Management is Prediction
This guest post is an excerpt from Ed Baker’s book (pages 47-48), The Symphony of Profound Knowledge, which was created in partnership with Aileron.org. Find a recent interview with Ed on the topic of this blog post at this link.
Deming’s criterion of knowledge is whether it helps us to predict and not whether we discover truth, because there is no such thing in the domain of empirical knowledge. In the empirical world, statements are only probable rather than true and absolute. If we can predict, then we have knowledge. We could have a beautifully constructed theory that has little or no relevance to the real problems that people face. Euclidean geometry, Plato’s forms, the normal curve, and other examples of abstract reasoning are true in their own world of mind, regardless of whether they apply to the empirical world. A theory that is internally consistent (i.e., true in its own world) has construct validity but may not have predictive validity. We learn about the ability of a theory to help us in predicting by structuring our predictions to be testable by empirical investigation. A theory is evaluated by future experience, whether in science, in management, or in everyday living. Theories can be revised as learning occurs, and as evidence accrues, we increase or decrease our degree of belief in their ability to help us predict.
Humans have the ability to apply knowledge to anticipate the future, not just to react to the present. To be able to say one knows means that one is able to predict, with some degree of certainty, the consequences of one’s own actions or that of others. Knowledge makes it possible to go beyond specific data and observations and make predictions that apply over a greater spread of time and place. Knowledge grows through systematic revision and extension of theory based on how things turn out. If a theory is shown to be inadequate, if it’s limited in its ability to help us predict, it should be revised or replaced. If a theory is taken to be truth, it can’t change, so there is no learning.
Any rational plan is a prediction of future performance and outcomes. Deming was amused by the cartoon “Diary of a Cat,” which he saw in the New Yorker magazine. Each day is the same as the day before. Wake up and there is the food; finish eating and there is the ball of yarn. Play with the yarn. There is no need for theory if you don’t have to plan for tomorrow. Without theory, humans can’t interpret experience, can’t make meaningful changes. We need knowledge. Knowledge has temporal spread. Knowledge comes from theory.
When a theory predicts without fail for a range of phenomena, it is said to be a law. Deming used the example of gravity. He was very sure that anywhere he dropped a pencil it would fall downward. He demonstrated. The result was always the same, he said. However, the laws of nature don’t exist out there—outside our mind; they exist in our minds. The descriptions and names we give to things are creations of the human mind, not the things to which they refer. “Gravity” is a word that represents a complex physical phenomenon that is not well understood, except perhaps by Einstein.
Walter Shewhart described three essential components of knowledge: (1) the data of experience in which the process of knowing begins, (2) the prediction of data that one would expect to get in the future, and (3) the degree of belief in the prediction based on evidence. This corresponds to the statement by C. I. Lewis that knowledge begins in the original data or observation and ends in the predicted data or observation. If the prediction is verified, the degree of belief in the theory is strengthened. Shewhart wrote that this is not as abstract as it appears. It applies to everyday experience, such as predicting the weather.
At Aileron, we fervently believe privately held business fuels free enterprise and raises the quality of life for us all. As businesses move beyond the start-up phase, a systematic approach to your business is critical to sustainable and strategic growth. We call this approach Professional Management, and have developed a system to implement it influenced by Dr. W. Edwards Deming and other great thought leaders. Dr. Deming’s timeless teachings have been, and will continue to be, a driving influence because we see his philosophies work.