In Their Own Words

In this new series, John Dues and Andrew Stotz discuss John's model for improvement. This episode includes an overview of the model and how John uses it for goal-setting and planning in his school.

0:00:02.4 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is building an improvement model. John, take it away.

0:00:24.8 John Dues: It's good to be back, Andrew. Yeah, so we sort of wrapped up this last series. We had a six-part series on organizational goal setting. And we, if you remember, we talked through those four conditions that are important for organizational goal setting, especially healthy goal setting, where before we set a goal, we understand sort of how capable our system is. We understand how our data is varying within our system. We are looking at our system and seeing if it's stable or unstable. And then, of course, we want to have a method for how we go about improving. And so you kind of have to have an understanding of those four conditions before you set a goal.

0:01:03.6 JD: And I thought sort of as an extension of that, or possibly a new series, we could kind of take a look at an improvement model that would help us sort of better set ambitious goals. Because when we did those four conditions, it kind of leaves you wondering, well, how ambitious should my goals be? Should I still do stretch goals, those types of things? And I think this improvement model that we're building here at United Schools sort of addresses that. And it's something we're building.

0:01:34.4 JD: And so I think the listeners kind of get like a little bit of behind the scenes on what it looks like now. I think we'll see a version of it. And perhaps through this dialogue, through the series, we'll even think about ways to improve it.

0:01:48.4 AS: Can I ask you a question about that?

0:01:49.6 JD: Sure.

0:01:50.0 AS: One of the things, I do a lot of lectures on corporate strategy and workshops, and the lingo gets so confusing, vision, mission, values, and all kinds of different ways that people refer to things. But when I talk to my clients and my students, I oftentimes just tell them a vision is a long-term goal. And it could be a five-year or a 10-year goal. And because it's long-term, it's a little bit more of a vision as opposed to, you can see it very clearly. Like my goal is to get an A in this particular class, this particular semester. Whereas what I try to say is, a vision is: I want to be in the top of that mountain. And I want us all to be at the top of that mountain in five years. And I kind of interchangeably call that a long-term goal and a vision. And I'm just curious what your thoughts are on long-term versus short and medium as we go into this discussion.

0:02:53.8 JD: Yeah. I think as we get into the model, we'll actually see both of those things, sort of a long-term sort of goal, sort of a more intermediate thing, and then how you work back and forth between those two things. So I think that's a good segue.

0:03:08.4 AS: Let's get in it.

0:03:08.4 JD: Yeah. And so just maybe just a few other things about the model before we get right into it. So one thing to know I've come to appreciate is when when I say a model, I just mean something visually representative that helps us understand and communicate how we think things should be functioning in reality. So when I say improvement model, I'm actually like talking about a diagram on a piece of paper that you can put in front of everybody on your team. So everybody has an understanding for how you're approaching goal setting in this case.

0:03:38.1 AS: Would you call it an improvement visualization? Or what's the difference between what you mean by model and like something that I would call, let's say, a visualization?

0:03:49.5 JD: Yeah, I'd say it's a type of visualization when I say model.

0:03:52.8 AS: Okay. Excellent.

0:03:53.8 JD: Yeah, that's what I'm talking about. And I think you'll see it when we get into the model that definitely there's credit due to Mike Rother and his concept of Improvement Kata because this model heavily borrows from the work that he's done, if you're familiar with that four-step Improvement Kata process.

0:04:15.1 AS: Yeah. Very.

0:04:19.7 JD: But anytime, whatever the thing is that you call like key performance metrics, key metrics, whatever you call that thing that we all set in our organizations, there's always this gap between what we want and what we're currently getting. And this model gives us the scientific way of thinking and working to close basically that gap. In this world, the gap between the voice of the process and the voice of the customer, how do we close that gap? So that's sort of what the model is addressing. So I'll share my screen so you can see that and anybody that's watching can see what the model looks like. And I'll just kind of leave that up as I'm talking about it, put it in slideshow.

0:05:08.7 AS: Great. We can see that now.

0:05:14.6 JD: Great. So we can just start by just kind of giving an overview, especially for those people who are listening, but you can kind of picture like a path going up a mountain and that path has twists and turns. It has obstacles. In this particular diagram or model, there's rocks in the way of the path. There's a water hazard, there's trees in the way, there's a roadblock. And as you go, it's kind of strange because you're working your way up. And I'll explain this all as we go through it kind of one step at a time. But as you're working from left to right in the model, this four-step improvement model, you have a team over on the left. This team's working on a goal that you're setting. And then over on the left, you actually have step two, which is grasp the current condition. And then you have this big crack in the path that's called the threshold of knowledge. And I'll talk about what that is.

0:06:11.1 JD: And sort of the next step is actually step four, experiment to overcome obstacles as you're working left to right. You go further up this path, up this mountain. And number three, the step three is establish your next target condition. And then when you get all the way up the mountain and you have this challenge or direction. So that's what you were just talking about. So what's that long-term thing that you're trying to accomplish? We call that a challenge or direction. So the steps that you're taking actually chronologically are you're going to do number one first.

0:06:43.2 JD: You're going to set that challenge or direction, but it actually is the thing that you're working toward. That's the sort of beginning with the end in mind. So that's why it's way up on the mountain, but you're going to do that first. And the next thing you're going to do is go all the way back down to the start of the path and grasp whatever that current condition is in your organization. And then you're going to run experiments on the way to trying to get to the next sort of intermediate step, that next target condition. So four steps, and then you have this team working on it.

0:07:16.8 AS: Which I would say for the traditional American style, as from my perspective, it can be a bit confusing because you're starting with number one at the farthest point away instead of closest to you. Then you're going to come to number two. From a timeline perspective, it feels like you're kind of zigzagging back and forth in your thinking.

0:07:38.8 JD: Yep. You definitely are. And it takes a little bit to wrap your head around it, but we'll kind of work through this piece by piece. So let's start with the team. So you have these people on the left-hand side of this diagram. There's sort of three different groups within that team. And we've talked about this a number of times, but remember that there's this key concept when you're going to take a thinking systems or a systems view of an organization. That you have to have these three different groups of people. You have to have the people that are working on the system, the people that are working in the system, and then from Dr. Deming's perspective, you have to have somebody that has profound knowledge, has that lens. So again, someone from the outside that has profound knowledge. And then in our case, the people working in the system, generally speaking, are the students. And then you have to have the managers that have the authority to work on the system. So in our system, that would be teachers and school leaders. But this model is not specific to educational organizations. You could translate this to any other type of organization.

0:08:50.4 JD: So if we were a hospital, then perhaps the people working in the system, depending on the improvement project, could be nurses. And then the managers that have the authority to work on the system, maybe the hospital management team. And then someone from outside with profound knowledge could be either someone internally that has familiarity with the System of Profound Knowledge or someone that they bring in externally, like a consultant to help out. So the point is, is that, again, this team, whoever's working in the system is going to differ by the organizational sector that you're working in. But it translates in the system basically.

0:09:31.0 AS: It's interesting that I've seen this type of diagram or concept about work on the system, work in the system and a System of Profound Knowledge coach. But it just kind of clicked for me to think about it. It obviously, like when I work with a company, I'm working with the owners and the top management. And when I do that, we're working on the system.

0:09:58.5 JD: Yep.

0:10:00.2 AS: And I have the knowledge of the System of Profound Lnowledge. So I'm coaching them about the system. And then within the system, they have the employees who are executing on what they're trying to improve and do, but it just perfectly explains it. So I love that diagram.

0:10:17.8 JD: Yeah. And I have the same experience. And I think we've mentioned on this podcast before that in my world, we often have school or district-based improvement teams. And it's typically leaders of the organization, sometimes teachers, but almost never is it students working in the system that are a part of, or, providing significant input into the improvement. So, I think if you can combine, in our case, students working in the system, because they have things that they can identify in terms of how they experience the system that are different than the people that work on the system. And then having that third group that, or that person that has that outside profound knowledge, if you put all the three of those things together, I think you have a much better chance to improve. But I think in schools, that's probably never happening. I'm assuming that's the same in other industries as well.

0:11:08.3 AS: And this also explains why when Dr. Deming would see slogans and things like that, encouraging the workers to do better and higher quality, he was like, they don't have the authority to change the system.

0:11:22.5 JD: Right.

0:11:24.1 AS: And what you've said is the group that's working on the system has the authority or the ability to change the system.

0:11:35.4 JD: Yeah. This is one...the makeup of this team that's using this four-step process, that's one innovation that we've done to this model that would be different from the Improvement Kata. So in the Improvement Kata, there's just coach and learner. Usually sometimes there's a coach of the coach, a coach and a learner, depending on how it's represented, but this is in my view, an innovation where you have the work on the system group, the work in the system group, and then the System of Profound Knowledge coach. I haven't seen that in this model.

0:12:07.4 AS: And could that be because when Mike Rother was writing his book, he was particularly referring to Toyota.

0:12:18.7 JD: Could be. Could be.

0:12:19.5 AS: Where the workers have more authority to impact the system. Whereas in the typical American system, the worker doesn't really have the authority to stop the production line or something like that to the extent of the Japanese. So interesting point.

0:12:36.1 JD: Yeah, that's a really good point. My understanding of Mike Rother's work is he sort of derived this improvement model by watching, observing, working with Toyota over a very long period of time. So that very well could be the case. Cool. So we have the team, so let's go to step one, that's the challenge or direction. And I really like that because again, when we did that six part series on Goal Setting is Often an Act of Desperation, one thing that I did think was missing was like, well, still as an organization, we want to move forward. We want to improve. We want to be ambitious in how we're setting our goals, but I don't think that fully came through in the four conditions. And so I think layering this model on top of the four conditions really helps because I think it is important to be ambitious, especially when we're talking about like a mission driven organization, we need to be setting ambitious targets for student learning, coming to school, those types of things.

0:13:39.6 JD: So really what we're doing in step one of the model is we're asking the question, where do we want to be in the long run? So this is a long term goal. This is a longer range goal that would differentiate us from other schools if we achieved it. But currently when we think about this goal, it actually seems nearly impossible because it's so far from where we are currently performing. We don't know how we're going to get there. So an example in my world is, schools have been paying much closer attention to chronic absenteeism, which is when a student misses 10% or more of the school year. And those numbers basically skyrocketed towards the end of the pandemic and then for the last several years. So that's something we're focusing on as an organization. So our chronic absenteeism rate is really high, like 52%, something like that over the last several years. And we want to get that down to 5%. So there's this huge gap.

0:14:53.6 AS: That's a huge move.

0:14:54.5 JD: Huge gap, order of magnitude, right? To go from 52%, that's the voice of the process. That's what's actually happening. And the voice of the customer, what we want is 5%. And we really don't know how to get there. And that's going to be the case at the point where you're at step one, but you're doing that first. You're setting that challenge or direction. And that really is something that needs to be set, in my view, at the leadership level, at the management level. So, that's step one.

0:15:22.9 AS: And you just said something that's interesting is we really don't know how to get there.

0:15:25.6 JD: And we really don't know...

0:15:26.9 AS: I mean, if we knew how to get there, we'd probably be there.

0:15:28.6 JD: Yeah. Yep. Yep. So that's step one. That's why if you're able to view the model and you're watching the podcast and you can see the video, that's why number one happens first, even though it's on the far right hand in the upper right hand corner at the top of the mountain in the model.

0:15:45.8 AS: And is there a reason why it's a relatively vague thing, right? Challenge or direction.

0:15:54.0 JD: Yeah.

0:15:55.5 AS: Why is it vague as opposed to specific target, goal or saying something like that?

0:16:03.7 JD: Yeah. I mean, I think, I like challenge or direction. One, it fits on the page. And it sort of conveys that it's going to be a challenge. And it also, if you're going to work in this way to achieve something like that, that it's actually setting the direction of the organization, the direction that the organization is moving toward. So.

0:16:24.0 AS: In other words, is it acknowledging that we really won't, we really don't know that target. We think we know it, we see that mountain, but as we go closer to it, we want to go in that direction, but as we get closer, it'll become more clear exactly where we're going to be or want to be.

0:16:44.7 JD: Well, I think this would be something that... I think in my view, we're still learning. But when we set that challenge or direction, I guess I could see some circumstances where we would come off that, but I think we kind of want to set it in a way that really pushes us. Right. So I'd be, I mean, I think you could learn some things that would say, okay, maybe that wasn't the exact right number to set, but I'd also be careful about just adjusting it because it's hard.

0:17:13.2 AS: Okay. So you mentioned 5%.

0:17:17.9 JD: Yeah.

0:17:19.1 AS: Would that be, would you state it as achieve 5%?

0:17:25.9 JD: Yeah. 5% or less of our students are chronically absent.

0:17:30.4 AS: Okay. Keep going. I don't want to slow it down. But listeners may get it faster than I do. I'm a little bit slow and I have a lot of questions as we go along.

0:17:37.0 JD: No, no. And I think what we could do in future episodes is dig into each of the steps a little bit more too, and use this as an overview session.

0:17:46.9 AS: Yep.

0:17:48.3 JD: So that was step one. So now what's going to happen in step two, you're going to come all the way back down. Now you're at the very start of the path.

0:17:56.6 AS: Back to reality.

0:18:00.6 JD: Back to reality, step two. And the first thing you have to do, okay, we've set the target, this very challenging direction we want to head into because it's the right thing to do. The next thing we're going to do is grasp the current condition. And so in step two of the model, we're going to ask, where are we now? So we know the long-term goal and now we need to study the current process and how it operates basically. So basically this study represents our current knowledge threshold about the process. And then it's going to contribute to how we define the next target condition we've set that sort of intermediate step on the way to the challenge. And so a lot of that six-part series on goal setting is often an act of desperation, a lot of that learning is right here at what we're doing at step two, because we're creating a process behavior chart in a lot of cases, and understanding how our data is performing over time in this particular area. That's what grasping the current condition means.

0:19:02.6 JD: So part of it, it's a data thing. So in this chronic absenteeism example, what I'm gonna do is I know where I want to be. Now I need to understand where are we historically. And then also as a part of grasping the current condition, I may wanna do some things like interview students and families that are chronically absent, then sort of dig into why that is. Interview teachers about why they think that is. There's a number of things that you could do at this step on the ground where the work happens to grasp the current condition. And I think there can be a sort of quantitative component to that and a qualitative component to that. Also, we sort of understand like how are things actually working on the ground that contribute to us not being where we want to in this particular area.

0:19:56.7 JD: So that's step two. That's what we're gonna do next. After we've set the challenge or direction, we wanna sort of understand the situation on the ground, grasp the current condition. And then next what we're gonna do is step three, which is establish your next target condition. So in step three of the model, we ask where do we want to be next? So we know we can't make this leap, from 52% to, 'cause we wanna decrease it down to 5%. We know we're not, that's too big a step that we're just gonna get there somehow magically. So our target condition, then it's our next goal, usually within a time bound, achieve by date. In Mike Rother's work, he suggests something on a pretty short term scale. Something like one week or one month. So something like chronic absenteeism, I think one month would be sort of where I would set the next target condition. Just having experience with something like attendance rates.

0:21:07.0 JD: And at this point we don't exactly know how we'll achieve the next target condition, but it also, it doesn't feel as impossible as the challenge. So it's a step towards the challenge. So we're gonna do that next. So we set the big challenge that may take us three years to get to. Then we understand the current conditions on the ground and we use that knowledge to set our next target condition. So that's step three. And then the fourth step is we're gonna experiment to overcome obstacles.

0:21:45.9 AS: And before you go to fourth, let me just ask a question about establish your next target condition. One of the things that's missing from that, obviously is, you know, coming from a different perspective, is that when we say, all right, here's where we want to be, and let's go back to reality, and here's where we are. Sometimes, when people work like myself and others, work with people who say, okay, let's map out all the steps to get to that vision. What are the next five things we have to do? Whereas here you're saying, let's focus on the next target condition rather than the next five.

0:22:25.4 JD: Yep. And keep in mind when I say establish the next target condition, what I literally mean is what's our next intermediate goal that we're gonna shoot for? So if we're trying to get all the way down to 5% from 52, remember decrease is good in this case, establish my next target condition, maybe over the next month, I wanna see if I can get that from 52% down to 35% or down to 40%. Part of what I would look at when I set that next target condition is what did the variation look like when I was charting in step two? So the magnitude of that variation will give me some indication of what would be a reasonable sort of next step target for step three basically.

0:23:11.9 AS: And maybe just explain for those people not familiar with Mike Rother's work and, you know, terminology that you're using, why do you say establish your next target condition?

0:23:28.0 JD: I think, I don't know. I think that, you know, really what I mean is just establish the next target, establish the next intermediate goal, basically. Now, I think using the word condition is because when you think about something like chronic absenteeism, there's conditions that probably contribute to that and part of that condition may be the things that you wanna work on. So I kind of think of like, you know, 'cause when you look at step four, you're gonna experiment. So you're creating a new set of realities, a new set of conditions in your organization. And so sort of that coincides with the metric that you're shooting for. So it's not just the metrics, it's also like what are the conditions surrounding that metric. If that makes sense.

0:24:15.8 AS: Yep.

0:24:16.9 JD: Cool. And then step four then is experiment to overcome obstacles. So basically in step four of the model, we move toward the target condition with experiments. And by experiments, what I'm talking about is Plan, Do, Study, Act cycles or PDSA cycles, which uncover obstacles we'll need to work on. So the path, and that's the path in the model is windy 'cause it's this path to the target condition is not gonna be straight line, but it's gonna require this rapid learning to move in that direction basically. And so let's say we've set that next target condition to be one month from now, that's what we're shooting for. And we're gonna run a series of experiments. Maybe it's four one-week PSDA cycles, maybe it's two, two week PSDA cycles. Maybe it's one one month cycle. It depends on sort of the nature of the Plan, Do Study, Act cycle. But running these cycles where we make a plan, including a prediction, run the experiment, and then study what happens and see if it's moving us in the direction of the target condition.

0:25:40.0 JD: And so in that way, we're rapidly learning what it's gonna take to hit that next target condition. And the other important part of this, you'll see in between the grasping of the current condition at step two and running those experiments, there's this huge fault line, this huge crack in the path that you can't just jump over. And it's kinda labeled there, it says Threshold of Knowledge. And basically it's the point at which you have no facts and data to go on. That's the threshold of knowledge. There's always a threshold of knowledge. And so to see further beyond that threshold of knowledge, that's where you conduct your next experiment.

0:26:28.7 AS: Interesting.

0:26:29.8 JD: So because you, like you were saying, we wanna outline these five steps that we're gonna do. So with chronic absenteeism, I read somewhere a Harvard study where if you text parents what a kid's attendance rate is on a regular basis, they're then more likely to come to school on a frequent basis. So you could see where a school system would spend all this money to get a texting system, maybe even allocate a person or a half of a FTE of a person to run this system. And they faithfully implement this texting system, and it has no impact at their school to impact those chronic, because it had nothing to do with what the actual problem was in that context. And you've spent all this money. And that was just a hypothetical.

0:27:21.2 AS: And you could have done a pilot test of 10 parents or 20 and done it manually and sent out some messages and just tested a little bit.

0:27:31.1 JD: Yeah. You run a test with 10 chronically absent kids. Just to see if you can improve their attendance for a week. And maybe you learn something or for a month and maybe you learn something. And then if the early evidence is pointing in the right direction, then you can run that experiment with more kids or for a longer period of time or under slightly different conditions. Those types of things.

0:27:54.6 AS: So an example that I would say in relation to this for one of my clients is that we've identified that they need to get a higher gross profit margin.

0:28:04.7 JD: Okay.

0:28:05.5 JD: And their gross profit margin is about 23%. And I know that the average is about 30 in the industry. And so my work with them is how are we gonna get that profit margin to be 30 or 35%? 35 would be showing that you've really got pricing power because of something that we've done. And so, I'm pounding away that we've gotta improve this, but you know what? We don't have data to understand the current condition. And this week we've... It's taken us about a couple months to pull that data together. But now we have absolutely comprehensive data that my team has calculated on the profitability of every product, the profitability of every customer, and the profitability of every process. We know the capacity utilization of each part of the production process. So now we have the knowledge that we didn't have before that's gonna, that once get, digest this knowledge, it's gonna give us the indication of what to do next. Which is it's gonna be shut down a particular production process or increase price there. We may lose customers, but it's not worth doing it at this low price or so, but without that knowledge, we're just, it's a dream.

0:29:21.4 JD: Yeah. It sounds like you guys have done step one and step two in that process.

0:29:28.0 AS: Yeah. Which is exciting. 'Cause now Friday's meeting is gonna be about, all right, how do we take this huge amount of data and effort that we've put in and now it's time to come up with what are the steps that we're gonna take?

0:29:40.4 JD: Yeah. And I think even just in that situation, even just acknowledging that there's the threshold of knowledge. Even just getting people to acknowledge that in a room that they actually don't know what's gonna happen. That's the power of the PDSA because it makes you predict, okay, you say this thing is gonna work and when you put in this plan in place, this is your prediction. And then when you come back next week and it doesn't work, then you have to explain that, you know, it's not a gotcha, but it very quickly makes you think in a different way.

0:30:13.0 AS: It keeps a record so someone has gone back, well, I didn't think it was gonna work, you know, for sure.

0:30:18.8 JD: Well, right. And it's usually very like, some of the things that I found in that is when people are off on their predictions, it's very mundane things that they didn't account for. We're in student recruitment season and we set a goal for the number of calls we're gonna make to prospective families. And then hypothetically a recruitment director could fall short and it's like, well what happened? It's like, well, oh, the two part-time people that we had, I forgot they are actually out two days last week right? And so it's usually things like that are actually getting in the way of us accomplishing these grand targets that we have set.

0:31:05.5 AS: By the way, where does the threshold of knowledge fit? We've got number one challenge or direction, number two, grasp the current condition. It's after the grasp the current condition that we come to the threshold of knowledge.

0:31:17.7 JD: Yeah. Because, well, we have somewhat of an understanding of the condition on the ground, but we don't know what's gonna improve it until we run the experiments. So we start running the experiments and we try to sort of narrow that knowledge gap basically. And this is sort of the final part is basically like what do you do when you get to that experiment and when you hit that target condition, when you reach that by the achieve-by date, well now there's a new condition and you repeat the four steps because you haven't reached the challenge or the direction. You just met that sort of intermediate goal. And you basically keep running this four step cycle until that learned long-term challenge is achieved.

0:32:12.5 AS: Okay. Great. So we've got the establish your next condition down where it could be one week, it could be one month, in some cases it could be longer, but it's really our next intermediate goal. Where do we wanna go next? What's the next right step?

0:32:28.5 JD: Yeah. Well, so you go back to step two 'cause you're not gonna change the challenge or direction. Now there's a new set of conditions 'cause you've moved ahead, right? And now you're gonna go back and say, okay, what are the current conditions like? And now we're gonna, okay, let's say we move from 52% to 42%. Now we go back and sort of understand the experiments from that last cycle. And we're gonna set that next target condition. So maybe now we wanna get it down to 25%. And we're gonna run another round of experiments in a certain amount of time to see if it hits that next target condition. And basically you're just gonna keep doing this over and over again. That's really the continual improvement model that we're operating under.

0:33:22.7 AS: So how would we wrap this up?

0:33:24.4 JD: So the big thing for me is, you sort of have to have a model to bridge that gap between current conditions and future aspirations. Beause there's always a gap between those two things. And what this model does is it gives us a scientific way of thinking and working to close this gap. It's a more powerful model than I've ever sort of seen anywhere. And then literally you put it on a piece of paper like this and then you have to explain it to people over and over and over. And then you have to actually do it with people. So we're actually doing this, getting people excited about running PDSAs. And the most important thing is that the challenge or direction, especially for leaders that are listening to this, you don't stand on this mountaintop and set it and then say, go do it. That's why this team aspect is so important. We're setting this challenge or direction as a team, and then we're working together on the ground. Putting that work in, running those experiments to try to bring this thing about, is a completely different way of working. It's not an accountability system, it's an improvement system.

0:34:39.4 AS: Yeah. That's a great overview of this system that you guys are applying and it's exciting to learn more. So I wanna thank you on behalf of everyone at The Deming Institute, John. And I thought the discussion was very interesting myself. And for listeners, remember to go to deming.org to continue your journey. You can find John's book win-win W. Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools on amazon.com. This is your host, Andrew Stotz, and I wanna leave you with one of my favorite quotes from Dr. Deming. "People are entitled to joy in work."

Is reaching A+ quality always the right answer? What happens when you consider factors that are part of the system, and not just the product in isolation? In this episode, Bill Bellows and Andrew Stotz discuss acceptability versus desirability in the quality realm.

TRANSCRIPT

0:00:02.5 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today's episode, episode three, is Acceptability and Desirability. Bill, take it away.

0:00:28.1 Bill Bellows: Thank you, Andrew, and welcome back to our listeners.

0:00:30.7 AS: Oh, yeah.

0:00:31.4 BB: Hey, do you know how long we've been doing these podcasts?

0:00:36.6 AS: No.

0:00:40.8 BB: We started... Our very first podcast was Valentine's Day 2023. I was gonna say 2013. 2023, so roughly 17 months of podcast, Andrew.

0:00:53.4 AS: That was our first date, huh?

0:00:55.0 BB: Our first date was Valentine's Day 2023.

0:00:58.9 AS: All right. Don't tell your wife.

[laughter]

0:01:03.1 BB: All right. And so along the way, I've shared reflections from my first exposures to Dr. Deming, as well as my first exposures to Genichi Taguchi. Talked about Edward de Bono, Tom Johnson, others, mentors, Bill Cooper, Phil Monroe, Gipsie Ranney was a great mentor. Last week, Andrew, while on vacation in New England with my wife, I visited for a day my 85-year-old graduate school advisor who I worked with for ten years, Bob Mayle, who lives in, I would say, the farthest reaches of Maine, a place called Roque Bluffs. Roque Bluffs. How's that for... That could be North Dakota. Roque Bluffs. He's in what they call Down East Maine. He's recently got a flip phone. He's very proud. He's got like a Motorola 1985 vintage flip phone. Anyway, he's cool, he's cool. He's...

0:02:15.9 AS: I'm just looking at that place on the map, and looks incredible.

0:02:19.0 BB: Oh, yeah. He's uh, until he got the phone, he was off the grid. We correspond by letters. He's no internet, no email. And he has electricity, lives in about an 800 square-foot, one-floor bungalow with his wife. This is the third time we've visited him. Every time we go up, we spend one day getting there, one day driving home from where my in-laws live in New York. And then one day with him, and the day ends with going to the nearby fisherman's place. He buys us fresh lobster and we take care of them. [chuckle]

0:03:01.3 AS: Yeah, my sister lives in Kennebunk, so when I go back to the US, I'm...

0:03:08.8 BB: Yeah, Kennebunk is maybe 4 hours away on that same coast.

0:03:15.3 AS: I'm just looking at the guide and map book for Roque Bluffs' State Park, and it says, "a beautiful setting with oceanfront beach, freshwater pond, and hiking trails."

0:03:25.9 BB: Yeah, he's got 10 acres... No, he's got, I think, 20, 25 acres of property. Sadly, he's slowly going blind. He has macular degeneration. But, boy, for a guy who's slowly going blind, he and I went for a walk around his property for a couple hours, and it's around and around... He's holding branches from hitting me, I'm holding branches from hitting him and there's... Let alone the terrain going up and down, you gotta step up and over around the rocks and the pine needles and all. And it was great. It was great. The week before, we were close to Lake George, which is a 32-mile lake in Upstate New York. And what was neat was we went on a three-hour tour, boat ride. And on that lake, there are 30 some islands of various sizes, many of them owned by the state, a number of them owned privately. Within the first hour, we're going by and he points to the island on the left and he says it was purchased in the late '30s by Irving Langmuir. Yeah, so he says, "Irving Langmuir," and I thought, I know that name from Dr. Deming. That name is referenced in The New Economics.

0:04:49.1 BB: In fact, at the opening of Chapter Five of The New Economics, the title is 'Leadership.' Every chapter begins with a quote, right? Chapter Five quote is, "You cannot plan to make a discovery," so says Irving Langmuir. So what is... The guy's describing this island purchased back in the late '30s by Langmuir for like $5,000. I think it's... I don't know if he still owns it, if it's owned by a nonprofit. It's not developed. It's privately held. I'm trying, I wrote to Langmuir's grandson who did a documentary about him. He was a Nobel Prize-winning physicist from GE's R&D center in Schenectady, New York, which is a couple hours south of there. But I'm certain, and I was looking for it earlier, I know I heard of him, of Irving Langmuir through Dr. Deming. And I believe in his lectures, Deming talked about Langmuir's emphasis on having fun at work, having fun. And so I gotta go back and check on that, but I did some research after the day, and sure enough came across some old videos, black and white videos that Langmuir produced for a local television station, talking about his... There's like show and tell with him in the laboratory. And in there, he talks about joy and work and all that.

0:06:33.5 BB: So I'm thinking, that's pretty cool. So I'm waiting to hear from his grandson. And ideally, I can have a conversation with his grandson, introduce him to Kevin and talk about Deming's work and the connection. Who knows what comes out of that? Who knows? Maybe an interview opportunity with you and Irving Langmuir's grandson. So, anyway.

