they got to at the bottom of that five whys sequence. So basically, you know, when they said that, when they asked that first question, you know, why are you not coming to school consistently? The student is then going to say something, right? I miss the bus almost every day.

 

0:09:10.7 John Dues: And so the next question, the next why question is built on the previous answer from the student. So why do you miss the bus every day? And you kind of keep going. And it doesn't always happen perfectly. Sometimes it takes three questions, sometimes it takes a little more than five. But generally speaking, once you drill down with those five whys, you'll get to sort of a root cause from the interviewee, right? And so then they're basically saying like, you know, based on that root cause we identified, what do you think we can do to improve your daily attendance? And then now they're sort of transitioning from the five whys into the planning of the intervention. And sort of that was step two of the plan. And step three is then actually starting to track the student's daily attendance as they do whatever that plan is across the 10 school days that are in that particular cycle. So that's the plan phase. You know, we had a key question that we designed around, and then the team also makes predictions about what they think is gonna happen during that cycle. That's the plan.

 

0:10:23.5 John Dues: And then, so then they move into, once the plan's in place, you run the experiment. That's the do, right? And so in this particular do, PDSA cycle two here, that team collected both the quantitative data, so that's the five whys interview, and then the quantitative data, that's the daily attendance data. And so, you know, I mentioned that they had chosen four students to do this work with. And so what you're doing in the do is saying, did you do the plan? Basically. And that shouldn't be assumed because things may happen that interrupt the plan or derail the plan or make you change the plan. The guy that's designing these PDSAs is pretty good project manager. He knows improvement science, he knows the Deming stuff pretty well. So largely this experiment ran as planned. It's also for a pretty short time frame, so there's less time for it to go sort of off the rails and go wrong. But one of the student's attendance, it was so poor during this two week period that they never actually held the empathy interview. So you're noting stuff like that. You plan to interview four kids, you actually only interviewed three kids.

 

0:11:34.9 John Dues: And here's the reason why, we couldn't even get to the part of interviewing the student, this particular student, because he was not there during that two week period when they were gonna do the interviews. And so then the data comes in, right? The data comes in and now we're ready to study what actually happened during that two week period. So with the first student, interestingly, during the course of the PDSA, that daily attendance rate did go up. Right? And he was actually, he did miss a couple days, so it wasn't perfect, but he brought a note and there was actually a medical diagnosis. There was like a excuse reason for those particular days. Right. The second student was that student I was just referring to. So it was, his attendance was so poor that weren't even able to do the interview. That happens that you know, in real life. Third student's, this was a real success story. She was a part of her, the plan that she designed. She was meeting with one of the staff members at the school she attends that she chose one-on-one at the start of the day and she had significantly increased attendance during this two week period.

 

0:13:04.0 John Dues: And then the last student had this initial bump early in the PDSA and then had four straight sort of missed days at the end of that two week period also due to an illness, due to the flu. So you know, four kids, one uh two kids, pretty good success. Two kids still had some absences throughout the period. And then one kid sort of really didn't break the cycle. Nothing changed. And in fact the interview didn't even occur. Which means there was also no intervention that occurred with that particular student. Even so, with the student where we couldn't do the interview during that period, part of the plan was to get him a more reliable bus stop and we actually were able to change his bus stop, communicate that to the family and then that still didn't lead to increased attendance. And that's, you know, when you, I think when you work like this too, when you are sort of a policymaker or politician and you make these proclamations, we're gonna decrease chronic absenteeism or to cut it in half. And then you say, okay, well here's four students. Do that in two weeks. Do that over the course, just two weeks, just 10 days. How hard could it be? Right. [laughter] You see, you see just how hard these things are in reality. Right. So can't just make these proclamations.

 

0:14:32.9 Andrew Stotz: And is that part of what you're trying to do also in this process is get people to, you know, I mean, obviously what you'd love is to be able to come up with solutions from these four students. But really what you also are identifying is the other side of that. Wow, this is even harder than I thought.

 

0:14:50.2 John Dues: Yeah. And I, you know, with the people that work in schools, like the folks that are on this improvement team, none of this is gonna be a surprise to them.

 

0:14:57.3 Andrew Stotz: Yeah, they already know that, I guess.

 

0:14:58.6 John Dues: They already know.

 

0:15:00.3 Andrew Stotz: Yeah.

