The W. Edwards Deming Institute Blog

True North Can Really Be “Management by Results” in Disguise

Guest post by Mike Stoecklein

I hear a lot of talk in healthcare about the importance of defining “true north” for the organization. If you search the internet, you’ll find many definitions of true north and examples from organizations. Here are a few (all are from healthcare organizations):

  • The company’s governing objective. Example given: deliver double-digit returns to our investors.
  • The company’s shared objectives and values. Example: provide the best customer service in our industry.
  • The core of what the organization is in business to do. Example: meeting budget, achieving 95% performance in the country on all quality indicators and, having all our staff members on Kaizen events.

Will these definitions help to create “constancy of purpose?” In many cases, the answer seems to be “no.” True North should help everyone in the organization to understand the common direction (the what), and see how they play an active role in supporting that direction. True North should also speak to the hearts and minds so that everyone understands why (the organization’s purpose).

True North is also commonly associated with results. What shall we measure? How will we know we are getting closer to our True North? The common categories of results usually include:

  • Quality (sometimes including “safety”)
  • Financial (usually including revenue, expense and productivity)
  • Delivery (timeliness or throughput)
  • Engagement (of staff)
  • Satisfaction (of customers)

This usually reveals an “explosion” of the many measures that healthcare organizations typically try to track. Many times this is due to requirements from outside agencies (the government or payers) but many times the additional KPIs (Key Performance Indicators) are due to requirements from upper management. Jim Womack, former CEO of the Lean Enterprise Institute, described it this way when he spoke at the 6th Annual Lean Healthcare Transformation Summit, “The more MBAs who produce more KPIs will only result in the ‘triple M’ – more, meaningless measures).”

To handle the volume of measures, it’s not uncommon for organizations to adopt a scorecard (balanced of course) approach. One example of such a chart is shown below. Color coding is intended to help identify where the parts of the organization are “off track.”

color coded (red and green) measure scorecard sheet

This approach typically does not lead to improvement, but rather to fear. Are the changes due to random variation or are they due to a special cause? How would they know? Viewing the organization as a set of parts, and then managing those parts separately will not lead to constancy of purpose. How could it?

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What To Consider When Looking at Data from Surveys

Frony Ward

Frony Ward

In this latest W. Edwards Deming Institute podcast, Dr. Sophronia (Frony) Ward, Managing and Founding Partner of Pinnacle Partners, (direct download) discussess what you need to consider when looking at data from surveys.

One of the points Frony makes is that often the survey data you see fail to provide the details that you really want to see when using the data. When you look at professionally done polls often they will be adjusted but those adjustments are not explained so the level of adjustment is often unknown.

For surveys done by businesses they often have big problems with survey methodology (dealing with issues such as response bias). Also businesses often have survey data that is collected where it is biased by pleas from those at the gemba for customers not to be honest on the survey.

Using data to help guide improvement efforts. But it is critical to know what the data does and does not tell you. There are many problems created when people attempt to use data but don’t understand what the data does and does not say. An understanding of variation is critical to using data effectively.

The Survey Handbook (created by the Navy TQL Office) is a good guide for using surveys to help learn about your organization system. As many of the readers of this blog will know Dr. Deming did a great deal of work with the U.S Navy and the Navy Total Quality Leadership office.

Another important concept for anyone using survey data is to consider the importance of stated preference versus revealed preference.

For those interested in political polling I strong suggest reading FiveThirtyEight. That site actually provides quite a bit of good thinking about data (on politics but also on sports, economics and more). One specific post on political polling: How FiveThirtyEight Calculates Pollster Ratings.

Related: Process Behavior Charts are the Secret to Understanding the Organization as a System (previous podcast with Frony Ward)Look at All the Data and Be Wary of Unjustified ConfidenceOperational Definitions and Data CollectionEnumerative and Analytic Studies

Lean Management Journal Articles by Bill Bellows

Bill Bellows serves on the board of trustees for The W. Edwards Deming Institute. He has been writing articles for the
Lean Management Journal
for several years that discuss how to apply Deming’s ideas (and related management improvement ideas) in organizations.

