In our 47th Deming Lens episode, host Tripp Babbitt shares his interpretation of wide-ranging aspects and implications of Dr. Deming's System of Profound Knowledge. This month he looks at the interaction of the parts of Dr. Deming's System of Profound Knowledge (SoPK). Show Notes

[00:00:15]
The Deming Lens - Episode 47 - SoPK: The Interaction of the Parts

[00:02:29]
Dr. Deming's US Prescription

[00:04:08]
My Journey through SoPK

[00:05:58]
Dr. Deming's SoPK and Learning

[00:09:09]
The Quotes of Dr. Deming

[00:11:33]
Developing Methods to Advance Knowledge on SoPK

 

 

Transcript

[00:00:15] In the 47th episode of The Demming Lens, we'll discuss the system of profound knowledge and the interaction of the parts of it. Hi, I'm Tripp Babbitt, host of the Demming Institute podcast, and this month I wanted to talk about a lot of things that I've experienced over the years with regards to Dr. Deming and the Demming community and misconceptions about Demming and things of that sort. So I wanted to focus on what I'm calling the system of profound knowledge, interaction of the parts. And for those of you that may not be familiar with Dr. Deming's philosophy or this maybe is the first podcast episode you've listened to, System of Profound Knowledge is basically Dr. Deming's last thoughts. If I if I I'm going to put it in my words about. His work and he left us this philosophy, it's made up of appreciation for a system, knowledge about variation, theory of knowledge and psychology. And, you know, we get a lot of things on the social media channels about what Dr. Deming said. Some are right, some are wrong. But regardless, I thought maybe I'd start with my kind of my own personal history and then kind of have a conversation about what Dr. Deming said with regards to the system of profound knowledge. So for me, when I first came across Dr. Deming's work in the mid 80s and attended one of his four day seminars, actually multiple times I went through this phase, I'm going to call the prescription phase.

 

[00:02:29] And I think that that was from what I've read, I've gone to the Library of Congress and looked at Dr. Deming's notes. A lot of his focus was on being prescriptive to especially U.S. managers and executives. And that's what you got. And Out of the Crisis, his 14 points to transform the Western style of management, that was that was really the aim of out of the crisis. And matter of fact, it started at the beginning of the book. So there was this prescriptive thing, but it really went against a lot of the cultural norms here in the states. And that was one of the things that many in the Demming community were fighting for, was things. When you talk in terms of. Rewards and performance appraisals, that became kind of what we do Deming, but we don't do that. So I'm sure many in the community can can relate unless you are someone who owned their own company and were able to implement these things, which isn't many people, but. I as I went through and started getting deeper and deeper into Dr. Deming's work, talking with other people in the community, one thing that became very evident to me early on was even though I had been exposed to understanding variation because I sold Mitutoyo equipment to manufacturers, I didn't really understand it.

 

[00:04:08] And so I spent a lot of time in the 1990s getting deeper. I went I went to multiple seminars, weeklong seminars with Dr. Don Wheeler. I worked with Dr. Ward, a gentleman by the name of Tim Baer, a statistician, and they got me to a point where I felt comfortable enough in my knowledge or at least where to go to get help around variation. And so much as much of my life was the 1992 was spent getting deeper into that. Now, as I started to enter 2000 and going to say, 2012, a lot of my focus was on systems because then, you know, common cause variation things between the limits. It's down to the system that you work. And if you're going to change the system, things of that sort got deeper and deeper into different works of not only Bertalanffy, Peter Senge, Russell Ackoff, folks like that. And since 2009 to say 2012 to even present, most of my focus has been on getting deeper knowledge in psychology. And along with that, neuroscience has really been able to give me a deeper knowledge of psychology and how the brain works in neuroscience and then the theory of knowledge. Those have been more recent where I'm going deeper into it. But each time I've gone through this, I'm also thinking in terms of the other components of the System of Profound Knowledge.

 

[00:05:58] In other words, I didn't just scrap variation in descript systems. I just learned more about the other parts, as Dr. Deming would call them, parts of the system. And one of the things that you learn pretty quickly, and in fact, it's what Dr. Deming said in the new economics when he was was talking in terms of the system of profound knowledge, again, as a philosophy, was that not one is more important than the other. And so a lot of this comes out of the new economics. And when you look at the system of profound knowledge in the chapters associated with it and the new economics, which is the last book that Dr. Deming wrote, is its stated purpose was to start the reader on the road to knowledge, and that you don't need to be eminent in any part to use the system of profound knowledge, meaning you don't have to be an expert in variation. You don't have to be an expert in systems. You have to do is take all four pieces and look at it. Now, I think it is left to you on your own to get deeper into these types of things, as you know I did over the years or continue to do. And so, you know, it's it's one of those things that, you know, it's a personal responsibility for you to go deeper into.The other segments.

 

[00:07:41] Now stated in the new economics is that Dr. Deming wrote that various segments of the system are profound. Knowledge proposed here cannot be separated. They interact with each other. Thus, knowledge of psychology is incomplete without knowledge of variation and so on and so forth. It's the interaction of the parts of the system, profound knowledge that make, from my perspective, make it work. And insights gives you insights to improve, not one part is greater than the other. Now, you may have expertize in one part, but your gains will come, let's say, whether it's psychology, fine. But if you understood variation, it's going to give you new insights into how to use psychology. And I'm going to put neuroscience because I think it's there. There's so much learning there going on. So it's and theory of knowledge and systems and all of those types of things will really help advance to advance what your thinking is. And this is the power to me of the system, a profound knowledge.

 

[00:09:09] Now, like everybody else that listens to Dr. Deming, you cannot go a day without someone quoting on social media, something attributed to Dr. Deming. Now, I'd say probably, you know, 90 percent of them are actual quotes, quotes that Dr.Deming said usually associated with data. And the other 10 percent are wrong quotes. But regardless, it generates curiosity. And I think that as opposed to continuing arguments over, you know, what Deming said, that what we should do is devolve into conversations of the system of profound knowledge and all. Of its parts. So the appreciation for a system, the theory, you know, knowledge about variation theory, theory of knowledge and psychology, that those are all ways to to generate conversations with people on the Internet to help them along. OK, well, you like this thing on data, regardless of whether it was the right quote or not, I think matters little in that somebody thinks that what they said was good and you just start it. They're used to correct people on that. I've kind of gotten away from that. But focus on one, focusing on just the one part missing the power of what system of profound knowledge is. And I think those are better conversations to have. And I'm starting to have these conversations with executives around all of the components. But they have to it's one of those things that the system, profound knowledge is something that is best eaten in small bites. I mean, it's it's very broad and especially I think applying these things to the organization lacks a lot of method. And it's been a real focus of what I've been concentrating on is trying to give method as imperfect as it is.

 

[00:11:33] How do we develop methods to help people through advancing their knowledge and achieving really what the new economics was trying to do is start the reader on the road to knowledge and how we can get there. Now, there's probably a better way than the way I'm going about it. I haven't seen one yet, but there are certainly having a method and kind of going through a process of learning. Using your own organization is a very powerful I've found. So regardless, I just wanted to get out that the system, profound knowledge, the interaction of the parts is what's the power here? I know there's people with expert that are experts in variation and I know people that are experts in psychology and know that their people are experts in systems. And some of the things I say sometimes I'm sure make them cringe. But I've they've shown me different ways to look at an organization that helps that organization improve. And the using that power of the interaction of the parts of the system are profound. Knowledge is something I believe can help everyone and every organization and every individual. Hi, this is Tripp Babbitt, one way that you can help the Deming Institute in this podcast is by providing a reading on Apple podcast.

In our 46th Deming Lens episode, host Tripp Babbitt shares his interpretation of wide-ranging aspects and implications of Dr. Deming's theory of management. This month he looks at tampering.

Show Notes

[00:00:15]
Deming Lens Episode 46 - The Art of Tampering

[00:01:38]
Shew hart Invents the Control Chert

[00:02:05]
Control Charts - Two Mistakes

[00:02:28]
The Knee-Jerk Reaction to Managing without Control Charts

[00:03:50]
Tampering in Action

[00:05:19]
Tampering - The Funnel Experiment

[00:05:43]
Using the Funnel and Control Charts to Play Golf

[00:09:06]
Overcorrection in Automation

 

 

Transcript

[00:00:15] In the 46 episode of The Deming Lens, we'll discuss the art of tampering.

 

[00:00:29] Hi, I'm Tripp Babbitt, host of the Deming Institute podcast, and this month I wanted to explore tampering. And it really comes to me in a couple of different ways. One is you can identify tampering if you have control charts and also by virtue of the final experiment, whether your system is on target. And I want to go back to a time when I really started to see control charts. I was selling equipment for Mitutoyo here in the U.S. and I saw the front line using the statistical process control charts. And I thought, wow, this is good. And they told me kind of what they did and how they benefited, making better products and things of that sort. But I never really made the association back with control charts being used really for for any data that you have.

 

[00:01:38] And it was more of a handicap than I than I ever realized, that there were more applications for control charts than just the front line. So when we look at control charts that Dr. Shujaat put together and about, I think was 1925, you really had two different types of mistakes that you could identify.

 

[00:02:05] And on page 317 of out of the crisis, the first mistake as a scribe, a variation or mistake to a special cause when in fact the cause belongs to the system, common cause.And then the second mistake you can make is ascribe a variation or a mistake to the system, a common causes, when in fact the cause was special.

 

[00:02:28] Now as a young manager, I was more in charge of inventory, but we would get for an industrial distributor I worked for, we would get monthly reports with all the numbers for that particular month. And it was like getting a report card. You know, you wanted to see how things came out. How are we doing? Where were sales? Were expenses down? Was the inventory up or down? And that was obviously the one I watched more closely.

 

[00:03:02] And, you know, it was interesting because of the reaction that people would have. It was, you know, psychologically, you felt the need to do something if sales were down or expenses were up, and there would always be these knee jerk reactions. And I was in it to you know, I was watching the inventory of inventory all of a sudden shot up. Then, you know, why was shooting up and try and reduce it immediately. And was it until I started using control charts? Was it long after I worked for the industrial distributor? I just hadn't found the application for it at that time.