 

0:15:00.4 John Dues: Because they're on the front lines. I mean, they already know knew this is, you know, multi layered, challenging problem to address. But on the flip side, there were some pretty encouraging signs that getting, we call it getting proximate to students, individualizing some of those interventions and then including the student in that attendance monitoring and the intervention that it, you know, like I said, there were some success stories. So that first student I talked about, he went from 52% attendance to during the intervention period, it jumped up to 70%. So, you know, it's a short time frame, but a positive sign. That second student that I said that, you know, we never even got to do the interview with, he actually got quite a bit worse. So he had something like 37% attendance and that dropped 10% during that two week period. And then that third student that I said was a real success story, she went from 75% attendance to 96% attendance. And 96% attendance is good. And then the last student, she was the one that I said, you know, there was an initial bump and then kind of fell off, due to the flu at the end, she basically stayed the same. Like she was at right around 56% attendance and stayed right in that mid-50s range during the intervention.

 

0:16:19.8 Andrew Stotz: And just for, if a listener or a viewer has come in just on this episode and they're trying to understand where we're at, it's maybe you could talk a little bit about what you're doing in the sense that someone may look at it and say, wait a minute, this is just some anecdotes and how does that help you? And then on the other hand, one of the lessons in the business world that people sometimes say these days is do things that don't scale, which is counterintuitive. But what they're trying to get you to do is focus in, on getting it right with a small number of people before you then, you know, decide to go to the next level. So just maybe just give a brief of where it's at in this whole process.

 

0:17:04.8 John Dues: Yeah, I mean, I think. I mean, that's the whole point of the PDSA. The counterintuitive thing is that while you want to improve things for all students, you may start by working with a single student or a single classroom, or in our case, you know, four students. So, you know, the good thing is, is that what you could possibly do out of a cycle like this is, and this is only two weeks. But there's significant learning. And so what you would then do with cycle three, perhaps if the team decided this was what they're gonna do, is make some adaptation to this process, and if you were feeling confident that the adaptation was gonna work, then you could possibly. It's pretty early cycle two to start spreading this real wide. But I mean, you could spread this, you know, if you wanted to, to instead of four students, maybe you wanna try 10 students, something like that. Right. And in that way, and that's the basic idea, is to go from one student to one classroom of students to maybe one grade level of students to a whole school, perhaps if some type of idea is working really well. But the thing is, is that the whole mantra is, I lost my train of thought. Start small, learn fast. That's the mantra. Right.

 

0:18:23.7 Andrew Stotz: And then the other question I would have is, to what extent is this, you know, just subject to the Hawthorne effect in the sense that we knew in the many years ago that when they increased the intensity of the light, the workers did better, and then when they reduced the intensity of the light, the workers did better. So it was just that somebody was paying attention to the workers and the result was they appreciated that and so they did better.

 

0:18:53.9 John Dues: Yeah, I mean, that's possible. I mean, I would say...

 

0:18:57.0 Andrew Stotz: Which of course. Which of course may be the solution anyways. Right? You know, like, geez, if a teacher was... If each student was greeted by a teacher who cared about them and said, I'm so happy to see you, and it's great that you made it on time. Let's get started. I mean that could change the life of some people for sure. Including me.

 

0:19:13.7 John Dues: Yeah, I mean, I think, you know, like the girl that went from 75% to 96% attendance during the intervention. I wouldn't say, oh my gosh, we're gonna do this school wide now, but what I would say is, wow, that worked for that two week period.

 

0:19:25.7 Andrew Stotz: We're learning.

 

0:19:27.5 John Dues: It was relatively easy to do on a daily basis, so let's do more of that. Right. And also another thing you can think about is when you run PDSA cycles and you, let's say you do have really great success on whatever that thing is and you've spread it throughout your system. But now the priorities have changed. There's some other thing that really needs intensive intervention. One thing you can do is sort of as the 10th step in our improvement process is hold the gains. And so you often can then check back in on that thing in a month or two months and just see what the data says. Did it deteriorate because we're not paying as much attention to it or because we put that thing in place and left it in place? Although we're not as hyper focused on it, is it still sort of continuing on in a way that's at least acceptable to us?

 

0:20:22.3 Andrew Stotz: I just had an idea. Why don't we put a finish line and a countdown clock and a checkered flag and cheer every student as they get over the line?

 

[laughter]

 

0:20:35.0 John Dues: Yeah, that would be great. That would be great. The problem is, is the cheering isn't the thing that's preventing them from coming to school.

 

0:20:45.1 Andrew Stotz: Yeah.

 

0:20:46.1 John Dues: Maybe like the cherry on top, but you know.