0:06:52.7 AS: Fantastic.

0:06:54.7 BB: But going back to what I mentioned earlier in my background in association with Deming and whatnot, and Taguchi, and I offer these comments to reinforce that while my interests in quality were initially all things Taguchi, and then largely Deming, and it wasn't long before I stopped, stepped back and an old friend from Rocketdyne 20 some years ago started focusing on thinking about thinking, which he later called InThinking. And it's what others would call awareness of our... Well, we called it... Rudy called it, better awareness of our thinking patterns, otherwise known as paradigms, mental models. We just like the way of explaining it in terms of becoming more aware of our thinking patterns. And I say that because... And what I'm presenting relative to quality in this series, a whole lot of what I'm focusing on is thinking about thinking relative to quality.

0:07:58.8 BB: And so last time, we talked about the eight dimensions of quality from David Garvin, and one of them was acceptability. And that is this notion in quality, alive and well today, Phil Crosby has created this focus on achieving zero defects. Everything meets the requirements, that gets us into the realm, everything is good. Dr. Deming and his red bead experiments talked about red beads and white beads. The white beads is what we're striving for. All the beads are good. The red beads represent defects, things we don't want. And that's this... Thinking wise, that's a thinking pattern of "things are good or bad." Well, then we can have high quality, low quality and quality. But at Rocketdyne, when I started referring to that as category thinking, putting things into categories, but in the world of quality, there's only two categories, Andrew: good and bad. This either meets requirements or it doesn't. And if it's good, then we're allowed to pass it on to the next person. If we pass it on and it's not good, then they're going to send it back to us and say, "Uh-uh, you didn't meet all the requirements." And what I used to do in class, I would take something, a pen or something, and I would go to someone in the seminar and I'd say, "If I hand this to you and it doesn't meet requirements, what are you going to say?" You're gonna say, "I'm not going to take it. It hasn't met the requirements."

0:09:36.4 BB: And I would say you're right. All the I's are not dotted, all the T's are not crossed, I'm not taking it. Then I would take it back and I'd say, "Okay, now what if I go off and dot all those I's and cross all those T's?" Then I would hand them the pen or whatever the thing was, and I'd say, "If all those things have been met," now we're talking acceptability. "Now, what do you say?" I said, "Can you reject it?" "No." I say, "So what do you say now that all those things... If you're aware that all those requirements have been met, in the world of quality, it is as good, now what do you say?" And they look at me and they're like, "What do I say?" I say, "Now you say, thank you." But what I also do is one more time... And I would play this out to people, I'd say, "Okay, Andrew, one more time. I hand you the pen, Andrew, all the requirements are met. And what do you say?" And you say, "Thank you." And I say, "What else just happened when you took it?"

0:10:45.4 AS: You accepted it.

0:10:47.3 BB: Yes. And I say, "And what does that mean?" "I don't know. What does that mean?" I said, "It means if you call me the next day and say, I've got a problem with this, you know what I'm going to say, Andrew?"

0:10:58.5 AS: "You accepted it."

0:11:01.5 BB: Right. And so, what acceptability means is don't call me later and complain. [laughter] So, I get a photo of you accepting it, you're smiling. So if you call me back the next day and say, "I've got a problem with this," I'd say, "No, no, no." So acceptability as a mental model is this idea that once you accept it, there's no coming back. If you reveal to me issues with it later, I deny all that. I'd say, I don't know what your problem with Andrew... It must be a problem on your end, because what I delivered to you is good. And if it is good, then there can't be any problems associated with it. So, if there are problems, have to be on your end, because defect-free, everything good, implies, ain't no problems, ain't no issues with it. I'm thinking of that Disney song, trouble-free mentality, Hakuna Matata.

[chuckle]

0:12:04.5 BB: But now I go back to the title, Acceptability and Desirability. One of Dr. Deming's Ph.D. students, Kauro [actually, Kosaku] Yoshida, he used to teach at Cal State Dominguez Hills back in the '80s, and I think sometime in the '90s, he went to Japan. I don't know if he was born and raised in Japan, but he was one of Dr. Deming's Ph.D. students, I believe, at NYU. Anyway, I know he's a Ph.D. student of Dr. Deming, he would do guest lectures in Dr. Deming's four-day seminars in and around Los Angeles. And, Yoshida is known for this saying that Americans are all about acceptability meets requirements, and the Japanese are about desirability. And what is that? Well, it's more than meeting requirements. And, I wanna get into more detail on that in future episodes. But for now, we could say acceptability is meeting requirements. In a binary world, it can be really hard to think of, if everything's met requirements, how do I do better than that? How do I continue to improve if everything meets requirements? Well, one clue, and I'll give a clue, is what I shared with the senior most ranking NASA executive responsible for quality.

0:13:46.4 BB: And this goes back to 2002 timeframe. And we had done some amazing things with desirability at Rocketdyne, which. is more than meeting requirements. And the Vice President of Quality at Rocketdyne knew this guy at NASA headquarters, and he says, "You should go show him what we're doing." So I called him up a week in advance of going out there. I had made the date, but I figured if I'm going to go all the way out there, a week in advance, I called him up just to make sure he knew I was coming. And he said something like, "What are we going to talk about?" He said something like, "We're going to talk about that Lean or Six Sigma stuff?" And I said, "No, more than that." And I think I described it as, we're going to challenge the model of interchangeable parts. And he's like, "Okay, so what does that mean?" So the explanation I gave him is I said, "What letter grade is required for everything that NASA purchases from any contractor? What letter grade is ostensibly in the contract? What letter grade? A, B, C, D. What letter grade is in the contract?" And he says, "Well, A+."

[laughter]

0:15:01.2 BB: And I said, "A+ is not the requirement." And he's like, "Well, what do you mean?" I said, "It's a pass-fail system." That's what acceptability is, Andrew. Acceptability is something is either good or bad, and if it's bad, you won't accept it. But if it's good, if I dot all the I's and cross all the T's, you will take it. It has met all the requirements. And that gets into what I talked about in the first podcast series of what I used to call the first question of quality management. Does this quality characteristic, does the thrust of this engine, does the roughness of this surface, does the diameter of this hole, does the pH of this bath meet requirements? And there's only two answers to that question, yes or no. And if yes is acceptable, and if no, that's unacceptable. And so I pointed out to him, much to his chagrin, is that the letter grade requirement is not A+, it's D- or better. [chuckle] And so as a preview of we'll get into in a future podcast, acceptability could be, acceptability is passing. And this guy was really shocked. I said, "Procurement at NASA is a pass-fail system."

0:16:21.9 BB: Every element of anything which is in that system purchased by NASA, everything in there today meets a set of requirements, is subject to a set of requirements which are met on a pass-fail basis. They're either, yes, it either meets requirements, acceptable, or not. That's NASA's, the quality system used by every NASA contractor I'm aware of. Boeing's advanced quality system is good parts and bad parts. Balls and strikes. And so again, for our viewers, acceptability is a pass-fail system. And what Yoshida... You can be thinking about what Yoshida's talked about, is Japanese companies. And again, I think it's foolish to think of all Japanese companies, but back in the '80s, that's really the way it came across, is all Japanese companies really have this figured out, and all American companies don't. I think that's naive. But nonetheless, what he's talking about is shifting from a pass-fail system, that's acceptability, to, let's say, letter grades of A's or B's. That would be more like desirability, is that it's not just passing, but an A grade or a B grade or a C grade. So that's, in round terms, a preview of Yoshida... A sense of, for this episode, of what I mean by acceptability and desirability.

0:17:54.7 BB: In the first podcast which was posted the other day, I made reference to, instead of achieving acceptability, now I can use that term, instead of achieving zero defects as the goal, in the world of acceptability, once we continuously improve and achieve acceptability, now everything is passing, not failing. This is in a world of what I refer to as category thinking, putting things in categories. In the world of black and white, black is one category, white is a category. You got two categories, good and bad. If everything meets requirements, how do you continuously improve if everything is good? Well, part of the challenge is realize that everything is good has variation in terms... Now we could talk about the not all letter grade A, and so we could focus on the things that are not A's and ask the question, is an A worthwhile or not? But what I was saying in the first podcast is my admiration for Dr. Deming's work uniquely... And Dr. Deming was inspired towards this end by Dr. Taguchi, and he gave great credit to that in Chapter Ten of The New Economics. And what I don't see in Lean nor Six Sigma, nor Lean/Six Sigma, nor Operational Excellence, what I don't see anywhere outside of Dr. Deming's work or Dr. Taguchi's work is anything in quality which is more than acceptability.

0:19:32.0 BB: It's all black and white. Again, Boeing's Advanced Quality System is good parts and bad parts. Now, again, I'm not suggesting that there's anything wrong with that. And I would also suggest in a Deming-based organization there may be characteristics for which all we need is that they're good. We don't need to know how good they are, we don't need to know the letter grade. And why is that? Because maybe it's not worth the trouble to discern more than that. And this is where I use the analogy of balls and strikes or kicking the ball into the net. If you've got an open net... That's Euro Cup soccer. There's no reason to be precisely placing the ball. All you want to do is get it into the net. And that's an area of zero defects, maybe all that is worthwhile, but there could be other situations where I want the ball in a very particular location in the strike zone. That's more of this desirability sense. So I want to clarify for those who listened to the first podcast, is what I'm inferring is I'm not aware of any quality management system, any management system in which, inspired by Dr. Deming and Taguchi, we have the ability to ask the question, is acceptability all that is required?

0:20:55.7 BB: And it could be for a lot of what we do, acceptability is not a bad place to be. But I'm proposing that as a choice, that we've thought about it and said, "You know what? In this situation, it's not worth, economically, the extra effort. And so let's put the extra effort into the things where it really matters." And if it doesn't... So use desirability where it makes sense, use acceptability elsewhere. Right now, what I see going on in organizations unaware of Dr. Deming's work, again, Dr. Taguchi's work, is that they're really blindly focusing on acceptability. And I think what we're going to get into is, I think there's confusion in desirability. But again, I want to keep that for a later episode. Now, people will say, "Well, Bill, the Six Sigma people are about desirability." No, the Six Sigma people have found a new way to define acceptability. And I'll give you one other fun story. When I taught at Northwestern's Kellogg Business School back in the late '90s, and I would start these seminars off by saying, "We're going to look at quality management practices, past, present, future." And so one year, I said, "So what quality management practices are you aware of?" And again, these are students that have worked in industry for five or six years.

0:22:17.6 BB: They've worked at GM, they worked at General Electric, they worked for Coca Cola, banking. These are sharp, sharp people. But you got into the program having worked somewhere in the world, in industry, so they came in with experience. And so they would say, zero defect quality is a quality management practice. And I'd say, "Okay, so where'd that come from?" And again, this is the late '90s. They were aware of the term, zero defects. They didn't know it was Philip Crosby, who I learned yesterday was... His undergraduate degree is from a school of podiatry. I don't know if he was a podiatrist, but he had an undergraduate... A degree in podiatry, somebody pointed out to me. Okay, fine. But Philip Crosby, his big thing was pushing for zero defects. And you can go to the American Society for Quality website to learn more about him. Philip Crosby is the acceptability paradigm. So, students would bring him up and I'd say, "Okay, so what about present? What about present?" And somebody said, "Six Sigma Quality." So I said, "So what do you know about Six Sigma Quality?" And somebody said," Cpk's of 2.00." And I said, "So what's... " again, in a future episode, we could talk about Cpk's."

0:23:48.5 AS: But I said to the guy, "Well, what's the defect rate for Six Sigma... For Cpk's or Six Sigma Quality or Cpk's of 2?" And very matter of factly, he says, "3.4 defects per million." So I said, "How does that compare to Phil Crosby's quality goal from 1962? Here we are, 1997, and he's talking about Motorola and Six Sigma Quality, a defect goal of 3.4 defects per million. And I said, "How does that compare to Phil Crosby's quality goal of zero defects in 1962?" And the guy says... [chuckle] So cool, he says, "Well, maybe zero is not worth achieving." 'Cause again, zero was the goal in 1962. Six Sigma sets the goal for 3.4 per million. Not zero, 3.4, to which this guy says... And I thought it was so cool, he says, "Well, maybe zero is not worth achieving." So, there. Well, my response was, "Well, what makes 3.4 the magic number for every process in every company around the world? So, what about that?" To which the response was crickets. But what I want to point out is we're still talking about zero... I mean 3.4 is like striving towards zero and admitting some. It is another way of looking at acceptability. It is... And again, and people claim it's really about desirability. I think, well, there's some confusion in desirability and my hope in this episode is to clear up some of that misunderstanding in acceptability as well as in desirability. And they... Let me just throw that out.

0:25:58.1 AS: Yeah, there's two things that I want to say, and the first one is what he should have replied is, for those older people listening or viewing that can remember the movie, Mr. Mom with Michael Keaton, I think it was. And he should have replied, "220, 221, whatever it takes." And he should have said, "Well, yeah, 3.4, 3.5, 3.6. It's could be around there."

0:26:27.5 BB: Well, the other thing is, why we're on that is... And I think this is... I'm really glad you brought that up, is, what I would push back on the Lean and the Six Sigma, those striving for zero defects or Cpk's of 2 or whatever they are is, how much money are we going to spend to achieve a Cpk of 2, a zero defects? And again, what I said and... Well, actually, when I posted on LinkedIn yesterday, "I'm okay with a quality goal of 3.4 defects per million." What I'm proposing is, instead of blindly saying zero defects is the goal and stop, or I want Cpk's of 1.33 or whatever they are everywhere in the organization, in terms of the economics of variation or the new economics, is how much money are we going to spend to achieve zero or 3.4 or whatever it is? And, is it worth the return on the investment? And this is where Dr. Taguchi's loss function comes in.

0:27:49.2 BB: And so what I'm proposing, inspired by Genichi Taguchi and W. Edwards Deming is, let's be thinking more about what is... Let's not blindly stop at zero, but if we choose to stop at zero, it's an economic choice that it's not worth the money at this time in comparison to other things we could be working on to improve this quality characteristic and that we've chosen to be here... Because what I don't want people to think is what Dr. Deming and Taguchi are talking about is we can spend any amount of money to achieve any quality goal without thinking of the consequences, nor thinking about, how does this goal on this thing in isolation, not make things bad elsewhere. So we have to be thinking about a quality goal, whether it's worth achieving and will that achievement be in concert with other goals and what we're doing there? That's what I'd like people thinking about as a result of this podcast tonight.

0:28:56.0 AS: And I think I have a good way of wrapping this up, and that is going back to Dr. Deming's first of his 14 Points, which is, create constancy of purpose towards improvement of product and service with the aim to become competitive, to stay in business, and to provide jobs. And I think that what that... I link that to what you're saying with the idea that we're trying to improve our products and services constantly. We're not trying to improve one process. And also, to become competitive in the market means we're improving the right things because we will become more competitive if we are hitting what the client wants and appreciates. And so... Yeah.

0:29:46.3 BB: But with regard to... Absolutely with regard to our customers, absolutely with regard to how it affects different aspects of our company, that we don't get head over heels in one aspect of our company and lose elsewhere, that we don't deliver A+ products to the customer in a losing way, meaning that the A+ is great for you, but financially, we can't afford currently... Now, again, there may be a moment where it's worthwhile to achieve the A... We know we can achieve the A+, but we may not know how to do it financially. We may have the technology to achieve that number. Now, we have to figure out, is, how can we do it in an economically advantaged way, not just for you, the customer, but for us. Otherwise, we're losing money by delivering desirability. So it's gotta work for us, for you, but it's also understanding how that improvement... That improvement of that product within your overall system might not be worthwhile to your customer, in which case we're providing a... The classic...

0:31:18.8 AS: You're not becoming competitive then.

0:31:21.8 BB: The better buggy whip. But that gets into looking at things as a system. And this is... What's invaluable is, all of this is covered with a grasp of the System of Profound Knowledge. The challenge is not to look at goals in isolation. And even I've seen people at Lean conferences quote Dr. Deming and his constancy of purpose and I thought, well, you can have a... A non-Deming company has a constancy of purpose. [chuckle] The only question is, what is the purpose? [laughter] And that's when I thought, a constancy of purpose on a focus on acceptability is good provided all of your competitors are likewise focusing on acceptability. So I just be... I just am fascinated to find people taking Deming's 14 Points one at a time, out of context, and just saying, "Well, Dr. Deming said this." Well, there we go again. [laughter]

0:32:29.9 AS: Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. If you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."

In this episode, Bill Bellows and Andrew Stotz discuss David Garvin's 8 Dimensions of Quality and how they apply in the Deming world. Bill references this article by Garvin: https://hbr.org/1987/11/competing-on-the-eight-dimensions-of-quality

TRANSCRIPT

0:00:02.4 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. This is the Misunderstanding Quality series, episode two, The Eight Dimensions of Quality. Bill, take it away.

0:00:30.4 Bill Bellows: Welcome back, Andrew. Great to see you again. All right, episode two, we're moving right along. So in episode one, which the title I proposed, waiting to see what comes out, the title I proposed was, Quality, Back to the Start. And that was inspired by some lyrics from Coldplay. Anyway, but this is a, it's going back to my start in quality and last time I mentioned discovering Taguchi's work long before I discovered Dr. Deming. In fact, Gipsie Ranney, who is the first president of the Deming Institute, the nonprofit formed by Dr. Deming and his family just before he passed away, and Gipsie became the first president and was on the board when I was on the board for many years. And I spoke with her nearly every day, either driving to work or driving home. And once, she calls me up and she says, "Bill," that was her Tennessee accent, "Bill."

0:01:50.5 BB: She says, "It says on The Deming Institute webpage that you infused Dr. Taguchi's work into Dr. Deming's work," something like that, that I... Something like I infused or introduced or I brought Taguchi's work into Deming's work, and I said, "Yes." I said, "Yeah, that sounds familiar." She says, "Isn't it the other way around?" That I brought Deming's work into Taguchi's work. And I said, "No, Gipsie," I said, "It depends on your starting point. And my starting point was Dr. Taguchi." But I thought it was so cool. She says, "Bill don't you have it? Don't you... " She is like, "Isn't it the other way around?" I said, "No, to me, it was all things Taguchi, then I discovered Dr. Deming." But I was thinking earlier before the podcast, and I walked around putting together how, what I wanna talk about tonight. And I thought, when I discovered Taguchi's work, I looked at everything in terms of an application of Dr. Taguchi's ideas.

0:03:29.7 AS: And one question about Taguchi for those people that don't know him and understand a little bit about him, was he... If I think about where Dr. Deming got at the end of his life, it was about a whole system, the System of Profound Knowledge and a comprehensive way of looking at things. Was Taguchi similar in that way or was he focused in on a couple different areas where he really made his contribution?

0:04:03.9 BB: Narrower than Dr. Deming's work. I mean, if we look at... And thank you for that... If we look at Dr. Deming's work in terms of the System of Profound Knowledge, the elements of systems psychology, variation, theory of knowledge, Taguchi's work is a lot about variation and a lot about systems. And not systems in the sense of Russ Ackoff systems thinking, but variation in the sense of where's the variation coming from looking upstream, what are the causes of that variation that create variation in that product, in that service?

0:04:50.9 BB: And then coupled with that is that, how is that variation impacting elsewhere in the system? So here I am receiving sources of variation. So what I deliver it to you has variation because of what's upstream of me and Taguchi's looking at that coupled with how is that variation impacting you? So those are the systems side, the variation side. Now, is there anything in Deming, in Taguchi's work about psychology and what happens when you're labelling workers and performance appraisals and, no, not at all.

0:05:37.6 AS: Okay, got it.

0:05:38.4 BB: Is there anything in there about theory of knowledge, how do we know that what we know is so? No, but there's a depth of work in variation which compliments very much so what Dr. Deming was doing. So anyway, so no. And so I discovered Taguchi's work, and I mentioned that in the first episode. I discovered his work, became fascinated with it, started looking at his ideas in terms of managing variation to achieve incredible... I mean, improved uniformity to the extent that it's worthwhile to achieve. So we were not striving for the ultimate uniformity, it's just the idea that we can manage the uniformity. And if we... And we'll look at this in more detail later, but for our audience now, if you think of a distribution of the variation in the performance of a product or a service, and you think in terms of... It doesn't have to be a bell-shaped distribution, but you have a distribution and it has an average and it has variation.

0:06:50.4 BB: What Dr. Taguchi's work is about in terms of a very brief, succinct point here in episode two is how might we change the shape of that distribution? How might we make it narrower, if that's a worthwhile adventure? It may be worthwhile to make it wider, not just narrower, but in both cases, we're changing the shape of the distribution and changing the location. So Taguchi's work, Taguchi's Methods, driven by variation comes to me, variation impacts you is how do I change the shape and location of that distribution? So on a regular basis, as I became more fascinated with that, I started thinking about, well, how might I apply Taguchi's ideas to these things that I encountered every day? Well, prior to that before discovering Taguchi's work, when I was a facilitator in problem solving and decision making training, I did the same thing, Andrew.

0:07:52.4 BB: I started looking at, oh, is this a problem? Is this a decision? Is this a situation that needs to be appraised? And so prior to that, what I was thinking about is when I was just a heat transfer analyst working on my Ph.D., I didn't look at how the heat transfer stuff affected all these other aspects of my lives. I didn't think about it when I went into a supermarket, but there was something about the problem solving and decision making that just infatuated me. And I would look at, oh, is Andrew talking about a decision or is Andrew talking about a problem? So I started hearing things. And so when I went into Taguchi's work, it was the same thing. And then shifting into Deming's work, it's the same thing. And I've... There's nothing else that I've studied that I look at things through those lenses. Anyway, so in studying, getting exposed to Taguchi, I mentioned that I had some time away from work, I went out on medical for some reasons and went and bought a book, a bunch of books.

0:09:02.4 BB: And one of the books I bought by David Garvin had come out in 1987, is entitled "The Eight Dimensions of Quality." There's a Harvard Business Review article that I wanna reference in this episode, and I'll put a link to the article. It's a free link. And so when you hear people talk about a quality product or a quality service or quality healthcare. We think in terms of it's quality as things, it's either good quality or bad quality or high quality, or somebody calls it low quality, or we just say it's a quality product. But what does that mean? So what I find is very loosely, we think in terms of categories of quality, good, bad, high, low. What we'll look at in a future episode is what would happen if we thought about quality on a continuum, which I believe Taguchi's work really demonstrates vividly as well as Dr. Deming's work.

0:10:07.4 BB: But even to back up before we talk about the eight dimensions of quality, I wanted to give some background on the word quality. The word quality, and this comes from an article and I'll put a link to this article, I wrote it for the Lean Management Journal a number of years ago, the word quality has Latin roots, beginning as qualitas, T-A-S, coined by the Roman philosopher and statesman, Marcus Tullius Cicero. He later became an adversary of this bad guy named Mark Antony. You've heard of him. Feared by Antony, this guy was feared by Antony because his power of speech led, you know what it led to, Andrew, his power of speech?

0:10:54.5 AS: What?

0:10:54.6 BB: His beheading.

0:10:55.8 AS: Oh my goodness.

0:10:56.5 BB: So for those of you with great powers of speech, watch out for your Mark Antony. But meanwhile, he introduced fellow Romans to the vocabulary of qualitas, quantitas, quantity, humanitas, humanities, essentia, which is, essence, he also is credited with an extensive list of expressions that translate into English today. Difference, infinity, science, morale. Cicero spoke of qualitas with his peers when focusing on the essential nature, character or property of an object. And this is kind of interesting. I mean, you can count how many apples do we have. And again, he came up with the term quantitas for quantity, but he is also talking about the essence of the apples. That's the quality word. And then 2000 years later when writing "The New Economics", Dr. Deming provided his definition and a little bit different.

0:12:05.3 BB: He says, "The problem anywhere is quality. What is quality?" Says the good doctor, "A product or service possesses quality if it helps somebody, it enjoys a good and sustainable market." And I said in the article, "As with Cicero, Deming saw quality as a property." And then some other background on quality before I talk about Garvin, "long after Cicero and well before Deming, quality as a property was a responsibility of guilds." Guilds. I mean, now we have writers guilds, we have actors guilds, and it's kind of cool that these guilds still exist and they are associations of artisans who control the practice of their craft, each with a revered trademark. So here in Los Angeles, we have writers guilds, actors guilds. They were organized as professional societies, just like unions.

0:13:00.2 BB: And these fraternities were developed, and within these fraternities they created standards for high quality. All right. So what is this quality management stuff from David Garvin? So this article was written 37 years ago and reviewing it for tonight's episode and I thought it fit in really, really well. I was reminded of... First time I read this article, 1989, I knew a lot about... Well, I knew, I was excited about Taguchi as I knew a lot about Taguchi, didn't know a lot about Dr. Deming. So I'm now reviewing it years later with a much deeper, broader Deming perspective than at that time. But I do believe, and I would encourage the listeners to get ahold of the article, look at it, if you wanna go into more depth, there's Garvin's book. And doing some research for tonight, I found out that he passed away in 2017, seven or so years ago.

0:14:04.6 BB: He was, I guess from, most of his career and education he was at the Harvard Business School, very well respected there. And so in the article it talks about, again, this, 1987, that's the era of Total Quality Management. That's the era in which Dr. Deming was attracting 2000 people to go to his seminars. 1987 is two years before Six Sigma Quality, two years before "The Machine That Changed The World." And in the article, he says, "Part of the problem, of course, is that Japanese and European competition have intensified. Not many companies tried to make quality programs work even as they implemented them." This is back when quality was an era of quality circles. He says, "In my view, most of the principles about quality were narrow in scope. They were designed as purely defensive measures to preempt failures or eliminate defects, eliminate red beads."

0:15:10.3 BB: "What managers need now is an aggressive strategy to gain and hold markets with high quality," there we go again, "as a competitive linchpin." All right. So in the article, he has some interesting explanations of... Highlights. In the book is more depth. He talks about Joseph Juran, "Juran's Quality Handbook". Juran observed that quality could be understood in terms of avoidable and unavoidable costs. Dr. Deming talked about the economics. The New Economics, right? But Juran is looking at avoidable, unavailable costs resulting from defects in product failures. That's very traditional quality today. The latter associated with prevention, inspection, sampling, sorting, quality control. And so this is what I found fascinating, is 37 years later, this is still the heavy sense of what quality is all about. Avoiding failure, avoiding defects.

0:16:18.3 BB: Then he talks about Total Quality Control coming from Armand Feigenbaum, who was a big name in the '80s. Again Dr. Deming's work kind of created this big quality movement but it wasn't just Dr. Deming people discovered, they discovered Philip Crosby in a Zero Defects advocacy, Feigenbaum, Juran, sometime later. Again, mid '80s, Dr. Taguchi's name started to be heard. All right. And then the reliability. All right. Now I wanna get into the... Oh, here's, this is good. "In 1961, the Martin Corporation, Martin Company was building Pershing missiles for the US Army. The design of the missile was sound, but Martin found that it could maintain high quality only through massive inspection programs."

0:17:13.0 BB: You know what Dr. Deming would say about inspection? It's after the fact. Sorting the good ones from the bad ones after the fact. No prevention there. But Martin found that it could only do it with inspection. And decided to offer... Again, this is 1961, and this is still the solution today, decided to offer workers incentives to lower the defect rate. And in December, 1961, delivered a Pershing missile to Cape Canaveral with zero discrepancies. Buoyed by this success, Martin's general manager in Florida accepted a challenge issued by the Army's missile command to deliver the first Pershing missile one month ahead of schedule. He went even further, he promised that the missile would be perfect. Perfect. You know what that means, Andrew?

0:18:12.3 AS: Tell us.

0:18:12.8 BB: All good, not bad.

0:18:14.9 AS: All good, not bad.

0:18:15.9 BB: He promised missile would be perfect with no hardware problems or document errors, and that all equipment would be fully operational 10 days after delivering. And so what was neat in going back to this is we still have this mindset that quality is about things being good, not bad. What is bad we call that scrap, we call that rework. That's alive and well today.

0:18:45.0 AS: The proclamations are interesting when you listen to what he's saying, when you're quoting that.

0:18:52.4 BB: Yeah, no, and I remember, 'cause again, I read this recently for the first time in 37 years and I'm going through it. And at the time I was thinking, "Wow, wow, wow, this is a really big deal. This is a really big deal." Now I look at it and say, "This is what we're still talking about today, 37 years later." The absence of defects is the essence of quality. All right. But so I would highly recommend the article. Now we get into what he proposes as eight critical dimensions of quality that can serve as a framework for strategic analysis. And I think even in a Deming environment, I think it's... I think what's really cool about this is it provides a broad view of quality that I think Deming's work fits in very well to, Dr. Taguchi's work fits in very well to, and I think covers a lot of what people call quality. So the first dimension he talks about is performance.

0:20:01.4 BB: And he says, "Of course, performance refers to a product's primary operating characteristics." He says, "For an automobile, performance would include traits like acceleration, handling, cruising speed. For a television, sound and picture clarity." He says "A power shovel in the excavation business that excavates 100 cubic yards per hour will outperform one that excavates 10 cubic yards per hour." So the capacity, that could be miles per gallon, carrying capacity, the resolution of the pixels, that's what he calls performance. Okay. Features is the second dimension of quality. Examples include free drinks on an airplane, but not if you're flying a number of airlines they charge you for those drinks, permanent press cycles on a washing machine, automatic tuners on a color television set. A number of people in our audience won't know what those are, bells and whistles. Features are bells and whistles.

