The W. Edwards Deming Institute Blog

The Failure of “The Livonia Philosophy” at my GM Plant

Guest post by Mark Graban

As I wrote about in my first post, my first job out of college was at the GM Livonia Engine Plant, outside of Detroit. General Motors wasn’t my ideal workplace after having read Deming’s Out of the Crisis and learning a bit about Lean manufacturing in college. If possible, I wanted to work in something closer to the Deming environment. But, I needed a job, so I cast a wide net.

To my surprise, during the interviewing process, GM promised me a different type of workplace (one that existed, at least, at this plant), one based on the Deming philosophy. I was probably the only kid coming out of college who recognized or cared about that. But, it really mattered to me.

Sadly, it didn’t take very long to realize that the plant had a very traditional management style, very traditionally combative labor/management relations, and a typical blame-and-shame, command-and-control environment that made people miserable and didn’t deliver quality to the customer or any of the right business results.

What had happened? I was told that Dr. Deming had taught some workshops within GM, particularly the Powertrain division in the 1980s. A forward-thinking plant manager modified the Deming Philosophy to create something called “The Livonia Philosophy.”

But, after a period of success, that plant manager was promoted and the new plant manager, essentially hit the “undo” button on all of the Deming stuff. There were still posters in the hallway glass cases celebrating the new approach. But, it was no longer the daily reality in the plant. I’ve blogged about some of the problems and chaos on my blog before.

One of my colleagues gave me a copy of a “Livonia Philosophy” handbook that was gathering dust, and I’ve kept it to this day.

image of the text of the Livonia philosophy with signatures of 30 people

The first page says “The Livonia Operating Philosophy” is born from “a changing business environment requires that together through trust, communication, and respect for the individual, we will build an organization supportive of all employees in the development and utilization of their knowledge, ability, and skill towards the achievement of personal as well as organizational goals.”

Wow. That sounds very much like the Toyota Production System and Lean management. Toyota talks about “respect for people” or “respect for humanity” as an “equally important pillar” of their Toyota Way management philosophy (the other being “continuous improvement”). The Livonia plant didn’t have a lot of trust and mutual respect. Without that, the communication mainly came in the form of yelling and screaming when results were poor.

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The Most Popular Videos on Our YouTube Channel in the Last Year

Here are the most popular videos on The W. Edwards Deming Institute You Tube channel in the last year. Unsurprisingly, those with W. Edwards Deming in them are very popular.

The videos with the most views in the last year:

  1. W. Edwards Deming: The 14 Points: 70,693 total views all time (added 2 year ago).
  2. The Red Bead Experiment with Dr. W. Edwards Deming: 42,323 views (2 year ago).
  3. Dr. Deming – The 5 Deadly Diseases (1984): 120,556 views (added 7 years ago)
  4. If Japan Can Why Can’t We: 22,323 views (1 year ago).
  5. Lessons from the Red Bead Experiment with W. Edwards Deming: 12,519 views (2 years ago)
  6. Red Bead Experiment (a longer video than the excerpts we posted previously): 3,197 (1 year ago)
  7. Deming The Man: 12,375 views (3 years ago).

All of those feature Dr. Deming. After those we then get to some featuring others (as well as one featuring Dr. Deming).

  1. The Schools Our Children Deserve by Alfie Kohn from the 2015 Deming in Education conference: 2,650 views (1 year ago)
  2. Lessons Of The Red Bead Experiment (a longer video than the excerpts from this that we had posted previously): 1,860 (1 year ago)
  3. Deming 101 – An Introduction to Dr. Deming’s Teachings by Peter Scholtes (this shows Peter’s full presentation at our 2008 conference in Madison, Wisconsin): 5,482 views (3 years ago)
  4. Nothing is More Disruptive to Education, Than Deming by David Langford from our 2015 annual conference: 1,284 views (1 year ago)
  5. Deming 101 – Knowledge about Variation. This video, and the next one, show excerpts from Ian Bradbury’s presentation at our annual conference in 2013: 3,524 views (3 years ago)
  6. Deming 101 – Theory of Knowledge/PDSA: 3,516 views (3 years ago)

The W. Edwards Deming Institute You Tube channel provides a large number of great videos. And the great content is not limited to the most popular videos, there are many wonderful videos that receive fewer views.

