The W. Edwards Deming Institute Blog

Test your Knowledge of Out of the Crisis and The New Economics

Test your knowledge of Out of the Crisis and The New Economics with crossword puzzles created by Joyce Orsini. Here is the puzzle for chapter 1 of The New Economics:

Crossword puzzle: Out of the Crisis, chapter 1

See puzzles for every chapter of both books (and also chapter 1 of Sample Design in Business Research) on the Deming Cooperative website.

Joyce was the long time president of The W. Edwards Deming Institute, director of the Deming Scholars program at Fordham University and editor of The Essential Deming.

Related: Podcast with Joyce Orsini and Kevin CahillPhotos of 2013 International Deming Research SeminarQuotes from Out of the Crisis

If Japan Can, Why Cant We? – 1980 NBC Special Report

It is very hard for us today to remember (or learn if we are too young) what the situation was like in 1980 (see the bottom of the post for some data on the economy at that time). Specifically two areas were very different back then: the USA economy and the media landscape.

On June 24th 1980, NBC broadcast a special program in prime time: “If Japan Can, Why Cant We?”. It is hard to image today that such a production could have even a ripple in the business community. But that was a very different time. And that program created much more than a ripple. Prime time TV was a much different place than it is today; back then such a broadcast had an amazingly large reach as network TV had little competition (even from cable TV, to say nothing of Netflix, the internet, computer gaming, etc.)

Today, NBC has allowed The W. Edwards Deming Institute to make this historic program available to stream over the internet. And this capability (to provide it on demand online) shows yet another way in which our current landscape is unimaginable different from 1980. Still the message in this broadcast on using management practices focused on delighting customers, respecting and involving employees while using data and statistical tools to continually improve is still very powerful today.

Insightful quote from “If Japan Can, Why Cant We?” by Herbert Striner, dean of the Kogod Business School at American University (7 minutes into the program).

When we’re discussing the new environmental control regulations concerning engines, the American manufacturers tend to be thinking immediately about how to put it off, how to stop it, which congressman to contact. While the people from Toyota, Honda, VW, are busy trying to figure out how soon to get back so they have their research people, their production people working on the problem of meeting these specifications.

I expressed similar thoughts in a post about American CEOs desire to lobby congress for relief instead of addressing how to improve performance to provide long term benefits; in that case in relation to the decades old and continuing health care crisis in the USA (one of Deming’s 7 deadly diseases of western management, again from the 1980s which is still doing us great harm today).

Jerry Jasinowski adds another insightful comment (9 minutes in):

We have to change the relationship between management and workers in many firms, to draw out the contributions that workers want to make to productivity problem.

As W. Edwards Deming said in Out of the Crisis

The greatest waste in America is failure to use the ability of people.

Throughout “If Japan Can, Why Cant We?” executives and front line workers talk about how important it is to involve workers in improvement efforts. And repeatedly Lloyd Dobbins (the presenter) mentions how the companies making this work in Japan, and the USA, don’t reduce the workforce based on improvements. So even as the companies make dramatic improvements in productivity workers’ jobs are safe (they are moved to other positions with the company or allow the company to grow output with the same labor force).

The importance of treating employees as people and deeply involving them in improvement efforts was stressed throughout. This is, of course, at the core of Deming’s management philosophy.

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Current Neuroscience Understanding Related to Psychology and the Theory of Knowledge

Presentation by Ed Chaplin MD at our 2015 Deming Institute annual conference – It Takes An Enterprise: Current Neuroscience and Knowledge of Psychology

This is really a great talk that does a great job of illustrating the importance of understanding how our brains work (psychology) and how we think (and risks in what we think we know – theory of knowledge) and how it relates to managing our organizations. It is full of connections to many important ideas people need to understand to adopt better management practices in general and Deming based management practices in particular.

He discusses habits and that “95% of the time we operate on auto-pilot.” It is only when something disrupts the flow and we are forced to make a consciously decision that we break from auto pilot mode (habits).

