Podcasts about Taguchi

Why would any leader choose to take on a transformation that requires rethinking how they lead, how their organization functions, and how they learn? In this episode, we dive deeper with Cliff Norman and David Williams, co-authors of Quality as an Organizational Strategy, exploring Chapter 11: “Getting Started.” They share powerful stories, practical steps, and the deep-rooted challenges leaders face when shifting from conventional methods to building true learning organizations grounded in Dr. Deming's philosophy. This conversation highlights why improvement cannot be delegated, why leadership transformation is essential, and how to begin the journey—with clarity, commitment, and courage. TRANSCRIPT 0:00:02.1 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today we are going to continue our conversation with Dave Williams and Cliff Norman about their book Quality as an Organizational Strategy. I found this book fascinating because I think it's addressing something where there's been a bit of a hole and that is how do we think about the strategy of our business? And so we already had our conversation in a prior episode about the overview of the book, but today we're going to be talking about specifically, now this is kind of funny because we're going to be talking about the back of the book and that is chapter 11, getting started. Dave, why don't you take it away?   0:00:53.3 Dave Williams: Well, thanks, Andrew. Thanks for having us back on the Deming podcast. So, as you mentioned, part of the way that the book is laid out is that it describes kind of the foundations that are behind quality as an organizational strategy and begins sort of with an introduction that explains a good bit about how Dr. Deming had this provocation of a need for leaders to transform the way that they approach leading organizations. And part of that was to move not just from process based improvement projects, but to start to think about major systems in the organization and to pursue quality as the overall strategy and create a continuous improvement organization or learning organization. And so the book lays some of the foundation behind the science of improvement or behind profound knowledge that underpin the thinking, walks through quality as an organizational strategy, as a method of five interdependent activities. Then at the end it comes back full circle to say, well, this is great, now you've learned about these theories and methods. But a natural question for any leader would be, how do I get started? And one of the first things that we talk about in that section actually is about why leaders would want to do this transformation.   0:02:30.9 Dave Williams: And this actually came from a conversation that Lloyd and Cliff and I had in 2020 where we were talking about getting on this journey of building the book. And we all kind of recognized that this was really, really hard work. And we were curious or we, we didn't have a good answer of what was our theory about why somebody would deviate from the way in which they work today and embark on a transformational change of the way that they approach leadership, the way that they approach organizations. And actually I ended up going on a journey of interviewing a whole host of leaders who had been influenced by Deming, who had been involved in improvement in healthcare, folks like Dr. Berwick and Paul Batalden and Brent James. I interviewed some folks in the UK and other places, like John Seddon, and asked them, oh and I should Blaine Godfrey, who had been the lead of the Durand Institute, and I posed the question, what causes somebody to want to embark on this change? And many people actually had a hard time articulating it. But the answer that emerged, or actually Blaine Godfrey was the one that kind of framed it the best, I think, for us, was a number of things.   0:03:57.7 Dave Williams: Sometimes it's something like a book like this comes out and people read it and it's interesting and new. Sometimes it's an event happens, a patient safety event or a major accident or something of which causes people to have to change or do something different. Sometimes it's a discouragement with a desire that you know you could do better, but you don't have methods or know how to. So there were a host of things that we listed, and those are some of a sample of them that might invite somebody to say, the way that we're working today is not getting us to the level that we want to. And now we want to embark on something different. And we might look to something like quality as an organizational strategy as a method for us to transform the way that we're working and build on the shoulders of Deming's philosophy and the science of improvement and do it differently.   0:04:56.0 Andrew Stotz: And when I look at the book, you guys are bringing together a lot of different stuff. It's not just a Deming book. It's Deming is a part of this, and that's fascinating. One of the questions I have is when we look at, let's say, a business owner, a business leader is looking for answers, as you said, maybe it's an event, maybe it's a discouragement, maybe it's a feeling like we can do better. Maybe it's just being beaten by competitors. They come to a point where they start looking for answers and they find some fantastic books, authors, ideas, consultants, all this and I think about whether that's Peter Drucker or whether that's the Lean movement or whether that's, let's say Taguchi or something like that is the teachings that you guys are talking about - and I'm going to specifically ask about the teachings of Dr. Deming. Is it more or is it more difficult or less difficult to implement than other books or styles or methods that someone's going to come across?   0:06:08.7 Cliff Norman: I have to quote one of my colleagues here who probably knew about more about Deming than anybody in API or all of us combined, that's Ron Moen, who did, I think it was 88 seminars, four-day seminars with Dr. Deming. Dr. Deming once told him, he said, Ron, I believe you've been to more of these and I've been to. And it's kind of a joke. He had a great sense of humor. But you know, Ron told me the problem with Deming is he's asking us to change. And there's all sorts of things out there that require the management and the leadership, they really don't have to do anything different. And there are several things out there. In fact, Philip Crosby, one of the three gurus during when they launched, he was more the evangelical and had a way of talking to management so that they understood it, which that was his contribution to all that. But when Six Sigma came up and black belts and all that, and Crosby looked at him and says, that's not going to change the system. He said, all you're doing is killing a bear for management, killing a bear for management, and then you'll get a black belt.   0:07:19.9 Cliff Norman: You know, And I thought, wow that's pretty profound. Because the management at that point doesn't have to do anything, just have the black belt ceremony. There's absolutely no change on their part. Where Deming, as Ron says, he's kind of a pain. You've got to learn about variation, you got to learn about Shewhart charts. You've got to be able to put together a family of measures for your organization. You've got to understand your organization's system. You need to understand psychology, you need to understand theory of knowledge and how people learn how they change. And nothing else out there puts that on leaders. And so that was a question that Dave was lending back to. Why would somebody do this to themselves? You know, why would they take on this whole extra thing to learn and all the rest of it. And for the people that I know that have made that, that bridge, the pure joy that they get and the rewards they get from people who are learning and that they're leading and that they're changing and they're able to go to other organizations and repeat this and call them up and say, thank you so much for helping me learn how to be a real leader.   0:08:35.8 Cliff Norman: I mean, that's the reward in it. But it requires a real change on the part of the leader. And I don't know of anything else, Andrew, that actually requires that kind of in depth change. And there was one of our leaders, Joe Balthazar, he had Jane and I do four years in a row with his leadership team, teach them the science of improvement. The same curriculum, same leaders, four years in a row. And the second year I was doing it, I said, don't we need... No, no, Cliff, I want you to do exactly what you did last year. He said, it takes years for people to understand this. And I thought, wow, this is unbelievable. But on the fourth year, the VP of sales walked up to me and he says, I think I figured it out. And I thought, wow. And it does it literally... Because you've got to depart from where you've been and start thinking about how you're going to change and let go of what's made you successful up to this point. And that's hard, that's hard for anybody to do.   0:09:47.2 Cliff Norman: And anybody's been through that four day seminar knows when they crossed that path that all of a sudden they had to say, you know what I've been doing, I can see where I've been, the problem and not the solution. And that's tough for us. That really is tough. And Deming says you have to give up that guilt trip. And once you understand the theory of variation, once you understand systems, once you understand psychology and theory of knowledge, it's time then for you to move on and let go of the guilt. I hope that makes sense. But that's the difficulty in this.   0:10:17.6 Andrew Stotz: It reminds me of two, it made me think about two things. I mean, I was just a 24 year old guy when I attended the seminars that I did, and they weren't even four day. I think they were two-day ones at Quality Enhancement Seminars in, what was it, George Washington, I think. But the point that I remember, as just a young guy who I was, I pretty much admired all these business leaders. And then to see Dr. Deming really nail em to the wall and say it's about you changing. And whether he was saying that directly or whether that he was implying that through the Red Bead experiment or other things, it's about you shaping the system. That really blew me away because I had already read some books and I was pretty excited. And then it also made me think about, let's say there's a really good book, I would say Good to Great by Jim Collins that highlights some things that you can do to succeed and make your business better. And you can just buy that book and hand it to your management team and go, hey, implement what you learned from this book.   0:11:20.8 Andrew Stotz: Whereas with the Deming book, it's like there's just so much more to it. So I guess the answer to this is it is more takes time. There's more thinking going on. And I think that's part of the whole point of what your book does, is to help us map it out. So why don't we go through and think about this and kind of maybe step by step through what is the starting point and how do we go?   0:11:45.4 Cliff Norman: Andrew, I just got to add to what you just said there and go back to Joe Balthazar at Hallmark Building Supplies. He shared with me that, and he's the one that said I want you to do these four year seminars dedicated Deming's idea of Profound knowledge. And he said, Cliff, the day I made it, I knew I'd made it. Is my son Joey spilled his milk. He's about three years old. And he said, I started to do my normal leap across the table and he said I was about mid air. And I thought, oh my, this is what they do. This is part of their system. This is common. And I'm treating this like it's special. And that was so profound for him. And when, when you move beyond the Shewhart chart and you see events in your life around you relative to the theory of variation, common and special cause variation at a deep way like that, that's the kind of transformation you want to see in a leader. And Joe will tell you he's forever grateful for Deming and everything he's learned, and I think that's the reward. But people need to be willing to go on that journey, as Dave was saying.   0:12:53.0 Andrew Stotz: So Dave, why don't you walk us through a little bit of what you guys are teaching in that chapter.   0:13:00.3 Dave Williams: Sure. Well, one of the next steps obviously is if somebody, if a leadership team thinks that they want to go on this journey, there's some considerations they got to think about. As we've already sort of alluded to or touched on, this is a leadership responsibility and a leadership change. And so there's got to be will amongst the leadership team in order to say we want to work together and work hard to do this work. That this is not something that, similar to Cliff's example of say, having black belts, that we can just hand it off, somebody else will do it, and we can just keep going about our business and hope. It's important that leaders spend time recognizing and thinking about the fact that this is going to involve them doing work, doing effort, changing the way that they think, changing the way that they practice. And I like to say it's good hard work. I mean it's going to be something that's deeply rewarding. But it does require them to have that will. And with will then it's going to come time and energy, right? They've got to make the space, they've got to create regular routines and opportunities for them to learn just in terms of content, learn in terms of practice or application and learn in the process of doing the improvement work and doing the change to the way that they work in the organization.   0:14:38.0 Dave Williams: So there's going to be a need to build in that ability. And then a third thing is to ask whether you think this is something that you can do on your own or whether it might be useful to have help. And help may be an internal, a consultant, but likely not to promote consulting it but, but there's a good chance that you're going to need somebody that has both experience in improvement and helping people do results-driven improvement as well as somebody who has experience doing system wide change through a lens like QOS. And, and the advantage of that often is it it gives you as a leadership team to focus in on your job of thinking and looking and learning and allow somebody else to be an external intervener, somebody who comes in and creates some of the support, some of the context, some of the ways that can make it easier for you to step back and look at your organization in a different way. And so many times those are some of the things that should be considered as teams working through it. Cliff, what would you add or improve upon.   0:16:07.3 Cliff Norman: The idea of external help. Deming was pretty black and white about that. I was kind of surprised. I went back and read one of his quotes. He said, "I should mention also the costly fallacy held by many people in management that a consultant must know all about a process in order to work on it. All evidence is exactly the contrary. Competent men in every position, from top management to the humblest worker know all there is to know about their work except how to improve it. Help towards improvement can come only from outside knowledge." And I was reflecting on that today with Jane who's been involved in this for 40 plus years also. I said Jane, when he said that, I think it was accurate because at that time she and I were going to Duran seminars. There's only two books out there with methods. One was Ishikawa's book on Guide to Quality Control. And the other was Feigenbaum's book. And then of course you had Duran's book on The Quality Handbook, which was a nice doorstop. But there wasn't that much knowledge about improvement. And the worst part where Deming was really getting to was there's very few people you'd run into that actually under the Shewhart methods and charts and understand the difference between special and common cause variation.   0:17:27.0 Cliff Norman: And so you had to bring that kind of knowledge in from the outside. And frankly, we've had people go off the rails here. You know, Dr. Deming in the teaching of statistics has identified analytic studies which is focused on looking at data over time and trying to understand that and simple methods and approaches and then what he calls enumerative statistics, which is use of T tests, F tests and all the rest of it, which assumes that under the IDD principle that data is independent and identically distributed. Well, if you have any special causes in the data set, it blows up both of those assumptions and the use of those methods doesn't offer any help in prediction. And as Dr. Deming often said, prediction is the problem. And then go back to Shewhart. And Shewhart said, things in nature are inherently stable, but man-made processes are inherently unstable. So when Dave and I first do a Shewhart chart for a client, we don't expect for it to be stable. We expect for to have special causes. And as Dr. Deming said and also Dr. Juran, that when you get a stable system, that in and of itself is an achievement, that means nobody's messing around with the system anymore.   0:18:43.0 Cliff Norman: And you see this in the simplest things, like in an office, somebody will walk in and they think that their body is the standard for what the internal temperature should be for that room. So then they walk up and they start tampering with the thermostat. And by the end of the day everybody's irritated because we've had so many bodies up there with their standard. Moving the funnel on us here, and just leaving it alone would probably all be better off. But you have to learn that. And I think that's what Dr. Deming was saying, is that that kind of knowledge is going to come from the outside. Now the good news is is that since he wrote that in 1986, we've got a lot of people out there and some of them are in organizations that do understand the Shewhart methods and can understand the difference between common and special cause variation. They do understand the difference between a new and analytic studies and statistics and they can be of help. So the Deming Institute has a room full of these people show up, but they're at their gatherings annually. So we're a lot further along than we were in 1986.   0:19:45.2 Andrew Stotz: Yeah. So let's go through that for just a second. Some considerations you've talked about. You know that it's a leadership change. Right. And you gotta ask yourself, are we ready to work on this? And you know, this is not a hands-off thing. The second thing you talked about is time and energy. Are we ready to make the space for this? We have to have regular meetings. You know, we've gotta really... There's some work involved here. And then the third part you've talked about is outside help. And you mentioned about this story of Joe Balthazar and how he asked you to do the same topic over and over for four years. And imagine if he was telling his team, let's meet and try to implement some of this stuff on our own. Everybody dig into a book and then let's try. It would be very difficult to make that kind of progress compared to bringing an outside person. Which also brings me to the last thing that you said, Cliff, which was the idea that Dr. Deming had mentioned, that you need an outside person to truly change something. Everybody's got the expertise on the inside.   0:20:44.5 Cliff Norman: I appreciate you summarizing that because my job and working with Joe and leadership team, I was meeting with him every month. But what the four years that Jane and I spent were the next levels of his leadership. You know, it wasn't the leadership team. And I'm glad you brought that up because it was the very next level that he wanted exposed to this and the VP of sales that came in, he was new, so he had to be part of this group because he wasn't there originally. And so there was that ongoing... He wanted that next generation that was going to take over for him and the others to really understand this. So I'm glad you summarized that for me to help.   0:21:30.5 Andrew Stotz: Yeah. And I think one of the starting points too, I mean, the body of work, not just this book, but the other books that you guys have been involved in and produced provide a lot of the starting points for this. So there's a lot there. Dave, where do we go after these considerations? And the people say, okay, yeah, leadership says, we want to make this change. We're ready to make some time for it. We're willing to get outside support and help. Where do we go next.   0:21:57.7 Dave Williams: Right. Well, one thing that we typically invite a leadership team to do is to take kind of a self assessment of where they sort of see their baseline in relation to the methods and activities of QOS. So in chapter one of the book, there's actually a table that is 10 different categories. And then each leader takes it independently and they rate their level of agreement with different definitions from 0 to 10. 0 being this really isn't present, and 10 is, I'm very, very far along on this journey that in the book that's out now, there's a summarized table, it's on a page. But actually in the QOS field guide that we're working on publishing this year, there's a much more detailed version that we use in practice that has deeper definitions, but basically it works its way through purpose and leadership and systems thinking and measurement and all the things that are tied into QOS and what... And as I mentioned, we have each individual member of the leadership team take it independently and then we bring those scores together to learn together.   0:23:32.5 Dave Williams: And there's different ways in which you can display it. In the book, we show an example of a leadership team's scatter plot where it shows the rating and then it also shows the standard deviation amongst that exists between the leadership team. It's very, very common for leaders to not be in agreement in terms of their score in each of the different areas. You know what I said, It's a 0 to 10 scale. Typically, in my experience using the tool, people tend to be between a 2 and a 6 and hovering around a 2 or a 4. But it sort of looks like a buckshot or shotgun blast where there's a very... If you were to put dots where everybody scores, where there's variation that exists. And that's good because it's useful for the team to pause and think about why they assess the organization the way that they did. Looking at it through this new lens, where are the places that there's agreement and also where are the places that there's variation? And that helps them to be able to think about the fact that through this process, they're likely to both improve their assessment of the organization, but also increase their agreement about where they are and what they need to do to move forward and what they need to do to improve.   0:25:05.2 Dave Williams: And so that's a useful starting point, gets everybody kind of on the same page, and it's something that we can use at intervals as one of the ways to continually come back and evaluate progress towards the destination of pursuing quality as an organizational strategy.   0:25:23.7 Andrew Stotz: Yeah, I mean, I imagine that self assessment, it helps you too when you work with companies to be able to really understand, okay, here are starting point with this company is really, they just really don't know much about all of this stuff, whereas you'll have some other clients that basically, wow, okay, there's a lot of knowledge here about it, but how's the implementation and all that? So are we ready to change? Are we prepared to devote the time and energy? Are we going to get outside help? And where are we now? What's our starting point that's great to help us understand exactly how you step through it. What comes next?   0:26:03.5 Cliff Norman: Well, in that very first milestone, in that table, is it table three, Dave? Anyway, the very first milestone is to establish formal improvement efforts. And the reason for that is that unless people experience what it takes to develop, test and implement changes in the organizations, they really can't appreciate the structure that comes with quality as an organizational strategy. Because it's very difficult for many organizations to launch three or four improvement efforts and then bring them to fruition. And there's all sorts of stuff that happens. And then you find out very quickly whether you have managers or leaders, and organizations they've brought me in, they say, let's do some leadership training. I said, no, let's just do some improvement and then we'll find out if we have leaders or not. And one group, I won't mention who it was, but they had five people on their leadership team and they had to replace two of them because they found out they couldn't actually manage an improvement effort. And then the CEO was wondering how they actually manage their organization, which they weren't either. And so it's a rather, it's an important test in the front.   0:27:22.2 Cliff Norman: But as Dr. Juran says, it's real important to develop the habit of improvement. And if you don't know what that is, if you've never experienced it, then it's hard to say to people, gee, I need a purpose that aligns my improvement efforts. I need to understand my system so I know where those improvements are going on. I need to build an information system, get information from customers outside, people inside. I need to put together a strategic plan that actually makes improvements on purpose. That's a lot of work. And once you understand how complicated it can get in terms of just doing three or four improvement efforts and then all of a sudden you got a portfolio of 30 to do your strategic plan. Now that needs some structure, that needs some guidance and all the rest of it. But I'll just go back one step further. My own journey. I was sent by Halliburton at Otis Engineering to go see Dr. Deming 1982 in February. And coming back, I had an audience with the president of our organization, Purvis Thrash. And I went on and on about Dr. Deming. He said, Cliff, you know what I'd like to have? I said, what's up, Mr. Thrash?   0:28:27.5 Cliff Norman: He says, if you'll take this 50 million dollar raw material problem and solve this for me, I'll be a happy man and I'll give you all the quality you want. But go take care of that problem for me first and then come back to me and talk about Deming and Juran and anything else you want to talk about. So I put together four or five people and over about three months we solved his 50 million dollar raw material problem. And then he had a meeting of all executives and I was sitting with the managers in the back row and he called me to the front and he says, Cliff, will you sign this card right here? And I says, well Mr. Thrash, what is this? He says, well, I'm giving you authority to sign $50,000 anytime you need it to get all the quality we can stand here at Otis Engineering. One of the vice presidents said, well, I don't have that authority. He said, you didn't save me $50 million. You know, but once that happens, Andrew, once you do that, then you've got people that are willing to help you. And then once that takes place, I can't tell you how important, it allowed me then to bring in Lloyd Provost to help me.   0:29:36.2 Cliff Norman: And they weren't about to pay out money. They didn't like consultants, in fact, they were anti-consultant. But you saved us $50 million. I gave you $50,000. And Lloyd doesn't make that much. So get him in here, do whatever you need to go do. And I just think it's so critical that we have that demonstration project that people understand at the leadership level what we're talking about when we talk about design and redesign of the system.   0:30:00.0 Andrew Stotz: Yeah. I mean, I appreciate in the book you're talking about this concept. I'm not going to call it quick wins, but the idea is we need to get results. You know, this isn't just about talking about stuff so that's one thing that as you just illustrated, that's one point. The second thing you mentioned, is this person a leader or a manager? You know, and I think for the listeners or viewers out there, they're probably... When they heard you say that, they're probably thinking. Okay, wait a minute. Are my team managers or leaders? How do I know? What would you say? What differentiates the two?   0:30:37.2 Cliff Norman: I was fortunate to hang around Dr. Maccabee, as Deming did, and I asked Dr. Maccabee that question. He said, Cliff it's actually pretty easy. He said leaders have followers, and if you have followers, you can be anywhere in the organization, be a leader, but if you don't have followers, you're not a leader. You might be a manager with authority. You're not a leader.   0:31:02.7 Andrew Stotz: Can I ask a little bit more on that? So I'm thinking about my own business, which is a coffee factory, and I have people that are running the business, but I also have people that are running departments like the roasting department. And that area when they're overseeing this and they're doing a very good job and they're keeping things up and all that. How do I understand in a sense you could say, are they followers? Well, not really. They're people working for them and they have a good time and so do I view that person as not necessarily a leader, but more of a manager, or how do I look at it in my own company?   0:31:35.5 Cliff Norman: It could be a manager, which is essential to the organization. And that's another big difference. You see, the leader can't delegate their relationship with the people who are followers. You can't do that any more than a teacher can dedicate her class to a substitute teacher. Anybody that's ever watched that knows that chaos is getting ready to break out here because that teacher has a relationship with those students. She knows them all in a big way. And when the substitute comes in is game time in most classrooms and so forth, the managers have skills and things that they're applying and they can actually delegate those. Like when I was a foreman, I could have somebody come in and take over my department and I say assign all my people tomorrow. And they could do that. Now, in terms of the people that I was leading that saw me as a leader in that department, they didn't have that relationship.   0:32:30.2 Cliff Norman: But management or skills and necessary things to make the organization run like you're talking about, the coffee is not going to get out the door unless I have people with subject matter knowledge and competent managers to make sure that the T's are getting crossed, the I's dotted and the rest of it. But the leadership of the organization that has followers, that's a whole different person. And I think it's important. That could be anywhere in the organization. Like I had at Halliburton, I had a VP of engineering. Everybody went to him, everybody. He had 110 patents. You know, he built that system. He built the whole organization. So the CEO did not have the followers that the VP of engineering had. And it was well earned. It's always earned, too.   0:33:16.7 Andrew Stotz: Yeah. Okay, that's great. Leaders have followers. Leaders cannot delegate their authority. They have a different relationship.   0:33:24.0 Cliff Norman: They can't delegate the relationship.   0:33:25.8 Andrew Stotz: The relationship. Okay.   0:33:27.4 Cliff Norman: Yeah. Very important.   0:33:34.3 Andrew Stotz: So now let's go back to what, where we were. So we were saying some of the considerations. Are we ready to change? Are we prepared to devote the time and energy? Are we ready to get outside help and where are we now? And that self assessment that you talked about helps us to understand what's our starting point. I always tell a joke with my students about this when I talk about. I'd say, imagine you go to London and you're going to go visit your friend and you call your friend up, you say, I've arrived and I'm calling from a phone booth and just tell me how to get there. And the friend says, well, where are you? And you say, I'm not really sure. Well, do you see anything around you? Yeah, well, there's lots of buildings, but I don't really, you know. Well, do you see any names of any streets? No, I don't really see anything. But just tell me how to get there. There's something missing. If we don't know where we are, it's very difficult to get to where we're going. So now we understand where we are. We got that scatter plot that you guys have that you've talked about. Dave, where do we go next?   0:34:26.6 Dave Williams: Well, so Cliff already mentioned one of the fundamentals. And sometimes I think this is something that people struggle with because they want to jump into something new. But one of the best starting points is to focus in on improvement. And there's a number of different reasons for that. So one is that I don't know about you all, but in my experience, if I ask people, like, hey, I want to create some improvement projects and get started on improvement, I always tell people, like, if you remember the old Stephen Covey exercise where he put the rocks and the stones and the sand into a jar and poured water. And like you would do it in different orders. And I'm fascinated that people will stare at the big rocks or the things that are right in front of them, or the things that are on their agenda, or the things that are part of their strategy. And then they'll look to the side and grab some rare event or some extra thing that isn't related to that, but they've always wanted to work on. And where we try to focus people's attention is one, what are you already working on? Can you look through your and ask around, what are the things that are currently in play, projects that exist? And sometimes we won't ask, what improvement projects do you have? Because if you do that, you get a short list.   0:35:51.4 Dave Williams: Those are the things that people defined as an improvement effort, or maybe use some kind of framing to decide it was an improvement project. It may be better to in the beginning of the book, in the first chapter, we talk about different ways that you improve. And there's designing and redesigning a process. There's designing and redesigning a service or a product. There's changing a whole system. And so it can be useful to say, well, what are we doing in these areas? And that may actually create a bigger list of the various things where people are working on something that's about change to the system that may lend itself to be better activated through firing it up as an improvement project. And then, of course, there's a good chance that any organization, especially if they've done some kind of strategic planning, have some strategic objectives or some strategic priorities which they've committed to or already said, these are the things we're going to work on. So kind of crowdsourcing or bringing those together helps us to potentially find the early portfolio of projects without having to look much further, without having to say, what else do you want to work on.   0:37:07.0 Dave Williams: And then if we've got that, if we've got that list, a second thing that we can do is invite people to use the three questions of the model for improvement and reflect on can you answer these three questions? Do you know what you're trying to accomplish? Do you know how a change will result in improvement? Do you know what changes you'll make? What's your theory about how you'll get to improvement? And so having a list of the things that are already present or existing may be one first step. Another second step in the firing up a portfolio of improvement projects is asking the three questions for the model for improvement. And then a third one, if it's an active project is we have a project progress scale that you might use that can help you gauge. So I've got a project where is it on its journey towards achieving its aim or getting results? Those three can help us to sort of get a sense of the work that is at hand and that has already been sort of started in some fashion that is already in progress and maybe to get a sense of the level of definition and the progress that exists.   0:38:22.3 Dave Williams: They may not be the right projects, but that's a good place to start before trying to create new ones. And I'll hand it to you, Andrew.   0:38:30.4 Andrew Stotz: I find that interesting. Both the story that you told Cliff about fix my raw material problem and then, Dave, what you're talking about is as you talk in the book, focus first on improvement. What are we already working on? What's an improvement project we've got? What's a problem we've got? Because a lot of times, let's say in the teachings of Dr. Deming, it's like, no, get your mind right, read this stuff, read this, figure this out, think about this, go to a seminar, talk to other people before you do anything. I feel like that is oftentimes where people get caught is they get caught up in, I need a year to think about this. And can you explain a little bit more about why once we've done our self assessment and we're ready to go, that you focus on improvement rather than the thinking process?   0:39:21.7 Dave Williams: Well, because we want to... Well, one, we know that in order to get results or to get a different result than what we want, we got to change the system that we got. Right. So in order to do that, we've got to do improvement. The other thing is that there's already energy that's being expended here.   0:39:41.4 Andrew Stotz: That's a good point.   0:39:42.7 Dave Williams: The risk that often I find people run into is that they then add other projects that are not strategic into that bucket and take up more energy. I'll tell you an example. I was working with the health system here in the States and we crowdsource just the things that they were calling improvement projects. The health system had 25 active teams that were just the ones that were called out as improvement projects. When we looked at those 25 teams, the vast majority of them were not actually... They had been meeting for months and doing things for quite some time, but they actually weren't doing any changes and, or they've been testing changes for quite some time. So, now just this exercise alone by only asking, what improvement projects do you have? You realize you've got 25 teams that have been resourced or are spending energy or going to meetings or focused on something. They may not be the strategic thing that matters, but that's irrelevant right now. We just know that we already have invested some interest here. The second thing is these folks have been on this journey for quite some time and are not making progress.   0:41:01.7 Dave Williams: So that tells me something about maybe the way that they framed it. Did they charter it well? Did they have the right people in the room or the right team? Did they have the right tools and methods to be able to break down the problem and then figure out what to test and learn? So there may be some difficulty...   0:41:19.4 Andrew Stotz: Or did they even just dissipate their efforts across 25 projects too? Right in their resources, yeah.   0:41:26.1 Dave Williams: Yeah. Or there are overlaps? So there's a number of different factors. There's actually a paper that was published by a health system in the United Kingdom, and it was really interesting. They spent a lot of attention on generating will through training and getting people in the classroom and teaching them about improvement methods. And they fired up all this energy. They had a massive explosion of the number of projects that were started or where somebody went into their software. They had a software platform. Anybody could go and start a project. Well, something like 50% of those projects never actually got to PDSA testing where they changed anything. And then there were a slew of them that were stuck in PDSA testing but never saw any movement in their process measures or their outcome measures. And only a small number actually progressed in achieving their aim. And I asked the Chief Quality Officer about this, and and he admittedly said that it was very exciting that we we're generating will and getting things going, but that alone was only getting them to maybe some early design and some thinking, but they weren't getting them to results.                                                                         0:42:34.8 Dave Williams: And I said, well, what about the ones that were getting results? And he said, well, those are actually ones where we've got an improvement advisor who's got some skills and ability and improvement. There are things that are resourced, there are things that were prioritized. And man, when we did all those things, they moved from planning and organizing and thinking to testing changes and moving in a direction of goodness and getting at least results in their process measures, if not their outcome measures. And so in my mind, I was like, I appreciate you're trying to build this sort of culture, but it felt like a lot of burnt energy at the front end with all these teams getting into training and firing up their software and more energy might have been strategic in copying what was getting to results. And I think that's part of what we're trying to get to, is helping people learn. You've got if you don't have a method to figure out strategic projects, let's look at the ones you got. How are they going? Where are people at? And how effective is the capability that you have within your system right now? And the leaders want to be part of that, and they can learn within that to go, oh, wow, this is our current state.   0:43:47.2 Dave Williams: And so maybe we're going to agree to continue on with these projects. Maybe we're going to sunset some of them, but we're going to learn together about how do we get better at getting better, and how do we learn how to move projects forward and not to have them take two years. Let's try to get them down to four or six months, whether that's through scope or execution. But let's get better at getting better. And then as we're building... Developing the early activities of QOS, we'll eventually get to a point where we'll also be able to identify more strategic projects that are going to move us towards our aim or towards our purpose better. And this will help us as we're trying to build the capability to get there.   0:44:32.7 Cliff Norman: You know, Andrew, early on, when Dave went down this path, he said that we got to make sure that somebody's working on improvement. They're actually making changes. And Jane and I were working with a group, and the CEO said they've been meeting a long time. Could you down there and see what they're doing? Because nothing's happening. And we started looking through their agendas and they had everything well documented, and it was all about getting ready to get ready. And then they'd assign the dessert. Who's going to bring the dessert to the next meeting. And Jane looked at him and says this reminds me of something, Cliff. I said, what's that? Can I share my screen?   0:45:10.9 Andrew Stotz: Yeah. Yep, go ahead.   0:45:13.7 Cliff Norman: I may send this to. You may know about it, but this is Dr. Deming's Diary of a Cat. And everyday...   0:45:20.6 Andrew Stotz: It hasn't come up yet. Hold on one second. Hopefully you've got permission now.   0:45:28.6 Cliff Norman: Let me go back and check here.   0:45:33.9 Andrew Stotz: Okay. It looks like it's coming up. One second.   