The W. Edwards Deming Institute Blog

Sustainability as National Imperative

Mark ‘Puck’ Mykleby, USMC Colonel (Ret.), Senior Fellow, New America Foundation and co-author of A National Strategic Narrative.

Mark provided a very large global systems view of where we are and the future we face. From the largest macro systems risks can be seen to the national security of the USA (and all other countries). Addressing these issues requires thinking systemically.

We cannot just put the old system on life support, we need a new system.

We have to start with the economy. And by the way it is not about doom and gloom… We can design anew, think anew and act anew.

In the clip Mark discusses the present danger and the grand strategy to address the challenges we face. He discussion opportunities that we can direct capital to that will provide economic profits and address sustainability: walkable communities, regenerative agriculture, productivity revolution (to provide for the demand of 3 billion new members of the global middle class).

I liked the statement he included in the talk: “If you want a new idea, read an old book.” while discussing good new ideas from an old book. And from an old document he quotes some pretty powerful words:

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

from the preamble to the United States Constitution.

Related: Approaching Sustainability Using Deming’s ThinkingProcess Thinking at PatagoniaBrian Joiner Podcast on Management, Sustainability and the Health Care System

Application of Deming’s System of Profound Knowledge in Healthcare

Mike Stoecklein presented his paper, Understanding and Application of Deming’s System of Profound Knowledge in Healthcare at the Deming Research seminar this year at Fordham University. This paper discusses the Healthcare Value Network’s Shingo-based assessment process (which has Deming-based principles) and provides examples of application from some of the Healthcare Value Network member organizations.

The prevailing style of management in healthcare is the same as the style described of Western management by Dr. Deming. (1,2) It is based on a short-term view, where management sees their job as achieving results by any means necessary. Committees and management batch problems for solving long after the problems have occurred, and the causes are commonly traced back to people. Management spends most of their time in boardrooms or conference rooms without any real understanding of the day-to-day operations, far removed from where the value is added (by the caregivers).

Healthcare managers have been led to believe that if they manage the parts of their organization well, then the parts will add up to a well-run organization. This reductionist view may work well for simple systems, but it produces poor quality, high costs, and a lack of cooperation when applied to complex systems like healthcare delivery.

This paper is useful for many reasons, including for those that think Deming’s ideas are about only managing a high volume faculty producing millions of the same product one after the other. That isn’t the case, but there are still people that have a misunderstanding on what Deming’s management ideas targeted. They targeted management of human organization not just factories.

Mike also references in his paper the main Deming ingredient missing from many “lean”/Toyota-Production-System efforts: understanding variation. He wrote a guest post here on that topic: We Need to Understand Variation to Manage Effectively.

graphic image of easily visible management practices and the foundational ideas that are often of site (and forgotten)

Management iceberg by Mike Stoecklein

Many organizations begin their journey in the “tools” category. While the use of tools can and does achieve results, the effort is difficult to maintain and often can become one of many “flavors of the month.” Some organizations may begin education and training programs for many people. While education systems are necessary to learn the new philosophy, large-scale education efforts without immediate opportunities for practice can result in wasted efforts and a false start.(35)

This is more profound than it may seem. Building a successful improvement focused organization is hard. Many organizations fail before they really have much success when they fall into one of the danger zones Mike mentions here.

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Brian Joiner Discussing His Career

In a previous post, Approaching Sustainability Using Deming’s Thinking, where you see Brian Joiner in the video (he and Andrew KcKeon were on the same panel). In this video Brian discusses his career including how he meet Dr. Deming and some personal anecdotes.

I like, and share his sentiment in the following quote, at the time Brian went to Rutgers to learn about quality:

Most of the other ones [statistics departments] were ivory tower type institutions unrelated to anything anybody might ever want to use.

That might be seen as harsh by some but it speaks to a real focus at the time of statistics departments on math rather than applied statistics. I met Brian when I was growing up; my father worked with Brian and George Box at the University of Wisconsin-Madison statistics department which, in my slightly biased option, became the premier applied statistics department in the world. I am firmly on the side that values applied statistics.

photo of histogram of people by height

Brian mentions “people pictures” in his talk, this is an example. They are living histograms with Penn State students arranged by height.

He mentions Edward Tufte uses the living histogram illustration in one of his books. I’ll take the opportunity to recommend Tufte’s books, they are excellent and a valuable resource to all working with data and having to communicate with others (which should be all managers).

Another story he tells is how they looked for a publisher for the Team Handbook and couldn’t find one. So they published it themselves. It remains a very useful book and one I recommend. I don’t hear people talk about it much anymore. I imagine because people think they are suppose to use new books, not old books. This is a pattern that leads to missing the best management books (most of which are over 20 years old – though there are occasionally new books that are worthwhile).