 

[00:03:50] And I wish I would have I would have understood a lot more about systems and variation and things of that sort. So control charts is the first the first way that you can identify whether you're tampering. So if you can imagine if you're you're looking at a monthly report and you're reacting to each month over month, you're going to make probably one of the two mistakes Dr. Deming and Dr. Shujaat identified. And it you know, it's just the way that we're built and it's typically we'll treat everything as a special cause for the most part, because we don't really you know, when you're looking at data and if you don't understand systems, that's just the way you're going to do it. And that can be, you know, say you got a 50 50 chance maybe of getting it right. But I found that managers, because they have a tendency to do mistake number one, you know, ascribing a variation or mistake to a special cause when in fact it belongs to the system. Everything was treated as special. There had to be something that we had to do in order to fix a problem that really wasn't a problem. Had we understood anything about variation, it's just the knowledge just wasn't there at that time.

 

[00:05:19] So control charts first way, identify tampering in the system and then the second way through the funnel experiment, you know, are you on target? Are you overinvesting off of the target? And I remember some of the early applications when I really started to grasp the concept of Variation.

 

[00:05:43] And actually, one of the early applications I used was in golf, when you have a new tool that you think can help you, you want to play it in as many places as it might make sense and sometimes places where it doesn't make sense. But one of the first applications was in golf playing golf. And I remember when I played on the golf team in college and at that time the rage was visualizations, you know, closing your eyes, visualizing the shot, how you wanted to go after your club, those types of things. However, I wish I would have had control charts because I think I would have looked at golf a little bit differently. Don't get me wrong, visualization is great to use in golf. If you're not using it, use it. But but it just gave me more information.

 

[00:06:36] So I started putting my golf scores on control charts. And of course, you got variation when I play a different course. I had my home course that I would play and then I would have other courses and obviously courses I was unfamiliar with. My scores would be higher because I didn't know where the ball should land and and so forth.

 

[00:06:57] But but the thing I really got was kind of I was using the concept of the funnel experiment, which started to make sense to me is when I use my tee shots, you know, adjustments were constant. You know, if you were always to the right, you know, you don't remember necessarily when you're making these adjustments and you can make over investments. But I started keeping data on how far my drives were were fading. I typically hit a fade back in those days. And, you know, who would go anywhere from five to, you know, thirty five yards. And so I started to do things to try and figure out how did I how could I shrink the amount of variation in my tee shots and be able to hit them at least consistently. Because then what you get at least consistent and you know, even if it's a 15 yard fade or slice, whatever you want to call it, then you could predict kind of where you needed to aim. But, you know, but I also had days and if any of you play golf where you're hitting it left and then you're hitting it right and it was like an army marching on the golf course. But but these cuts have really started to to grab at me. And I had opportunities more and more to use control charts in management settings and data and things of that sort. And you start to make better decisions when you're using data now. A lot of the time. And I know what some people are going to say. Well, those are all the results types of data. Yes, they were. But to get people to grasp concepts of variation, just seeing the data on a chart is useful. It is helpful to management to understand systems and variation and things of that sort when they're using it on their own data.

 

[00:09:06] You know, and and as I started to use control charts, I would look back on some of the things that I'd seen and I remember a customer in Kentucky that had bought a machine.

 

[00:09:19] And what it would do is it would drill a hole. Let's say there was probably 26 different stations or 30 to forget how many the exact number of it was. But you would drill a hole in station one, station two would measure it, and then it would make adjustments to station one.

 

[00:09:38] And now I would I know they were having a lot of problems with it. Was it really my machine or anything? Because it was going to replace all these workers? It never did, because they had so many problems with the machine because of overcorrection was was kind of what I remember being the problem with the machine and, you know, off to the Milky Way, so to speak. It was the final experiment at work where where they were tampering, in essence with measurements, with immediate feedback, thinking that that was a good thing. And so you wound up with this overcorrection and and the parts wouldn't come out. Right. And it was I just remember it being a big boat anchor that, you know, the management there really was upset over. But one of the things that I do find is, you know, and putting together my effective executive education program is, as I talked to executives, most of them know about control charts. They do. Many of them, especially manufacturing, see it as something that it is for the front line. But I'll tell you what, to many management executives in service don't know about control charts. They've heard of them, but they don't really understand how they might be able to help them.

 

[00:11:08] And it's one of these concepts that I think the frustration of Dr. Deming after World War II I'm very familiar with because they either believe it's for something for the front line and to get it. And but and they're looking at these data and they're like, I was back, you know, and in the 80s, looking at data and, you know, the highs and lows of the emotion kind of take the day. And that's one of the things that control charts can do, is get you focused on reducing the variation, getting rid of the special causes, you know, and things of that sort and not reacting to mistake. One mistake to that Dr. Shewhart talked about so.

 

[00:12:02] The other thing that I that I've reflected on quite a bit, too, and especially recently, but I remember I took a course back in college and even in my MBA program that had to do with the banking system in the Federal Reserve. And I haven't quite been able to apply all elements of it, although it's something I'm constantly working on is some of these larger systems like this. The Federal Reserve was put in at 1913, something like that.

 

[00:12:33] You know, we're supposed to be an independent group that could kind of guide the economy so we wouldn't have these large gyrations of inflation and things of that sort. But, you know, we were back on the gold standard back in back in 1913. So it wasn't as difficult. And then again, in 1971, when we got off the gold standard and we became fiat currency. This is where the Fed has allowed things to to get out of control over a period of time. And when I look back at some of the data, it almost looks like a random walk since we went off the gold standard, like we lost our target, you know, something to associate fiat money with gold.

 

[00:13:23] And it makes me wonder, are we experiencing right now with our money, you know, M1 and M2, our money supply, a random walk?

 

[00:13:38] Because right now there's a lot of pressure on interest rates to go up and the Fed is doing everything it can to prevent that because we have such a large federal deficit of, you know, 28 trillion dollars that they're artificially manipulating the system or in the words of Dr. Deming, tampering. But those are those are some of the things I'm looking I'd be curious if if people have looked at that or thought about that in application and some of these larger systems like this, because it seems to me.

 

[00:14:17] That we are experiencing a random walk by not keeping to a gold standard and also keeping it on target, knowing that there's pressure to keep interest rates low because of such a high federal deficit. But these are some of the things that you can look at, some of these broader systems. We get all these policy changes and things in government. How can they look at these systems more completely use data to help use this feedback and also some knowledge of tampering and being able to recognize whether you're tampering with the system or not?

 

[00:15:04] Anyway, that's what I want to talk about. This February was was tampering. And if you have any thoughts on tampering or even stories to tell, send them to me at [email protected].

 

[00:15:21] Hi, this is Tripp Babbitt. One way that you can help the Deming Institute and this podcast is by providing a rating on Apple podcast.

In our 45th "Deming Lens" episode, host Tripp Babbitt shares his interpretation of wide-ranging aspects and implications of Dr. Deming's theory of management. This month he looks at some of the contributions of Ron Moen.

Show Notes

[00:00:14]
Deming Lens 45

[00:00:29]
Tribute to Ron Moen

[00:04:14]
Ron Moen on Meeting Dr. Deming

[00:08:56]
PDCA vs PDSA

[00:11:33]
Ron Moen on Using PDSA

[00:13:35]
Dr. Deming and One of His Famous Quotes

[00:14:33]
The Lack of Use of Shewhart's Control Charts in Organizations

 

 

Transcript

Tripp Babbitt: [00:00:14] In the forty-fifth episode of The Deming Lens, we'll take a look back at some of the contributions of Ron Moen.

 

Tripp Babbitt: [00:00:29] In this Deming lens, I wanted to pay tribute to the life of Ron Moen and go back in time a little bit to when I interviewed Ron Moen back in 2015 and 16 for the Deming Institute podcast. And I'll pull out a few recordings that I have of him and some of the answers. But you can I'll put a link in to the Web page where you can go and listen to them directly from the podcast Deming. But I will add one other thing that I did, too. As I went back some of the early interviews that I did, I did not do transcripts for them.

 

Tripp Babbitt: [00:01:20] So this one, I went back because I listen to these podcasts again, and especially Ron, the one I did with Ron Moen and Cliff Norman back in 2015 and 16.

 

Tripp Babbitt: [00:01:40] And like I said, I'm going to cut a few clips out that I thought that stood out to me anyway in my interviews with Ron and Cliff.

 

Tripp Babbitt: [00:01:51] But, you know, I may have met Ron Moen back in the late 80s when I was going to Dr. Deming seminars and early 90s.

 

Tripp Babbitt: [00:02:02] I know he was active during that time period, being one of the helpers at Dr. Deming's four-day seminars that I attended. But he had you know, he I hadn't heard of him long before most of the other people in the community, primarily from reading The Reckoning, which I talked about, I believe in previous podcast episodes, is kind of how I got to know who Dr. Deming was.

 

Tripp Babbitt: [00:02:35] A great book, by the way, if I get a chance, "The Reckoning," because Ron Moen's name is mentioned in there. So that was my first association between Dr. Deming and Ron Moen. But he's had he had quite a career.

 

Tripp Babbitt: [00:02:53] You know, he was a he had advanced degrees in mathematics and statistics and wrote a lot of technical papers. And you can just tell even from the interview, both Cliff and Ron are people that are constantly learning these. These people represent folks that that really put an emphasis on continuing their learning. You could tell from these interviews and they also brought up subjects. I mean, the 2015 interview talked about the evolution basically of going from Dr. Deming's 14 points to the system of profound knowledge. And it was a good interview from there. And so I suggest to people that they go back and look and or listen to those previous episodes, because these will just be a short clip, some of them less than 20 seconds, some maybe a couple of minutes that I've pulled for this episode.

 

Tripp Babbitt: [00:03:59] So anyway, let's get on with it. One of the first ones that I pulled was Ron Moen and his relationship with the Deming philosophy and with Dr. Deming himself.

 

Ron Moen: [00:04:14] For me, it was graduate school at the University of Missouri, I went to a American Statistical Association meeting in Montreal in 1971. Deming was there, and I was in the audience. There was probably a hundred statisticians, and he made every one of them mad because his topic was on analytic studies. And this is really a very important message that carries throughout his lifetime, this enumerative versus analytic. And statisticians never really got it. They thought that he was doing away with their profession. And their theory is correct for enumerative problems, but it's not correct for analytic. So, I just spent four years in graduate school learning the theory behind enumerative studies. My advisor was in Montreal and he said, "How do you like working in the real world?" I said, "Where is the population?" There's no population. The world's already dynamic. And enumerative problems are not appropriate. Statistics works for enumerative, but the problems that we work on are analytic. So, that was kind of the whole starting point. I also worked with him in ASTM E11 Committee, it was called, in Philadelphia. He was a member of that. I was a member of that in 1973. I took his classes at George Washington University in '79 and '80. And from 1980 forward, it was the NBC White Paper, the four-day seminars, and so on so forth. So, that was my start.