 

0:20:49.4 Andrew Stotz: Exactly.

 

0:20:51.6 John Dues: So, so it's tough. Yeah.

 

0:20:52.2 Andrew Stotz: Great, great example of where superficial things that outsiders see may not really connect with the real trouble that they're struggling with. Yep.

 

0:21:01.5 John Dues: And remember, the student's not the only part of the process. The people, the staff that were doing these interventions, they reported that this was like a really powerful experience for them. Most of them haven't been through a PDSA cycle before.

 

0:21:18.6 Andrew Stotz: Right.

 

0:21:18.6 John Dues: So this.

 

0:21:20.3 Andrew Stotz: Maybe I was, slogans and exhortations is what I was just talking about.

 

0:21:24.8 John Dues: Right, right, right. Yeah. But they felt pretty confident that doing more of that thing was a good idea coming out of cycle one and then this second cycle. Now, with that being said, one of the things that we've also discovered is that there's some required intervening that has to happen as kids meet certain thresholds that are required by the state of Ohio. And so I think I mentioned this before, that one of the things that we're doing as a part of the project was mapping out the intervention process in place at each campus. So while the benchmarks are the same for when you need to do that, the how and the who and the when, that there's variation in that. So right now we're taking like each of the campuses mapped out their intervention process for attendance, and we're taking a look at that. And so what we're actually gonna do in the next cycle is work to put together a more standardized approach to these intervention teams. So, and that... And you get that from the team, you know, you're sort of talking about, you know, as we get to the Act.

 

0:22:38.4 John Dues: I think I've talked about this before. There's sort of the three A's. You can adopt this into your system, write it down in a manual or whatever, you can adapt it, change it a little bit, or if it's really not going well, then you abandon it. So in this case, there's an adaptation where we're gonna sort of shift gears and work on this process mapping and get that put in place 'cause the team feels like that's the highest lever, next thing to do, basically.

 

0:23:06.5 Andrew Stotz: And is that. Have you already mapped out PDSA 3 now? And you're in that process? Is that. And that's what we're gonna talk about next one, or where are you at with that?

 

0:23:15.5 John Dues: Yeah, so I think looking at the process maps would be interesting because you can sort of assume that things happen relatively similarly, you know, especially in a small school system like ours. But you're gonna see that there's... And it's not right or wrong necessarily, but there may be a sort of like, again, a better way to do things because there are many... There's sometimes many people involved, many processes, many forms. And so, yeah, we're gonna look and see, basically, is one more efficient than the other, is one more effective than the other, that type of thing.

 

0:23:51.4 Andrew Stotz: Okay.

 

0:23:52.3 John Dues: Yeah. So a lot of learning, you know, I mean, I think, and you know, again, this takes time. But, and we're still sort of in that "define the problem" step. But again, the fact that we're studying the problem, the fact that we're talking to kids as a part of it, we're actually learning from data coming from what's happening on the ground. The ultimate solution or set of solutions we come up with are gonna be much more robust, you know, and they're gonna be much more sort of durable into the future, anti-fragile you know, into the future because of this work versus, you know, the typical fly by night. Let's have a pizza party on Friday to encourage kids to come to school, that just... There may be an initial bump, but it's just, this has no durability into the future. Yeah.

 

0:24:44.8 Andrew Stotz: Great, great. Well, I like that. And I got excited 'cause I thought, oh, maybe we can come up with some incentive or something. But what I see is that the challenge is how do you make it durable? So I like that word. And this was a good discussion on that.

 

0:25:01.8 John Dues: Yeah. Well, I was just gonna say the other point I would make is, you know, sometimes you can plan, plan, plan, but that, you know, at any point of an improvement process, you can use a PDSA cycle, start running an experiment and start gathering information right away. Just do something, you know, thoughtful, but do something. Don't plan in a room when you can go out and get actual, run actual experiments and get back real data.

 

0:25:27.5 Andrew Stotz: All right, and one other question I had that just came to my mind is what is the value of doing this in such a structured way as the PDSA versus Oh, come on, John, we're testing things all the time, you know, and let's say that to some extent they are, right? We all are testing every day. Why is it important that it's done in a structured way, in a documented way?

 

0:25:50.8 John Dues: Well, I mean, one, you have a historical record. Two, you know, we had four. So there's one PDSA cycle, but actually there's four different mini experiments happening, one at each campus. And if you didn't write it down like the guy does that's designing these, every one of the experiments would have been different. And he really thinks through step by step. Okay, put this number here. How are we gonna define that? There's a validated list of definitions of that type of attendance issue that day. Because if you don't have all that stuff, then there's no way to analyze it after the fact, or at least it's a lot less, a lot less efficient.