0:21:17.2 BB: There was a time people would say the number of cup holders in your automobile, a feature could be intermittent wipers. So these are features. So again, I mean, so performance is kind of cool. What is the capacity, is it 100 horsepower, 200 horsepower, that's performance. Features, bells and whistles. Okay. Fine. Reliability, now we're talking. The dimension represents the probability of a product malfunctioning or failing within a specified period of time. So your car breaking down, are you gonna drive to work every day and one morning you're gonna go out and it's... That's a reliability issue. Okay. That's... When I think about reliability, that's a Taguchi thing, that's a Deming thing. And looking at time between failures, okay, fine. Reliability comes down to... And if importance for the impact of downtime, if you're looking at engines not working and you're sitting at the gate, that's a reliability issue. The reliability is, it can be repaired, but it's gonna take some time, perhaps. Conformance. All right.

0:22:40.4 AS: Is number four, right?

0:22:42.2 BB: This is number four, a related dimension of quality is conformance or the degree to which a product's design and operating characteristics meet established standards. "This dimension owes to the importance of traditional approaches," it says, "to quality pioneers such as Juran." All products and services involve specifications of some sort. When new designs or models are developed, dimensions are set for parts or purity, these specifications are normally expressed as a target or a center. Now it's starting to sound a little bit like Dr. Taguchi's work, an ideal value, deviance from the center within a specified range. But this approach equates good quality with operating inside the tolerance band. There is little interest in whether the specifications have been met exactly. For the most part, dispersion within specifications is ignored. Ignored. That's balls and strikes, Andrew, balls and strikes.

0:23:51.2 BB: As long as the ball is somewhere in the strike zone, as long as the characteristic is somewhere within requirements, conformance, this gets into what I talk about in terms of the question number one of quality management. Has the requirement been met, the requirement for the performance, the dimension, is it within requirements? And there's only two answers, yes or no. That's conformance. I used to think that the American Society for Quality might be better known as the American Society for the Preservation of Conformance. I find there's a lot of conformance thinking. I'm reminded of, I'm a member of the American Society for Quality as I'm on the Deming Medal Committee, so I have to be a member of ASQ. So I get a daily or every other day newsletter with comments and conformance is a big part of the conversation. Good parts and bad parts, scrap and rework. All right.

0:25:02.3 BB: Conformance is number four. And it's not to say there isn't a place for the conformance, but conformance is then again different from what Dr. Taguchi is talking about. All right. Durability, the measure of a product life. Durability has both economic and technical dimensions. Durability is how long does it work before I throw it away? So reliability is about, I can repair it. Okay. And that's an inconvenience. Durability is like light bulbs. It runs and runs or a refrigerator and someone says, "Well, it's time for a new one." That's a durability issue. Okay. Durability is the amount of use you get before you haul it off to the junkyard. That's durability. Okay. Serviceability. And back in the '60s, now I'm dating myself, there would be commercials for... I don't know which television brand, but what they talked about is, and these would be commercials. Commercials on television as to "our TV is easy to repair." And I thought, is that a good thing?

[laughter]

0:26:22.4 AS: Is that a foreboding?

0:26:24.4 BB: Yeah. And so... But again, the last couple of days I had to fix the sprinkler system in the backyard. And here in California we have, everybody has a sprinkler system. In the East Coast, people have above ground sprinkler systems. Here, they're all below ground. You don't have to worry about the lines freezing, at least in Los Angeles. And so anyway, one of the valves broke and I thought I was gonna buy a new one and take some of the parts from the new one to put it into the old one. And that didn't quite work. And so meaning to say, serviceability on the design was awful. I couldn't service it.

0:27:11.5 BB: I had to replace the whole damn thing, which was a lot more work than I was expecting. Anyway, however they designed it, serviceability didn't seem to be a consideration in the... That's dimension number six. Again, not to say there's anything wrong with thinking about serviceability. In terms of... Yeah. Okay, I'll leave it with that. Okay, serviceability. Number seven, aesthetics. The final two dimensions of quality are the most subjective, aesthetics, how a product looks, feels, sounds, taste, or smells is clearly a matter of personal judgment. Nevertheless, there seem to be patterns, a rich and full flavor aroma.

0:28:01.0 BB: That's got nothing to do with Dr. Taguchi's work. I mean, you can go off and do market research, find out what is the most appealing flavor, the most appealing taste, the most appealing aroma. And this is what I used to tell students is, and once you understand that or that vivid color that attracts the customer, then you could use Dr. Taguchi's work for, how can I reliably, predictably recreate, week after week, day by day, car by car, that aroma, that flavor, but Taguchi's work is not gonna tell you what it is. And then the last dimension of quality, you ready, Andrew?

0:28:45.8 AS: Give it to me, Bill.

0:28:47.7 BB: Perceived quality. "Consumers do not always have complete information on a product's attributes and direct measure is maybe their only basis. A product's durability can seldom be observed." And so we talk about perceptions of quality. Again, this is 1987, he says, "For this reason, Honda, which makes cars in Marysville, Ohio, and Sony, which builds color TVs have been reluctant to publicize that their products..." Ready? "Are made in America." Because the perception in 1987 is we want them to be made in Japan. And then we could talk about the perception of Cadillac quality, the perception of Jaguar quality.

0:29:35.7 BB: My father's gas station back in the early '70s, it was a block away from the nearby hospital. So a lot of our customers were doctors and they came in in their Cadillacs and Mercedes. And it was just a lot of fun. It was pretty cool. And one doctor against all of his peers' recommendations bought a Jaguar XJ12, V12, 12 cylinders, and they told him again and again, they said, "It'll spend more time in the shop than you driving it." No, no, no, he had to have one, he had to have one. And sure enough, it spent most of the time in the shop, but I got to drive it now and then, which was pretty cool. But that's perceived quality.

0:30:27.5 BB: So I just wanted to, in this episode, throughout those eight dimensions of quality. Again, I encourage our listeners, viewers, I think to get a broader sense of quality before you just look at quality from Dr. Deming's perspective, quality from anyone else's. I think that Garvin has done a really good job covering eight bases, if I can use that term, of quality. And then what I think is neat is to look at which of these tie into Deming's work, which of these tie into Dr. Taguchi's work? And that's what I wanted to cover in this episode.

0:31:01.8 AS: Fantastic. Well, let's just review that for the listeners and the viewers out there, eight dimensions. The first one is performance, the second one is features, the third one is reliability, the fourth one is conformance, the fifth one is durability, the sixth one is serviceability, the seventh one is aesthetics, how it feels and all that, and then the eighth one is perceived quality. Woah, that was...

0:31:29.4 BB: All about... Yeah. And it is reputation. You either have a great reputation or not.

0:31:38.3 AS: All right. Well, Bill, on behalf of everyone at the Deming Institute, I want to thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. And if you wanna keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."

Where did your "quality journey" start? In this first episode of a new series on quality, Bill Bellows shares his "origin story," the evolution of his thinking, and why the Deming philosophy is unique.

TRANSCRIPT

0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey in the teachings of Dr. W Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. This is a new series called Misunderstanding Quality, and the topic for today is Quality Management, what century are we in? Bill, take it away.

0:00:35.7 Bill Bellows: Thank you, Andrew. [chuckle] All right.

0:00:39.5 AS: Exciting. I'm excited to hear what you've got going on in your mind about this Misunderstanding Quality.

0:00:45.6 BB: Well, first let me say that whether you're new to quality or looking for ideas on quality and quality management, quality improvement, quality management, the aim I have in mind for this podcast series is to improve your ability to manage quality through deepening your appreciation of the Deming philosophy and how to apply it. But specifically, a focus on quality, time after time, which is where most people heard about Deming, was through Quality, Productivity and Competitive Position. For example, the title of his first book. And relative to the title, what came to mind is an anecdote shared with me by two mentors that both spent a good deal of time with Dr. Deming. The first, Gipsie Ranney, who was a professor of statistics at University of Tennessee when she met Dr. Deming, went on to become a senior statistical consultant to GM and the first president of the Deming Institute, when Dr. Deming and his family, shortly before he died, formed a nonprofit called The Deming Institute. Gipsie and I used to speak literally every day, driving to work, driving home, we... "What's up, what's up?" And we always... It was so cool. I wish I had the recordings. Anyway, she once shared that she once asked Dr. Deming, "What do they learn in your seminars? What do attendees learn in your seminars?" To which she said Dr. Deming said, "I know what I said, I don't know what they heard."

[laughter]

0:02:26.0 BB: And along those lines, in the same timeframe, Bill Cooper who just turned 90, he and my wife share a birthday. Not the same year. Bill turned 90 last November and he was senior civilian at the US Navy's aircraft overhaul facility in San Diego, known as North Island. So as aircraft carriers are coming into San Diego, which is like the... I think they call it... It's like the headquarters of the Pacific Fleet. So as aircraft carriers are coming back, planes for which the repair work cannot be done on the carriers fly off to North Island. And Bill was in charge of, he said, some 5,000 civilians. And his peer on the military side, Phil Monroe was in charge of all the military people, and they got exposed to Dr. Deming's work in the early '80s, went off, left there, became Deming consultants. Anyway, Bill said he once asked Dr. Demings, says, "What percent of the attendees of your seminars walk away really understanding what you said?" And he said... Bill said Dr. Deming said, "A small percentage."

[laughter]

0:03:44.0 BB: And so what I had in mind in this series is... One is, what makes it hard to understand what Dr. Deming is talking about? And so for the listeners, what I'm hoping we can help you understand, what might be some invisible challenges that you're having in your organizations trying to explain this to others. So maybe you think your understanding is pretty good, but like Dr. Deming, maybe people are having a hard time understanding what you're saying. And I know what it's like to be in a room, presenting to people. And I had that same experience. I had one Rocketdyne executive... Rocketdyne was sold a few times. Every time it got sold, our Deming transformation efforts got set back a few years. So when the latest management team came in six, seven years ago, I met with one of the very top people, was explaining... Trying to explain to him for the first time what we had accomplished with some, I thought, absolutely amazing work by managing variation as a system. And he said something like, "So are people rejecting what you're saying?" And I said, "No, that's not it." He says, "So they're accepting what you're saying?" I said, "Well... " he said, "What's the problem?" I said, "What they accepted is not what I said." [laughter]

0:05:19.5 BB: I said, we're not in disagreement, but what they think they heard is... And that's when I found that I've experienced that. So anyway, so I wanted to get some background. So my first exposure to quality circles, and this is like... So I was living in this parallel universe, a heat transfer engineer working on rocket engines, and Quality comes into the organization. And unbeknownst to me, there's this quality movement going on, inspired by Dr. Deming, and we're on this wave. I had no idea. All I know is all of a sudden, we got Quality Circles, quality teams, every department...

0:06:03.8 AS: What year was that, roughly?

0:06:06.1 BB: 1984.

0:06:08.9 AS: Okay.

0:06:10.5 BB: Yeah. And I remember a book I was... I remember there was a pamphlet... You mentioned that. The company was AVCO, A-V-C-O, the Aviation Corporation, which is nearly as old as the Boeing Company. So it was one of the... So, Boeing gets into airplanes, the Wright Brothers get into airplanes, people are... Investors getting in, and AVCO, A-V-C-O, was formed by someone you likely heard of, Averill Harriman, major Wall Street guy at the time. And so anyway, I remember there being an AVCO book on quality circles. As you mentioned, I remember seeing that. And I remember just going along for the ride. I'm new to corporations, I'm just a subject matter expert in gas turbine heat transfer, and we're going to the... We got these things called quality circles, whatever. And I remember our department formed... Our department was a team, we had goals, and I remember going to these quality meetings, and let's say the goal would be that we read an article about heat transfer or something. I was just kind of fumbling with this thing called quality circles.

0:07:28.6 BB: But I remember, looking over the shoulder of the department secretary with a IBM Selectric typewriter, and this is before PCs, so we're using IBM 3270, dumb terminals. And I remember being over near the secretary, Kathy, and she's typing away the weekly activity reports, Friday morning kind of thing. And on a routine basis, I'd be over there and she'd be typing along. And then on the very last page, under the title, "Quality Circles," she would type in "Quality Circles are progressing as planned." [chuckle] 'Cause then these would be distributed to people in the department. So I'm watching her now create the next original. And it dawns on me, two things. One is, it's the very last topic in the meeting, in the weekly minutes, and two is it's the same damn thing every time, "Quality Circles are on plan." And I remember saying to her, "Why don't we just have that printed into the stationary?" [laughter]

0:08:39.5 BB: This is before I knew... For me, quality was just a seven-letter word. I don't know. So this is my exposure. And I remember thinking one of the quality goals we're thinking of in our department is... I think somebody even really brought this up, is we're gonna answer the phone by the second ring. That's gonna be our quality goal. And then, I remember we're negotiating for cleaning services. The floors were a mess. Tile floors, they were just a mess. And I remember in our department, we were lobbying to get better janitorial services, have the things cleaned more often. And next thing, we're negotiating with the VP of Engineering relative to, "Well, if your quality circles are on track, then I'll think about that." And it was just like... So it's some really ugly memories [chuckle] of this whole quality thing.

0:09:34.3 BB: But then I got into... I mentioned on the very first of our previous podcast, getting involved as a problem solving decision-making facilitator. I was hanging out with the HR training people, they had some... Their director of training, our director of training was a very astute guy and he was... I'm convinced, having met many people in that role, he knew what was going on. He knew a lot of the names in quality, not so... He knew of Deming's name, he knew of De Bono's name, Kepner-Tregoe, but he seemed to know his stuff. He's a fun guy to be with. And so, that's likely where I first heard Deming's name and that first book would've been Quality, Productivity and Competitive Position, which is... It's almost impenetrable, but I can remember at some point looking at that.

0:10:29.7 BB: But anyway, but in the fall of '87, I started being assigned a taskforce as helping... 'cause now I'm a problem-solving facilitator. But I still don't know... I don't know what quality is. All I know is I get invited to help solve problems. And we were looking at a very bad wear problem, these gears wearing each other out, enormous visibility to the Pentagon, because the tank engines we were making, 120 a month, were being shipped to the tank plant. And then, these tanks with these engines were being sent... The majority of them, sent to Europe. And they were the frontline of defense in Western Europe. This is the Cold War, Andrew.

0:11:17.4 AS: Right.

0:11:19.2 BB: And so the problem that came up was that a couple of these tanks had these gears wear through each other within 50 hours. And I've never been on such a high visibility taskforce because the Generals concern was that every one of those tanks was likely to not operate. And that might be the opportunity for the "Russki's" to launch World War III, because, what a great time, the tanks... If they knew these tanks weren't working. So it was a lot of stress, a lot of pressure. And after months of slow progress, the Army said, "Hey, why don't you guys go look at this Taguchi thing. The transmission people from General Motors who make the tank transmission, anytime they have a snafu like this, they use this Taguchi stuff." So I got assigned the action to go look at that. And I remember, this is pre-internet. And somehow, I did a literature search. I remember it was through something called Nerac, N-E-R-A-C. And out comes these pages. And the thing on Taguchi was... So first of all, who is this Taguchi guy?

0:12:29.0 BB: What is this quality stuff? I don't know. I'm a problem solving guy. And then I remember the first article on reference to Taguchi says, "Quality is the minimum of loss imparted to society by a product after a shipment to the customer." And I thought, "What does that mean?" So I don't know what... I mean, minimum of... I'm thinking... And I thought, "This can't be anything." So anyway, went out to General Motors and got exposed to what they were doing, and a few years later, realized it wasn't exactly Taguchi, but it was... There's some nuances there. But anyway, they exposed me to Design of Experiments and what's known as fractional factorial testing. And coupled with shifting how we look at the measurement process, we solved this problem within weeks, a problem that had been going on for months. So then I got excited about... This Taguchi thing's kind of cool. I'm liking this. And it was a lot more exciting than what I was doing. And I thought, "I think I wanna do this." So the following year, I went to the Taguchi conference. So we had the application and I was so excited, Andrew, that I was turned down for funding. The Army would have paid for me to go to this conference, 'cause the Army, by that point, had invited me to work on at least two problems.

0:13:54.4 BB: Once we solved the first one, when problems came up, the Army literally turned to the program management people at Lycoming and said, "Do a Taguchi study, get Bill Bellows involved." So I was walking on water. I thought it was kind of cool. So I wanted to go to this Taguchi conference, and it was turned down. And they said, "It's not your job." So I told my boss when they told me it was gonna be turned down, I said, "I'm going to this conference." I said, "Whether the company pays for it or not, I am going." So I drove 14 hours each way to Detroit. And in the room are all the US experts on Taguchi's ideas at the time. I didn't know who Deming was at the time. I still didn't know what quality was, but I walked outta there thinking, "This is what I wanna do." And then, where I'm getting to is, a few months later, I was gonna go out on medical I had surgery planned.

0:14:53.1 BB: I was gonna be out for about two months. So my wife and I lived in New Haven, maybe 10 miles north of Yale. And I remember going to the... Again, this is pre-Amazon. I mean, talk about dating ourselves. What century are we in? So I remember going with my wife to the Yale bookstore, the Yale co-op bookstore, and every book they had on quality, I bought. And I'm gonna sit home for two months and read all these books. And I remember buying books. I'm pretty sure I got books about Deming, some about Taguchi, some by Phil Crosby about Zero Defects. Six Sigma Quality entry was a year away.

0:15:35.7 BB: And so I sat down... I got out of the hospital, I'm resting at home, sitting on the couch every day and reading, and also calling the Taguchi people that I had met, I think, at the previous conference. I met some big names. So I'm reading the books, calling them up. And again, these are like my personal professors. And I remember saying to a few of them... What blew me away, and I don't... It somehow dawned on me, I was naive. In the world of engineering, we use... Most of my exposure, at least in heat transfer, we use the same terms the same way. We talk about radiation heat transfer, conduction heat transfer, convection heat transfer. So many of the terms are the same terms, so we can have a conversation. So I'm thinking the same thing applies in quality, that we're all like the heat transfer people. It's easy to communicate 'cause we got the same models. We're using the same words the same way. Then I started thinking, I'm no longer... And this is a real shock. I'm no longer thinking we're using the same words the same way, hence my introduction to misunderstanding quality, [laughter] or I would say, the beginning of a journey to better understand the... I think there are incredible opportunities for people in quality organizations, or people that wanna get into quality.

0:17:08.3 BB: I think it's an ideal opportunity to introduce Deming's ideas. And I say that because everybody else is doing their own thing. Engineering's off designing, Manufacturing's off producing, and Quality has an incredible opportunity to bring together Deming's sense of a systems view of quality. Nobody else has that charter. So my hope is in our conversations, we can help people that are trying to do some things, whether it's jumpstart their continuous improvement program or get their quality program out of what it currently is. In fact...

0:17:52.4 AS: By the way, I wanna...

0:17:55.9 BB: Go ahead, go ahead.

0:17:56.0 AS: I wanna ask a question about that, because what you've mentioned is interesting, that the systems aspect... Is that unique? Would you say that's unique to Deming? I mean, if we think about Taguchi and I think about the Taguchi Method, I'm thinking about a really powerful tool for understanding variation. But explain what you mean by that.

0:18:24.0 BB: A couple of things come to mind when you ask that question. One is the predominant explanation of quality. And if we have time, I wanna talk about that. The term quality, "qualitas," comes from Cicero, a Roman in ancient times. But by and large, in manufacturing, in corporate quality, in corporations, the operational definition, what do we mean by quality? This thing is... What are Quality organizations doing? And what I find they're doing is calling balls and strikes. They're looking at a given quality characteristics, whether it's the fuel economy of an engine, of a gas turbine engine, the performance, the thrust level of a rocket engine, the diameter of a hole, and asking, "Does that characteristic of surface roughness diameter, does it meet a set of requirements?"

0:19:30.4 BB: And the requirements are typically set... There's a lower one and an upper one. We don't say the meeting is gonna start at 10 o'clock, because if you understand variation, we can't get exactly 10. We can't get exactly 1.00 inch thickness for the plate, for the hole diameter. So then, we define quality. Typically, this is what people do in organizations. This is what I... I didn't know anything about this until I started... Well, what are quality people doing? They're asking, "Does this thing meet requirements?"

0:20:07.4 BB: And even towards that end, I remember asking a... I had a coworker who's a quality engineer, I've got many friends who are quality engineers, and this one guy came into a class one day that I was doing, and he's just beating his head against the wall over... I said, "What's...what have you been doing lately." He says, "All I'm doing Bill is dispositioning hardware, dispositioning hardware," which translates to trying to find out why something doesn't meet requirements and coming up with a corrective action, or buying it as is. So either changing the requirements or explaining why we can use it as is. But he's just like, "That's all I'm doing lately. I'm just getting overwhelmed with all this." So I said, "Well, what if overnight, by some miracle, you were to come in, and beginning first thing tomorrow morning, everything meets requirements." And that's the goal of quality in most organizations, is that everything meets requirements. So I said, "If everything beginning tomorrow morning, through some overnight miracle, meets requirements, hence forth, how would your life change?" He says, "I wouldn't have a job." [laughter]

0:21:26.9 BB: I said, "What other changes would you begin to see throughout the day, the coming days?" He says, "My boss's job wouldn't exist." I said, "Okay, keep going, keep going." He says, "Well, the whole organization will have no reason to exist." [laughter] And that's not farfetched. And I throw that out, the challenge to our listeners is, seriously, if everything in the organization beginning tomorrow morning met requirements through some... Dr. Deming would say as you know, by what method? Let's say the method exists, what would change? Now, I'm not saying these people necessarily get laid off. Maybe they get moved elsewhere. Maybe we set our sights higher and try to do things we've never done before, 'cause now everything's gonna be a home run. But that's what I find in corporations, I think, a very extremely commonplace 21st century Andrew explanation of quality is, "Does it meet requirements?" And that goes... And this whole idea of setting requirements, setting a lower and an upper, allowing for variation, that goes back to the early 1700s. And I've also read that it might go back even longer in China. We were talking earlier about China.

0:22:58.2 BB: And so if it goes back longer, all the better. And the point being, fast forward to today, that's largely where we are today, in this early 1700s. Does it meet requirements? Yes or no? And what Dr. Deming is talking about is not acceptability. First of all, he would say there's a place for acceptability. There's a place for meeting requirements, maybe based on the circumstances, all that matters is that it meets requirements. So if you're a pitcher and you're throwing a ball and the batter can't hit the ball, and as long as it's somewhere in the strike zone, or if you're kicking the ball into the net in a football match or otherwise known as soccer in the States, maybe the goalkeeper's so bad, all you gotta do is... They'll jump out of the way.

0:23:49.7 BB: Now, on the other hand, there may be a different batter or a different goalkeeper where you've gotta go where they aren't. And that gets into understanding variation and where we are in meeting requirements matters. And what I find is most organizations I've ever interacted with, and this is through Rocketdyne, as owned by Boeing, going to many different divisions of Boeing around the country, doing seminars across England, across New Zealand, university classes and university lectures, hundreds of them. I've never come across... With rare exception have I ever come across anyone who says, "Bill, in our organization, quality is more like what Dr. Deming is talking about." Meaning, "We are doing more than meeting requirements, we are focusing on where the ball is placed in the strike zone, where the ball is placed in the net, and we specialize in that because we have seen great advantage." Most people I present this to don't even know that's a possibility, don't even know it's anything to lobby for.

0:25:12.0 BB: And so to that I'd say, whether you're looking at Operational Excellence, which is kind of a hybrid of Lean and Six Sigma or Six Sigma alone, or Lean alone, everything I've studied in all of those go back to the question of quality being... Quality's defined Phil Crosby-wise, which is striving for zero defects, striving for everything meeting requirements, and then we're done. And when I joined The Deming Institute, part of my excitement was helping the organization differentiate Dr. Deming's ideas over these other quality management ideas and other management ideas as uniquely positioned to differentiate, to understand that there's an opport... There are incredible opportunities for realizing that everything that meets requirements is not the same. And how do we put a value on that? And one is, the better we understand that, the better we can minimize scrap and rework problems if we're paying attention to where we are, if the process is in control, if we can use that concept from variation. And then simultaneously, another...

0:26:35.7 BB: There's two opportunities. One is, I think the better we manage variation, the less likely we're gonna have scrap and rework. Wouldn't that be great? And two is that that buys us time to think about... 'cause now that we're not in that constant firefighting mode, now we can start to think about how to manage variation of the system and to improve how things integrate. And we did both of those at Rocketdyne. But I've yet to find many organizations who say, "Been there, done that. Been there, done that."

0:27:12.1 AS: So, if we think about the takeaways for someone listening or watching this, you've talked about Misunderstanding Quality, you've talked about everything meet requirements, you've talked about, what century are we in? So, what should they take back to their business from this discussion that can give them a foundation of a starting point of this series and what you're saying on this point? What do you want them to take away?

0:27:40.3 BB: First, I would say I wouldn't necessarily go tell anybody about this yet. [laughter] I'd say, "Hmm, this Deming stuff. There's something to this. What I'm hearing from Bill is there's something here that I can't get elsewhere." You can listen to our prior sessions. There's 22 of them. We're gonna be adding new aspects to that...

0:28:07.9 AS: Okay. So, let's talk about that for a second. So, learn on your own first. Maybe it's a personal transformation. Start with that?

0:28:09.9 BB: Yes.

0:28:14.8 AS: Okay.

0:28:16.1 BB: Absolutely... Yes, absolutely...

0:28:18.1 AS: What would be number two that you want them to get away from this?

0:28:22.9 BB: Well, my advice is, you're not crazy that there's things about the Deming philosophy that are unique, that are... I think so much... There's a lot of people excited by what Dr. Deming's offering. I think there's more than meets the eye. I mean...

0:28:46.1 AS: Okay, so let's talk about that for a second. So, there's unique things about Deming, and one of them that you talked about is the systems thinking?

0:28:54.6 BB: Yeah. I mean, imagine... What I liken it to, instead of zero defects being the goal, which is what most organizations are striving for, and their quality systems are about, "We wanna get zero defects over here, over here, over here." We're juggling all these places, trying to get to zero defects all over the place. What if they saw zero defects as not the destination, but the starting point? That, to really understand continual improvement, zero defects is not the goal. Imagine that as the starting point. At least, imagine the ability to go across that apparent finish line and realize... Or the analogy I would use is, go through the door called "zero defects is the end," and realize there's a lot more, there's so much more to do when you start to look at things with a Deming view. And so, instead of thinking, we're striving for zero defects and then we're done, to me, that's the starting point to really begin to appreciate what it means to look at systems.

0:30:07.7 AS: Okay. So we've got, start with your own personal transformation and learn the material, and understand that there's some unique things about the Deming teachings, in particular, systems. And understand that... I kind of visualized while you were talking, a person walking along with no knowledge of many things, but they're inquisitive, and what they find is a wrench. And then they start to find that there's ways to use this wrench in their daily life. And then later, they find that there's other tools like a screwdriver. And all of a sudden, they found this world of tools, and now they have this amazing toolbox. But then all of a sudden, they meet someone that's taking those tools and creating a car, or a this, or a that. And then they realize, maybe the tool has gotta be the starting point, or is a starting point. But what the tools can create and what additional tools can create is so much bigger than just that first wrench that you picked up.

0:31:14.2 BB: It's the appreciation. And I'm glad you brought those points up. Dr. Deming talks about tools and techniques. A control chart is a tool. A run chart is a tool. Design of Experiments are... These are tools. And so that's a tool. A technique is, how do we create a control chart? That's a technique. What I try to do with audiences, whether it's clients or university classes or whatever, is help them differentiate. Tools and techniques are about improving efficiency, doing things well. Doing something faster or cheaper... What's unique to Dr. Deming is not the tools you'll find him talking about, but the concepts he's talking about, and the idea of looking at things as a system. Dr. Deming defines quality, and it can be obtuse for people. I find it fascinating. He says, "Product or service possesses quality if it helps someone and enjoys a sustainable market." So, traditional quality is me throwing the ball to you, Andrew, or passing a football or basketball, whatever it is, and judging the quality of the pass when the ball leaves my hand. And we say, "That was a good pass."

0:32:49.9 BB: What Dr. Deming's talking about is, it's a good pass, just as if it's a good conversation, if you can hear what I say, we can go back and forth. And so, Deming's perspective on quality is not what's good for me, the producer, but it's how well does it fit you that I'm delivering something that matches... That we're synchronous, that... It has to be good for you, not just me checking off and saying, "This is good, this is good, this is good. Boom." That it's not good until you say it's good. That's a different view. It's the same thing as, "Well, I told you." Then you say, "Well, I didn't hear it." I says, "Well, then why don't you have your ears checked?" [laughter] Dr. Deming's talking about, it's not a conversation if you can't hear it. And so, when he's explaining to Bill Cooper and Gipsie that people are having a hard time, he was struggling to improve that 'cause he knew that when you begin to understand that what you're saying is not heard, Deming understood it was his obligation to try harder. And part of the Deming philosophy is understanding that it's not just me throwing it and saying, "There it is." It's listening for the feedback as to, "Did it make sense?" So, quality in that arena is a mutual phenomenon, not unilaterally my thing.