Those articles include:

The Last Straw

And, so it goes, when we relentlessly focus our attention on one of many causes as the singular cause and miss the system. This is an easy recipe for blaming an individual within a system (be it the pilot after an airplane crash, the conductor after a train crash, or the captain after a ship sinks) rather than a greater open system of causes. Dr Deming proposed an appreciation of his System of Profound Knowledge as a means to shift our narrow viewpoints from the last straw to boundary-less systems of contributions.

Business as unusual: shift from big problems to great opportunities

In a determined shift from black or white data to continuum data, a serious problem was solved and I was exposed to the important differences between continuum data and black or white data. Awareness of this difference and the advantages of these modes of thinking, as well as data collection efforts, with strong parallels to a focus on things gone wrong and things going well, is a cornerstone for business as unusual.

This is one of the big problems with how dashboards are often used. If something is not flagged as bad now then it is ignored. But often by using in-process measures to stay on top of systems and adjust before things go bad (or to work on continual improvement) will result in much better performance. People involved in a process need to know much more than ok or not-ok in order to manage and improve systems.

Come Together and Mind the Choice

When building a handful of transmissions, for R&D needs, perhaps it is more economically viable to mind the parts, due to an added expense of minding gaps. As volume grows and the system expands to include customers, minding gaps may be the preferred path to profitability. In closing, there is a time and place for minding parts and a time and place for minding gaps.

Related: Reflections from Dr. Deming on a Foundation for Leading (Bill presentation at our 2014 annual conference)How Did We Do on the Test? (Bill speaking at our conference)Using Deming’s Management Methods to Enhance the Application of Taguchi’s Ideas (Deming podcast with Bill Bellows)

Deming Inspired Innovation in Education

David Langford presented at our 2014 annual conference on Deming Inspired Innovation in Education.

The aim of the system of education is to provide meaningful learning experiences for youth in it’s day, for it’s future, in order to add value to society.

It is easy for me to imagine the power of focusing on meaning in education. We are naturally curious and interested in learning. The education system often beats that out of us, but if you switched the aim from grading to providing meaningful learning experiences you harness the natural desires we have to learn.

The importance of meaning is one that applies very strongly in the workplace also. As W. Edwards Deming said:

Motivation – nonsense. All that people need to know is why their work is important.

Related: Managers Should Focus on Eliminating De-motivationChange has to Start from the Top – Webcast with David LangfordAttributing Fault to the Person Without Considering the SystemA Powerful Tool: The Capacity Matrix

Institute Training on the Job

“Institute training on the job” is point 8 in W. Edwards Deming’s 14 points for management.

Dr. Deming’s management system was focused on creating a work environment that allowed people to take pride in their work by letting them contribute fully. So many workplaces waste the abilities of people and in doing so demoralize them and create organizations that are ineffective.

In creating a management system that focuses on allowing people to contribute everything they have to offer it is important to invest in those people. People can do wonderful things if given the opportunity. But you can also set people up to fail by relying on them to succeed but not giving them the proper tools to succeed.

A quote from W. Edwards Deming from Out of the Crisis is included in our previous post, People are Part of the Management System:

People are part of the system; they need help… Many people think of machinery and data processing when I mention system. Few of them know that recruitment, training, supervision, and aids to production workers are part of the system.

While training is important, make sure your training is part of a management system that works. The type of training shown in the red beads experiment doesn’t help. Telling workers to do what they are trained to do, and not to think, question and experiment is the opposite of what is desired.

The training that is needed is how to successfully experiment to improve the results created by the organization. To do this an understanding of variation is critical. And training in how to understand the organization as a system is critical. The training needed is that training that allows people to succeed when given the opportunity to use their brains to continual improve.

People naturally want to do well. But as Dr. Deming said (quoted by Brian Joiner):

Best efforts are not enough, you have to know what to do.