 

0:26:28.3 Andrew Stotz: And the learning could be lost too.

 

0:26:30.1 John Dues: Learning could be lost. And you know, I would venture to guess that, you know, if you run a sort of an experiment haphazardly, especially if there's multiple locations, the people sort of, their definition of the thing that's being measured is gonna vary too.

 

0:26:45.0 Andrew Stotz: Yeah.

 

0:26:45.5 John Dues: Almost every time. Almost every time, even subtly.

 

0:26:50.9 Andrew Stotz: All right, well, that was a great discussion. And 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 John's book, Win-Win, W. Edwards Deming, The System of Profound Knowledge and The Science of Improving Schools on Amazon. 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.

 

How does "quality" apply in all areas of an organization? In this final episode of the Misunderstanding Quality series, Bill Bellows and host Andrew Stotz discuss lessons from the first twelve episodes, and the big ah-ha moments that happen when we stop limiting our thinking.

TRANSCRIPT

0:00:02.6 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. Today is episode 13 and the title is Quality Management: Don't be limited. Bill, take it away.

0:00:30.5 Bill Bellows: Hey, Andrew. So this is episode. What number did you say it was?

0:00:36.2 Andrew Stotz: 13. Lucky 13.

0:00:38.1 Bill Bellows: Lucky 13. So then for those who are concerned about the use of the number 13, this is episode 14.

0:00:51.0 Andrew Stotz: I thought you're gonna say episode 12A.

0:00:54.7 Bill Bellows: And for those who don't mind the number 13, this is episode 13. And as we talked earlier, if Dr. Deming was to title the episode it would be... It would not be "don't." It would be "do not", do not be limited. So at the start I wanted to go back to review the path we're on. We've been on episode one back in end of May, Quality, Back to the Start. All part of the Misunderstanding Quality series for The Deming Institute. Episode two, we got into the Eight Dimensions of Quality with David Garvin. One of those dimensions was acceptability.

0:01:49.8 Bill Bellows: Another was reliability. Another was I say dependability performance. Okay. And I think it's important in a series about misunderstanding quality to look at the work of David Garvin. Just realize I think it's fascinating to... You move out of the world of the American Society Quality and control charts and whatnot. And that's why I think Garvin's work paints a nice... Gives a nice perspective to not be limited.  And then we got into in the third episode Acceptability and Desirability. Episode four, Pay Attention to Choices and the choice of differentiating acceptability which is I'll take anything which meets requirements, and desirability.

0:02:42.3 Bill Bellows: I want that little doggy in the window. Not any doggy in the window. And then we followed that with episode five, the Red Bead Experiment which for many is their first exposure to Dr. Deming's work. I know when I worked for the Deming Institute for a few years the Red Bead Experiment website was one of one of the most popular pages. I believe another one was the 14 Points for Management. And, personally, I've presented the Red Bead Experiment think just once, just once. And I'm going to be doing it at the 2025 at, let me back up, the Bryce Canyon Deming... The Bryce Canyon...Bryce Canyon Forum. I can't remember the name. It's a partnership between Southern Utah University and The Deming Institute, and we're doing it at Southern Utah University. And on one of those days, I'll be doing the Red Bead Experiment, which takes a lot of time and then studying to present it a few years ago I was getting all the videos that I could find of it, many of them on The Deming Institute web page and none of them have the entire data collection.

0:04:18.5 Bill Bellows: They kind of fast forward through six people putting the... drawing the beads each four times and when you're up on stage trying to do that, I had four people that's, you gotta do a lot of work to make it that exciting. But the reason I present it, I say I present it for a number of reasons. One is to do the classic "The red beads are not caused by the workers are taken separately. They're caused by the system which includes the workers. It's an understanding of variation and introduction to control charts" and all of that is as exposed by Dr. Deming is classic.

0:05:00.7 Bill Bellows: But, I'd like to take it one step further, which is to go back into that desirability thinking and look at the concept that we've talked about of going through the doorway and going past the achievement of zero defects, zero red beads, and realize that there's further opportunities for improvement when you start to look at variation in the white beads. And, that then takes into account how the beads are used. And that gets us into the realm of looking at quality as a system.   Looking at quality with a systems view as opposed... That's good, that's good, that's good. With or without an appreciation on how the bead is used. So anyway, that was episode five. We explored that. Next we got into the differentiation of Category Thinking and Continuum Thinking.