0:34:16.7 AS: Okay.

0:34:17.8 BB: And I would welcome anyone, as we've done in the past, to reach out if there are questions, comments, observation you'd like to share, and we can use that feedback in future sessions.

0:34:30.6 AS: Fantastic. Well, that's an excellent kickoff. And let's end with the idea that quality is a mutual phenomenon. I think that's a good statement. So Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."

In the final episode of the goal setting in classrooms series, John Dues and Andrew Stotz discuss the last three of the 10 Key Lessons for implementing Deming in schools. They finish up with the example of Jessica's 4th-grade science class.

TRANSCRIPT

0:00:02.4 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. This is episode six about goal setting through a Deming lens. John, take it away.

0:00:26.4 John Dues: Hey, Andrew, it's good to be back. Yeah, for the past handful of episodes or so, we've been talking about organizational goal setting. We covered these four conditions of healthy goal setting and then got into these 10 key lessons for data analysis. And then we've been looking at those 10 key lessons applied to an improvement project. And we've been talking about a project that was completed by Jessica Cutler and she did a Continual Improvement Fellowship with us here at our schools. And if you remember, Jessica was attempting to improve the joy in learning of her students in her fourth grade science class. So last time we looked at lessons five through seven. Today we're gonna look at those final three lessons, eight, nine and ten applied to her project.

0:01:15.7 AS: It's exciting.

0:01:17.1 JD: Yeah. So we'll jump in here. We'll kind of do a description, a refresher of each lesson. And we'll kind of talk about how it was applied to her specific project, and we'll look at some of her data to kind of bring that live for those of the folks that have video. Let's jump in with lesson number eight. So we've talked about this before, but lesson number eight was: more timely data is better for improvement purposes. So we've talked about this a lot. We've talked about something like state testing data. We've said, it can be useful, but it's not super useful for improvement purposes, because we don't get it until the year ends. And students in our case, have already gone on summer vacation by the time that data comes in. And you know that the analogous data probably happens in lots of different sectors where you get data that lags, to the point that it's not really that useful for improvement purposes.

0:02:15.8 JD: So when we're trying to improve something, more frequent data is helpful because then we can sort of see if an intervention that we're trying is having an effect, the intended effect. We can learn that more quickly if we have more frequent data. And so it's, there's not a hard and fast rule, I don't think for how frequently you should be gathering data. It just sort of needs to be in sync with the improvement context. I think that's the important thing. Whether it's daily or a couple times a day or weekly, or monthly, quarterly, whatever, it's gotta be in sync with whatever you're trying to improve.

0:02:50.5 AS: You made me think about a documentary I saw about, how they do brain surgery and how the patient can't be sedated because they're asking the patient questions about, do you feel this and they're testing whether they're getting... They're trying to, let's say, get rid of a piece of a cancerous growth, and they wanna make sure that they're not getting into an area that's gonna damage their brain. And so, the feedback mechanism that they're getting through their tools and the feedback from the patient, it's horrifying to think of the whole thing.

0:03:27.7 JD: Yeah.

0:03:28.3 AS: It's a perfect example of why more timely data is useful for improvement purposes 'cause imagine if you didn't have that information, you knock the patient out, you get the cancerous growth, but who knows what you get in addition to that.

0:03:43.7 JD: Yeah, that's really interesting. I think that's certainly an extreme example, [laughter], but I think it's relevant. No matter what our context, that data allows us to understand what's going on, variation, trends, whether our system is stable, unstable, how we should go about improving. So it's not dissimilar from the doctors in that example.

0:04:06.8 AS: And it's indisputable I think, I would argue. But yet many people may not, they may be operating with data that's not timely. And so this is a reminder that we would pretty much always want that timely data. So that's lesson eight. Wow.

0:04:22.6 JD: Lesson eight. Yeah. And let's see how we can, I'll put a visualization on the screen so you can see what Jessica's data look like. All right. So now you can see. We've looked at these charts before. This is Jessica's process behavior chart for joy in science. So just to reorient, you have the joy percentage that students are feeling after a lesson on the x-axis, sorry, on the y-axis. On the x-axis, you have the school dates where they've collected this survey information from students in Jessica's class.

0:04:57.0 AS: Can you put that in Slide Show view?

0:05:00.4 JD: Yeah. I can do that. Yeah.

0:05:02.7 AS: Just it'll make it bigger, so for the...

0:05:06.5 JD: There you go.

0:05:07.8 AS: For the listeners out there, we're looking at a chart of daily, well, let's say it looks like daily data. There's probably weekends that are not in there because class is not on weekends, but it's the ups and downs of a chart that's ranging between a pretty, a relatively narrow range, and these are the scores that are coming from Jessica's surveying of the students each day, I believe. Correct?

0:05:34.2 JD: Yeah. So each day where Jessica is giving a survey to assess the joy in science that students are feeling, then she's averaging all those students together. And then the plot, the dot is the average of all the students sort of assessment of how much joy they felt in a particular science lesson.

0:05:54.7 AS: And that's the average. So for the listeners out there John's got an average line down the middle of these various data points, and then he is also got a red line above and a red line below the, above the highest point and slightly below the lowest point. Maybe you can explain that a little bit more.

0:06:15.4 JD: Yeah. So with Jessica, you remember originally she started plotting on a line chart or a run chart when we just had a few data points just to kind of get a sense of how things are moving so she could talk about it with her class. And over time what's happened is she's now got, at this point in the project, which she started in January, now this is sort of mid-March. And so she's collected two to three data points a week. So she doesn't survey the kids every day just for time sake, but she's getting two, three data points a week. And so by March, she started just a couple months ago, she's got 28 data points. So that sort of goes back to this idea of more timely data is better for improvement.

0:07:00.9 JD: And a lot of times, let's say a school district or a school does actually survey their students about how, what they think of their classes. That might happen at best once a semester or maybe once a year. And so at the end of the year you have one or two data points. So it's really hard to tell sort of what's actually going on. Compared to this, Jessica's got these 28 data points in just about two months or so of school. So she's got 28 data points to work with. And so what her and her students are doing with this data then, one, they can see how it's moving up and down. So we have, the blue dots are all the plotted points, like you said, the green line is the average running sort of through the middle of the data, and then those red lines are our process limits, the upper and lower natural process limits that sort of tell us the bounds of the system.

0:07:50.4 JD: And that's based on the difference in each successive data point. But the most important thing is that as Jessica and her students are looking at this, initially, they're really just studying it and trying to sort of see how things are going from survey to survey. So one of the things that Deming talked about frequently is not tampering with data, which would be if you sort of, you overreact to a single data point. So let's say, a couple of days in, it dips down from where it started and you say, oh my gosh, we gotta change things. And so that's what Deming is talking about. Not tampering, not overreacting to any single data point. Instead look at this whole picture that you get from these 28 data points and then talk about...

0:08:41.5 JD: In Jessica's case she's talking about with her students, what can we learn from this data? What does the variation from point to point look like? If we keep using the system, the fourth grade science system, if we leave it as is, then we'll probably just keep getting data pretty similar to this over time, unless something more substantial changes either in the negative or the positive. So right now they...

0:09:10.1 AS: And I think for the listeners, it's, you can see that there's really no strong pattern that I can see from this. It's just, there's some, sometimes that there's, seems like there's little trends and stuff like that. But I would say that the level of joy in the science classroom is pretty stable.

0:09:32.1 JD: Pretty stable. Yeah. Pretty high. It's bouncing around maybe a 76% average across those two and a half months or so. And so, they, you kind of consider this like the baseline. They've got a good solid baseline understanding of what joy looks like in this fourth grade science classroom. Did that stop sharing on your end?

0:10:00.2 AS: Yep.

0:10:00.2 JD: Okay, great. So that's lesson eight. So clearly she's gathered a lot of data in a pretty short amount of time. It's timely, it's useful, it's usable, it can be studied by her and her students. So we'll switch it to lesson nine now. So now they've got a good amount of data. They got 28 data points. That's plenty of data to work with. So lesson nine is now we wanna clearly label the start date for an intervention directly in her chart. And remember from earlier episodes, not only are we collecting this data, we're actually putting this up on a screen on a smart board in the classroom, and Jessica and her students are studying this data together. They're actually looking at this, this exact chart and she's explaining sort of kind of like we just did to the listeners. She's explaining what the chart means.

0:10:54.2 JD: And so over time, like once a week she's putting this up on the smart board and now kids are getting used to, how do you read this data? What does this mean? What are all these dots? What do these numbers mean? What do these red lines mean? That type of thing. And so now that they've got enough data, now we can start talking about interventions. That's really what lesson nine is about. And the point here is that you want to clearly, explicitly with a literally like a dotted line in the chart to mark on the day that you're gonna try something new. So you insert this dashed vertical line, we'll take a look at it in a second, on the date the intervention started. And then we're also gonna probably label it something simple so we can remember what intervention we tried at that point in time.

0:11:42.7 JD: So what this then allows the team to do is then to very easily see the data that happened before the intervention and the data that happened after the implementation of this intervention or this change idea. And then once we've started this change and we start plotting points after the change has gone into effect, then we can start seeing or start looking for those patterns in the data that we've talked about, those different rules, those three rules that we've talked about across these episodes. And just to refresh, rule one would be if we see a single data point outside of either of the limits, rule two is if we see eight consecutive points on either side of that green average line, and rule three is if we see three out of four dots in a row that are closer to one of the limits than they are to that central line.

0:12:38.3 JD: So that again, those patterns tell us that something significant, mathematically improbable has happened. It's a big enough magnitude in change that you wouldn't have expected it otherwise. And when we see that pattern, we can be reasonably assured that that intervention that we've tried has worked.

0:12:56.0 AS: And let me ask you about the intervention for just a second because I could imagine that if this project was going on, first question is, does Jessica's students are, obviously know that this experiment is going on?

0:13:08.3 JD: Yes.

0:13:09.8 AS: Because they're filling out a survey. And my first question is, do they know that there's an intervention happening? I would expect that it would be yes, because they're gonna feel or see that intervention. Correct?

0:13:25.1 JD: Sure. Yep.

0:13:25.2 AS: That's my first point that I want to think about. And the second point is, let's imagine now that everybody in the classroom has been seeing this chart and they're, everybody's excited and they got a lot of ideas about how they could improve. Jessica probably has a lot of ideas. So the temptation is to say, let's change these three things and see what happens.

0:13:46.5 JD: Yeah.

0:13:47.1 AS: Is it important that we only do one thing at a time or that one intervention at a time or not? So maybe those are two questions I have in my mind.

0:13:58.6 JD: Yeah, so to the first question, are you, you're saying there there might be some type of participant or...

0:14:02.3 AS: Bias.

0:14:03.3 JD: Observer effect like that they want this to happen. That's certainly possible. But speaking to the second question, what intervention do you go with? Do you go with one or you go with multiple? If you remember a couple of episodes ago we talked about, and we actually looked at a fishbone diagram that Jessica and her students that they created and they said, okay, what causes us to have low joy in class? And then they sort of mapped those, they categorized them, and there were different things like technology not working. If you remember, one was like distractions, like other teachers walk into the room during the lesson. And one of them was others like classmates making a lot of noise, making noises during class and distracting me. And so they mapped out different causes. I think they probably came up with like 12 or 15 different causes as possibilities.

0:14:58.7 JD: And they actually voted as a class. Which of these, if we worked on one of these, which would have the biggest impact? So not every kid voted for it, but the majority or the item that the most kids thought would have the biggest impact was if we could somehow stop all the noises basically. So they came up with that as a class, but not, it wasn't everybody's idea. But I think we've also talked about sort of the lessons from David Langford where once kids see that you're gonna actually take this serious, take their ideas serious and start acting on them, they take the project pretty seriously too. So maybe not a perfect answer, but that's sort of what we...

0:15:38.0 AS: I was thinking that, ultimately you could get short-term blips when you do an intervention and then it stabilizes possibly. That's one possibility. And the second thing I thought is, well, I mean ultimately the objective, whether that's an output from a factory, and keeping, improving that output or whether that's the output related to joy in the classroom as an example, you want it to go up and stay up and you want the students to see it and say, wow, look, it's happening. So, yeah.

0:16:11.7 JD: And there's different ways you can handle this. So this joy thing could go up to a certain point. They're like, I don't know if we can get any more joy, like, it's pretty high. And what you could do at that point is say, okay, I'm gonna assign a student to just sort of, every once in a while, we'll keep doing these surveys and we will sort of keep plotting the data, but we're not gonna talk about a lot. I'm just gonna assign this as a student's job to plot the new data points. And we'll kind of, we'll kind of measure it, but we won't keep up with the intervention 'cause we got it to a point that we're pretty happy with. And now as a class we may wanna switch, switch our attention to something else.

0:16:45.2 JD: So we started getting into the winter months and attendance has dipped. Maybe we've been charting that and say, Hey guys, we gotta, gotta kinda work on this. This is gone below sort of a level that's really good for learning. So let's think about as a group how we could come up with some ideas to raise that. So maybe you turn your attention to something else, 'cause you can't pay attention to everything at once.

0:17:07.2 AS: Yeah, and I think I could use an example in my Valuation Master Class Boot Camp where students were asking for more personal feedback and I realized I couldn't really scale this class if I had to get stuck into hundreds of grading basically. And that's when I came up with the concept of feedback Friday, where one student from each team would present and then I would give feedback, I would give a critique and they would be intense and all students would be watching, it would be recorded, and all of a sudden all the issues related to wanting this personal feedback went away. And therefore, once I instituted it on a regular basis, I went on to the next issue and I made sure that I didn't lose the progress that I had made and continue to make feedback Friday better and better.

0:17:56.2 JD: Yeah. Yeah. That's great. That's great. I'll share my screen so you can kinda see what this looked like in Jessica's class now, what the chart looks like now. So now you see that same chart, that same process behavior chart, exact same one we were just looking at except now you can see this, this dashed vertical line that marks the spot where the intervention was started that we just talked about. And what the kids are actually doing, and Jessica are running a PDSA cycle, a Plan-Do-Study-Act cycle. That's the experimental cycle in her class. And what they're running that PDSA on is, again, how can we put something in place to reduce the distracting noises. And so what the students actually said is if we get a deduction for making noises, then there will be less noises. And so in the school's sort of management system, a deduction is sort of like a demerit.

0:19:00.0 JD: If you maybe went to a Catholic school or something like that, or some public schools had demerits as well, but basically it's like a minor infraction basically that goes home or that gets communicated to parents at the end of the week. But the kids came up with this so their basic premise is, their plan, their prediction is if there are less noises, we'll be able to enjoy science class. And if we give deductions for these noises, then there'll be less noises. So some people may push back, well, I don't think you should give deductions or something like that, but which, fine, you could have that opinion. But I think the powerful point here is this is, the students created this, it was their idea. And so they're testing that idea to see if it actually has impact.

0:19:44.8 JD: And they're learning to do that test in this scientific thinking way by using the Plan-Do-Study-Act cycle, and seeing if it actually has an impact on their data. So at the point where they draw this dashed line, let's call that March 19th, we can see a couple of additional data points have been gathered. So you can see the data went up from 3/18 to 3/21. So from March 18th to March 21st, rose from about, let's call it 73% or so, up to about 76% on March 21st. And then that next day it rose another percent or two and let's call that 78%.

0:20:28.1 JD: And so the trap here is you could say, okay, we did this intervention and it made things better. But the key point is the data did go up, but we haven't gathered enough additional data to see one of those patterns that we talked about that would say, oh, this actually has had a significant change. Because before the dashed line, you can see data points that are as high or even higher than some of these ones that we see after the PDSA is started. So it's too early to say one way or another if this intervention is having an impact. So we're not gonna overreact. You could see a place where you're so excited that it did go up a couple of days from where it was on March 18th before you started this experiment, but that's a trap. Because it's still just common cause data, still just bouncing around that average, it's still within the bounds of the red process limits that define the science system.

0:21:34.2 AS: I have an experiment going on in my latest Valuation Master Class Boot Camp, but in that case, it's a 6-week period that I'm testing, and then I see the outcome at the end of the six weeks to test whether my hypothesis was right or not. Whereas here it's real time trying to understand what's happening. So yes, you can be tempted when it's real time to try to jump to conclusion, but when you said, well, okay, I can't really get the answer to this conclusion until I've run the test in a fixed time period, then it's you don't have as much of that temptation to draw a conclusion.

0:22:14.1 JD: Yeah. And if I actually was... I should have actually taken this a step farther. I marked it with this Plan-Do-Study-Act cycle. What I should have done too is write "noises" or something like that, deduction for noises, some small annotation, so it'd be clear what this PDSA cycle is.

0:22:32.1 AS: In other words, you're saying identify the intervention by the vertical line, but also label it as to what that intervention was, which you've done before on the other chart. I remember.

0:22:42.1 JD: Yeah. And then it'd be sort of just looking at this when she puts this up on the smart board for the class to see it again too. Oh yeah yeah, that's when we ran that first intervention and that was that intervention where we did deductions for noises. But the bigger point is that this never happens where you have some data, you understand a system, you plan systematic intervention, and then you gather more data right after it to see if it's having an impact. We'd never do that ever, in education, ever. Ever have I ever seen this before. Nothing like this. Just this little setup combining the process behavior chart with the Plan-Do-Study-Act cycle, I think is very, very, very powerful and very different approach than what school improvement.

0:23:33.4 AS: Exciting.

0:23:34.6 JD: Yeah. The typical approach is to school improvement. So I'll stop that share for a second there, and we can do a quick overview of lesson 10 and then jump back into the chart as more data has been gathered. So lesson 10 is: the purpose of data analysis is insight. Seems pretty straightforward. This is one of those key teachings from Dr. Donald Wheeler who we've talked about. He taught us that the best analysis is the simplest analysis, which provides the needed insight.

0:24:08.1 AS: So repeat lesson 10, again, the purpose of...

0:24:11.6 JD: The purpose of data analysis is insight.

0:24:14.7 AS: Yep.

0:24:15.6 JD: So just plotting the dots on the run chart and turning the run chart into the process behavior chart, that's the most straightforward method for understanding how our data is performing over time. We've talked about this a lot, but it's way more intuitive to understand the data and how it's moving than if you just stored it in a table or a spreadsheet. Got to use these time sequence charts. That's so very important.

0:24:42.2 AS: And I was just looking at the definition of insight, which is a clear, deep, and sometimes sudden understanding of a complicated problem or situation.

0:24:51.6 JD: Yeah. And I think that can happen, much more likely to happen when you have the data visualized in this way than the ways that we typically visualize data in just like a table or a spreadsheet. And so in Jessica's case, we left off on March 22nd and they had done two surveys after the intervention. And so then of course what they do is they continue over the next 4, or 5, 6 weeks, gathering more of that data as they're running that intervention, then we can sort of switch back and see what that data is looking like now.

0:25:28.3 AS: Exciting.

0:25:30.3 JD: So we have this same chart with that additional data. So we have data all the way out to now April 11th. So they run this PDSA for about a month, three weeks, month, three, four weeks.

0:25:47.9 AS: And that's 11 data points after the intervention. Okay.

0:25:54.0 JD: Yep. Purposeful. So what was I gonna say? Oh, yeah. So three, four weeks for a Plan-Do-Study-Act cycle, that's a pretty good amount of time. Two to four weeks, I've kind of found is a sweet spot. Shorter than that, it's hard to get enough data back to see if your intervention has made a difference. Longer than that, then it's you're getting away from the sort of adaptability, the ability to sort of build on an early intervention, make the tweaks you need to. So that two to four week time period for your PDSA seems like a sweet spot to me. So she's continued to collect this joy in learning data to see... Basically what her and her class are doing is seeing if their theory is correct. Does this idea of giving deductions for making noises have an impact? Is it effective?

0:26:44.0 JD: So if they learn, if the data comes back and there is no change, no indication of improvement, then a lot of people will say, well, my experiment has failed. And my answer to that is, no, it hasn't failed. It might not have worked like you wanted, but you learn very quickly that that noise deduction is not going to work and we're gonna try some other thing, some other intervention. We learn that very very quickly within 3 or 4 weeks that we need to try something new. Now, in the case of Jessica's class, that's not what happened. So you can actually see that dotted line, vertical dotted line is still at March 19th, we have those 11 additional data points. And you can actually see, if you count, starting with March 21st, you count 1-2-3-4-5-6-7-8-9-10-11 data points that are above that green average line from before.

0:27:45.5 JD: So originally the red lines, the limits and the central line would just be straight across. But once I see that eight or more of those are on one side of that central line, then I actually shift the limits and the average line, 'cause I have a new system. I've shifted it up and that actually is an indication that this intervention has worked, because we said... Now for those that are watching, it doesn't appear that all the blue dots are above that green line, but they were before the shift. Remember the shift indicates a new system. So I go back to the point where the first dot of the 8 or more in a row occurred, and that's where I have indicated a new system with the shift in the limits and the central line. So this, their theory was actually correct. This idea of giving a deduction for noises actually worked to improve the joy in Jessica's science class. It was a successful experiment.

0:28:52.7 AS: Can I draw on your chart there and ask some questions?

0:29:00.5 JD: Sure. Yeah.

0:29:00.6 AS: So one of my questions is, is it possible, for instance, in the preliminary period, let's say the first 20 days or so that things were kind of stabilized and then what we saw is that things potentially improved here in the period before the intervention and that the intervention caused an increase, but it may not be as significant as it appears based upon the prior, the most recent, let's say 10 days or something like that. So that's my question on it. I'll delete my drawings there.

0:29:46.3 JD: Yeah, I think that's a fair question. So, the reason I didn't shift those before, despite you do see a pattern, so before the dotted line, I considered that period a baseline period where we were just collecting 'cause they hadn't tried anything yet. So Dr. Wheeler has these series of four questions. So in addition to seeing a signal, he's got these other sort of questions that he typically asks and that they're yes/no questions. And you want the answer to all those to be yes. And one of 'em is like, do you know why an improvement or a decline happened? And if you don't, then you really shouldn't shift the limits. So that's why I didn't shift them before. I chose not to shift them until we actually did something, actually tried something.

0:30:33.2 AS: Which is basically saying that you're trying to get the voice of the students, a clear voice, and that may be that over the time of the intervention, it could be that the... Sorry, over the time of the initial data gathering, that the repetition of it may have caused students to feel more joy in the classroom because they were being asked and maybe that started to adjust a little bit up and there's the baseline, so. Yep. Okay.

0:31:01.6 JD: Yeah. And so this is sort of where the project ended for the fellowship that Jessica was doing. But, what would happen if we could sort of see what happened, further out in the school year is that, either Jessica and the class could then be sort of satisfied with where the joy in learning is at this point where the improvement occurred. Or they could run another cycle, sort of testing, sort of a tweaked version of that noise reduction PDSA, that intervention or they could add something to it.

0:31:43.0 AS: Or they could have run another fishbone point, maybe the noise wasn't actually the students thought it would be the number one contributor, but, maybe by looking at the next one they could see, oh, hey, wait a minute, this may be a higher contributor or not.

0:32:01.2 JD: Yeah. And when you dug into the actual plan, the specifics of the plan, how that noise deduction was going to work, there may be something in that plan that didn't go as planned and that's where you would have to lean on, 'cause we've talked about the three sort of parts of the improvement team that you need. You need the frontline people. That's the students. You need the person with the authority to change the system. That's Jessica. And then someone with the knowledge of the system, profound knowledge. That's me. Well, those, the Jessica and her students are the one in that every day. So they're gonna have learning about how that intervention went, that would then inform the second cycle of the PDSA, whatever that was gonna be, whatever they're gonna work on next. The learning from the first cycle is gonna inform that sort of next cycle.

0:32:51.4 JD: So the idea is that you don't just run a PDSA once but you repeatedly test interventions or change ideas until you get that system where you want it to be.

0:33:01.1 AS: So for the listeners and viewers out there, I bet you're thinking gosh, Jessica's pretty lucky to have John help her to go through this. And I think about lots of things that I want to talk to you about [laughter] about my testing in my own business, and I know in my own teaching, but also in my business. So that I think is one of the exciting things about this is the idea that we just, we do a lot of these things in our head sometimes. I think this will make a difference and, but we're not doing this level of detail usually in the way that we're actually performing the tests and trying to see what the outcomes are.

0:33:43.9 JD: Yeah I think that for school people too, I think when we've attempted to improve schools, reform schools, what happens is we go really fast and the learning actually happens very slowly and we don't really appreciate what it actually takes to change something in practice. And what happens then is to the frontline people like teachers... The reformers have good intentions but the people on the front line just get worn out basically, and a lot of times nothing actually even improves. You just wear people out. You make these big changes go fast and wide in the system and you don't really know exactly what to do on the ground because the opposite is having Jessica's classroom. They're actually learning fast but trying very small changes and getting feedback right in the place where that feedback needs to be given right in the classroom and then they can then learn from that and make changes.

0:34:49.8 JD: And again, it may seem smaller. Maybe it doesn't seem that revolutionary to people but to me, I think it's a completely revolutionary, completely different way to do school improvement that actually kind of honors the expertise of the teacher in the classroom, it takes into account how students are experiencing a change and then I'm kind of providing a method that they can use to then make that classroom better for everybody so and I think in doing so students more likely to find joy in their work, joy in their learnings, teachers more likely to find joy in their work as well. So to me it's a win-win for all those involved.

0:35:34.9 AS: Fantastic. Well, should we wrap up there?

0:35:40.6 JD: Yeah, I think that's a good place to wrap up this particular series.

0:35:45.1 AS: And maybe you could just review for the whole series of what we've done just to kind of make sure that everybody's clear and if somebody just came in on this one they know a little bit of the flow of what they're gonna get in the prior ones.

0:36:00.4 JD: Yeah. So we did six episodes and in those six episodes we started off just talking about what do you need to have in place for healthy goal setting at an organizational level, and we put four conditions in place that before you ever set a goal you should have to understand the capability of your system, you have to understand the variation within your system, you have to understand if the system that you're studying is stable, and then you have to have a logical answer to the question by what method. By what method are you gonna bring about improvement or by what method you're gonna get to this goal that you wanna set. So we talked about that, you gotta have these four conditions in place and without those we said goal setting is often an act of desperation.

0:36:49.7 JD: And then from there what we did is start talking about these 10 key lessons for data analysis so as you get the data about the goal and you start to understand the conditions for that system of process we could use those 10 data lessons to then interpret the data that we're looking at or studying and then we basically did that over the first four episodes. In the last few episodes what we've done is look at those lessons applied to Jessica's improvement project and that's what we just wrapped up looking at those 10 lessons.

0:37:23.7 AS: I don't know about the listeners and viewers but for me this type of stuff just gets me excited about how we can improve the way we improve.

0:37:33.4 JD: Yeah. For sure.

0:37:34.9 AS: And that's exciting. So John, on behalf of everyone at the Deming Institute I want to thank you again for this discussion, and for listeners, remember to go to deming.org to continue your journey. You can find John's book Win-Win W. Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools on amazon.com. This is your host Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."

In this episode, John Dues and Andrew Stotz apply lessons five through seven of the 10 Key Lessons for implementing Deming in classrooms. They continue using Jessica's fourth-grade science class as an example to illustrate the concepts in action.

TRANSCRIPT

0:00:02.2 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. This is episode five about goal setting through a Deming lens. John, take it away.

0:00:23.2 John Dues: Yeah, it's good to be back, Andrew. Yeah, like you said, for the past few episodes we've been talking about organizational goal setting. We covered four healthy conditions, or four conditions of healthy goal setting and 10 key lessons for data analysis. And then what we turn to in the last episode is looking at an applied example of the 10 key lessons for data analysis and in action. And, if you remember from last time we were looking at this improvement project from Jessica Cutler, she's a fourth grade science teacher, and she did the improvement fellowship here at United Schools Network, where she learned the tools, the techniques, the philosophies, the processes behind the Deming theory, continual improvement, that type of thing. And in... And in Jessica's specific case, in her fourth grade science class, what she was settled on that she was gonna improve was, the joy in learning of her students. And we looked at lessons one through four through the eyes or through the lens of her project. And today we're gonna look at lessons five through seven. So basically the next, uh, the next three lessons of those 10 key lessons.

0:01:34.8 AS: I can't wait. Let's do it.

0:01:37.3 JD: Let's do it. So lesson number five was: show enough data in your baseline to illustrate the previous level of variation. Right. So the basic idea with this particular lesson is that, you know, let's say we're trying to improve something. We have a data point or maybe a couple data points. We wanna get to a point where we're starting to understand how this particular concept works. In this case, what we're looking at is joy in learning. And there's some different rules for how many data points you should, should have in a typical base baseline. But, you know, a pretty good rule of thumb is, you know, if you can get 12 to 15, that's... That's pretty solid. You can start working with fewer data points in real life. And even if you just have five or six values, that's gonna give you more understanding than just, you know, a single data point, which is often what we're... What we're working with.