0:45:38.4 Cliff Norman: It said every day is today. There's no theory days of the week. But today I got up some food in a bowl, it was great. Slept some too. Play with yarn, got some food in a bowl, had a good nap, slept, food, yarn, fun. Play with a shoelace. There's a big change right there. Went from yarn to a shoelace. Some people call that a job shop. And ate, slept, had a good day, slept, ate some food, yarn, so forth. So, and the team meeting looked just like that. But there's really no changes going on relative to improvement. So Dr. Deming would often share this into four days seminar to make sure that we weren't involved in the Diary of the Cat, but we were actually doing something useful in terms of making changes in the organization.   0:46:24.4 Andrew Stotz: That's a great one. And it helps us to understand that we could be busy all day long and not improve anything.   0:46:31.8 Cliff Norman: You know, or actually confuse that with improvement. In fact, we have an operational API that my team, we were embarrassed in our first, wait a second, our first improvement guide we wrote. And Dr. Adamir Pente, who's a professor at the university in Brazil, he sent us a note and he said, I know you guys and he said you're real big on operational definitions, but you've written this book on improvement and nowhere have you, you've defined what you mean by improvement. And then he put together a three part definition that there's a design and redesign system, there's system measures and the change is sustainable and lasting and so we put that definition in the second edition. But I was confronted at a university, I won't mention which one it was, but they had 30 Keystone projects for a advanced degree program for nursing and they were convinced they were doing improvement. And when I had them apply that definition, they came up out of the thirty. They only could find two projects out of the 30 where they were actually designing and redesigning the system, which, that's the first thing Dave said are we designing and redesigning and making real changes? And people think just showing up and going through motions and all the rest of it is improvement. No, it means...   0:48:07.8 Dave Williams: Looks like we've lost...   0:48:11.9 Andrew Stotz: We lost you at the last, the last statement you just made. People are going through all this stuff and thinking that they're improving, but they're...   0:48:22.8 Cliff Norman: Yeah, it's showing up and going through motions and you know, having the meetings and making sure we assign who's bringing dessert. But we're not really designing and changing the system. We're not getting measurable changes of improvement. In other words, we haven't tracked the data over time and we can't say that the changes that we've made are going to in fact be sustainable because we haven't known what we've done to the system to deserve a sustainable change.   0:48:51.4 Andrew Stotz: By the way, what a buzzword these days, sustainability, sustainable and all that. And you just think do people really think about how we're building something that's really lasting and sustainable?   0:49:04.8 Cliff Norman: Well, we have a checklist and actually Jane designed it for the first edition and it literally lays out what changes did you make, which processes did you change, what's going to change in the documentation, whose role statements have been changed in the organization because of this change. And once all that's answered on that checklist, which is in the book, then we can... But we're pretty certain that we've created the structure to make it easy for people to do the right thing and hard to do the wrong thing. But unless that structure's changed, probably not much going to happen.   0:49:40.8 Andrew Stotz: Just for the sake of time, because I think we want to wrap up in just a bit. But there's so many stuff, so much stuff that we've been through. But I know there's even more in this chapter, but how would you start to bring this together for the person who is a leader, himself or herself, and they're listening to this and they're thinking, okay, I'm ready to make a change and I'm prepared to devote the time and energy because I see the outcome and I'm open to help, whether that's through the book and other books, whether that's through a consultant, whatever that is. And I can even do a self assessment to some extent and know where our level is, which is very low. We don't know much about this type of stuff and that type of thing. We talked about the first focus on improvement. How do they pull this all together and start moving on it?   0:50:35.0 Dave Williams: There's three things that follow the self assessment. The first one is this focus on doing improvement work and setting up a portfolio of projects. And we just kind of talked about many of the different methods that go into that. And like I said, sometimes that when you say that out loud, leaders don't initially get excited by it because they think they have it. But actually it's a powerful opportunity for you to learn about what's currently going on in the organization and about where this opportunity is to reduce a lot of the noise and a lot of the friction that's getting in the way from you getting to results. The second thing that often happens in parallel is that the leaders need to build a learning system where they're going to be able to learn together both about these projects and what these projects are telling them about their organization, about their culture, about their people, and about their capacity to get results, but also that they can start to be learning about the science of improvement and profound knowledge and the activities of QOS that are going to be part of what they're going to work on developing over the course of the first year or two.   0:51:50.6 Dave Williams: And so that typically is, that's making that space and energy. It's a blend of book learning and application and practical. Trying and looking at things within the organization. It's a very applied approach, but it's an ongoing piece of their discovery. And I often argue that this is a real opportunity for leadership because they're going to be able to see their organization in a way that they haven't seen it before. And when we talk about profound knowledge, they're going to gain this profound understanding and expertise about what they're charged with and what they own and what they want to change in a way that they haven't been able to have it before. And so it's a hard work, but rewarding work. And then third is that typically where the, where we invite people to start is to focus in on the first activity, which is to develop or establish or develop their purpose. When this work was initially framed, not everybody was as... Not everybody had a mission, vision and value statement or a purpose statement that wasn't as common, but today people do. But the difference here, and you'll see this in the chapter on purpose, is that organizations that are pursuing quality as an organizational strategy are organizations that are systems that are built to constantly be trying to match a need that exists out in the world.   0:53:34.7 Dave Williams: And so often a learning for people is to step back and have to reflect on, well, what is the need in which we are creating these products and services to match? And if we're creating these things to match the need, how do we understand what's important, what are the quality characteristics that matter? And then how do we define what our mission is in that context? And being able to say, here's why we exist and the need that we're trying to serve, and in what way? And how do we set a vision for where we want to get into the future and what are the tenants or the practical values that exist in our organization, that we want to define how we work together in terms of building in that way. And so purpose is a big focus. It's that clarity of the need, the clarity of the quality characteristics that it takes to match that need. Understanding what are the products and services that we have. I know that sounds a little trivial, but you'd be stunned how hard it is, especially in service organizations, for people to actually describe what it is that they do, what are the actual services.   0:54:54.3 Dave Williams: They might have the name of the service or the class or the whatever, but to actually say this is what we deliver, and then really think about how do I use this as our organization's sort of North Star, our aim, so that everything else that follows is going to be about building a system that produces the results that we want and produces the services that match that need. So going forward, that's going to be very, very important in instructing the direction and instructing the way in which we're going to work as a community of professional people together.   0:55:30.8 Andrew Stotz: So after self assessment, we're talking about focusing on improvement. We're talking about building a learning system, and we're talking about revisiting or establishing or developing our purpose?   0:55:43.3 Cliff Norman: Yeah, I'll just add to what you just said there, Andrew. There's three basic things that have to happen when we start working. Number one is create the habit of improvement. Start improvement right away. Second thing, Dave just went through some detail on building a system of improvement. And Dave called that a learning system, which I thought was interesting because that's what Dr. Maccabee called it when he saw the five activities. Said, these are really methods for building a learning organization. And he said, I've never really seen them before, but this is what will come out of this, which is the essence of what you want. You want people continually learning, as Dr. Deming said, so they can continually improve. But the third thing that has to happen is we have to develop internal capability for them to carry this on, because we're not going to be around with them. We've never advertised. We don't advertise for clients, and we only get word of mouth. And we're only in there to do those three things, get them started on the habit of improvement, start building the system improvement so they can take it over.   0:56:43.4 Cliff Norman: And the third thing, start developing internal capability so they can continue it on into the future. So those three things basically take off on day one. And depending on the organization, I think this is critical. Dave, you asked this question the other day, if the context is such they've got things in front of them are so bad and so challenging that they just need to work on improvement. That's where we're going to be focused. But now if they can chew gum and walk at the same time, we're going to start building the system of improvement. And the first people I want on those initial teams, I want people on there who are going to be future improvement advisors. And more importantly, they perceive them as future leaders in the organization. I don't want a cadre of a whole bunch of improvement advisors. I want leaders in the future who actually understand the science of improvement, understand these methods, so when they go to the next department, the next organization, they can carry this on. So those three things start improving, start building a system of improvement. And the third thing, start developing internal capability. Those have got to take off almost simultaneously, depending on the situation, of course.   0:57:49.8 Andrew Stotz: Well, on that note, that's quite a discussion. I'm so happy that we can have this to go in a little bit deeper into the work that you guys have done. Again, the book is Quality As an Organizational Strategy. I got mine on Amazon and it sent it to me. But I wonder if you have any last words that you'd like to share about what we've talked about today in relation to getting started.   0:58:18.3 Cliff Norman: So, Dave, why don't you talk a little bit about. Because I think this is critical. We've just finished Andrew, the book that's going to be for the people who actually have to build this system. So Dave, just say a few things about that if you would, because you.   0:58:32.0 Dave Williams: About the field guide?   0:58:33.8 Cliff Norman: Yeah.   0:58:35.5 Dave Williams: Yeah. Well, so when this body of work was first created, there was the content of which you see in this book. And then there were also a lot of exercises and methods and applications and examples that existed as well. And it was a pretty thick binder. We have created two volumes. One, the book that you have, which is the description of the theory and the method and gives you some of the tools. And we're now in the process of pulling together what we call the QOS Field Guide, which is a guide that is supporting people that are going down this journey. It follows the same structure as the book, with the exception of the, the Getting started chapter that we had at the end is now at the beginning. And it walks through in great detail various ways in which you leaders and practitioners can approach getting started and building the capacity and then working through each of the activities. And it's equal in size, I mean, it's about the same thickness. But what we tried to do is to give people really pragmatic things to do.   1:00:01.1 Dave Williams: So there are exercises where people are simulating an idea or a concept or a particular piece. There are what we call QOS applications, which are where you're actually taking the theory or the method and applying it to your own organization. There are case studies and things that have been built that might allow you to practice. There's wonderful examples of just about everything from all, from people that we have worked with over the years across multiple different fields, from my background in emergency services and healthcare to education to manufacturing to elevator companies, all kinds of great stuff. And so that will be helpful as people are trying to think about pursuing this journey and working through that first phase of developing QOS and moving into using it. And we're in the stages of having it done to be available later this year.   1:01:08.6 Andrew Stotz: Exciting.   1:01:09.2 Cliff Norman: We've tried to make it useful, Andrew, that the people have to stay overnight with the management and actually get something done and build it without being run off. That everything is there for them to make sure that they make it successfully. That's the thing we kept in mind as we kept writing this second volume.   1:01:25.2 Andrew Stotz: Yeah, I mean, I would say my experience with your guys's writing is that it's applicable.   1:01:34.1 Dave Williams: Well, Andrew, one thing I was going to add on you mentioned a lot of different examples. There are a lot of books in which people tell you a theory, but they don't tell you how to do it. Or they tell you about their own experience, but they don't actually convey the theory. The Quality as an Organizational Strategy book is laying out the theory and the methods of this approach built on the foundations of the science of improvement and profound knowledge and the Deming philosophy. The QOS Field Guide adds to that by giving you the methods and the tools and the things. It doesn't mean that that by itself you can't just go through like it's some kind of self guided tour and all of a sudden magic happens. There's a lot of work and learning and things that have to go into going through that process. But between these two volumes, a leadership team has the tools and methods that put them in position to be able to make this journey.   1:02:41.4 Andrew Stotz: Right. Well, let's wrap it up there. On behalf of everyone, I appreciate Dave and Cliff. All that you're doing and you're sharing with us and taking the time to do that. So from everyone at the Deming Institute, I want to thank you again for joining this and bringing your discussion on these topics. And for listeners, remember to go to deming.org to continue your journey. And you can find this book, Quality as an Organizational Strategy at Amazon and other booksellers. Are there even booksellers these days? I don't even know. They're mainly online these days. So this is your host, Andrew Stotz, and I'm going to leave you with one of my favorite quotes from Dr. Deming, which is "people are entitled to joy in work."  

How does "quality" apply in all areas of an organization? In this final episode of the Misunderstanding Quality series, Bill Bellows and host Andrew Stotz discuss lessons from the first twelve episodes, and the big ah-ha moments that happen when we stop limiting our thinking. TRANSCRIPT 0:00:02.6 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today is episode 13 and the title is Quality Management: Don't be limited. Bill, take it away. 0:00:30.5 Bill Bellows: Hey, Andrew. So this is episode. What number did you say it was? 0:00:36.2 Andrew Stotz: 13. Lucky 13. 0:00:38.1 Bill Bellows: Lucky 13. So then for those who are concerned about the use of the number 13, this is episode 14. 0:00:51.0 Andrew Stotz: I thought you're gonna say episode 12A. 0:00:54.7 Bill Bellows: And for those who don't mind the number 13, this is episode 13. And as we talked earlier, if Dr. Deming was to title the episode it would be... It would not be "don't." It would be "do not", do not be limited. So at the start I wanted to go back to review the path we're on. We've been on episode one back in end of May, Quality, Back to the Start. All part of the Misunderstanding Quality series for The Deming Institute. Episode two, we got into the Eight Dimensions of Quality with David Garvin. One of those dimensions was acceptability. 0:01:49.8 Bill Bellows: Another was reliability. Another was I say dependability performance. Okay. And I think it's important in a series about misunderstanding quality to look at the work of David Garvin. Just realize I think it's fascinating to... You move out of the world of the American Society Quality and control charts and whatnot. And that's why I think Garvin's work paints a nice... Gives a nice perspective to not be limited.  And then we got into in the third episode Acceptability and Desirability. Episode four, Pay Attention to Choices and the choice of differentiating acceptability which is I'll take anything which meets requirements, and desirability. 0:02:42.3 Bill Bellows: I want that little doggy in the window. Not any doggy in the window. And then we followed that with episode five, the Red Bead Experiment which for many is their first exposure to Dr. Deming's work. I know when I worked for the Deming Institute for a few years the Red Bead Experiment website was one of one of the most popular pages. I believe another one was the 14 Points for Management. And, personally, I've presented the Red Bead Experiment think just once, just once. And I'm going to be doing it at the 2025 at, let me back up, the Bryce Canyon Deming... The Bryce Canyon...Bryce Canyon Forum. I can't remember the name. It's a partnership between Southern Utah University and The Deming Institute, and we're doing it at Southern Utah University. And on one of those days, I'll be doing the Red Bead Experiment, which takes a lot of time and then studying to present it a few years ago I was getting all the videos that I could find of it, many of them on The Deming Institute web page and none of them have the entire data collection. 0:04:18.5 Bill Bellows: They kind of fast forward through six people putting the... drawing the beads each four times and when you're up on stage trying to do that, I had four people that's, you gotta do a lot of work to make it that exciting. But the reason I present it, I say I present it for a number of reasons. One is to do the classic "The red beads are not caused by the workers are taken separately. They're caused by the system which includes the workers. It's an understanding of variation and introduction to control charts" and all of that is as exposed by Dr. Deming is classic. 0:05:00.7 Bill Bellows: But, I'd like to take it one step further, which is to go back into that desirability thinking and look at the concept that we've talked about of going through the doorway and going past the achievement of zero defects, zero red beads, and realize that there's further opportunities for improvement when you start to look at variation in the white beads. And, that then takes into account how the beads are used. And that gets us into the realm of looking at quality as a system.   Looking at quality with a systems view as opposed... That's good, that's good, that's good. With or without an appreciation on how the bead is used. So anyway, that was episode five. We explored that. Next we got into the differentiation of Category Thinking and Continuum Thinking. 0:05:55.5 Bill Bellows: And for those who haven't listened to it, maybe not in a while, the differentiation is category thinking. Putting things in categories such as red beads and white beads are the... It could be any categories, categories of fruit, categories of religion, categories of political systems. We have categories and then within a category we have variation. We have different. We have apples and oranges and then we have a given type of orange. And then there's variation in the juiciness, ripeness. That's called continuum thinking, which goes back to, if we go back to the red beads and the white beads is notion that the white beads are not uniformly white, not uniform in diameter or weight. 0:06:44.5 Bill Bellows: And, what are the implications there? Well, if we think in terms of categories, red beads and white beads, if all the beads are white have we stopped improving? And Dr. Deming and I believe it was Point 5 of the 14 Points stressed the need for continual improvement. And yes, you can continuously improve and reduce cost, you can continuously reduce cycle time, but can you continuously improve quality? Well, not if you're stuck in a category of good, then the role of that is to just to remind people that there's opportunities to go further when you begin to look at variation in white, which is the essence of looking at how what you're looking at is part of a system, which Dr. Deming was well, well aware of. 0:07:33.7 Bill Bellows: Next we got into the Paradigms of Variation and a big part there was differentiating acceptability. Well, going beyond acceptability was differentiating accuracy from precision. Precision is getting the same result shrinking the variation, otherwise known as getting achieving great piece-to-piece consistency. Metrics that begin with the letter C and sub P could be Cp, Cpk, are the two most popular. Those are measures of precision that we're getting small standard deviations that they are very, very close to each other. But in the paradigms of variation that was what I referred to as Paradigm B thinking we're looking for uniformity. Paradigm A thinking being acceptance, we'll take anything that meets requirements... Or academically called paradigm A. Paradigm C is what Dr. Taguchi was talking about with the desirability, where we're saying I want this value, I want uniformity around this specific value. 0:08:43.9 Bill Bellows: Here what we're looking at is uniformity around the target, around an ideal, otherwise known as piece-to-target variability. And, the idea there is that the closer we are to that ideal, the easier it is for others downstream to integrate what we're passing forward. Whether that's putting something into a hole or does this person we want to hire best integrate into our system. So, integration is not just a mechanical thing. In episode eight we then got into Beyond Looking Good which then shatters the Paradigm A acceptability thinking, going more deeply into the opportunities for continual improvement of quality. 0:09:29.1 Bill Bellows: If you shift to continuum thinking. Next, Worse than a thief coming from Dr. Taguchi. And that's the issue of achieving uniform. Part of what we looked at is the downside of looking at things in isolation and not looking at the greater system. Then episode 10 we look at Are you in favor of improvement of quality? 0:09:53.6 Andrew Stotz: I'm in favor. 0:09:55.7 Bill Bellows: To which he would always say, but of course. That was a reference back to chapter one of The New Economics. And he said everyone's got an answer. Improving quality computers and gadgets. And what we spoke about is Quality 4.0, which is gadgets of the 21st century, tools and techniques. And again, what we said is, there's nothing wrong with tools and techniques. Tools and techniques are about efficiency, doing things well, but they lack what Russ Ackoff would say in asking, are we doing the right things well. And then episode 11 delved into what I've...amongst the things I've learned from Dr. Taguchi, To improve quality, don't measure quality. 0:10:42.5 Bill Bellows: If we have a problem with, we want to reduce scrap, we want to reduce rework, we want to eliminate the problems that the customer has experienced or that someone downstream is experiencing. And what Dr. Taguchi emphasized was start asking, what is the function of the thing we're trying to do? And the idea is that if you improve the function, then you're likely to improve the quality as measured by what the customer is looking for. If you focus on what the... If you focus your efforts on reducing what the customer is complaining about, you're likely to get something else the customer is complaining about. And for more on that, go to episode 11. 0:11:19.0 Bill Bellows: And then episode 12, Do specification limits limit improvement? Which again goes back to what I experienced on a regular basis is in my university courses with people I interact with and consulting is a very heavy emphasis on meeting requirements and moving on. And not a lot of thought of going beyond that or even that there's anything more to do, that's alive and well. And that's reinforced by Six Sigma Quality is filled with that mindset. If you pay attention closely to Lean Manufacturing, you'll see that mindset again, alive and well. So, what I wanted to get to tonight in episode 13, Quality. 0:12:04.3 Andrew Stotz: That was quite a review, by the way. 0:12:06.7 Bill Bellows: Yeah, Quality Management: don't be limited, as and I'm teaching for the sixth time a class in quality management at Cal State Northridge. The title used to be Seminar in Quality Management. The title this year is Engineering Quality Management and Analytics. One of the assignments I give them, essays, the quizzes, attending the lectures. 0:12:34.9 Bill Bellows: Learning Capacity Matrix that I learned about from David Langford. But what I was sharing with you earlier, Andrew, is one of the first things I thought about and designed in this course, back in 2019 was I could just imagine students going through the course. And, what I'm going to hear is, what I've heard before is professor, these are very, very interesting ideas, but I'm not sure how I would apply them where I work. Because where I work is different. It's different. And to avoid that question, I came up with an assignment I called the Application Proposal. And there's four parts to it. But part one is: imagine upon completion of this course. And I let them know about this in the first lecture and I say, imagine upon completion of the course, your boss, someone you work with, challenges you to find three things you can do within three to six months of the of the completion of the course. 0:13:34.6 Bill Bellows: And it must include something you learned in this course. I don't say what thing, I don't say two things, I don't say three things. I leave it to them. But all it comes down to is I'd like you to contemplate and within three to six months of the completion of the course, what could you do? And I call that the near-term application. Well, subtask one is come up with three. They have to meet your job, your role, not your boss's role, not another department's role. They have to fit your role because only you know then the method by which you would go about that. And, so for that near-term, I ask them to let me know what is the present state of that near term, the before, the current condition and what is the after. What is the future state of that near-term? So I assign that before the course begins, I give them until week five to submit and give me those three things. The reason I asked for three is if one, if the first one they give me, if they only asked for one and one didn't quite fit, then I say, well, okay, Andrew, go back and give me another one that same time. 0:14:49.7 Bill Bellows: So I said, give me three. And most often all three are fantastic. In which case I say they're all great. Which one would you like to do? But again, it has to fit their role because in Sub-Task 2, the next thing I want them to do is not so much tell me about the present state, tell me more about the future state. And again, the future state is how much can you accomplish within that three-to-six month period? And that's subtask two. Then they come back to me and tell me the plan. What is the plan by which you go from the near-term present state to the near-term future state, tell me about the plan. Tell me what some of the obstacles might be and how you plan to deal with the obstacles. And then I say now what I want you to do is imagine that is wildly successful, jump ahead a year and a half to two years and tell me what you would do next. How would you build upon this? And in that mid-term time frame, what is the present? What is the future of the mid-term? And then go a few years out and tell me how you're going to further expand on what you've learned. 0:16:03.4 Bill Bellows: I call that the far-term. And for the far-term, what's the present, what's the future? So when they submit that to me, then I come back with - it could be questions about some of the terminology.  It could be a suggestion that they look at something with the use of Production Viewed as a System. Or, I ask them to think about operational definitions or perhaps suggest a control chart and, or a book. So, part of the reason I wanted to bring that up is few of the title, few of the topics we are looking at are specifically quality related. They're all about improving how the organization operates. Which goes back to what Dr. Deming stressed is the importance of continual improvement. 0:16:50.9 Andrew Stotz: Can you explain that just for a second? Because that was interesting about quality versus improving the organization. What did you mean by that? 0:17:00.4 Bill Bellows: Well, I, they didn't come to me with this process I have, has lots, has a very high defect rate and I thought that's where I need to focus. Or this process has a lot of scrap and rework. That's where I want to focus. What I was excited by is that they were looking at how to take a bunch of things they already do and better integrate them. Just fundamentally what I found them thinking about is how can I spend time to organize these activities as a system and as a result spend a whole lot less time on this and move on to the next thing. And, what I found fascinating about that is if we keep our thinking to quality and quality's about good parts and bad parts, good things and bad things, and having less bad things and more good things, that could be a really narrow view of what Dr. Deming was proposing. Now another aspect of the assignment was not only do I want them to give me three ideas, we down-select to one. It could be they're writing a new piece of software. One of the applications has to do with a really fascinating use of artificial intelligence. 0:18:27.0 Bill Bellows: And what's that got to do with quality? Well, what's interesting is it has a lot to do with improving the functionality of a product or a service, having it be more reliable, more consistent, easier to integrate. But, the other thing I want to point out is not only do I ask them to come up with three things and then assuming all three things fit well with their job, their responsibilities, their experience.  What I'm also interested in is what from the course are you going to use in this application? And, two things came up that fit again and again.  One is the value proposition of a feedback loop. 0:19:12.9 Bill Bellows: And they would ask me, what do you mean by feedback? I said, well, you're going to come along and you're going to tie these things together based on a theory that's going to work better. Yes. Well, how will you know it's doing that? How will you know how well this is performing? And, I said when I see this is what people refer to as Plan-Do, but there's no Study. It's just... And, I saw that Rocketdyne, then people would come along and say, oh, I know what to do, I'm just gonna go off and change the requirements and do this. 0:19:44.6 Bill Bellows: But, there was no feedback loop. In fact, it was even hard to say that I saw it implemented. It just saw the planning and the doing. But, no study, no acting. 0:19:57.3 Andrew Stotz: Is that the Do-Do style? 0:20:01.3 Bill Bellows: Yes. But what was really exciting to share with them is I said in a non-Deming company, which we have referred to as a Red Pen Company or, or a Me Organization or a Last Straw. And I don't think we covered those terms all that much in this episode, in this series, we definitely covered it in our first series. But what I found is in a Deming or in a non -Deming company, there's not a lot of feedback. And even if I deliver to you something which barely meets requirements and we spoke about this, that in the world of acceptability, a D- letter grade is acceptable. Why is it acceptable? Because it's not enough. It's good parts and bad parts. And so even if I deliver to you, Andrew, something which barely met requirements, and you said to me, Bill, this barely meets requirements. And I say, Andrew, did you say barely meets requirements? And you say, yes. So, Andrew, it did meet requirements and you say, yes. So I say, "Why are you calling me Andrew?" 0:21:12.1 Andrew Stotz: By the way that just made me think about the difference between a pass fail course structure and a gradient course structure. 0:21:20.7 Bill Bellows: Exactly. 0:21:21.5 Andrew Stotz: Yeah. Okay. 0:21:22.5 Bill Bellows: Yeah. So even if you give me that feedback. I reject it. I'm just going to say, Andrew, move on. But I said, in a Deming organization, feedback is everything. The students were giving me feedback on the quizzes and some things that caused me to go off and modify some things I'm doing. And I told them, if I don't have that feedback, I cannot improve the course. So, I met with each of them last week for an hour, and the feedback I was getting is instrumental in improving the course for the remainder of the semester as well as for next year. And, so that's what I found is what really differentiates a Deming approach to improving a process or a service or a product is feedback, which goes then to watching how it's used. It is, I think I mentioned to you Gipsie Ranney, who was the first president of The Deming Institute, a Professor of Statistics at University of Tennessee, when she met Dr. Deming and later became a senior consultant, maybe advisor to General Motors Powertrain. And once she told me, she said to Dr. Deming "You know, Dr. Deming, what do people get out of your seminars?" And. he said, "I know what I told them. 0:22:42.0 Bill Bellows: I don't know what they heard." And, the challenge is without knowing what they heard, because we would also say, and I'm pretty sure we brought this up in one of our this series or the prior series, Deming would say the questions are more important than the answers because the questions provide them with feedback as to what is going on. So anyway, part of what I wanted to bring out today in this quality management, don't be limited, is whether or not you're focusing on quality per se, minimizing scrap, minimizing work. If you're trying to improve a process, again, you're not improving it necessarily because there's more I want to have less scrap. But if your improvement is, I want it to take less time, I want it to be easier to do. I want it to be cheaper to do. Well, while you're at it, think about a feedback loop.  And the role of the feedback is to give you a sense of is it achieving what you're hoping it would achieve? It would allow you over time to maybe find out it's getting better.  Maybe there's a special cause you want to take advantage of or a special cause you want to avoid.  But, without that feedback, how do you know how it's working and then beyond that? 0:23:55.7 Andrew Stotz: And where is the origin of the information coming from for the feedback loop? Is it a feedback loop within your area or is it feedback loop from the next process or what do you. 0:24:08.3 Bill Bellows: All of that. That's what I told her. I said one is, I said, when you're developing the process. I told them, I said, when you're. If in Sub-Ttask 1, your idea is to flowchart a process, come up with a template, a prototype. Part of the feedback is showing that to people. And part of the feedback is, does it make sense to them?  Do they have suggestions for improvement? Do they... Is there an issue with operational definitions?  There would be better clarity based on the words you're using.  You may say in there clean this thing, or early in the semester, one of the assignments I gave the students was to explain some aspect of the course within their organization. And then I thought, well, then now it will explain to who. And I thought, well, unless I say if I felt that without giving clarity to who they're explaining it to, they're going to get lost in the assignment. Am I explaining it to a co-worker? Am I explaining it to someone in management? Am I explaining it to the CEO? And, finally I just thought, well, that's kind of crazy. 0:25:18.3 Bill Bellows: I just said, well, as if you're explaining it to a classmate. But, my concern was if I didn't provide clarity on who they're explaining it to, then they're going to be all over the place in terms of what I'm looking for versus what they're trying to do. And that being feedback and that also being what I told them is part of collecting, part of feedback is looking for how can I improve the operation, how can I improve? Or, what are the opportunities for paying closer attention to operational definitions, which means the words or the processes that we're asking people to follow. 0:25:58.3 Bill Bellows: But, I found in in joining Rocketdyne, I was in the TQM Office and then I began to see what engineering does. Oh, I had a sense of that when I worked in Connecticut, paid more attention to what manufacturing does. Well, then when I moved into a project management office. Well, project management is just like quality management. It's breaking things into parts, managing the parts in isolation. And, so when I talk about quality management, don't be limited. There's a lot Dr. Deming's offering that could be applied to project management, which is again, looking at how the efforts integrate, not looking at the actions taken separately. 0:26:45.4 Andrew Stotz: And, so how would you wrap up what you want to take away. What you want people to take away from this discussion? You went over a very great review of what we talked about, which was kind of the first half of this discussion. And what did you want people to get from that review? 0:27:05.2 Bill Bellows: The big thing, the big aha has been: this is so much more than quality. And, I've always felt that way, that when people look at Dr. Deming's work and talk about Dr. Deming is improving quality, and then when I work for The Deming Institute, the inquiries I would get it was part of my job to respond to people. And they want to know I work for a non-profit, do Dr. Deming's ideas apply. And, so for our target audience of people wanting to bring Dr. Deming's ideas to their respective organizations, even though the focus here is quality, we call this series Misunderstanding Quality. At this point, I'd like you to think more broadly that this is far more than how to improve quality.  This is improving management of resources, management of our time, management of our energy.  So this is a universal phenomenon. Not again, you can look at it as good parts and bad parts, and that's looking at things in isolation. That's what project managers do. That's what program managers do. That's what organizations do relentlessly. And this is what Ackoff would call the characteristic way of management. Break it into parts and manage the parts as well as possible. 0:28:21.5 Bill Bellows: So, I just wanted to bring that back as a reminder of this quality, quality, quality focuses. There's a lot more to this than improving quality when it comes to applying these ideas. 0:28:34.7 Andrew Stotz: And, I would just reiterate that from my first interactions with Dr. Deming when I was 24, and then I moved to Thailand and I did finance business and all that. So I wasn't, applying statistical tools in my business at the time. That just wasn't where I was at. But the message that I got from him about understanding variation and understanding to not be misled by variation, to see things as part of a system. Also to understand that if we really wanted to improve something, we had to go back to the beginning and think about how have we designed this? 0:29:20.3 Andrew Stotz: How do we reduce the final variability of it? And, so, it was those core principles that really turned me on. Where I could imagine, if I was an engineer or a statistician, that I would have latched on maybe more to the tools, but from where I was at, I was really excited about the message. And, I also really resonated with that message that stop blaming the worker. And, I saw that at Pepsi, that the worker just had very little control. I mean, we're told to take control, but the fact is that if we're not given the resources, we can only get to a certain level. 0:29:58.3 Andrew Stotz: Plus, also the thinking of senior management, you are shaped by their thinking. And, I always tell the story of the accumulation tables in between processes at a Pepsi production facility. And that basically allows two operators of these two different machines to, when one goes down, let's say the latest, the farthest along in the production process, let's say the bottling goes down, the bottle cleaning process behind it can keep cranking and build up that accumulation table until it's absolutely full. And, that gives time for the maintenance guys to go fix the bottling problem that you have and not stop the guy behind. And, that was a very natural thing from management perspective and from my perspective. But, when I came to Thailand, I did learn a lot more about the Japanese and the way they were doing thing at Toyota. 0:30:51.4 Andrew Stotz: I went out and looked at some factories here and I started realizing they don't do that. They have their string on the production line, that they stop the whole thing. But the point is the thing, if a worker can't go beyond that, you know what the senior management believe about it. So, that was another thing that I would say it goes way beyond just some tools and other things. So, I'll wrap it up there. And Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion and for listeners. Remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming and that is people are entitled to joy in work. 