0:05:55.5 Bill Bellows: And for those who haven't listened to it, maybe not in a while, the differentiation is category thinking. Putting things in categories such as red beads and white beads are the... It could be any categories, categories of fruit, categories of religion, categories of political systems. We have categories and then within a category we have variation. We have different. We have apples and oranges and then we have a given type of orange. And then there's variation in the juiciness, ripeness. That's called continuum thinking, which goes back to, if we go back to the red beads and the white beads is notion that the white beads are not uniformly white, not uniform in diameter or weight.

0:06:44.5 Bill Bellows: And, what are the implications there? Well, if we think in terms of categories, red beads and white beads, if all the beads are white have we stopped improving? And Dr. Deming and I believe it was Point 5 of the 14 Points stressed the need for continual improvement. And yes, you can continuously improve and reduce cost, you can continuously reduce cycle time, but can you continuously improve quality? Well, not if you're stuck in a category of good, then the role of that is to just to remind people that there's opportunities to go further when you begin to look at variation in white, which is the essence of looking at how what you're looking at is part of a system, which Dr. Deming was well, well aware of.

0:07:33.7 Bill Bellows: Next we got into the Paradigms of Variation and a big part there was differentiating acceptability. Well, going beyond acceptability was differentiating accuracy from precision. Precision is getting the same result shrinking the variation, otherwise known as getting achieving great piece-to-piece consistency. Metrics that begin with the letter C and sub P could be Cp, Cpk, are the two most popular. Those are measures of precision that we're getting small standard deviations that they are very, very close to each other. But in the paradigms of variation that was what I referred to as Paradigm B thinking we're looking for uniformity. Paradigm A thinking being acceptance, we'll take anything that meets requirements... Or academically called paradigm A. Paradigm C is what Dr. Taguchi was talking about with the desirability, where we're saying I want this value, I want uniformity around this specific value.

0:08:43.9 Bill Bellows: Here what we're looking at is uniformity around the target, around an ideal, otherwise known as piece-to-target variability. And, the idea there is that the closer we are to that ideal, the easier it is for others downstream to integrate what we're passing forward. Whether that's putting something into a hole or does this person we want to hire best integrate into our system. So, integration is not just a mechanical thing. In episode eight we then got into Beyond Looking Good which then shatters the Paradigm A acceptability thinking, going more deeply into the opportunities for continual improvement of quality.

0:09:29.1 Bill Bellows: If you shift to continuum thinking. Next, Worse than a thief coming from Dr. Taguchi. And that's the issue of achieving uniform. Part of what we looked at is the downside of looking at things in isolation and not looking at the greater system. Then episode 10 we look at Are you in favor of improvement of quality?

0:09:53.6 Andrew Stotz: I'm in favor.

0:09:55.7 Bill Bellows: To which he would always say, but of course. That was a reference back to chapter one of The New Economics. And he said everyone's got an answer. Improving quality computers and gadgets. And what we spoke about is Quality 4.0, which is gadgets of the 21st century, tools and techniques. And again, what we said is, there's nothing wrong with tools and techniques. Tools and techniques are about efficiency, doing things well, but they lack what Russ Ackoff would say in asking, are we doing the right things well. And then episode 11 delved into what I've...amongst the things I've learned from Dr. Taguchi, To improve quality, don't measure quality.

0:10:42.5 Bill Bellows: If we have a problem with, we want to reduce scrap, we want to reduce rework, we want to eliminate the problems that the customer has experienced or that someone downstream is experiencing. And what Dr. Taguchi emphasized was start asking, what is the function of the thing we're trying to do? And the idea is that if you improve the function, then you're likely to improve the quality as measured by what the customer is looking for. If you focus on what the... If you focus your efforts on reducing what the customer is complaining about, you're likely to get something else the customer is complaining about. And for more on that, go to episode 11.

0:11:19.0 Bill Bellows: And then episode 12, Do specification limits limit improvement? Which again goes back to what I experienced on a regular basis is in my university courses with people I interact with and consulting is a very heavy emphasis on meeting requirements and moving on. And not a lot of thought of going beyond that or even that there's anything more to do, that's alive and well. And that's reinforced by Six Sigma Quality is filled with that mindset. If you pay attention closely to Lean Manufacturing, you'll see that mindset again, alive and well. So, what I wanted to get to tonight in episode 13, Quality.

0:12:04.3 Andrew Stotz: That was quite a review, by the way.