0:02:35.6 AS: In, other words, even if you have less data, you can say that this gives some guidance.

0:02:40.9 JD: Yeah.

0:02:41.1 AS: And then you know that the reliability of that may be a little bit less, but it gives you a way... A place to start.

0:02:46.9 JD: A place to start. You're gonna learn more over time, but at least even five or six data points is more than what I typically seen in the typical, let's say, chart where it has last month and this month, right? So even five or six points is a lot more than that. You know, what's... What's typical? So I can kind of show you, I'll share my screen here and we'll take a look at, Jessica's initial run chart. You see that right?

0:03:19.3 AS: We can see it.

0:03:21.2 JD: Awesome.

0:03:22.3 AS: You wanna put it in slideshow? Can we see that? Yeah, there you go.

0:03:24.9 JD: Yeah, I'll do that.

0:03:25.4 AS: Perfect.

0:03:26.3 JD: That works better. So, you know, again, what we're trying to do is show enough data in the baseline to understand what happened prior to whenever we started this improvement effort. And I think I've shared this quote before, but I really love this one from Dr. Donald Berwick, he said "plotting measurements over time turns out in my view to be one of the most powerful things we have for systemic learning." So what... That's what this is all about really, is sort of taking that lesson to heart. So, so you can look at Jessica's run chart for "joy in science." So just to sort of orient you to the chart. We have dates along the bottom. So she started collecting this data on January 4th, and this is for about the first 10 days of data she has collected. So she's collected this data between January 4th and January 24th. So, you know, a few times a week she's giving a survey. You'll remember where she's actually asking your kids, how joyful was this science lesson?

0:04:24.4 JD: Mm-hmm.

0:04:27.2 JD: And so this is a run chart 'cause it's just the data with the median running through the middle, that green line there, the data is the blue lines connected by, or sorry, the blue dots connected by the points and the y axis there along the left is the joy in learning percentage. So out of a hundred percent, sort of what are kids saying? How are kids sort of evaluating each of these science lessons? So we've got 10 data points so far, which is a pretty good start. So it's starting to give Jessica and her science class a decent understanding about, you know, when we, you know, define joy in science and then we start to collect this data, we really don't have any idea what that's gonna look like in practice. But now that she started plotting this data over time, we have a much better sense of what the kids think of the science lessons basically. So on the very first day...

0:05:25.4 AS: And what is the... What is the median amount just for the listeners out there that don't see it? What would be the... Is that 78%?

0:05:33.8 JD: Yeah, about 78%. So that very first day was 77%. The second day was about 68%. And then you sort of see it bounce around that median over the course of that, those 10 days. So some of the points are below the median, some of the points are above the median.

0:05:50.4 AS: And the highest point above is about 83, it looks like roughly around that.

0:05:54.4 JD: Yeah. Around 82, 83%. And one technical point is at the point that it's a run chart we don't have the process limits, those red lines that we've been taking a look at and with a run chart and, you know, fewer data points, we only have 10. It's fairly typical to use the median, just so you know, you can kind of better control for any outlier data points which we really don't have any outliers in this particular case but that's just sort of a technical point. So, yeah, I mean, I think, you know what you start to see, you start to get a sense of what this data looks like, you know, and you're gonna keep collecting this data over an additional time period, right? And she hasn't at this point introduced any interventions or any changes. Right now they're just learning about this joy in learning system, really. Right.

0:06:51.8 JD: And so, you know, as she's thinking about this, this really brings us to... To lesson six, which is, you know, what's the goal of data analysis? And this is true in schools and it's true anywhere. We're not just gonna look at the past results, but we're also gonna, you know, probably more importantly, look to the future and hopefully sort of be able to predict what's gonna happen in the future. And, you know, whatever concept that we're looking at. And so as we continue to gather additional data, we can then turn that run chart from those initial 10 points into a process behavior chart. Right. You know, that's a, sort of a, you know, it's the run chart on steroids because not only can we see the variation, which you can see in the run chart, but now because we've added more data, we've added the upper and lower natural process limit, we can also start to characterize the type of variation that we see in that data.

0:08:00.1 AS: So for the listeners, listeners out there, John just switched to a new chart which is just an extension of the prior chart carrying it out for a few more weeks, it looks like, of daily data. And then he's added in a lower and upper natural process limit.

0:08:18.9 JD: Yeah. So we're still, we're still plotting the data for joy in science. So the data is still the blue dots connected by the blue lines now because we have 24 or so data points, the green line, the central line is the average of that data running through the data. And we have enough data to add the upper and lower natural process limit. And so right now we can start to determine do we only have natural variation, those everyday ups and downs, that common cause variation, or do we have some type of exceptional or special cause variation that's outside of what would be expected in this particular system. We can start making...

0:09:00.7 AS: Can you...

0:09:02.2 JD: Go ahead.

0:09:02.8 AS: I was gonna... I was gonna ask you if you can just explain how you calculated the upper and lower natural process limits just so people can understand. Is it max and min or is it standard deviation or what is that?

0:09:18.3 JD: Yeah, basically what's happening is that, so we've plotted the data and then we use that data, we calculate the average, and then we also calculate what the moving range, is what it's called. So we just look at each successive data point and the difference between those two points. And basically there's a formula that you use for the upper and lower natural process limits that takes all of those things into account. So it's not standard deviation, but it's instead using the moving, moving range between each successive data point.

0:09:52.9 AS: In other words, the data that's on this chart will always fall within the natural upper and lower. In other words it's... Or is, will data points fall outside of that?

0:10:05.7 JD: Well, it depends on what kind of system it is.

0:10:07.8 AS: Right. Okay.

0:10:09.8 JD: If it's a stable system, that means all we see is sort of natural ups and downs in the data. And we use those formulas for the process limits. The magnitude of the difference of each successive data point is such that it's not necessarily big or small, it's just based on what you're seeing empirically. It's basically predictable. Right. And if it's not predictable, then we'll see special causes. So we'll see special patterns in the data. So I think maybe last time we talked about the three patterns, or you know, in some episode we talked about the patterns that would suggest there's a special cause that goes to the study. Those three patterns that I use are, is there a single one of these joy in science data points outside of either the upper or lower natural process limit that'd be a special cause.

0:11:05.4 JD: If you see eight data points in a row, either above the central line or below the central line, that's a special cause. And if I see three out of four in a row that are either closer to the upper limit or to the lower limit than they are to that central line, that's a pattern of the data that suggests a special cause. So we don't, in this particular dataset, we don't see any special causes. So now we have... Now we have a very solid baseline set of data. We have 24 data points. And when you're using an average central line and get... Getting technical, once you get to about 17 data points, those upper and lower natural process limits start to solidify, meaning they're not gonna really change too much 'cause you have enough data unless something really significant happens. And then if you're using the median, that solidification happens when you get to about 24 data points.

0:12:07.5 JD: So when you're, you know, when you're getting to 17 to 24 data points in your baseline, you're really getting pretty solid upper and lower national process limits. So, as of this March 1st date, which is the last date in this particular chart, there are 24 data points. So you have a pretty solid baseline set of data. Right now, the upper natural process limit is 95%. That lower limit is sitting at 66%, and then the average running through the middle, that green line is 81%. So this basically tells us that if nothing changes within Jessica's fourth grade science system, her classroom, we can expect the data to bounce around this 81% average and stay within the bounds of the limit. So we would call this a common cause system because we don't see any of those rules that I just talked about for special causes. And that's important.

0:13:07.4 JD: So do we have an unstable system or a stable system? We have a stable system. A stable system means that the data is predictable and unless something happens, you know, and this could be something that happens in the control of the teacher in the class, or it could be out of the control of the teacher in the class, but unless something happens that's significant, this data is just kind of keep humming along like this over the course of March, April, May of this particular school year. Right. So once we get to this point, so we have baseline data we've collected in a run chart, we start to understand how that data is moving up and down. We got some more data and we added the upper and lower natural process limits. Now we can assess not only the variation, but also the stability and the capability of the system, all of those things, those questions can start to be answered now that we have this process behavior chart.

0:14:09.3 JD: And this brings us to the final lesson for today, which is lesson 7, which is the improvement approach depends on the stability of the system under study. So that's why one of the reasons why the process behavior chart is so powerful is because now I have an understanding of what I need to do, like what type of approach I need to take to improve this particular system. Right? So in this particular case, I have a predictable system. And so the only way to bring about meaningful improvement is to fundamentally change this science system, right?

0:14:52.6 JD: The flip side would be if I did see a special cause let's say, it was an unpredictable system. We saw special cause on the low side. I'd wanna study that, what happened on that particular day. Because if I see a special cause, let's say on February 2nd I saw a special cause, let's say I saw a single data point below the lower natural process limit that's so different and unexpected, I'd actually wanna go to her classroom and talk to her in her class and say, okay, what happened on that day? I'm gonna try to remove that special cause. Study of that specific data point is warranted. If you don't see those special causes, then those, even though there are ups and downs, there are increases and decreases. They're within that, you know, the expected bounds of this particular system. Right.

0:15:46.9 AS: And I was gonna say, I can't remember if I got this from Dr. Deming or where it came from, but I know as an analyst in the stock market analyzing tons and tons of data in my career, I always say if something looks like a special cause or looks strange it's probably an error.

[laughter]

0:16:03.2 AS: And it could just be for instance, that a student came in and they didn't understand how to fill it out or they refused to fill it out or they filled out the form with a really bizarre thing, or maybe they thought that number 10 was good and number one was bad, but in fact on the survey it was number one that was good and number 10 that was bad. And you find out that, you know, that special cause came from some sort of error.

0:16:26.6 JD: That's certainly possible. That's certainly possible.

0:16:29.5 AS: As opposed to another special cause could be, let's just say that the school had a blackout and all of a sudden the air conditioning went off for half of the class and everybody was just like really frustrated. They were burning hot. It was really a hot day and that special cause could have been a legitimate cause as opposed to let's say an error cause but you know, it causes an extreme, you know response on the survey.

0:16:56.9 JD: Yeah. And the thing is, is yeah, it could be a number of different things. Maybe she tried, maybe she had gotten some feedback about her lessons and maybe even she tried a different lesson design and it was new to her and it just didn't work very well. Maybe she tried to use some new technology or a new activity and it just didn't go well. But you know, if I'm seeing that data show up as a special cause and let's say I'm seeing that the next day or a couple days later, it's still fresh in my mind and I can even go into my chart and label what happened that day. Okay. And I... Now, okay, I'm gonna remove that thing or I'm, you know, if it's a lesson I'm trying, maybe I don't wanna give up on it, but I know I need to improve it 'cause it led to some issues in my classroom, but it's close enough to the time it actually happened that I actually remember what happened on that particular day and I can sort of pinpoint that issue.

0:17:52.9 AS: Yeah.

0:17:54.5 JD: And the data told me it was worth going into studying that particular data point because it was so different than what I had seen previously in this particular 4th grade science system.

0:18:06.5 AS: Makes sense.

0:18:09.9 JD: But in this case, we don't see that, that was a hypothetical. So all we see is sort of the data moving up and down around that green average line. So we have a stable system. So again, that tells me I need to improve the science system itself. There's no special causes to remove. So, the next question I think I would ask, and if you remember one of the data lessons is that we sort of combine the frontline workers, which is the students in this case. We have the manager or the leader, that's the teacher, and then someone with profound knowledge from the Deming lens, that's me, we're bringing these people together and we're saying, okay, you know, we're seeing this hum along this joy in science thing, hum along at sort of like an 81% average. So I think it's a reasonable question to ask, is that good enough? And should we turn our attention to something else. Now, there could be some situations where it's not good enough or some situations where that is good enough. They chose to keep moving to improve that joy in learning. But I think it'd be perfectly reasonable in some context to say, well, you know, sure, maybe we could get a little better here, but maybe it's not worth the effort in that particular area. Maybe we're gonna turn our attention to something else. You know.

0:19:23.7 AS: So you learn something from the chart and that could be...

0:19:26.4 JD: Learn something from the chart. Yeah, yeah.

0:19:27.9 AS: Because when I look at this chart, I just think hard work is ahead.

0:19:31.2 JD: Yeah. Yeah.

0:19:34.7 AS: 'Cause in order to, if you have a stable system with not a lot of extreme... Firefighting is kind of a fun thing, right? When you got special causes, you feel really important. You go out there, you try to figure out what those individual things are, you're the hero. You fix it, you understand it, you see it, whatever. But then when you get a stable system, it's like, oh man, now we got to think about how do we make some substantial changes in the system. It doesn't have to be substantial, but how do we make changes in the system, you know? And then measure whether that has an impact.

0:20:06.4 JD: Yeah. And to your point about fire... Fighting fires, like I didn't know, we had never measured joy in learning like this before, so I didn't know what we were gonna get with Jessica. And so you know what I think you also see here is a pretty well-run classroom. These are kids that are finding a pretty high amount of joy in their lessons. I think that you can kind of objectively say that, but they did choose to move on with the project and keep focusing on this particular system. And I thought it was really interesting. They actually... I'll flip slides here.

0:20:45.6 JD: They actually made this sort of rudimentary fishbone diagram, so you can, if you're viewing the video here you can see that Jessica just took a pen and a piece of paper and put this on the overhead in the classroom, and basically just drew a fishbone. And on the fishbone diagram is also called a cause and effect diagram. So out on the right it says effect. And she wrote low enjoyment, so she's meaning low enjoyment of science class. And they started brainstorming, those are the bones of the fish, what's leading to what's causing the effect of low enjoyment in science class. And so they... She did this brainstorming activity with the kids. So some of the things they came up with were why is there low enjoyment with science class? Well, the computers are sometimes lagging when the kids are trying to use them. They're mad at Ms. Cutler for one reason or another. There's a lot of writing in a particular lesson. There's a lot of reading in a particular lesson.

0:21:58.2 AS: Other teachers coming into the room.

0:22:00.7 JD: Other teachers coming into the room and disrupting the class.

0:22:02.7 AS: Stop bothering me.

0:22:04.1 JD: Yeah. I mean, you know, these are the things you don't often think about. And then they talked about classmates making noises throughout classes, another distraction. And they basically categorized these into different categories. So there were sort of things that made the lesson boring. That was one category. Accidents happening, those are like the computers not working correctly. Scholar... We call our student scholars. So students getting in trouble was one, and then distractions was another category. And so then they did another activity basically after they had this fishbone. And they basically did like a voting activity where they would figure out which of these is the most dominant cause of low enjoyment. And actually what they came up with is their classmates call, like making noises, like students making a lot of noise, making noises, random noises throughout the lesson, they identified that particular thing as the thing that they're gonna then do something like design a plan, do study around, like how are we gonna reduce the amount of noise in the class?

0:23:12.7 JD: And this is all the students coming up with these ideas. Of course, Jessica's guiding these conversations as the adult in the room, but the kids are coming up with this. Like I never would have, well, maybe I shouldn't say I would never have, but it probably wouldn't likely have been on my radar that teacher, other teachers coming into the room was a main source of distraction. You know, who knows what they're doing, dropping off papers that have to be passed out, that dismissal or coming to find a kid for this thing or that thing. Who knows why they're stopping by. But schools are certainly rife with all kinds of disruptions, announcements, people coming into the room, those types of things.

0:23:51.0 AS: It's interesting too to see mad at Miss Cutler because... I was just reading a book about or some research about how to get rid of anger and that type of thing. And they talk about meditation and I do breathing exercise before every class, when every class starts. And it's a way of just kind of calming down and separating the class time from the chaos of outside, but it also could be something that could help with feeling mad.

0:24:27.9 JD: Yeah. And I think if in certain classrooms that certainly could have risen to the top. And then what you do is then design the PSA around that. So how do you do meditation? How do you know if you're going to do... How do you know if you're doing it right? How long do you do it? You know? Does it have the intended impact? You could study all kinds of different things with meditation, but...

0:24:52.4 AS: And are you really mad or is there... Are you really mad at Ms. Cutler or are you... Are you frustrated about something else? Or that...

0:24:58.1 JD: Exactly. Yeah. Is it warranted? Is there actually something that she should stop doing or start doing? There's all kinds of possibilities there. But the main point, and I think this kind of would bring us to the wrap up is taking this approach is very different. Even just the step, Jessica's step of saying, I'm gonna work on joy in science, joy in learning in science class. That's a very different approach. And then step beyond that, I'm gonna involve my students in this improvement approach. And we have these various methods and tools for systematically collecting the classes input, and that those are improvement science or continual improvement tools that we're using. And then we're applying some of the knowledge about variation, Deming sort of data methods to understand that data, that we've systematically collected from students.

0:25:58.7 JD: And now students are involved. So they're actively coming up with both the reasons, the problems that are happening. And then they're like what we'll get into in the last few lessons is their input into the solutions, the change ideas that are gonna make things better. But all of this represents a very different approach than what's typical when it comes to school improvement. These things are not being handed down from on high from someone that has no connection to this classroom whatsoever. Instead, it's actually the people in the classroom that are developing the solutions.

0:26:36.9 AS: I just was thinking about the idea of imagining that this group of students is working really hard on that, and they come up with so much knowledge and learning about how to create a more joyful classroom. And then imagine that they've now codified that together with Ms. Cutler to create kind of the standard operating procedures. Like we put up a sign on the door outside that says, do not disturb until class is over, or...

0:27:06.1 JD: Something simple. Yeah.

0:27:07.0 AS: And that they come up with, and a breathing exercise or whatever that is. And then you imagine the next group of students coming in for the next year, let's say, or whatever, that next group who can then take the learning that the first group had and then try to take it to another level, and then upgrade how the operations of the room is done. And you do that a couple of iterations, and you've now accumulated knowledge that you are building on until in a business, you're... You're creating a competitive advantage.

0:27:40.4 JD: Yeah, absolutely. And another thing that these guys did was they didn't say we're gonna improve X, Y, or Z and then set an arbitrary goal, which is one of the things we've talked about that often happens at the outset of any type of improvement. They didn't... They sort of avoided this act of desperation. We talk about goal setting as an active... Are often goal setting is often an act of desperation. They avoided that completely. Instead, what they did was we gathered some baseline data to understand what is the capability of our system when it comes to joy in learning. That's what they did first. They didn't set the goal first. A lot of wisdom, a lot of wisdom in 10 year olds for sure.

0:28:22.1 AS: That's interesting. Well, John, on behalf of everyone at the Deming Institute, I want to thank you again for the discussion and for listeners, remember to go to deming.org to continue your journey. You can find John's book Win-Win: W. Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools on amazon.com. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, and its absolutely applicable to today's discussion. People are entitled to joy in work.

How do you know that the learning you and your colleagues are doing is leading to changes in behavior? In this episode, Bill and Andrew discuss little tests you can do to see if the transformation you're working toward is really happening.

0:00:02.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunity. Today is episode 22, and the title is, Test for Understanding Transformation. Bill, take it away.

0:00:30.7 Bill Bellows: Hey, we've been at this podcast for about a year now, right?

0:00:36.6 AS: It's incredible how long it's been.

0:00:39.8 BB: And in the beginning you said, I've been at this for 30 years, right?

0:00:43.7 AS: Yeah.

[laughter]

0:00:46.7 BB: Maybe we should change that to 31.

0:00:48.3 AS: Oh, man, there you go.

0:00:51.2 BB: All right.

0:00:53.0 AS: That reminds me of the joke of the janitor at the exhibition of the dinosaurs and the group of kids was being led through the museum and their guide had to run to the bathroom. And so they were looking at this dinosaur and they asked the janitor, "How old is that dinosaur?" And he said, "Well, that dinosaur is 300,032 years old." "Oh, how do they know it so exactly?" He said, "Well, it was 300,000 when I started working here 30 years ago."

[laughter]

0:01:28.8 AS: So there we are.

0:01:31.4 BB: That's great.

0:01:33.3 AS: Thirty-one years.

0:01:34.0 BB: All right, all right, all right. So first thing I wanna say is, as you know and our listeners know, I go back and listen to this podcast and I interact with people that are listening too, and I get some feedback. And in episode 19, I said the Germans were developing jet engines in the late 1940s. No, it turns out the Germans were developing jet engines in the late 1930s and they had a fighter plane with a turbine engine, a developmental engine in the late '30s. They didn't get into full-scale development and production. Production didn't start till the tail end of the war. But anyway, but I was off by a decade. In episode 21, I mentioned that checks were awarded within Rocketdyne for improvement suggestions and individuals who submitted this and it could be for an individual, maybe it was done for two people, three people, I don't know, but they got 10% of the annual savings on a suggestion that was implemented in a one-time lump sum payment.

0:02:36.1 BB: So you got 10% of the savings for one year and I thought, imagine going to the president of the company and let's say I walk into the president's office and you're my attorney. And I walk in and I say, "Hey, Mr. President, I've got a suggestion. You know that suggestion program?" He says, "Yeah, yeah, yeah. Come on in, come on in. And who's this guy with you?" "Well that's Andrew Stotz." "And who's Andrew?" "He's my attorney, and he and I have been thinking about what this is worth." "Well, tell me about it." "No, well, before we get into it, we've got this form to sign here."

0:03:10.9 AS: Andrew.

0:03:11.1 BB: "Right? And you wanna see the idea or not? But we don't have to share it." But I thought, imagine people going to great length and really taking advantage of it. Well, a few of us that were involved in our InThinking Roadmap training, what we started to propose is we want a piece of the action, Andrew. So the proposal we had is that, Andrew, if you come to one of our classes, a study session on The New Economics or Managing Variation of a System, we'll have you sign a roster, right? And so if you are ever given a check for big numbers, Andrew, then we're gonna claim that our training contributed to your idea and all we ask is 10%, right?

0:03:58.1 AS: Of your 10%.

0:04:00.9 BB: I mean, I think that's fair, right? But imagine everybody in the organization becoming a profit center.

0:04:08.7 AS: Crazy.

0:04:10.4 BB: That's what you get. All right.

0:04:14.5 AS: And the lesson from that is focus on intrinsic motivation. People wanna make improvements, they wanna contribute.

0:04:23.8 BB: You start... You go down the slippery slope of incentives, which will be part of what we look at later. There's just no end to that. All right?

0:04:31.4 AS: Yeah.

0:04:32.2 BB: So I mentioned in a previous podcast that I had an interaction, met the army's first woman four-star general, and I just wanna give you some more background and interesting things that happened with her relative to this test for understanding transformation. I don't know April, May, 2008, someone on her staff reached out to me and when they first... When the guy got a hold of me, I said... From the Pentagon, he called me, I think it was like 8:00 or 9:00 o'clock at night here. Whatever it was, it was after hours in LA so it was after hours in DC. I remember saying to the guy, "How did you find me?" He says, "There's a lot of stuff on the internet." So he says, "I came across a presentation you did for Goodwill Industries." And he says, "In there you talk about... " He says, "There's some really good stuff in there."

0:05:29.0 BB: And I said, "Like what?" He said, "You have a slide in there about you can minimize loss to society by picking up nails in a parking lot." And that was an example of what I used Dr. Taguchi's work, minimizing loss to society. I said, "Yeah, I remember that slide." He says, "We don't do enough of that in the Army." And he says, "Hey, we've got a conference next week, late notice. The keynote speaker bailed out." And he's calling me on a Monday. The presentation's a week from Wednesday and he says... And also he said that the Army had an initiative called Enterprise Thinking and Enterprise Thinking was part of what we called our effort within Rocketdyne. We used the terms Enterprise Thinking, organizational awareness, and that InThinking personal awareness. We were using those two terms. So he did a search on that, found my name, and he says, "What do you think?" And he says, "We're gonna... "

0:06:24.3 BB: If I agree, we'll have a follow-up vetting call the next day. So he calls me up the next day and it's him and a two-star general. There are three people in the room, all senior officers, and he says, "Okay, so, but tell us what you do." So I shared the last... It sounds funny, is what seems to have been the last straw in their interest was having me speak, was my last straw story. Remember the executive from the European airline and... Right? So I tell that story about my efforts within Rocketdyne and Boeing about this airline executive and how this deeply resonated with this executive of this customer of this company that buys a lot of Boeing airplanes that we focused on the one cause, not the greater system.

0:07:13.2 BB: And within minutes of sharing that story, they started laughing, leading to it a few minutes later to them saying, "you're the one."

0:07:19.2 AS: [laughter] That's very interesting.

0:07:21.3 BB: You're the one. So for our listeners, I'd say, let this be a reminder of how a personal story guided by insights on how Dr. Deming's System of Profound Knowledge can open doors for you. And you can use that story, come up with your own stories, but you just never know when you're gonna be in a situation where you need a really simple story. So as an aside, they contact me, like I mentioned, 10 years later, and I think I shared with you offline that the speaker I was replacing was the great Richard Rumelt, the strategy professor from UCLA, who for whatever reason needed to bail out. And then when this podcast is posted, I'll put a link to the slides of the presentation.

0:08:05.7 BB: It's about 45 minutes long. What was not covered... I went back and looked at it earlier to say, what did I share with them that got them so excited? All I know is it fit into 45 minutes to an hour. What was not covered was the trip reports, whether Red Pen or Blue Pen, Last Straw/All Straw, Me/We organizations. But after it was done, as I'm coming off the stage, General Dunwoody in uniform comes up to me. She was thrilled. Her exact words were, "You hit it." She says, "Bill, you hit it out of the park." And I thought, well, I had help from a lot of people. She then says something to me that I'll never forget. So we're face-to-face, right? Let me just... Right?

0:08:45.1 BB: And she says to me, "Bill, you've got a real challenge on your hands. Bill, you've got a real challenge on your hands." So prompted by that, I held my hand out, my right hand, which is what you do to initiate a handshake, and then she reaches out to shakes my hand and I said, "General Dunwoody, we have a challenge on our hands." [laughter] And she erupted in laughter. And my only regret, even though we went out for drinks for the next couple of hours, but my regret was not having a photo of her and I doing a double high five as she laughed. So then I remained in touch with her for the next six to eight months when she was promoted to four-star and she looked for opportunities to get me to the Pentagon, which she did. And I was trying to get her or somebody on her staff to come to Rocketdyne to learn more about what we're doing.

0:09:38.1 BB: But I say I share this anecdote as an example of a Test for Understanding of a transformation. So what is a TFU, test for understanding? This is something I got exposed to in my Kepner-Tregoe Problem Solving and Decision Making training, which I talked about in one of the first episodes. And in our training to deliver what was then a five-day course, we were coached on how to interact with seminar attendees, including how to answer questions and how to ask questions. And one of the things we got our knuckles wrapped for was saying, are there any questions? Because no one answers that. There is... And if I had said that when I was being certified, I'd have failed. So instead we're coached on how to ask questions or make comments, which serve as a test for someone's understanding of what I presented.

0:10:27.9 BB: For example, for me to reply to General Dunwoody with we have a challenge on our hands was to test her understanding of what I said and her laughter is a response that I could be expecting with something short. As an aside, an appreciation, we've talked about Ackoff's D-I-K-U-W model data, raw data information. You turn that into what, where, when, extent, knowledge. If we convert that to how does something operate looking inside of an automobile, how do the pieces work together? Remember he said understanding is when you look outward 'cause knowledge looking inward, Russ would say, doesn't tell you why the car is designed for four passengers. That comes from looking outward. And then wisdom is what do we do with all this? Well, the Kepner-Tregoe training was Test for Understanding and now that I'm inspired by Ackoff, well in my university classes, I ask "Test for Information" classes. I have them watch videos and say, what company was Russ working for?

0:11:31.1 BB: This anecdote, that's information. Nothing wrong with those questions. I can ask for "Test for Knowledge" questions asking how something operates. So what I don't know is like, why are they called Test for Understanding? They could be Test for Knowledge, Test for Information, Test for Wisdom. And obviously TFI test for information could be true, false, multiple choice and test for knowledge and understanding could be short, but then I want to go deeper. And so what I wanna share is in one of my university courses, I share the following, true, you can't make it up news stories. It says, once upon a time a national airline came in dead last on on-time performance one month even though it had offered its employees everything from cash to pizza to finish first in the US Department of Transportation's monthly rankings. Does that sound like incentives, Andrew?

0:12:33.0 AS: It's all there.

0:12:33.8 BB: If we finish first, pizza parties. Now if they got exposed to Rocketdyne, they'd be handing out checks for $10,000. So in one of the research essays, for a number of the courses, every week, every module, I give them a research essay very similarly, giving them a situation and then what's going on with the questions is having them think about what they've been exposed to so far. And so question one in this assignment is given this account, list five assumptions that were made by the management team of this airline? And so I just wanna share one student's response. He says, "assumption one..." And also let me say this comes from the second of two Deming courses I do. So these students have been exposed to a one, one-semester course prior to this. So this is not intro stuff. This is getting deep into it.

0:13:34.3 BB: And so anyway he says, "assumption one, offering incentives like cash and pizza would motivate employees to prioritize on-time performance." Okay? That's an assumption. "Assumption two, employee morale and satisfaction directly correlate with on-time performance. Assumption three, the issue of on-time performance primarily stems from..." Are you ready? "Employee motivation or effort. The incentives provided were perceived as valuable by employees." And you're gonna love where this goes. "Assumption five, employees have significant control over factors that influence on-time performance such as aircraft maintenance, air traffic control and weather conditions."