 

Tripp Babbitt: [00:05:45] Now, in that first interview that I did with Ron Moen and Cliff Norman, Ron talked about the evolution of the System of Profound Knowledge. And again, just a short clip here of what research that Ron and Cliff had done and some of the experiences that Ron had and how that evolved the movement from Deming's 14 points to the System of Profound Knowledge, how that evolved.

 

Ron Moen: [00:06:20] Cliff and I tackled this problem back in January of this year, and because we felt there was such a misunderstanding in that whatever Deming said was permanent, and in fact, this paper really shows the evolution of Deming's learning. It really, I think it does a good job of that. So, we've just submitted this paper to "Quality Progress" for American Society of Quality. And it'll be published next spring, we think. 

 

Ron Moen: [00:06:49] They don't have a date yet, so that's what we'd like to talk about. I think the overall message is that, yes, and he started with Shewhart's ideas. And what year was that when he first met Shewhart, Cliff? 1927. Fall of 1927. A fellow by the name of Kunsman introduced Deming to Shewhart.

 

Ron Moen: [00:07:12] So, then what we did in this paper was we sort of took it into three parts, before 1980, 1980-1988, and then 1989-1993, and again, Deming's learning was tremendous through that span of time, but it was Shewhart's idea that applied to a Stanford University eight-day course on SQC or Statistical Quality Control for World War II. Stanford University put together this course. Deming taught it 22 times. So, Deming started by teaching SQC, which basically is the understanding variation part and the understanding of separation of common and special causes that he learned from Shewhart. So, that was the course in 1942. And then we move forward to 1950, after World War II, where he took that same course and taught it to the Japanese. He was invited to teach the Japanese. It was another eight-day course. What was different, and we bring out in the paper, was, there were managers there. It wasn't just all quality control people. It was managers, so his message sorta changed to how do managers deal with the understanding variation? And so, there was an emphasis on management. And several of the courses, there were a lot of managers in the sessions in 1950. So, that kind of was the beginning of a message for management. 

 

Tripp Babbitt: [00:08:42] Now, the next interview I did with Ron Moen and Clifford Norman was in May of 2016, and the subject really has taken off.

 

Tripp Babbitt: [00:08:56] And I find myself referencing this particular interview. A matter of fact, it's the most listened to interview that I have done for the Deming Institute has a lot of lessons over the years. But it's this conversation because we know, especially in the lean community, a lot of people use Plan, Do, CHECK, Act. And what Dr. Deming really was referencing was Plan, Do, STUDY, Act.

 

Tripp Babbitt: [00:09:32] So now I start to see people use PDCA and people in that community come back and say, no, it's PDSA.

 

Tripp Babbitt: [00:09:39] And this is this conversation, I think kind of initiated some of that conversation, as well as the paper that Ron Moen and Cliff Norman and some others did during that time period.

 

Tripp Babbitt: [00:09:55] So let me play this clip. It's a little bit longer.

 

Tripp Babbitt: [00:09:59] Well, maybe not, but I added in here, but it became a touchstone moment basically for this PDCA versus PDSA conversation.

 

Ron Moen: [00:10:14] And Deming's comment in a letter to me on November 17, 1990, "Be sure and call it the PDSA. Not the corruption, PDCA." The corruption PDCA. I was shocked. He was so angry about how he was seeing the PDCA being used and connecting it to his name. And then finally, my third research was at the Library of Congress in the Archives. It was a response... Somebody sent a letter to him. And it was actually a paper and he asked Deming to comment on it. And it had the PDCA cycle in there. And here was Deming's response in this, he said, "What you proposed is not the Deming cycle. I do not know the source of the cycle that you propose. How the PDCA ever came into existence, I know not.

 

Tripp Babbitt: [00:11:11] Another moment that I thought was important to share was also how Ron Moen evolved using PDSA and just, you know, evolved in general. And I thought that that was something very interesting at the time.

 

Tripp Babbitt: [00:11:33] And so from that May 2016, here's how Associates in Process Improvement that Ron Moen and Cliff Norman were a part are a part of and how they were you using PDSA?

 

Ron Moen: [00:11:54] Cliff, myself and our other colleagues, we published our version of it in 1991. Actually, Deming reviewed this and liked it but he didn't put it in his '93 book. And so, the planning is really, we ask people to state the objective. What are your questions that you want to answer and what are your predictions to those questions? And then, you have a Plan to carry out that cycle. Carrying it out then when you go to the Study part, you compare your results, you complete your data analysis, compare your data to your prediction, summarize what was learned. So, we made this deductive-inductive, which I think is more closely tied to the scientific method that Deming did. So, I think that's a change that we made, and we've been using that since 1991. So, it's really the planning is, you might think of PDSA as P means prediction and then, the Study part is: Compare your prediction to what happened and then, what did we learn from that? So, it's a little bit different. Deming liked it, but he didn't put it in his book. And a lot of times with Deming, he would assume that most things are known. You don't need to be that specific, whereas I think both Cliff and my experience is that you need to be much more prescriptive. He kept it very high level, Plan-Do-Study-Act. So, we added that to it and I think we've been using that since 1991. So, it has a lot of leverage.

 

Tripp Babbitt: [00:13:35] In another kind of salient moment. But humorous. Ron talked about one of my favorite Deming quotes that I use quite often. I know others have and maybe picked it up from this particular podcast interview.

 

Ron Moen: [00:13:56] And the overall method is Deming's methods change yearly, monthly. And, you know, some people come up to seminar and say, well, you said this last month.

 

Ron Moen: [00:14:07] I have I have it on tape. And his answer was, "I make no apologies for learning." Now you have this on tape.

 

Tripp Babbitt: [00:14:18] And I think this particular question and this clip is one that I started first with Ron Moen and Cliff Norman, so here you go.

 

Tripp Babbitt: [00:14:33] Let me let me ask you guys a question that you just brought up. Are you shocked by the number of organizations that you walk into that do not use statistical process control in any form?

 

Ron Moen: [00:14:47] Well, to win this Deming Prize, which I think there have been 18 companies in India that won the Deming Prize. Part of the Deming Prize is the use of control charts.

 

Ron Moen: [00:14:59] So, if you win the Deming Prize, you have to practice it. Where do I see it outside of that? Not as common, not as common. I think a lot of people are getting away from that, the use of Shewhart charts. And again, this importance of separating the common cause and special cause, I think that's... I don't know... I think it is going away.

 

Tripp Babbitt: [00:15:24] And so Ron Moen made a number of contributions to not only Dr. Deming's work, but to society as a whole. And, you know, it's kind of funny. You remember that the last two words or the last words of that you spoke to certain people. And when you get a chance to reflect on their lives and their contributions to it and I remember what the last two words or the last few words that Dr. Deming spoke to me when I was talking to him on the telephone was, "You better hurry." Meaning, you know, run out of time to convince people to operate in a different way. But here are the last few words that Ron Moen spoke to me.

 

Ron Moen: [00:16:18] Thanks, Tripp.

 

Tripp Babbitt: [00:16:19] Well, no, thank you, Ron Moen.

 

 

In our 44th "Deming Lens" episode, host Tripp Babbitt shares his interpretation of wide-ranging aspects and implications of Dr. Deming's theory of management. This month he looks at the audience demographics of the Deming Institute Podcast.

Show Notes

[00:00:14]
Deming Lens - Episode 44

[00:01:09]
The US

[00:02:58]
By Country Breakout

[00:06:14]
Top 5 Downloaded Episodes

 

 

Transcript

[00:00:14] In the 44th episode of The Deming Lens, we'll take a look at the audience that listens to the Deming Insitute podcast.

 

[00:00:31] Hi, I'm Tripp Babbitt, hosts of the Deming Institute podcast, and in this final episode of our covid filled year of Twenty Twenty, I wanted to cover the audience that the Deming Institute podcast has been playing to.

 

[00:00:55] And I'm not at liberty to share what the numbers are, but I can share kind of what the coverage is for the world.

 

[00:01:09] Basically, first of all, shouldn't be any surprise to anyone that all 50 states in the United States have at least listen to the Deming Institue podcast over the years. And it's been almost it'll be seven years, I believe, in April that we started the podcast. But just some kind of interesting statistics and maybe not statistics, but rankings the top states, which shouldn't surprise anyone. Top three states that listen to the podcast are California, Texas and New York.

 

[00:01:54] And then the states with the fewest downloads are North Dakota, Montana and Alaska.

 

[00:02:05] And I just every once in a while, I'll go back and I look at some of these statistics and I find them interesting just to kind of and I never I don't can't remember that I've shared these before. But again, I think they're they're interesting now, the top five cities in the US that as far as listenership or downloads are New York, Los Angeles, San Francisco, Washington, D.C. and Chicago. So I don't know that there be any particular surprises with regards to what the top five cities would be in the US listening to the podcast. Now, this I did find interesting. I did. I also ran data on the top five countries. Well, no surprise the United States has over 50 percent of the listenership.

 

[00:02:58] Now, at one point when we first started the downloads in the in the US represented 80 percent or more of all downloads. And over the last few years, especially over the last three years, the US number percentage has gone down. It's just a little over 50 percent now. Then you have the U.K., which kind of stands alone at second. And then if I were to probably group the next group and this is where it got a little surprising for me was Canada, which doesn't surprise me, but India, Australia and the Philippines, of all places, I, I kind of expected the India listenership to go up over time as we've interviewed some folks from from India. But the Philippines kind of surprised me. I would guess that as far as the rate of increase of the downloads, India is has definitely shot up the list the fastest the Philippines. I haven't done all the analysis on it, but in essence, kind of came out of nowhere. So it just it just kind of surprised me. And and so that makes basically the top six with the US, UK, Canada, India, Australia and the Philippines. And then there's kind of another group and I'll just kind of round up the top ten, which are Germany, Mexico, Ireland and Brazil. Now, the thing I got curious about were which countries were listening. And then that became a little bit of an overwhelming exercise. So I try to go look at it a different way, which is which countries aren't listening. And there are three and maybe four.