Related: Statistics for Discovery by George Box (on applied statistics versus mathematical statistics)many more great papers by George BoxBrian Joiner Podcast on Management, Sustainability and the Health Care SystemDistorting the System, Distorting the Data or Improving the System

Knowledge About Psychology for Managers, from Dan Ariely

One of the four cornerstones of Dr. Deming’s management system is an understanding of psychology. Dr. Deming continued to learn and adapt based on the latest research and what to continually improve his ideas on management. To stay true to his vision, we need to continually improve our understanding based on new knowledge.

image of the cover of The Upside of Irrationality

Dan Ariely, Professor of Psychology and Behavioral Economics at Duke University, continues to produce valuable insights for managers on understanding human psychology. Managers should be learning from him to improve the management of the human systems in their organization and in working with customers, suppliers and other stakeholders. We frequently have issues in our organizations that grow out of faulty theories about how people think (often based on beliefs of much more coldly rational thought than the research shows is really found in people).

Dan Ariely recently responded to questions on Reddit with some interesting quotes. He described himself as . And his quotes are backed with very good research – details on the research can be found in his books and online.

What was the one thing that surprised you the most in your studies?

Dan Ariely: The ability of people to rationalize. In one study, we gave people a chance to cheat — which they took, and very quickly afterwards, they believed their own lies.

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Approaching Sustainability Using Deming’s Thinking

Excerpt from panel discussion on Deming and Sustainability with Andrew KcKeon at the 2013 Deming Institute Fall Conference.

Andrew mentions Clayton Christensen’s work with the innovators dilemma which I also think is very worthwhile. Andrew also says:

Systems thinking and addressing sustainability is the end of externalities. Because what it says is those aren’t external, it depends on how you draw your system… your customer is part of your supply chain now, because you are going to go back and take that product back and remake it.

That idea of expanding your view of the system to include what your customers do with your product when they are done was also addressed in the Patagonia presentation. That concept also guides many efforts to make products that are intentionally designed (including the supporting system needed to make it happen) to be reused or recycled.

An excellent paper, is mentioned in the video by Dan Robertson: Thinking About Management from a Climate Change Perspective, by Andrew McKeon and Gipsie Ranney.

Related: Using Deming’s Management Ideas to Explore SustainabilityClayton Christensen on Innovation and Macro EconomicsBrian Joiner Podcast on Management, Sustainability and the Health Care System

Deming Seminar in Hong Kong, 12 to 14 June 2014

The W. Edwards Deming Institute is presenting our 2 1/2 day seminar, The Deming Management Method for Owners and Executives in Hong Kong from 12 to 14 June 2014. The host for the Hong Kong seminar is the Hong Kong Quality Assurance Agency.

collage of 4 photos of W. Edwards Deming

Enjoy early bird rate if register before 31 March 2014. Read more via the Hong Kong Quality Assurance Agency with details on the seminar, including the registration form.

During the seminar, participants will learn how to apply the Deming Management Method in their organizations. You may already know about Deming Quality, and now take the opportunity to learn and apply Deming-based Leadership.

Kelly Allan and John Hunter will co-present the seminar for The W. Edwards Deming Institute.

Related: Video Introduction to Dr. W. Edwards DemingThe Essential Deming, a New Book on Dr. Deming’s WorkDr. Deming on Leadership

Lessons From the Red Bead Experiment with Dr. Deming

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.

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The Red Bead Experiment with Dr. W. Edwards Deming

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).

This webcast includes excerpt from the Deming Library Red Bead Experiment videos. The Deming Library was a collaboration between producer Clare Crawford-Mason and Dr. Deming created from 1986 to 1993. Those videos are now available from The W. Edward Deming Institute.

We will post a new post new week looking at some of the lessons managers can learn from thinking about the Red Bead Experiment.

Related: Attributing Fault to the Person Without Considering the SystemThe Idea of Performance Rating to Capture Merit is AlluringUnderstanding Data

Other webcasts of the red bead experiment: David JoyceMayo ClinicJoakim SundénSteve Prevette

20th Annual International Deming Research Seminar, 3-4 March 2014 in New York City

The 20th Annual International Deming Research Seminar will be held 3-4 March 2014 at Fordham University in New York City.

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.

photo of Nida Backaitis

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:

  1. provide new perspective on the nature of the transformation Deming implored us to make
  2. shed new light on why most of Deming’s audience has even today not fully understood his message and
  3. 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

See the full list of presentations.

Related: Photos of 2013 International Deming Research SeminarDeming Research Seminar Round Table Session (last year)Call for Papers for the 20th Annual International Deming Research Seminar

Management of USA Apparel Operations is a Huge Barrier to Production in the USA

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.

During another part of his presentation Randy mentions this webcast from Patagonia: What Is Quality for Our Time? Responsible Business and the Patagonia

Related: Applying Deming’s Management Thinking at PatagoniaRespect for Employees, Don’t Waste the Ability of PeopleProcess Thinking at PatagoniaPractical Ways to Respect People in Your Organization