0:12:06.7 Bill Bellows: Yeah, Quality Management: don't be limited, as and I'm teaching for the sixth time a class in quality management at Cal State Northridge. The title used to be Seminar in Quality Management. The title this year is Engineering Quality Management and Analytics. One of the assignments I give them, essays, the quizzes, attending the lectures.

0:12:34.9 Bill Bellows: Learning Capacity Matrix that I learned about from David Langford. But what I was sharing with you earlier, Andrew, is one of the first things I thought about and designed in this course, back in 2019 was I could just imagine students going through the course. And, what I'm going to hear is, what I've heard before is professor, these are very, very interesting ideas, but I'm not sure how I would apply them where I work. Because where I work is different. It's different. And to avoid that question, I came up with an assignment I called the Application Proposal. And there's four parts to it. But part one is: imagine upon completion of this course. And I let them know about this in the first lecture and I say, imagine upon completion of the course, your boss, someone you work with, challenges you to find three things you can do within three to six months of the of the completion of the course.

0:13:34.6 Bill Bellows: And it must include something you learned in this course. I don't say what thing, I don't say two things, I don't say three things. I leave it to them. But all it comes down to is I'd like you to contemplate and within three to six months of the completion of the course, what could you do? And I call that the near-term application. Well, subtask one is come up with three. They have to meet your job, your role, not your boss's role, not another department's role. They have to fit your role because only you know then the method by which you would go about that. And, so for that near-term, I ask them to let me know what is the present state of that near term, the before, the current condition and what is the after. What is the future state of that near-term? So I assign that before the course begins, I give them until week five to submit and give me those three things. The reason I asked for three is if one, if the first one they give me, if they only asked for one and one didn't quite fit, then I say, well, okay, Andrew, go back and give me another one that same time.

0:14:49.7 Bill Bellows: So I said, give me three. And most often all three are fantastic. In which case I say they're all great. Which one would you like to do? But again, it has to fit their role because in Sub-Task 2, the next thing I want them to do is not so much tell me about the present state, tell me more about the future state. And again, the future state is how much can you accomplish within that three-to-six month period? And that's subtask two. Then they come back to me and tell me the plan. What is the plan by which you go from the near-term present state to the near-term future state, tell me about the plan. Tell me what some of the obstacles might be and how you plan to deal with the obstacles. And then I say now what I want you to do is imagine that is wildly successful, jump ahead a year and a half to two years and tell me what you would do next. How would you build upon this? And in that mid-term time frame, what is the present? What is the future of the mid-term? And then go a few years out and tell me how you're going to further expand on what you've learned.

0:16:03.4 Bill Bellows: I call that the far-term. And for the far-term, what's the present, what's the future? So when they submit that to me, then I come back with - it could be questions about some of the terminology.  It could be a suggestion that they look at something with the use of Production Viewed as a System. Or, I ask them to think about operational definitions or perhaps suggest a control chart and, or a book. So, part of the reason I wanted to bring that up is few of the title, few of the topics we are looking at are specifically quality related. They're all about improving how the organization operates. Which goes back to what Dr. Deming stressed is the importance of continual improvement.

0:16:50.9 Andrew Stotz: Can you explain that just for a second? Because that was interesting about quality versus improving the organization. What did you mean by that?

0:17:00.4 Bill Bellows: Well, I, they didn't come to me with this process I have, has lots, has a very high defect rate and I thought that's where I need to focus. Or this process has a lot of scrap and rework. That's where I want to focus. What I was excited by is that they were looking at how to take a bunch of things they already do and better integrate them. Just fundamentally what I found them thinking about is how can I spend time to organize these activities as a system and as a result spend a whole lot less time on this and move on to the next thing. And, what I found fascinating about that is if we keep our thinking to quality and quality's about good parts and bad parts, good things and bad things, and having less bad things and more good things, that could be a really narrow view of what Dr. Deming was proposing. Now another aspect of the assignment was not only do I want them to give me three ideas, we down-select to one. It could be they're writing a new piece of software. One of the applications has to do with a really fascinating use of artificial intelligence.

0:18:27.0 Bill Bellows: And what's that got to do with quality? Well, what's interesting is it has a lot to do with improving the functionality of a product or a service, having it be more reliable, more consistent, easier to integrate. But, the other thing I want to point out is not only do I ask them to come up with three things and then assuming all three things fit well with their job, their responsibilities, their experience.  What I'm also interested in is what from the course are you going to use in this application? And, two things came up that fit again and again.  One is the value proposition of a feedback loop.