 

[00:05:04] And I explain that in a second. But the first one is Chad in Africa and the Western Sahara. And there have never been anybody from those countries. So if you knew somebody in that country, have them listen to the podcast and and then we can check them off the list. Another one is Turkmenistan. Hopefully I'm saying that correctly has not. Had anyone from that particular country listen to the podcast and then this one is the one that I'm not sure about, and it's it's Svalbard, which is actually part of Norway. So we've we've had a lot of listeners from Norway and I sometimes some of these ancillary and I don't know what you would call them. I think they reference them as an archipelago kind of standalone, but they're part of Norway doesn't show up.So I'm wondering if it just is something within. Libsyn too. We put our podcast on.

 

[00:06:14] So those are some of the things that I found looking through here now, the top five podcast episodes, not surprisingly.

 

[00:06:24] And this one created, I think at the time, some degree of controversy was the conversation I had with Ron Moen about the PDSA cycle where Dr. Deming, he had notes from from Dr. Deming and communications with them that PDC AI was I forget the exact words Dr. Deming used, but something to the effect of, you know, a an abomination of PDSA.

 

[00:06:54] And that particular episode, it, I think I say, shocked me. But I've seen PDK over the years so often.

 

[00:07:05] And I started seeing people change over from PDCA to PDSA based on just that podcast alone, that podcast episode alone, the second most listen to podcast kind of surprise me. And some of these are skewed. And I explained that here in just a minute. But what was lujah on who owns a automotive repair shop? And we did an interview with him back in 2015 and it was a good interview. I was a little surprised of the amount of people that had listened to it. But then as I started thinking about it and looking at the Deming Institute website, a lot of these top five that I'm going to go through are promoted on their particular website so they'll show up on a particular page or a popular page.

 

[00:08:01] So they're people naturally click on them and listen to them.

 

[00:08:07] The third most listen to podcast episode was Paula Marshall. And I really need to go back in there and do some of the work that I do today on fixing that particular episode. But that whole conversation about how Dr. Deming took Paula Marshall, who owns Bamma companies, and they make apple pies, it was really interesting to me and I learned a lot by listening to that not long after and when I went to the Library of Congress and actually looked through Dr. Deming's files that are there at the Library of Congress for folks to be able to read. But it was a good episode. But I just need to clean up the audio on that a little bit. I didn't have the knowledge I have today and how to do that. I was really early on in doing interviews and podcast episodes. The fourth is the one I did with the Deming Lens, which was point one of Dr. Deming's Fourteen Points.

 

[00:09:17] I did a whole series on the 14 points where we went through each of the 14.

 

[00:09:25] I pulled some of the information from the blog. I pulled it from out of the crisis. I pulled it from my notes that I took during Dr. Deming's four day seminar back in the late eighties and.

 

[00:09:43] So that one obviously shows up on some of the Deming Institute pages also, and then fifth was David Langford on using Dr. Deming's ideas and improving education.

 

[00:09:54] And David, as someone that I interviewed several times over the years, talking about how he how he applies Dr. Deming's ideas to education. And David is definitely someone who worked with Dr. Deming and, you know, trying to promote his ideas within education.

 

[00:10:19] So I just thought it was interesting and kind of the end to end the year. I have like I like I said, I haven't really talked about these. And as I mentioned, I'm not at liberty to give the actual volume that are out there.

 

[00:10:36] But I felt it was OK to at least share some of the things that about the podcast itself and relatively neutral terms. And so that's it for twenty twenty. And I hope everyone has a good into a tough year as far as twenty twenty goes. And as we go into twenty, twenty one, you have a lot of great hopes.

 

[00:11:05] We have a vaccination now, we have a vaccine now and so there's hope out there again. And getting out of this particular crisis that we're in which is going to lead to a whole series of new problems and individual countries that they're going to be facing in the upcoming years. And a lot of them have to do with the amount of money printing that that is going on, a lot of countries to just kind of keep things going. So best wishes for twenty, twenty one.

 

[00:11:43] Hi, this is Tripp Babbitt, one way that you can help the Deming Institute and this podcast is by providing a reading on Apple podcasts. If you have additional comments, you can reach me at [email protected].

 

In our 43rd "Deming Lens" episode, host Tripp Babbitt shares his interpretation of wide-ranging aspects and implications of Dr. Deming's theory of management. This month he looks at Management Theories contrasting Frederick Taylor and the work of W. Edwards Deming.

Show Notes

[00:00:14]
Deming Lens - Episode 43

[00:03:30]
Taylorism Flaw #1

[00:03:57]
Neo-Taylorism

[00:05:24]
Taylorism Flaw #2

[00:06:23]
Taylorism Flaw #3

[00:07:28]
Taylorism Flaw #4

[00:09:22]
Taylorism Flaw #5

[00:10:18]
Taylorism Flaw #6

[00:11:37]
Taylorism Flaw #7

[00:12:46]
Taylorism Flaw #8

 

 

Transcript

Tripp Babbitt: [00:00:14] In this edition of The Deming Lens will complete a series on mangement theories contrasting Frederick Taylor and the work of W. Edwards Deming.

 

Tripp Babbitt: [00:00:31] Hi, I'm Tripp Babbitt, hosts of the Deming Insitute podcast, and in the last Deming Lent, the 40 second episode, I talked about Frederick Taylor and scientific management and things of that sort and in essence, brought in the book Deming's Profound Changes, coauthored by one of the members of the Deming Institute Advisory Council. And it's an important book. I've mentioned it before in previous episodes. I've talked about this, but I think it's from the perspective of how a manager thinks. I think it's helpful to understand kind of what's being taught in universities and colleges versus what Dr. Deming was talking about. And I I my personal admiration for this book has to do with being able to differentiate between what Frederick Taylor did in the early nineteen hundreds and what Dr. Deming proposed in his system of profound knowledge that he wrote in 1992. And we're talking about, to me, a huge difference. In matter of fact, the the difference I use are a way to describe it is the Fosbury flop.

 

Tripp Babbitt: [00:02:10] You know, Fosbury the Fosbury flop is the way everybody does the high jump today. But when it first came out in 1968 at the Olympics, it was something very new.

 

Tripp Babbitt: [00:02:22] So I want to walk through these things as this episode be a little bit longer. But I want to walk through these eight things that I ended the last episode with. And they are were the flaws of Taylorism. And I'm going to take you through kind of three levels for each of these things.

 

Tripp Babbitt: [00:02:42] One is how Taylor the floor of Taylor's thinking what the book Deming's for Profound Changes talks about in terms of what's referenced as Neo Taylorism, which is kind of taking what Taylor did in the nineteen hundreds or early nineteen hundreds and the way management has kind of played it out in today's world. And I think these things, even though that means profound changes, a little bit dated now too, it's still relevant and kind of where we've been and kind of how Dr. Deming saw things. So let's just start and I'll walk through these and you'll see some recurring themes in here, as I did years ago.

 

Tripp Babbitt: [00:03:30] And I've focused in on some of the overlaps of the thinking as far as the flaws go. So let's just jump into them. So the first one was belief in management control as the essential precondition for increased productivity. That was the flaw associated with Frederick Taylor and his thinking and the way this is played out.

 

Tripp Babbitt: [00:03:57] You think in terms of Neo Taylor ism or the way it's played out today is that your boss is your customer. I mean, they are the ones that, in essence, tell you what to do on a daily basis. They're the ones who judge the judge and jury of your work. And this is pretty widespread, I would say, in most organizations.

 

Tripp Babbitt: [00:04:22] Now, the way Deming viewed things was that management job is not to control and that management's job was to coach and to provide methods and tools. And for me, the emphasis on methods really struck home because Method's gives you a way to achieve what you're trying to accomplish. And not many there's not a lot of focus in management today on methods. It's more what type of leader are you? Do you have emotional intelligence and things of that sort? And what I think is really missing is then I think those are soft skills. And I'm not saying they're not important.

 

Tripp Babbitt: [00:05:05] They're very important. But there's also the hard skills or what I reference is hard skills, which are methods to do things like innovate and, you know, the ways to look at data and ways to develop your synthetic thinking. But we'll talk about some of those a little bit later.

 

Tripp Babbitt: [00:05:24] The second thing was belief in the possibility of optimal processes and. The needlestick way, and I think you could even go back to Frederick Taylor himself, and so there was always one best way to do something and everybody's always looking for best practices or, oh, the competitor did this. And we've got to copy that because there have been so successful. Sometimes they're been successful with it. But the impression is that what they're doing is cool.

 

Tripp Babbitt: [00:05:52] And so we've got to copy what somebody else is doing. And Deming was his advocacy was for there was always a better way and that that mindset always exists. There's always a way to do something better. And for instance, technology can help us see new things, but it doesn't necessarily have to do them or accomplish them. So that's one of the big differences then between Deming and Taylor,

 

Tripp Babbitt: [00:06:23] The third thing, a narrow view of process improvement. Now we get into this subject of synthetic thinking a little bit. And Neil Taylorism is management reorganizations were use our use today as a substitute for actual improvement or in the book they reference process improvement. I think it's just improvement in general. But this is in essence, what the book said from a Neotel Ristic standpoint. Dr. Deming was about process improvement. And I like to distinguish greatly at this point something I've learned over the years, which is process improvement.

 

Tripp Babbitt: [00:07:07] The way that it's looked at today is far less effective than systemic improvement. And this means that you have to become a synthetic thinker and understand that the whole is greater than the sum of its parts and that many organizations are, you know, the same process improvement and Deming.

 

Tripp Babbitt: [00:07:28] But what we really want to do in order to become effective is achieve systemic improvement to make the hole better. So this is a good Segway into the fourth thing, which is low level sub optimization instead of total system improvement.

 

Tripp Babbitt: [00:07:50] So there's this recurring theme now of systemic improvement, or I like to reference synthetic thinking that you need in order to improve an entire system.

 

Tripp Babbitt: [00:08:04] And the Neo-Tayloristic view is and we see this in organizations all the time, probably have it in your organization, are quotas or targets for individuals and teams and departments and things of that sort. So this is, again, breaking the parts down and trying to optimize each of the pieces within an organization that you cannot contrast that against Dr. Deming's thinking and the story or the way to convey this. I think best that people can kind of get is when he used an orchestra and that an orchestra.

 

Tripp Babbitt: [00:08:42] Doesn't have a group of 150 primadonnas trying to play their own solos. They all have their moment or maybe they never have their moment, but they all know what their role is within trying to create music that's pleasing to the ear. And and along with that, because you are able to get hundred and fifty people to cooperate in order to achieve the aim of creating beautiful music, you know, everybody wins.There's a satisfaction associated with the whole system operating well.

