The W. Edwards Deming Institute Blog

David and Carole Schwinn Presentation on The Man, The Mission, The Movement

David and Carole Schwinn’s presentation at the 2016 Annual Deming Conference: The Man, The Mission, The Movement:

David Schwinn talking about Dr. Deming’s work at Ford

Dr. Deming would come and talk to top management and come and listen to the workers. That is what he did. And he would do this over and over and over again.

Dr. Deming’s willingness to criticize senior executives directly, even at huge companies (GM, Ford…), is well known. His talking directly with and listening to workers is less well known. But those that worked closely with him saw a huge difference between his respect for all workers at how many consultants (and executives and managers) acted.

Carol mentioned a group study visit to Japan that they took in 1985. Peter Scholtes, another participant, wrote about that visit and I posted on our blog previously: My First Trip To Japan by Peter Scholtes.

They both referred to W. Edwards Deming drive to improve not just management but people’s lives. I think this is an important aspect that many people overlook. I discussed that idea in the first post on this blog: Dr. Deming’s personal aim was to advance commerce, prosperity and peace.

No community need be poor if it has people and good management. No country need be poor if it has people and good management.

– W. Edwards Deming

Related: David Schwinn blog posts on PQ Systems2011 ASA Deming Lecture by Roger Hoerl, Need Any Country be Poor?The Aim Should be the Best Life Rather Than Work v. Life Balance

The Degree of Interdependence

graphic showing degree of interdependence with business being more so than an orchestra

Dr. Deming discusses the interdependence of business in: Managing the Organization as a System.

For example, in a bowling team each one plays his one solos, on the other hand in an orchestra it is all interdependence. They work together as a system. I’d say that the degree of interdependence is probably greater in a business than it is in an orchestra.

The greater the inter-dependance between sub-processes the greater be the need for communication and cooperation. Management’s job is to optimize the system.

A good example of a system well optimized is a good orchestra. The players are not there to play solos as prima-donas, to catch the ear of the listener, they are there to support each other.

This is a wonderfully vivid example. People can appreciate the need to optimize the system and not the individual pieces of an orchestra. It is obvious each component of the orchestra reducing their waste (all that time not playing) isn’t going to make a better end result.

It isn’t as easy to appreciate the destructive impacts of optimizing components of a management system without appreciating the interactions and interrelationships within the organization. But the simple image above is a useful reminder that when we are in management if we are not thinking about the end result of the system we risk optimizing component to the detriment of the whole. Business is more interdependent than an orchestra yet we often ignore the interdependence and seek to optimize components.

We need to Optimize the overall system, not the individual components. That is easier to say than to do. The links in this post provide more information on thinking in this manner and managing with this understanding.

In a previous post, People Copy Examples and Wonder Why They Don’t Succeed we quote Russell Ackoff: “Yes. The art of managing interactions is very different indeed than the management of actions, and history requires this transition for effective management.”

Related: Break Down Barriers Between DepartmentsSilos to Systems: Presentation by Lisa SnyderDr. Russell Ackoff Webcast on Systems Thinking94% Belongs to the SystemDistorting the System, Distorting the Data or Improving the SystemLeadership and the New ScienceRoot Cause, Interactions, Robustness and Design of ExperimentsEliminate Sales Commissions: Reject Theory X Management and Embrace Systems Thinking

Kevin Murphy’s Presentation: Application and Lessons of Deming’s Perspective on Leadership

Kevin Murphy’s presentation at the 14th In2:InThinking Annual Forum Weekend Conference: Application and Lessons of Deming’s Perspective on Leadership:

[Vimeo plays the video automatically – which is obviously an extremely bad Ux practice. Even using their code to disable autoplay of the video doesn’t work. So I have removed the embedded video. You may view the video here.]

Kevin is the President at Triumph Accessory Services. After graduating from the Deming Scholars program at Fordham University he worked for GE Aircraft Engines. When GE decided to sell off the units providing engine and airframe accessory services, Kevin participated in a management buyout of the company that is now part of Triumph Accessory Services.

The sound on the video is not great. It is less bad on the last half, so if you really can’t put up with it at the beginning you could skip to about half way through the presentation.