Always remember that each point in Deming’s 14 points are part of one system. They must be understood within that entire system. “Institute training on the job” is meant to be part of a system with all the other points and Dr. Deming emphasized that idea as he updated how he expressed his management system over time.

Good practices to institute training on the job include, training on:

  • understanding variation (understanding what data does, and does not indicate is critical to data based decision making)
  • how to use standard work instructions
  • creating and understanding process flowcharts
  • how to use PDSA to experiment, learn and improve
  • job skills (so for example, training new managers and team leaders on how to coach effectively)
  • quality tools (control chart, fishbone diagram, value stream map…)

Related: Knowing How to Manage People Is the Single Most Important Part of ManagementRespect People by Creating a Climate for Joy in WorkGive People Enough Rope (and the Right Rope) to Succeed

Tips to Get the Most Out of the Deming Collection at the Library of Congress

Guest post by Luciana Paulise. See her previous guest posts: Applying Deming Principles at Small and Medium-sized Enterprises and Applying a Model for Small Business Continual Improvement.

W. Edwards Deming used to say “Knowledge is the key. Lack of knowledge…that is the problem.” Knowledge is what differentiates successful companies from the ones that are not. And helping people to get knowledge is a wonderful gift only some dare to give. The Deming Institute gave me the opportunity to get to know more about Deming and his System of profound knowledge through a grants they awarded me. I was fortunate enough to get one of the 5 annual grants to be able to access to the Deming Collection at the Manuscript Division of the Library of Congress in Washington, D.C. The manuscripts division was established in 1897, and includes historical documentation, including 23 groups of presidential papers, ranging in time from George Washington to Calvin Coolidge, an inspiring place indeed.

Luciana Paulise outside the Madison building of the Library of Congress

Luciana Paulise outside the Madison building of the Library of Congress

  • Plan: I was so excited to continue my research directly at the Library of Congress that I couldn’t wait to travel from Buenos Aires to Washington D.C., but first I needed to plan ahead the content I was going to request access to.
  • Get a contact or advisor: All researchers are advised to email or telephone the Manuscript Reading Room prior to visiting. Many collections are stored off-site, and advance notice is needed to retrieve these items for research use. The division provides reference service in person or by correspondence. I actually sent them an email to request the folders I was going to look at to avoid any delays when I finally got to the library. This assistance is generally provided by professional reference librarians in the reading room.
  • Divide and conquer: Considering that I was only going to be there 5 working days, I requested 15 boxes, and tried to allocate a specific amount of time per folder. What happens is that Parkinson’s Law states that work will expand to fill the time given for it to be executed, so if you are not prepared about how to get your work done, you may not be able to finish on time, and delaying my trip back was not an option for me.
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W. Edwards Deming and the Leander Way

2014 W. Edwards Deming Institute conference presentation by Monta Akin, Kendra Shaffer and Jill Walker: W. Edwards Deming and the Leander Way.

The Leander, Texas independent school district looked to focus on improving student learning (not to improve teaching). Those ideas seem similar but there is a big difference in what you see as your aim. To achieve this aim to improve student learning Leander focused on viewing the organization as a system. With that focus they sought to continually improve the system with a focus on student learning.

This view allowed them to focus on how to improve the system to allow students to learn. If the results are not what is desired they don’t blame the student or the teacher but seek to improve the system so future results are better.

Another key to the success in Leander is that they understood this was a long term effort. They didn’t expect to finish in a year or two. They understood everything would not change at once. But by viewing the organization as a system they could maintain a focus on continual improvement and understood those things that are stuggling today can be improved next week, next month or next year.

Leander uses data and PDSA to experiment, learn and improve.

Often people will say Deming isn’t just the tools. That is certainly true. But using tools and data to make improvement efforts concrete is important.

As Deming said, best efforts are not enough, you have to know what to do. But he also said, “Best efforts are essential.” Tools are not enough: and like best efforts, using them without understanding the management system can do damage. But tools are also essential and Leander’s experience shows a long term effort to integrate quality improvement tools into the management system to achieve long term continual improvement.