 

Tripp Babbitt: [00:09:22] The fifth thing is the cause of defects in a Tayloristic mindset is people, you know, oh, we've got to find somebody to blame and you know, somebody and this is very, very prevalent within organizations. And so because of that and the Neil Taylor mistake or the more modern application of Taylor's thinking, we see all of these worker motivation schemes. And this this can be distinguished from Deming and synthetic thinking or systems thinking that defects are from the system and not people. And Dr. Deming's favors a famous percentage was 94 percent of the defects are from the system and only six percent is from the individual or special special causes or events.

 

Tripp Babbitt: [00:10:18] The sixth thing, separation of planning and doing neo Taylorism again, separation of management from the workplace in the front line is still even today. Unless you're a small organization, will see management will be on some floor, maybe upper floor of an organization and they don't really come into contact with the people, you know, where the work is being done or with front line people.

 

Tripp Babbitt: [00:10:46] And Dr. Deming's view was that there was a need for management to understand the processes that they manage, that you needed to understand the work that you were managing as opposed to just collecting data on what's going on. And that we need to value the contribution and value created by the worker and that's that is a huge shift for a lot of organizations, is just that we're talking in terms of culture change. This is one of the things that I see organizations struggle with a lot, because that isn't the reason I became an executive or a manager, was to, you know, be around, you know, the front line workers doing stuff. I can manage them with the data and, you know, process charts and things of that sort.

 

Tripp Babbitt: [00:11:37] The seventh thing, failure to recognize systems and communities in the organization that Neotel Ristic or modern view of this has worked is viewed individually instead of collaboratively.

 

Tripp Babbitt: [00:11:54] And this whole collaboration piece when we talked in terms of the orchestra comes to mind when you think of the systems which you're involved with. And there's a couple of things I pull from this. One is abdication of management's responsibility for the welfare of employees. We see this played out from an artistic standpoint.

 

Tripp Babbitt: [00:12:17] We get layoffs, we get rank and yank, although we're seeing less of that nowadays and at its height during the 90s and even the early 2000s. And, you know, we got to contrast this with Dr. Deming's view of, you know, what is best for society, what is the greater good, what is really the aim here where everybody has an opportunity to win?

 

Tripp Babbitt: [00:12:46] The eighth thing is view of workers as interchangeable by bionic machines. The need tailor a Ristic view is failure to recognize the major effect of the system on an employee's performance. And this is one of the things I think when I'm discussing with management or executives about their organization and their performance is that they because they're not synthetic thinking is something you have to develop within your organization. I don't think you just say you need to understand the whole and people get that they need excuse me. They need to do it. Why? They're looking at their own organization. And so Deming is a promote promotes basically that the system, as I mentioned before, the 94 percent is what you need to focus in on.

 

Tripp Babbitt: [00:13:44] And and by focusing in on the six percent or even just the individual, you're going to lose out what gains that you get of systemic thinking. And we hit this again, we're talking in terms of process improvement problem. And I and I wish Dr. Deming would have used the word systemic improvement process improvement. Again, we're talking about analytic thinking, of kind of trying to optimize the pieces, the individual, the team, and not understanding how the whole might gain and that sometimes different departments may need to give a little as opposed to get.

 

Tripp Babbitt: [00:14:30] And sometimes the way this plays out from a Neo-Tayloristic standpoint is we have profit centers and maybe not. You might go so far I'd never heard it talked in terms of, you know, the individual must show profit. But certainly in terms of individual departments, I've heard of, you know, H.R. departments and finance departments have to show that they're profitable. I don't understand the thinking there because they're they're they're enablers. They are not the ones that create value for the customer.

 

Tripp Babbitt: [00:15:06] But those are the eight things. Deming's view was very different.

 

Tripp Babbitt: [00:15:11] And that's why I say that Dr. Deming and his system of profound knowledge is a huge leap from where Frederick Taylor taken us and how we've made it.

 

Tripp Babbitt: [00:15:26] Tried to make it better by what we're teaching in universities and, you know, Dr. Deming's message still isn't broadly taught at universities and certainly far less understood by universities and what what he did. And so this offers huge opportunity, I think, for an organization, you know, trying trying to compete in a global marketplace. This that is this week's Deming Lens. And we will talk to you next month.

 

Tripp Babbitt: [00:16:01] Hi, this is Tripp Babbitt. One way that you can help the Deming Institute. And this podcast is by providing a rating on Apple podcasts. If you have additional comments, you can reach me at [email protected].

 

In our 42nd "Deming Lens" episode, host Tripp Babbitt shares his interpretation of wide-ranging aspects and implications of Dr. Deming's theory of management. This month he looks at Management Theories.

Show Notes

[00:00:14]
Deming Lens #42

[00:02:16]
Deming's Profound Changes

[00:03:25]
Weber, Taylor and Fayol

[00:07:11]
Mary Parker Follett

 

 

Transcript

Tripp Babbitt: [00:00:14] In Episode 42 of The Deming Lens, we'll begin to discuss management theory, starting with some history.

 

Tripp Babbitt: [00:00:29] Hi, I'm Tripp Babbitt, host of the Deming Institue podcast.

Tripp Babbitt: [00:00:46]  This month I wanted to do a two-part series or start a two part series on management theory. And the first part will go through and we'll cover people that were influential in management theory and what their thinking was from the really the beginning of the industrial revolution to until today.

 

Tripp Babbitt: [00:01:54] A lot of that influence still exists and maybe some of the problems associated with some of those theories. And the next month, what I'll do is I'm going to walk through how the Deming philosophy, the system of profound knowledge differs from some of the classic management theory.

 

Tripp Babbitt: [00:02:16] And I'm a big fan for those of you who are watching the video of Deming's profound changes and Dan Robertson and Ken Delevingne or two folks that wrote it, influenced by the work of Perry Gluckman, who they liked as a mentor and coached them on the Deming philosophy. But Perry Gluckman actually was a student of Dr. Deming back at NYU. But he walks through a lot of the differences and some of the things a lot of the information that I have will be drawn from Deming's profound changes.

 

Tripp Babbitt: [00:02:56] Now, let's set the scene a little bit. So the industrial revolution starting late. Seventeen hundreds to the late eighteen hundreds, energy changed. We have steam and hydropower.

 

Tripp Babbitt: [00:03:09] We've got machinery coming out. We have new ways of transporting people. And now the question becomes, how do we organize all of this and and how do we increase productivity and manage the people?

 

Tripp Babbitt: [00:03:25] And so there were three, in essence, influencers during that time for what some folks will call classic management theory. And one wasn't Max Weber or Veber Frederick Taylor and Henry Fayol. And those three primarily made up a lot of what we know today with Frederick Taylor. To me, being probably the most influential of those particular three opinion, Max Weber basically was very big picture. He talked a lot about bureaucracy and that these organizations should be an extension of government, a lot of legal, rational types of thinking, and also came up with the original philosophy of hiring the best people. Henry Faile talked a lot about management and administration science, and it really focused on a few things, five things planning, organization, command, coordinate and control. And those were his five things associated with management and emphasized that management should stay out of the details of the work. And then Frederick Taylor, obviously scientific management, which is the basis of a lot of the book, Deming's profound changes and the differences, but he kind of kind of grabbed some of the ideas of Max Weber and Henry fail and put them into his system, but of scientific management. And it's really applying science to the work. And he did things like time and motion studies. And we'll get into a little bit more of the detail associated with that next month as we kind of contrast the thinking of these thinkers.

 

Tripp Babbitt: [00:05:29] Now, what were some of the problems associated with this thinking that came from these areas? Well, I am I guess not going to say the problems at this point, the commonalities of these three philosophies. There was the hierarchy. They all believed in hierarchy. They believed in the division of labor. They believed and the centralization of authority, the separation of work and personal life, that those two things should be different, that you have always hire the best employees and pay you wanted to pay people with their your best people. And that there was one right way to do things. So those are kind of the commonalities, some of the flaws associated with some of this management thinking, this management theory is, and this is out of Deming's profound changes, is one belief in management controls the essential precondition of increasing productivity to belief in the possibility of optimal processes. Three, a narrow view of process improvement for low level. So optimization instead of holistic total system improvement. Five Separation of planning and doing. Recognition of only one cause of death affects people seven. Failure to recognize systems and communities in the organization. And a view of workers as interchangeable bionic machines. Now, I want to make a kind of a side note here.

 

Tripp Babbitt: [00:07:11] And Mary Parker Follette, who worked with Frederick Taylor, actually was the first person to kind of come out and say that there's something out there with regards to systems. And so this will kind of set us up for next month, will walk through some of these management theories. And I've got to tell you that these management theories are still well entrenched in management today and almost subconsciously, but they're taught in a university still today. And I think that that's part of the problem and that we haven't advanced beyond that. To other thinkers like Dr. Deming, like Russell Akef, like Ludwig von Berlanti, those people have kind of advanced the management. But it seems like we're still teaching and doing the things of some of these thinkers from the Industrial Revolution time period. So anyway, that's what we'll do next month. If you have comments. You can reach me at [email protected]. That's it for this month. We'll talk to you next month in the second part of this series.

 

Tripp Babbitt: [00:08:51] Hi, this is Tripp Babbitt. One way that you can help the Deming Institute in this podcast is by providing a reading on Apple podcasts. If you have additional comments, you can reach me at [email protected].

In our 41st "Deming Lens" episode, host Tripp Babbitt shares his interpretation of wide-ranging aspects and implications of Dr. Deming's theory of management. This month he looks at the book, The Reckoning" and some of the implications of it.

Show Notes

[00:00:14]
Deming Lens - Episode 41

[00:00:29]
Episode 41 - Dr. Deming's Guide to Layoffs

[00:02:43]
Ackoff on Layoffs

[00:03:38]
The Larger Social System

[00:04:23]
Capitalism, Socialism and Communism

[00:05:42]
Dr. Deming's 5 Steps to Layoffs

[00:06:34]
Are Leaders Cutting Salaries Before Layoffs?

 

 

Transcript

Tripp Babbitt: [00:00:14] The forty-first episode of the Deming Lens will give you Dr. Deming's guide to layoffs.