Kevin discussed the fact that many important factors cannot be managed and the importance of managing with consideration of those factors and impacts. He also showed the importance of using data when possible to help manage your organization. Sometimes I get the impression that some people learn the idea that some important factors cannot be measured and think that is an excuse to not worry about using data. This is not at all what Dr. Deming meant.

Data is extremely useful in managing an organization and doing so well is critical to continually improving. Dr. Deming’s admonition that “It is wrong to suppose that if you can’t measure it, you can’t manage it – a costly myth.” was a warning of trying to force the use of data into decisions where they didn’t help. It was not a statement against the many cases where using data is extremely valuable.

Don’t be too quick to use the excuse that some things can’t be measured when you are having difficulty figuring out how to measure to access the current status or the effectiveness of experiments. Do be willing to accept that some things cannot be measured, but in my experience it is far too common for people to give up too soon thinking of useful ways measures could be used. Kevin showed a great many examples using data and control charts to lead improvement at Triumph Accessory Services.

Kevin also discussed an example where the data begins to look troubling. And it shows the importance of knowing exactly what is going on with processes for which you are using data. The process was under experimentation and the extra effort in trying to find good solutions increased the time it took to complete the process.

If we had setup labor standards there is no way, no way that we would have gotten the experimentation and the improvement we got. There is not a chance.

He is using “labor standards” there to mean setting standards such as set times for specific tasks that people are measured against and evaluated on (the quote is from about 78m 45s).

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Gipsie Ranney

Sadly, we have to announce the passing of our dear friend Gipsie Ranney on March 7th. Gipsie Ann Bush Ranney was born in Kingsport, Tennessee to Raymond and Lola Bush. Gipsie is survived by four cousins; Anna Kate Barnes, Dwight Campbell, Rita Marcum Denton and Thelma Marium Smith. She obtained a bachelors degree in Mathematics from Duke University and Masters and Ph.D. In Statistics from North Carolina State University.

photo of Gipsie Ranney

Gipsie Ranney

Gipsie was a student and close colleague of Dr. W. Edwards Deming. She spent decades advocating Deming’s philosophy and helping people across the world with its application. Gipsie loved to travel to experience diverse cultures and history, taking many trips to Europe, Africa and Asia. She was a lifelong learner and read voraciously. How many bookshelves have Marx and Mao next to Hajek and Friedman, the Bible next to the Quran and Richard Dawkins? Gipsie enriched so many lives and will be deeply missed.

Gipsie Ranney was the first president of The W. Edwards Deming Institute. A resident of Brentwood, Tennessee and an avid supporter of the Nashville Symphony, Gipsie was an international consultant to organizations on management, quality improvement and statistical methodology. She co-authored Beyond Total Quality Management: Toward the Emerging Paradigm, and also contributed to Competing Globally Through Customer Value.

In appreciation of her “outstanding contribution in advancing the theory and practice of statistical thinking to the management of enterprises worldwide,” the American Society for Quality awarded her the Deming Medal for 1996.

In addition to an extensive international consulting career, Gipsie served as Director of Statistical Methodology for General Motors Powertrain Group from 1988 to 1992 ​ (helping implement Deming’s ideas at GM)​, following 15 years as a member of the faculty of the Department of Statistics at the University of Tennessee, Knoxville. While there, she co-founded of the University of Tennessee’s Institute for Productivity through Quality, and she developed and conducted numerous seminars on quality improvement. She finished her teaching career with a few years at Belmont University in Nashville before retiring.

Gipsie was someone I very much enjoyed talking to at the early Deming Institute conferences. She had a sharp mind and sharp wit; reminiscent of Dr. Deming in many ways.

I also enjoyed her appreciation for my father’s work (they were both statisticians). It was not the first time people’s connection to my father ​helped me start a friendship​. It was enjoyable to talk to someone that understood Deming’s ideas deeply and also understood the importance of applying these ideas in the workplace to improve people’s lives.

Neither of us were afraid to voice frustration as the resistance to improvement inside many organizations. She used that frustration to reinforce her commitment to helping bring about transformation. We all benefit from the work Gipsie did and the influence she had on many of those who are influencing the application of Deming’s ideas today.