0:14:20.2 AS: Good answers.

0:14:23.0 BB: Again, what I think is cool and for our listeners is what you're gonna get in question two, three, four, and five is builds upon a foundation where these students have, for one and a half semesters been exposed to Deming, Taguchi, Ackoff, Gipsie Ranney, Tom Johnson, the System of Profound Knowledge, hours and hours of videos. And so this is my way of Testing their Understanding. And so if you're a university professor, you might find interest in this. If you're within an organization, this could be a sense of how do you know what people are hearing in your explanations of Deming's work or whatever you're trying to bring to your organization? So anyway, I then have them read a blog at a Deming Institute link, and I'll add this blog when this is posted but it's deming.org/the insanity of extrinsic motivation. All right. And they've been exposed to these concepts but I just said, "Hey, go off and read this blog." And it was likely a blog by John Hunter.

0:15:32.0 AS: Yep.

0:15:32.2 BB: All right, question two. All right. Now it gets interesting, is that "in appreciation of Edward de Bono's, "Six Thinking Hats"," which they've been exposed to, "and the Yellow Hat, which is the logical positive, why is this such a great idea? Listen, explain five potential logical, positive benefits of incentives, which would explain why they would be implemented in a ME Organization." And so what's seen is I have them put themselves in a ME Organization, put on the Yellow Hat and think about what would be so exciting about this. And so logical, positive number one. "Incentives can serve as a powerful motivator for individuals within the organization, driving them to achieve higher levels of performance and productivity. When employees are offered rewards for their efforts, they're more likely to be motivated to excel in their roles," Andrew. Logical positive number two, enhanced performance. Explanation, "by tying incentives to specific goals or targets, organizations can encourage employees to focus their efforts on key priorities and objectives.

0:16:46.9 BB: This can lead to improved performance across various aspects of the business, ultimately driving better results." Number three, attraction and retention of talent. Oh, yeah. Explanation, "offering attractive incentives can help organizations attract top talent and retain existing employees. Attractive incentives can serve as a key differentiator for organizations seeking to attract and retain skilled professionals." Now, let me also say, this is an undergraduate class. As I mentioned, this is the second of two that I offer. Many of these students are working full-time or part-time. So this is coming from someone who is working full-time, probably mid to late 20s. So these are not... They're undergraduates but lifewise, they've got a lot of real-world experience.

0:17:44.0 BB: All right. Logical positive four, promotion of innovation and creativity. Explanation, "incentives can encourage employees to think creatively and innovative in their roles. By rewarding innovative ideas and contributions, organizations can foster..." Ready, Andrew? "A culture of creativity and continuous improvement, driving long-term success and competitive advantage." And the last one, positive organizational culture. "Implementing incentives can contribute to a positive organizational culture characterized by recognition, reward and appreciation. When employees feel valued and rewarded for their contributions, they're more likely to feel engaged, satisfied, and committed to the organization." But here's what's really cool about this test for understanding, I get to position them in the framework of a ME Organization with the Yellow Hat.

0:18:40.9 BB: Now question three, in appreciation of Edward de Bono's, "Six Thinking Hats" and the Black Hat, what Edward calls a logical negative, list and explain five potential aspects of incentives, which would explain why they would not be implemented in a WE Organization. And this is coming from the same person. This is why I think it's so, so cool that I wanna share with our listeners. The same person's being forced to look at it both ways. Negative number one, potential for... Ready, Andrew? "Unintended consequences." Oh my God. "Incentives can sometime lead to unintended consequences such as employees focusing solely on tasks that are incentivized while neglecting other important aspects of their roles. This tunnel vision can result in suboptimal outcomes for the organization as a whole."

0:19:30.7 BB: "Number two, risk of eroding intrinsic motivation. Explanation, offering external rewards like incentives can undermine intrinsic motivation leading employees to become less interested in the work and more focused on earning rewards. Number three, creation of unhealthy competition. Explanation, incentives can foster a competitive culture within the organization where employees may prioritize individual success over collaboration and teamwork. This competitive atmosphere can breed..." Ready? "Resentment and distrust among employees." Can you imagine that, Andrew? Resentment and distrust? That seems like it would clash with my previous positive thought, but it really just points out how careful management needs to be.

0:20:19.0 AS: Yes.

0:20:19.2 BB: All right. Cost considerations. "Implementing incentive programs can be costly for organizations, particularly if the rewards offered are substantial or if the program is not carefully managed. Organizations may be hesitant to invest resources and incentives, especially if they're uncertain about the return on investment if budget is of concern." And then number five, "short-term focus over our long-term goals." Explanation, "incentives often improve short-term gains rather than long-term strategic objectives. Employees may prioritize activities that yield immediate results, even if they're not aligned with the organization's broader goals or values."

0:21:02.7 BB: And then question four, here's the kicker. "In appreciation of your evolving understanding of the use of incentives, share, if you would, a personal account of a memorable attempt by someone to use incentives to motivate you, so that so many pizza parties or bringing a small box of donuts or coffee in for working a weekend I was supposed to have off." And then question five, "in appreciation of your answer to question four, why is this use of incentives so memorable to you? They were very ineffective. I often felt insulted that my boss thought that $20 worth of pizza or donuts made up for asking me to give 50% of my days off that week."

0:21:55.5 AS: Here's a donut for you.

0:22:00.6 BB: Here's a doggy bone, here's a doggy bone. I just wanted to share that this time. Next time we'll look at more.

0:22:09.3 AS: One of the things that...

0:22:10.6 BB: There are other examples of Test for Understanding. Go ahead, Andrew.

0:22:12.3 AS: One of the things that I wanted to... What you made me think about is that you and I can talk here about the downside of incentives but we have to accept the world is absolutely sold on the topic of incentives.

0:22:27.2 BB: Absolutely.

0:22:27.8 AS: A 100, I mean, 99.999% and if you're not sold on it, you're still gonna be forced to do it.

0:22:34.5 BB: Well, you know why they're sold on them, 'cause they work.

0:22:39.7 AS: It's like a shotgun. One of those pellets is gonna hit the target but...

0:22:47.7 BB: That's right.

0:22:48.4 AS: A lot of other pellets are gonna hit...

0:22:50.6 BB: And that's all that matters. And then what you get into is, you know what, Andrew, that that one person walks away excited, right? And that's the pellet that I look at. And I say, yep, and what about those others? You know what I say to that, Andrew? Those others, you know what, Andrew, you can't please everybody.

0:23:07.8 AS: Yeah.

0:23:07.9 BB: So this is so reinforcing. There's one person that gets all wrapped up based on my theory that this is a great thing to do and I hone in on that. And everything else I dismiss as, "ah, what are you gonna do? You can't please everybody." But what's missing is, what is that doing to destroy their willingness to collaborate with the one I gave the award to?

0:23:33.1 AS: Yeah, I'm picturing a bunch of people and laying on the ground injured by the pellets but that one black, or that one... Let's say the one target that we were going after, that target is down but there's 50 other people down also.

0:23:50.6 BB: No, but then this is where I get into the white bead variation we talked about early, early on, is that if all I'm doing is measuring, have you completed the task and we're looking at it from a black and white perspective and you leave the bowling ball in the doorway for the next person, meaning that you complete a task with the absolute minimum requirements for it to be deemed complete. Does the car have gas? Yes. You didn't say how much but when people then... When those people that were summarily dismissed didn't receive the award, when they go out and don't share an idea, don't give somebody a warning of something or not even maliciously leave the bowling ball in the doorway but believe that the way to get ahead is to do everything as fast as possible, but in doing so, what you're doing is creating a lot of extra work for others, and then you get promoted based on that. Now you get into... In episode 22 we talked about, as long as there's no transparency, you get away with that. And then the person at the end of the line gets buried with all that stuff and everybody else says, well, my part was good and my part was good. How come Andrew can't put these together?

0:25:26.8 AS: In wrapping this up, I want to think just briefly about how somebody... So we're talking about understanding transformation, but we're also talking about incentives.

0:25:39.8 BB: Yes.

0:25:40.5 AS: And I would like to get a takeaway from you about how somebody who lives in a world of incentives, how do they, after listening to this, go back to their office and how should they exist? It's not like they can run away from a structure of incentives. Maybe when they become CEO, they decide, I'm not gonna do it that way, but they're gonna go back to their office and they're gonna be subjected to the incentive system. Obviously, the first thing is we wanna open up their mind to think, oh, there's more to it than just, these darned employees aren't doing what I'm telling them, even when I'm giving them incentives. But what would you give them as far as a takeaway?

0:26:27.1 BB: Well, I'll give you some examples of what some brilliant colleagues did at Rocketdyne, as they became transformed, as they became aware, and one is politely decline. Say, I don't, I don't need that. Just again you have to be careful there. There could be some misinterpretations of that. So you have to be...

0:27:03.2 AS: What if you're required to put an incentive system on top of your employees?

0:27:09.5 BB: Well, first, if it's coming down to you to go off and implement this, then one thing you could do is create a system which is based on chance. Everyone who contributed an idea, their name goes into a lottery for free lunch the first Wednesday of the month, and everybody knows. So then we're using the incentive money but using it in a way that everyone deems as fair. So that's one thing. And you just say, I'll... So then if your boss asks, have you distributed the incentive money? You say, yes, but you're distributing it based on a system of chance of which everyone realize they stand an equal chance of winning.

0:27:56.9 AS: Okay. So let's address that for a second. So your boss believes in incentives. They ask you to implement this system. Now you proposed one option, which is to do something based upon chance, but now let's look at your employees under you that have been indoctrinated their whole life on the concept of incentives. And you give them a system of chance and they're gonna come back and say, wait a minute, you're not rewarding the person who's contributing the most here? Now obviously you have a teaching moment and you can do all that, but is there any other way that you can deal with this?

0:28:33.7 BB: No, it could be tough. You've got to... You may have to go along until you can create a teaching moment. And what I did with the colleagues, when there are these a "great minds doing great things" events, and an announcement would go out as to who are the privileged few that got invited to these events, and I would tell people that if you go to the event, then that's what I would say. You can decline, you can politely decline. There's some things you can decline.

0:29:17.4 AS: I guess the other thing you could do, you could also... When you have to, when you're forced to reward, you can celebrate everybody's contribution while you're also being forced to give that incentive to that one person that has been deemed as the one that contributed the most.

0:29:36.9 BB: Well, I'll give you another example that a colleague did, a work colleague. He didn't do it in a work setting. Not that it couldn't be done in a work setting, but he signed up to be as a judge in a science fair in a nearby school. It was a work-related thing. And as it got closer, he realized... It was a... It would involve... What is a science fair without the number one science experiment? And my theory is you can't get a bunch of adults and a bunch of kids together in any organized way without giving out an award that just, it's like, oh, we got everybody together. We got to find a way to single somebody out. So when he realized what was going on, instead of not going, what he did, he took it upon himself to interact with every kid whose science experiment he watched and asked them lots of questions about it, about what inspired them? What did they learn?

0:30:30.6 BB: So what he wanted by the end of the day was that they were more intrigued that someone came and really wanted to know what they learned and less inclined to listen to who won the award. And I've seen that in a work setting, again, where we had events and the next thing you know there's an award and I thought, well, what can we do? Well, we can go around and really engage in the people who's got tables set up for the share fair knowing at the end of the day, we have this. We just can't break this, we just can't break this.

0:31:08.2 AS: Yeah. All right. So...

0:31:10.3 BB: But the other thing I've seen, I've seen people who received rewards, use that money. Literally, one guy in the quality organization at Rocketdyne received an award. It might have been for a $1000. He used the money, Andrew, to buy copies of The New Economics for everyone in the organization.

[laughter]

0:31:31.7 AS: Well, that brings us to another possibility, is that you convince your boss that you at least want to give... You want to reward the whole department.

0:31:40.5 BB: Yes.

0:31:40.9 AS: Any reward that you do, you want to reward your whole department. And so that could be something that your boss would say, "Okay, go ahead and do that." And they're not gonna go against it as opposed to trying to, say, no, I won't do it this way, but...

0:32:02.1 BB: Well, towards that end, I've seen people that are rewards crazy. At Rocketdyne, there's one guy in particular in a machine shop manufacturing environment and some big program wanted to thank five out of the 50 people in his organization with t-shirts. And he said, "You either give me 50 t-shirts or no t-shirts."

0:32:27.6 AS: Yeah.

0:32:28.8 BB: And I thought that was really cool 'cause this... And I don't know to what degree his exposure to what we were doing, but I thought that's what we need more of. Come back with 50 shirts and we'll take them.

0:32:44.1 AS: Okay. Let's wrap this up by doing a brief wrap-up of why you're saying... Why you've titled this Test for Understanding and what can the listeners take away.

0:32:56.6 BB: The idea is again, if in a seminar learning event situation is one thing, but if you're involved in leading in a transformation within your respective organizations, what I'm suggesting is that you think about how to Test the Understanding of that transformation's progress with your audience. And we talked in the past about leaving a coffee cup in the hallway, see if it's still there. That's a Test for Understanding of the culture of the organization. And that's what I'm suggesting here, is there are simple things you can do such when somebody says, come see what my son did. You can say, your son? Or is it, was there a spouse involved? And just as you become aware of the nuances of this transformation, you could be looking at somebody look at two data points and draw a conclusion and they're just a day out of some seminar with you about understanding variation and they're looking for a cause of one data point shift.

0:34:13.0 BB: So it's just, what can you do day in and day out, just your little things to test the organization or test an individual's understanding of this transformation process that we're talking about, which is, how are you seeing things differently? Are you becoming more aware of incentives and their destruction, more aware of theories? That's all. What just came to mind is... And the other aspect of it was this idea that very deliberately with the foundation of ME and WE, Red Pen/Blue Pen, then you can build upon that by saying to somebody, how might a Blue Pen Company go off and do this? How might a red pen company go off and do that? And that's not a guarantee that either one of them is right, but I find it becomes a really neat way on an individual basis to say, as you just pointed out, Andrew, so how would I as a manager in a Blue Pen Company deal with that awkward situation?

0:35:19.2 BB: Well, if I was in a red pen, this is what I would do. And so it's not only testing for understanding, but also the power of this contrast. And that's what I found with a group recently, especially the students. If I give them the contrast, I think it's easier for them to see one's about managing things in isolation and all that beckon such as belief in addition and root cause analysis, and one's about looking at things as a system. So it's not just Test for Understanding, but a test of both foundations is what I wanted to get across.

0:35:57.0 AS: Okay, great. Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. If you wanna keep in touch with Bill, hey, you can find him on LinkedIn and he listens. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. I mean, I say this quote every time until I will be bored stiff of it, but "people are entitled to joy in work."

How can you make lasting change at your organization? Recruit your friends! In this discussion, Bill Bellows lays out his experience recruiting and working with a small group to make big changes in a large company.

0:00:02.5 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunity. Today is episode 21, and the topic is Transparency. Bill, take it away.

0:00:27.1 Bill Bellows: Thank you, Andrew, and welcome to our audience. And I wanna thank a handful of people who have reached out to me on LinkedIn and elsewhere to talk about the podcast, what they're getting out of it, and which has been very interesting meeting people from around the world. And that's led me to a couple opening remarks for clarity on some of the things we've discussed in the past. And then we'll get into our feature topic. And so I say, [chuckle] is that in my early years at Rocketdyne, the Rocket Factory, a few of us started to see the synergy of what we were absorbing and integrating from, primarily from Dr. Deming and Taguchi, not just them, there were others. And we're 10 years away from really beginning to see what Russ Ackoff was able to offer us. At one point, there were eight of us. It started off with one, then another, then another. Next thing you know there's eight of us. We were what Barry Bebb and his cloud model would call advocates. Advocates of a change, of a transformation. We've been using that word. And I started to refer to us as the Gang of Eight 'cause this is the early '90's. And I think in China there was a group known as the Gang of Eight. Maybe that was the '80's. And I remember thinking, "Oh, we're like the Gang of Eight."

0:01:54.7 AS: I thought that was a Gang of Four in China, is that the Gang of Four.

0:01:58.9 BB: Well, there was a Gang of Four, then there was a Gang of Eight. There were both.

0:02:02.4 AS: Okay.

0:02:03.1 BB: But anyway, but I remember hearing that word, and then I thought, "Well, so okay, a gang of eight." We started to meet regularly, perhaps every other week, sharing ideas on how to initiate a transformation and how we operated, again, inspired by Deming. So at first we met quietly, we would meet in another building, not wanting to call attention to our efforts, not wanting to be visible for those who might have been adversaries again to borrow from Barry's model. 'Cause Barry's model was, there's, for every advocate there's a few more adversaries. So we were keeping our heads down. And this is before I knew anything about Barry, but I, we were just kind, a little bit paranoid that people would see what we're doing. And so who were the ones that were the adversary? Well, those were promoting rewards and recognition. Those were promoting individual cash incentives for suggestion programs including, as I mentioned a previous podcast, an individual could submit a suggestion award, get up to 10% of the annual savings in a onetime lump sum. They were giving out checks for $10,000, Andrew. And I would kid people, if the company's giving out checks for $10,000, do you think we've got photographs of me receiving a check for 10,000? You betcha.

0:02:03.5 BB: And there it is in the newspaper, me receiving a check, not that me, [chuckle] but somebody receiving a check for $10,000, a big smile with the President. And it's in the newspaper and did that cause issues? Yes. But anyway, it wasn't obvious for some of us that we might have been, sorry, it wasn't obvious for some time that those we might have considered the adversary to our efforts were very likely not meeting to plan how to stall our efforts. [chuckle] Right. And, but it took a while to realize this, so here we are trying to be very discreet, meeting discreetly. And then it, at some time it dawned on me and some of the others that, those of us that were inspired to learn, think, and work together on transformation efforts as we've been exploring these podcasts, we have the benefits of positive synergy. And the adversaries at best operate without synergy as they're not likely to be inclined to do much more than participate in what some at Rocketdyne called, you ready, "Bill Bellows' Bitch Sessions." [laughter] And they come back from a class with me and they start bitching about me. And then the local people in that area would come by and tell me, and they said, "Anything we can do?" I said, "Yeah," I said, "Ask them what part of Rocketdyne moving in the direction of a Blue Pen Company do they not like." Right? It's just arrrgggggh.

0:02:04.2 BB: And I say, anyway. But once we had more and more results from our efforts, results from applying these ideas with very visible improvements in quality and costs leading to improved profits, it was all the harder for the adversaries to slow our efforts. Again, we were most fortunate to be working on challenges, we had challenges in fighting fires, but we also had challenges in designing hardware that achieved "Snap Fit" status, which translates to dramatically easier to integrate higher performing as well, as we shifted from parts to systems, challenges that required, guess what? A different lens inspired by Dr. Deming. That's, [chuckle] again, listening to the previous podcast, 'cause I thought, "Well, I wanna clarify a few things." Did we have ups and downs, Andrew? Yes, we did. We had days when we're excited, we had days when we were down. But what really worked out well, [chuckle] and the running joke was, there was variation in our excitement.

0:02:04.7 BB: So I may have been down, you'd be up, so you'd lift me up and then when you're down, I lift you up. And so the running joke we had amongst us was, thank God for variation in our moods. Because if we were all depressed at the same time, we'd go off the cliff. [chuckle] But we just took turns as to the ups and the downs. And we're very fortunate to have weekends 'cause that gave us time to not wanna choke some people. So, [chuckle] but come Monday we're relaxed. And then, but another thing that I wanted to point out from things we talked about previous podcasts, years ago, 30, nearly 30 years ago, I met a senior structural analyst from Boeing, Al Viswanathan, who was on the Boeing Commercial side. And he somehow got involved in the commercial side.

0:06:52.1 BB: Well, I don't know if it was the commercial side or military side. Anyway, Boeing had, there were both sides and one side was pro-Deming and the other side was anti-Deming. So he must have been on the defense side. And why would the defense side be pro-Deming? Because the Pentagon was pro-Deming. And so the defense side people would have been watching that. Anyway, Al somehow got involved in studying Deming's work and being a mentor within the organization. And I met him, I know when he worked there, when he retired. Anyway, Al, coming from Al, what I want to share is something he would say relative to Dr. Deming's funnel experiment. There's rule one of the funnel, rule two, rule three, and rule four. So rule one is you have a funnel and you drop marbles from the funnel onto the floor, and you get a pattern of where the marbles lay.

0:07:49.1 BB: And that's called variation. You're holding the funnel, you drop the marble, it lands in a different spot each time. And then rule two is you, if the marble is off a little bit to the right of the target that you're trying to hit, then you move the funnel the other direction. So two and three have to do with compensating. If it doesn't go where you want, then you shift it accordingly. Rule four, remember rule four of the funnel?

0:08:17.4 AS: I don't remember that.

0:08:18.9 BB: And this is... I think it's chapter eight. I know it's in The New Economics. Chapter 8, I'm sorry, rule four of the funnel is wherever the marble lands, position the funnel for the next drop. So in rule one, you keep it where it is and you get a pattern. Rules two and three, you compensate for where it lands. You either go left if it goes right and you compensate. And in compensating, it becomes worse. But what becomes really bad is when you put the funnel in rule four over where the last marble landed, and you end up getting farther and farther from the target leading to, remember the expression Dr. Deming used for that?

0:09:00.9 AS: Well, I remember the word tampering. But it meant when you get way off the target. What was that?

0:09:06.6 BB: He called it going off to the Milky Way. [laughter] And there are computer simulations where if, some people have done, you know, created.

0:09:16.0 AS: You do it in California and you end up in New York.

0:09:17.8 BB: Yep. And you, and you, and you keep getting further and further. Well, so in conversations with Al, and it could have been me and him and Dave Nave, Dick Steele and others, and at some point, Al would say, "How do we know we're not going off to the Milky Way?" Which translates to, how do we know that what we're interpreting from Deming is not getting further and further and further and further away from what he was trying to say? How do we know that we aren't wacky? How do we know? Because we think, "Oh, we're getting, we're understanding this better and better." And what I would say is, how do we know we're not going off to the Milky Way? "Actually," I say, "We don't know." But part of having a community of people that work closely with Deming, people that know more than me about Dr. Deming's work is you can tap into that community and maybe lessen the chance that we go off to the Milky Way. Now, again, is that a guarantee? No, it's not a guarantee.

0:10:25.9 BB: But I would say, what I appreciate about Al saying that is, it's just a reminder that how do we know that what we're interpreting is true? So we're here, you and I are having these conversations, we're sharing interpretations, lessons learned, are we, is what Dr. Deming would say, "Is this worker training worker?" So, each of us are ignorant, and we think we understand Deming, and we're sharing it with others "well, I know, I know." Now, we can all be right, we can all be going off to the Milky Way. So I just wanted to say that, when I'm talking about diffusion from a point source and getting smarter and smarter and having these conversations within our organization. How do we know we aren't fooling each other? We don't know.

0:11:18.7 AS: I have a couple follow ups here. First of all, the 1991 Washington Post called it the Gang of Eight, as opposed to the Gang of Four, which was before that time, during the Cultural Revolution. And the Gang of Eight included seven men and one woman. And the Gang of Four, of course, included Mao's wife. So there's a little clarification.

0:11:44.6 BB: I wasn't sure if she was part of the four or part of the eight. I knew her name was in there somewhere.

0:11:49.0 AS: And the second thing you talked about the volatility of your feelings, your moods, right. And I just wanted to introduce the concept of volatility in finance, which is that volatility in itself is not bad. What's bad is correlation of volatility. So if all of you are upset on the same day, then it's just an absolute crash. But if one's upset on Monday and another one's happy and productive on Monday, then it starts to balance. And that's what we do in the world of finance is we combine correlation with volatility. And Harry Markowitz got a Nobel Prize in economics for coming up with the concept that risk can be reduced by understanding the correlation between assets and adding a highly risky asset to a Portfolio could, in fact, reduce the risk of the Portfolio overall, if the correlation between that asset and the Portfolio was, let's say negative or very low.

0:12:55.5 BB: Wow what you're talking about is the benefit of not being synchronous, being asynchronous.

0:13:04.2 AS: Correct.

0:13:05.1 BB: So you're up, I'm down, and I'm up, you're down, and then we can get through these periods. And yeah, and that's exactly what we're talking about. But you're right, I'm glad you brought that up because I've heard people talk about that as well. But that's exactly the point we're trying to make is, so for all those who think we ought to shrink variation to zero, I'd say, well, maybe there's value in variation, value in diversity of opinions. And also I have had people in the past say, "Well, so a Blue Pen Company is a bunch of people that go along to go along." I said, "No, it's a bunch of people that have strong disagreements on things and they share those disagreements."

0:13:49.5 BB: Now, at the end of the day by Friday, we've got to make a decision as to releasing this album whatever it is, because we've gotta ship. And we may arm wrestle, we may vote however we're gonna do it. So there can be disagreement. We have the ability to articulate where we're coming from. Borrowed from Edward de Bono, we can use a black hat and I can give you reasons why you don't think it'll work. You can call me on it and say, "Bill, how do I know it's your black hat and not what de Bono would call your red hat, which is my intuition."

0:14:26.4 AS: So if I say it doesn't work, you could say, "Bill, is that you don't feel it'll work or you know it won't work?" And I say, "Andrew, you're right. I have a bad feeling about it." I say, "Well, let's just be honest about it." But again, at the end of the day, we may vote. But we're gonna move forward. And what's not gonna happen is if you decide to take however we decide to make that decision, what there won't be a lot of room for is a bunch of "I told you so."

0:14:58.8 AS: Right.

0:15:00.4 BB: And we just we just dispense with that and just say this time, maybe the idea I had, we'll just have to wait till later and we're just gonna move on. So it's not to say it's a bunch of happiness and we're always in agreement. No, very strong relationships can have very strong disagreements. They just don't result in a civil war. Years ago, when my wife and I got married, she said I was just, it was lucky for me that she liked cats. I said that was non-starters. I said liking cats was a requirement. [laughter]

0:15:44.3 BB: So there's a few things that were non-starters. And if she didn't like cats, I'd have had a hard time with that. But on everything else, there's things we can disagree with. That's okay. All right. So given that I wanna talk about tonight is something that's come up in some other conversations recently. And it's about transparency. And then I have a quote that I've used in the past. I've once in a while attributed to Peter Senge, because I can't remember is actually Robert Fritz, a close associate of Peter Senge. And Fritz's comment is, "It's not what the vision is that is important. It's what the vision does." And what I like about that is if you have a shared mental model of a Blue Pen Company. And I just began to appreciate how powerful it is that we have a shared vision. And relative to transparency, what I was sharing with some people is the transparency that exists in a Blue Pen Company, a Deming organization, a WE organization, an All-Straw organization and the transparency that which is as simple as me saying to you.

0:17:05.5 BB: Well, I say let's talk about the lack of transparency. I can meet a requirement, as we've talked about, an infinite number of ways to meet any set of requirements. And the letter grade is not A plus. It is not 100. It could be a D minus. I could leave for you the bowling ball on the doorway. And in a non-Deming Organization. I could meet any requirement you give me, Andrew, with the minimal amount of effort. Because all that we're measuring is that it met requirements. And so I give it to you and, and all you do is you look at the measurement and it says, "Yep, the car has gas." You're like, "Hey, I'm excited."

0:17:45.2 BB: Well, the black and white thinking allows me to hide a whole bunch of things. So if I said the car has gas. And you complain because it only has a quarter of a tank, I said, "Andrew. It has gas." But I thought in a Deming organization, I don't think we're gonna play those games. I think we're gonna have a lot more transparency relative to when I meet a set of requirements. Am I gonna leave the bowling ball on the doorway for you unilaterally? I don't think so. Maybe once I learn my lesson because I'm a new hire. I'm bringing something from where I used to work. But I think in a Deming environment, I think the transparency is gonna bring out the best in us.

0:18:33.8 BB: So I just want to throw that, that's part of where I'm coming from with transparency. You know, we don't have this murkiness as to, you know, where are they coming from? And. also we're going to be, you know, as Ackoff was, we're going to go to great lengths to be precise with language, and understand that efficiency is not effectiveness, that management is not leadership. And I think the better we have that clarity, I think that's a trademark of what that environment is about.

0:19:02.2 AS: It's interesting because, you know, the ultimate clarity is doing a run chart or a control chart on a process and seeing the outcome. And that's transparent and clear. And I've done a lot in my own management career by just getting data into a format that people can, you know, go back to and look at and think about. And just the transparency of that data can make a huge difference to the way people interpret what's going on in that unit.

0:19:38.9 BB: You're right. As opposed to the transparency of two data points, quality, I'm sorry, I think I've used this example. You can remind me of, you know, when I was at Rocketdyne once upon a time, and there was a meeting where the safety metrics, number of accidents, per employee in the first quarter was a certain level. Then in the second quarter, it went down. And I mean, the number of accidents per employee went down. Safety got better. And as you know, in this meeting with a bunch of directors and the VP and somebody says to the VP, why is safety improved? And their response was, because "We've let them know safety is important." Well, who's the we? Who's the they? So, and, but imagine the transparency for somebody hearing that we've let them know. That's a way of saying, so you're, you're believing that because it went down, it's because of things we said, and they're not interested in safety.