0:19:12.9 Bill Bellows: And they would ask me, what do you mean by feedback? I said, well, you're going to come along and you're going to tie these things together based on a theory that's going to work better. Yes. Well, how will you know it's doing that? How will you know how well this is performing? And, I said when I see this is what people refer to as Plan-Do, but there's no Study. It's just... And, I saw that Rocketdyne, then people would come along and say, oh, I know what to do, I'm just gonna go off and change the requirements and do this.

0:19:44.6 Bill Bellows: But, there was no feedback loop. In fact, it was even hard to say that I saw it implemented. It just saw the planning and the doing. But, no study, no acting.

0:19:57.3 Andrew Stotz: Is that the Do-Do style?

0:20:01.3 Bill Bellows: Yes. But what was really exciting to share with them is I said in a non-Deming company, which we have referred to as a Red Pen Company or, or a Me Organization or a Last Straw. And I don't think we covered those terms all that much in this episode, in this series, we definitely covered it in our first series. But what I found is in a Deming or in a non -Deming company, there's not a lot of feedback. And even if I deliver to you something which barely meets requirements and we spoke about this, that in the world of acceptability, a D- letter grade is acceptable. Why is it acceptable? Because it's not enough. It's good parts and bad parts. And so even if I deliver to you, Andrew, something which barely met requirements, and you said to me, Bill, this barely meets requirements. And I say, Andrew, did you say barely meets requirements? And you say, yes. So, Andrew, it did meet requirements and you say, yes. So I say, "Why are you calling me Andrew?"

0:21:12.1 Andrew Stotz: By the way that just made me think about the difference between a pass fail course structure and a gradient course structure.

0:21:20.7 Bill Bellows: Exactly.

0:21:21.5 Andrew Stotz: Yeah. Okay.

0:21:22.5 Bill Bellows: Yeah. So even if you give me that feedback. I reject it. I'm just going to say, Andrew, move on. But I said, in a Deming organization, feedback is everything. The students were giving me feedback on the quizzes and some things that caused me to go off and modify some things I'm doing. And I told them, if I don't have that feedback, I cannot improve the course. So, I met with each of them last week for an hour, and the feedback I was getting is instrumental in improving the course for the remainder of the semester as well as for next year. And, so that's what I found is what really differentiates a Deming approach to improving a process or a service or a product is feedback, which goes then to watching how it's used. It is, I think I mentioned to you Gipsie Ranney, who was the first president of The Deming Institute, a Professor of Statistics at University of Tennessee, when she met Dr. Deming and later became a senior consultant, maybe advisor to General Motors Powertrain. And once she told me, she said to Dr. Deming "You know, Dr. Deming, what do people get out of your seminars?" And. he said, "I know what I told them.

0:22:42.0 Bill Bellows: I don't know what they heard." And, the challenge is without knowing what they heard, because we would also say, and I'm pretty sure we brought this up in one of our this series or the prior series, Deming would say the questions are more important than the answers because the questions provide them with feedback as to what is going on. So anyway, part of what I wanted to bring out today in this quality management, don't be limited, is whether or not you're focusing on quality per se, minimizing scrap, minimizing work. If you're trying to improve a process, again, you're not improving it necessarily because there's more I want to have less scrap. But if your improvement is, I want it to take less time, I want it to be easier to do. I want it to be cheaper to do. Well, while you're at it, think about a feedback loop.  And the role of the feedback is to give you a sense of is it achieving what you're hoping it would achieve? It would allow you over time to maybe find out it's getting better.  Maybe there's a special cause you want to take advantage of or a special cause you want to avoid.  But, without that feedback, how do you know how it's working and then beyond that?

0:23:55.7 Andrew Stotz: And where is the origin of the information coming from for the feedback loop? Is it a feedback loop within your area or is it feedback loop from the next process or what do you.

0:24:08.3 Bill Bellows: All of that. That's what I told her. I said one is, I said, when you're developing the process. I told them, I said, when you're. If in Sub-Ttask 1, your idea is to flowchart a process, come up with a template, a prototype. Part of the feedback is showing that to people. And part of the feedback is, does it make sense to them?  Do they have suggestions for improvement? Do they... Is there an issue with operational definitions?  There would be better clarity based on the words you're using.  You may say in there clean this thing, or early in the semester, one of the assignments I gave the students was to explain some aspect of the course within their organization. And then I thought, well, then now it will explain to who. And I thought, well, unless I say if I felt that without giving clarity to who they're explaining it to, they're going to get lost in the assignment. Am I explaining it to a co-worker? Am I explaining it to someone in management? Am I explaining it to the CEO? And, finally I just thought, well, that's kind of crazy.