 

Tripp Babbitt: [00:00:29] Hi, I'm Tripp Babbitt, host of the Deming Institute podcast, and in this Deming lens, I am going to give you Dr. Deming's guide for layoffs. And this may sound a little strange to a lot of the listeners out there. I've talked about this before in Deming Lens 27. We're talking about point twelve, remove barriers that rob people of pride, of workmanship. And this is a subject that I think is timely, especially at the moment where we're going to be discussing what to do when your company faces reduced revenue and it doesn't really matter the size of your organization. What does matter is the way that you go about handling this decline in revenue at your organization. So. I think I'm going to first start out and talk about what different people have said in terms of layoffs, so Russell Ackoff, for instance, talked about layoffs or downsizing or whatever you want, irresponsible and ineffective because it treats symptoms instead of causes.

 

Tripp Babbitt: [00:01:59] And I think that, you know, in normal times, we would probably say, yeah, that makes a lot of sense to me. And companies do this. They somehow accumulate a large group of people that's excessive and they use a formula.

 

Tripp Babbitt: [00:02:18] I think many of us have probably heard it before, but they believe that the corporation's primary responsibility is to shareholders and that they must be profitable and that any excess employees remove profit, remove or reduce the profit in an organization and therefore they have to make cuts to employees.

 

Tripp Babbitt: [00:02:43] And I have found that and been part of on both sides of the sea with regards to layoffs, laying off large groups of people, as well as being part of layoffs in organizations. And I think what especially Russell Ackoff talks about is that there is a larger social system that is out there now. Fundamentally, it's hard enough for people to grasp synthetic thinking and understand that their department or their team or their unit is a part of an organization. And there's a lot placed on the individual, the unit, the team to department to perform and often the suboptimized system because we're trying to maximize the pieces.

 

Tripp Babbitt: [00:03:38] And we know from Russell Ackoff that the sum of the parts or the performance of the organization is greater than the sum of the parts. And this is at the heart of some of these larger social systems that are at work. So we have to understand, first of all, that a system we look at, an organization departments only a part of a broader system, but even that corporation as part of a larger social system and, you know, part of that social system is the reason for it is to create and maintain productive employment in that social system.

 

Tripp Babbitt: [00:04:23] And this gets into so many different things that we see going on in our society today, especially here in the United States. Communism and socialism have not demonstrated ability to produce enough wealth to make possible an acceptable standard of living. And many people have talked about that. We have a whole group of people in the in the US that are now believe socialism is better than capitalism. And on the cover side, capitalistic societies have not distributed enough wealth equitably. And that is the problem is this maldistribution of wealth is a threat to capitalism as insufficient production of wealth is to socialism and communism. And so this is kind of the conundrum that we face today in society. And I'm afraid we're not addressing that well enough. I've gone through a number of articles and it takes me back every time to what Dr. Deming said about layoffs and downsizing, that if you face a decline, that there's five steps in essence that you need to take.

 

Tripp Babbitt: [00:05:42] And the first is that you cut the corporate dividends or you cut them out. The second is salaries and bonuses of top management are cut. The third is management. Salaries of top to middle management are cut. The fourth step is rank and file are asked to accept pay up pay cuts. And the fifth is reduction in workforce through attrition, voluntary discharge and early retirement.

 

Tripp Babbitt: [00:06:16] Now, I'm not going to get into naming companies, as I've been asked to by the Deming Institute, not to shame companies, but you can pretty much look this stuff up on your own with regards to which companies are doing the right thing and which aren't.

 

Tripp Babbitt: [00:06:34] And some of them are doing it and token fashion. In other words, you're seeing some CEOs of very large organizations that have already made massive errors in doing stock buybacks and increasing their dividend so that they would get their pay up because a lot of their pay is dependent upon what the stock price is.

 

Tripp Babbitt: [00:06:59] So.Even though they may say, look, I'm going to reduce my three million dollar a year salary by 20 percent, then that would be six hundred thousand dollars.

 

Tripp Babbitt: [00:07:15] But if they're getting 20 million dollars based upon the stock price and some of the other things, even though their revenues are down, the stock price is up, as we've seen here in the last six months, things have recovered, at least in the financial markets. They are in this scenario where, oh, I get it. Six hundred thousand dollar reduction of my 20 million dollar salary. Now, this is very token to me and this does not follow the formula doesn't make you a leader. Matter of fact, it doesn't make you a leader. So in order to be a leader, you're going to have to forgo. Your salary to some degree, and there are people out here, you know, if I have to look through the list of names of organizations here, they are doing very well as individuals while society falters.

 

Tripp Babbitt: [00:08:18] And this is obviously a big subject. And some of the things that I just talked about with regards to capitalist societies is that we're not distributing the wealth equitably. And I don't believe that the answer is personally, I don't believe that the answer is socialism or communism. But we need to be after the greater good in society by doing what's right in times of crisis as opposed to what's right for me. So this is this is the conundrum that we face today.

 

Tripp Babbitt: [00:08:57] And moving forward, we're going to need to find ways to more equitable, equitably distribute wealth in organizations that it really has to start at that level.

 

Tripp Babbitt: [00:09:09] Once the government enter, enters in wealth isn't distributed in an effective manner at that level. So then we begin to lose things like innovation and some of the things, good things that come along with capitalist societies. So this is this is today's problem. I mean, dead. And Dr. Deming laid out, I think, a fair formula for organizations. You have to look larger than yourself. Your constancy of purpose has to include social responsibility and that your organization as part of a larger social system. And I think that that is better done voluntarily rather than having the government try and save people that aren't willing to do the right thing. It makes you question the types of leaders that we have and some of these organizations, especially when they're doing token actions and then that saying there aren't some out there that are doing the right thing, but making layoffs in Dr. Deming's formula by by walking through his five step process of cut the corporate dividends or cut them out. Salaries and bonuses of top management cut. Management salaries of top to middle management are cut, rank and file are then asked to accept pay cut cuts and the last thing, reduction in workforce through attrition and voluntary voluntary discharge and early retirement. These are timeless, especially in a capitalist society, that we maintain this larger social system. That's my message for this week ending September 30th, 2020.

 

Tripp Babbitt: [00:11:10] Hi, this is Tripp Babbitt. One way that you can help the Deming Institute and this podcast is by providing a rating on Apple podcasts. If you have additional comments, you can reach me at [email protected].

 

In our 40th "Deming Lens" episode, host Tripp Babbitt shares his interpretation of wide-ranging aspects and implications of Dr. Deming's theory of management. This month he looks at the book, The Reckoning" and some of the implications of it.

Podcasts mentioned in this episode:

1. Paula Marshall

2. Kevin Cahill

3. Ed Baker

4. Monta Akin

5. Clare-Crawford and Bob Mason

 

SHOW NOTES

[00:00:14] Deming Institute Podcast - Episode 40
[00:00:27] Episode 40 - My Top 5 Favorite Episodes
[00:02:06] 1. Paula Marshall
[00:04:20] 2. Kevin Cahill
[00:05:17] 3. Ed Baker
[00:08:52] 4. Monta Akin
[00:10:09] 5. Clare-Crawford and Bob Mason

TRANSCRIPT

Tripp Babbitt: [00:00:14] In the fortieth episode of The Deming Lens, I will go through my top five favorite podcast episodes.

Tripp Babbitt: [00:00:27] Hi, I'm Tripp Babbitt, host of the Deming Institute podcast and the Deming Lens, and this is Episode 40. I thought I would switch things up a little bit. I was doing a lot of reflecting over the past week or so, thinking about all the people I've had the pleasure of interviewing for the Deming Institute podcast. So I kind of came up with lack of a better term, my five favorite podcast episodes. And there are a ton of people that merfolk every interview I've done. I've either learned something or just had great enjoyment.

Tripp Babbitt: [00:01:08] And talking to folks that admired the work of W. Edwards Deming, people like Alfie Kohn and David Langford and Dick Steele and Ron Moen and Cliff Norman and Dan Robertson and I could go on and on and on. There are a ton of good interviews, some better than others, as I got better at doing podcasting. But it was it has been a real enjoyment for me to learn from different people and not just gaining knowledge, but but the. History of how different people came into contact with Dr. Deming's work or him or himself. And so my top five, I'll just first name them, go through him a little bit, and I hope that you'll take an opportunity to listen to some of these folks.

Tripp Babbitt: [00:02:06] But my number one is Paula Marshall. Second is my inaugural interview with Kevin Cahill. My third was Ed Baker and my fourth was Monáe Aiken from Leander School District, and my fifth was Claire Crawford and Bob Mason that I had the opportunity to talk to. So let me just talk about starting with Paula Marshall. I, I love that episode so much because not only did you get a little history, but Paula Marshall is a dynamic person. She has a lot of personality. She's fun to talk to. And she owns a company called Bamma Companies, and they make the apple pies for McDonalds all over the world and still do. And so she runs this family, basically family initiated and family owned business. And we got into a conversation about performance appraisals. And I wish I would have known about better audio quality back in those days because is one of the early interviews. But my interview with her is a little bit sketchy on the audio.

Tripp Babbitt: [00:03:19] But overall, it was one of those interviews that just I got a lot of energy from it, like a lot of energy from Paula Marshall and talking about her experience in having poor quality at Bamma companies and how she was kind of nudged towards going to one of Dr. Deming's four day seminars, her interactions with them, but also just how he interacted with her and going and moving away from performance appraisals and what she had done up to that point. I'll let you listen to the episode itself. But and I later had the opportunity to meet Paula at a couple of Deming Institute events. But I think you will enjoy it if you haven't if you've not listened to some of the early interviews. Again, I apologize about some of the quality of it. I was the no, really what I was doing at the beginning. Now we're six years later. Seven years later.

Tripp Babbitt: [00:04:20] The second one is Kevin Cahill, the inaugural. Now, obviously, even when I interviewed Kevin, I did not have my own equipment. I hadn't purchased any equipment because I wasn't sure how this would go. And the equipment for podcast can be very expensive once you start getting mixers and digital recorders and things of that sort. So I actually had a friend that had podcasting equipment and so I use that for my interview with Kevin. But I really enjoyed that interview because of the stories he told about Dr. Deming, including how what happened the night that he watched the NBC White Paper. If Japan can, why can't we? And just the the storytelling there and the history of it isn't lost with me.

Tripp Babbitt: [00:05:17] Third, Ed Baker, now Ed Baker.He his interview was interesting to me. He he traveled along with Dr. Deming, with Ford. And it kind of goes through the Ford story, talks about Taylorism. He talks about the improvement methods of today.