We also benefit from her example of expanding one’s horizon in interpreting Dr. Deming’s theory of management. While trained as a statistician, Gipsie spoke and wrote on topics ranging from environmental sustainability to the trouble with incentives (“they work”), to legitimacy and fairness in organizations, to the question of “What world are we in?” and “Transformation – You Can’t Just Do One Thing.”

Related: Improving Problem SolvingGipsie Ranney and Don Petersen reflect on Dr. Deming’s Legacy (video)Remembering NummiPeter Scholtes

Application of Statistical Methods in 1940

Dave Nave found an interesting forward from a set of 1985 standards on Control Charts. It describes how those standards were created as part of the World War II war effort, with Dr. Deming on the committee. Subsequently the standards were transfer to ASQ/ANSI.

From the forward

Upon request by the War Department, the American Standards Association, in December, 1940, initiated a project on the application of statistical methods to the quality control of materials and manufactured products.

Since, due to the national emergency, there was an urgent need for the prompt development of standards in this field, the ASA Defense Emergency Procedure (later called the War Emergency Procedure) was applied to this project, and the following
Emergency Technical Committee (later, War Committee) was appointed to develop such

  • H.F. Dodge, Bell Telephone Laboratories, Inc, Chairman
  • A.G. Ashcroft, Alexander Smith and Sons Carpet Company
  • W. Edwards Deming, Bureau of the Census
  • Leslie E. Simon, Ordnance Department, U.S. Army
  • R.E. Wareham, General Electric Company
  • John Gaillard, American Standards Association, Secretary

This committee developed these three standards. Drafts were submitted for criticism and comment to a number of key individuals in groups having a substantial interest in the subject of the standards. All of the comments were carefully reviewed by the committee and a number of changes were made in accordance with suggestions received.

The revised drafts of Z1.1 and Z1.2 were unanimously approved by the Emergency Technical Committee and received ASA approval as American Defense Emergency Standards (later, War Standards) on May 27, 1941. Zl.3 was first approved in 1942.

In November, 1952, the ASA invited the American Society for Quality Control (ASQC) to accept the proprietary sponsorship for the three standards which had been developed by the War Committee. The invitation was accepted by ASQC in February, 1953, and the standards were turned over to the ASQC Standards Committee who assigned the designations ASQC Bl, ASQC 82, and ASQC B3 to the standards which were later to become ANSI standards Z l. l, Zl.2 and 21.3 respectively. The personnel of the committee at that time was as follows:

  • Irving W. Burr, Purdue University
  • W. Edwards Deming, Consultant in Statistical Surveys, New York University
  • Harold F. Dodge, Bell Telephone Laboratories, Inc (retired) and Rutgers, The State University of New Jersey, Chairman
  • Eugene L. Grant, Stanford University
  • Ralph E. Wareham, Consultant in Quality Control

One of the duties of the ASQC as Proprietary Sponsor was the establishment of a national consensus on approval of the standards by industry. In August, 1956, a canvass of industry was instituted in which organizations believed to have a substantial interest in the subject of quality control were contacted. This canvass resulted in all but three of the organizations interested approving the standards as circulated by the ASQC.

After further review by the Standards Committee of ASQC, in the light of comments received in the course of the canvass, the ASQC felt that the basic criticisms had been covered by making minor modifications and bringing the appendixes up to date, and accordingly submitted the standards to ASA for approval as American Standards. In the course of considering the submittal for a recommendation on approval, the Miscellaneous Standards Board, which had jurisdiction over this work, requested that those organizations which had objected be contacted again to ascertain their present feelings in the matter. This was done with the result that the organizations involved announced that they now approved the standards.

It is interesting to occasionally consider the history that led us to where we are today.

Related: Ron Moen and Cliff Norman Discuss the Evolution of Deming’s Management IdeasThe Influence of C. I. Lewis on Walter Shewhart and W. Edwards DemingToyota’s Management HistorySpeech by Dr. Deming to Japanese Business Leaders in 1950

Creating Technology Solutions that are Appropriate Given the System Context

Kentaro Toyama‘s presentation at the 2016 Annual Deming Institute Conference – Geek Heresy: Technology’s Law of Amplification

From the website for Kentaro’s book, Geek Heresy

“Toyama’s research reminds us that there are few one-size-fits-all solutions. If technology is going to improve the lives of the world’s poorest, it must be grounded in a deep understanding of human behavior and an appreciation for cultural differences.”