I think the root cause of many of the problems in our organizations are a contradiction between how we do what we do and our beliefs about how we do what we do.

We are still stuck in a 17th century rationalism; but yet all the neurophysiology tells us we’re irrational. We think emotively. Our morality, our ethics are all emotion driven. It occurs before we get to the point of rational [thought].

We learn to see the world through our narratives. Our narratives become our biology.

The point he is making is that what we accept as narratives drive how we see the evidence around us. It is important to remember this in conjunction of what he said earlier that we are not very rational in our thought. And later he discusses how narratives have a similar result as optical illusions in that our brain leaps to incorrect understanding due to how our brains works (the links shows my post on that topic on my Curious Cat Management blog in 2007).

Education is necessary to raise awareness; it is not sufficient to change behavior.

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A Powerful Tool: The Capacity Matrix

I attended a 4 day seminar by David Langford about 15 years ago. The seminar was on using Deming’s ideas to improve education. I wasn’t in the education field, but I believe what I wrote about earlier: we don’t need to restrict our management learning to our industry. And thankfully my boss shared that thinking and approved my attendance. I learned a great deal at that seminar.

One of the things that I learned about at that seminar was using a capacity matrix to improve student learning. It is one of those ideas that when you hear about it, immediately you realize this is a vastly superior method to those current used. I am cynical/experienced enough to know that just because much better methods are available, and explained to people, is no guaranty they will be used.

I haven’t managed to get the capacity matrix idea adopted in organizations I worked in. But I do think it is a vastly superior way to manage career development, training, certification, coaching, education… in organizations. I used the idea some to help myself understand what was needed to guide decision making on those topics. I do believe directly using capacity matrices would have been useful but given my options I chose to put my efforts behind pursuing other improvement ideas.

Applying them would have been useful the organizations but I felt I would have to abandon other things in order to push for their use and I had less likelihood of success with getting capacity matrices used directly. My philosophy is very much based on the idea of building the capability of the organization for the long term; by growing the capability to adopt better management methods eventually adopting capacity matrices into the management system would be more likely to succeed.

And I used one for myself and found it worthwhile. I think it would be useful to anyone interested in seeking to improve themselves and their skills and abilities, even if you do it totally on your own.

You can view an example capacity matrix from Quality Learning Australia (registration required – free). Langford for Learning web site provides many example learning matrices and How to use Capacity Matrices in the Elementary Classroom… (also requires registration – free).

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Using Data to Seek Continual Improvement, Not Just Process Monitoring

Dr. Donald Wheeler and Dr. Henry Neave wrote an interesting article in Quality Digest recently: Shewhart and the Probability Approach

Shewhart’s use of three-sigma limits, as opposed to any other multiple of sigma, did not stem from any specific mathematical computation. Rather, Shewhart found that the use of three-sigma limits “seems to be an acceptable economic value,” and that the choice of three sigma was justified by “empirical evidence that it works.” This pragmatic approach is markedly different from the strictly mathematical approach commonly taught by those who have not understood what Shewhart was doing.

This is an important point, drawing the upper and lower control limits 3-sigma from the mean is based on practical experience with managing processes. 3 is not a statistically derived measure it is a practical measure based on what works effectively. Using 3 results in the best choice of when to use special cause problem solving methods (what is special about this result) versus common cause problem solving (how can we improve the overall system to improve results.

They also remind us that the process monitoring chart (control chart) does not require normally distributed data. And this is a good thing because real processes are not normally distributed – they have impacts to the process that create results that are not normally distributed. It is true many textbooks and other books will say the data needs to be normally distributed, this is due to less useful statistical methods (as they discuss in the paper) that in addition to being less useful are disconnected from how real processes behave.

The crucial difference between Shewhart’s work and the probability approach is that his work was developed in the context, and with the purpose, of process improvement as opposed to process monitoring.

