The lessons that can be illustrated using the Red Bead experiment are too many to include in this post. But we can touch on a few of the ideas. The value of the Red Bead Experiment is to provide focus to your thinking.
It is hard to believe what the full Red Bead Experiment is like for many people. For many participants the psychology gets to them even while they can understand rationally the constraints placed on them. The letter Dr. Deming reads is a common reaction.
For those that say the red bead experiment is unrealistic and therefore can’t be of value. Of course it is unrealistic. It is a simplification. But the lessons don’t rely on the exactness of the illustration to a real organization. The lessons are illustrated by this simple construction.
Llyod Dobbins, states in the clip included here: “They wound up frustrated by that would not let them do their work and were powerless to change.” This is a very common experience. The red bead experiment takes it to an extreme but the point is being forced to work in a broken system that you are powerless to change. Sadly, that is a common fate of many workers. Blaming workers in such situations is obviously pointless.
Dr. Deming reading from the “willing workers” letter:
People wished to do their best. I though about my own work situation, how often people are in a situation they cannot govern but wished to do their best, and people do their best. And after a while, what happens to their drive, their care, their desire? For some they become burned out, tuned out. Fortunately there are many that only need the opportunity and methods to contribute.
This is very true.
Llyod Dobyns provides some more lessons
Workers will try to do a good job even when they know they cannot. Doing your best doesn’t matter, unless you know what to do, why you are doing it, and how to do it.
The Red Bead Experiment is an activity Dr. Deming included in his 4 day seminars. The webcast shows excerpts of Dr. Deming carry out the Red Bead Experiment with participants from the audience.
Dr. Deming used the Red Bead Experiment to clearly and dramatically illustrate several points about poor management practices. This includes the fallacy of rating people and ranking them in order of performance for next year, based on pervious performance.
The Red Bead Experiment uses statistical theory to show that even though a “willing worker” wants to do a good job, their success is directly tied to and limited by the nature of the system they are working within. Real and sustainable improvement on the part of the willing worker is achieved only when management is able to improve the system.
As with any model it oversimplifies reality but the experiment drives home lessons very powerfully. It is hard to appreciate this without experiencing this directly yourself but the webcast gives a glimpse of what is involved.
The discussion in his sessions of understanding of psychology and the misuse and misunderstanding of data and variation are dramatic for many people. Many presenters continue to use the Red Bead Experiment in seminars today, including The W. Edward Deming Institute (in our 2 1/2 day seminars).
Experts in healthcare and education, as well as practitioners in government, manufacturing, and service industries will share their ideas and explore their results applying Dr. W. Edwards Deming’s theory of management. Academics and practitioners will gather from around the world for two days of presentations, exchanges, and roundtables.
Nida Backaitis speaking at The W. Edwards Deming Annual conference in 2013. Photo by Judy Cahill.
Nida Backaitis will provide the keynote presentation – The Transformation Deming Called For: A View Through The Lens Of Adult Stage Development. Nida Backaitis applies the adult vertical developmental lens to the teachings of W. Edwards Deming in order to:
provide new perspective on the nature of the transformation Deming implored us to make
shed new light on why most of Deming’s audience has even today not fully understood his message and
why our culture is more ready to understand his message anew some 20 years after his death.
Other speakers include:
Diversity In Action: Creating Responsive Systems In High Variation Environments by Jim Benson, Modus Cooperandi
Understanding And Application Of Deming’s System Of Profound Knowledge In Healthcare - Experiences of and Lessons Learned by the Healthcare Value Network’s “Acceleration & Assessment Team” by Mike Stoecklein
Argyris, Deming & Transformation – Our Values in Action Will Transform Us by Dennis M. Sergent
Why Is It Crucial To Apply Dr. Deming’s SoPK In I.T. Today? – Insights From Research and Practice by Poorani Jeyasekar
Randy Harward spoke at the 2013 Deming Institute annual conference about his experience with applying Deming’s management ideas at Patagonia.
Low energy costs in the USA are a significant factor driving companies to consider moving apparel production to the USA. Energy costs have decreased in the USA (driven by excess supplies of natural gas driving down costs) and energy costs are a significant factor for apparel production.