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Deadly Disease of Management: Emphasis on Short-term Profits

One of Dr. Deming’s 7 deadly diseases is:

Emphasis on short-term profits: short-term thinking

It is easy to focus on short term goals and use a somewhat simple short term figure to measure success. But just because it is easier to look at the quarterly profit figure than determine progress without such a clear measure doesn’t mean it is wise. And in fact it is not wise.

Also, the idea of quarterly profit being a simple measure of success is flawed in more basic ways than just short term versus long term thinking (the idea that boiling things down to 1 short term measure is an acceptable measure of future success). The games played to manipulate earnings are enormous (and no surprise to those who understand likely outcome of pressure to meet short term goals is a desire to manipulate the figure rather than improve underlying results). In Profit Beyond Measure by H. Thomas Johnson and Anders Broms, the authors provide many good thoughts on the problems of accounting measures and management.

image for quote "he that would run his company on visible figures alone will in time have neither company nor figures." by W. Edwards Deming

In Warren Buffett’s 2010 annual letter to shareholders he mentions the advantage Berkshire Hathaway has because it doesn’t focus on short term results:

At GEICO, for example, we enthusiastically spent $900 million last year on advertising to obtain policyholders who deliver us no immediate profits. If we could spend twice that amount productively, we would happily do so though short-term results would be further penalized. Many large investments at our railroad and utility operations are also made with an eye to payoffs well down the road.

At Berkshire, managers can focus on running their businesses: They are not subjected to meetings at headquarters nor financing worries nor Wall Street harassment. They simply get a letter from me every two years and call me when they wish.

I wrote on my Curious Cat Management Improvement blog in 2007, Eliminating Quarterly Earnings Guidance: “It is good to see more people understand the bad practice of excessive short term focus on quarterly profits. It is also a bit amusing to see the Chamber of Commerce pushing an idea Deming was called unrealistic for proposing.”

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Why Dr. Deming’s Work is So Important to Me

Guest post by Mark Graban

While my work is usually associated with the term “Lean” and the lessons from the Toyota Production System, some of my earliest learning and inspiration for improvement came from the work of W. Edwards Deming. I don’t think I learned anything about Deming or his work as an undergraduate Industrial Engineering student from 1991 to 1995. I do remember my statistics professor saying something in class, in early 1994, right after Dr. Deming passed away. I think I was the only one to raise my hand after he asked who had heard of him.

Why had I heard of Dr. Deming? I was fortunate that my father had an opportunity to be a student in the famed four-day seminar, while working as an engineer at the Cadillac division of General Motors, in the late 1980s. I don’t remember getting too many details from my dad about the class, other than Dr. Deming chastising some executives who showed up during the last hour of the last day. But, I was curious enough to check out the copy of Out of the Crisis that was on my dad’s bookshelf. I first read the book during a break between quarters during my junior year in college.

Out of the Crisis resonated with me – not because of statistics, but because of the human factors, the psychology, and the workplace dynamics that I already recognized from the workplace, having worked a few part time retail jobs at that point. For example, I had experience with one bullying boss who didn’t listen to his employees.

Thankfully, I also had some very good managers who still fell victim to conventional wisdom management ideas, such as a store manager creating special sales incentives and contests that seemed silly and unnecessary. My co-workers and I didn’t understand why we had to be motivated to sell video game systems during the holiday shopping season, since that’s what we already enjoyed doing (read more about it in this post from my blog). It was one of my first experiences with teamwork and intrinsic motivation being squashed by extrinsic incentives and competition.