Are your specification limits holding you back from improving your products and services? Should you throw out specifications? What does Stephen Hawking have to do with it? In this episode, Bill Bellows and host Andrew Stotz discuss specifications and variation. TRANSCRIPT 0:00:02.5 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today is episode 12, and the title is Do Specification Limits Limit Improvement. Bill, take it away.   0:00:31.4 Bill Bellows: Hey, Andrew. How's it going? All right.   0:00:33.8 Andrew Stotz: Great. Great to have you back and great to see you. For those that are just listening, you can watch the video on DemingNEXT. But for those listening, Bill looks handsome, full of energy, ready to go, and it's my 8:30 in the morning in Bangkok, Thailand. So let's rock Bill.   0:00:56.3 Bill Bellows: So. I spoke recently to one of the folks I'd met on LinkedIn that have listened to our podcast and took the offer to reach out and we now talk regularly. And I just wanna say I've gotta, before we get to some, the story behind the title, I wanted to share, a heads up. And if anyone would like a copy of this article that I wanna, take some excerpts from, then just reach out to me on LinkedIn and ask for a copy of the article. The article's entitled 'A Brief History of Quality,' and there's three parts. So it's about 10 pages overall, and it was published in 2015 in the Lean Management Journal, which I don't believe still exists. I was writing articles at the end once a month for this journal, I think based out of the UK.   0:02:04.3 Bill Bellows: I think there was a manufacturing magazine that still exists and had this as a special topic and my interest was bringing Dr. Deming's ideas, to the Lean community, which is why it was a Lean Management Journal, so the article was entitled 'Brief History Equality.' And so I wanna get to those topics, but when I was reading the article, reminding myself of it, I thought, oh, I'll just share this story online with Andrew and our audience. And so here I'm just gonna read the opening paragraph. It says, "several years ago, I had the opportunity to attend an hour-long lecture by Stephen Hawking," right? So the article was written in 2015. So the presentation by Hawking would've been maybe 2012, 2013. And back to the article, it says, "he, Hawking, returns to Pasadena every summer for a one-month retreat, a ritual he started in the 1970s, several thousand attendees sitting in both a lecture hall and outdoors on a lawn area complete with a giant screen were treated to an evening of reflection of the legendary Cambridge physicist."   0:03:14.3 Bill Bellows: And I'll just pause. I have friends who work at JPL and they got me seats, and they got me an inside seat in the balcony, front row of the balcony, but they had big screens outside. I mean, it was like a rock concert for Stephen Hawking, right?   0:03:34.3 Andrew Stotz: That's amazing.   0:03:34.9 Bill Bellows: Oh, it was so cool. Oh, it was so cool. So anyway, "his focus was my brief history offering us a glimpse of his life through a twist on his treatise, A Brief History of Time. His introspective presentation revealed his genius, his humility, his search for black holes, his passion for life, not to mention his dry sense of humor. It ended with questions from three Caltech students, the last of which came from a postdoc student, an inquiry Hawking had likely tackled many times before."   0:04:06.6 Bill Bellows: So realize he's answering the questions through a voice activated thing. And it appeared that the questions were, his answers were prerecorded, but they're still coming through a device that is a synthesized voice. But I get the impression that he knew the questions were coming, so we in the audience were hearing the questions for the first time. But he had already answered the questions. So anyway, it ended with questions. There was an undergraduate student, a graduate student, then a postdoc, and I said, "the last of which came from a postdoc student, an inquiry Hawking had likely tackled many times before. And the student relayed the story of an unnamed physicist who once compared himself to both Isaac Newton and Albert Einstein." So this unnamed physicist compared himself to Einstein and Newton each placed on a scale of 1 lowest to 10 highest. "With this context, Hawking was asked where he would rank himself."   0:05:22.0 Bill Bellows: So this physicist said, oh, you know, Andrew, I see myself as this. And so the guy relays the story, and he says to Hawking, so given this other physicist said this, where would you rank yourself? "Well, I do not recall the relative rankings posed in the query. I'll never forget Hawking's abrupt reply. He says, “anyone who compares themselves to others is a loser." And I found online that he was, that commentary, this was not the first time he said that.   0:06:04.9 Andrew Stotz: Right.   0:06:06.5 Bill Bellows: And I just thought, oh, anyone who compares himself to others is a loser. And then the end of the paragraph is "in reference to Dr. Deming," Andrew, "variation, there will always be. So can't we just get used to variation?" So the title, are you in favor? No, no, no, no. That was last time. Are you in favor of improving the quality was number 10. Number 11 was to improve quality, don't measure quality. For 12, the specification limits limit improvement.   0:06:46.9 Andrew Stotz: Now, if that was true, first of all, that would be a little scary, 'cause we spend a lot of time working on specification limits. There's a lot of people working on that.   0:06:55.4 Bill Bellows: But here's what's behind the title. In 1995, I was invited to speak, not for the first time, but for the first time I ever spoke to an audience of the American Society of Quality. It was a San Fernando Valley chapter. I forget the number. I've spoken there many, many times over the years, but this is the first time I ever spoke to quality professionals as opposed to project managers or Society of Manufacturing Engineers. I was there with my wife. There's dinner, then after dinner in the next room, and the chairs were set up, theater style, that'd be 70, 80 people. And I was talking about what I would, I mean, things I still talk about, I talk about new things, to have new things done. But the big thing I was trying to get across the audience is, the difference between meeting requirements, which in this series, we call it acceptability versus desirability, which is, I want this value, I want this professor, I want to date this person. And so I was relaying that concept to that audience. And the question I asked that night was do specification limits limit improvement?   0:08:31.0 Bill Bellows: And there was a guy about seven rows back, and I built up to that. That wasn't the opening thing, but what I was really pushing on was a focus on Phil Crosby's goal of striving for zero defects. And, then what? Once you achieve that, then what? And we've talked about the doorway and that's like the door is closed, we get up to the doorway and we've achieved zero defects. And, what we've talked about is going through the doorway and the attitude is, well, why open the door? I mean, don't open the door, Andrew. There's a wall on the other side of that door, Andrew. So it might be a door, but everybody knows there's a wall behind it, and I was poking at that with this audience, and prepared to show them the value proposition of going through that.   0:09:34.0 Bill Bellows: So anyway, I remember I got to the point of asking, do specification limits limit thinking about improvement or something like that. And a more senior gentleman, about seven or eight rows back, and fortunately, he was seven or eight rows back, fortunately, because he stood up and he says, "Are you saying we don't need specification limits?" There's a lot more anger in his voice. And I said, "No," I said, "I'm saying I think they limit our thinking about improvement." And, but he was really upset with me, and I was deliberately provoking because again, you and I have talked about, how can we inspire through this podcast and other podcasts that you do with the others, to get people to think about the possibilities that Dr. Deming shared with us. And it's not believing that there's a door that you can't walk through. You open the door and there's an opening and you can go through. There's a lot more going on there. So anyway, so I had prepared them. The whole reason for being there was to share what we were doing at Rocketdyne, and not just talk about the possibilities, but show them the possibilities. But he got very upset with me. But if he was in the front row, he might've hit me.   0:11:08.9 Andrew Stotz: May have thrown a book at you.   0:11:11.5 Bill Bellows: Oh, he...   0:11:12.2 Andrew Stotz: May have thrown a Specification Limit at you.   0:11:17.0 Bill Bellows: Twice I've had people get, well, I've gotten a number of people upset with me over the years, but that night was, I'll never forget, and I'll never forget, because my wife was sitting in the front row and she asked me never to be that provocative again. It might be dangerous to my health. But I was doing another class, also for the American Society of Quality, I was a member of the local chapter, and there was a big movement within Rocketdyne that all Quality Engineers within Rocketdyne be Certified Quality Engineers. And so two or three of us from Rocketdyne got involved in helping the local chapter train people to prepare to take this one day exam. Very, very, very rigorous. And it's a valuable credential for quality professionals.   0:12:20.1 Bill Bellows: And so the company was pushing that every single quality engineer was certified. So we did the classes on site. So instead of going to the nearby Cal State Northridge and doing it over there, we wanted to do it onsite, make it easy for our employees to attend. And so I would do one and a half sessions. So a given session was three hours long, and then there'd be a half session. And my topics were Design of Experiments and Dr. Taguchi's work. And so as I got this group this one night for the very first time, I was the second half of that three-hour session, and there's 30 some people in the room at Rocketdyne. And the question I wanted to raise is, why run experiments? What would provoke you to run an experiments either, planned experimentation, Design of Experiments or Dr. Taguchi's approach to it.   0:13:15.1 Bill Bellows: So I was throwing that out and I said, in my experience, we're either applying it to make something better - that's improvement, Andrew, - or we're applying it to find out why something doesn't work, which is rearward looking. And I was saying that in my experience, I spend like a whole lot of time running experiments to solve a problem, to fix something that was broken, to get it back to where it was before the fire alarm, not as much time focusing on good to make it better. And so I was just playing in that space of, you know, I guess I was asking the audience are we running experiments to go from bad to good and stop, or from good to better? And I was playing with that 30 people in the room, and all of a sudden, four or five feet in front of me, this guy stands up, says this is BS, but he didn't use the initials, he actually said the word and walked out of the room. And all of us are looking at him like, and there was no provocation. Now, I admit for the ASQ meeting, I was poking to make sure they were paying attention. Here, I was just plain just, why do we run experiments? So, he stands up, he lets out that word, pretty high volume, storms out of the room.   0:14:42.1 Bill Bellows: Well, at Rocketdyne, you can't... You need a... You have to walk around with someone who works there. You just can't go walk around the place, so I had to quickly get one of my coworkers who was in the room to go escort him to the lobby or else, we're all gonna get fired for having somebody unescorted. So the specification limits limit thinking about improvement, I think they do. I am constantly working with university courses or in my consulting work and acceptability in terms of the quality goal, that this is acceptable, it meets requirements is alive and well and thriving, thriving. And, I think what goes on in organizations, I think there's such a focus on getting things done, that to be done is to be good and is to stop that I could pass my work on to you.   0:15:45.2 Bill Bellows: And, the challenge becomes, even if you're aware that you can walk through the doorway and move from acceptability to desirability, how do you sell that to an organization, which you, what I see in organizations, there's a lot of kicking the can down the road. There's a lot of, and even worse than that, there's a lot of toast scraping going on because there's not a lot of understanding that the person toasting it is over toasting it because all they do is put the toast into the oven. Somebody else takes it out, somebody else scrapes it, somebody else sends it back to a different toaster. And I see a lack of understanding of this because the heads are down. That's part of what I see. What I also see in organizations is, with students is this is their first drop.   0:16:51.0 Bill Bellows: Wherever they are, engineering, manufacturing, quality, they're new, they're excited, they're excited to be on their own, to have an income. And they're taking what they learned in universities, and now, they get to apply it. And I remember what that was like. I worked the summer after getting my bachelor's degree, my last semester, I took a class at heat transfer, the prior semester, took a class in jet engines, and I just fell in love with heat transfer and I fell in love with jet engines. And that summer, I was coming back in the fall to go to graduate school for my master's degree. That summer, I worked for a jet engine company as a heat transfer engineer, I was in heaven.   0:17:37.6 Andrew Stotz: Yeah. That's gotta be the coolest thing.   0:17:40.1 Bill Bellows: Just incredible. So I can imagine people coming out of college, going to work, and you get to apply what you learned. You get to use computers, you get to work with some really cool people, and you're doing what you're doing, and it's a blast. And I think it takes a few years before you start to listen to what the veterans are talking about. And you might hear that they're challenging how decisions are made, they're challenging how the company is run. I think prior to that, your heads are down and you're just the subject matter expert. It could be, you know, engineering and manufacturing, finance, and you're doing what you're doing. Their head is down, you're receiving, you're delivering. I still remember when I went to work with my Ph.D. at the same jet engine company, they hired me back. And, I remember walking down the hallway with a colleague and somebody says, that's the VP of Engineering.   0:18:42.7 Bill Bellows: And I thought, we have a VP of Engineering? I mean, I know we have a Vice President of the United States, but I didn't know anything about titles like that. And I think... And I don't think I'm the only one. I've shared those with some younger folks recently, and they agree, you come in, it's heads down, we don't know management, all I get to work on this great stuff. I go and I, and so what we're, but I think what happens is, I think at some point of time you start to look up and you're hearing what the more senior people that are there are saying you've had some experience. And, I know when people join Rocketdyne, and they would come to my class and I would share these stories that had some things that were, if your experience would be questionable, some other things that are pretty cool.   0:19:34.6 Bill Bellows: And, I just had the feeling and I found out people would walk outta there thinking what you mean that, I mean the things, the use of incentives, like why do we need incentives? But, and what I found was it took a couple of years and I would bump into these same people and they'd say, now I'm beginning to understand what you were talking about and what Dr. Deming was talking about. So I throw that out. For those listeners that are trying to, that are at that phase where you're starting to wonder how are decisions being made? You're wondering what you wanna do in your profession. You're wondering what this Deming stuff is about. A whole lot of this entire series has been targeted at people that are new to Deming's ideas. Or maybe they have some experience, they're getting some exposure through these podcasts either with me and the ones you're doing with John and the others. And so, but the other thing I wanna get into today is this quality thing. I go back to this article. And then I was thinking about this article, things I didn't know when I started researching this article is, this term quality, where does that come from? And the term quality comes from, I got to pull it, I have to scroll through the article. Let me get it, let me get it.   0:21:06.4 Bill Bellows: All right. Here we go. "The word quality," Andrew "has Latin roots, beginning with qualitas coined by Roman philosopher and statesman, Marcus Tullius Cicero, who later became an adversary of Mark Antony." You know, what happened to Cicero? Wasn't pretty.   0:21:32.8 Andrew Stotz: Yeah.   0:21:33.9 Bill Bellows: "Feared by Antony," I wrote, "his power of speech led to his eventual beheading. But long after he introduces fellow Romans to the vocabulary of qualitas, that's quality; quantitas, that's quantity; humanitas, that's humanity; and essentia, which is essential. He's also credited with an extensive list of expressions that translate into English, including difference, infinity, science, and morale. When Plato invented the phrase poiotes for use by his peers." So Plato would've been Greek, "Cicero spoke of qualitas with his peers when focusing on the property of an object, not its quantity." And, what I had in mind there is counting how many things we have, so you come in and you want five apples, five suits, whatever it is, there's the quantity thing. And then what Cicero was trying to do is say, quality is not the number, but quality is a differentiation of not just any suit, not just any...   0:22:53.1 Bill Bellows: And I think that becomes the challenge is, is that still important? So when Dr. Deming came on board in 1980, at the age of 79, when the NBC white paper was written, and people got excited by quality because quality was something that people identified with Japanese products, not with American products.   0:23:19.9 Andrew Stotz: Well, not in 1980.   0:23:21.1 Bill Bellows: Not in 1980...   [laughter]   0:23:22.2 Bill Bellows: I mean, at that time, the auto companies were making a lot of money in repair businesses. And Toyota comes along and says, and the words on the street, our products don't require all that repair. And I thought, yeah. And what was neat about that is when I thought, when you think about differentiation and like how do you sell quality? Because, again, I find it, for the longest time, beginning in 1980, quality was hot. Quality improvement. I mean, the American Society of Quality membership skyrocketed. Their membership has dropped like a rock since then because they don't have this Deming guy around that got them going.   0:24:12.1 Bill Bellows: Now, they're still big in the Six Sigma, but I don't believe their membership is anything like it was, but what I was thinking and getting ready for tonight is the economics of quality is from a consumer, what, at least, when my wife and I buy Toyota, it's a value proposition. It's the idea that if we buy Toyota, in our experience, we're getting a car that doesn't break down as often, is far more reliable. That becomes the differentiation. Also in the first... In the second series, second podcast of this series, we talked about the eight dimensions of quality and David Garvin's work.   0:25:03.2 Bill Bellows: And one of them was features, that a car with cup holders is quality 'cause... And there was a time, and the more cup holders, the better. And that was... And Garvin was saying lots of features is quality. He said, reliability could perceived it as a dimension of quality. Conformance was one of the dimensions, and he attributed that to the traditional thinking of Crosby. Reliability is a thing. And so when it comes to, how do you sell quality today? How do you get people within your organizations to go beyond, 'cause what I see right now is it's almost as if quality has gone back to quantity, that it's gone, that it's lost its appeal. Now, quantity doesn't lose its appeal 'cause we're selling, five of them, 20 of them, 30 of them.   0:26:09.2 Bill Bellows: But I don't get the impression from students and others that I interact with, that quality has big appeal. But, if we convert quality to the ability to do more with less, I mean the, when I'm delivering a higher quality item to you within the organization, that it's easier for you to integrate, to do something with, that's money, that's savings of time. And the question is, well, I guess how can we help make people more aware that when you go through the door of good and go beyond looking good and start to think about opportunities for desirable? And again, what we've said in the past is there's nothing wrong with tools, nothing wrong with the techniques to use them, there's nothing wrong with acceptability, but desirability is a differentiator.   0:27:15.2 Bill Bellows: And then the challenge becomes, if everyone's focused on acceptability, where it makes sense, then within your organization going beyond that, as we've explained, and this is where Dr. Taguchi's work is very critical. Dr. Deming learned about desirability from Dr. Taguchi in 1960. And that's what I think is, for all this interest in Toyota, I guess my question is, why is everybody excited by Toyota? Is it because they do single-minute exchange of dies? I don't think so. Is it because they do mixed model production? They can have, in one production line have a red car followed by a blue car, followed by a green car as opposed to mass production? Or is it because of the incredible reliability of the product? That's my answer, and I'm sticking to it. So...   0:28:14.3 Andrew Stotz: Yeah.   0:28:14.7 Bill Bellows: So what do you think Andrew?   0:28:17.2 Andrew Stotz: Yeah. There's two things that I was thinking about. One of the things I was thinking about is the idea if we're doing good with quality, and maybe we're satisfied with good, I was thinking about the book 'Good to Great,' and like how do you make this breakthrough? And then I was maybe it's good to groundbreaking or good to amazing or whatever. But like, when you really go beyond specification limits and take it to the next level, it's like you're moving from good to great. And one of the things that I see a lot is that, and I talk a lot in my corporate strategy courses with my clients and with my students is this idea that Deming really hit home about, about focusing on your customer, not your competitor.   0:29:06.6 Andrew Stotz: And I just feel like humans have a need to classify everything, to name everything, to label everything. And once they've got that label, that's the specification. That's what we want, they will fixate on that. And whether, I think, you think about all the kids that come out of the out of some meeting with a doctor and say, oh, I'm ADHD. Okay, we got a label now that's good and bad. And so that's where I think it, when I thought about the specification limits limit improvement, I think that, specification to me, when I think about quality, I think about setting a standard, moving to a, a new standard, and then maintaining that standard. And I can see the purpose of limits and controls and trying to understand how do we maintain that. But if we only stay on maintaining that and never move beyond that, then are we really, are we really in pursuit of quality?   0:30:12.0 Andrew Stotz: Now, on the other hand, when I think about the customers of my coffee factory, CoffeeWORKS and they want the exact same experience every single morning. Now, if we can make tests and do PDSAs to improve how we're doing that, less resources, better inputs and all that, great, but they do not want a difference. And I was just thinking about it also in relation to my evaluation masterclass bootcamp, where I still have a lot of variation coming out at the end of the bootcamp. Now, in the beginning, this is bootcamp number 19. So I've done this a lot. In the beginning, man, I would have, someone really terrible and someone really great, and I wasn't satisfied. So I kept trying to improve the content, the process, the feedback to make sure that by the time they get to the end, but I was just frustrated yesterday thinking there's still a lot of variation that, and I'm not talking about, the variation of a personality or something.   0:31:15.2 Andrew Stotz: I'm just talking about the variation of understanding and implementing what they're learning. And then I was thinking as I was at the park running this morning, I was thinking like, what makes Toyota so great is that there is very little variation of the 10 million cars that they've produced last year. And how impressive that is when all I'm trying to do is do it in a small little course. So I don't know, those are some things that were coming into my head when I thought about what you're talking about.   0:31:44.6 Bill Bellows: But no, you're right, in terms of the coffee, and I think you brought up a couple of good points. One is when the customer wants that flavor, whatever that level is, now, but that, I don't know how, anything about measuring taste, but there could be, within the range, within that, when they say they want that flavor, I mean, that could still have, could be a pretty broad spectrum. So maybe there's the ability to make it more consistent within that, if that's possible.   0:32:27.8 Andrew Stotz: Yeah, I think that, I think, like we have a blend we call Hunter's Brew, and I drink that every single morning and I can say, yeah, there's a variation, but it's a small enough variation that it doesn't bother me at all. And I think it doesn't bother our customer. Could we get more conformity to that? Yes, I think we could reduce that. Is it worth it? That's another question. We're looking at some automated equipment, some automated roasting equipment that would bring automation that would allow us to reduce that variation a bit. Will the customer notice that or not? Maybe. But the customer will definitely notice if we're outside of specification limits or if it's burnt...   0:33:12.7 Bill Bellows: Yes.   0:33:13.5 Andrew Stotz: As an example, and we're still shipping it, you know, they'll definitely notice that. And we have our mechanisms to try to measure that so that we are within those limits. So I do see, I see that the function of that to me is like, okay, in fact, in any business, you're constantly chasing and putting out fires. I mean, there's always things going on in every business owner's situation.   0:33:38.6 Bill Bellows: Right.   0:33:39.9 Andrew Stotz: And so there's at points where it's like, okay, can you just keep that in specification limit for right now while I get over to here and fix how we're gonna make sure that this is at another level where that is, I would consider it kind of an improvement versus maintaining. But I don't know, I'm just, I'm riffing here, but those are some things in my head.   0:34:00.0 Bill Bellows: No, what I hear you talking about is if we shift from quality management to, I mean, what desirability is about is looking at things as a system. Acceptability is about looking at things in isolation and saying, this is good, this is good, this is good, this is good. Not necessarily with a lot of focus of how is that used. So if we move away from quality and really what we're talking about is a better way to run an organization with a sense of connectedness that we're, we can talk about working together. Well, it's hard to work together if the fundamental mindset is: here, Andrew, my part is good and I wash my hands of it. When you come back and say, well, Bill, I'm having trouble integrating it, that's more like working separately.   0:35:07.2 Bill Bellows: So if we shift the focus from quality, which could be really narrow, it could be an entry point, but I think if we step back, I mean the title of Dr. Deming's last book was 'The New Economics,' the idea which has to be, which to me, which is about a resource. The better we manage the organization as a system, the more we can do with less. And relative to the quality of the taste and yeah, the customers want this and maybe we can make that even more consistent simultaneously. Can we use control charts to see special causes before they get too far downstream that allows us to maintain that consistency? That'd be nice. Then can we figure out ways to expand our capacity as we gain more? So there's a whole lot to do. So the organization is not static. And simultaneously the challenge becomes how do we stay ahead of others who might be trying to do the same thing? Dr. Deming would say, be thankful for a good competitor. Are we just gonna sit there and say, oh, we're the only coffee... We're the only ones in house that know how to do this. What is our differentiator? And I think having a workforce that thinks in terms of how the activities are connected, that are constantly involved in improvement activities.   0:36:45.1 Bill Bellows: Short of that, what you're hoping is that no one comes along in... Remember the book, it was required reading within Boeing, sadly, 'Who Moved My Cheese?'   0:36:58.2 Andrew Stotz: It was required reading at Pepsi when I was there, and I hated that book. We had another one called 'The Game of Work,' which I just was so annoyed with, but that 'Who Moved My Cheese?' I never, never really enjoyed that at all.   0:37:07.0 Bill Bellows: We used to laugh about, within Rocketdyne 'cause, and for those who aren't aware of the book, the storyline is that there's a bunch of mice and they're living in their little cubby holes and every day they go through the mouse hole, try to avoid the cat, find the cheese, bring the cheese back into their cubby hole, and that life is good. And then one day, somebody steals the cheese, moves the cheese and one's kind of frantic and the other's like, oh, not to worry, Andrew, I'm sure it was taken by a nice person and I'm sure they'll return it. So I wouldn't lose sleep over that. That's okay. That's okay. And then kind of the moral was another company is stealing your cheese and you're sitting there thinking everything's okay, and next thing you know, you're outta business because you weren't paying attention. And so the, and it was, this is written for adults with cartoons of cheese. That's how you appeal... That's how...   0:38:15.9 Andrew Stotz: Yeah. So that's what got me annoyed about it because it felt like, just tell me what you're trying to tell me, okay. Instead of telling me this story. But yeah, it was a used to create the burning platform concept that was used... I know at Pepsi when I was there, they talked about the burning platform, the level of urgency, we're gonna get, and, and there's, I kind of understand where they were coming from with it, but yeah.   0:38:44.7 Bill Bellows: But what is interesting is nowhere in the book was a strategy to be the ones moving the cheese. What it was more like is don't be in an environment where somebody else moves the cheese. Don't be that company. And I thought, no, you wanna be the company that's moving the cheese. But that was, maybe that's an advanced book that hasn't come out yet.   [laughter]   0:39:08.6 Bill Bellows: But really...   0:39:10.5 Andrew Stotz: There's some work for you, Bill.   0:39:12.6 Bill Bellows: But, but that's what... I mean what Dr. Deming is talking about is having an environment where you have that capacity on an ongoing basis. First of all, you're not sitting back stopping at good, thinking that what you're doing is always acceptable. It's trying to do more with that. Anyway, that's what I wanted to explore today. Again, there's nothing wrong with specification limits. I told the gentleman that night, specification limits are provided to allow for variation, to allow for commerce, to allow for suppliers to provide things that meet requirements. Then the question becomes, is there value in doing something with a variation within the specification limits? Is there value in moving that variation around? And that's the desirability focus. That is what Ford realized Toyota was doing a lot, is that then improves the functionality of the resulting product, it improves its reliability. All of that is the possibility of going beyond meeting requirements. So it's not that we shouldn't have, we need specifications. Why? Because there's variation. And if we didn't allow for variation, we couldn't have commerce because we can't deliver exactly anything. So I just want, just for some...   0:40:34.9 Andrew Stotz: Okay, all right. That's a good one.   0:40:37.4 Bill Bellows: All right.   0:40:38.2 Andrew Stotz: And I'll wrap it up with a little humor.   0:40:40.4 Bill Bellows: Go ahead.   0:40:40.5 Andrew Stotz: There were some parody books that came out, in relation to 'Who Moved My Cheese.' In 2002, the book 'Who Cut the Cheese' by Stilton Jarlsberg, which was good. And in 2011 was, 'I Moved Your Cheese' by Deepak Malhotra. So there you go. A little humor for the day. Bill, on behalf of everybody at The Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. He responds. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. I just love this quote. I think about it all the time. "People are entitled to joy in work."  

On Feb. 19, 1942, shortly after Pearl Harbor, President Franklin D. Roosevelt signed an executive order that enabled the forced removal and incarceration of 120,000 Japanese Americans in camps located mostly in the western United States.Many were citizens. Those camps closed a few years later and those who were detained resettled around the country. Vinicius Taguchi, president of the local chapter of the Japanese American Citizens League, said he sees parallels between this troubling history and the present.Particularly, the rhetoric used by the current Trump administration.“[During World War II] there was a lot of scapegoating and wartime hysteria,” Taguchi said. “That some people have to be kept on a registry, potentially needing to be locked away, if necessary. That's very frightening language for us.”The Minnesota chapter was founded in 1946 and has worked for decades to raise awareness about what the Japanese American community experienced to prevent history from repeating itself.As the group marks 83 years since Executive Order 9066, Taguchi believes this work is as urgent than ever.“If your rights can be taken away with the flick of a pen, are they truly rights or are they privileges? That's something we need to be aware of, and that's something we need to fight for — to secure rights for the strongest and the weakest among us.”For the full interview with Taguchi, use the audio player above.