0:20:45.3 BB: And then if it goes the other way, we're going to claim what? That they're not listening? So you're right. I mean, the ability, the transparency of looking at a set of data on a control chart and the realization that the process is in control. Then we look at the ups and downs and say, no reason for alarm here.

0:21:12.2 AS: The other thing that I thought relates to transparency is fear. In the sense that what is fear? Fear is, you know, a concern that something is going to happen is about to happen is in the process of happening, or, you know, something's happening to you and you're not being able to see, you know, what's going on. So I was just thinking, you know, another angle on transparency is, you know, reducing fear in an organization by being, you know, let more transparent.

0:21:41.5 BB: Yes. And, and I can even imagine, what's funny is that, a co-worker in my office, once upon a time. And. And she was upset with a decision made by the president at that time was my boss. And so she, so for about two years or so, she reported to me, lovely lady, lovely friend, great friend. So anyway, she was upset. She comes in. Did you hear the decision made? And I said, no, I didn't know. And she says, and she was really upset. And I don't know what it was that she was upset. And at some point she said something like, "I don't know what I'm going to do. I just don't know what I'm going to do." I turned to her and I said, if I were you, I would take this personally. Which caused her to laugh. And when I told her, again I get back to transparency, I said, "I may not agree with a decision, but I may never know the choices he had." And so in that situation, Andrew, there may be situations in a Deming company where for whatever reason, there is no transparency, we don't know the options, we don't know what was on the table, all we know is the outcome, and it could be because of, you know, Security and Exchange issues relative to, you know, stock prices, there's, there's all kinds of reasons we may not know.

0:23:03.4 BB: But in that environment, we may, we have to live with it. We just have to say, well, and when I look at it as, and I'm glad you brought that up. Because when I look at it as, there may be decisions, we don't know the choices, we don't know the criteria, we may never know. Instead of agonizing over it, I'd like to think that if we were in the room and knew what they knew and the options they had, we might well make the same decision. And that's something that I became excited about at Rocketdyne was, I didn't have to be in the room for a bunch of decisions, a whole bunch of decisions, I didn't have to be in the room. And what I thought was, if I can help people develop a better and better sense of what a Deming organization, how that operates. And then, and then practice, perhaps, you know, how might they handle a given scenario, and in fact, Kevin's mom, Diana Deming Cahill reached out to me in the late '90s, you know, late '90s, and asked if I would resurrect a Deming Study group for Los Angeles, which existed when Deming was alive, they used to meet at the LA Times.

0:24:51.4 BB: They had invited speakers. And after Deming died it dissolved, and she saw what we're doing within the Boeing sites and asked if I would, you know, work with her to resurrect that. I said sure, I said but here's the deal. When she explained to me how it used to work, invited speakers every month and I thought, that's a lot of work finding a speaker every month. And I said, and it's so easy to be, you know, sit in the back of the room and watch somebody talk I thought. I'm not, I'm not, I don't like that format. And so, a few of us spent a good deal of time coming up with a format. And we went from three hours to two hours and, and then came down to a really neat format that we held for a couple years. We met in two different sites. We met in Canoga Park. We met in the other group met in Huntington Beach where Diana would show up we first we looked at a location there LAX, that wasn't going to work. So we spent the first hour talking about reflections how we're seeing the world through a Deming lens, things that had happened since the last month that we're seeing, that we're seeing differently.

0:26:08.6 BB: That's the first hour. And then the second hour someone would introduce a topic and the topic would be, "How would a Deming organization do X." And what was neat was just to brainstorm. How would a Deming organization go about doing something, that may be way beyond our, our personal responsibility and it just allowed us to play in this space. And, and just, you know, wonder what is, what is going on there. And I throw that out in the spirit of transparency is, it was just to me it was just fun to just practice. How would you deal with, how would you deal with, how would you deal with. And that's what got me thinking that, now going back to, I think that if you get a diverse enough group of people with different experiences and perspectives I think the better they understand, yeah, where Deming and the others are coming from.

0:27:02.5 BB: I think we're going to see a lot of common decision making. And that was for me was very relaxing, that I didn't have to worry about "now they're going to make the right decision." I just thought, if they understand the process, and they use, you know, Edward de Bono's ideas to go through ideas. I thought, the best I can do is say, how did you reach this conclusion, what options did you consider who was involved in the decision making? I can ask those types of questions. I can ask, you know, did you include the supplier did you include... I can ask that. And once I understand that I'd say, if I trust the process. Then I have to trust the result, which goes back to transparency. So I no longer. I mean, that's what parents do - you trust. You raise your kids in a way that you help them develop a sense of a process. And then you just have to live with the results.

0:28:00.8 BB: And same thing as sports. You, I've seen coaches. When I was a youth referee, they're trying to micromanage every minute of the game and I thought it's too late for that you've got to do that at practice. And then once they're playing you just let them go. And that's a demonstration of how well you've prepared them.

0:28:21.6 AS: That's a great, you know, a great one. It's so, it's so amazing to see a team in action and a coach being able to kind of sit back and say now it's up to you. And, you know, I've trained you and everything I can. How would you, how would you wrap this up and provide people with how a Deming organization would apply transparency and maybe give, you know, some one or two ideas about how someone can leave this conversation and bring more transparency back to their organization.

0:29:00.8 BB: I think it's, goes back, to me it goes back to, as a point source within your respective organizations, listening to our podcast, you know, reading articles on, I mean, watching things on DemingNEXT and learning more. And, and yeah. Reaching out and finding people that are, you know, perhaps more knowledgeable than you about Deming's work or Ackoff work. And then Deming once said something about everyone's entitled to a master or mentor or someone, and I was very fortunate to be associated with some brilliant people that worked closely with Deming and Ackoff, and Ackoff himself and Taguchi. I would say, one is, what can you, what can you be doing to improve your understanding, with the appreciation of going off to the Milky Way.

0:29:51.6 BB: And then how can you then practice sharing that with others? Like we did going back to this Gang of Eight and what can be done within your respective organizations to create this group of one, group of two, group of three, group of four. And how might you work together to better appreciate what you think Dr. Deming and Ackoff and others are saying, how you might apply them? How can you support one another? And then, and at least, again, you're gonna have ups and downs, but I don't think there's any substitute for that. And many people I've mentored are solo people within their respective organizations. And what I keep telling them is you've got to find someone else to help you. You can't be the only one in that meeting lobbying for working on things that are good when everybody else is working on things that are bad.

0:30:46.4 BB: It's just gonna sound foolish but imagine being in a situation where you're lobbying for working on something which is good because you want to prevent it from going bad or improve integration. And then someone hears that remark and says, Bill, with all these challenges we have, I can't believe you're going off and doing that. Then imagine you're there in the meeting. And then after that person tries to sidetrack it, you say, "Bill, is that what you were trying to say?" And I say, "no, Andrew, that's not at all what I was trying to say." So you can come to my rescue. And when I'm being shoved aside, I've been in those sessions where I get shoved aside and it takes someone like you to be able to step in and say, Bill, did you say you wanted to do that? I don't think that's what you said.

0:31:10.5 BB: And that's what I would say is, increase the transparency amongst a small group, and then try to increase that transparency. And what becomes a lot of fun is, there are a handful of people at Rocketdyne, we can go into an office of any number of people and take turns exchanging things and reading. And we could see where things are going. And two of us, two or three of us can have a room of 10 and change the course of that conversation because we were incredibly transparent amongst each other. So I just leave it with that, Andrew.

0:32:21.8 AS: Well, Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. If you want to keep in touch with Bill, just find him on LinkedIn. As you can see, he responds. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming. People are entitled to joy in work. And, are you enjoying work?

Can a 4th grade class decide on an operational definition of "joy in learning"? In part 4 of this series, educator John Dues and host Andrew Stotz discuss a real-world example of applying Deming in a classroom. This episode covers the first part of the story, with more to come in future episodes!

0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. This is episode four about goal setting through a Deming lens. John, take it away.

0:00:22.6 John Dues: Good to be back, Andrew. Yeah, we've been talking about organizational goal setting last few episodes. A couple episodes ago, we talked about those four conditions that organizations should understand prior to setting a goal. Then we sort of introduced this idea of trying to stay away from arbitrary and capricious education goals. And then we got into these 10 lessons for data analysis. And so what I thought we could do now is we've got that foundation in place is that we could take a look at an applied example in real classrooms of those 10 key lessons in action to kind of bring those alive. And I ran this project a few years ago with a teacher named Jessica Cutler. She's a fourth grade science teacher in our network. And she was going through something we call a Continual Improvement Fellowship. So we do this sort of internal fellowship where people can learn that sort of way of thinking, the tools, techniques, the theories related to the science of improvement. And then they actually take that right away and apply it to a problem in their classroom or their department or their school, depending on who it is.

0:01:55.0 JD: And so what Jessica was doing, what her project ended up being was she was trying to improve the joy in learning in her fourth grade science class. So it's interesting to see how that sort of project evolved. So I thought we could revisit each of the 10 lessons and how that lesson was applied in Jessica's improvement project. And we'll maybe get through three or four of the lessons today. And then over the course of the next few episodes, kind of get to all 10 lessons and think through how they were... How that went in her improvement project.

0:02:08.1 AS: Sounds like a good plan, practical application.

0:02:12.0 JD: Yeah. I mean, it was interesting too, because she didn't initially sort of consider joy as a possibility. She was thinking like, I'm gonna work on improving test scores or something like that was sort of her initial brainstorm. And then sort of pivoted to this when we kind of talked through what was possible from the Deming philosophy type of standpoint. So it's interesting to see how things evolve. But just to kind of revisit, so we talked through these 10 lessons. Lesson one was "data has no meaning apart from their context." So we talked about these questions that are important, like who collected the data? How was it collected? When was it collected? Where was the data collected? What are the values themselves represent? What's that operational definition for the concept under measurement? Have there been any changes to that operational definition as the project unfolds? And so even with a project with a teacher and her students, all of those questions are relevant. They're still important just because you're dealing with students that doesn't mean anything changes on that front. So it was important for her to sort of think through all of those things as she thought through the start of her project.

0:03:28.9 JD: And what her and her students came up with after they sort of decided that they were gonna focus on joy, they focused on this problem statement. And they were like, well, what do we want science class to look like? 'Cause that was sort of their starting point. And what her and her students...Oh sorry go ahead.

0:03:45.9 AS: One thing you started off talking about her, now you're talking about her students. So she got her students involved in this process. Is that what you're saying?

0:03:56.2 JD: Yeah. So they were working together from the very outset even...

0:04:02.0 AS: As opposed to a teacher talking through this with a principal or something in a faculty room and then thinking of how do I... Okay.

0:04:09.2 JD: Yep. That's right. Yeah. And so what they came up with is the sort of desired future state of science classes. "We are able to stay focused through science, enjoy science class and remain engaged." And so to give some context, what was happening is that she taught science and social studies and it was sort of like a back-to-back class period. And they would do science second. And so by the time they were doing science, sometimes the students were getting off task, disengaged. They weren't as engaged as either the students wanted to be or the teacher wanted them to be in that second lesson. So they, they came up with that as the thing they were gonna focus on. And then because they were gonna focus on joy in learning, they had to define what that meant. So what did joy in learning mean to that fourth grade science class? And what they came up with as a definition, which I really like, is "we wanna have fun learning, finding things we like to learn and have fun completing classwork and activities." So they came up with this operational definition. And keep in mind, these are fourth graders and Jessica's having these conversations like, what's the operational definition? That's not probably typical language you're gonna use with fourth graders. But if you walk them through these things, they actually pick up on it pretty quickly.

0:05:26.1 JD: It's actually pretty cool to see.

0:05:28.1 AS: And to them, a more simpler word sounds like was fun.

0:05:35.0 JD: Yeah, right. They wanted that to be a part of the science learning process. So basically, once they had the operational definition, they had to think through, well, how are we going to measure that concept that we've defined? And what they did was they just developed a simple survey. Jessica did it in Google Forms. just had, really just had two questions. The first question was, on a scale of 1 to 10, how much did you enjoy science class today? And then there was a second open-ended question that said, what made you enjoy or not enjoy class today? So it was fresh in the kids' minds. So basically, at the end, each kid has a Chromebook in Jessica's science class. She would just sort of share the link to the survey, and the kids would complete that as the closing activity for the lesson. So she would get two things out of it. So 1 to 10, just a real quick sort of numerical quantified value, how much the kids enjoyed science class that day. And then, because it had just happened, the students could say what they did and didn't like about the lesson. Oh, we haven't used computers in a few days. Or it'd be nice if I had a video to help bring this concept alive. Or there's a few words that you use that I don't know the definitions to. Could you add those definitions to the glossary? So just things like that, simple things like that.

0:06:55.9 JD: Right away. And then what Jessica could then do is take that information and actually adjust her lessons as she planned maybe for the next week, she could make those adjustments based on this feedback she was getting from the students. So that's sort of the application of lesson number one. So what are we measuring? How are we gonna measure it? When are we collecting this data? That type of thing. Lesson two, if you remember back from when we covered the lessons was "we don't manage or control the data. The data is the voice of the process," right?

0:07:28.9 JD: So we talked about this ideas that while we don't control the data, we do manage the system and the processes from which the data come, right? So, and this is really key conception of the system's view. You, you say you're going to improve this particular classroom. So that's the system. So you're not necessarily controlling the data. You're not controlling how the kids are evaluating, the numbers that they're putting one through 10 to assess joy in learning, but what the teacher and then the students, because of this project do have control over are the learning processes that are happening throughout science class, right? And so back to your point about you switch from talking about Jessica, the teacher to the students. And then you said "we" that's also a key conception of taking this approach, right?

0:08:24.4 JD: So what I think Deming would say is that when you're going to improve an organization, you have to sort of combine sort of three critical pieces. One thing is you need someone from the outside, from outside the system that has Profound Knowledge. And then that person or persons has to be collaborating with the people working in the system. So those are the students, they're working in the science class system. And, then you that third group or that third person is the manager or managers have that have the authority to work on the system. So in this case, Jessica has the authority to change what's happening in her science class.

0:09:10.2 JD: The students are the workers working in that science system. And then that third part is that person that has the sort of understanding of the System of Profound Knowledge and it's sort of bringing all of these parts together that really is how you begin to transition sort of conventional classrooms to those guided by the Deming quality learning principles, right?

0:09:33.1 JD: So in in the case of Jessica's project, that person that was, that had a System of Profound Knowledge lens was me. So I was sort of acting as an, the outsider, 'cause I'm outside of the science system. But I have this understanding of the System of Profound Knowledge. And I'm working with Jessica as she's working with her students, to sort of bring that lens to the projects.

0:10:00.4 AS: And what's the point of doing all that if she doesn't have the ability to make the changes necessary to test, if you're gonna if we change this, it's gonna result in something why go and do all this if you're just stuck in a system that you simply cannot change because of government regulation or whatever, maybe.

0:10:17.5 JD: Right. Yeah. So it's bringing all those pieces together. But what I found thinking about the three parts of a team that's working toward organizational improvement, what I've found in the past is, in my experience, whether it's a school improvement team or a district based improvement team, most of them are devoid of at least one parts of one of those components, usually two of those components, 'cause usually students aren't involved.

0:10:45.9 JD: And then in most school systems, there's no one with this outside knowledge, the System of Profound Knowledge lens, right. And I think it's what we're really doing is the students can identify the waste, the inefficiency, the things that aren't going well from their perspective, but we don't often ask them. Or if we do, we do it in a way where it's an end of year survey or an end of semester survey, but this is collecting that feedback in real time and then acting on it. We're not planning to do something next year with this feedback, we're actually planning to do something the next day, or maybe the next week, to adjust the science lessons.

0:11:24.8 AS: And it's one of those two things that come into my mind, what, how do you handle the idea that what's causing the impact on joy in learning could be that the student had a bad night, the night before. And I guess by doing many samples that starts to kind of wash out. And then the other question is since the students know that the teacher could likely make an adjustment, is there any possibility that they could be gaming or playing the system.

0:11:57.1 JD: Well, that's interesting, because I think, well on the first point. I think pretty quickly, my experience with this and David Langford I know you've talked to has echoed this sentiment is you know, he was working with high school students, this is an elementary project but either way. You may get some students that don't take this seriously. At first. And you may get some kind of crazy answers crazy brainstorms or crazy survey submissions, although I don't think Jessica got much of that.

0:12:30.2 JD: But in other projects I've gotten some stuff at the outset that was a little bit off the wall. But like David said to me when I first started this and then it's been my experience since is that kids, once they realize that you're actually gonna act on the feedback, as long as the feedback is in good faith. They actually start to take it seriously, pretty, pretty quickly. And so I think pretty quickly, those sort of types of worries go by the wayside. Now, I will say I did say that the...

0:13:01.1 JD: One of the components that has to be on this improvement team is the person that has the authority to change the system. So at the end of the day, even though we're gathering this input, Jessica's really the person as the teacher of that classroom that has the authority to make the changes to the system based on her judgment or, her professional judgment as a science teacher of what should happen. And so the students certainly offer feedback and inform that process, but ultimately it's Jessica that's gonna determine the changes to the system.

0:13:34.0 AS: I hear David in my ears saying, you know what, Andrew? You don't trust the students? They probably have a more honest, view of what's going on than most adults do. So yes, I hear the voice of David Langford.

0:13:49.2 JD: Yeah. Well, and interestingly, and we'll get into this towards the end, not today, but when we get to some of the other lessons, interestingly, not to give away the story, but, one of the things that was getting kids off track was a lot of noise during class, kids making noises. And they actually came up with this system where they were kind of penalizing each other. This was their own idea. And so, kids know exactly what's going on in class. And so it was interesting to see how they came up with some ideas to rectify that. But yeah, so it was really just bringing together, these three groups or, the group of students and then Jessica and then myself. It's that combination that's really where the power for improvement lies. And again, I, that type of partnership is just not typical in school improvement situations.

0:14:45.7 JD: So that's lesson two, applied. Lesson number three is "plot the dots for any data that incurs in time order." Right? So we've talked about this a lot. The idea behind the primary point of "plot the dots" is that plotting data over time helps us understand variation, and that in turn leads us to take more appropriate action. I think that what we decided to do with Jessica's project is, start plotting the points on a run chart and connect those points with a line, and then it becomes pretty intuitive as we're looking at that data, what joy in learning looks like in this science class. And then once we have enough data, we can turn that run part chart into a process behavior chart and actually add the limits.

0:15:40.2 JD: So, like I said, Jessica, once her and the class determined that what they were going to improve was join in learning, and they defined that concept operationally and created the survey, right away they started gathering this survey data as a part of the project, and usually they would gather the data maybe, two or three times a week across the course of this particular improvement project. So maybe I'll share my screen just so you can see what that initial run chart looked like. So, you have this run chart, and I left this in the spreadsheet so you could see the actual data. So as she began administering these surveys, she would send me the data and then I would create it the run chart for her, start plotting that data so that both of us could sort of see the variation in that survey data over time. And then she could actually take this, she would put this run chart on a slide, and every week or so she would actually show the students what the data looked like.

0:16:49.7 AS: And just to be clear, we've got a chart for those that are listening, we've got a chart that has a blue line and it's going up and down kind of around the level of about 79. So they've got points that are based, that are days. Some days are below that 79 some days are above. But also I'm assuming that those points are the output of all the surveys. So the average answer on that day from the survey as different from the average or median of all the day's output, correct?

0:17:31.1 JD: Yeah, that's right. So this is, the run chart from Jessica's class that's displaying the survey results. And what they're measuring is joy in science class as assessed by the students.

0:17:44.3 AS: On the first day, the students basically said, 75% of the respondents said that they had joy in science.

0:17:51.9 JD: That's right. So in this particular school year, which was two years ago, so we had done some of the project planning before kids went on winter break, and then when they came back from winter break, they were ready to start administering the survey. And we started plotting the dots, charting the data over time. So the X axis for those who are listening are the dates.

0:18:16.2 JD: The, Y axis is the joy in learning, percent of kids that the rating of the kids from one to 10. And then I just turn it into a percent. And so you have the green line, the central line running through is the median. We're using the median 'cause that's fairly typical for a run chart because typically run charts don't have as much data as a process behavior chart. And so, outliers can have a greater impact. So we're using the median to sort of control for that. Although this data's fairly tight. So on day one, like you said on January 4th of this school year 75, the kids sort of rated the joy in learning of that particular lesson as a 75% of 100. And then you sort of see it bounce around.

0:19:04.7 JD: That median of 79. And so what I'm showing is the data from the first 10 surveys that Jessica administered at the end of class. So over the course of 20 days from January 4th through January 24th, she administered that this survey 10 different times. So about two to three times a week. And so we see a high of about 83% joy in learning and a low of 67% joy in learning. And you have about half the points above the median, about half the points below the median. So even though it's only 10 data points, Jessica and her class, and then myself, we were starting to learn about what did joy in learning, joy in science class actually look like? Now that we have this definition and we're measuring it with these surveys and then plotting these data points. So again, she's actually putting this up on, on the, up on the screen so kids can actually see this. And what she said was after the 5th or 6th survey, and she's plotted this and put this up on a screen a few times, the kids are actually getting excited. And they're wanting to see their data. They're wanting to see what the results look like for each survey as she started plotting this.

0:20:30.6 AS: It's funny because I, when I was a loading supervisor at Pepsi, I started putting up the percent correct for each of the loaders in the warehouse. And I didn't make any comment or anything, I just put it up there. And yeah, people are interested when they start seeing numbers, they start thinking, they start asking questions.

0:20:54.3 JD: Yeah, and you can see too at a school, in a fourth grade science classroom, you can see all types of lessons, you can sort of build up this reading graphs, calculating percentages, using when do you use line graphs for some other type of graph?

0:21:10.2 AS: And why use median versus mean? Because a small amount of data could be distorted if you have a huge outlier.

0:21:18.8 JD: Yep, all kinds of practical lessons. So this brings us to sort of the last lesson for this particular episode. I think lesson four is two or three data points are not a trend, right? So, we've said that you should start plotting the dots as soon as you've decided to collect some type of data that occurs over time. And really when people ask me what type of data can you put on a run chart or a process behavior chart, there's almost any data that you're interested in improving in schools unfolds over time, almost all of it. Whether that's a daily cadence, a weekly cadence, monthly, quarterly, yearly, whatever it is, right? But the problem is the vast majority of data that we look at as educators and really probably most people, it's typically two or maybe three data points. But that doesn't tell you anything about how the data is varying naturally. So when we start thinking about this particular data, we start learning quite a bit. For one, as a teacher, I would have no idea how my kids would evaluate their joy in my classroom.

0:22:29.9 JD: And so I think if I was Jessica, I'd be pretty happy off of that, that the sort of average or the median rating is close to 80%, basically the rating each lesson has an eight out of 10. Right. I think a second thing is let's say we were a school district and we did systematically give our kids some type of survey that assess their satisfaction with the school. Right. Maybe they do it twice a year or annually. Right. And so after at the end of the year, you have two data points, but you don't really have any idea for what to do with that data. You have no idea if you collected three or four or five data points, what that would look like. And here she is in just 20 calendar days and a couple of school weeks. She's got 10 data points to work with already. So she's building that baseline of data. So I think what this is to me is just a very different approach to school improvement.

0:23:39.4 JD: And the tools are relatively simple. The ideas are relatively simple. But I think overall this really, the takeaway I want for folks is that this project really illustrates a very different approach to school improvement, guided by these sound sort of Deming principles for how to use data, to how to understand variation, to how to include the people working in the system, right?. We've talked about these arbitrary targets throughout this series, and you could see that when Jessica and her class would go to maybe set a goal for joy after collecting some of this data, that goal would be tied to something real. It's tied to actual data from the classroom. And you can sort of avoid goal setting as an act of desperation when you take this type of approach.

0:24:38.4 AS: Joy in the joy of bringing joy in science.

0:24:44.2 JD: Yeah, it's really all about this process, right? It's the kids getting into this process, that's the psychological part. They're involved in their educational process. And so that is completely different than what's happening in the typical classroom, I think, in the United States.

0:25:00.5 AS: You can imagine somebody not wanting to do this because they're afraid of what they're going to see.

0:25:07.0 JD: Certainly [laughter]

0:25:08.3 AS: Yeah.

0:25:08.7 JD: Certainly. Yeah. Hopefully they would be open to sort of collecting the data and being reflective as a professional. But I could see, maybe that's not, tha's not always the case. And another question, I kind of shared this project with some folks, in different settings, and one of the questions I typically get is, well, what about the science test scores? Like, this is great if kids have joy, I guess is kind of the reaction. But what... How does that impact the academics?

0:25:44.0 JD: And my response is, well if kids don't find joy in their learning and they're not engaged, what kind of results are you gonna get? [laughter] To me this is sort of like a part of the process that leads to academic outcomes, when you enjoy the things that you're doing, when you feel like you have some control over a process, maybe not the full control, but when you have some control, when you have input into something that you're doing all day long, you're gonna have more investment because, you know, because you're seeing that your input has meaning. That's really that psychological component.

0:26:18.2 AS: It's obvious, but maybe not proven.

0:26:21.9 JD: Yeah, I think so. I think so.

0:26:28.4 AS: Okay.

[SILENCE]

0:26:30.9 JD: Yeah. I think that's a pretty good spot to wrap up this opener with the... We covered those first four lessons and started to look at how this project unfolded in, Jessica's classroom. And I think, next we can kind of see as she gathered more data, what this looked like over time. And then as she sort of had that baseline in place, then the next thing we'll look at is: what did she do as a change idea or an intervention to try to make these rates go higher in her classroom?

0:27:08.4 AS: That's interesting. I mean, in my wrap up of this, I think how lucky, is Jessica to have someone from the outside? I think a lot of teachers and a lot of people in business, they don't really have anybody to go to. And the company's not providing that type of stuff or the school is not providing that. And so you just kind of make it up as you go along. And I think that's, that's one of the things, 'cause I'm, I think like probably other listeners and viewers who are, listening to this, they're thinking, I wonder if John could help me do that in my area? The idea of, we all know there's places that we could improve that we may not be. And if a school system can provide that, wow, that's a big... That's exciting.

0:27:56.6 JD: Yeah. I'd be happy to. And it was like a, it was definitely a mutual effort. Jessica put a lot of work into sort of, 'cause she has gone through that fellowship, she had to sort of learn all of these tools and then actually, turn around and put them into practice in her classroom. And she found ways to do this in a way where, she could still do the things she was required to do, like delivering the lessons that she was required to deliver and those types of things. But then she found ways to sort of incorporate what she learned in the fellowship to make her classroom better. Seeing that, seeing her openness to feedback that really made this like a, I think a, mutually beneficial experience. And I think the kids enjoyed it too.

0:28:39.2 AS: And the purpose of this series too is, the idea of how can you do this at home and how can you start doing it in your own school, in your own classroom, in your own life? And so I think I'm looking forward to the next session where we're gonna go deeper into... I've already got, a series of questions and things that I'm wondering, and then I saw some tabs in your, in your worksheet that I thought, okay, there's gonna be some more interesting stuff. So I think we're all gonna see you in that next section.

0:29:09.9 AS: And on behalf of everyone at the Deming Institute, I want to thank you again for this discussion and, taking the time to go through these steps with us. And for listeners, remember to go to deming.org to continue your journey. You can find John's book Win-Win, W Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools on amazon.com. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming, and it's particularly apropos, people are entitled to joy in work.

Dr. Deming developed his philosophy over time and in conversations with others, not in isolation. As learners, we tend to forget that context, but it's important to remember because no one implements Deming in isolation, either. In this conversation, Bill Bellows and host Andrew Stotz discuss how there's no such thing as a purely Deming organization and why that's good.

TRANSCRIPT

0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussions with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today is episode 20, entitled, System of Profound Wisdom. Bill, take it Away.

0:00:31.6 Bill Bellows: But not just for 30 years. I forgot to say I started when I was 12.

0:00:36.6 AS: Yes. [laughter] Yes. And you've got the hair to prove it.

[laughter]

0:00:43.7 BB: All right. Now, actually, I was thinking the proposal and the title, I thought... I mean, System of Profound Wisdom is cool, System of Profound Questions. Either one of those is good. Let's see which title comes out.

0:00:57.6 AS: Yeah. And I think we'll have to also understand that may some listeners that may not even know what System of Profound Knowledge means, they've been listening. They do. But if today's their first episode, we also gotta break that down, just briefly.

0:01:10.9 BB: Yeah. Okay, let's do that. All right. Well, let me give an opening a quote from Dr. Deming from chapter three, and then we can explain this SoPK, System of Profound Knowledge, thing. But in chapter three of Dr. Deming's last book, The New Economics, the last edition, edition three, came out in 2018. And chapter three, Dr. Deming says, "We saw in the last chapter, we are living under the tyranny of the prevailing style of management. Most people imagine that this style has always existed. It is a fixture. Actually, it is a modern invention a trap that has led us into decline. Transformation is required. Education and government, along with industry, are also in need of transformation. The System of Profound Knowledge to be introduced in the next chapter is a theory for transformation." So you wanna...

0:02:15.4 AS: That's good.

0:02:16.7 BB: So let's say something. Let's just say something about SoPK. How would you explain that?