Related: Monta Akin on The 20 Year Deming Journey at the Leander Independent School District (podcast)Deming Podcast with Dr. Bret Champion, Superintendent of the Leander Independent School DistrictWhat Schools Can Learn from Dr. Deming’s Philosophy by Andrea Gabor

Institute Leadership

Point 7 in Dr. Deming’s 14 obligations of management:

Institute leadership (see point 12 and Chapter 8 in Out of the Crisis). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.

The phrase “institute leadership” is difficult to understand without context. But Dr. Deming provided context. Point 12 addresses the need to create management systems that provide people joy and pride in work. And he specifically mentions the need to abolish the annual performance appraisal.

image of Deming quote: A leader is a coach not a judge

For Deming, instituting leadership meant creating management systems that allowed people to take pride in their work and was consistent with the principles he expressed (understanding the organization as a system, understanding variation, etc.). That system allows the organization to be successful by providing for the needs of the employees, delighting customers and meeting the needs of other stakeholders. This system had to be led with an understanding of the interactions between the interrelated compenents.

The title of chapter 5 of the New Economics is Leadership. From that chapter, page 116

As I use the term here, the job of a leader is to accomplish transformation of his organization. He possesses knowledge, personality, and persuasive power (chapter 6 [Management of People]).

How may he accomplish transformation? First, he has theory. He understands why the transformation would bring gains to his organization and to all the people that his organization deals with. Second, he feels compelled to accomplish transformation as an obligation to himself and to his organization. Third, he is a practical man. He has a plan, step by step, and can explain it in simple terms.

But what is in his own head is not enough. He must convince and change enough people in power to make it happen. He possesses persuasive power. He understands people.

See more of my thoughts related to that quote in our previous post: Dr. Deming on Leadership. That post includes another important quote:

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What Role Does/Should The Deming System of Profound Knowledge Play in the World of “Big Data”?

Guest post by Kim Melton

To put it simply, effective use of Big Data to make decisions depends on each of the four components of The System of Profound Knowledge and the interaction between the components. Big Data has always been around if we think of this as datasets that are larger than our current ability to store and analyze.

System of profound knowledge venn diagram

Each time technology advances to allow for collection, storage, and analysis of more data, we have the opportunity to expand the boundaries of the systems that we can analyze and improve. We have the ability to incorporate data from more sources (both internal and external to our own organization and to supplement “traditional data” with unstructured data). We have the opportunity to learn through the testing of new and expanded theories. At the same time, we need to be vigilant about understanding the data we are using. Are operational definitions the same across different data sources? Have we considered the impact of collecting data (e.g., personal privacy issues, perceived purpose for collection and analysis of data, etc.)? Do we know why, when and how data were collected?

Big Data (and analytics) has the potential to help individuals and organizations make better and more informed decisions…but more data does not automatically produce better results.

What is the aim? In the language of analytics, are data being collected and analyzed to Describe, Predict, or Prescribe? In Deming’s language, are we talking about an enumerative or analytic problem? Will our results be used to describe the current situation or to attempt to understand the cause system in order to understand and/or change future output from the process? Attempting to understand the cause system and to make recommendation for action that impacts the cause system requires a combination of technical skills and subject matter knowledge—and this usually involves cooperation among individuals with different perspectives.

What is our theory? Theory poses questions that guide analysis. As Dr. Deming would say, “Without a theory there is no learning.” Big Data allows us to investigate new theories, and techniques for visualizing data provides opportunities for recognizing patterns and generating additional questions (and theories). But, more data, by itself will not generate answers to unasked questions. In fact, as the availability of data increases, there is increased need for cooperation between individuals with different viewpoints.

With the availability of more and more data, how do we reconcile this with the recognition that there are aspects of working with people and organizations that need to be managed but that still cannot be measured? And, if too much focus is placed on “getting the right numbers,” people will “game” the systems to make the data look good.

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