In this episode of Misunderstanding Quality, host Andrew Stotz and Bill Bellows discuss what not to measure when it comes to quality. Bill offers some great examples to show how organizations get it wrong, and how to get it right. TRANSCRIPT 0:00:02.4 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Bill Bellows, we're gonna have a lot of fun, who has spent 31 plus years now that it's 2025, helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities in the episode, today is episode 11, and the title is "To Improve Quality, Don't Measure Quality". Bill, take it away.   0:00:35.6 Bill Bellows: Thank you, Andrew. And, so the title of episode 10, came from chapter 10... Chapter 1 of The New Economics, and I used a quote from Dr. Deming, which was, "Are you in favor of the improvement of quality?" Which Dr. Deming says, "Are you in favor of the improvement of quality? We can have a national referendum, yes or no?" Everyone says yes. Then he says... Then he say, "We could have a secret ballot." And... But I... At the beginning of the podcast, I had said, "Are you in favor of quality?" And it's... No, it's, "Are you in favor of the improvement of quality?" And so today I wanna, in episode 11, share it with our listeners and viewers, more of the profound insights from Genichi Taguchi. But I think, what I was just thinking is saying, "Are you in favor of quality?" And I've used that quote, which now I now realize it's a misquote. It's not, "Are you in favor of quality?" It's "Are you in favor of improvement of quality?" But in seminars, what I've done is used the quote, the misquote, I would say Dr. Deming would ask, "Are you in favor of quality?" And he would say, "We're gonna have a secret ballot. Is everyone in favor of ballot?" In quality, everyone says yes. So I would go through that.   0:02:16.3 Bill Bellows: And then I would go to the next question, and I would say to the audience, I'd say, "Okay. Dr. Deming made reference to secret ballot. So I wanna do a secret ballot. I want you to close your eyes, and I'm gonna ask you a question, and if your answer is yes, raise your hand. But I want you to close your eyes when you raise your hand, 'cause I don't want you to raise your hand 'cause everybody else does. Okay, so close your eyes." And I say, "Are you in favor of teamwork?" And all the hands go up. [laughter] And it's not so much "Are you in favor of improvement of teamwork?" But it's the idea that, acceptability saying this part is acceptable, as we've shared in prior episodes, is the essence of looking at that part, my task, my effort in isolation. And what that has to do with teamwork, I question. Now, with a few of us at Rocketdyne years ago used to talk about, we would say, you give out a term paper assignment, the term paper must be between 10 and 20 pages long. And what happens? They're close to 10 pages. Then I would share, we'd tell Allison, our daughter, I'd say when she was in high school, "Be home by between 8:00 and 10 o'clock," and she shows up around 10 o'clock.   0:03:51.6 Bill Bellows: And I would show a distribution over there. Then I would say, "What about a machinist? The machinist is given a hole to machine. And what does machinist do is machine the hole on the low side, and then a machinist is machining the outer diameter of a shaft or a tube. And what does machinist do? Machines to the high side." And so I would show those four distributions either on the low side or the high side, and say, "What do they all have in common?" And people would say, "Each of those people's looking out for themself. They're focusing on their work in isolation." Then I would say, "So what do you call that in a non-Deming company or in a... " In the first podcast there is a, called it a Red Pen Company or a ME organization, or a Last Straw companies... What do you call that behavior where people look at the requirements and say, "What's best for me?" What do you call that? What do you call, people scratch their head? We say... You ready? "Teamwork."   [laughter]   0:05:00.6 Bill Bellows: And everybody laughs. And then I turn to somebody in class and I say, "So Andrew, are you a team player?" And Andrew says, "Yes." And I say, "Andrew, if you machine the holes to the low side, are you a team player?" And you might say, "I'm not sure." And I would say, "Say yes." And you'd say, "Okay. I say yes." And I say, "Okay, Andrew, who's on your team?" And you say, "Me." "So, oh, you are a team player, man."   0:05:24.2 Andrew Stotz: I'm a team player. Team Andrew always wins.   0:05:28.2 Bill Bellows: Yeah. And I would say, so I say, "In a non-Deming company, everyone's a team player. All right. But who's on the team?" So I would say to people, "You'd be a fool not to be on your own team. The only question is, who else is on your team?" All right. Back to Dr. Taguchi to improve quality, don't measure quality. And I was, got into this in an explanation with some others recently, and somebody was showing me a bunch of defect rate data involving some process. And the question was, how to apply this occurrence of defect rate data to Dr. Taguchi's loss function. And so, again, reminder to our listeners, acceptability is everything that meets requirements is okay. Either I am unaware of differences or the differences don't matter, any parking spot, any professor any Thermo 2, any doctor and desirability is "I want this doctor, this parking spot, this, this, this, this, this." And so not just anything that meets requirements.   0:06:50.3 Bill Bellows: And Dr. Taguchi's work has a lot to do with that thinking. And Andrew, yeah, I'm on a month, on a regular basis, meeting more and more people that are listening to the podcast and reaching out to me on LinkedIn. And one shared with me recently then, and he started to listen to this series, and he said, he never thought about desirability. He says everything he knows, everything he sees every day, is acceptability. And he's like, "You mean, there's more than that?" And it's like, "Hello. That's what our series is trying to do." So...   0:07:26.6 Andrew Stotz: And let me introduce you to door number three, which opens you up into this whole 'nother world of...   0:07:35.6 Bill Bellows: Yes.   0:07:35.7 Andrew Stotz: The interconnectedness and understanding quality from the impact on all the different parts of the organization, not just the one thing and the one area. Yep.   0:07:46.6 Bill Bellows: Yes. Yeah, yeah, yeah. Exactly.   0:07:48.9 Andrew Stotz: But that's door number three. Now, we don't wanna go through that right off the bat, but when you go through it, unfortunately door number three disappears as you walk through it, and it's a wall...   [laughter]   0:08:00.4 Andrew Stotz: And you can't go back because now you understand that what is a system, what is the interconnectedness of everything, and once you see that, you can't unsee it.   0:08:09.6 Bill Bellows: That's right. Now, it's like, it's a holistic view in which... And a from a holistic perspective, parts don't exist, parts of exist, but everything is connected.   0:08:27.4 Andrew Stotz: Right.   0:08:28.2 Bill Bellows: And what does that mean? So anyway...   0:08:30.1 Andrew Stotz: And just to put that into context, let's just take a car. A customer never buys a part. And they don't buy a jumble of parts, they buy the car. So to the customer's perspective, it's even more meaningless, the independent parts of that.   0:08:50.3 Bill Bellows: When I would go to Seattle and do training when Rocketdyne was owned by Boeing, and I'd be doing training for people working on commercial airplanes or 737s, 47s and whatnot. And one of the jokes I would use is that, "Hey, 747... " People went, "What's a 747?" How about 787? If I was today, I'd say "a 787 is not a bunch of parts that fly in close formation." But that is, the mindset is that... But anyway, so acceptability is looking at the parts in isolation, looking at things in isolation, it's assigning a grade to a student, it's performance appraisals, that's all about isolation, it's thinking, "I won the game, I get an award. I lost the game." All of that thinking, from engineering to, how we look at human resources, the idea that the savings add additional only works when the activities are independent. So that's all acceptability, looking at things in isolation. Desirability in this idea of a preferred value, I don't know that anyone contributed to that, besides Dr. Taguchi. In fact, this morning, I was talking with some friends overseas about Joseph Juran's work. And, do you remember last time you and I worked, I was sharing with them that our last podcast followed the last meeting I had with these friends in Europe. And I said that conversation led to our podcast conversation about Quality 4.0, and it's all acceptability, acceptability, acceptability, meet, meet, meet requirements.   0:10:35.6 Bill Bellows: This very conversation. And I said, I went back and did some research on what Joseph Juran... How Juran defined quality. 'Cause I looked at the ASQs definition of quality and it gave two definitions of quality, one attributed to Juran talking about quality as fitness for use, and then Philip Crosby's definition is, meeting requirements. But you may recall, I said, there is no explanation of how Dr. Deming defined quality. Yeah, maybe that will come. But, so I was sharing that with them, and also shared with them a model I've used. And it might have come up in our first series, but I think the classic model within organizations is, I work, I follow a bunch of steps to make a part, a thing, a module, something. And if all the requirements are met, I hand off to you, you're downstream. And then likewise, there's others in parallel with me that hand off good parts, good things to you. Because they're good, we can hand off to you. And then the model is you take the parts that are good and put them together, and because they are good, they fit. And then you pass that integrated component downstream where other integrated components come together. And we progressively go from, it could be that we're putting together the fuselage, somebody else is putting together the wings, and it's all coming together. And at the other end, it's an airplane.   0:12:22.5 Bill Bellows: And on every handoff we hand off what is, so the parts that are good fit, the components that are good fit together with other, then we turn the whole thing on, it works. And I show this flow to people and I say, "So what do you see going on in there?" And what eventually they start to see is that all the thinking is black and white, because they're good, they fit, because they fit, they fit, and when you turn it on, it works. There's nothing relative about that. And so I was sharing that with these folks this morning, and I said, after you and I spoke last time, went back and looked, and Juran talks about fitness for use, and the question was, is Juran's definition of fitness, absolute fitness or relative fitness? Meaning that there's a degree of good in the parts associated with desirability thinking, and if we've got degrees of good in the parts, then there's degrees of fit. And, well, it turns out there's plenty of reason to believe that Juran had a model of acceptability that the parts are good, then they fit. All to come back to what Dr. Taguchi is talking about in terms of improving quality, is improving quality from a variable perspective that there's degrees of good. And so now we go back to, to improve quality, don't measure quality. And I remember when he said that and we were dumbfounded, "Well, what do you mean by that?"   0:13:52.5 Bill Bellows: And then he would go on to explain, that traditionally, we look at the quality... The lack of quality of something. An inspector says, "There's a scratch on the door. There's a ding here. There's a crack there. There's a, the weld has a drop in it. The weld has porosity." You know what that means is that's not a... The quality inspector is looking for the absence of a crack, the absence of porosity and things like that. And it also parallels with what I learned from Ackoff, Russ would say, [chuckle] "Getting less of what you want doesn't get you what you want." So you could say, "I want less waste, less defects." Well, what is it you want? Again, the clarification is, Russ would say, "Getting less of what you don't want doesn't get you what you want." And likewise, Dr. Taguchi talked about, what is the function of the process? So if you're talking about, imagine on a washing machine, when you have a... Or a dryer, and you have a motor that's spinning, and around the motor is a belt that's spinning the drum. Well, the quality problem, classic quality problem could be that the belt slips, or the belt cracks, or the belt is vibrating.   0:15:28.3 Bill Bellows: Well, then you say, "Well, okay, what's the function of the belt?" Well, it's not about cracking. The function of the belt is to transmit energy from the motor to the drum. And if it does that really well over sustained periods of time, then that suggests there's probably less cracking going on and less slipping going on. But if you don't look at it from a function perspective and ask, "What's the function of the belt?" And move away from, "Well, I don't want it to crack and I don't want it to slip." Well, then tell me what you want it to do. What is it you want it to do? Now, let's get into more of what we do want. And then, and this is what's neat listening to Dr. Taguchi as an engineer, you say, "Well, okay, so what is the belt trying to do? It's trying to transmit energy." So if I can design the belt, and by changing the materials of the belt to transmit energy, under wide-ranging temperatures, wide-ranging usage conditions, if I do a good job of that, then I should see less cracking problems. Absent that, if I try to reduce the number of cracks, I may end up with a belt slipping more often. So then what happens is you end up trading one problem for another, which is not uncommon.   0:16:57.7 Bill Bellows: You go from, the cookies being undercooked to overcooked as opposed to saying, "What's the role of the baking process?" And he would say, "To transmit energy to the cookie in the precise amount. And if we have the precise amount and distribution, then that should work out." Now, relative to welding. Welding, there is, there may be a dozen different weld anomalies that inspectors are looking for, with X-rays, they see porosity, they see, what's called drop-through with the material and the weld, drops a little bit, which could result in a fatigue problem leading to cracking. Well, here Dr. Taguchi would say, "Well, what's the function of a weld?" Say, well, to join two pieces of material together with a given strength. And so you join them together. And then once they're joined together, now you run tests and you say, "I wanna... " It could be, "I wanna heat and cool the weld to see how it does with that. I wanna introduce vibration to the weld." And if you can show that under vibration, under wide-ranging changes in the environment, that the strength holds up, then by focusing on the strength, which is what you want, you end up with fewer quality problems. But it's turning things around and saying, "Not what I don't want, what do I want?"   0:18:35.3 Andrew Stotz: And...   0:18:36.4 Bill Bellows: And that's what... Go ahead. Go ahead. Andrew.   0:18:37.6 Andrew Stotz: There's two things. The more I think about this quote that you're talking about, to improve quality, don't measure quality, sometimes I think I got it, but sometimes I don't. I just wanna think about a couple of parallels. One of them is sometimes we say in the field of sales and marketing, we may say, "Fill your pipeline and your sales will happen." So focus on the beginning of the process. If you don't have a pipeline of people coming in to your company, into your sales team, there's nobody to sell. So that's an example. We also say sometimes, focus on the inputs and the outputs will take care of themselves. That's another way that we would use something similar. But I'm just curious, what does it mean by "Don't measure quality"?   0:19:25.0 Bill Bellows: Yeah. And that's a good question. I'd say, Taguchi's used to quality being the absence of defects. And quality is what the customer's complaining about. So he's saying, quality problems in terms of don't measure quality, he's saying, "So what are the quality problems?" "Oh, let me tell you, we've got porosity, we've got cracks, we've got drop-through, we've got cracking, cracking of the belt and slipping and the... " This is what people are complaining about. And what he's saying is, the customer's not articulating, "Hey, Andrew, improve the function." They're complaining about the... You just have to interpret that what they're saying is, you have to take where they are. They don't want it to crack. They want it to last longer. They want all these things and say... And the idea is, don't get sucked into what they don't want. Turn it around to, well then, I'm the engineer, and this is what Dr. Taguchi would say, "As an engineer, don't be dumbed down into the complaint world. Turn it around and say, what could you improve? What is the function of that thing you're selling?" And if you improve the function, because again, the beauty of talking about function, if you focus on problems, you eliminate one problem, create another problem, then another problem. Now you're just... And what...   0:21:00.8 Andrew Stotz: So it's whack-a-mole...   0:21:02.3 Bill Bellows: Exactly.   0:21:03.6 Andrew Stotz: It's whack-a-mole in the back end of the process without the awareness of, "What are the customer's needs and how do we understand whether we're hitting the mark?" And...   0:21:12.7 Bill Bellows: Oh, and this is what Dr. Taguchi used to call as whack-a-mole engineering. It's what Ackoff would say, "Today's problems come from yesterday's solutions."   0:21:24.6 Andrew Stotz: So just just to visualize that, can imagine going into a factory and saying, "Look at all these charts and how we reduce the defects of this and that. And this is... " We've reduced all these defects, but in fact, that could be out of touch with what the customer really needs at the end of that production.   0:21:44.1 Bill Bellows: Yes, it is... The beauty is, it is saying... And he would get really angry with people who got sucked into the rabbit hole of eliminating defects, scrap and rework and things like that. And just say... What he's trying to say is, "I want you to be smarter than that. I want you to start to think about what is the function of the machining process? What is the function of the welding process? What is the... " And what was neat was, I spent... On three different occasions, I spent a week with him, watching him engage every day with four teams. A team would come in for two hours, and he would discuss with them whatever the hardware was. I'm not at liberty to say what company it was. [laughter] But it was a really cool company.   0:22:56.9 Bill Bellows: And the people there invited me in because I learned at Dr. Deming's... I attended Dr. Deming's very last four-day seminar, and there met some people that were very close to him. And one of them shared that, there were people for many years, traveled with Dr. Deming. They found out where he was gonna be a given week, maybe called up his secretary Ceilia Kilian and, once he became, bonded when... And somehow Dr. Deming liked you. And then you would say, "Dr. Deming, I'm gonna take a week's vacation next summer. Where are you gonna be in June?" And he'd say, "Well, I'm gonna be at GM corporate headquarters." And what these people told me is that, they would be with him that week, whether he is doing a four-day seminar in Ohio. Now, I don't know who paid for it.   0:23:50.8 Andrew Stotz: No.   0:23:50.9 Bill Bellows: But he gave them access to be with him wherever he was. And one guy told me he was at some high-level GM meetings that week, and he said, "Dr. Deming is there and he and some others." And I think they may have been called "Deming Scholars". I know that term was used. But anyway, this guy was telling me they were there, and this GM executive comes over to him and it says to him, "So, who are you again?" And you say, "Andrew Stotz." And he says something like, "So what might I ask are your qualifications for being here?" And he says, "If Deming overheard that, Deming would turn to the executive, snap at him and say, 'These are my people. What are your qualifications?'" So anyway, inspired by that, I walked out of Dr. Deming's four-day seminar, called up a friend of mine who worked for Dr. Taguchi's company and said, "Deming had people travel with him. I wanna travel with Dr. Taguchi. I don't wanna go to a seminar. I wanna see him in action."   0:24:56.1 Andrew Stotz: Yep.   0:24:56.4 Bill Bellows: And I said, "Can we make that happen?" And it happened, and I got to go inside a company. The lawyers didn't know I was there. And I asked him, I said, to the lawyer, "Do I have to sign anything?" He said, "No. If we let the lawyers know you were here, you wouldn't be here. So, here are the rules. You can't tell anybody what happened, blah, blah, blah, blah, blah." So I get to be a fly on the wall watching him. So, a team would come in and say, "Here's this stuff we're working on." And he would... And they had an approach, which would be, reducing defects or scrap rework. And then he would turn it around for the next hour and a half and get them thinking about function. And after the first week of doing this four times a day for five days, I walked out of there thinking, "There's five basic functions." I started to notice the patterns. And then the second time I did this, a team would come in and I'm thinking, "I know what he's gonna do. He's gonna... He has in mind a function model. And all these things relative to how things come together." And so I did that three times. But, it was neat to get my brain adapted to, "Okay, what's the function? Where's he gonna come? Where's he gonna come?"   0:26:16.0 Bill Bellows: And then I would... The people would present it, and I'm thinking, "I think it's gonna go for function five. Yep. Bingo." So that's what I just wanted to share with the audience tonight. Again, there's a lot of depth. I taught two 40-hour courses at Rocketdyne in Taguchi Methods. So, a 40-hour intro and a 40-hour more advanced. So all I wanted to cover tonight, is that wisdom of not being defect-focused, but for our audience to start thinking about, start to think about the function. In fact, when I was having this conversation with a colleague recently and, 'cause he's talking about turning defect rate, he was thinking turning defect rate data into a loss function. I said, "No, defect rate thinking is acceptability thinking, the loss function is desirability thinking. They don't go together." I said, "What I wanna know is what's causing the defects." And we start diving into what's causing the defects, we can turn it into a variable data as opposed to a discontinuous data. Anyway. And I just wanted to throw out... Go ahead, Andrew.   0:27:34.4 Andrew Stotz: To wrap this up, I'm thinking about, I like what you just said, "Stop being defect-focused." Replace that with...   0:27:44.5 Bill Bellows: What is it we're trying to accomplish?   0:27:47.8 Andrew Stotz: Yeah.   0:27:48.2 Bill Bellows: If you say, "Well, we don't want defects." I know we don't want defects. But what do we want?   0:27:52.9 Andrew Stotz: Do we say replace it with outcome focus, customer focus? What would you say?   0:27:58.1 Bill Bellows: Yeah, well, absolutely it's customer focus. The idea is that, now you start to think in terms of, is what is the greater system in which this is used.   0:28:11.0 Andrew Stotz: Okay. So...   0:28:11.1 Bill Bellows: The defect thinking is just saying it doesn't fit, it doesn't meet requirements. But that doesn't tell me what you're trying to do.   0:28:17.0 Andrew Stotz: Okay. So I think I know what you're saying. Stop being defect-focused, and please walk through door number three.   0:28:25.3 Bill Bellows: Yes! Stop...   0:28:27.7 Andrew Stotz: And in door number three, you're gonna be aware of the customer, the next process, the next flow, the customer of your area and the ultimate customer, and start focusing on the needs and the desires of them, and bring that back in the chain of your process. And you'll be improving, you'll stop being focused on "Fix this, stop this. Don't do that." Let's not have any more of that, and you'll be more into, "Let's do this because this is going to drive a much better outcome, or the exact outcome that our customer wants."   0:29:05.2 Bill Bellows: Yeah, it is, which changes the hat. That may not be the purview of people in the quality organization. So, they're out there counting defects. This is not to say it's their job. Not that they're not in the loop, but it's turning to the people that are more aware... That are more in tune with functionality, which is likely gonna be that people designing the thing, thinking about what's the role of the windshield wiper? Is it to skip across the windshield? Is it to, which is, that chatter. No, we don't want the chatter. So what is it we do want? We want the windshield wiper to move smoothly. And what does that mean? It means at a given second, we want it to be... And this is where the smoothness functionality comes in that I saw Dr. Taguchi many times is, is saying at a given interval of seconds, it should be here, here, here, here, here. And if it does match those positions, then what have we done? We have improved the smoothness of the flow of the wiper blade, or whatever it is that thing.   0:30:21.5 Bill Bellows: And that's the type of thing I'm trying to introduce, in this short episode, people thinking about function, not the lack of quality, but what is it we're trying to achieve? Now, otherwise, we can also say, Ackoff would say, and Dr. Deming would agree with him, is that organizations aren't in business to make a profit. They're in business to do something really well. That's the function of the organization. And then profit is the result of that. As opposed to being profit focus, in which case you start to... You run it as a finance company and misunderstand the focus and you start believing in addition and you end up with a mess.   0:31:04.2 Andrew Stotz: So, let's end it with a cartoon that I saw in The Wall Street Journal. And in that cartoon, it was a couple of guys, young guys wearing suits, and they were talking to each other, and they were either, it was either in an MBA class or they were in a factory or something, and it said, "Things? I don't wanna make things. I wanna make money." [laughter] And the whole point is, money is the result of making great things.   0:31:38.3 Bill Bellows: Exactly. Exactly. Exactly. And that's why... And this is why I so enjoyed about listening to Ackoff, conversations with Russ... Conversations with Dr. Taguchi. And then reading Deming. I don't have any conversation with Dr. Deming and thinking of that there. They, each were astute enough to see the process, the means leading to the result. Tom Johnson would say, "The means are the ends in the making." So you have organizations that are either means-focused, which is process focus, versus, "Did you deliver the report? Did you deliver the thing?" And Dr. Deming's big thing is, by what method? Tom would say, "By what means?" So...   0:32:25.2 Andrew Stotz: All right. Well...   0:32:25.2 Bill Bellows: Anyway, that's what I wanted to expose our audience to tonight.   0:32:29.4 Andrew Stotz: There it is. They've been exposed. Ladies and gentlemen, the exposure has happened. Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And if you wanna keep in touch with Bill, just find him on LinkedIn. And this is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming. And you know this one, you can say it along with me 'cause I say it all the time. People are entitled to joy in work.

Everyone is in favor of improving quality, but what does that mean? In this episode Bill Bellows and Andrew Stotz discuss stories of meeting requirements, missing the mark, and what Dr. Deming said about how to do better. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussions with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. And I guess now that we're into 2025, it's gonna be 32 years pretty soon. The episode for today is episode 10, are you in favor of quality? Bill, take it away.   0:00:33.5 Bill Bellows: Thank you, Andrew, and Happy New Year.   0:00:35.1 Andrew Stotz: Happy New Year.   0:00:36.4 Bill Bellows: Happy New Year to our listeners. And yeah, so here we are episode 10 of Misunderstanding Quality. We got up to 22 episodes in our first series and then we'll have a follow-on series. One is I would like to thank those who took the invite to reach out to me on LinkedIn. And I've just started connecting with a few new people who are doing some interesting things involved in types of work that I'm not familiar with, it's just fascinating to listen to the types of issues they deal with. And they each come to me with an interest in Dr. Deming's work. So they're following the podcast series, this one, the others that you're doing, and they listen to all of them. And I'm not sure if they've contacted the others, but they've reached out to me. So I wanna once again say for those of you that are enjoying this conversation, my conversation with you, Andrew, then please reach out to me.   0:01:50.0 Bill Bellows: If you'd like to know more, that's one thing. The last episode was called Worse Than a Thief. And one thing I wanna mention, there's a bunch of meanings relative to being worse than a thief. One distinctly from Dr. Taguchi was... And I don't... He gave examples of manufacturers that made plastic sheeting for crops to protect the crops and his complaint was that they made it to the minimum side of the requirement. So there was a requirement on the thickness, so again, even if you have a 1mil thick here, we have in the States, there's you can buy plastic 1mil, which is 0.001 inch or something heavier. And so, and obviously, in the world of manufacturing, you're not gonna get exactly 0.001, it's gonna be a little low, a little high. So what Dr. Taguchi was referencing is companies in Japan that were making plastic sheeting that would be used for a number of things. But in particular, he talked about it, what if it's being used to protect crops?   0:03:19.8 Bill Bellows: And what if the manufacturers, to save money because they're buying the plastic by the pound, selling it by the yard, so they're gonna make it as thin as possible. And his concern was, so how much are you saving to make it as thin as possible? And what is the impact of being on the thin side when a crop is lost? And that was his reference to being worse than a thief, that you're saving a few pennies but costing the farmer the... Right? And so that could be... So that's a situation where there's a requirement, the requirement is met minimally. You and I reference that as leaving the bowling ball in the doorway, delivering to the absolute minimum, or I mean delivering to the minimum, the maximum of the requirement, whatever best suits me. So if I'm delivering to you a term paper and you as the professor say, "It must be between five and 10 pages," and I say, "Well, I'm gonna make it five pages."   0:04:23.9 Bill Bellows: If in another situation, [chuckle] an example, I guess is if when our daughter was in high school and we said, "Allison, make sure you're home between 10:00 and midnight," then she may move that to the high side of the tolerance and come home at 10:00 or 11:59. But in either case, what Taguchi is referencing is in the world of acceptability, the requirements have been met. But the worse than a thief aspect is, is what is the personal gain versus the impact to others in the system. So that could be picking up the nail in the parking lot or deciding not to do it. So I just wanna point out that I see that as a very broad statement, not just in terms of meeting requirements, but within your organization are you... To what degree are you focusing on your department at the detriment of the organization? That's another way of being worse than a thief.   0:05:28.7 Bill Bellows: It could be you're spending all of your budget just before the end of the year. 'Cause you know what happens, Andrew, if you don't spend all of your budget.   0:05:38.0 Andrew Stotz: Gonna get taken away.   0:05:38.9 Bill Bellows: So if you're 10 percent under, the next year you're gonna get 10% less. So I used to kid people is, so what will I spend... Again, so you learn the hard way, if you don't spend the entire budget then your boss the next year says, "Well, Andrew, you only spent 80% of the budget, so we're only gonna give you 80% of last year." So what's the... What message does Andrew learn? I tell people is you go a little bit over the 100%, right? You go a little bit over. And so even that I would say is worse than a thief 'cause what are you doing? You're withholding your resources that others may find. So I just wanna say that that statement is not as narrow as looking at a set of requirements, it is looking at things from what's good for me versus good for the system. All right, have fun to that one.   0:06:30.0 Andrew Stotz: Right.   0:06:31.0 Bill Bellows: So relative to the title you mentioned. Are you in favor of quality? What inspired that? There's another thing I've been looking at recently, whether on LinkedIn or elsewhere on the internet. I'm a member of ASQ, the American Society for Quality, so I get regular notes from them. And I go off and look, and I'm just reminded of how most organizations think about quality, which is meeting requirements, and it could be much more than that. But anyway, in The New Economics, Dr. Deming's book, first edition, came out in 1993. In there in the first chapter, he says, let me pull it up, and I wanna read it exactly from the good doctor.   Near the end of chapter one of the New Economics, Dr. Deming, in bold text, our listeners will find a statement, “a look at some of the usual suggestions for improvement of quality.” And Dr. Deming says, "There's widespread interest in quality. Suppose that we were to conduct next Tuesday a national referendum with the question, are you in favor of improvement of quality? Yes or no? The results." predicted Dr. Deming "would show, I believe," and again, I'm quoting Deming, "an avalanche in favor of quality. Moreover, unfortunately, almost everybody has the answer on how to achieve it. Just read the letters to the editor, speeches, books. It seems so simple. Here are some of the answers offered, all insufficient, some even negative in results."   0:09:17.9 Bill Bellows: "Automation, new machinery, more computers, gadgets, hard work, best efforts, merit system, annual appraisal, make everybody accountable, MBO, management by objective as practiced, MBR, management by results." And I'll just pause. Dr. Deming, when he would read this list in a seminar, would also make reference to MBIR, management by imposition of results. All right, back to Dr. Deming. "Rank people, rank teams, rank divisions, rank salesmen, reward them at the top, punish them at the bottom. More SQC, statistical quality control, more inspection, establish an office of quality, appoint someone as VP in charge of quality, incentive pay, work standards," in parentheses, "quotas," comma, "time standards," end quote. "Zero defects, meet specifications, motivate people." And then in bold print, Dr. Deming adds, "What is wrong with these suggestions?" He says, "the fallacy of the suggestions listed above will be obvious from subsequent pages of the text," meaning The New Economics.   0:10:36.1 Bill Bellows: "Every one of them ducks the responsibility of management," Andrew. "A company that advertised that the future belongs to him that invest in it, and thereupon proceeded to invest heavily," 40 million, no, 40 billion, I'm sorry, that's ten to the ninth. "40 billion in new machinery and automation, results, trouble, overcapacity, high cost, low quality. It must be said in defense of the management that they obviously had faith in the future." And I asked some people that knew Dr. Deming far better than me. Once upon a time, I said, "So who was Dr. Deming talking about, the company that invested $40 billion?" He said, "Oh, that was General Motors." And I used to think when I was at Rocketdyne that you could not ask for a better competitor than one that would invest $40 billion to lose market share, right? Talk about self-inflicted gunshot wounds that they're gonna go off, invest heavily in technology gadgets. That's what Dr. Deming's calling 'em, gadgets.   0:11:55.2 Andrew Stotz: Gadgets.   0:11:55.8 Bill Bellows: Did you ever hear what Dr. Deming said about, he says, there's a couple of things he said. This is one of the things I heard him say live. He said, "Where's the data in the computer? Gone forever." And then he'd say, "the hardest thing in all the world to find..." You know what he said, Andrew, was the hardest thing in all the world to find?   0:12:24.0 Andrew Stotz: No, what was that?   0:12:27.3 Bill Bellows: "A piece of paper and a pencil." 'Cause his mindset was just put the data that you wanna plot on a piece of paper, as opposed to in the computer, gone forever. Now, I worked with a company as a consultant for three years. And one of the first things they had me work on, of course, was trying to learn about a problem that happened a few years earlier. A problem, meaning something that did not conform to requirements. And in the middle of working on that for about three months and working on that, and the issue was, let's learn about what happened a couple of years ago so it doesn't happen again. And what happened a few years ago was a very stringent set of requirements for this aerospace hardware, missed the requirement by 10%. It was close. It was close, but the customer would not buy it. And it was a multimillion dollar asset that they held onto 'cause they were hoping they can convince the customer to buy it. And the customer just said, "You keep it, you keep it." So the issue was, "Come over and help us understand what happened. We don't do that again."   0:13:54.1 Bill Bellows: Well, in the midst of that, the same product being produced a few months later, instead of missing the requirement by about 10%, missed the requirement by about 70%.   0:14:12.9 Andrew Stotz: Oh.   0:14:13.2 Bill Bellows: Oh, oh. It was a nightmare. And the company spent a whole lot of money chasing that. In the long run, it may have been a bad test. We never found exactly what it was. And when I caught up with them years later, they eventually went back into production. But the reason I bring that up is, after the incident, I was called over. It was a very intense time to go figure out what's going on, only to find out that the data was in a computer. So, the data was not being plotted real time. So after the incident, one of the things that happened within a few days of the incident was to go back and plot the data. So when I was in a meeting and they showed the data and I knew what they were saying was they had pulled it out of the computer. I thought, "Dr. Deming's not kidding. Where's the data, in the computer? Gone forever." So I wanted to...   0:15:23.8 Andrew Stotz: I had something I wanted to add to that, and that is I have a couple of great classic pictures in our family that were made 100 years, 120 years ago.   0:15:36.8 Bill Bellows: Oh wow. Lucky you.   0:15:39.9 Andrew Stotz: Great grandma, those old, really old pictures. And I was just showing them to my, to some of the ladies that take care of my mom and they just can't. And I said, "Now think about all the improvements that have been done in photography. What is the chance that one out of your 10,000 pictures on your iPhone that you've taken is going to survive 120 years like this picture?" And the answer is zero. There's zero chance.   0:16:14.4 Bill Bellows: That's right. Because even if you have kids, they don't want 4000 photos then... 4000...   0:16:25.0 Andrew Stotz: Nobody can deal with that.   0:16:26.4 Bill Bellows: No one could... You're absolutely right. They will not. Unless that photo is printed and turned into a keepsake. Gone forever.   0:16:38.7 Andrew Stotz: Yeah.   0:16:39.0 Bill Bellows: Yeah. No, that's a good point. That's a very... And the fact that these photos lasted that long is pretty damn amazing.   0:16:47.2 Andrew Stotz: Well, there's a great book. I forgot the name of it, but I'll remember it. There's a great book about how slow this... The pace. It's called "Future Hype" is the name of it. It's all about the slow pace of innovation. And this is a great example. Going from no photo to a great photo 120 years ago was true innovation.   0:17:12.0 Bill Bellows: Oh, yeah. Yes.   0:17:13.8 Andrew Stotz: Just coming up with ways to do thousands of photos. And the author just basically crushes everything that you think is innovation. That there's millions of patents now that are coming out. We're much more innovative than we were in the past. And then his whole point is, "Yeah, and go and look at them, and what you see is that they've changed the color a little bit, they've changed this, they've changed that, and they're just doing modifications." So, every single area that you think there is innovation. And I think that's part of what Dr. Deming's talking about, about it's in the computer that doesn't. Tools and gadgets don't solve the problem.   0:17:56.1 Bill Bellows: No, it's... Well, they are tools. And as we've talked about in this series, in the first series, there are tools and techniques. Cell phones, computers, automobiles. These are tools. Techniques are how to use them. And tools, to borrow from Ackoff, are about efficiency, doing things well. But not to be confused with effectiveness, also from Ackoff, which is doing the right thing. And what I admire... I think what we both admire about Dr. Deming's work is the ability of the System of Profound Knowledge to provoke the question of whether or not something is... Doing something is worthwhile to do. And that has to do with not doing things faster, but stepping back and asking, "Why am I doing this in the first place?" Dr. Deming talked about. I think he used to say... He phrased it as, be, Dr. Deming saying, "Andrew, do you know how companies make toast?" And Andrew says, "No, Dr. Deming, how do companies make toast?" You ever hear that?   0:19:16.0 Andrew Stotz: No.   0:19:17.1 Bill Bellows: He says, "First, they burn it, then they scrape it." [laughter] And so what I see in organizations is the people who make the toast pass it off to the next person who does the inspection, and then upon the inspection, is sent to the toast scraper, then the toast scraper scrapes the toast and then sends it to somebody else, which could be a second toasting. [laughter] And then on to the next. And the person who makes the toast in the first place is none the wiser that X percent of the toast, they're just passing it on and so the technology is used to speed that up. And what's not happening is some type of feedback on adjusting the controls. It's just, it's... And this is what I saw when I worked in Connecticut, was immense toast scraping. Oh, it was just phenomenal. We had a machine making these plates for a heat exchanger for the Army's current main engine battle tank. A 1500 horsepower gas turbine engine. And half the volume, Andrew, of the tank is a heat exchanger to capture the exhaust heat to preheat the compressed air to improve the fuel economy.   0:20:52.4 Bill Bellows: Even when half the volume of the tank engine is a heat exchanger to capture every ounce of excess energy and convert it back to the efficiency of the engine. Even with that, the fuel economy of the Army's today main battle tank is measured in gallons per mile 'cause it drinks gasoline. Now, it's phenomenal performance. But they can't move too fast to outrun the tankers. So, these heat exchanger plates have, in the original design, I'm not sure what design is nowadays, had roughly 2 miles of welding in the heat exchanger. And the welding was what's known as resistance welding. And these very, very thin plates were welded together with a little dot of current to melt the metal to create a little bead, and then another one on, and they were overlapping melts, and that created a seam. And after these plates were welded together, you know, two together, each of them was put on to this under a bright light, a literally a Lazy Susan.   0:22:11.0 Bill Bellows: This thing had a 27 inch outer diameter and there'd be a bead around the outside and a bead around the inside. Two different diameters. And on a given plate one inspector would look under a magnifying glass to see, are there any gaps in the beads? And then flip it over and look at the other side, and then hand off to the next person to look at the same plate again.   0:22:37.1 Bill Bellows: So, every plate was 200% inspected. There were 10 machines making these plates. There was no traceability from the inspector. All the problems might have been coming from machine number one. There was no such awareness. And so, after the inspector, "I found a quarter of an inch where you... " "Okay. Then we send it to Andrew for a re-weld." There's no feedback and is that system any better today? I'm aware of systems today that are very similar to that. So, anyway, that's what Deming's talking about relative to the... Yeah. How do companies make toast? Well, the other thing I want to jump to, relative to this "Are you in favor of quality?" Which got it on my one is, I thought, is something really neat to include in this series that we're doing Misunderstanding Quality. But as I'm getting these prompts from ASQ on a regular basis, I was reminded of a few things that are near and dear within the world of the American Society of Quality. And one is what's known as Quality 4.0. Not, 1.0, Andrew, 4.0. 4.0.   0:24:00.1 Andrew Stotz: So, we're out of the crisis.   0:24:01.1 Bill Bellows: Oh, and so the phrase, Quality 4.0, this is today, right? And actually, the incentive, "Quality 4.0," this is actually five years old. So maybe they're on to Quality 5.0, Andrew. The phrase, "Quality 4.0," derived from the German industrialization program called Industry 4.0, is an evaluation of the role of quality in the increasing digital and automated world. One question surrounding Quality 4.0 is where increasing automation will leave quality professionals in the future. Technology, Andrew, has changed quality work and now offers useful statistical software that allows the Six Sigma quality movement to grow. Tons of data that allow quality professionals to act on quality issues in almost real time and new statistical methods. So, what I find is, "Quality 4.0" is artificial intelligence. It's the Internet of Things. It is technology. So if Deming was writing the, you know, the chapter on that we just mentioned earlier, the list of all the things on that list would be pretty much everything I see in "Quality 4.0." Right.   0:25:23.9 Bill Bellows: So, how far have we come in the professional world of quality? At least I am... I find there's a lot missing relative to what Dr. Deming was talking about 30 some years ago. So, that's what I wanted to put on the table is, you know, we're again not... None of us have said we're against tools and techniques. Whether it's chat GPT, artificial intelligence, those are fantastic. But if they're not guided with a System of Profound Knowledge, then you're going to improve uniformity in isolation.   0:26:09.8 Bill Bellows: And we've talked about that in this series and that is the difference between precision and not accuracy. It is making things uniform. Then you have to ask, again when I... What I challenge for those that are in the Six Sigma world is everything I've seen and I've been reading a lot about Six Sigma for the last 30 years. Everything I see about it when it comes to reducing variability, it is about reducing variability to shrink the distribution such that, what, Andrew? Such that we end up with acceptability 100% all. No red beads, all white beads. And then we get into... I went in preparation for a call today to the ASQ website to learn, just a reminder, refresher on Quality 4.0 and again, nothing wrong with advanced digital technologies, but what if we coupled that with a strong foundation that we're trying to offer people in the Deming ??? who are interested in what Dr. Deming's ideas bring to improve, to guide that technology. So anyway, that's, you know, Quality 4.0. Also, I'm on the ASQ website and their glossary section if anyone wants to go look there. If you're a member, you get free access to this. "Quality, a subjective term for which each person or sector has its own definition."   0:27:42.7 Bill Bellows: Okay. "In technical usage, quality can have two meanings. One, the characteristic of a product or service that bears on its ability to satisfy stated or implied needs. Two, a product or service free of deficiencies." Excuse me. "According to Joseph Juran, quality means fitness for use. According to Philip Crosby, it means conformance to requirements." And I don't see in here a reference to Dr. Deming and how he defined quality, Andrew. Huh? Interesting. What I enjoyed about being a member of the... In fact I'm still a member of the American Society for Quality. The reason I joined is I was excited by quality. Everything I was learning about Dr. Taguchi's work and then Dr. Deming's work and then began to wonder if the American Society for Quality was advancing and doc... So if anyone listening has access to the American Society for Quality and people that make decisions there, you might want to include Dr. Deming's definition of quality.   0:29:00.2 Bill Bellows: Where Dr. Deming would say a product or service possesses quality if it helps someone and enjoys a sustainable market. And what I find is unique about that is my interpretation, as Dr. Deming is saying a lecture I deliver, a podcast we present, that we are not the judge of the quality that our listeners, students are. The people downstream are the judge of that. So, it's not me handing off a part that meets requirements saying this is good. Even when Juran says fitness for use, what I would ask is fitness absolute or is fitness relative? And so that's... So anyway, I just thought it'd be fascinating to remind our listeners of the simplicity of Dr. Deming's message from The New Economics. You know, is everyone and anyone in favor of quality? Yes. And again, nothing wrong with tools and techniques, but what a Deming organization, a Blue Pen Company, a "We" organization. What they could do, guided by the Deming philosophy, with computers, where computers make sense, with AI, where AI makes sense, would seriously outpace what other companies are doing. It's interesting, but it's just not enough to compete with companies who will do that.   0:30:32.3 Bill Bellows: So, if nobody is following the Deming philosophy, then you can get by with Quality 4.0, doing AI and doing those things. But if you've got competitors and what Dr. Deming would say, Andrew, is be thankful for a good competitor, one who raises your game, right. And so, if you and I are playing tennis and you know, we're out there to become better tennis players, and as soon as I find out that you're out there so you can go brag to your mom about how you beat me last night, then I say, "Andrew, find somebody else to beat." But if you're interest and my interest is, you know, getting a lot of exercise and improving our game. That's a different story. So, that's what I just wanted to share with our ongoing listeners, is there's a lot to be gained by continuing to study the Deming philosophy. Add it to your repertoire, build a foundation guided by what The Deming Institute is doing and sponsoring podcasts like this, as well as DemingNEXT is, there's just a lot of opportunities for what Dr. Deming is offering. And I'm reminded of that on a regular basis that people are saying, "Boy, why didn't I learn about this a long time ago, what this can bring organizations?" So that's what I wanted to bring to the table today.   0:31:50.1 Andrew Stotz: That's wonderful. Well, Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion and for listeners, remember to go to deming.org to continue your journey. You'll see DemingNEXT there and the like. If you want to keep in touch with Bill, just find him on LinkedIn and reach out to him because he is responsive. This is your host, Andrew Stotz, and I want to leave you with one of my favorite quotes from Dr. Deming. I just never stop talking about this quote 'cause I love it. "People are entitled to joy in work."  