— Bill Gates, co-founder of Microsoft and co-chair of The Bill and Melinda Gates Foundation

Looking through Kentaro’s web site he works closely on what I have known under the term of “appropriate technology” – using technology (often very simple types of technology) to improve people’s lives. I grew up with my father’s interest and around his work with appropriate technology and I find it extremely interesting and a powerful method to improve the world. In the first post on this blog I discussed how I thought this idea tied with Deming’s focus on “prosperity” and improving people’s lives in a way those in rich countries often overlook.

Kentaro discusses aspects of what those interested in using technology to improve people’s lives run into. One of the most common is that the system in which the solutions are put into place often work against just placing a solution that works in one context into another. So for example, putting a new solar power system to pump water may work wonderfully (and it even avoids an issue of running power lines to a location that doesn’t have easy to connect grid power). But if the system requires maintenance which is difficult to get locally (either due to a lack of trained staff, poor transportation or poor spare parts availability) the solution may well not be very effective.

“Appropriate” in appropriate technology essentially means, appropriate for the system in which it will be used. This idea is very familiar to those of us using Dr. Deming’s ideas. Appropriate technology is really about delivering customer delight with an understanding of the system in which this solution will be used. The solution only is wise when it is proper for the context within which it is used.

The other aspect appropriate technology sought to remedy was solutions meeting real needs. Too often solutions being delivered were what external experts thought should help instead of what people really needed. The appropriate technology solution for this is familiar to those using Deming’s ideas: get deep understanding of users’ needs and pilot on a small scale.

Appropriate technology efforts learned from that when solutions were of great interest to people (when matched to user’s actual needs) those users would be engaged to help make the solution work for the long term. So if the solution could provide spare parts and reliable technology within the context of the system in question people would use their ingenuity and hard work to sustain those solutions. Conversely if the solution misread the market (it wasn’t really what they cared about) or was poorly designed for the realities of the system in which it was placed then people wouldn’t be committed to making it work.

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Eliminating Sales Commissions at Air Force One

At Air Force One, the word team means something

Over the past few years, Air Force One CEO Greg Guy did away with commission pay for all sales associates and general managers.

“The performance has been great and I would never consider going back,” he says.

Of the HVAC contractor’s 170 employees, pay changed for about 20 people, but Guy pitched the idea first to his Cincinnati office.

Rather than focusing on sales goals or credit, they would measure system inputs — number of new leads, number of opportunities, etc., — trying to reach certain metrics, and then all share in the results.

This result is seen at many different organizations as they focus on improving systems to deliver customer delight instead of focusing on using extrinsic motivation on salespeople: Why ThoughtWorks Eliminated Sales Commissions (2013)Eliminate Sales Commissions: Reject Theory X Management and Embrace Systems Thinking (2012)Righter Incentivization (2008).

photo of Greg Guy

Greg Guy

Air Force One, CEO Greg Guy attended the 2013 Deming Institute Annual conference and was able to begin to learn how to put into action a management system to address the problems created by a commision based culture. The need to address this problem first became clear to him in reading Daniel Pink’s Drive: The Surprising Truth about What Motivates Us.

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Everybody Thinking, Learning and Doing

In this presentation Dan Jones discusses what we (with an understanding of Deming’s ideas) can see as an aspect of the Deming chain reaction:

Focusing on quality and then time the consequence is that we lower costs. Rather than focusing initially on costs as most people do and then somehow hoping that quality and time will be impacted. That is the wrong sequence, the right sequence is quality and then time and then cost and then new products.

Brian Joiner also expressed this idea well:

Real benefits come when managers begin to understand the profound difference between “cost cutting” and “eliminating the causes of costs.”

Dan’s presentation includes a nice discussion of the importance of understanding the organization as a system (in his words the value streams). With that understanding you can then seek to improve the overall system. Without an understanding of the overall system organizations frequently optimize components that in turn sub-optimize the whole.