The energy costs of transporting goods globally (mainly driven by oil prices which have remained high) add to the incentive to produce near customers (so this increases the benefit of producing apparel for USA consumers in the USA – though not for producing in the USA for export). There are also, of course, other benefits to manufacturing close to the customer.
You can run a physical plant cheaper in the USA than you can in China. So if it is just the machinery required, investment and all of the equipment it is actually cheaper here in the USA than in a lot of what we call 3rd world countries. But we aren’t very good at management. So the biggest problem you find is the very very low efficiency, low worker productivity in the apparel industry anyway in the US. It is very low compared to what you find in much of the rest of the world.
And it is all management. That is what I deal with, working with factories to make a process easier for workers, have their involvement in how a product flows through the system.
How do you make that system flow. Well you can only design it or automate it, the answer in the US is often to automate production. You can’t do that in apparel, the design changes are too quick. There is some apparel you can do with automation but mostly you need to use really engaged workers who are really happy to come in and change the system they work in every day.
So when they come in and there is something wrong with it or they can think of a little bit faster way to do it they are engaged enough to do it and the managers let them do that. That does not happen in the US, at least not in apparel. Some of the worst factories I visited anywhere in the world are here in the US… So until we get some enlightened managers in USA apparel factories it is a real struggle: it is not a small factor it is huge.
When people first learn of standard work within the Deming context (or lean manufacturing or the other flavors of management with some process focus) they often fear it means following outdated processes that are ineffective. I believe this is because, if they have experience with standards, that experience was a bad experience. They likely suffered from the equivalent of processes written in stone that no longer make sense but no one knew how, or no one had the authority to officially change them.
Often this results in people unofficially “changing them” (leaving them as they are, but) using their own variations. This often results in chaos (though often delayed until those knowing the right undocumented processes to follow are not around), including making process improvement difficult as the baseline state is so confusing.
One sign of progress in management systems over the last 20 years is there are many more organizations providing good experiences with standardized work processes (often from Deming based or lean manufacturing based management systems).
For standard work processes to be effective the organization needs to create a culture of process thinking (without that people don’t respect the importance of standard work and chaos and poor results ensue). Process thinking is a natural result of the Deming’s management ideas: evidence based management, PDSA, understanding variation, eliminating non-value added work, encouraging joy in work (which requires letting people view how they contribute to providing customer value), etc..
Randy Harward spoke at the 2013 Deming Institute annual conference on applying Deming management methods and sustainability and Patagonia.
It was better because designers and developers went from being just people who bought things, and marketed them, to people who had to understand and solve problems throughout the whole process. They became process engineers, every one of them… It was a huge change for the company. Sales and satisfaction increased for the whole company.
Previously, that that were thought impossible, technical barrier, just fell away as we explored the whole process.
Randy discusses how end to end process thinking, systems thinking, created the ability for Patagonia to create sustainability and business success together. Without looking at the whole system, sustainability often can seem to create increased costs. But as the entire system is optimized (for sustainability, quality and customer value) there are big gains for the business.
The culture of process thinking and continual improvement don’t sound much different than what companies say they do. But the difference in practice is profound.
Randy Harward spoke at the 2013 Deming Institute annual conference on applying Deming management methods and sustainability and Patagonia.
I was hired to take care of this huge volume of returns coming back from customers, we had so many quality problems. I was managing customer service and all the systems required to handle this huge volume of returns. And I kept raising my hand and saying “why don’t we do something about the problem.”
I visited companies, suppliers and customers all over the world. And I took seminars, and that is when I discovered Dr. Deming and it changed my life. It aligned much of my thinking.
I finally realized what was happening in a Western Mountaineering situation wasn’t… You know at the time at Western Mountaineering I didn’t think what was real management, I thought we were just goofing around. I have actually tried the rest of my life to recreate that situation… it is very very difficult to do what happened there.
We set to work building and documenting every system for design, development, production and sourcing of apparel worldwide. Part of that was teaching a 6 week quality course on tools and Deming’s philosophy to every employee at Patagonia… We taught the red bead experiment as part of that, and I tell you to this day I can’t believe what an impact that exercise has. It really changes world views. 25 years later people still tell me about that game.