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Curiosity, Learning, Knowledge, and Improvement with Tim Higgins

Tim Higgins provided the Deming 101 presentation at our 2016 annual conference – Curiosity, Learning, Knowledge, and Improvement:

Tim starts off by saying that some people think Deming’s life was about variation but Deming’s purpose for understanding variation was to learn. This insight is wise. Quotes are useful to provide focus but that can also serve to over-simplify. To understand Deming’s ideas you need to understand the context within which each quote resides. Understanding variation is important but within the entire context of his management system not as an isolated concept.

we’re curious, we learn. You can’t stop a kid from learning, unless you put him in school. So Its part of who we are because we’re human. Bees make honey, people learn.

Throughout the presentation Tim does a good job of exploring the importance of our natural curiosity and the importance of a system view (understanding the connections between components not just understanding components individually).

He also discusses a point that might seem obvious but often seems to be overlooked

If you are going to collect data you need to get back to the fundamental question: why are we collecting this? What are we trying to learn? What are we going to do with that?

You need to understand what it [the data] is going to tell you about your system that might be useful?

We need actionable data that we can learn from and use to improve. As Dr. Deming said: “Data are not taken for museum purposes; they are taken as a basis for doing something.

Tim mentions Edward de Bono’s ideas at several points during the presentation. I also find de Bono’s ideas worth exploring and that his ideas and tools offer insight to aid those applying Deming’s ideas.

Related: Deming 101 with Ian BradburyKelly Allan’s Deming 101 Presentation at Our 2014 Annual Conference


The Most Popular Posts on The W. Edwards Deming Institute Blog in 2016

The 20 most popular post on our blog this year (by page views reported by our analytic tool):

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Using Dr. Deming’s Ideas at Baptist Memorial Health Care

Skip Steward, Chief Improvement Office (CIO) for Baptist Memorial Health Care Corporation in Memphis, Tennessee is the latest guest on the Deming Podcast (download the podcast).

Dr. Deming’s thinking continues to influence me, not only in things like PDSA thinking, but also in some of those other fundamental principles around constancy of purpose, around how we think about systems, how we think about the worker and the work that they are doing.

A friend of mine the other day told me that “improving the work is the work.” I reflect on Dr. Deming quite often.

photo of Skip Steward

Skip Steward

Skip discusses that it unfortunate that at Baptist Memorial Health Care the knowledge of Deming is largely limited to the folks working in quality specific positions. He says this is something he has seen throughout his career – with Deming’s ideas not being appreciated as widely as they should be.

He also discusses the success they have achieved in involving senior executives in the organizational hierarchy (CEO of the individual hospitals etc.) as active participants in practicing the principles of Baptist Management System in their daily work. One thing that has worked very well is using Toyota Kata principles. The executives have taken to that practice quite well (more effectively than other attempts to engage senior executives in changing their behaviors).

Skip talks about building relationships to earn the right to work together with staff to improve the organization. He did not just rely on the authority of his position, he understood the importance of earning respect and trust in order to help facilitate the adoption of new management system practices.

He also talks about the de-emphasis on tools several times in the podcast. At the same time if you listen to what he says they have done, and are doing, he lists a great deal of tool and concept use.

As I have said before I understand the criticism of using tools without understanding how they fit into a management system. That use of tools without the vision of how those tools play a role in a view of the organization as a system greatly limits the possible benefits.

At the same time those tools and concepts are very powerful and ignoring them also creates a system that is much less effective than it could be. It seems to me he really is using tools and concept a great deal but in a way that is integrated with the management system. The emphasis is on thinking systemically and understanding the role those tools are meant to fulfill. The tools serve a purpose they are a means to an end, not an end themselves. This is exactly the right way to do things, in my opinion.

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Countering Confirmation Bias

The greatest obstacle to discovery is not ignorance; it is the illusion of knowledge.

– Daniel J. Boorstin

After you decide that Deming’s ideas seem valuable you must act to adopt new methods in order to benefit from what you have learned. This takes many forms and I have discussed many possible steps in that direction in past posts. Today lets look at how to counteract confirmation bias once you appreciate the weakness that it introduces into your decision making process (based on an understanding of psychology and theory of knowledge).

One way to improve the system (based on the knowledge that confirmation bias is ingrained into how we think) is to encourage dissenting opinions in your organization. Often our organizations put great pressure on people to go along with the accepted opinion. This certainly makes things easier and it reduces interpersonal conflict (making things easier for managers). And in most cases going along is sensible.