Join Bill Bellows and Andrew Stotz as they discuss what actions (or inactions) make us worse than thieves and how that relates to expiration dates, and acceptability vs desirability. Plus, stories about job swapping, Achieving Competitive Excellence, and birthdays. TRANSCRIPT 0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today is Episode 9, and it's entitled "Worse Than a Thief." Bill, take it away.   0:00:27.2 Bill Bellows: Welcome, Andrew. I haven't seen you in a while, and great to be back.   0:00:29.1 AS: It's been a while.   0:00:32.0 BB: Here we are. Episode 9 already. Gosh, [chuckle] time flies when we're having fun. First, let me say a shout out to people who are reaching out to me on LinkedIn. I spoke with another one of them this afternoon. It's always exciting to connect with them. And then I ideally connect in a regular basis and help them as best I can, and learn from them as best I can.   0:01:03.0 AS: Yep.   0:01:03.2 BB: So, for those who are thinking about it, they keep hearing you say, "Hey, you know how to reach Bill? Find him on LinkedIn." So, a reminder for those who are waiting for a nudge, here's a nudge. So, "Worse than a thief" is an expression that Dr. Taguchi used when he say, Andrew, "Don't be worse than a thief." And we'll get to that, but let me just give our audience some context on that.   0:01:37.8 AS: Yep.   0:01:39.0 BB: Dr. Taguchi would say... And actually, I don't know if Dr. Taguchi explained it. Someone explained it to me this way. He said a thief could be someone who steals your wallet, finds $20; which means they're up 20, you're down 20; which people refer to as "zero sum gain." Right? So, the thief's gain is my loss, zero sum. What could be worse than that? Well, "worse than a thief" would be a situation where what someone gains is nothing compared to what I lose. A simple example is, [chuckle] I'm not the only one who does this, but if I'm going to the supermarket and I get out of the car and I see a nail in the parking lot or a piece of glass in the parking lot on my way in. So, I'm not talking about walking all around the parking lot. I'm talking about if on my way into the store I see a nail, something that could puncture a foot, a tire, and I spend a few seconds to pick it up, throw it in the trash can right by the door, then my theory is the reason I do that, the reason others do that, is the belief that that little bit of time that I am spending doing that could potentially save someone far more than the few seconds it took me.   0:03:20.9 BB: Well, "worse than a thief" would be, I see that broken bottle, let's say a bunch of shards of glass. And having worked at my father's gas station, I've seen... A nail on a tire is one thing. Nail creates a puncture. A piece of glass in a tire creates a fracture. A piece of glass can destroy a tire 'cause you get a crack and it spreads, and that's hard to repair. A puncture with a nail, yeah, it's inconvenient, but that doesn't destroy the tire. So, I'm overly sensitive when I see pieces of glass in a parking lot, that that could ruin a tire.   0:04:04.8 AS: And ruin a day.   0:04:06.2 BB: Ruin a day, oh yeah. And so the idea is that for someone to not take the time, and the time they save cost you more than they saved, that's worse than a thief.   0:04:19.8 AS: Right.   0:04:20.0 BB: So, if I meet a set of requirements, leave the bowling ball in the doorway, deliver minimally, but in the world of acceptability, what do we call that, Andrew? It's good.   0:04:35.3 AS: It's good.   0:04:36.0 BB: Right? It's good. It's just within requirements, but good.   0:04:41.8 AS: It's not beyond looking good.   0:04:43.9 BB: And forget about beyond looking good; this is looking good. So, I leave the bowling ball in the doorway. I deliver to you the absolute minimum, which is still good. So, your response to that, Andrew, is, "Thank you, Bill." [chuckle]   0:05:00.0 AS: Yeah.   0:05:00.1 BB: And I'm not saying you know what I did, but let's say the situation where I am unaware of the loss function. I'm unaware that what I'm doing is make making your life worse.   0:05:12.2 AS: Right.   0:05:13.3 BB: But the idea is that my shortcut to deliver the D minus; D minus, minus, minus, minus, minus. 'Cause that's still not an F. What Taguchi is talking about is that the amount of resources I save, may be a fraction of what it cost you in terms of extra effort to use it. So, my savings of an hour, a minute, a second causing you far more than I saved, is worse than a thief. But in the world of acceptability, there is no such thing. In the world of acceptability, a little bit within requirements on the low side, a little bit within requirements on the high side, it's all the same. Again, there may be a situation where if you're putting a shelf on a piece of wood on a wall as a shelf and it's a little bit longer, a little bit long on either side, that may not have an impact; may not be touching anything on either side. It doesn't have to fit in.   0:06:25.9 BB: Now, this past weekend, our son and I were installing a new floor at our daughter's condo, and we wanted the pieces to fit in-between other pieces and this laminate floor which is a [chuckle] lot of work. Our son is turning into quite the artist when it comes to woodworking and things. But it's very precise getting things just right, just right, just right. And that attention to detail, that attention to making sure the gaps are just right, minding the gap and not the part. And there were pieces of this floor that he was trying to install. And it was driving him nuts, and finally... He's trying to figure it out and he finally figured it out what was going on. 'Cause he wanted that floor and the spacing between not just to meet requirements [chuckle] not that our daughter gave him and set the requirement, but he wanted the floor in those gaps to be invisible. He wanted things to... Right? He had a higher level, a higher standard.   0:07:25.3 BB: Now, this is the same kid who when he was 13 left the bowling ball in the doorway. But I would've done that. You would've done that. So, anyway, that's the difference between... Another reminder of, one, the difference between acceptability and desirability. But to add to this idea of "worse than a thief," embedded in the concept of desirability is not to be worse than a thief, is to understand the consequences of your action on others, and the amount of time and your decision on how you deliver it and how you meet the requirements. The idea is that, the less time you take in order to save at your end might be causing the person downstream in your organization more than you're saving.   0:08:22.8 AS: In other words, something small, you could adjust something small that would have a huge impact down the line, and you just didn't... You don't know about it.   0:08:32.2 BB: Again, that's why I go back to the nail in the parking lot. To not pick up the nail could cause someone so much more than the few seconds you didn't spend. But again, that could be...   [overlapping conversation]   0:08:44.0 AS: And one of the things that makes it easier or better for a working environment is you know your downstream.   0:08:51.8 BB: Yes.   0:08:51.8 AS: When you're walking in the parking lot, you don't know your downstream; it's just anybody generally, and hopefully I've stopped something from happening here, but you're never gonna know and all that. But with a business, you know your downstream, you know your upstream, and that communication can produce a really, really exciting result because you can see it and feel it.   0:09:11.8 BB: Well, and thank you for bringing that up, because I've got notes from... Since the last time we met, I keep a file for the next sessions we're gonna do. And so as things, ideas come up from people that I'm meeting on LinkedIn or elsewhere, then I, "Oh, let me throw that in." And so I throw it into a Word file for the next time. And so somewhere, I can't remember who, but since the last time we spoke, someone shared with me... Hold on, let me find it here. Okay. In their organization, they do staff rotation. They move people around in their organization. And the question had to do with, "Isn't that what Dr. Deming would promote? Is having people move around the organization?" And I said... Hold on, I gotta sneeze. I said, "Well, if I am the person that makes the parts that you have to assemble, and I make them just within requirements unaware of the downstream impact... " I don't know where they are within the requirements, let's say.   0:10:30.0 BB: All I know is that they're acceptable. I machine it, I measure it, the inspection says it's good, I don't know where within it's good. I don't know. So, I'm unaware. All I know is that it met the requirements. And I hand off to you on a regular basis, and then the boss comes along and says, "Bill, I wanna have you go do Andrew's job." So, now, I'm on the receiving end. And maybe you are upstream doing what I used to do. And you are likewise unaware that... You don't know that you're delivering acceptability. All you know is all the parts you deliver are good. You're trained the same way I'm trained, I'm doing your job. Does that change anything? [chuckle] If I take on your job and let's say, banging it together, whereas the week before you were banging it together, does that rotation create the conversation?   0:11:27.2 AS: So, you're saying rotation for the sake of rotation is not necessarily valuable if in fact, what could be more value is just the two of us sitting down and saying, "So what is it that you're doing with yours and what do you need?" and maybe visiting the other side or something like that.   0:11:44.9 BB: My point is, until the thought occurs to either one of us on the distinction between acceptable and desirable, neither one of us is the wiser as to why we do what we do. So, having people move around the organization and take on different roles, absent an understanding of this contrast, absent an understanding of what Dr. Deming is talking about, which includes these distinctions, that's not gonna do anything.   0:12:16.0 AS: Right.   0:12:16.8 BB: I would say it's a nice idea, and you hear about that all the time about oh the CEO's gonna go work at the front desk. But if the CEO goes to the front desk, again, unless he or she has a sense of what could be, that things could be smoother than what they are because of where they've worked before and it's so much smoother over there, that could lead to why at the Atlanta office does it take so much longer than the LA office. Now I'm beginning to wonder what might be causing that difference. But if I just take on your job for the first time, or if you and I every other week change jobs. So, I'm doing your job, we are both doing assembly, we're both making the parts. Absent an understanding of the contrast between a Deming environment or a non-Deming environment, which would include an appreciation of what Dr. Deming would call the System of Profound Knowledge and the elements of psychology and systems and variation, the theory of knowledge, just not enough. Insufficient. Nice idea. But it's when at Rocketdyne we would call "reforming."   0:13:39.0 BB: And we started 'cause Russ... Dr. Deming talks about transformation, and Russ talks about reforming. And so I started thinking, "How would I explain what... " I just thought it was too... My interpretation of what Dr. Deming is saying of the individual transform will begin to see things differently, okay. My interpretation is, I begin to hear things differently, I begin to hear the contrast between somebody referring to their son as "their son" versus "our son," my idea versus our idea; I start paying attention to pronouns, so I start hearing things differently; I start to think about, see things as a system a little... I become more aware, visually more aware.   0:14:43.9 BB: And to me, another aspect I think about relative to transformation is that, if I'm the professor and you're the student in a class, or in any situation, I don't see... I think about how I've contributed to whatever it is you're doing. I have somehow created the headache that you're experiencing. If I'm upstream of you in the organization, whether that's me delivering a report or a tool, or I'm the professor delivering the lecture, I began to realize that your issues I've created, and I begin to see things as a... I begin to see that I am part of the issue, Part of the solution, part of the problem. When I explained to students this, I began to realize as a professor that I am not an observer of your learning, asking "How did you do on the exam?" I am a participant in your learning, saying "How did we do in the lecture?" And to me, that's all part of this transformation.   0:15:53.0 BB: Now, the other word, "reform," which is associated with things I've heard from Russ. He talks about... Yeah, I'll just pause there. But I started thinking, well, Deming's talking about how I see the world, how I begin to see relationships differently, think about variation differently. That's a personal transformation. Reforming, and others began to explain to people at Rocketdyne and I do with clients and students is, reforming is when you and I swap jobs. Reforming is when I look at the process and get rid of a few steps. Reforming is changing titles. Reforming is painting something, [chuckle] changing the color. I think I shared, maybe in the first podcast series, I was doing a multi-day, one-on-one seminar with a pediatrician in Kazakhstan, who came to London to meet me and a bunch of other friends to learn more about Dr. Deming's work. And the entire thing was done through a translator.   0:17:07.1 BB: And so I would ask a question in English, it would be translated to Russian then back to me in English. And so at some point, I said to Ivan Klimenko, a wonderful, wonderful guy. I said, "Ivan," I said [chuckle] to Yuri, the translator, I said, "Ask Ivan, what's the fastest way for a Red Pen Company, a non-Deming company, a "Me" organization, to become a Blue Pen Company, otherwise known as a Deming company or "We" organization." And these are terms that we talked about in the first series; I don't think in this series. But, anyway, I said, "So what's the fastest way for a non-Deming company to become a Deming company? A Red Pen Company to become a Blue Pen Company?"   0:17:44.9 BB: And so he asked, and I'm listening to the translation. And he says, "Okay, I give up." I said, "Spray paint." [chuckle] And that's what reforming is: Getting out the red spray paint, having things become neat, clean, and organized, and you're just going through the motions. There's no change of state. And so, "I do your job, you do my job," that's not sufficient. But get us to think about the contrast of a Deming and a non-Deming organization, then you and I changing roles could be enormously beneficial as I begin to understand what it's like to be on the receiving end. Now, we're talking. And I think I mentioned in a previous podcast, I had a woman attend one of the classes I did at Rocketdyne, and she said, "Bill, in our organization, we have compassion for one another." It's the same thing. It's not sufficient. And that's me saying, "Andrew, I feel really bad. I lost a lot of sleep last night thinking about how much time you spend banging together all those parts that I give you. And if there was anything I could do to make things better, I would love to help you. But at the end of the day, Andrew, all the parts I gave you are good, right? I don't give you bad stuff, right? Have I ever given you a defective part, Andrew?"   0:19:12.0 AS: Nope.   0:19:13.1 BB: "So, everything's good, right? Everything's good that I give you? Well, then, if I could help you, but I don't know what else to do. Everything I give you is good. So, it must be on your end." [laughter]   [overlapping conversation]   0:19:24.1 AS: And I'm busy. Yeah.   0:19:26.6 BB: Must be on you. And that's what I'm talking about. Now, if I understand that I'm contributing to your headache, I'm contributing to the trouble you're having with an example, now I'm inspired; now I understand there's something on me. [chuckle] But, short of that, nice idea, it's not helping.   0:19:50.0 BB: [laughter] So, the story I wanted to share before we're talking about this role-changing. Again, role-changing by itself, nah, not sufficient. So, see if this sounds familiar. It has to do with acceptability. I'm pretty certain it's part of the first series. I wanna make sure it's part of the second series. So, I was in a seminar at Rocketdyne on something to do with quality. And I think United Technologies had purchased Rocketdyne. They were bringing to us their new quality management system. Not just any quality management system, Andrew. This was called ACE, A-C-E. And, when we first learned about this, I remember being in a room when their United Technologies, ACE experts started to explain it. And some of my colleagues said, "Well, what is ACE?" They said, "Well, it's Achieving Competitive Excellence." "Well, what is it? What is it, 'competitive... '"   0:20:52.2 AS: It sounds like you wanna put that up on the wall as a slogan.   0:20:56.0 BB: It was a slogan, "Achieving Competitive Excellence." And people says, "Well, what is it?" I said, "Well, it's Lean Six Sigma." Well, so why do you call it ACE? Well, our arch rivals, General Electric. they call it Lean Six Sigma. We ain't gonna call it Lean Six Sigma. So, we're calling it ACE, A-C-E, Achieving Competitive Excellence. But it's the same thing as Lean Six Sigma. [chuckle] And so we had all this mandatory ACE training that we would all sit through and pray that the rosters were never lost, were never lost so we wouldn't have to take the training again. So, in the training, there was a discussion of, how does the environment impact quality? And I don't know how it came up, but similar, there's a conversation about the environment could affect quality. And, so when that was raised, I think it was a question that came up.   0:21:56.9 BB: How does the environment affect quality? The physical environment: How hot it is, how cold it is. So, one of the attendees says, "I've got an example." He says, "I worked for a Boeing supplier," and it might have been, "I worked for Boeing in Australia." I know he said he worked in Australia. They made parts, big parts, very tall parts like a 15, 20... Very long section. And I think he said it had to do with the tails, part of the tail for Boeing airplane. [chuckle] He says, "When we would measure it," he said, "we knew that if we took the measurement first thing in the morning before the sun came up and it started to get hot, then there's a good chance that the length would meet requirements. And, we knew that once that part saw the heat of the sun and expanded, then it wouldn't meet requirements. So, we measured it first thing in the morning, [laughter] and that's an example of how the environment affects quality." And, my first thought when I heard that was, "You can't make that story up, that I will keep measuring it until it meets requirements." That, Andrew, is me shipping acceptability. Do I care at all about how that part is used, Andrew? [chuckle]   0:23:18.7 AS: Nope.   0:23:19.9 BB: Do I know how that part is installed? Am I watching you install it and go through all, you know, hammer it? Nope. No. Again, even if I did, would I think twice that I measured it before the sun came up and that might be causing the issue? No, that still would not occur to me. But the other thing I wanted to bring up on this, on the topic of ACE, remember what ACE stands for?   0:23:46.0 AS: Achieving Competitive...   0:23:50.0 BB: Excellence.   0:23:50.3 AS: Excellence.   0:23:51.8 BB: So, Rocketdyne was owned by United Technologies of Pratt and Whitney, division of West Palm Beach, for 10 years or so? 10 long years. ACE, ACE, ACE, ACE, ACE. So, I kept thinking, [chuckle] I said to some of my Deming colleagues, "There's gotta be another acronym which is A-C-E." Achieving Competitive... What? What might be another E word? 'Cause it's not... Instead of ACE, Achieving Competitive Excellence, I kept thinking of this, what might be another way of what this is really all about? And it dawned me. The embarrassment is how long it took me to come up with what ACE translated to. And it was "Achieving Compliance Excellence." [chuckle]   0:24:42.9 AS: Excellent.   0:24:45.0 BB: Does it meet requirements? Yes. And so what is compliance excellence? It gets us back to acceptability. So, traditional quality compliance. But then while I was on the thought of Achieving Compliance Excellence, and then, well, there's a place for meeting requirements. There's a place for compliance excellence. I'm not throwing it out the window. I would say, if I ask you, Andrew, how far it is to the closest airport and you say 42 miles, 42 kilometers, or you say it takes an hour, then embedded in that model is "A minute is a minute, an hour is an hour, a mile is a mile, and all the miles are the same." Well, maybe they aren't. Maybe they aren't. Maybe I'm walking that distance, and I'm going uphill and downhill. Maybe I'm driving that distance. And those changes in elevation don't matter as much. So, then, what I thought was, there's Achieving Compliance Excellence that's acceptability, and then there's Achieving Contextual Excellence, which is my understanding of the context.   0:25:56.7 BB: And given my understanding of the context, if you say to me, "How far is it to the nearest airport?" I say, "Well, tell me more about the context of your question. Are you driving there? Are you riding your bike there? Are you walking there?" 'Cause then I'm realizing that every mile with Compliance Excellence, I just treat it as "a mile is a mile is a mile." They're all interchangeable, they're all the same. With Contextual Excellence, the context matters. And I say to you, "That's a... I mean, 42 miles, but boy, every mile is... They're brutal." And so then just the idea that context matters, that the understanding of a system matters. All right. So, next thing I wanna get to, and we've talked about this before but we never got it in, but I wanna provide, I really... Well, what I think is a neat example. [laughter] Okay. Calm down, Bill. [laughter]   0:26:54.8 AS: Yeah. You're excited about it.   0:26:57.0 BB: All right.   0:26:57.1 AS: So, about your idea... [chuckle]   0:27:00.2 BB: All right. So, again, in this spirit, my aim in conversation with you is to provide insights to people trying to bring these ideas to their organization. They're either trying to improve their own understanding, looking for better ways to explain it to others. And towards that end, here is a keeper. And for those who try this, if you have trouble, get back to me. Let me know how it goes. Here's the scenario I give people, and I've done this many, many times. What I used to do is give everyone in the room a clear transparency. That's when you had overhead projectors. [chuckle] 'Cause people say, "What is a transparency? What is an overhead projector?"   [overlapping conversation]   0:27:45.0 AS: Yeah exactly.   0:27:46.8 BB: It's a clear piece of plastic, like the size of a sheet of paper. And on that sheet, on that piece of plastic was a vertical line and a horizontal line. I could call it set a set of axes, X-Y axis. And the vertical axis I called "flavor." And the horizontal axis, I called "time." And, so everyone, when they would walk into a seminar, would get a clear transparency. I give them a pen to write on this transparency. And I'd say to them, "Here's what I want you to imagine. The horizontal axis is time. The vertical axis is flavor." And I would hold up a can of soda and I'd say, "Imagine. Imagine, inside this can, imagine before the lid is put on, soda is added to this can," any kind of soda. Right? "Imagine soda's in the can. Imagine in the can is a probe, a flavor meter. And the flavor meter is connected to the pen in your hand." And what that... Wirelessly, Andrew. So, there's this probe that goes into the soda, into the can. It is, let's say, with Bluetooth technology connected to the pen in your hand, such that you have the ability with this magic pen to trace out what the flavor of the soda in the can is at any point in time.   0:29:31.0 BB: And so I would put on the vertical axis, right, the Y axis, I would put a little tick mark, maybe three quarters of the way up the vertical axis. And so everyone started at that tick mark. And I would say, "Okay, get your pen ready, get it on the tick mark. This flavor meter is inside the can. It's transmitting to your hand and the pen the flavor of Pepsi. If I was to seal this can, put the lid on it, and I say, 'Now the device is activated.' As soon as I put the lid on the can, the pen is activated and your hand starts to trace out what is the flavor of the soda doing over time." And I would say, "If you think the flavor gets better, then you have a curve going up. If you think the flavor of the soda's getting worse, then it goes down. If you think it stays the same, it just goes across."   0:30:37.1 BB: And I would just say, "What I want each of you to do, as soon as that can is sealed, I want you to imagine what the flavor of Pepsi, Coke, whatever it is, I want you to... " The question is, "What do you think the flavor of soda is doing in a sealed can over time?" And I would say, "Don't ask any questions. Just do that." Now, most of the people just take that and they just draw something. They might draw something flat going across. [chuckle] Now and then somebody would say, [chuckle] "Is the can in a refrigerator?" [chuckle] And my response is, "Don't complicate this."   [laughter]   0:31:26.1 BB: So, I just throw that out. Most people just take that and just trace something out. And for the one who says, "Is it refrigerated? What's the timescale? Is the horizontal axis years or minutes?" I'd say, "Don't complicate it." [chuckle]   0:31:46.8 AS: "And don't ask questions."   0:31:48.9 BB: "And don't ask... " But you can bring me over and I'll ask you a question. You can ask your questions, I would just say, "Don't complicate it." So, what do we do? Everyone gets a few minutes, they draw it. I take all those transparencies that you can see through, and I put them on top of one another. And I can now hold them up to the room and people can see what I'm holding up. They can see all the different curves.   0:32:17.0 AS: Right.   0:32:18.0 BB: 'Cause they all start at the same point. And then I would say to the audience, "What do they all have in common?" Well, they all start at the same point. "What else do they have in common? What do they all have in common?" And people are like, "I don't know." Some of them are flat. They go across, the flavor doesn't change. Most of them think it goes down at some rate.   0:32:43.4 AS: Yep.   0:32:45.0 BB: Either concave down or convex down. Now and then, somebody will say it goes up and up and up; might go up and then down. But most people think it goes down over time. That's the leading answer. The second leading answer is it's constant. Up and down, rarely. So, I've done that. I've had people do that. I used to have a stack of 500 of transparencies. I used to save them and just go through them. I've done it, let's say in round numbers, 1,500 to 2,000 people. So, all the curves start at that tick mark in the 99.9999% of them either go down or go across. What's cool is, all those curves are smooth. Meaning, very smoothly up, very smoothly across, very smoothly down. Mathematically, that's called a "continuous function." And what I explained to them is, if I draw a vertical line halfway across the horizontal axis, and I look at every one of those curves, because the curves are smooth, if I draw a vertical line and how each curve, your profile and all the others go across that line, immediately to the left and immediately to the right, it's the same value because the curve is smooth.   0:34:28.3 BB: But I don't ask them to draw a smooth curve. I just say, "What do you think the flavor does over time?" They always, with three exceptions, draw a smooth curve. And so when I ask them what do they have in common, you get, "They start at the same point." Nope, that's not it. I don't know if anyone's ever articulated, "They're all continuous functions." Very rarely. So, then I explained, "They're all continuous functions. But I didn't ask you to draw a continuous function." Well, when I point out to them that three times, three times, Andrew, out of nearly 2,000, somebody drew a curve that goes starting at the tick mark, zero time, and it goes straight across halfway across the page at the same level, and then drops down to zero instantly, it's what's known mathematically as a "step function."   0:35:26.9 BB: So, it goes across, goes across, and then in zero time drops down to zero and then continues. So, three out of nearly 2,000 people drew a curve that wasn't smooth. Again, mathematically known as a step function. And each time I went up to that person and I said, and I comment on it, and each of them said, there's a point at which it goes bad. And each of them had a job in a quality organization. [chuckle] And so why is this important? Because in industry, there's this thing known as an "expiration date." What is an expiration date? It's the date past which you cannot use the chemical, the thing. And what's the assumption? The assumption is, a second before midnight on that date, Andrew, you could use that chemical, that acid, that glue, whatever it is in our product; a second before midnight, before the expiration date, you can use that. But a second after midnight, we put this tape and we call it "defective." And so I've worked with companies that are in the chemical business, and they literally have this tape. At the expiration date, we don't use it. A second before midnight, we do. And so what you have is a sense that it goes from good to bad, you know how fast, Andrew?   0:37:15.0 AS: Tick of a clock.   0:37:17.0 BB: Faster than that, Andrew. Zero time.   0:37:21.0 AS: Yeah.   0:37:22.0 BB: Zero time. And so what I ask people is, "Can you think of any phenomenon that happens in zero time?" And people call that's... "Well, the driver was killed instantly." No, it wasn't zero time. "Well, someone is shot." It's not zero time. And so what's cool is, when I ask people to describe a phenomenon, describe any physical phenomenon that happens in zero time, that we go from one location to another, from one state to another in zero time, I've not been stumped on that. Although actually, [chuckle] there are some situations where that happens. Well, the reason that's important for our audience is, that's a demonstration that expiration-date thinking is an organizational construct. It's not a physical construct. Milk goes bad fast. [chuckle] I'll admit, the expiration date on the half gallon of milk, it goes bad fast.   0:38:27.2 BB: But a second before midnight and a second after midnight, it's still the same. So, expiration-date thinking is what acceptability is about; that everything is good, equally good, but once we go across that expiration date, Andrew, then the flavor changes suddenly. And so what I used to kid people is, imagine if that really happened, right? Then we'd have this contest. I'd say, "Andrew, I had a can of Pepsi recently. And have you ever done this, Andrew? You get the can of Pepsi that has the expiration date on it. And if you listen to it at midnight, on the expiration date, you listen closely, you can hear it go from good to bad, Andrew." [chuckle] Would that be awesome? [chuckle] So, I was sharing some of this recently with our good friend, Christina, at The Deming Institute office.   0:39:31.0 AS: Yep.   0:39:32.7 BB: And it happened to be her birthday. And, so I sent her a note and I said, "Happy birthday." And I said, "So, did you change age immediately on the second you were born?" 'Cause she said, 'cause I think she said something like, "My mom reached out to me and she reminded me exactly what time I was born." And I said, "Oh," I said, "so did you feel the change in age as you crossed that?" And she said, she said, "Hi, Bill. Of course, I felt instantly different on my birthday. My mom even told me what time, so I'd know exactly when to feel different." [chuckle] Now, so here's a question for you, Andrew. Can you think of a situation where something changes from one value to another in zero time? In zero time. Again, we don't go from living to dying in zero time. The change of Pepsi doesn't go from one value to another in zero time. The quality of any product is not changing, you go from one side to the other. But can you think of anything that actually happens in zero time: Across that line, it goes from one value to another?   0:41:05.0 AS: Nope, I can't.   0:41:08.8 BB: Oh, come on, Andrew. You ready?   0:41:16.2 AS: Go for it.   0:41:20.0 BB: Did you ever hear of the German novelist, Thomas Mann, M-A-N-N?   0:41:24.0 AS: No.   0:41:25.7 BB: All right. I wrote this down as a closing thought; it may not be the closing thought. We'll just throw it in right now. So, this in an article [chuckle] I wrote for the Lean Management Journal.   0:41:38.0 AS: By the way, it's gotta be the closing thought because we're running out of time. So, perfect.   0:41:43.7 BB: Fantastic! Well, then here's my closing thought, Andrew. You want my closing thought?   0:41:47.1 AS: Do it.   0:41:48.1 BB: All right. So, from an article I wrote for the Lean Management Journal, so here's the quote. "I have witnessed industrial chemicals in full use right up to the expiration date, and then banned from use and tagged for immediate disposal with a passing of the expiration date only seconds before the chemicals were freely used. While they may rapidly sour, it is unlikely that they expire with a big bang, all in keeping with a sentiment of German novelist Thomas Mann's observation about New Year's Eve," Andrew. What he said was, "Time has no divisions to market's passage. There's never a thunderstorm or a blare of trumpets to announce the beginning of a new month or year. Even when the century begins, it is only we mere mortals who ring bells and fire off pistols." So, at midnight on December 31st, a fraction of a second before midnight, we're in 2024 and we go to 2025 in zero time, Andrew. So, legally things change as you go across a line. You go from the United States to Mexico across a line of zero thickness. So, legally things across a line change instantly.   0:43:17.0 AS: Well.   0:43:18.0 BB: A coupon, Andrew, expires at midnight. [laughter]   0:43:22.7 AS: Yep. All right. Well, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And if you wanna keep in touch with Bill, as he mentioned at the beginning, just reach out to him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. "People are entitled to joy in work."