This difference is far more important than you might at first appreciate. It gets right to the heart of the divide between the main approaches to the whole quality issue. On the one hand, we have approaches that regard quality merely in terms of conformance to requirements, meeting specifications, and zero defects. On the other hand, we have Deming’s demand for continual improvement—a never-ending fight to reduce variation. The probability approach can only cope with the former. Shewhart’s own work was inspired by the need for the latter.

Related: Knowledge of VariationHow to create a control chart for seasonal or trending data by Lynda FinnEnumerative and Analytic StudiesSpecial Cause Signal Isn’t Proof A Special Cause Exists

Paula Marshall’s Presentation at Our 2015 Conference on Using Deming’s Ideas at The Bama Companies

Paula Marshall, CEO of The Bama Companies, tells us about her experiences with Dr. Deming and his influence on the family business in her presentation at out 2015 annual conference. Also see Paula’s presentation at the 2014 Deming Conference Webcast.

Speaking of the long term relationship with McDonald’s (currently $250 million a year):

McDonald’s in the only one that today, still, does not put any stock in a contract. They put stock in relationships.

She talks about how her father grew their business alongside McDonald’s without contracts. That included investing in personnel and factories in new countries as McDonald’s expanded without contracts between them and McDonald’s. The business relationship was a true partnership based on trust.

Today The Bama Companies has some factories that supply only McDonald’s. This relationship is possible through trust and a commitment to a long term supplier partnership (not a contract but something stronger in reality).

I tell our people that our company would not be in existence if I hadn’t met him [Dr. Deming]. Because at a point in time, McDonald’s said, “enough.”

McDonald’s head of quality forced Paula to watch “If Japan Can Why Can’t We” and attend a 4 day Deming seminar with the expectation she would then lead improvements at The Bama Companies in order to meet McDonald’s expectations.

She talks about how Dr. Deming began what became a long term journey by explaining that he needed to learn from her how to reach more CEO’s. Deming understood that he wasn’t reaching enough CEO’s (she was the only CEO of 500 people at that seminar). And she saw the opportunity to change her thinking and the way her company was managed based on the ideas, that she found so powerful, that Deming’s was presenting.

Over the next few years I was able to transform my company because of my conversations and my work with Dr. Deming… I would take to Dr. Deming the most complicated problems I had… and he would always have simple questions back for me.

Related: Baking Apple Pies Using the Deming Management SystemApplying Deming’s Management Thinking at PatagoniaFord and Managing the Supplier Relationship

Applying Dr. Deming’s Ideas at the Lakeville Public School System

Lisa Snyder

Lisa Snyder

Dr. Lisa Snyder, Superintendent of the Lakeville Public Schools shares how the work of Dr. Deming is influencing her as a superintendent and the rewards and challenges of adopting his philosophies in the latest Deming podcast. Lisa will be speaking at the First Annual Deming in Education Conference (in less than 2 weeks).

Lisa’s Deming journey began 23 years ago, when in a new job with a school in Winona, Minnesota, she was sent to listen to Dr. Deming via satellite. The experience had a huge impact on Lisa as she connected Deming’s philosophy to her own beliefs, she thought:

This is the framework that public schools are so desperately lacking to be able to become more proactive and less reactive in the way we do our work.

One of the things that really resonated was the whole idea of systems thinking versus blaming people. Many organizations, including public schools, tend to evaluate and blame, at a very high level. So if something is not going right, it must be the student’s fault or the teacher’s fault, or maybe its the parent’s fault or the teacher-before-me’s fault. But there is always this blame game going on.

Lisa found Deming’s proposal to instead look at systemic explanation for poor results was very powerful concept. This mindset change focused efforts on fixing systems. And that leads to better results. The all too common blame tactics rarely result in changes that improve results.

Lisa discusses how different implementation of plans are today, with a continual improvement and systems thinking understanding. One of the big differences is that plans are evaluated while they are being implemented. They don’t wait for the end of the year to evaluate how things are going. They evaluate all during the year and make adjustments as necessary.