Dan also discusses the primacy good lean efforts (as Deming bases efforts also do) put on creating systems that enable people to create value for the organization. The organization must both give them the opportunity to take joy in their work and also provide the training, education and opportunity to learn and grow.

As John Shook summarizes, the power of all of this is actually learning is the work. That is the unique part of this system [Toyota Production System / lean thinking] that we have recombined the thinking, which we previously gave to experts, and the doing – we are recombining those into everybody thinking and doing. So actually we are making people at the same time we are making products, which is a phrase you will often hear from Toyota.

This idea of growing the capability of the organization and the capabilities of the people while delivering today is the core of my view on how to lead an organization.

Related: Minimize Total CostLeadership While Viewing the Organization as a SystemHow to Create a Continual Improvement CultureBuilding a Great Software Development Team

Deming’s Ideas Applied at Intermountain Healthcare Since 1988

I like to share interesting articles (and other resources) that provide examples of organizations applying Deming’s ideas in practice. Here is another of those articles: How Intermountain Trimmed Health Care Costs Through Robust Quality Improvement Efforts by Brent James and Lucy Savitz (2011). Since 1988, Intermountain Healthcare has applied to healthcare-delivery the insights of W. Edwards Deming’s process management theory.

Intermountain Healthcare is an integrated delivery system based in Utah and Idaho. Its network of twenty-three hospitals and 160 clinics provides more than half of all health care delivered in the region.

Intermountain has been identified as a low-cost, high-quality provider.1 It has made demonstrated improvements in clinical quality that have lowered the cost of care delivery. Those successes come from two primary factors: First, Intermountain developed an ability to measure, understand, and feed back to clinicians and clinical leadership detailed clinical variation and outcome data. Second, the system created an administrative structure that uses its robust clinical information to oversee the performance of care delivery and to drive positive change.

W. Edwards Deming cautioned against clinging to examples, and for good reason. But many people like to learn about how others have applied Deming’s ideas. I think people can learn useful lessons this way, but they also must be careful to realize that specific examples are the result of many different influences.

the findings forced Intermountain to focus on the processes of care delivery that underlie particular treatments, rather than on the clinicians who executed those processes—the “measurement for improvement” approach discussed below. As the inquiry continued, the system was eventually able to document significant declines in physician variation. Physicians led almost all of the changes themselves. Declines in variation were associated with large declines in costs, while clinical outcomes remained at their original high levels. For example, Intermountain’s average internal cost for performing a total hip replacement fell from more than $12,000 in 1987 to about $8,000 per case in 1989.

The idea anyone can take from this is to learn from data, examine the process and let those doing the work use the data (with an understanding of variation) to experiment and improve processes. That is the kind of lesson to take, not to think the lesson is to see the exact actions taken by Intermountain and copy them. The lessons are not about how specific changes to treatments were made (limiting the value to those with only that type of need – a sub-set of those in healthcare). The lesson is about viewing the organization as a system, resisting the urge to blame some people and see others as heroes, giving those working on a process the tools (quality tools and the relevant education and training) and management freedom to learn and improve those processes.

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David Langford Presentation on Motivation and System Improvement

David Langford’s presentation at our 2015 annual conference was titled: Education – Implementation Intentions and Automatization.

David included a clip from one of my favorite shows, Utopia (called Dreamland in USA) with a vivid example of a performance appraisal experience.

David also discusses the problems created by using extrinsic motivation to drive improved measures. As David illustrates this tactic over and over results in people distorting the data and distorting the system under pressure to avoid punishment and get rewards.

Those with knowledge of how human systems work can predict the likely consequences of creating poor management systems. Yet when the natural result occur, each time people blame individuals responding predictably to the forces created by the management system.

Those with management authority act without knowledge and create systems that will likely result in bad behavior by individuals. But instead of learning, we blame individuals rather than blaming the poor management practices that predictably led to the poor outcome. Those that learn from W. Edwards Deming can avoid falling into these traps created by poor management practices.

David has discussed the problem of attributing fault to the person without considering the system in previous presentation at our annual conference.

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