0:02:23.1 AS: Yeah. Well, actually, I wanna talk very briefly about what you just said, because it's just...

0:02:27.1 BB: Oh, sure.

0:02:29.6 AS: At one point, I thought, "It's a system of knowledge." But he just said it was a system of transformation.

0:02:38.7 BB: It's a theory for transformation.

0:02:40.1 AS: A theory for transformation. Okay, got it. I see. And one of the things that I... I look at Toyota so much just 'cause it's so fascinating and how they've survived all these years, the continuity in the business, the continuity and the profitability of the business, the continued march to become the number one auto producer in the world, and having faced all the ups and downs and survived. And I just think that what they have is a learning organization. No matter what the challenge is, they're trying to apply learning tools, like System of Profound Knowledge, like PDSA, to try to figure out how to solve this problem. And I think that many companies, including at times my companies, [chuckle] we sometimes will scramble and we'll lose knowledge and we won't gain knowledge. And so the System of Profound Knowledge, to me, is all about the idea of how do we build a base of knowledge in our business and then build upon that base of knowledge rather than destroy it when the new management comes in or when a new management idea comes in.

0:04:00.7 AS: And that's something I've just been thinking about a lot. Because I do know a company that I've been doing some work with, and they basically threw away a huge amount of work that they did on System of Profound Knowledge and stuff to go with the prevailing system of management, is like going back. And now, they just produced a loss in the first quarter, and I just think, "Interesting. Interesting."

0:04:27.6 BB: Well, a couple things come to mind based on what you said. One is I would propose that Toyota, I'm in agreement of "Toyota's a learning organization." And that'll come up later. I've got some other thoughts on learning organizations. And we know that they were influenced by Dr. Deming. To what degree, I'm not sure of. Shoichiro Toyoda, who is one of the sons of the founder of the Toyota Motor Car Company, was honored with a Deming prize in 1990. And I believe it came from JUSE, as opposed to the American Society for Quality. One or the other. He was honored with a Deming Prize.

0:05:32.0 AS: Yep.

0:05:33.5 BB: Again, I don't know if it's Deming Prize or Deming Medal. But I know he was honored. What's most important, the point I wanna make is, upon receiving it he said, "There is not a day that goes by that I don't think about the impact of Dr. Deming on Toyota." But, if I was to look at the Toyota Production System website, Toyota's Toyota Production System website, which I've done numerous times, I'd be hard-pressed to find anything on that page that I could say, "You see this word, Andrew? You see this sentence, Andrew? You see this sentiment? That's Deming." Not at all. Not at all. It's Taiichi Ohno. It's Shigeo Shingo. I'm not saying it's not good, but all those ideas predate Deming going to Japan in 1950. Taiichi Ohno joined Toyota right out of college as an industrial engineer in 1933, I believe. The Japanese Army, I mentioned in a previous episode, in 1942, wanted him to move from Toyota's loom works for making cloth to their automobile works for making Jeeps. This comes from a book that I would highly recommend. Last time we were talking about books. I wanted to read a book, I don't know, maybe 10 years ago. I wanted to read a book about Toyota, but not one written by someone at MIT or university. I didn't wanna read a book written by an academic. I've done that.

0:07:15.1 BB: I wanted to read a book by somebody inside Toyota, get that perspective, that viewpoint. And the book, Against All Odds, the... Wait I'll get the complete title. Against All Odds: The Story of the Toyota Motor Corporation and the Family That Changed it. The first author, Yukiyasu Togo, T-O-G-O, and William Wartman. I have a friend who worked there. Worked... Let me back up. [chuckle] Togo, Mr. Togo, born and raised in Japan, worked for Toyota in Japan, came to the States in the '60s and opened the doors to Toyota Motors, USA. So, he was the first person running that operation in Los Angeles. And it was here for years. I think it's now in Texas. My late friend, Bill Cummings, worked there in marketing. And my friend, Bill, was part of the team that was working on a proposal for a Lexus. And he has amazing stories of Togo. He said, "Any executive... " And I don't know how high that... What range, from factory manager, VPs. But he said the executives there had their use, free use, they had a company car. And he said Togo drove a Celica. Not a Celica. He drove a... What's their base model? Not a...

0:08:56.2 AS: A Corolla?

0:08:57.7 BB: Corolla. Yes, yes, yes. Thank you. He drove a Corolla. He didn't drive... And I said, "Why did he drive a Corolla?" Because it was their biggest selling car, and he wanted to know what most people were experiencing. He could have been driving the highest level cars they had at the time. Again, this is before a Lexus. And so in this book, it talks about the history of Toyota, Taiichi Ohno coming in, Shigeo Shingo's contributions, and the influence of Dr. Deming. And there's a really fascinating account how in 1950, a young manager, Shoichiro Toyoda, was confronted with a challenge that they couldn't repair the cars as fast as they could sell them. This is post-war Japan. They found a car with phenomenal market success. Prior to that, they were trying to sell taxicabs, 'cause people could not... I mean, buying a car as a family was not an option. But by 1950, it was beginning to be the case. And the challenge that Shoichiro Toyoda faced was improving the quality, 'cause they couldn't fix them as fast as they could sell them. And yet, so I have no doubt that that young manager, who would go on to become the chairman, whatever the titles are, no doubt he was influenced by Dr. Deming. But I don't know what that means.

0:10:23.4 BB: That does not... The Toyota Production System is not Deming. And that's as evidenced by this talk about eliminating waste. And those are not Deming concepts. But I believe, back to your point, that his work helped create a foundation for learning. But I would also propose, Andrew, that everything I've read and studied quite a bit about the Toyota Production System, Lean, The Machine That Changed The World, nothing in there explains reliability. To me, reliability is how parts come together, work together. 'Cause as we've talked, a bunch of parts that meet print and meet print all over the place could have different levels of reliability, because meeting requirements, as we've talked in earlier episodes, ain't all it's cracked up to be. So I firmly believe... And I also mentioned to you, I sat for 14 hours flying home from Japan with a young engineer who worked for Toyota, and they do manage variation as Dr. Taguchi proposed. That is not revealed. But there's definitely something going on. But I would also say that I think the trouble they ran into was trying to be the number one car maker, and now they're back to the model of, "If we are good at what we do, then that will follow."

0:11:56.8 BB: And I'm gonna talk later about Tom Johnson's book, just to reinforce that, 'cause Tom, a former professor of management at Portland State University, has visited Toyota plants numerous times back before people found out how popular it was. But what I want to get into is... What we've been talking about the last couple episodes is Dr. Deming uses this term, transformation. And as I shared an article last time by John Kotter, the classic leadership professor, former, he's retired, at the University... Oh, sorry, Harvard Business School. And what he's talking about for transformation is, I don't think, [chuckle] maybe a little bit of crossover with what Dr. Deming is talking about. What we talked about last time is, Deming's transformation is a personal thing that we hear the world differently, see the world differently. We ask different questions. And that's not what Kotter is talking about. And it's not to dismiss all that what Kotter is talking about, but just because we're talking about transformation doesn't mean we mean the same thing.

0:13:10.6 BB: And likewise, we can talk about a Deming organization and a non-Deming organization. What teamwork means in both is different. In a Deming organization, we understand performance is caused by the system, not the workers taken individually. And as a result of that, we're not going to see performance appraisals, which are measures of individuals. Whereas in a non-Deming organization, we're going to see performance appraisals, KPIs flow down to individuals. [chuckle] The other thing I had in my notes is, are there really two types of organizations? No, that's just a model. [chuckle] So, really, it's a continuum of organizations. And going back to George Box, all models are wrong, some are useful. But we talked earlier, you mentioned the learning organization. Well, I'm sure, Andrew, that we have both worked in non-Deming organizations, and we have seen, and we have seen people as learners in a non-Deming organization, but what are they learning? [chuckle] It could be learning to tell the boss what they want to hear. They could be learning to hide information that could cause pain. [chuckle] Those organizations are filled with learners, but it's about learning that makes things worse. It's like digging the pit deeper. What Deming is talking about is learning that improves how the organization operates, and as a result, improves profit. In a non-Deming organization, that learning is actually destroying profit.

0:14:51.8 BB: All right. And early, spoke... Russ, Russ and Dr. Deming spoke for about three hours in 1992. It got condensed down to a volume 21 of The Deming Library, for which our viewers, if you're a subscriber to DemingNEXT, you can watch it in its entirety. All the Deming videos produced by Clare Crawford-Mason are in that. You can see excerpts of volume 21, which is... Believe is theory of a system of education, and it's Russ Ackoff and Dr. Deming for a half hour. So you can find excerpts of that on The Deming Institute's YouTube channel.

0:15:37.0 BB: And what I wanted to bring up is in there, Russ explains to Dr. Deming the DIKUW model that we've spoken about in previous episodes, where D is data. That's raw numbers, Russ would say. I is information. When we turn those raw numbers into distances and times and weights, Russ would say that information is what the newspaper writer writes, who did what to whom. Knowledge, the K, could be someone's explanation as to how these things happened. U, understanding. Understanding is when you step back and look at the container. Russ would say that knowledge, knowledge is what you're using in developing to take apart a car or to take apart a washing machine and see how all these things work together. But understanding is needed to explain why the driver sits on the left versus the right, why the car is designed for a family of four, why the washing machine is designed for a factor of four. That's not inside it. That's the understanding looking outward piece that Russ would also refer to as synthesis. And then the W, that's the wisdom piece. What do I do with all this stuff? And what Russ is talking about is part of wisdom is doing the right things right. So, I wanted to touch upon in this episode is why did Dr. Deming refer to his system as the System of Profound Knowledge? Why not the System of Profound Understanding? Why not the System of Profound Wisdom? And I think, had he lived longer, maybe he would have expanded. Maybe he would have had...

0:17:28.4 BB: And I think that's the case. I think it's... 'Cause I just think... And this is what's so interesting, is, if you look at Dr. Deming's work in isolation and not go off and look at other's work, such as Tom Johnson or Russ, you can start asking questions like this.

0:17:45.7 AS: One thing I was going to interject is that I took my first Deming seminar in 1989, I believe, or 1990. And then I took my second one with Dr. Deming in 1992. And then soon after that, I moved to Thailand and kind of went into a different life, teaching finance and then working in the stock market. And then we set up our factory here for coffee business. But it wasn't until another 10 years, maybe 15 years, that I reignited my flame for what Dr. Deming was doing. And that's when I wrote my book about Transform Your Business with Dr. Deming's 14 Points. And what I, so, I was revisiting the material that had impacted me so much. And I found this new topic called System of Profound Knowledge. I never heard of that. And I realized that, it really fully fledged came out in 1993, The New Economics, which I didn't get. I only had Out of the Crisis.

0:18:49.9 BB: '93.

0:18:49.9 AS: Yeah. And so that just was fascinating to go back to what was already, the oldest teacher I ever had in my life at '92, leave it, come back 10, 15 years later and find out, wait a minute, he added on even more in his final book.

0:19:10.4 BB: Well, Joyce Orsini, who was recruited by Fordham University at the encouragement of Dr. Deming, or the suggestion of Dr. Deming to lead their Deming Scholars MBA program in 1990. Professor Marta Mooney, professor of accounting, who I had the great fortune of meeting several times, was very inspired by Dr. Deming's work. And was able to get his permission to have an MBA program in his name called the Deming Scholars MBA program. And when she asked him for a recommendation, "Who should lead this program?" It was Joyce Orsini, who at the time I think was a vice president at a bank in New York. I'm not sure, possibly in human resources, but I know she was in New York as a vice president.

0:20:10.0 BB: And I believe she had finished her PhD under Dr. Deming at NYU by that time. And the reason I bring up Joyce's name, I met her after Dr. Deming had died. Nancy Mann, who is running a company called Quality Enhancement Seminars with, a, at the beginning one product, Dr. Deming's 4-Day seminar, when Dr. Deming died, and I had mentioned, I was at his last seminar in December '93, she continued offering 4-day seminars. And I met her later that year when she was paired with Ron Moen and they were together presenting it, and others were paired presenting it. And at one point, as I got to know Joyce, she said, "His last five years were borrowed time." I said, "What do you mean?" She said, "He started working on the book in 19'" evidently the '87, '88 timeframe, he started to articulate these words, Profound Knowledge.

0:21:11.0 BB: And I know he had, on a regular basis, he had dinner engagements with friends including Claire Crawford-Mason and her husband. And Claire has some amazing stories of Deming coming by with these ideas. And she said, once she said, "What is this?" And he is, she took out a napkin, a discretely, wrote down the, "an understanding of the difference between intrinsic motivation and extrinsic motivation. Difference between understanding special causes versus common causes." And she just wrote all this stuff down, typed it up. When he showed up the next week, she greeted him at the door and said, and she said, he said, This is Claire. And Claire said, he said, "What's that?" He says, "Well, I took notes last week."

0:21:54.2 BB: And he says, "I can do better." [chuckle] And so week by week by week. And as he interacted with the people around him, he whittled it down. And I'm guessing it put it into some, there's a technique for grouping things, you, where on post-it notes and you come up with four categories and these things all go over here. There's one of the elements of that, one of the 16 had to, or 18 or so, had to do with Dr. Taguchi's loss function. So that could have gone into the, maybe the variation piece, maybe the systems piece. But Joyce said, basically he was frustrated that the 14 Points were essentially kind of a cookbook where you saw things like, "cease dependence on inspection" interpreted as "get rid of the inspectors." And so he knew and I'd say, guided by his own production of a system mindset, he knew that what he was articulating and the feedback were inconsistent.

0:23:01.9 BB: And I've gotta keep trying. And she said, "His last five years on borrowed time as he was dying of cancer, was just trying to get this message out." So I first got exposed to it 19, spring of '90 when I saw him speaking in Connecticut. And I was all about Taguchi expecting him to, I didn't know what to expect, but I knew what I was seeing and hearing from Dr. Taguchi when I heard Dr. Deming talk about Red Beads. I don't know anything about that, common cause and special cause, I didn't know anything about that. And so for me, it was just a bunch of stuff, and I just tucked it away. But when the book came out in '93, then it really made sense. But I just had to see a lot of the prevailing style of management in the role I had as an improvement specialist, become, [chuckle] a firefighter or a fireman helping people out.

0:24:01.5 AS: I noticed as I've gotten older that, I do start to connect the pieces together of various disciplines and various bits of knowledge to realize, so for instance, in my case, I'm teaching a corporate strategy course right now at the university. Tonight's, in fact, the last night of this particular intake. And my area of expertise is in finance, but now I see the connection between strategy and finance, and how a good strategy is going to be reflected in superior financial performance relative to peers. And of course, I know how to measure that very well. So I can synthesize more and more different areas of things that I know things about, that I just couldn't do when I was younger. So I can see, and he was always learning, obviously. So I can see how he, and also I can also see the idea of, I need bigger principles. I need bigger as you said, theory for transformation. I need, I need to be able to put this into a framework that brings all that together. And I'm still feeling frustrated about some of that, where I'm at with some of that, because I'm kind of halfway in my progress on that. But I definitely can see the idea of that coming later in life as I approach the big 6-0.

0:25:37.3 BB: The big 6-0, [chuckle] Well, but a big part, I mean, based on what you're talking about, it ended up... Previously we spoke about Richard Rumelt's work, Good Strategy/Bad Strategy, and I mentioned that I use a lecture by Richard Rumelt, I think it was 2011 or so. It was right after his book, Good Strategy/Bad Strategy came out. He spoke at the London School of Economics, and our listeners can find it if you just did a Google search for Richard Rumelt, that's R-U-M... One M. E-L-T. Good Strategy/Bad Strategy. LSE, London School of Economics. Brilliant, brilliant lecture. And I've seen it numerous times for one of my university courses. And he is like Deming, he doesn't suffer fools. And, it finally dawned on me, Deming organizations, if we can use this simple Deming versus non-Deming or Red Pen versus Blue Pen, and as, George Box would say, all models are wrong, some are useful. If we can use that model, I think it's easy to see that what frustrates Rumelt is you've got all these non-Deming companies coming up with strategies without a method.

0:27:00.0 BB: What Rumelt also talks about is not only do you need a method, but you have to be honest on what's in the way of us achieving this? Again, Dr. Deming would say, if you didn't need a method, why don't you're already achieving the results? And so it just dawned on me thinking the reason he's so frustrated, and I think that's one word you can use to describe him, but if he is talking to senior staff lacking this, an understanding of Deming's work, then he is getting a lot of bad strategies. And organizations that would understand what Dr. Deming's talking about, would greatly benefit from Rumelt's work. And they would be one, they'd have the benefit of having an organization that is beginning or is understanding what a transformation guided by Dr. Deming's work is about. And then you could look up and you're naturally inclined to have good or better strategy than worser strategies.

0:28:02.2 BB: And then you have the benefit of, profit's not the reason, profit is the result of all that. And, but next thing I wanna point out is, and I think we talked about it last time, but I just wanted to make sure it was up here, is I've come across recently and I'm not sure talking with who, but there's this what's in vogue today? Data-driven decisions. And again, whenever I hear the word data, I think backed in Ackoff's DIKUW model, I think data-driven. Well, first Dr. Deming would say, the most important numbers are unknown and unknowable. So if you're doing things on a data-driven way, then you're missing the rest of Dr. Deming's theory of management. But why not knowledge-driven decisions, why not understanding-driven decisions And beyond that, why not, right? How long... [laughter] I guess we can... Part of the reason we're doing these Andrew is that we'd like to believe we're helping people move in the direction from data-driven decisions to wisdom-driven decisions, right?

0:29:13.1 AS: Yeah. In fact, you even had the gall to name this episode the System of Profound Wisdom.

0:29:24.0 BB: And that's the title.

0:29:24.9 AS: There it is.

0:29:28.9 BB: But in terms of, I'll give you a fun story from Rocketdyne years ago, and I was talking with a manager in the quality organization and he says, "you know what the problem is, you know what the problem is?" I said, "what?" He says, "the problem is the executives are not getting the data fast enough." And I said, "what data?" He says "the scrap and rework data, they're just not getting it fast enough." So I said, "no matter how fast they get it, it's already happened."

[laughter]

0:30:00.0 BB: But it was just, and I just couldn't get through to him that, that if we're being reactive and talking about scrap and rework, it's already happened. By the time the... If the executives hear it a second later, it's already happened. It's still old news.

0:30:14.7 AS: And if that executive would've been thinking he would've said, but Bill, I want to be on the cutting edge of history.

0:30:23.1 BB: Yeah, it's like...

0:30:24.6 AS: I don't want information, I don't want old information, really old. I just want it as new as it can be, but still old.

0:30:32.9 BB: Well, it reminds me of an Ackoff quote is, instead of... It's "Change or be changed." Ackoff talked about organizations that instead of them being ready for what happens, they create what's gonna happen, which would be more of a Deming organizational approach. Anyway, we talked about books last time and I thought it'd be neat to share a couple books as one as I've shared the Against All Odds Book about Toyota.

0:31:08.8 AS: Which I'll say is on Amazon, but it's only looks like it's a used book and it's priced at about 70 bucks. So I've just...

0:31:16.2 BB: How much?

0:31:16.8 AS: Got that one down? 70 bucks? Because I think it's, you're buying it from someone who has it as a their own edition or something. I don't know.

0:31:23.8 BB: It's not uncommon. This is a, insider used book thing. It's not uncommon that you'll see books on Amazon for 70, but if you go to ThriftBooks or Abe Books, you can, I have found multi-$100 books elsewhere. I don't know how that happens, but it does. Anyway, another book I wanted to reference in today's episode is Profit Beyond Measure subtitle, Extraordinary Results through Attention to Work and People, published in 2000. You can... I don't know if you can get that new, you definitely get it old or used, written by, H. Thomas Johnson. H is for Howard, he goes by Tom, Tom Johnson. Brilliant, brilliant mind. He visited Rocketdyne a few times.

0:32:17.1 BB: On the inside cover page, Tom wrote, "This book is dedicated to the memory of Dr. W. Edwards Deming, 1900-1993. May the seventh generation after us know a world shaped by his thinking." And in the book, you'll find this quote, and I've used it in a previous episode, but for those who may be hearing it first here and Tom's a deep thinker. He's, and as well as his wife Elaine, they're two very deep thinkers. They've both spoke at Rocketdyne numerous times. But one of my favorite quotes from Tom is, "How the world we perceive works depends on how we think. The world we perceive is the world we bring forth through our thinking." And again, it goes back to, we don't see the world as it is. We see the world as we are. We hear the world as we are. I wrote a blog for The Deming Institute. If our listeners would like to find it, if you just do a search for Deming blog, Bellows and Johnson, you'll find the blog. And the blog is about the book Profit Beyond Measure. And in there, I said, "In keeping with Myron Tribus' observation that what you see depends upon what you thought before you looked, Johnson's background as a cost accountant, guided by seminars and conversations with Dr. Deming, prepared him to see Toyota as a living system," right? You talk about Toyota.

0:33:53.9 BB: He saw it as a living system, not a value stream of independent parts. And that was, that's me talking. I mean, Tom talked about Toyota's living system. And then I put in there with the Toyota Production System, people talk about value streams. Well, in those value streams, they have a defect, good part, bad part model that the parts are handed off, handed off, handed off. That is ostensibly a value stream of independent parts 'cause the quality model of the Toyota Production System, if you study it anywhere, is not Genichi Taguchi. It's the classic good parts and bad parts. And if we're handing off good parts, they are not interdependent. They are independent. And then I close with, "instead of seeing a focus on the elimination of waste and non-value added efforts, Johnson saw self-organization, interdependence, and diversity, the three, as the three primary principles of his approach, which he called Management By Means." And so what's neat, Andrew, is he, Tom was as a student of Deming's work, attending Dr. Deming seminars, hearing about SoPK, System of Profound Knowledge, and he in parallel developed his own model that he calls Management By Means. But what's neat is if you compare the two, there's three principles. So he says self-organization.

0:35:31.0 BB: Well, that's kind of like psychology and people. So we can self-organize interdependence, the other self-organized, but we're connected with one another. So that's, that's kind of a systems perspective there as well. And the third one, diversity. So when I think of diversity, I think of variation. I can also think in terms of people. So that what I don't see in there explicitly is Theory of Knowledge. But Tom's developing this model in parallel with Dr. Deming's work, probably beginning in the early '80s. And part of what Tom had in mind, I believe, by calling it Management By Means, is juxtaposing it with that other management by, right? You know the other one, Andrew, management by?

0:36:33.8 AS: You mean the bad one or the good one, Management By Objective?

0:36:37.8 BB: Or Management By Results. Or Dr. Deming once said, MBIR, Management by Imposition of Results. But what's neat is, and this is what I cover and with my online courses, Tom is really, it's just such insight. Tom believes that treating the means as the ends in the making. So he's saying that the ends are what happen when we focus on the means, which is like, if you focus on the process, you get the result. But no, MBIR, as we focus on the result, we throw the process out the window. And so when I've asked students in one of my classes is, why does Tom Johnson believe that treating the means as an ends in the making is a much surer route to stable and satisfactory financial performance than to continue as most companies do? You ready, Andrew? To chase targets as if the means do not matter. Does that resonate with you, Andrew?

0:37:44.1 AS: Yes. They're tampering.

0:37:46.8 BB: Yeah. I also want to quote, I met Tom in 1997. I'm not sure if this... Actually, this article is online and I'll try to remember to post a link to it. If I forget, our listeners can contact me on LinkedIn and I'll send you a link to find the paper. This is when I first got exposed to Tom. It just blew me away. I still remember there at a Deming conference in 1997, hearing Tom talk. I thought, wow, this is different. So, Tom's paper that I'm referencing is A Different Perspective on Quality, the subtitle, Bringing Management to Life. Can you imagine? "Bringing Management to Life." And it was in Washington, DC, the 1997 conference. And then Tom says, this is the opening. And so when Tom and his wife would speak at Rocketdyne or other conferences I organized.

0:38:44.0 BB: Tom read from a lectern. So he needed a box to get up there and he read, whereas Elaine, his wife, is all extemporaneous. Both deeply profound, two different styles. So what Tom wrote here is he says, "despite the impression given by my title, Professor of Quality Management, I do not speak to you as a trained or a certified authority on the subject of quality management. I adopted that title more or less casually after giving a presentation to an audience of Oregon business executives just over six years ago. That presentation described how my thinking had changed in the last five years since I co-authored the 1987 book, Relevance Lost, the Rise and Fall of Management Accounting, and the talk which presaged my 1992 book, Relevance Regained." And this is when he... After he wrote, Relevance Lost, he went on the lecture circuit, he met the likes of Peter Scholtes and Brian Joiner, got pulled into the Deming community.

0:39:45.4 BB: And then he wrote this scathing book called Relevance Regained and the subtitle is... I think our audience will love it, From Top-Down Control to Bottom-Up Empowerment. Then he goes on to say, "in that I told how I had come to believe that management accounting, a subject that I had pursued and practiced for over 30 years." Over 30 years, sounds familiar. Then he says, "could no longer provide useful tools for management. I said in essence that instead of managing by results, instead of driving people with quantitative financial targets, it's time for people in business..." And this is 30 years ago, Andrew. "It's time for people in business to shift their attention to how they organize work and how they relate to each other as human beings. I suggested that if companies organize work and build relationships properly, then the results that accountants keep track of will what? Take care of themselves."

0:40:50.8 AS: It's so true, it's so true.

0:40:54.1 BB: Yeah, it sounds so literally Tom was writing that in 1999, 2000. Well, actually no, that was 1997, that was 1997, but the same sentiment.

0:41:03.4 AS: It just makes me think of the diagram that we see and that Deming had about the flow through a business, it's the same thing as of the flow from activity to result.

0:41:20.6 BB: Yes.

0:41:21.9 AS: And when we focus on the result and work backwards, it's a mess from a long-term perspective, but you can get to the result. It's not to say you can't get to the result, but you're not building a system that can replicate that. But when you start with the beginning of that process of how do we set this up right to get to that result, then you have a repeatable process that can deliver value. In other words, you've invested a large amount in the origination of that process that then can produce for a much longer time. Um, I have to mention that the worst part of this whole time that we talk is when I have to tell you that we're almost out of time 'cause there's so much to talk about. So we do need to wrap it up, but, yeah.

0:42:09.3 BB: All right. I got a couple of closing thoughts from Tom and then we'll pick this up in episode 21.

0:42:21.3 AS: Yep.

0:42:22.9 BB: Let me also say, for those who are really... If you really wanna know... I'd say, before you read The New Economics... I'm sorry, before you read Profit Beyond Measure, one is the article I just referenced, "Bringing Quality to Life" is a good start. I'd also encourage our readers to do a search. I do this routinely. It shouldn't be that hard to find, but look for an article written by Art Kleiner, Art as in Arthur, Kleiner, K-L-E-I-N-E-R. And the article is entitled, Measures... The Measures That Matter. I think it might be What Are The Measures That Matter? And that article brilliantly written by Kleiner who I don't think knows all that much about Deming, but he knows a whole lot about Tom Johnson and Robert Kaplan, who together co-authored "Relevance Lost" and then moved apart. And Tom became more and more Deming and Kaplan became more and more non and finally wrote this article.

0:43:35.6 AS: Is this article coming out in 2002, "What Are The Measures That Matter? A 10-year Debate Between Two Feuding Gurus Shed Some Light on a Vexing Business Question?"

0:43:46.4 BB: That's it.

0:43:47.2 AS: There it is and it's on the...

0:43:47.4 BB: And it is riveting.

0:43:50.8 AS: Okay.

0:43:50.8 BB: Absolutely riveting. Is it put out by...

0:43:54.0 AS: PwC, it looks like and it's under strategy...

0:43:58.5 BB: Pricewaterhouse...

0:43:58.8 AS: Yeah, strategy and business.

0:44:00.2 BB: PricewaterhouseCooper? Yeah.

0:44:01.3 AS: Yeah.

0:44:03.1 BB: And 'cause what's in there is Kleiner explaining that what Tom's talking about might take some time. You can go out tomorrow, Andrew, and slash and burn and cut and show instant results. Now what you're not looking at is what are the consequences? And so... But... And then... But Kleiner I think does a brilliant job of juxtaposing and trying to talk about what makes Kaplan's work, the Balanced Scorecard, so popular. Why is Tom so anti that?

0:44:37.9 BB: And to a degree, it could be for some a leap of faith to go over there, but we'll talk about that later. Let me just close with this and this comes from my blog on The Deming Institute about Profit Beyond Measure and I said, "for those who are willing and able to discern the dramatic differences between the prevailing focus of systems that aim to produce better parts with less waste and reductions to non-value-added efforts," that's my poke at Lean and Six Sigma, "and those systems that capitalize on a systemic connection between parts. Tom's book, Profit Beyond Measure, offers abundant food for thought. The difference also represents a shifting from profit as the sole reason for a business to profit as the result of extraordinary attention to working people, a most fitting subtitle to this book."

0:45:35.9 AS: Well, Bill, on behalf of everyone at The Deming Institute, I want to thank you again for the discussion and for listeners, remember to go to deming.org to continue your journey. If you wanna keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to Joy in work" and I hope you are enjoying your work.