Tripp Babbitt: [00:05:37] But the reason I probably enjoyed the Ed Baker interview is because I had to prep so much for that. Not only did I read his book, but I read about it. Baker looked for previous references and other books, but I just remember it from a lot of preparation standpoint. I read the book twice, but I think before we did the interview and there's a lot of good things in there. He'll tell basically the message that I that I think I got out of that interview was, you know, whether it's Lean or Six Sigma or TQM or any other improvement methodology that most of the people that are enjoying those methodologies are missing the system of profound knowledge.

Tripp Babbitt: [00:06:21] So, again, that would be appreciation for system theory and knowledge, theory, variation and psychology and and those four things that were being emphasized as opposed to just the statistical process control types of things that a lot of people focus in on, on Six Sigma and Lean. I think this is quite a.

Tripp Babbitt: [00:06:47] Quite a bit of this, but he also talks about in there about Jim McConville, our mattress Mac, as he's known at gallery furniture in the story of what happened there.

Tripp Babbitt: [00:06:58] And that was one of the Jim McIngvale is a person that has been mentioned a number of times in Dr. Deming's books as someone who changed from very sales type of attitude to understanding a system. And he's he's well known in the Houston area for a lot of things that he's done, like when they had the hurricane, how he opened his stores and just let people in during that time period and kind of not only paying it forward, but that, you know, these are it's funny you think about if people are selfish enough, they'd be altruistic as kind of the thing because you treat everybody really well. And I think that that when I think of Jim McIngvale, I think of that quote, not that he said it, but just what applies to to him. But Ed Baker talking about that story was good. Excuse me. Good for me. He also was very influential in that interview. Got me thinking about thinking and how we need to change thinking the way we think about things. And I developed this model I call the ninety five method, but it involves looking through a customer lens but looking through a thinking lens. And and Ed Baker talks quite a bit about thinking and influence the udemy training that I put it put out there based off of a lot of the things out of that interview and what kept getting deeper and deeper in understanding, thinking that was going on, mental models and things of that sort.

Tripp Babbitt: [00:08:52] The fourth interview that I really enjoyed was with Monta Akin, and Monacan is a, first of all, just a sweetheart of a person, but she shared the story. She worked at the Leander School District. I believe she's retired now.

Tripp Babbitt: [00:09:09] But how she had listened to things that were happening with David Langford and Sitka, Alaska, and about how education was being applying the Deming method with some of the things that David Langford was doing.

Tripp Babbitt: [00:09:28] And she was really the first person to really talk about education. As someone from a school district, I'd listen to the story of David Langford and had interviewed them, but just her grasping some concepts and, you know, waking up in the middle of the night while watching, you know, if Japan can, why can't we? And our interactions with David Langford all were really relevant to me. And I'm kind of a, I don't know, amateur history buff, not only about Dr. Deming, but but a number of other things and really enjoyed that history.

Tripp Babbitt: [00:10:09] And the fifth person that I really became one of my favorite episodes is with Claire Crawford Mason and Bob Mason, her husband, and just a number of things that really stand out in my mind. I go back to all five of these quite often, actually. And Claire Crawford, Mason talks about how she first met Dr. Deming and and some of the things that were happening that led up to the white paper of Japan can why can't we, which you can watch at the Deming Institute website. I think it's also on YouTube, if I remember correctly.

Tripp Babbitt: [00:10:45] But kind of the the what launched Dr. Deming back in this country, even though he was already famous over in Japan and just the history of how everything kind of degenerated into this white paper. And, you know, we didn't have a like today for some of you, we don't have a thousand.We didn't have a thousand channels back in 1980, basically ABC, NBC and CBS.

Tripp Babbitt: [00:11:15] And that was it. I mean, really that that you would listen to. So they almost had those three stations had a virtual monopoly on as far as television goes or communication goes. But the history of that is really relevant to me. I enjoyed that type of history, again, the same type of thing with mine again. And, you know, there were different quotes out of there. You listen to how Dr. Deming loved the fact that Bob Mason went to Harvard. We went to the business school and how Dr. Deming thought they were teaching the wrong things in Harvard Business School.

Tripp Babbitt: [00:11:56] And every time he would meet with Bob or see Bob, you would ask him about all the bad stuff that Harvard was teaching about business, which is not only funny, but it was interesting to me. So anyway, those are my top five.

Tripp Babbitt: [00:12:12] I didn't mean to slight anybody. I've learned so much from working with all of these or interviewing all of these different people and some of the conversations that I've had with them and certainly the post conversations that I've had with a lot of these folks about things that maybe were more relevant to me or thought were relevant to me and not necessarily relevant to the broader audience.

Tripp Babbitt: [00:12:35] But anyway, those are my top five. I will put links to those and this episode so people can can go and listen to them on their own. But that's what I wanted to cover this week. I hope this change would be a little bit different for you and learning about some other episodes and some of the things we've I don't know what the number is now of episodes that we've done, but it's a lot. So thank you for listening and we'll talk again in a month or so.

Tripp Babbitt: [00:13:10] Thank you for listening to the Deming Institute podcast, stay updated on the latest blogs, podcasts, programs and other activities at Deming dot org.

 

 

In our 39th "Deming Lens" episode, host Tripp Babbitt shares his interpretation of wide-ranging aspects and implications of Dr. Deming's theory of management. This month he looks at the book, The Reckoning" and some of the implications of it.

SHOW NOTES

[00:00:15]
Deming Lens - Episode 39

[00:02:53]
Deming Finds an Audience

 

 

Transcript

Tripp Babbitt: [00:00:15] In the 39 episode of The Deming Lens will discuss the book, The Reckoning and some of the questions that it leads us.

 

Tripp Babbitt: [00:00:28] Hi, I'm Tripp Babbitt, host of The Deming Lens, and this month I wanted to talk about a book called The Reckoning. Now you can go back to an interview I did with Dick Steele, who is a board of trustees member for the Deming Institute, where he had come across the same book, The Reckoning. It was published in 1986. It was written by David Halberstam. And this book was one that really enthralled me at the age of 26 as explaining kind of what was happening in the 80s and actually prior to that from World War Two up and two up until 1986. And I was captivated by primarily because I worked for an industrial distributor and I was seeing manufacturing begin to disappear. And I wasn't sure what was going on, but I knew something was going on and. When I started reading this book, it's it's Grapes of Wrath long, so it's not a short book, but if you are interested in that kind of understanding, the rise of Nissan, which was originally called Datsun, they didn't take on the family name until they started making quality products. And interesting story in and of itself. But the book would talk about the rise of Nissan and the fall of Ford during this time period and gives a great history of what was happening on a very intimate level with individuals involved and being named. I was going through my MBA program at the time. And this book really hit home with some of the things that I was studying and I thought, you know, I was studying operations and finance.

 

Tripp Babbitt: [00:02:53] And. As I read it, I got to I believe it's Chapter 19.I'm looking through the book as I look oh, excuse me, it's 17 chapters, 17 of the The Reckoning.And it says Deming finds an audience, and I didn't think much about it at the time until I started to read that the the chapter and it's started to talk about.

 

Tripp Babbitt: [00:03:25] W. Edwards, Deming and how he was revered in Japan and, you know, he was really famous in Japan and the Japanese were always puzzled when they come over to visit him in Washington, D.C., in the States, and he people in the United States didn't know who he was. And primarily his fame came from his knowledge of statistical quality control. And the Japanese had seen that as the as the reason for losing World War Two is that the U.S. had made quality products. And I thought, wow, why have I not heard of this guy? I'm going through an MBA program and a highly in an area with a lot of engineers that were in my MBA program that worked for a Whirlpool corporation.

 

Tripp Babbitt: [00:04:23] And I thought.I haven't even read his name once, and actually as I started to go back to some of my books that I was given during the course of my MBA and operations, it was a chapter we didn't cover. But there was a brief mention of Deming in there, but nothing about statistical quality control or any of those things.And.At the time, I was a sales rep for an industrial distributor, so I was going to night school to get get my MBA and one of the products that I sold was a company called MIDA Toyia. And they make measuring products. And they had come out with this thing about statistical, what we would probably know better as a statistical process control or as Dr. Wheeler likes to call it, process behavior charts was something that I saw in its infancy, at least in the U.S. being used that I had ever seen. Of course, now we know that was used during World War Two and it didn't prove that the products that were out there. And I also was listening to a video that's on YouTube about Huma Deming, who was in. Japan, and he was primarily charged with finding ways for General MacArthur to communicate to the masses right after World War Two because he had a problem, he couldn't communicate to everybody. And so Homer Deming went in and helped set up radios and radio stations and receivers so that people could have them in their home and hear what was kind of happening in their in their country. And so Homer Sarasohn was a big part of that. And he was a 29 year old guy who had worked on radars during the course of the war.

 

Tripp Babbitt: [00:06:31] But I found it very fascinating that I had never heard of this W. Edwards Deming. So I immediately went out to all of my professors and said, who is this guy? And I finally found a professor that had heard of him but didn't really know much about the work that was being done by Dr.Deming. And so that became the thesis for my or the subject of my thesis for my MBA program. And so I wrote about W. Edwards Deming and his focus on quality and that quality need to precede profit. And I have no idea where that paper is anymore. But regardless, it was something that captivated me. And I started to the very initial stages of understanding, statistical process, control and how to use it and how it could be used to benefit in improving the quality of products and services. And so it was became a lifelong obsession with me. And every once in a while, I go back and I read the reckoning and not necessarily all the pages, sometimes I do. The last time I read it, probably cover to cover was in 2000 seven, 2008, when the banking crisis started. And because there you go. There's another reckoning now. The things I'm going to say here are not they're not to be political. They are to be. What I see happening today is going to be something far worse than what we experienced in 2008 in that in the United States. Anyway, we're running up massive amounts of debt in the U.S. and inflation is starting to show, but not in necessarily ways that we're feeling it at the moment.

 

Tripp Babbitt: [00:08:36] The dollar has dropped. Some people are predicting a precipitous drop in the dollar, just like real estate fell during the banking crisis in 2008. I think we're on the verge, in my opinion, from the things that I've read of another reckoning. And the reckoning that's going to happen this time is going to be very financially devastating. The twenty seven trillion dollars in debt that the United States has, there's going to be a reckoning. And I think that some of the things, because we didn't listen to some of the things Dr. Deming talked about, which would have avoided the 2008 banking crisis, because, Dr. Drew, I mean, we talk about, you know, people are worried about bad service from a teller. He said the thing that's going to could ruin a bank are loans. And guess what ruined the banks in 2008 was the bad loans that they had written. We have a credit crisis here not only as a government in the United States, but even on the individual level. Well, we just recently passed a trillion dollar and consumer debt. So we have an issue that is manifesting itself here in the states. And there there's going to be another reckoning for the same reasons that Dr. Deming recognized back in the 80s as manufacturing started to fall apart. Now, we seem to not learn the same lessons each time we go through these things. So I'm hopeful that with all the things that are going on and the fact, you know, with the pandemic, with foreign relations and everything else, that we come to an understanding, there are certain things that need to be manufactured locally.