In this insightful conversation, Dr. Julie Taguchi, a leading hematology oncology specialist, shares her extensive experience in treating patients, the significance of estrogen and progesterone, and the implications of family history on HRT with Dr. Doug. The discussion also delves into the risks and benefits of various treatments, including tamoxifen and aromatase inhibitors, while emphasizing the importance of individualized patient care and quality of life considerations. Want to connect with Dr. Julie Taguchi? CLICK HERE: https://drjulietaguchi.com/

In this episode, Bill Bellows and Andrew Stotz dive further into acceptability versus desirability in the quality world. Is it enough that something is "good" - meets requirements - or do you need to focus on degrees of "good"? How can you tell the difference? TRANSCRIPT 0:00:02.5 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Episode, today is episode eight, Beyond Looking Good. Bill, take it away.   0:00:25.4 Bill Bellows: Hi, Andrew. How are you doing?   0:00:29.1 AS: Beyond looking good. So beyond my good looks, that's what you're saying. Okay.   0:00:33.6 BB: No, but it's funny, this beyond looking good and so I could say, Andrew, how you feeling? Oh, I'm feeling good. Right? I'm feeling good. So we have this, and that's part of why I think is funny is how are things? Things are good, things are good.   0:00:49.3 AS: Looking good.   0:00:51.0 BB: And that's what I find is, I mean, and it's not that people are necessarily honest, but when somebody says how was your day? Good. Or it could be the extreme other, and we won't use any foul language, but it's like, but I find it's just a very common, how are you feeling? Oh, I'm feeling good. Or I could say, great, which is better than good. So anyway, so I'm gonna pick up on, well first say that a heavy focus of this series, Misunderstanding Quality, is for you, quality professionals out there around the world that are excited by Deming's work, learning about Deming's work, trying to bring Dr. Deming's ideas to your organization in your quality function.   0:01:41.6 BB: Or it could be, you're elsewhere in the organization and you believe that...you're inspired to realize that there's something about how quality is managed in your organization, whether you're in design or manufacturing, which is inhibiting what you might want otherwise to do. And what I'm hoping is that the examples and concepts presented here can help you, one, absorb the ideas yourself, begin to absorb them, eventually explain them to people at work. At least once a month I'm contacted by someone listening to the podcast who says, hey, they wanna connect with me on LinkedIn, and then quite often I reach out to them and ideally end up in a conversation with them to find out more about what they're trying to do.   0:02:38.7 BB: But what I'm hoping is that this fundamental information, knowledge, wisdom is useful to you and personally learning, but then depending on what you wanna do with it, you have to engage others. And that's why I've been encouraging, and this is what I do with people I mentor, is you have to develop the ability to explain it to others. 'Cause you can't be the only one talking about these differences. You're gonna drive your coworkers nuts. You might get in a jam where somebody's confused by what you're trying to do, and you need help, or you need help in implementation, help in explaining.   0:03:17.6 BB: So I'm gonna go back to acceptability and desirability. And I was in the Finland, the Netherlands and the Sweden about a month ago with friends in each of those countries. And what came up was, again, this acceptability/desirability and that contrast. So acceptability again, as a reminder is, there's no need to know where we are within the requirements. It is absolutely good. All we know is that it meets requirements for whatever the requirements are. It is you're comfortable with good versus bad. I was talking with somebody, some clients today and we were talking about, pass versus fail. And I said, 'cause it's really a pass. Acceptability is a pass-fail system. And what does passing mean?   0:04:17.5 BB: Passing means not failing. It's like, years ago when I was a summer student working for this jet engine company in Connecticut and got together for beers one Friday night with a couple of the executives, and there were a couple of us summer interns there with these directors. Yeah. Senior directors. And one of the senior directors says to us, says, so what's the difference between business and crime? And we're like, this and this and this and this. And I don't know what our answers were, but we. And finally one of them said, no, no, no, no, no, no. He said, the basic difference is crime's illegal.   0:05:03.0 BB: So you end up with what is bad, what is bad is what's not good. And what is good, good is what's not bad. And so what is passing? Passing is not failing. And so when I was explaining to somebody today I was asking him, what's the letter grade? What letter grade? In fact, I asked a very senior NASA executive this question once. What letter grade do they expect for everything they buy that put into their missions? And he said, A plus. And I said, A plus is not the requirement. He said, what's the requirement? I said, D minus. And he is like, nah, it's not D minus. I said, your procurement system is based on things being good or things being bad. He said, yep.   0:05:45.7 BB: I said, well, what is good but passing? Right. Good is not... Good is... To be good is to not be bad, to pass is to not fail. What is crime? What is crime is what's illegal versus legal. It's one or the other. We talked once on the previous podcast about Kepner-Tregoe problem solving, decision making. And part of decision making I mentioned is you come up with a bunch of characteristics of a decision. You're buying a house and you want it to be one story, three bedrooms, two bathrooms, whatever it is. And you put down all the requirements and then you ask for each of those requirements. Is it a must or a want? And a must is yes or no. It has it or it doesn't. So it must have three bedrooms, must be one story. The must could be must be under a million dollars or whatever the number is.   0:06:53.5 BB: And then you get into, well, is that really a must or is that a high weighted want? For our daughter, Allison, I remember taking her out to buy a bike for her birthday one year and she said, well, how much can we spend? And I said, $200. So, what did she say, Andrew? "What if it's 201?" Well, then you get into, well, is that a must or a high weighted want? You know what I say? Depends on how much money's in your wallet. If you don't have $201, it is a must if you're...   0:07:34.7 AS: I thought she was gonna say, if I can get it for 150, can I keep the 50 bucks?   0:07:41.3 BB: But that's it. So acceptability is like treating it as a must. It is absolute. It has to be three bedrooms. And then what is desirability? Desirability is the lower the cost, the better, the higher the performance, the better. And so acceptability is absolute, it is good versus bad. Desirability there's relativeness. And the next thing I wanna say is why should we be interested in desirability? Which also based on what we've talked about before, is to be appreciative of desirability in regard to the Dr. Deming's Red Bead Experiment. Deming Red Bead Experiment, we had red beads and white beads the customer wanted white beads. And then one of the things we looked at was, if all the red beads are gone, can we still improve?   0:08:46.1 BB: And then people would say, well, we can make the white beads faster, we can make them cheaper, but can we make the white beads better? And the huge blind spot and asking that question to audiences on a regular basis is, they get stuck. Well, then we got into, well, what if there's variation in the white beads? So part of desirability is that there's variation in good. And that allows us to go beyond just being good to better. But what is better than? Well, better than is, I mean, what would be better for the organization would be a better appreciation of the white bead variation. One, could prevent red beads from happening in the first place. And so why do we have a gas gauge that goes anywhere from E to full? It allows us to watch the gauge go down and go down and go down.   0:09:39.7 BB: What does that? It's watching variation in good and then getting gas before it runs out. So if we use a run chart and monitor vacuum level in a braze oven if we're monitoring something on a variable way, not just saying it's good or it's bad, that allows us to see trouble coming before it happens. We could use that information to create a control chart and go one step further. And so relative to a given characteristic, what we're doing is trying to prevent non-conformances, trying to prevent bad from happening by monitoring what is good. What we can also do and what I shared is with appreciation of Dr. Taguchi's insights, the idea that the closer we are to that ideal value so when we're at home cutting the piece of wood really close to that line, why do we do that?   0:10:33.7 BB: Because at home we have to get those pieces of wood together and they're not quite square or straight, then that's extra work over there. So those are two aspects of the value proposition for desirability. And then I wanted to mention is, our son is a handyman and a pet sitter. And he is self-employed in both. And the handyman stuff involves and sometimes it involves woodworking. And recently he's doing some work in our house and some really cool stuff. So he experiments in our house, which is great for us. He also experiments in our daughter's condo. So there's great opportunities for him to practice doing something. So he was cutting some long pieces of wood and they weren't, he was very frustrated. They weren't coming out straight. So we called a friend who's a master craftsman over, and he gave us both a lesson on how to, how desirability, how to get a really straight cut, not just anywhere within spec, but you need a really straight cut so they fit together well.   0:11:38.6 BB: Well, this carpenter friend, Alex, shared with me a while ago, years ago, what it's like in the construction industry. 'Cause I explained to him acceptability, desirability, focusing on the target. And in the world of construction, he gets involved, he'll be involved on a team building a multimillion dollar home for six months to a year. And it's not uncommon he's called in to have to deal with everybody else barely meeting requirements. And his job is to go in there and straighten things up because they're not quite right. And that's all this compensation stuff. And that's what with his insights trying to help our son get around that. All right, so, I do wanna share a couple anecdotes from Rocketdyne the world of acceptability and so it was a fun story.   0:12:41.2 BB: I was meeting with a small team and one of them was a senior quality manager and in the quality organization. And he says, you know what the problem is Bill? He says, what's, you know what the problem is? He said, "the problem is the executives VP of quality and as directors are not getting the quality data fast enough." So I said, "well, what data?" And he says, "scrap and rework data. He said, "they're just not getting it fast enough." So I said, "I don't care how fast they get it it's already happened."   [laughter]   0:13:18.9 BB: And I kept saying to him, the speed doesn't matter. And so how many red beads did we have today? Well, we gotta instantly report the number of red beads on a cell phone. No. If you monitor the white bead variation, then that's a means to do that. Also say, when I joined Rocketdyne in 1990, there was a big movement on the space shuttle main engine program. And I don't know what instigated this, but Rocketdyne developed, designed and developed and then produced for many years the space shuttle main engine. I mean the world's first reusable rocket engine. And there was a movement before I got there to change the drawings. And so a set of manufacturing drawings will have a nominal value, let's say 10. And then it might be something must be 10 plus or minus one.   0:14:19.4 BB: And what does that mean in terms of acceptability? It means anything between nine and 11. And then what I learned was they'll say that the number 10, that's the nominal value. And then we have 10 plus or minus one. Well, what matters to the person downstream is not the 10 plus or minus one. What matters to the person downstream is it's gotta be between nine and 11. So no matter what that nominal is, the nominal goes out the window. So there was a movement to get rid of the nominal value. 'Cause now the machinist has to do the math, 10 plus or minus one. Okay? Anything between nine and 11. So we're gonna save you all that trouble and just give you two numbers. The min and the max. And so what is that system? That is a system based on acceptability.   0:15:07.0 BB: And so that was the starting point when I joined. And so what I wanted to add for our listeners, if you're in an organization, this came up recently with one of my clients, and they're talking about the nominal value of that 10. The 10 plus or minus one, or it could be the nominal value is 11 and they'll say 11 plus nothing minus two. And so what does that mean? 11 plus nothing means eleven's the max minus two means nine and 11. So when I saw it doesn't really matter what the nominal value is, 'cause all that's gonna happen is gonna get translated to a minimum and max. And so in this client, they're talking about nominal values, nominal values. And I said, my recommendation is when it comes to desirability, don't say nominal.   0:16:00.3 BB: 'Cause I'm not convinced we use that term the same way. What I would suggest, again, this is for those listening to the podcast on a regular basis, is don't use the word nominal. It's confusing. Use the word target. Say that is the ideal. And the idea, by using the word target, which may not be part of the vocabulary, you can differentiate from nominal, which I find to be confusing and just say that's what we want. I'm gonna give you another fun story relative to acceptability. I was at a supplier conference, so in the room are a couple hundred Rocketdyne suppliers. And the person speaking before me says, and there was some very heavy duty brow beating.   0:16:48.0 BB: And the person ahead of me says, when we give a Rocketdyne employee a job and they sign that it's good, that's their personal warranty, Andrew. That's their personal warranty. So for you suppliers, when you tell us something is good, that's your personal warranty to us. And so that has to be transmitted to your organization. That's personal warranties. We take it seriously. This is the space business, Andrew. So that was going on and there was some heavy duty browbeating. And on the one hand I'm thinking, I wonder what happened recently where somebody said, Andrew, get up there on stage and go browbeat 'em, go browbeat 'em. And so this guy's up there, browbeating, browbeating.   0:17:42.7 AS: We need people to take this serious.   0:17:44.0 BB: Well, this is personal warranty, Andrew. When you say it's good, that's your warranty. So I got up and I told the story of the bowling ball being left in the doorway of the bedroom. And I said, the fact of the matter is, Wilson gave us his personal warranty that the bowling ball was in the bedroom. And just trying to say, 'cause the personal warranty is not a personal warranty of an A plus Andrew. It's not a personal warranty. It's a personal warranty that it's good and what is good, Andrew? Not bad. And so when I hear this talk of personal warranty, it's like it's not all that it's cracked up to be. When you start to look at what is good is what's not bad.   0:18:36.4 AS: By the way, I have a funny one to share in this one. And that is, every time I start my ethics in finance class with a new batch of fourth year finance students here in Thailand, class starts at 9:00 AM and the students think that the time to arrive is somewhere a little bit before or a little bit after nine. And when they arrive at the class at 9:01 or actually just after 9:00, they find the door is locked.   0:19:12.3 BB: Yeah.   0:19:13.3 AS: And then I leave them outside. And then after about five minutes, I go out after they've built up a group of people out there and I come out and I talk to them. I said just so you know I want you to be on time for my class. Don't tell me about traffic. Don't tell me you're busy. I got a full-time job and I'm working like crazy and I'm here for you. I'm not making much money out of this. So show me the respect and be here on time. They come in, they walk in shame, past all their classmates, and then they sit down and then I lock the door again, and of course another batch comes at about 9:05 or 9:10.   0:19:46.0 AS: And then I do the same. And then I bring them in, and then next week they come and they're all there at 8:58, let's say 8:59, but nobody arrives past 9:00. And then in the following weeks, I never locked a door anymore. Curious how things change. And of course, things start to shift back to that range around it, but it just made me think about what I do in trying to communicate that, whether it's right or wrong or whatever. But I like doing it because I want the students, I wanna set the parameters from the beginning. Like, take it seriously.   0:20:26.4 BB: Oh yeah. I go to a daily meeting and it starts exactly on the hour and it's done exactly. And everybody knows that. And the degree to which things are accomplished and 'cause the whole strategy was to develop a cadence that, yeah, no, that's...   0:20:56.8 AS: And I have a hard time. I want to, with my valuation masterclass bootcamp, which I do have classes at 6:00 PM. I'm generally pretty lenient letting students come in, but there's a part of me that has... I've started locking the room after 6:03 or so, and then I'll unlock it five minutes, 10 minutes later and let a few people that are... But I've had some questions in my mind as to whether I should just be hard line and say, it starts at 6:00, if you don't make it, see you next time. Now we also record it so they can watch it. But I don't know, I haven't really figured out whether I should be that tough or not.   0:21:35.0 BB: Yeah. And that's what it comes down to. I think depending on the environment, there could be, I mean, it's about synchronizing watches, right?   0:21:48.9 AS: Well, yeah. And the other thing that you could say is that, well, Andrew, come on if you understand variation, then you understand that there's gonna be some people that are gonna be late, and there's gonna be some people that are gonna be early. You set the target at 6:00 PM what else would you expect? But I guess what I'm thinking is, if for a student they should be thinking, I need to shift my target to be 8:00, sorry, 5:55 if the meeting's at 6:00, that way I could be a little bit late, you know?   0:22:16.2 BB: Exactly.   0:22:16.7 AS: And it's same concept, it's just that shifting that target. So maybe I need to start working on that one.   0:22:25.3 BB: No and it's respect for the other 15 people in the meeting that... you know, and this idea that we are... This meeting is designed for this reason, but it has to fit the work. And, yeah, I mean, so is that necessary for a college class? Again, I mean, if it depends on how much you wanna squeeze in. And five minutes if you're trying to get a whole bunch in and develop a cadence, then, yeah.   0:23:07.6 AS: Well, it also depends. What are you teaching.   0:23:11.4 BB: Exactly.   0:23:12.5 AS: In my Valuation Masterclass about valuing companies, I've decided I'm not teaching Excel. You can go somewhere else and get that, and people ask me for it, and I let them use my Excel model that I've created, but I've just decided that's not what I'm gonna teach. And so in this case, with being an ethics class, I think it is probably important to teach about the importance of time and understanding that. And so for that, but for the bootcamp, Valuation Masterclass Bootcamp, I am trying to teach discipline and helping young people realize you gotta deliver. And so that's it. By the way you're looking good, Bill. So let us summarize beyond looking good. How would you like people to... What would you like them to take away from our discussion on this topic?   0:24:07.3 BB: It goes, this is...I mean, we started off this whole series talking about quality and the eight dimensions of quality and the book and the article by David Garvin of the Harvard Business School. So to first introduce in this series called Misunderstanding Quality, that there are dimensions of quality. And amongst those dimensions were capacity and reliability and repairability. And one was aesthetics, and one was a sense of a reputation that through everything else, you're developing a reputation. Well, one of them was acceptability, and that then was the inspiration to get into the contrast between acceptability and desirability.   0:25:05.6 BB: And there's a lot to that. And so what I found in the beginning I had a little bit in mind based on some things I've seen. And then the more I researched it, the more I saw and what I wanna get into next time is, and these are questions I was asking people in the trip to Europe is, first is, can acceptability - a focus on acceptability explain the incredible reliability of Toyota products? At least that I have experienced. Can you explain that with acceptability? And I don't think so. Next, okay, I'll go back to my notes here.   0:25:57.7 BB: Next is, does your organization, again, for those calling in, the better you understand this distinction between acceptability and desirability. Does your organization distinguish those? Does your quality system... Is your quality system based on acceptability? Does it have acceptability and desirability? That is a question for our audience. What I want to get into next time is, and I think I've mentioned this before, I've read much a great deal about Lean. I've gone to Lean conferences. I've written plenty of articles for the Lean Management Journal involving reading articles and commenting on them. Everything I see within Lean is acceptability. I don't see any mention of desirability. Six Sigma quality is that we wanna have 3.4 defects per million. There's no mention in acceptability, either explicitly or implicitly to this difference between acceptability and desirability nor in Lean.   0:27:04.9 AS: Sorry, can you clarify that for just a second? Okay. So you said Lean was one and Six Sigma was the other, which was focused on which?   0:27:13.4 BB: Well, what I'm saying is that I don't see explicitly... I don't see a call out in the Lean literature a conversation about acceptability and desirability. What I see is plenty of evidence of an acceptability-based quality mindset in Lean, in Six Sigma quality, in Lean Six Sigma, in Operational Excellence, in the Toyota Production System is what I see is a heavy emphasis directly about things being good versus bad. I don't see any inference to desirability that there's something beyond good in that system.   0:28:06.4 BB: And that's what I've been wanting to point out, is I think Dr. Deming's work is unique in its appreciation of that distinction in explaining the difference and the value of understanding when acceptability makes sense, when desirability makes sense. And that's what this whole Misunderstanding Quality series, a big part that I'm trying to introduce through my experiences is, if you're interested in moving your organization or just your personal awareness beyond a good mindset into continual improvement, that's what I'm trying to bring about in this series.   0:28:50.5 AS: Fantastic.   0:28:50.9 BB: That's my story, Andrew, and I'm sticking to it.   0:28:53.7 AS: Yeah. Exciting. Exciting. Well, Bill on behalf...   0:28:58.9 BB: It'll be on my tombstone, acceptability is not desirability.   0:29:01.7 AS: Yeah, exactly. We have accepted the death. It is acceptable. It's not desirable, but... On behalf of everyone at The Deming Institute, I want to thank you, Bill, for this discussion. Again, it's a fun one to hear what you're thinking about. And for listeners, remember to go to Deming.org to continue your journey. Any final thoughts Bill?   0:29:31.4 BB: Keep looking good Andrew, keep looking good.   0:29:34.0 AS: I wanna go beyond looking good. If you wanna keep in touch with Bill, just find him on LinkedIn. He responds. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. People are entitled to joy in work.

What if every moment of your life felt like a scene from a musical? This whimsical idea drives our exploration into the joy of spontaneous singing, from how a G-Dragon anthem can boost your confidence to the challenges of sing-alongs during movie screenings of the much-anticipated Wicked. We chuckle at the idea of imposing no-singing policies in theaters, while also considering the cultural love for karaoke in places like the Philippines. Let's imagine how creative solutions can preserve cinema etiquette while still allowing audiences to revel in their musical passions.In the world of K-Pop, power struggles and controversies make headlines, with Min Hee Jin's resignation from HYBE taking center stage. We look at the complex web of allegations, lawsuits, and industry politics surrounding her label, ADOR, and its popular artist, NewJeans. As speculation swirls about the group's future and Min's controversial work with V from BTS sparks investigation, we delve into the precarious balance of power and artistry in this competitive industry. The drama unfolds amidst a backdrop of rumored disbandments and corporate maneuvering, leaving fans and critics alike pondering what's next.Shifting gears, we celebrate the unexpected career path of former KAT-TUN member Junnosuke Taguchi as he embarks on a new journey as a host in Fukuoka. From legal woes to entrepreneurial ventures, Taguchi's post-idol life is nothing short of intriguing. His latest endeavor invites us to speculate on his charm and talent, whether on television or in the hospitality scene. With light-hearted fantasies about interacting with him in his new role, we reminisce about his enduring appeal and wish him success in his latest chapter, all while encouraging listeners to join us in this musical odyssey through the world of entertainment.Support the showPlease help Music Elixir by rating, reviewing, and sharing the episode. We appreciate your support!Follow us on:TwitterInstagram If have questions, comments, or requests click on our form:Music Elixir FormDJ Panic Blog:OK ASIA

In this episode, Bill Bellows and Andrew Stotz explore the intersection of variation and quality through awareness of the "Paradigms of Variation.” In a progression from acceptability to desirability, Bill created this 4-part model to offer economic insights for differentiating “Zero Defect” quality from “Loss Function" quality," with the aim of avoiding confusion between precision and accuracy when desirability is the choice.   Learn how to decide which paradigm your quality management system fits into! TRANSCRIPT 0:00:02.5 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. This is episode 7, The Paradigms of Variation. Bill, take it away.   0:00:30.3 Bill Bellows: Thank you, Andrew, and welcome to our listeners, as well as viewers, if you have access to the viewing version. Yeah, so I went back and listened to Episode 6. I'm going out bike riding 2-3 hours a day, so I listened to the podcast, listened to other things, stop and write down. Let me go write that down. And, so, we're going to pick up today on some major themes. And, what I keep coming back to is, is I think the difference between acceptability and desirability is the difference between how most companies operate and how a company inspired by Dr. Deming would operate.   0:01:29.3 BB: And, I just think of, if there was no difference between the two, then... Well, lemme even back up. I mentioned last time we were talking about why my wife and I buy Toyotas. And, yes, we've had one terrible buy, which I continue to talk about. [laughter] And, it's fun because it's just a reminder that even a company like Toyota can deliver a really lousy product, which we were unfortunate to have purchased. And, we're not the only ones that, and they've rebounded and they've apologized, they've had issues. There's no doubt about that. They have issues, but they have notably been inspired by Dr. Deming.   0:02:30.6 BB: The one thing I brought up last time was relative on this thinking of acceptability, desirability, where acceptability is looking at things and saying it's a quality system of good and bad. It's acceptable, which is good and unacceptable is not good. And, that's how most organizations view quality. Again, the focus of this series is Misunderstanding Quality. Our previous series was broadly looking at implications for Dr. Deming's ideas. And, here our focus is quality. And, so what I'm trying to get across here is quality management, traditional quality management.   0:03:17.4 BB: In most organizations, in all organizations I've ever interacted with is acceptability basis, good parts and bad parts. It's a measurement system of it meets requirements, we ship it, if it meets requirements, we buy it. And, I'm not saying there's anything wrong with that, but I don't think a system focused on acceptability can explain... To me, it does not explain the incredible reliability I have personally experienced in Toyota products.   0:03:46.9 BB: Now, I'm working with a graduate student and I wanna pursue that as a research topic in the spring, 'cause for all I know, the reliability of components in all cars has improved. I don't know if it's, I only by Toyota, 'cause so this woman I've met recently and I'm mentoring her and we're working on a research project. And, I thought recently, I'd like... And, I'm not sure how to do this, but I just know, I think I've mentioned I worked at my father's gas station back in the '70s and I remember replacing water pumps and alternators and all this stuff. This was before Japanese cars were everywhere. There were Japanese cars, but not like you see today.   0:04:33.3 BB: And, so I'm just used to all those components being routinely replaced. And, all I know is I don't routinely replace anything but the battery and the tires and change the oil. I think that's about it. Everything else is pretty good. But, I do think the differentiation between Toyota and most other companies is their appreciation of desirability and how to manage desirability. And, that's why I keep coming back to this as a theme for these sessions. And, what I think is a differentiation between a Deming view of quality and all other views of quality. What I tried to say last time is I just give you indications of a focus on acceptability. It's a quality system which looks at things that are good or things that are bad. It's, last time we talked about category thinking. It's black and white thinking. If the parts are good, then the mindset, if they're good, then they fit.   0:05:38.4 BB: Well, with a focus on continuum thinking, then you have the understanding that there's variation in good. And, that leads to variation in fit and variation in performance. And, that's a sense of things are relatively good, not absolutely good, whereas black and white category thinking is acceptability. They're all good. And, if they're all good, then they should all fit. I was, when I was at Rocketdyne, met, and the one thing I wanted to point out is... Again, as I said in the past, so much of what I'm sharing with the audience and people I've met through these podcasts or people I'm mentoring, helping them bring these ideas to their respective organizations or their consultants, whatever it is.   0:06:29.0 BB: And, so I like to provide examples in here for things for them to go off and try. You at the end of each podcast encourage them to reach out to me, a number of them have, and from that I've learned a great deal. And, so one guy was... A guy I was working with at Rocketdyne, he was at a site that did final assembly of rocket engine components. And, so one thing I'd say is the people who... And for those listening, if you wanna find people in your organization that would really value the difference between an acceptability focus and a desirability focus, find the people that do assembly, find the people that put things together. 'Cause the ones that machine the holes, they think all the holes are good. People that make the tubes, all the tubes are good. But, find the people that are trying to put the tubes into the holes. Those are the people I loved working with because they were the ones that felt the difference every day.   0:07:31.1 BB: And, so I was in a workshop for a week or so. And there's two people ahead of me. They came from this final assembly operation of Rocketdyne. And, during a break, I was trying to clarify some of the things I had said and I used, I shared with them an example of how when we focused on not the tubes by themselves or the holes by themselves, that we focused on how well the tubes go into the holes, which has a lot to do with the clearance between them and the idea that nobody owns the clearance. One person owns one part, one owns another. And, what we realized is if we focused on the relationship, what a big difference it made. So I'm explaining it to him and he turns to me and he says, he's like, "Oh, my God," he says, "I've got hundreds of turbine blades and a bunch of turbine wheels and the blades slide into the wheel." And he says, "I can't get the blades onto the wheel."   0:08:31.0 BB: And I said, "But they're all good." He says, "They're all good." But he said, "Well, what you're now explaining to me is why they don't go together. Why I have this headache." So I said, "Well, do you know where the blades come from?" He says, "yeah". And I said, "Do you know where the wheels come from?" He says, "yeah". I said, "Well, why don't you call them up and talk to them?" He says, "There's no reason for a phone call 'cause all they're going to say is, "Why are you calling me? They're all good." So, he just walked away with his head exploding 'cause he's got all these things.   0:09:05.8 BB: And, so I use that for our listeners is if you want to find people that would really resonate with the difference between acceptable and desirable, talk to the people that have to put things together. There you will find... And, so my strategy was, get them smart. Now they have to be patient with the people upstream 'cause the people upstream are not deliberately doing what they're doing to them. So, what you don't want to do is have them get... You want their consciousness to go up but you now wanna use them to talk to the component people. Now you've got a conversation. Otherwise, the component people say, "Why are you talking to me? Everything I do is good."   0:09:51.6 BB: So, I just want to talk at this point, just to reinforce that I think there's something going on with Toyota that is very intentional about managing desirability when it makes sense using acceptability. So, it's a choice. And, so indications of a focus on desirability is when you look at options that are acceptable and you say, "Of all these apples, I want this one. It's the ripest. Of all these donuts, I want this one. It's got the most sprinkles. Of all these parking spots, I want this one. It's a little bit wider than the other. I want this surgeon. I want this professor for this course."   0:10:33.8 BB: All right. So, what we're saying "is of all the choices, I want this one". So, some new ideas I want to get into tonight are the Paradigms of Variation A, B, C, D, and E. Paradigm A we looked at in the past. That's just acceptability. Does it meet requirements or not? The quality focus is achieving zero defects. And tonight I want to get into B and C. The next time we'll look at D and E. In explaining these ideas recently to someone who listened to one of our previous podcasts and were focusing on, he started asking about decision making. And that got me thinking about, of course, I took years ago decision making with Kepner and Tregoe. And there they talk about decisions. We're gonna look, we're gonna go buy a car, go buy a house. We're gonna make a decision.   0:11:29.4 BB: And, once you decide on the decision, you then list the criteria of the decision. And you come up with all the things you want in this decision. And then you look at each of them and you say, "is it a must or a want"? And let's say you're looking at houses. It could be a lot of houses to go look at. What makes this focus on acceptability, it's musts and wants. And must is very much acceptability. So you say: "We're looking for a house that must be one story, it must be in the middle of the block. The house must be in the middle of the block. It must have four bedrooms, must have two bathrooms". So now when you're looking at all these houses, acceptability says "I'm only gonna look at the ones that meet those requirements". And, so now the strategy is to go from hundreds of options down to an order of magnitude less.   0:12:25.1 BB: Now we're going to get it down to maybe 20. Now you look at the wants. So you've got an original list of all the things, the criteria, and you look at each one and say, "is it a must, is it a want"? And what I've just said is the first screening is all the ones that pass the must get into the next category. Well, with the Kepner-Tregoe folks, they talk about must, which is acceptability, and the wants are about desirability.   0:12:51.4 BB: And then here it ties into Dr. Taguchi's mindset, and we'll look at Taguchi in a future session. Taguchi looks at a characteristic of quality, such as the diameter of a hole, the performance of an automobile, miles per gallon. And he says, in terms of desirability, there's three different targets. There is desirability, I want the smallest possible value. So, if you're buying a house, it could be, I want the lowest possible electric bills where zero is the goal. It's not gonna be zero, but I'm looking, of all the ones that pass the must, now I'm looking at all the houses, and I'm saying "I want the lowest possible electric bill". That's a Smaller-is-Best.   0:13:35.9 BB: Larger-is-Best is I want something which is as big as possible. It could be I want the most roof facing the sun, in case I put solar in. That's a Larger-is-Best characteristic, where Taguchi would say the ideal is infinity, but the bigger, the better, as opposed to Smaller-is-Better. And, the other characteristic is what Taguchi calls Nominal-is-Best, is I have an ideal single value in mind. And in each case, the reason I point that out is that desirability is about going past acceptability and saying amongst all the things that are acceptable, I want the smallest, I want the largest, or I want this. It is a preference for one of those.   0:14:19.4 BB: So, I thought... I was using that to explain to this friend the other day, and I thought that would be nice to tie in here. That desirability is a focus on of all the things that meet requirements, now I want to go one step further. That's just not enough. All right, so now let's get into Paradigms B and C. And I want to use an exercise we used in the first series. And, the idea for our audience is imagine a quality characteristic having a lower requirement, a minimum, otherwise known as the lower spec, the lower tolerance. So, there's a minimum value, and then there's a maximum value. And, when I do this in my classes, I say "let's say the quality characteristic is the outer diameter of a tube." And, then so what I'd like the audience to appreciate is we've got a min and a max.   0:15:18.9 BB: And, then imagine your job as listener is to make the decision as to who to buy from. And. let's say we've got two suppliers that are ready to provide us with their product, these tubes that we're gonna buy. And, your job as a listener is to make the decision as to who to buy from. Who are we going to buy from? And, so we go off and we tell them, "Here's the min, here's the max," and they come back. And, they each give us a distribution. And, so what I'd like the audience to think about is a distribution. Just think very simply of two normal distributions, two Gaussian distributions. And, let's say the first distribution goes all the way from the min to the max. It takes up the entire range.   0:16:08.5 AS: So wide and flat.   0:16:12.1 BB: Wide and flat. That's supplier one. And supplier two, let's say is maybe three quarters of the way over. It's incredibly uniform. It uses a very small fraction of the tolerance. So that's tall and narrow. That's distribution two as opposed to wide and flat. So, imagine we've got those two to buy from. But imagine also, and this is a highly idealized scenario. And, I use this and this is why I want to share it with our audience. Because it becomes a great way of diving into what I think is a lot of confusion about meeting requirements. And, so what I want you to imagine is that no matter who you buy from, they both promise that they will deliver at the same price per tube.   0:17:00.8 BB: So, no matter who you buy from, price-wise, they are identical. To which I'd say that's highly idealized, but that's a given. Criteria number two, the delivery rates are the same. So, we cannot differentiate on delivery. We cannot differentiate on price. The third condition we find out is that everything they deliver meets requirements, 100%. So, if there is any scrap and rework, they don't ship that to us. So, everything they deliver meets requirements. And, again, that's highly idealized.   0:17:41.6 BB: Number four is the distributions are in control. And, that means that the processes are predictable and stable. And, that's guaranteed. So, imagine these distributions day by day every order is the same shape, the same average, the same amount of variation. Also, it will never change. It will never change. And, the other thing I want to point out in this fourth point here is that your job as the buyer is to buy these. They are used as is within our organization. , 0:18:15.5 BB: And, the fifth point is that there's a min and a max. And, so I've been using this exercise for, gosh, going back to 1995, and I throw it out there and then I show them the distributions. I say "same price, same schedule, delivery rate, everything meets requirements, distributions never change shape or location. You're going to use as is. And there's the min, there's the max. Who do you buy from?" And, I give people not only do we buy from one or two, but I also say I'll give you a third option.   