She doesn’t mention it specifically in the podcast, but essentially they are using in-process measures and gathering feedback to learn quickly and adjust as needed.

The biggest challenge that really flies in the face of the Deming philosophy is the teacher evaluation system in Minnesota.

Trying to reconcile that problem while using effective collaborative continual improvement strategies that view the organization as a system is challenging. But the performance evaluation of teachers is one of the challenges they have to cope with, it is a reality of their current system.

The school has applied for a state program that allows school districts to create innovation zones that can allow them to be exempted from certain state requirements. That may allow them to more easily adopt better management practices going forward. One of the things they are moving toward are more job focused learning for students and incorporating job based learning in addition to classroom based learning.

Subscribe to the RSS feed for the Deming Institute podcast series.

Related: Monta Akin on The 20 Year Deming Journey at the Leander, Texas Independent School DistrictImproving Student Achievement at the Urbandale Community School DistrictHow Did We Do on the Test?Problems With Student Evaluations as Measures of Teacher Performance

2015 Deming Prize Winners

image of the Deming Prize medal

The Union of Japanese Scientists and Engineers (JUSE) has announced the 2015 Deming Prize winners.

One company was awarded the Deming Grand Prize this year:

3 years after a company has received the Deming Prize they may apply to the top prize. That prize has previously been named the Japan Quality Medal but was renamed, in 2012, to the Deming Grand Prize.

The companies awarded the Deming Prize this year are:

Since 2000 organizations based in India have received the most Deming Prizes; Japan is second, just ahead of Thailand.

Distribution of winning organizations since 2000 (including prizes for 2015)

  • India – 21
  • Japan – 14
  • Thailand – 12
  • China – 2
  • USA – 2
  • Singapore – 1
  • Taiwan – 1

2015 Deming Prize for Individuals

  • Tadaaki Jagawa, Advisor, Toyota; Executive Adviser to the Board, Hino Motors (Japan)

Related: 2014 Deming Prize Winners2013 Deming Prize Winners2008 Deming Prize Awardees

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First Annual Deming in Education Conference, 6-8 November 2015

Join us 6-8 November 2015 for the First Annual Deming in Education Conference at the Cedarbrook Lodge in Seattle, Washington.

Alfie Kohn and David Langford will be featured speakers at the conference. Also, conference attendees will have the opportunity to here from:

  • Kevin Cahill, Executive Director, The W. Edwards Deming Institute®
  • Michael King and Jane Kovacs, Directors, Quality Learning Australia
  • Jake Rodgers, Principal, Gold Bar Elementary (Gold Bar, Washington)
  • Christine Simpson and Sarah Ambrus, Principal and Teacher, Leander ISD (Austin, Texas)
  • Lisa Snyder, Superintendent of Schools, ISD 194-Lakeville Area Public Schools (MN)
  • JW Wilson, Executive Director, Advanced Learning Institute

See the agenda.

Hear the stories of leaders who are challenging the status quo to create exceptional learning environments that preserves our children’s natural curiosity and “yearning for learning”. Learn how the systems approach of Dr. W. Edwards Deming will liberate fear and ignite passion in students and educators alike. Come discover the true potential and future of education in our country.

This conference is for educators, administrators, business and organizational leaders interested in making a profound and sustained difference in education and quality learning.

Register for the conference.

Change has to Start from the Top, David Langford at 2013 Deming Conference.

A limited number of scholarships will be available for individuals requiring financial assistance to attend the conference. Scholarships will cover the full amount of the registration fee. To apply complete the scholarship application.

Related: Deming Institute Podcast with Alfie Kohn on Systems Thinking, Human Behavior and EducationWhat Schools Can Learn from Dr. Deming’s Philosophy by Andrea Gabor (2014 Deming Conference presentation)Video with Dr. Deming and David Langford: A Theory of a System for Educators and Managers