 

Tripp Babbitt: [00:10:34] And by virtue of that, we're going to take a different attitude on how we go about things. Now, I mentioned in a previous episode, I think a couple of episodes ago, I talked about how. You know, even our government is starting to recognize that captains of industry are short term thinkers and can't think to the long term because they're looking to do something for their an individual greater good as opposed to a broader system, greater good. And as I read The Reckoning, there was an excerpt from it that I think kind of hit home with me. And it says nothing of Paul Deming more than the idea of the interchangeable manager, what is the motivation and purpose of men like this? He would say with contempt, do they even know what they do anymore? What do they produce? All they knew about was numbers, not product. All they thought about was maximum profit, not the excellence of profit. Or product, the numbers, of course, he added, always lied, they know all the visible numbers, but the visible numbers tell them so little they know nothing of the invisible numbers. Who can put a price on a satisfied customer and who can figure out the cost of a dissatisfied customer? One of Deming's American disciples, Ron Moen, who has been interviewed on the Deming Institute podcast.

 

[00:12:14] Said it was as if Deming saw work as a kind of Zen experience, what he is really asking Mon and pointed out is what is the purpose of life and what is the purpose of work? Why are you doing this? Who truly benefits from what you do other than yourself? Those are not questions that many people in American business want to answer anymore. And so here we are. And I think these are the same questions that as we look to the future, no matter what happens, we're in an interesting thing. And I think this is a precursor to a certain reckoning, again, in the United States as these things cycle through. So I thought I would leave you with those questions this month to reflect on and how we might be able to do a greater good other than a greater good for ourselves.

 

[00:13:15] Thank you for listening to the Deming Institute podcast, stay updated on the latest blogs, podcasts, programs and other activities at Deming dot org.

 

 

In our 38th "Deming Lens" episode, host Tripp Babbitt shares his interpretation of wide-ranging aspects and implications of Dr. Deming's theory of management. This month he looks at short-term thinking.

SHOW NOTES

[00:00:15] Deming Lens #38 - Short-Term Thinking
[00:00:56] Attorney General Barr on American Executives
[00:04:15] Dr. Deming's Take on Short-Term Thinking

[00:09:56] We Need New Thinking in Executives

TRANSCRIPT

Tripp Babbitt: [00:00:15] This is the Thirty-eighth Episode of the Deming Lens. Hi, I'm Tripp Babbitt, host of The Deming Lens. And over the past month, I have been listening to some of the political things that have been going on, and they have no intention of making the Deming lens a political lens by any stretch. But there was something there was an interview with Attorney General William Barr.

Tripp Babbitt: [00:00:56] Now, no matter what your political affiliation, William Barr got on and he was talking about China and way, which they're putting in 5G networks all over the world, being helped by the Chinese Communist Party or the CCP.

Tripp Babbitt: [00:01:19] And a lot of this is being subsidized because at least the belief of this administration is, is that China will use this because they fund of the wall way or help fund Wall Way, give insight and to secrets and intellectual property and things of that sort all over the world.

Tripp Babbitt: [00:01:47] And what I thought was really interesting was some of the things that William Barr said.

Tripp Babbitt: [00:01:56] I've never heard anyone in government quite put it this way. I've heard about all the greed and stuff that are in corporations. You hear that talk quite a bit. But he was the first person that said, you know, that U.S. businesses are helping China in the race for economic and technological dominance by putting their earnings, their their organizational or company earnings above national interest. And that really just struck me. I've never heard a government official really talk in those terms before. There was the end in quotes, basically. Attorney General Barr said they're willing, ultimately, many of them meaning these companies, to sacrifice the long term viability of their companies for short term profit so that they can get their stock options to move to the golf resort.

Tripp Babbitt: [00:02:55] Now, that's a direct quote from William Barr in an Republican administration, which, like I said, it really struck me as something very different. And I think there's some frustration where there was expectation that a lot of the companies in the U.S. when they got the tax cuts, would be moving companies back. They'd be investing in things in their own company. But instead, they most of them have forgone dividends. But they've done a lot of stock buybacks, which artificially raises the price of stocks. And, you know, Barr's mantra was that these executives are not taking the long term view and then the national view of maintaining the American strength.

Tripp Babbitt: [00:03:48] So now there's all types of talk about maybe the U.S. is going to invest in Nokia, which is in Finland or Sweden's Ericsson or a combination of the both of the two, in order to compete against war way so that countries will have access to the 5G network.

Tripp Babbitt: [00:04:15] That from a basically free country. So I immediately when you hear these things, the first thing that hits you is, OK. This is Dr. Deming talking all over again about short term profits. And I talked about this a little bit and the stock buybacks and things like that. An episode in the Deming Lens, Episode 35. So you can go back and you can listen to that particular episode. But but when I was looking through for the short term profits, I found something that Dr. Deming said that that fit perfectly. So I just want to this is from out of the crisis. It. He says short term profits are not a reliable indicator of performance of management. Anybody can pay dividends by deferring maintenance, cutting out research or acquiring another company. And here, I might add, you know, doing Stipe's stock buybacks and options to put more money in executives pockets. But it goes on to say dividends and paper profits, the yardstick by which managers of money and heads of. These are judges to make no contribution to material living for people anywhere, nor do they improve the competitive position of a company or of an American industry. Paper profits do not make bread. Improvement of quality and productivity. Do they make a contribution to better material living for all people here and everywhere? And then I'll just finish this.

Tripp Babbitt: [00:05:57] This particular section that Dr. Deming goes on to say, people that depend on dividends live on to live on should be concern, not merely with the size of the dividend and today, but also with the question of whether there will be dividends three years from now, five years from now, 10 years from now. Minute management has the obligation to protect investment. Wow. And you Attorney General Barr's position is we're not being competitive with wall away because American management has to short term thinking. And then you wonder kind of what's changed in the United States since Dr. Deming observed these things back in the early 80s. Now, we know that the longevity of companies, let's say in the S&P 500 has narrowed that itch. It's shortened over the years. Yeah, a thirty three year average. Tenure of companies in the S&P 500 1964 narrowed to twenty four years in 2016 and is forecast to shrink to 12 years in 2027. Now, there's a couple different ways to look at this. I mean, yes, we have a rapidly changing environment where organizations are being disrupted or whole industries are being disrupted because of technology and the Internet.

Tripp Babbitt: [00:07:35] These are things that, you know, will continue to happen.But what hits me in the face is that none of these organizations are looking really to the long term when they're doing things like corporate stock buybacks. Dr. Deming talked about dividends and as I mentioned in Episode 35, that that's kind of been replaced by these stock options and artificially pumping up the stock price through the stock buybacks by making fewer stock, few fewer and fewer number of stocks available in the market. So we've got this environment going on and we're not reinvesting. I spoke to an executive recently and she told me that we're talking about making no change. And this was in the in the financial arena. And she told me that, well, our executives are getting close to retirement. And really what they're about as is getting as much money out of this financial institution than really trying to make significant change. You know that this is something like what I'm talking about and making huge transformation in an organization wouldn't fly because its executives just wouldn't be interested. And they're looking for the shortcuts to get their stock options higher and their bonuses higher and things of that sort. And I got to tell you, I I see this a lot and have seen it a lot in organizations over the years, especially as a consultant, because people are saying, well, what can you cut out of my organization? But there is a change going on. And I don't want to be completely pessimistic about what's going on in the environment today. I have all sorts of issues with plenty holes and some of the things that they think. But one of the things that they are about is the greater good. Now, I think sometimes that's misguided. But at the same time, they seem to be looking to not just stuff their own pockets.

Tripp Babbitt: [00:09:56] Now, a lot of them haven't risen necessarily to positions where they can make a lot of money and pocket the pocket themselves. And we'll be interesting to see. Do they follow the same path of many of the boomers that preceded them in executive positions and start to take that? But but I. I don't think so. I think there's enough going on our society about inequities that things will change for the better. And we'll start trying to do things that are for the greater good. And just a for instance, no matter what you think of Mark Cuban, I'm a huge shark tank fan. It's just it's good entertainment. But, you know, he's he has talked about, you know, we need to find ways to accumulate wealth. If we're going to give stop stock options to executives, maybe we should be giving them to employees. But I think these are that this is the type of thinking that is going to be need to be considered or the new theories that we need come up with the find ways to help get people out of poverty. You know, a lot of people talk about rebuilding the middle class, but there's inefficiencies in the way that we operate today when things go through these large institutions for things like Medicaid and food stamps and things of that sort. They have to go through these huge machines in government to dole out things that people need in order to be able to live. And that, to me, is is completely ineffective. And an inefficient way of doing it is putting through these big machines that have basically provision services at exorbitant rates. It's very expensive to send people back through the government. So these are. So this is some of the thinking, that I think we're going to need to tackle as we move forward.

Tripp Babbitt: [00:12:11] And you know, Dr. Deming, I think he nailed it back in the 80s. And we seem to be we seem to cycle through this to a certain degree. I think this great disparity that we have between, you know, what an executive salary is and an employee salary is, there's been a lot of light shined on it in the past where you thought maybe there would be some things I would be going. We've talked about women and equality of pay, minorities in pay. But I think as we start to recognize that some of the greed that has penetrated our system makes it something that that we're going to need to come up with new theories.

Tripp Babbitt: [00:13:01] And I think Dr. Deming had nailed it right from the beginning that we have to look much bigger at larger systems.

Tripp Babbitt: [00:13:09] Are we maximizing the value of our society as opposed to just our organization or our individual pocketbook? So that's what I wanted to talk about this week or this month on the Deming lens and just gives us something to think about, about how we want to run our organizations. I know one of the things that I'm doing, I'm building executive education program that has a lot of this in it. Not not to browbeat executives into to do something they don't want to do, but in essence, to make them aware of what their thinking is. And, you know, how does this how how does this play into the greater good of society and how can we make it better?

Tripp Babbitt: [00:13:56] Thank you for listening to the Deming Institute podcast, stay updated on the latest blogs, podcasts, programs and other activities at Deming dot org.