What it [QA manual] created was clarity. What we had was photographs, detailed photographs of every stitch and type of construction. We started removing all the debate about what was and wasn’t acceptable.
When it was implemented it was like turning off the facet, seconds [bad product] just disappeared – at least half of them overnight.
Visual management and clear expectation are an important part of success. They integrate with the idea of standardization to make clear what is expected. Standardization doesn’t not stifle improvement, standards are meant to be continually updated. If the system doesn’t have a good process for continual updating the standards and visual job instructions that is a serious failure.
Randy Harward spoke at the 2013 Deming Institute annual conference on applying Deming management methods at Western Mountaineering and Patagonia.
Western Mountaineering was facing a cash flow crisis when Randy Harward took over and he strongly considered closing down. Given the problems the “only way out of the situation was to increase turns” (increase how quickly they sold their existing inventory). Then they could pay down the debt using the marginal profit from sales. Given the financial crisis, the group took up to 20% voluntary pay cuts.
Randy had all employees attend weekly finance meetings where they discussed the company books and the reality they faced (debt levels, importance of quickly turning inventory, cash flow, etc.). On top of this each clerk was given a budget to work with for their area.
each of them got to work on improving turns and sales in their area and the place started to get an energy it just didn’t have before. Everyone was involved at a level I have never seen and sales started to increase.
They had success but then ran into a new problem: they ran out of inventory. And when Randy asked suppliers to provide more inventory they were unwilling to do so (presumably due to concerns about being paid for their good in the event Western Mountaineering ran into financial problems).
In discussions about goals, I typically find attempts to create two distinct categories of goals. I see the words “arbitrary goals.” Arbitrary numerical goals are believed to be bad, problematic. Some numerical goals the non-arbitrary type are believed to be useful, good, even necessary. I could find no evidence Deming made a distinction between arbitrary and non-arbitrary goals. His distinction was between goals I set for myself and numerical goals others imposed upon me or set for me.
For me any goal is inherently arbitrary particularly a numerical goal. Deming seems to warn us that the ill effects of a numerical goal have to do with imposing it on others (without providing resources to achieve it) rather than whether or not the goal is arbitrary. Deming pointed out the damaging effects of setting numerical goals for others without distinguishing between arbitrary and non-arbitrary goals.
Thoughts on “Arbitrary”
When I establish a system boundary, it is a thought process. The boundary I establish is arbitrary. The system boundary is not in the world outside of me; it is in my thinking. The boundary is arbitrary not in the sense that it is without foundation or irrational, or whimsical or frivolous.
It is arbitrary in the sense that it is discretionary, voluntary, elective, optional, and subjective. I can engage in much thought and effort; utilize my current knowledge; collect and examine data and information as a precursor to setting the boundary. Yet even with all that effort the boundary is arbitrary in the sense I have described. It is based upon the subjective things like: my purpose in establishing it; my perception of my current context; my current knowledge (which is never complete); the data and information I elect to gather and the data examination option I choose to apply. The system boundary is not in the world outside of me; it is in my thinking.
Similarly, a numerical goal, regardless of the level of rational thought and amount of effort I invest in establishing it, is similarly arbitrary.
Deming’s use of “goals” and “arbitrary”
In a comprehensive search of The New Economics 2nd Edition, I found:
“arbitrary” was used only once [p 146 in regards to student assessment scales]
“goal” paired with “numerical” was used a dozen or maybe two dozen times
Support of top management is not sufficient. It is not enough that top management comity themselves for life to quality and productivity. They must know what it is that they are committed to — that is, what they must do. These obligations can not be delegated. Support is not enough: action is required.
As discussed in our previous post: Improvement is a Learning Process. If you are not practicing improvement yourself, learning is much less than it could be. Actively experimenting with improvement yourself maximizes what you learn.
Since executives have the greatest authority, they have enormous influence on the organization. If executives don’t learn to understand variation, continually improve using the PDSA cycle, appreciate the interactions within a management system, etc. they will stymie efforts to improve the management system.
Those with the most influence should have the best grasp of management improvement. They need to continually be learning how to improve the improvement process. And many of the processes they are involved with have the largest impact on the future success of the organization. Those are precisely the processes most in need of continual improvement.