The organization has survived and grown based on those accepted beliefs and practices. And the people in the organization will be reluctant to challenge what has worked. It is understandable that organizations have evolved in this way.

Confirmation bias will increase this reluctance. As confirmation bias tells us that people will accept “evidence” that supports their beliefs and reject evidence that undermines their beliefs. And institutionalizing this practice by disparaging those that question the accepted beliefs we magnify the negative impact of confirmation bias.

comic: time to do my own research on the real truth... Literally the first link that agrees with what you already believe - "jackpot"

Most of those accepted beliefs are working fine within the organization or changes would have been made previously. It can be that the current practices are wise, or it can just be that they can be accommodated. One big problem for the organization is the impact of many different weaknesses, in isolation, may be minor but when you add up (or thinking systemically, when you appreciate the interactions created within the system by them) the impact of all the bad practices together might be very large.

In most organization we need to introduce changes to the management system that reverse the current pressure to go along and to not question or ask for evidence of current practices. Most management systems would benefit from encouraging the challenging the accepted beliefs. They would benefit from encouraging the testing of beliefs and the examining of the results of those experiments.

With an understanding of psychology we can accept that confirmation bias is a weakness in how we think. And we can see in our organizations all the ways we encourage compliance and going along. Such practices further reinforce confirmation bias. Even if someone could force themselves to question and push back against confirmation bias personally, when they see the challenges of moving forward with those thoughts within the organization they are dissuaded from doing so.

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Overview and Status of The W. Edwards Deming Institute

Kevin Cahill, Executive Director of The W. Edwards Deming Institute provided an overview and status of the Institute at our last annual conference.

Kevin mentioned our updated web site, our presence on various social media sites and the quote web site we created last year.

A lot of people ask about my grandfather’s quotes. If you go to quotes.deming.org we put together a very cool site where you can actually see specific quotes my grandfather has made and then it will tie it back to where that quote came from (page 22 of the New Economics, Out of the Crisis, to a particular article). So it’s a fun way to see what those quotes are and we are continually adding quotes to it.

He also discussed the initiatives that the Institute is focusing our resources on: the Deming Education Initiative and the Deming Non-profit Initiative.

Kevin also announced The W. Edwards Deming Institute will be providing a new online learning program soon and that offering will be expanded greatly over the next few years.

Related: Kevin Cahill’s Welcome Message to the Deming In Education ConferenceLean Blog Podcast with Kevin Cahill discussing his Grandfather, W. Edwards Deming


Using Deming’s Ideas When Your Organization Doesn’t

If people asked Dr. Deming what they should do if they tried to get their company to adopt Deming’s ideas on management and the company wouldn’t he often suggested working on their resume and applying to other companies. Of course a tricky part of this decisions is determining how much effort to put into getting the organization to change is enough (and what are smart methods to use in that effort). I am actually not going to address those questions here (for some ideas on what methods to use when looking to transform the organization see: Transforming the Management System of an Organization, How to Start Applying Deming’s Ideas on Management and How to Get a New Management Strategy, Tool or Concept Adopted).

Here, I want to address what to do if you want to take advantage of Deming’s ideas and your organization has no interest in doing so and you like your job and want to stay anyway. In practice this is very similar to my advice on how to help transform your company. But you should on being successful within the existing structure instead of focusing on moving forward the transformation (granted I would prefer working to promote the transformation, but if you are not in a position to do that there are still plenty of opportunities to apply Deming’s ideas).

First, you can transform yourself. You can transform your understanding and how you learn (with an appreciation for the theory of knowledge and what conclusions you can and cannot draw from the data you use). You can transform how you act.

View your organization with an understanding of Deming’s management ideas. Think of the organization as a system. Even if you can’t persuade others to do this, you doing so will help you understand the situation more clearly and allow you to think of solutions that take advantage of this understanding. System thinking will allow you to find leverage points that can be used to multiply the benefits of improvements.

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