0:25:18.3 Bill Bellows: I just said, well, as if you're explaining it to a classmate. But, my concern was if I didn't provide clarity on who they're explaining it to, then they're going to be all over the place in terms of what I'm looking for versus what they're trying to do. And that being feedback and that also being what I told them is part of collecting, part of feedback is looking for how can I improve the operation, how can I improve? Or, what are the opportunities for paying closer attention to operational definitions, which means the words or the processes that we're asking people to follow.

0:25:58.3 Bill Bellows: But, I found in in joining Rocketdyne, I was in the TQM Office and then I began to see what engineering does. Oh, I had a sense of that when I worked in Connecticut, paid more attention to what manufacturing does. Well, then when I moved into a project management office. Well, project management is just like quality management. It's breaking things into parts, managing the parts in isolation. And, so when I talk about quality management, don't be limited. There's a lot Dr. Deming's offering that could be applied to project management, which is again, looking at how the efforts integrate, not looking at the actions taken separately.

0:26:45.4 Andrew Stotz: And, so how would you wrap up what you want to take away. What you want people to take away from this discussion? You went over a very great review of what we talked about, which was kind of the first half of this discussion. And what did you want people to get from that review?

0:27:05.2 Bill Bellows: The big thing, the big aha has been: this is so much more than quality. And, I've always felt that way, that when people look at Dr. Deming's work and talk about Dr. Deming is improving quality, and then when I work for The Deming Institute, the inquiries I would get it was part of my job to respond to people. And they want to know I work for a non-profit, do Dr. Deming's ideas apply. And, so for our target audience of people wanting to bring Dr. Deming's ideas to their respective organizations, even though the focus here is quality, we call this series Misunderstanding Quality. At this point, I'd like you to think more broadly that this is far more than how to improve quality.  This is improving management of resources, management of our time, management of our energy.  So this is a universal phenomenon. Not again, you can look at it as good parts and bad parts, and that's looking at things in isolation. That's what project managers do. That's what program managers do. That's what organizations do relentlessly. And this is what Ackoff would call the characteristic way of management. Break it into parts and manage the parts as well as possible.

0:28:21.5 Bill Bellows: So, I just wanted to bring that back as a reminder of this quality, quality, quality focuses. There's a lot more to this than improving quality when it comes to applying these ideas.

0:28:34.7 Andrew Stotz: And, I would just reiterate that from my first interactions with Dr. Deming when I was 24, and then I moved to Thailand and I did finance business and all that. So I wasn't, applying statistical tools in my business at the time. That just wasn't where I was at. But the message that I got from him about understanding variation and understanding to not be misled by variation, to see things as part of a system. Also to understand that if we really wanted to improve something, we had to go back to the beginning and think about how have we designed this?

0:29:20.3 Andrew Stotz: How do we reduce the final variability of it? And, so, it was those core principles that really turned me on. Where I could imagine, if I was an engineer or a statistician, that I would have latched on maybe more to the tools, but from where I was at, I was really excited about the message. And, I also really resonated with that message that stop blaming the worker. And, I saw that at Pepsi, that the worker just had very little control. I mean, we're told to take control, but the fact is that if we're not given the resources, we can only get to a certain level.

0:29:58.3 Andrew Stotz: Plus, also the thinking of senior management, you are shaped by their thinking. And, I always tell the story of the accumulation tables in between processes at a Pepsi production facility. And that basically allows two operators of these two different machines to, when one goes down, let's say the latest, the farthest along in the production process, let's say the bottling goes down, the bottle cleaning process behind it can keep cranking and build up that accumulation table until it's absolutely full. And, that gives time for the maintenance guys to go fix the bottling problem that you have and not stop the guy behind. And, that was a very natural thing from management perspective and from my perspective. But, when I came to Thailand, I did learn a lot more about the Japanese and the way they were doing thing at Toyota.

0:30:51.4 Andrew Stotz: I went out and looked at some factories here and I started realizing they don't do that. They have their string on the production line, that they stop the whole thing. But the point is the thing, if a worker can't go beyond that, you know what the senior management believe about it. So, that was another thing that I would say it goes way beyond just some tools and other things. So, I'll wrap it up there. And Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion and for listeners. Remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming and that is people are entitled to joy in work.