0:18:51.5 BB: The third option is it doesn't matter. It doesn't matter. So, what I find is that three quarters of the audience will take distribution two, the narrow one. And when I ask them, why do you like distribution two? They say, "because it has less variation". I then say, "From what?" Then they say, "From each other." And, that's what a standard deviation is, variation from each other. So roughly 75% plus and minus...   [overlapping conversation]   0:19:25.8 AS: When you say of each other, you're talking about each other curve or each other item in the...   0:19:31.3 BB: Each other tube.  So, the amount of variation from all the tubes are close together, so the variation from each other.   0:19:38.6 AS: Okay. Each item. Yeah, okay.   0:19:41.8 BB: Standard deviation is the average variation from the average value. So, when I ask them, why do you like two? Okay, and then I asked the ones who take the wide one in the middle, I say, "why do you like that one," and they say because... And, actually, we'll come back to that. This is pretty funny. They will take that, but a very small percent say it doesn't matter, and here's what's interesting, if I didn't show the distributions, if all I did was say there's two suppliers out there, the same price, same schedule, that guarantee zero defects, the results will never change. Here's the min, here's the max, I'm willing to bet if I didn't show the distributions, people would say "it doesn't matter, I'll take either one". But, as soon as I show them the distributions, they want the narrow one. And, I use this for our attendees, this is a great way to show people that they really don't believe in tolerances, 'cause as soon as you go past meeting requirements, what you're really saying is, there's a higher bar.   0:21:05.6 AS: Okay, so requirements would be... Or, tolerances would be the extremes of that flat, wide curve. And, any one of those outcomes meets the tolerance.   0:21:17.5 BB: Yes, and so for companies that are striving to meet requirements, why is it when I give you two distributions that meet requirements... Why is it when I show you the distributions, and I'm willing to bet if I don't show you the distributions and all you know is they're 100% good, then you say "well, it doesn't matter," Well then what changes when I show you the distributions?   0:21:43.6 AS: I know why I'd choose the narrow one.   0:21:48.1 BB: Go ahead.   0:21:49.1 AS: I know how damn hard it is to reduce variation and I forget about any tolerance of anything, if I have two companies that show me a wide distribution, and another one shows me a narrow one, and let's say it's accurate. I'm much more impressed with how a company can do the same exact output as another company, the same product that they're trying to deliver, but they are producing a much more narrow range of outcome, which could be that they just have automation in their production line and the other one has manual.   0:22:27.4 BB: And, I have seen that within Rocketdyne, I've seen processes do that. I have seen the wide become the narrow through automation. Yeah. Okay, so hold that thought then. So, what I do in my graduate classes is I show that... Not only do I give them two options, I give them four options. So, I throw in two other distributions, but really what it comes down to is the wide one versus the narrow one, and then the other two, I throw in there that usually aren't taken, they're distractions. All right, so what I'll do in a graduate class in quality management is to show that and get the results I just showed. If I present the same exercise and then say, "imagine the average value of distribution one, the middle of distribution one, imagine that is the ideal value".   0:23:24.7 AS: That, you're talking about the wide and flat.   0:23:28.4 BB: Yes. So, all I do is I go back to the entire exercise and now I add in a line at the average of the wide distribution, and then go through and ask one more time, who would you take.   0:23:46.3 AS: So, now the dilemma that the listener has is that now we have a, within limits, within tolerances, we have a wide but flat distribution that's centered on the middle point between the upper and lower tolerance.   0:24:06.4 BB: Yeah, yes.   0:24:08.8 AS: And, then we have... Go ahead.   0:24:11.7 BB: Well, yeah, that is distribution one, same as the first part, we went through this, and all I'm doing now is saying, "imagine the average value of the middle is said to be the ideal value".   0:24:29.4 AS: And, now you're gonna tell us that the narrow one is not on that central or ideal value.   0:24:36.2 BB: No, that is still where it is at the three-quarter point, all I've done is now said, this is desirability. I'm now saying "that is the ideal value, that is the target, that is the value we prefer". And, people still take the narrowest distribution number two.   0:24:58.8 AS: I wouldn't take the narrow one because I would think that the company would have to prove to me that they can shift that narrow curve.   0:25:06.6 BB: Well, okay, and I'm glad you brought that up because according to the explanation I gave of equal price, equal schedule, meets requirements. I deliberately put in the criteria that you have to use them as is. So, now I'm forcing people to choose between the narrowest one over there at the three-quarter point, and the wide one on target. And, there's no doubt if I gave them the option of taking the narrow distribution and sliding it over, they would. Every single person would do that. But, when I give you a choice of, okay, now what? So, two things here, one is, is it calling out the ideal of value, 'cause desirability is not just beyond acceptability, it is saying, "I desire this value, I want this parking spot, I want this apple, I want this value". And, that's something we've been alluding to earlier, but that's what I wanna call out today is that...   0:26:13.7 BB: So, in other words, when I presented the exercise of the two distributions, without calling out what's desirable, all I'm doing is saying they're both acceptable, which do you prefer? But, instead of saying it doesn't matter, I'd like the narrowest one, and it may well be what people are doing is exactly what you're saying is the narrowest one seems better and easily could be for what you explained.   0:26:40.8 BB: But, what's interesting is, even when I call out what's desirable as the value, people will take the narrowest distribution, and so now what I wanna add to our prior conversation is Paradigm A, acceptability, the Paradigm A response would be, it doesn't matter. Choosing the narrowest one, otherwise known as precision, we're very precisely hitting that value, small standard deviation, that's what I refer to as Paradigm B, piece-to -piece consistency. Paradigm C is desirability being on the ideal value, that's piece-to-target consistency. And, in Dr. Taguchi's work, what he's talking about is the impact downstream of not just looking at the tubes, but when you look at how the tubes are inserted into a hole, perhaps, then what he's saying is that the reason you would call out the desirable value is what you're saying is how this tube integrates in a bigger system matters, which is why I want this value.   0:27:54.2 AS: Okay, so let's go back, A, meet requirements, that's acceptability. Anything within those tolerances we can accept. B is a narrow distribution, what you called precision or piece-to -piece consistency. And what was C?   0:28:12.8 BB: C is, I'll take the wide distribution where the average value is on target, that's piece- to-target consistency. Otherwise known as accuracy.   0:28:27.3 AS: Okay. Target consistency, otherwise known as accuracy. All right, and then precision around D is precision around the ideal value.   0:28:37.7 BB: Well, for those that want to take the narrowest one and slide it over, what you're now doing is saying, "I'm gonna start with precision, and I'm going to focus on the ideal". Now, what you're doing is saying, "step one is precision, step two is accuracy".   0:28:56.4 AS: Okay. And step three or D?   0:29:00.9 BB: Paradigm D?   0:29:02.7 AS: Yeah.   0:29:02.7 BB: Is that what you're... Yeah. Paradigm D would be the ability to produce, to move the distribution as needed to different locations.   0:29:17.4 AS: The narrow distribution?   0:29:18.9 BB: Yes, and so I'll give you an example in terms of, let's say tennis, Paradigm A in tennis is just to get the ball across the net. I just wanna get it somewhere on the other side of the court, right. Now that may be okay if you and I are neighbors, but that doesn't get us into professional level. Paradigm B, is I can hit it consistently to one place on your side of the court. Now, I can't control that location, but boy, I can get that location every single time. Next thing you know, you know exactly where the ball is going, and that's Paradigm B.  Paradigm C is I can move it to where I want it to go, which you will eventually figure out, so I can control where it goes. Paradigm D is I can consistently hit any side of the court on the fly.   0:30:11.0 BB: So, Paradigm D is I can take that narrow distribution and move it around for different customers, different applications, and Dr. Taguchi refers to that as Technology Development, and what Taguchi is talking about is developing a technology which has incredible precision in providing your sales people the ability to move the next move it to accuracy and to sell that product by tuning it to different customers as you would in sports, move the ball around to the other side of the court. So now you're going to the point that you've got incredible precision, and now you've got “on demand accuracy,” that's Paradigm D.  Paradigm C is I can do one-size-fits-all which is, which may be all you need for the application.   0:31:06.9 AS: I wanna separate the Paradigm B, the narrow distribution and that's precision around some value versus Paradigm D is precision around the ideal value.   0:31:20.7 BB: And, the idea is that desirability is about an ideal value. And, so if we're talking piece-to-piece consistency, that means it's uniform, but I'm not paying attention to... I have a value in mind that I want. And that's the difference between Dr. Taguchi's work, I mean, it's the ability to be precise. Again, accuracy, desirability is I have an ideal value in mind. And acceptability is it doesn't really matter.  Precision is uniformity without accuracy. And so, if you are... What Dr. Taguchi is talking about is, is depending on how what you're delivering integrates, being consistent may cause the person downstream to consistently need a hammer to get the tube into the hole.   0:32:24.2 BB: So, it's consistent, but what you're now saying, what Taguchi is saying is, if you pay attention to where you are within requirement, which is desirability, then you can improve integration. And, that is my explanation for why Toyota's products have incredibly reliability, that they are focusing on integration, not just uniformity and precision by itself.   0:32:49.8 AS: I would love to put this in the context of a dart thrower. The Paradigm A meeting requirability or acceptability, they stand way behind and they throw and they hit the overall dart board.   0:33:04.3 BB: Dart board. It's on the board. Yes.   0:33:07.2 AS: And, the narrow distribution is, well, they hit the same spot over to the left, right towards the edge, they hit that spot consistently. And, then basically, I'm gonna jump to D just because I'm imagining that I'm just gonna ask the guy, Hey, can you just move over just a little bit, and I'mma move them over about a half a foot, and when I do, you're gonna start throwing that dart right at the same location, but over to the right, meaning at the target. The center of the dart...   0:33:43.9 BB: The bull's eye. Yeah. Yeah, well, that's... And you call that C or D?   0:33:47.6 AS: I call that D.   0:33:49.5 BB: No, I would say, let's call that C being on target, meaning that C is, for games of darts where the most points are being on the bull's eye, that's Paradigm C.   0:34:04.0 AS: So accuracy, yeah.   0:34:05.4 BB: Paradigm D would be a game in which the ideal value changes. So now, okay, now I watch the... When I play darts, I'm sure there's lots of darts games, but one game we used to play it in our cellar at home was baseball. So, the dart board is divided into has numbers one, two, three through, and you'd go to... There'd be a wedge number one, a wedge number two, a wedge number three, that's Paradigm D that I could hit the different wedges on demand. But that's what it is. So A is anywhere in. B is consistent, precision, but again, the idea is if you can move that, but now what we're talking about is, is there an impulse to move it or are we happy just being precise? What Taguchi's talking about is the value proposition of desirability is to take precision, take that uniformity and move it to the ideal value, and what you've just done and doing so, you're now focusing on not this characteristic in isolation, you're now focusing on how this characteristic meshes with another characteristic. And, it's not just one thing in isolation, one thing in isolation does not give you a highly reliable automobile.   0:35:38.9 AS: Is there anything you wanna add to that, or are you ready to sum it up?   0:35:45.0 BB: No, that's it. The big summation is, we've been building up to the contrast between acceptable and desirable. I just wanted to add some more fidelity. Desirable is I have a value in mind, which Dr. Taguchi referred to as a target. So, for people at home, in the kitchen, the target value could be exactly one cup of flour. We talked earlier about our daughter, when she worked in a coffee shop and then, and at home she'd give us these recipes for making coffee and it'd be dad, exactly this amount of coffee and exactly that. And, we had a scale, it wasn't just anywhere between. She'd say "dad, you have to get a scale." I mean she was... We started calling her the coffee snob, 'cause it was very, this amount, this amount. So, in the kitchen then it's about precisely one cup. Precisely one this. And that's desirability.   0:36:40.6 AS: And, I was just thinking, the best word for that is bull's eye!   0:36:48.3 BB: Yes.   0:36:48.8 AS: You hit it right on the spot.   0:36:50.6 BB: Yeah.   0:36:51.6 AS: Great. Well, Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion. It was not only acceptable, it was desirable. For listeners, remember to go to deming.org to continue your journey. And, if you want to keep in touch with Bill, just find him on LinkedIn. He'll reply. This is your host, Andrew Stotz, and I leave you with one of my favorite quotes from Dr. Deming, "people are entitled to joy in work."

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Is quality simply a matter of two categories: good and bad? But then how do you get to "better"? In this episode, Bill Bellows and Andrew Stotz discuss categories and continuum thinking. TRANSCRIPT 0:00:02.4 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W Edwards Deming. Today I'm continuing my discussion with Bill Bellows who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. And today is episode six, Category Thinking and Continuum Thinking. Bill, take it away.   0:00:27.9 Bill Bellows: Welcome Andrew great to see you again. All right, so in podcast five, I went back and it was just posted by The Deming Institute. And I just wanna clarify again on the topic of acceptability and desirability. Where we're going tonight is looking at acceptability and desirability in a little bit more detail, a little bit differently, but those are still the prevailing themes. And again, I just wanna reinforce that none of this is to imply that desirability is better than acceptability. What's important is to be aware of when I'm using acceptability thinking. And when I'm using desirability thinking and use the one that makes the most sense in that situation. We were talking earlier about companies whose products we enjoy using and we're loyal to them. And I mentioned that my wife and I have developed a loyalty to Toyota products.   0:01:40.4 BB: Going back to 1989 was our first Toyota product. And I knew I wanted a pickup truck. 'Cause I was borrowing a pickup truck from a number of friends and I thought, I really like a pickup truck. There's a lot you can do with a pickup truck. So, I knew I wanted a pickup truck. And I knew from having worked in my father's gas station, I had reason to believe I wanted a Japanese pickup truck and not an American pickup truck. So, I then it was a question of is it a Mazda, Toyota.   0:02:11.1 AS: Nissan.   0:02:13.2 BB: Sorry Nissan. And I looked at all of them and yeah I just all I knew is I was gonna be one of those. And I think the major reason I went with... My wife and I went with a Toyota... I don't think the prices were that different. But it just had a, it was the styling was a little bit better. But I did not... That's why I bought it.   0:02:46.5 AS: The loyalty wasn't built yet.   0:02:49.0 BB: No I knew to stay away... I knew I had seen plenty of examples of... Well, I had traded in my first car that my father, my parents got me when I was in college was a 1975 Chevy Nova. Four door Chevy Nova. And the reason four doors is important is a... If it was a two door, the door would be longer. But it was a four door. By the time I gave that car to a friend, the engine was running beautifully but the body was falling apart. And, so, by the time I sold it to get the pickup truck, in order to get out of it, I'd have to throw my shoulder into the driver's door. Why? Because the door droop was so great that when you close the door, I mean the door drooped and this is not a four door, this is a two door. So, imagine if it was a two door the door would be even heavier. So, on a four door, the door drooped. And, so, when you closed it, you'd had to lift it and then close it in order to get out you had to... Oh, it's just my wife couldn't drive. It was just a nuisance.   0:04:17.6 AS: And, that in '75 was just about when the Japanese were really starting to go after the US car makers. And but I want to tell you just a quick one. I can't remember if I've told you, but I used to have a 1963 Lincoln Continental here in beautiful Bangkok. And I owned it for 10 years. And then eventually I sold it. But what a beautiful car. And people always ask me the same thing and they said, isn't it hard to take care of? And I said, you gotta remember back in those days, cars were simple.   0:04:49.1 BB: Yeah, yeah. So, the... So, with... So, the experience of 14 years or so, with the '75 Chevy Nova. And the door was like the straw that broke the camel's back. It just done with this, all right. So, we're gonna buy Japanese, bought a Toyota. That was the first one. And I think I've mentioned in the first podcast I mentioned that we had a 1998 Toyota Sienna, which is their first, it was their Toyota third attempt at a minivan. The first one I think was underpowered, the second one... And we knew we wanted a minivan. It was time, the kids were getting a little bit bigger. It was time for minivan. And just as we were ready to go buy it, they had a... I think a competitor came out with dual sliding doors. Dual sliding doors. And, so, instead of Toyota coming out with a one sliding door, they stepped back. I think Chrysler came out with two sliding doors. And they figured we can't come to market with one sliding door. They've got two sliding doors. So, then we waited another year and they finally came out and given all of our delight with the Toyota pickup truck, boom, that's what we wanted. And then the transmission failed, six months later with 10,000 miles in the car.   0:06:18.5 BB: And I have a photo of that. Not only did the transmission fail at 10,000 miles, but it failed on Christmas morning on our way to see friends about an hour away. And this guy, people were going to see, he knew I loved Toyota. And when he drove to pick us up, we transferred everything from that to his Ford F-150. He says to me... So, then we had to have the car towed on a flatbed to his house and the next day to the dealership, what a nuisance headache. But when he showed up, he looks at me knowing that I like Toyota. And he says, how's this data point change your theory about Toyota?   0:07:06.5 AS: I thought he was gonna say, if it was me, I would've said pop in the back.   0:07:12.6 BB: And I was like, yeah, that really hurts. Well when I shared that story with students at Northwestern's Business School, the Kellogg Business School, their advice and these are students that had worked in all different industries from Coke to banking, and a number of 'em have worked in the auto industry. And their advice was, I said, Professor Bellows never buy anyone's first model year, even Toyota. Now I have a friend who he and his wife bought the same model year Toyota Sienna. They did not have a problem.  Oe did. When I met at a Deming conference, a guy who worked in Georgetown, Kentucky which is where the Sienna was made. And, so, I met him at a conference and when he said he worked for Toyota, I said, oh, my wife and I buy nothing but Toyotas. He says, oh. And I said, we have a first model...   0:08:08.6 BB: Year Sienna. And everything was good. And then I'm thinking, I'm gonna ask the guy a question. And I looked straight in his eyes. We were pretty close together. And I'm about to ask him a question. I'm looking straight in his eyes and I said, we got a Toyota Sienna. He says, how do you like it? And I looked right at him and I said, the transmission failed at 10,000 miles. And he rolled his eyes. And I said, so, you know about this. It wasn't a look of shock. It was, yeah, all right. So, I said, all right, all right. Your expression just told me that you know something about this. I said, what's up? He says, we tried. This is so cool. He says, we tried to save a few pennies on a bearing.   0:09:00.8 BB: I said, you did but what you did cost me more than you saved. So, yeah you guys saved a few pennies on a bearing and cost my wife weeks of aggravation to have it towed from where it happened to the place we were going because it Christmas Day, it broke. Everything's shut down on Christmas days. You can't have it right? And, so, we had it towed, had to get a rental car. Then they're complaining about, we had... Who authorized this rental car? We only pay... It was just headache after headache. But we still buy Toyota Andrew. We still buy Toyota. Why? Because I'm afraid to buy from anybody else. Well, part of the reason I wanted to share that with our audience is I buy Toyota products based on value. And I believe that the best value we get in transportation, personal transportation is the money we spend buying a Toyota most often brand new. We've also bought some used, got great use out of them, never had a problem, anything like what I just shared with you. And that's having owned five or six different Toyotas. I mean, right now in our family we have three of them.   0:10:16.7 AS: I think I need to correct you.   0:10:19.1 BB: Go ahead.   0:10:19.9 AS: You buy Toyotas on value and values.   0:10:25.7 BB: Yes!   0:10:28.2 AS: You're aligned with their values and therefore you're willing to look beyond the mistakes and problems that it comes with every product, every service, every company, because you're aligned with their values.   0:10:42.2 BB: Well, what's funny is when we bought the Sienna and we're talking with 'em, doing the driving and signed agree to buy it, that's the color we want. We want these seats, blah, blah, blah. And then you go talk to the closer and the closer's a guy, the gal at the dealership that wants to add on the undercoating and the this and the this and the this and the this. And he wanted to sell us at a premium price, this extended warranty and I dunno what it costs, but I said, I've done a whole lot of research. And he says to me it's so funny. He says, when these things break down, a circuit board breaks and that'll cost you this and this and this, and, so, I'm gonna sign you up for the insurance policy, the extra coverage. And I said, no, and he is going on and on. And I said, look it, I've done a lot of research into how they're made and I said, and the values of that organization. So, I said, the reason we buy Toyota is that I have an understanding, a pretty damn good understanding of how they manage the product, the pieces and how it all comes together. And he's pushing back at me. Finally, I said, I teach university courses on how Toyota operates and their quality system.   0:12:14.8 BB: So, we didn't get the extra coverage. Now it was still covered under warranty, so, it was kind of laughable that. But anyways, the reason I bring that up is that...   0:12:27.3 AS: Before you do that, I want to just say for the listeners and viewers out there, what is the messaging from a corporate strategy perspective? And that is have values that you stand for. Communicate those to the market, stay loyal to them and the customers who align with those values will stick with you through the hard times that you're gonna definitely have. There's a quote by Alexander Hamilton says, "those who stand for nothing, fall for everything." If you do not stand for a clear set of values that the market can perceive, then people are gonna fall away from you as soon as times get tough.   0:13:07.2 BB: Oh yeah. And I...I, I. It's about that and that's why I've read lots about Toyota. How they operate written by people outside of Toyota trying to explain it, people inside of Toyota and their explanations. But part of the reason I bring this up is my fascination, my interest in Dr. Deming's philosophy, is a great deal to do with his system is based on an incredible appreciation of the difference between acceptability and desirability. All other quality management systems, whether it's the quality management within Lean is acceptability based, good parts and bad parts, Operational Excellence, Six Sigma Quality. In fact, there's a quote at the end of chapter 10 in "The New Economics". And chapter 10 was the original last chapter until the third edition came out. In which case there's chapter 11 written in large part by Kelly Allen, a good friend.   0:14:15.1 BB: And when chapter 10 was the end I thought it was pretty cool that at the very end of chapter 10. The last few pages of chapter 10 of “The New Economics” are about Dr. Taguchi's loss function. And this is what turned me on to Dr. Taguchi, was finding “The New Economics" in a brick and mortar bookstore. I knew from ASQ Quality Progress that this was coming out. So, I remember when it came out, this was before Amazon, going to the bookstore. Going through it and saying what does this guy think about Taguchi? Because Taguchi was my, the one I really idolized. And I opened it up and I turned to chapter 10 and it's all about the loss function, the problem and I thought this is way cool. So, the closing quote... The closing... The last sentence in chapter 10 which again was the original last chapter until third edition came out, is the following "Conformance to specifications," that's acceptability, "zero defects," that's acceptability. "Six Sigma quality," which is acceptability "and all other specification-based nostrums all miss the point, ,stated by Donald J. Wheeler."   0:15:42.6 BB: So, then I looked up, but what is a nostrum? And Dr. Deming not Dr. Deming a nostrum is defined as “quack medicine.”  So, "Conformance to specifications, zero defect, Six Sigma quality, and all other specification-based nostrums all miss the point." And, so, I wrote an article about this, gosh, 20 years ago. I said, what's the point? And my explanation, the point is, all of them are about managing parts in isolation. Looking at things in isolation. Again that's acceptability. And as I said earlier, I'm not saying acceptability is bad, I'm just saying acceptability is not desirability. And the other thing I wanna add is, why do I... My wife and I love Toyota products. I've got reason to believe through a lot of research and talking, sharing the ideas that we talk about in these podcasts with people within Toyota. And they have a desirability focus that nobody else... That I'm not aware of anybody else has.   0:16:54.9 BB: And, that's having presented around the world doing classes, at Kellogg Business School, at university. Yeah, the Kellogg Business School Northwestern University. I teach online classes at Cal State Northridge, Southern Utah University. I've lectured at many universities. And I never had anyone come to me working in industry saying, Bill, what you're talking about, we practice where I work. No. And, so, for those that are pursuing the Toyota Production System stuff. My response is, I don't buy Toyota products because they use the Toyota Production System. Now, that may help with getting the car to market faster. But I don't believe the Toyota Production System is why people buy Toyota products. I believe Toyota's quality management system... At least I buy Toyotas because I believe their quality management system, inspired by Dr. Taguchi, inspired by Dr. Deming, is providing something that nobody else has in many industries. All right. So, I wanted to get that out.   0:18:06.7 AS: So, are you saying Toyota Production System is more of a tool that is in their toolbox of quality management system?   0:18:18.4 BB: Um, the Toyota Production System is classic Industrial Engineering.   0:18:26.8 AS: Right.   0:18:27.0 BB: It's how to...   0:18:28.3 AS: It's a natural.   0:18:30.5 BB: How to improve flow, how to improve throughput by minimizing number of steps, by minimizing inventory. It's highly credited to Taiichi Ohno, who was mentored by the founder of the Toyota Motor Company. And it's all about, they don't have a lot of money. So, we need minimal inventory, minimum steps. So, it's like... So, the Toyota Production System is an efficiency based system based on, we don't have a lot of money, we're not gonna buy a lot of inventory. But the quality aspect of the Toyota Production System everywhere, everything I've written, everything I've read by people describing the Toyota Production System it's all explained by acceptability. So, that they may be moving things closer together so people don't walk so far.   0:19:27.8 BB: But what I'm looking at with Dr. Deming's work inspired by Dr. Taguchi is what is it about the quality system that causes those parts to come together so well and the products to perform so well? So, it's not just having the parts when I reach out, the part is there, but those parts integrate better. I've mentioned in the first podcast series that Toyota had 100% snap-fit pickup truck in 1969 at a time when Ford was banging things together using rubber mallets to get the parts together. They took apart and assembled a Toyota pickup truck twice 'cause they didn't believe the results the first time the parts went together without mallets. That's what I'm talking about, that within that system, the ability for the parts to come together to work together cannot be explained by an acceptability based system. And, so, having spoken with people and having the opportunity to share with people within Toyota the ideas we talk about inspired by Dr. Deming, I've learned that they do desirability in a way that nobody... I'm not aware of anyone else having done.   0:20:48.5 BB: All right, so, what I want to get into, add to the discussion tonight, relative to category thinking, is this idea of category thinking, continuum thinking. Category thinking quite simply is putting things in categories. So, in acceptability we have two categories, good or bad, or maybe three categories. It's good or it's scrap or it's rework. So, category thinking is generically putting things into categories. And so, we could look at category... Categories could be... There could be two categories, three categories.   0:21:27.1 BB: It's been a while since I've gone to see a movie, but I believe they still have a rating system of PG, PG-13, R, R-17, maybe X. Those are categories. Fruits and vegetables. Those are two high level categories. Within each of those categories, we have types of, we have apples and oranges, and within them we have types of apples. That's all category thinking. You go into a supermarket and every aisle... There's the cereal aisle. That's a category. There's the canned goods, those are categories. Religions - talk about categories. So, every religion you look at is its own category. And, then within those categories they have subcategories. How about music? How many categories in music are there Andrew?   0:22:18.9 AS: Well, it gets all messed up on my iTunes where I'm like, that's not heavy metal. That's rock.   0:22:28.6 BB: Yeah. And then there's types of rock. In the beginning it was rock and roll, and then there's types of rock and roll.   0:22:34.0 AS: Progressive rock.   0:22:34.0 BB: Progressive rock. And then we have people... So, what category would we put... I think somebody asked Lucinda Williams, we're going to see her in a few weeks. So, what category? Well, she doesn't fit a category. So, that's category thinking. Category thinking is putting things in categories. We could say, where did you go to college? That's a category. These are USC grads, those are Cal State grads. And, part of the point I want to make is that we use category thinking all the time. Putting people in categories is what we do. Such as you and our daughter are Cal State graduates.   0:23:17.6 BB: And, so, what degrees do they have? Those are categories. So, I don't know what we would do if we couldn't put things in the categories. So, I don't think category, putting people in category is not a bad thing. Now, when you start to associate values with the categories, now we're getting into racism or sexism and then, okay. But this idea that putting people in categories is a bad thing, I'd say category thinking is our simple way of organizing everything around us and these little file cabinets. Now added to that is when you put four or five things into a category, then what you're implying is that they're all the same. And that gets into acceptability.   0:24:12.8 BB: So, if this is a good part, that's a good part. That's a bad part. That's a good part. So, all the good parts go into the good part category. Then we say, oh, these are all good. Then we get into the sense of, and they're interchangeable. Well, maybe not. And that has to do with what I call continuum thinking. All right, so before we get to continuum thinking, Andrew, remember the question. What do you call the person who graduates last in their class of medical school?   0:24:43.3 AS: I don't remember that.   0:24:45.2 BB: Okay, so take a wild guess, Andrew, putting the pressure on, what do you call the person that graduates last in his or her class in medical school?   0:24:55.7 AS: Surgeon general.   0:24:56.9 BB: What's cool is that's a question I've been able to ask all around the world. Now, depending on where I go, I can't talk about baseball because they don't understand baseball. Or depending on where I go, I can't say soccer or I have to say football. Then if I say football, I have to say, well, I mean your football, not American football. But what's neat about this question, what do you call the person that graduates last in their class in medical school, that's "doctor." That's also acceptability thinking. From the first in class to the last in class, they all met requirements. Andrew, you know what that is? Acceptability. So, category thinking is a form... Acceptability is a form of category thinking. All right. Now I'm gonna give you three numbers and I'm going to ask you which two of the three are closest to being the same. You ready?   0:25:58.0 AS: Yep.   0:26:01.7 BB: 5.001, 5.999 and 6.001.   0:26:11.1 AS: 5.999 and 6.001.   0:26:17.6 BB: Are close to being the same?   0:26:18.8 AS: Yeah.   0:26:20.2 S3: That's what most people think. Okay. But...   0:26:25.7 AS: One's a six and one's a five. That's a problem.   0:26:29.5 BB: All right. And, so, again, the numbers were 5.001, 5.999 and 6.001. And the question is, which two of the three are close to being the same? And, what most people will say is 5.999 and 6.001, which infers that what does same mean?   0:26:48.5 AS: The integers?   0:26:49.1 BB: If you answered.   0:26:49.9 AS: I looked at the integers at the end rather than the whole number at the beginning.   0:26:56.7 BB: But is it safe to say you chose those numbers by saying they were closest together?   0:27:01.6 AS: Correct. Yes.   0:27:03.2 BB: So, in your case you're saying, if I plot those numbers from zero to infinity. Then those two are really close together. That's one definition of same is proximity. But, same could also be, they begin with five, in which case the first two are close to being the same. 'cause they both begin with five or they're both less than six. Or, I could say 5.001 and 6.001, because they both end in .001. So, it turns out there's three answers to the question. But the answer of the last two and proximity is what category is what continuum thinking is about. On a continuum these two are closest together. All right.   0:27:51.2 AS: And I have to tell you, we're gonna be running out of time, so we gotta wrap this up.   0:27:55.4 BB: All right. So, when I asked you the question, what do you call the person who graduates last in their class of medical school? And you said doctor, that's category thinking. If you used... Well actually the thing is, if I ask, what do you call the person who graduates last in their class at the United States, US Army's Military Academy, known as West Point, one answer is Second Lieutenant. 'cause they're all Second Lieutenants. But West Point uses continuum thinking to define the very last person in their class. So, it's the last person in class is not called second lieutenant. The last person in the class is called goat, as in the animal.   0:28:43.2 BB: And a very famous goat at West Point, who from my reading, was very proud to have graduated last because there's... I think Mike Pompeo, who was Secretary of State under president Trump, was first in his class at West Point, first in his class. A very famous, I wanna be the last person in my graduating class at West Point was George Custer. You've heard of him?   0:29:14.3 AS: Yep.   0:29:15.5 BB: And, he was deliberately lazy, so he wanted to be the very last person in his class. But that's, but the idea is that category thinking says they're all Second Lieutenants, they're all doctors. Continuum thinking is when you say this is the first, this is the second, this is the third. And when you come up, when you start to order them and say, the last one is goat, that's looking at things on a continuum, which is continuum thinking. Well, given that most quality systems, including Boeing's Advanced Quality System, are based on category thinking and category thinking, you have good parts and bad parts. When I ask a question as I brought up in the podcast five. I said I go to audiences and ask, how much time do you spend discussing parts which are good, that arrive on time? And the answer is none. And I say, well why is that? 'Cause in that system they're focusing on taking things from bad to good. And then what? Stopping at good.   0:30:20.0 BB: Well, part of the thing I wanna get across in this episode is the reason we're stuck in that model of stopping at good is because the quality system is based on category thinking of bad and good. And in a world of good and bad, there is no better. In a world of short and tall, there is no taller. And, so, continuum thinking allows us to go beyond that. And, so, going back to Dr. Deming's quote, conformance requirements, which is category thinking, zero defect, Six Sigma quality, those are all category based systems, which means it's good parts and bad parts. But then I come back to how does a system which is based on good parts and bad parts deliver such incredible reliability in the products? And, I believe it's because they're using continuum thinking. Not... And again not continuum thinking everywhere, but I think they have very judiciously figured out where to use continuum thinking and that is their differentiator. In my admiration for Dr. Deming's System of Profound Knowledge is, I've not come across any other type of management theory, which has that level of fidelity to explain that. And, in order to practice continuum thinking, implement it, you have to work together.   0:31:43.9 AS: And I'm gonna wrap this up by... One of the revelations that I come upon when I listen to what you're saying is. That's also what makes Deming's teachings sometimes hard to grasp, because there is no clear category and there is no clear beginning and end. There is no certification and therefore it's just hard for us who are used to being in categories to grasp. And that's my conclusion what I draw from everything you've just said.   0:32:16.6 BB: Well and let me add to that, really appreciate you saying that. Let me add to that,much of what I was doing at Rocketdyne... When I began to appreciate that the reason I was focusing on solving problems, solving problems and the problems we didn't solve were the problems where the customer, NASA said, we're gonna take this work and take it to the company down the street because you guys can't make it happen.  And, that scared the hell out of me that we're gonna lose this work to competitors because... And when I looked at it, was why are we stuck?  And I looked at Dr. Deming's work, the reason we're stuck is we're... 'cause our quality system is based on good parts and bad parts. We're waiting for trouble to happen. And, so, but still what I found is, and when I started to focus on... I went from being 100% Taguchi to more about Dr. Deming's work and trying to come up with everyday examples to make Dr. Deming's work more accessible.   0:33:16.9 BB: So, in Dr. Deming's work, you're not gonna find category thinking, continuum thinking. So many of the concepts we talk about in this series, in the prior series are... I refer to them as InThinking Concepts, just trying to make it easier for people to begin to absorb the brilliance of Dr. Deming's work. Because, I think absent that, when he says quality, what kind of quality is he talking about? Acceptability quality, desirability quality. So, I'm with you, I think the work is brilliant. I'm just hoping through our conversations and these podcasts that we can make his work far more accessible.   0:33:56.4 AS: Yep. Well, I think we're doing that. And Bill, on behalf of everyone at The Deming Institute and the audience, I wanna thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. Of course, if you wanna keep in touch with Bill, just find him on LinkedIn. This is your host Andrew Stotz. And I'm gonna leave you with one of my favorite quotes from Dr. Deming. "People are entitled to joy in work."

What can Dr. Deming's famous Red Bead Experiment teach us about quality? What happens when you only focus on the bad, and ignore the good? In this episode Bill Bellows and Andrew Stotz discuss acceptability vs desirability in the context of the Red Beads and a few of the 14 Points for Management. 0:00:02.1 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussions with Bill Bellows who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. This is episode 5 of the Misunderstanding Quality series and the title is "The Red Bead Experiment." Bill take it away.   0:00:30.4 Bill: Thank you, Andrew, and welcome back. Welcome back to our listeners. One thing I want to say is, one is I listen to every podcast two or three times, listening for, is there a need for clarification, reminding myself, thinking, oh, I should have said this. Or sometimes I say, oh, make sure you make this point, and I do or I don't. And. so one is, nothing comes up from the last one that I thought I missed or mispronounced, but what I do want to clarify is, I'm viewing the target audience as quality professionals in your respective organization or people that want to become a quality professional that are learning, that are trying to apply these ideas in their organization, are fascinated with it. Could be quality professionals who are consultants looking for new awareness of the Deming perspective. So, that's...   0:01:35.8 Bill: And so, some of what I have in mind is, and the examples is, things you can try at home. In fact one thing I encourage... What I encourage my students to do, undergraduate and graduate students, even the clients I consult with, companies I consult with, is develop the ability to explain these ideas, any of them, to people outside of work. So, that could be a spouse, a brother, a sister, a mother, father, son, daughter. And, why outside of work? 'Cause I view that as a safe audience. You say, hey, I just listened to this podcast. Somebody at work may not be as safe. And why are we having this conversation? So, I would say, it could be a college classmate, but one is, try explaining these things to people outside of work and then when whoever that is looks at you and says, I have no idea what you're talking about, or this makes sense, then as you develop that confidence then you're refining your explanations. And that puts you in a better position to apply, to explain it at work.   0:02:54.9 Bill: And why is that important? I'd say there's a lot you can do on your own. I mentioned that a month or so ago, my wife and I were in New England, and I met my doctoral dissertation advisor, who's 86 years old and lives in the middle of nowhere. And one of the things is the wisdom he gave us way back when it was so profound. One of the things he said, we were poor starving college students making seven bucks an hour, working 20 hours during the semester as Research Assistants or 40 hours during the summer. And what a life. Living in... This is poor starving college students. And he would say to us... We'd get together now and then, there'd be a keg on campus and we'd be... Which it wasn't all that often, but anyway, he'd say to us, "These are the best years of your life." [laughter] And we'd look at him like... Now again, I mean, we were... I wouldn't say we were poor starving college students, but I mean, we made ends meet. Now our classmates had gone, undergraduate, gone off to work and they were making real money, and we just stayed in the slum housing and doing... Just living cheap.   0:04:20.3 Bill: Then he says, "These are the best years of your life." We're looking at him like what are you saying? And what he said was, you're working on your research projects either undergrad, masters or PhDs. He said, "You will never have the time you have now to focus on one thing and not be distracted." Now a few of the classmates were married. Most were not married, but he just said this is... I mean, what a dream situation. You're in the laboratory every day. That's all of your focus. Your tuition is covered, blah, blah, blah. But it was just like, yeah, okay. So, when our daughter was in graduate school I shared that with her and she laughed at me. I said, "Allison, these are the best years of your life."   0:05:14.4 AS: If only we listened.   0:05:15.5 Bill: Right. So, that's... And well, I wanted to bring up... But the other thing I want to bring up aside from that story is, he'd say to us, when you go to work, he said trust me. He said "there will be more than enough time to get your job done. You'll have a lot of... You will have time to..." And he said, 'cause he used to brag about he'd be given a task and he can get it done in a fraction of the time that was allocated. And why I mention that is that every job has latitude. And so, to our listeners I would say, think about how to use the latitude you have to practice, to do a small scale Plan-Do-Study-Act thing. Now I really think that's what it's going to come down to is, either experiment at home or whatever, but just practice. And then as Andrew always reminds us at the end of each podcast, you can reach out to me on LinkedIn. And that's led to a number of people I'm meeting with once or twice a month.   0:06:31.8 Bill: And they are exactly who I hope to meet, is young quality professionals wanting to know more, to know more, to know more, and they're either in the States or they're living in Europe. All right. So, before we get into the Red Bead Experiment I wanna go back and talk more about acceptability, desirability which will be a focus of the Red Bead Experiment as well. But in the first series we did, there were 23 episodes before we got into the Misunderstanding Quality, and somewhere in there we discussed, you may recall the paradigms of variation. And the paradigms are labeled letters A, B, C, D and E. And we will look at them in this series. So, for those who don't know what I just said, don't worry we'll cover you. And for those who heard it before, okay, we're going to review it. And I mentioned that because paradigm A, the only one I want to talk about tonight, is paradigm A, is does it meet requirements? That's what acceptability is. Is it good? 'Cause we have this binary world in quality. Part of paradigm A is a binary world. It is good or it's bad. We talked about last time is, if it's bad can we salvage it? Which means we can rework it.   0:07:52.3 Bill: Now some of the rework means it could be we can rework it and use it. And in the aerospace industry what happens is, maybe we can't put it in a flight engine. When I was at Rocketdyne maybe it doesn't end up in a Space Shuttle Main Engine, but maybe it ends up in a test engine and a test stand, so it doesn't fly, but we're still going to use it, or it's scrapped. We have to throw it away. But paradigm A is acceptability. Another thing I want to mention is, I was commenting on LinkedIn the last couple of days over process capability metrics. And there's Cp which stands for capability of the process. And, then there's Cpk which is a little bit different. And I don't want to get into those equations tonight, maybe in a future episode. But what I want to say is, if you're looking at a metric such as yield, people say the yield is 100%. What does that mean? It means everything is good. What if the yield is 50%? That means we have to... 50% is good, 50% is bad.   0:09:06.2 Bill: So, yield is an acceptability metric. Why do I say that? Because the measure is percent good. What is a good versus bad? Also say that indices that involve the requirements. And we've talked in the past about a lower requirement and an upper requirement, the idea because we expect variation we give a min and a max. And so, if the equation for the metric you're using includes the tolerance limits, then that's a clue that that's an acceptability-based metric. Now, I don't care whatever else is in the equation, but if those two numbers are in the equation, then the inference is, what you're talking about is a measure, some type of measure of acceptability.   0:10:00.5 AS: Right.   0:10:02.6 Bill: But even if people talk about... If the metric includes the middle of the requirements, well, as soon as you say middle of the requirements, as soon as you say requirements we're back to acceptability. So, these are things to pay attention to is what we're talking about acceptability and desirability, 'cause what we talked about last time was I was trying to give everyday examples of both. And so, acceptability is when people talk about... In fact I listened to about an hour long podcast today on quality management. And one of the comments was, if you follow the steps correctly you get the right result. Well, that's acceptability. Right? If things are right as opposed to wrong. So, again, when you're in this world of good, bad, right versus wrong, that's acceptability.   0:10:58.7 Bill: Again, the reminder is this is not to say acceptability is bad, but it's not desirability. Which one is it? And then what we talked about in the last podcast number four was choose. Do we wanna to focus on acceptability or do we wanna focus on desirability? Where desirability is saying, of all the things that are acceptable, I want this one. I want that orange. I want that parking spot. I wanna date that person of all the ones that meet requirements in my search... You know, in the dating app. And so, that's acceptability. What got me excited by Deming's work in the early '90s was, I was spending a whole lot of time at Rocketdyne focusing on things that were broken. I'm trying to apply Dr. Taguchi's ideas to go, to take something that used to be good but then slipped into bad, and now we're focusing on the bad stuff to make it good. And now the good news is it kept me busy.   0:12:06.5 Bill: I was having a lot of fun. These are high visibility things and the solutions. We got the solutions working with some really wonderful people. But that led me to start asking questions. And I was once at an all-day meeting in Seattle at Boeing. Rocketdyne had been sold to Boeing Commercial Airplane Company. I got invited to a meeting up there. And it was a monthly all-day production meeting. I don't know 50, 60 people in the room. And they asked me to come up. So, I went up. And what time does the meeting start? You know 8 o'clock, 9 o'clock, whatever. And I said you know put me on a few hours into the meeting. Well, why then? Well, I want to listen to the first couple of hours of the meeting. Because in listening, now we're going back to what we talked about with Edgar Schein. And I've developed the ability... You know, I can hear are we focusing on acceptability, desirability, I can hear things you know with a Deming lens. People think of a lens as seeing, well, there's a Deming ear set as well.   0:13:10.7 Bill: And so, I listened for the first two hours and exactly what I expected. So, when I get up to speak at last I said before I got to the slides, I said, "How much time do you spend every day discussing parts that are good, that arrive on time?" And a couple of people in the front row made a circle with their fingers, zero. And I said, so why is that the case? And one of them says, if it's not broken don't fix it. And wherever I go that's what people say. I went to a big Boeing customer doing... Because they were a customer we sold them rocket engines of some size. And I was briefing that slide, had 110 people in the room for a lunchtime presentation. Before I could read the slide, the room erupted in laughter. And so, I share that because if we're spending all this time focusing on the bad but not the good, what is that? That's acceptability. That's what happens, is the economics of acceptability says, only focus on the bad to make it good. But we don't focus on the good because... And that's what we're gonna look at towards the end of tonight is, why don't we focus on the good? And so, next, I had a co-worker at Rocketdyne got a job in Chicago at a toy factory. They bottled soap bubbles. And as a kid's toy with a little wand inside and blowing bubbles and all that.   0:14:56.0 Bill: And she dramatically turned the place around, did some amazing, amazing work. She went from being the senior manufacturing engineer to the, I think plant manager. So, she called me up as she'd been promoted to plant manager. And the question was now that I'm plant manager what should I focus on? So, I said... I had known her for four or five years at that time. I had been mentoring her and the mentoring continued in that capacity. So, I said well, what do you think you should focus on? And the comment was, I think I should focus on all the things that are broken. Well, that's acceptability once again. And I said, so you're focusing on being 100% reactive. And she said, well, yeah. And I said, what you're doing then by focusing on acceptability, you're saying the things that are good I ship, the things that are bad I got to work on. But without understanding that there's actually variation in good... I mean, go back to the Boeing folks when the guy says to me if it's not broken don't fix it. My response to that was, if you use that thinking to drive your car when would you put gas in it? When it runs out. If you use that thinking relative to your plumbing system, your water system at home when would you call the plumber? When it breaks.   0:16:25.5 Bill: When would you go see the doctor? When... So, the downside of not working on things that are good and not paying attention to things that are good is that they may bite you. So, part of the value proposition of acknowledging from a desirability perspective that there's variation in good. If you pay attention to the variation in good there's two upsides. One is, you can prevent bad from happening if that's all you want to do. And two, the focus of a future episode is by focusing on things that are good and paying attention to desirability in the way that Yoshida, Professor Yoshida was talking about. That offers opportunities to do things that you can't do with an acceptability focus, which is improve how things work together as a system. And the idea being when you move from acceptability which is a part focus to desirability, which is a system focus, you can improve the system. Okay, more to follow on that. All right. So, I got some questions for you Andrew, are you ready?   0:17:37.4 AS: Uh-oh. Uh-oh.   0:17:39.8 Bill: So, Dr. Deming had how many points for management?   0:17:42.9 AS: Fourteen.   0:17:46.3 Bill: All right. Okay.   0:17:48.3 AS: I'm being set up here. I just feel it. You start with the easy ones.   0:17:52.8 Bill: All right. And...   0:17:54.3 AS: Listeners, viewers help me out.   0:17:56.9 Bill: All right. And which point, Andrew, was cease dependence on inspection to achieve quality? What number was that?   0:18:09.6 AS: I'm gonna say four or five, or six. I can't remember.   0:18:14.2 Bill: Three. Three.   0:18:14.6 AS: Really? Three. Okay. That was close.   0:18:16.1 Bill: I would not have known. That was number three.   0:18:19.1 AS: Yeah.   0:18:20.1 Bill: And it's followed by Dr. Deming saying, "Eliminate the need for inspection on a mass basis by building quality to the product." So, the first question is what point was it? And again, I had to look it up. I know it's one of the 14. Second question, Andrew, is, if Dr. Deming is saying cease dependence on inspection to achieve quality, would you think of that as an acceptability focus or a desirability focus?   0:18:55.1 AS: I don't know if I can answer that. I mean, I can only think about what he was saying, which was design quality in from the beginning and get everybody involved in quality, not just having an inspector at the end, but I'm not sure.   0:19:11.4 Bill: Yeah. No. And even as I asked the other question, I'm thinking... Well, this is great because if in the audience you think of quality from an acceptability perspective, right?   0:19:24.2 AS: Mm-hmm.   0:19:24.9 Bill: So, if you're working for Boeing, which is all about acceptability or most companies, and you hear step three, then you're thinking, cease dependence on the inspection to achieve..., you're thinking acceptability. If that's what you're used to, if you're used to quality being doesn't meet requirements...   0:19:42.9 AS: Okay.   0:19:43.2 Bill: Then what you're hearing is Deming talking about acceptability. But if you've been exposed to Yoshida's work and Dr. Taguchi's work and you're understanding that within requirements there's variation of things that are good, so it's kind of a trick question. The idea is it depends. Alright.   0:20:02.4 AS: Yep.   0:20:05.5 Bill: I got two other of 14 points to ask you about. Alright. Which of the 14 points is in the practice of awarding business on the basis of price tag alone? Instead, minimize total cost. So,  first which point is that?   0:20:26.9 AS: I think it was also... I would say then four.   0:20:32.1 Bill: Yes.   [laughter]   0:20:33.6 AS: Yeah.   0:20:34.1 Bill: Yeah.   [laughter]   0:20:34.5 AS: You'd think I know. I wrote a book about it.   [laughter]   0:20:39.3 Bill: Alright. So, that's point four and...   0:20:42.1 AS: Okay. So, I got... I don't wanna be rated and ranked, but I got one right at least. Okay. Let's keep going.   0:20:49.1 Bill: Okay. And, so, is that acceptability or desirability? Let's say this. Is awarding business on price tag acceptability or desirability?   0:21:02.1 AS: Probably acceptability.   0:21:04.6 Bill: Yeah. 'Cause then you're saying...   0:21:06.5 AS: Can you hit this number? It's okay.   0:21:11.2 Bill: Yeah. Or you contact your insurance company and you say, I'm looking for a heart surgeon, and you say, and I found one, blah, blah, blah, blah, blah. And they call you up and say, yes, that person is a heart surgeon, but we prefer you use this one. [chuckle] What's the chance they're thinking about a cheaper option? Right? Alright? So, you're looking at from desirability perspective...   0:21:38.5 AS: This guy's really cheap on kidneys.   0:21:40.7 Bill: Right? And so you're thinking you've done a bunch of references. You've asked your friends. And why are you asking? Because all the doctors out there that meet requirements, you're blindly saying, I'll take any one. That's acceptability. And you're saying, I want this one. That's desirability. But the insurance company says, no. We consider them all to be the same in our policy. That's acceptability. Alright. Okay. And here's the last point we're gonna look at tonight. Which of the 14 points is "improve constantly and forever the system of production and service to improve quality and productivity and thus constantly decrease cost"?   0:22:23.5 AS: Isn't that number one? Constancy of... That's...   0:22:28.0 Bill: That's constancy of purpose. That's number one.   0:22:28.8 AS: Okay. Constancy of purpose. So, improve... Don't know. No. No.   0:22:39.4 Bill: That's number 5.   0:22:40.5 AS: Okay. Five.   0:22:44.5 Bill: And I was looking at, so I know those are three and one, and I thought, oh, that's three, four, and five. Alright. So, what I wanna do there is, we're gonna look at that a little bit later. So, I don't wanna ask you about acceptability, desirability, but I just wanna lay that on on the table. Alright. So, now we're gonna look at what Dr. Deming referred to as his chain reaction. The Deming Chain Reaction. Alright. So, what do you remember about the Deming chain reaction? It wasn't a motorcycle chain or a bicycle chain, right? What did Dr. Deming call his chain reaction?   0:23:31.3 AS: I can't... I mean, I'm thinking of the flowchart.   0:23:34.9 Bill: Yeah. We'll get to that. We'll get to that. The chain reaction...   0:23:36.5 AS: But that I can't remember.   0:23:39.6 Bill: And this is likely Out of the Crisis. The Deming chain reaction is, "if you improve quality, you will reduce scrap and rework, thereby reduce costs." And then he goes on to, by reducing costs, you can increase sales and expand the market. That's the chain reaction.   0:24:01.9 AS: Yeah.   0:24:02.2 Bill: So, when I ask students, again, in my either graduate, undergraduate classes is, talk about the Deming Chain Reaction, then I say, is the Deming Chain Reaction... Within the Deming Chain Reaction, Deming says, if you improve quality, reduce scrap and rework, lower cost, is that explanation of quality, acceptability, or desirability?   0:24:31.9 AS: I don't know. I'm fearful to answer nowadays because I'm not getting these right.   0:24:37.4 Bill: No. You are. You're on a roll. [chuckle] Again, the Deming Chain Reaction, if we improve quality, we reduce scrap and rework, thereby lower the cost thereby sell more and expand the market.   0:24:52.2 AS: I would say that's desirability.   0:24:56.1 Bill: Okay. One more time. If we improve quality, we reduce scrap and rework.   0:25:03.2 AS: Yep.   0:25:04.3 Bill: So, the clue is scrap. Is scrap something we talk about with acceptability or desirability?   0:25:12.1 AS: That's acceptability.   0:25:14.1 Bill: And rework.   0:25:18.2 AS: Well, we're trying to make it acceptable.   0:25:20.1 Bill: Exactly. And the reason I point that out is, I'm not sure... And I think we talked last time about things we agree with Deming or disagree with Deming. I'm not a big fan of the Deming Chain Reaction because I think... Again, if I'm in the audience and I'm working for a company that defines quality and in terms of acceptability, and he says to me, if you improve quality, reduce scrap and rework, that's what I'm used to. And my concern is, in other ways he's explaining quality in terms of constantly improving. Well, how can you constantly improve quality once you get to 100% yield? So. if all the product is good, which is acceptability, if there's no scrap and no rework, can you improve quality? Not if you're focusing on acceptability. And so, what I'm saying there is, that if Dr. Deming is in one hand defining the chain reaction and using the term quality in reference to scrap and rework, then he's projecting quality as acceptability. But if he's talking about improving constantly and forever, and then we get into, can you improve the quality forever? That's what he's saying.   0:26:49.1 Bill: What if you get to 100% yield, which is the maximum value of acceptability? Well, only if you shift to desirability can you improve forever quality, if you think it's worthwhile to do. So, that's why I wanted to go back and look at those things. One is revisit acceptability, desirability, and point out what I think are some opportunities for confusion in trying to explain Deming's work. Alright. Now we'll talk about the Red Bead experiment, which is, the very first time... I remember reading about it in the earliest books I read. I think, who is it that wrote the first books on Deming management, Deming management? She's a...   0:27:42.8 AS: Killian?   0:27:44.3 Bill: No, no, no. Cecilia Killian was Deming's admin.   0:27:48.9 AS: Mary?   0:27:50.5 Bill: Yeah. Mary Walton.   0:27:51.6 AS: Mary Walton.   0:27:52.5 Bill: Mary Walton. I remember reading a Mary Walton's book, that's when I first got exposed to this Red Bead experiment. So, The Deming Institute has a dedicated webpage, so, if you go to deming.org, or just do a Google search for deming.org Red Bead experiment, it's one of the most popular pages. I think that might be the second most popular, most visited page past the 14 Points. In there you can find short videos. There are longer videos, but there's enough on there to follow along with what I want to explain. So, Dr. Deming and the Red Bead experiment would take from the audience, and it could be four willing workers, six willing workers. He'd be the manager of the White Bead Company, and he would explain to them, he would share with them. He had a bowl, and in the bowl were 5,000 beads, maybe an eighth of an inch in diameter, small plastic beads, and there'd be 5,000 in the bowl, 4,000 white, 1,000 red.   0:29:00.6 Bill: And then there was a paddle, and the paddle could be roughly two inches by four inches, and the paddle had a little handle, and it had holes in it. So, the instructions he would provide to the willing workers, the production workers, is to take this paddle at a given angle, slide it in flat into the bowl, even the back of the beads. The beads are in one container, they get poured into another container.   0:29:27.7 AS: In a pan.   0:29:28.1 Bill: It's a mixing process, and then he pours them back in. So, just pour them from one to the other, and he would be very persnickety on pour at 45 degrees, tip from the corner. You pour back and forth, put the paddle in, and you'd end up with 50 of the beads would fill the paddle, and then you'd go to the inspector number one. And the inspector number one would count how many red beads, which is not what the customer wants. What the customer wants is white beads, but the raw material includes both. So, you go to inspector one, and they may count five beads. You go to inspector number two, and they quietly see five. The numbers get written down. Ideally, they're the same. And then you go to the, I think, the master inspector, and they say, five beads, and then "dismissed." And then write the five on a flip chart, and then the next person comes and does it, and the next person comes and does it. So, all six come up and draw beads, and then we count the number of red ones. The number of red ones go into this big table. Next thing you know we've done this over four different days. I've done this. This could take an hour. And even when you watch the videos, there's a fast forwarding.   0:31:00.1 Bill: I've done the Red Bead experiment, I think, just once, and I did it with a former student, which worked out really well, 'cause there was a lot of dead time, and the audience was watching, and so I was able to get conversation going with her. So, for those wanting to do this, boy, you've got to be pretty good on your feet to keep the audience entertained. To get to the point where you've got a table on the whiteboard, or on the flip chart, and on the table are the six willing workers on the left-hand side, and then day by day the red beads... Looking at the number of red beads. So, what are the red beads? Well, the red beads are not what the customer wants. What the customer wants are white beads, but in the production process, because the raw material includes red, well, then the red ends up in the output. So, I ask people, so, if the white beads are what the customer wants, what are the red beads? And typically, people say those are the defective, defects, scrap.   0:32:03.2 Bill: And, so now you get into this model is based on acceptability. The beads are either good, white, or bad, red. And so I would ask the students in class, in a work setting, what might the red beads be? I, in fact, asked our daughter. She said, is just moving from being a junior high school English teacher to a senior high school English teacher. Her undergraduate degree is from Cal State Long Beach.   0:32:34.3 AS: There you go.   0:32:34.3 Bill: So, her first day of school was today. She's also the varsity swim coach, which is way, way cool. Mom and dad are proud of her. So, I remember asking her a few years ago. So, I said, Allison, what are the red beads in the classroom? She said, well, the stapler doesn't work. The door doesn't close. The projector screen doesn't come down. The computer doesn't work. These are red beads in the classroom. So, I said, okay, Allison. What are the white beads?   0:33:01.1 Bill: Geez. So, we get so used to talking about the red beads are the defects or things that... Well, the white beads, by comparison, are the things that are good. So, I said, Allison, if the computer works, that's a white bead. If the door closes, that's a white bead. If you can close the window, that's a white bead. If you can pull down the screen, that's a white bead. So, the red beads are the things around us that are defects, broken, and the white beads are the others. And so, I wanna throw that out to do some stage setting. And ideally, this is a review for our listeners, and if not, you've gotta go watch as many videos as you can in The Deming Institute website. There's a lot of great content there. Watching Dr. Deming do this is pretty cool.   0:33:49.0 AS: He's a funny guy.   0:33:51.6 Bill: And I was very fortunate to be in Dr. Deming's very last four-day seminar. I did not participate in The Red Bead Experiment. I let somebody else do that, but it was classic. Well, the next thing I wanna get into is, and I would say to audiences many times, so we know... Well, a couple things. It's so easy to look at that data on a spreadsheet and say, Jill's the best performer. She has the minimum number of red beads. So, on the one hand, we can look day by day, and it could be Jill's number started off low. And we gave her an award, and then it went high, and then we started blaming her. So, there's variation in the number of beads, worker to worker and day to day. So, a given worker, their scores go up and down. So, that's called variation.   0:34:43.4 Bill: And so one of the aspects of the System of Profound Knowledge, which we haven't talked about too much, but ideally our listeners know Dr. Deming was really big about the value proposition of understanding variation. So, what Dr. Deming would talk about in his four-day seminars, and ideally anybody presenting this, is you take the data, you draw the usual conclusions. We're looking at data from an acceptability perspective. We look at the spreadsheet, and then voila, we turn it into a run chart and look at that data over time, calculate control limits, and then find that all the data is within the control limits and draw the conclusion that the process is in control. And then you move from in a non-Deming environment, looking at this data point versus this data point and drawing these conclusions that the white... The number of red beads is due to the workers.   0:35:33.7 Bill: So, the punch lines you'll find at Deming Institute webpage is that the workers are trying as best they can, that the red beads are caused not by the workers taken separately, but by the system, which includes the workers. A lot of great learning there. And a very significant piece is, in a Deming environment, where Deming's coming from is, again, this is before we go further in this in future sessions is, he's proposing that the majority of what goes on in the system relative to the performance of anything you measure is coming from the system. And if that is really, really understood, then you're hard pressed to blame people in sales for lousy sales or dips in sales or you look at grades of students in a classroom. So, for people looking at Dr. Deming's ideas, perhaps for the first time, realize that what he's talking about is coming from The Red Bead Experiment is a great eye opener for this is that, let's stop blaming the workers for the production issues and step back and look at our procurement system.   0:36:39.6 Bill: Do we have a procurement system where we're buying on price tag? If you buy on price tag, you end up with buying a lot of red beads. So, one aspect I wanna leave our listeners with today is, as you're studying this, realize there's a psychology aspect to The Red Bead Experiment. Not only the idea that there's variation up and down, but what are the implications of realizing that we can't be blaming the workers for the behavior of the system. The system includes the workers, but it also includes things that are well beyond their control. Well, where I wanna go next with this and then we'll next time get in and go further is, in appreciation of point five, "improve constantly forever the system," what I would ask audience is, so we know the red beads are caused by the system. We know the number of white beads goes up and down. But if we were to improve the system by not buying red beads or pre-sorting them out and get fewer and fewer red beads in there, then we get to the point that all the beads are white, perhaps. We have continuous improvement.   0:37:47.2 Bill: We end up with a 100% yield. Well, then we get into, again, and I've kind of set the stage in prior comments, what I would ask people is, what Dr. Deming's talking about trying to achieve zero red beads everywhere in the organization? Is that what we're striving for with the Deming philosophy, is to go around the organization, I want every single process to produce no red beads to make it to a 100% white beads? And if that's what Dr. Deming is talking about, then what does point five mean about continuously improving? Now we get into what I mentioned earlier is, you can improve the speed of operation to produce more white beads, so, we can do them faster, we can do them cheaper, but can we improve the quality of the white beads under that model? And the answer is no, because acceptability stops at a 100%. So, what we'll look at next time is, if you look at the beads and look closely, you'll see they have different diameters, different weights. They're not exactly the same color white. So, what is that Andrew? That's called variation.   0:39:00.9 Bill: And now it brings us back to desirability. So, what I encourage people to do, most of the times I see people presenting The Red Bead Experiment, they present it from an acceptability perspective. That's the starting point. But what I encourage our listeners to do is go through all that, and this becomes a great opportunity to move your audiences from acceptability focus to desirability by talking about the inherent variation in those beads. Again, we'll talk about the value proposition economically in future sessions, as well as the other paradigms of variation before we get there. So, that's what I wanna cover.   0:39:43.2 AS: Wow. Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. If you wanna keep in touch with Bill, just find him on LinkedIn, and this is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. It never gets old. "People are entitled to joy in work."

We are finally starting to get into the Taika era and the Taika reforms, which would really start the transformation of Yamato into the bureaucratic state of the Nara period.  This episode, we look back at how the Yamato state had been changing up to this point, some of the possible influences and precursors, and then dive into some of the first edicts, largely dealing with sending out governors to the provinces.  These governors, or "kokushi", were originally temporary positions, limited in what they could do.  More info over at https://sengokudaimyo.com/podcast/episode-108  Rough Transcript   Welcome to Sengoku Daimyo's Chronicles of Japan.  My name is Joshua and this is Episode 108: The Great Change ……………….. The Kuni no Miyatsuko, hereditary leader of his lands, likely heard the news before they arrived.  Apparently Yamato was sending out an official—a kokushi—who was going to be doing some sort of survey.  Whatever.  Just another person from Yamato's court—what did it matter?  His family had been in charge of the local lands for as long as anyone remembered, and while they might give nominal fealty to the Oho-kimi in Yamato, along with the occasional bit of taxes, paid in rice, what consequence was it to him?  Some might say he was a big fish in a small pond, but it was his pond.  Always had been, and always would be.  Wouldn't it? ……………….. And we are back with our regular chronological podcast, and we are finally going to pick back up on the fall out from the events of 645, the Isshi Incident, when Prince Naka no Oe orchestrated the murder of Soga no Iruka, and later his father, Soga no Emishi, in full view of the court, including his mother, Takara, aka Kougyoku Tennou.  That incident would be the start of Naka no Oe's own rise to power and the reshaping of Yamato from the its longstanding clan based system of government to a new national government of laws and punishments, known generally as the Ritsuryo system.  This episode we'll dive into this new system and the so-called “Taika reforms” that brought it about, the changes it ushered in, and the ripples this sent throughout the entire archipelago.     The term “Taika” itself means “Great Change”, and it isn't clear to me if it was picked because they expected to be making big changes or after the fact, but in the minds of most Japanese historians it is quite accurate. The entire system actually took about a century or so to really come together—we often think of the Ritsuryo system as it was in its final version.  This period, though, is where things kicked off, so we'll be setting the stage and talking about some of the edicts during this period that eventually became the written code of the Ritsuryo system.  This was started by Naka no Oe who, spoiler alert, would eventually reign as sovereign and be known as Tenchi Tennou.  The system he helps put into place would continue to be used and refined even after his death and even after the end of the period covered by the Nihon Shoki. So after some background, we'll get to some of the very first edicts this episode, and then spend more time on them again, in the future. The RitsuryoThe Ritsuryo system was based largely on continental models, with Confucian ideals and the legal code of the Tang dynasty having particular influence.  And as we discuss these changes, which were huge, I'll start with some clarifications and caveats.  This was a system of government based largely on continental models, with Confucian ideals and the legal code of the Tang dynasty having particular influence.  That   One of the first things to emphasize is that said, itthis wasn't exactly an immediate revolution and reformation.  Based on the entries in the Nihon Shoki, some of the work had already  been started long before Naka no Oe came on the scene, largely attributed to the influence of Prince Umayado, aka Shotoku Taishi, and things like the 17 article constitution and rank system, which we discussed back in episode 95.  And even after its initial implementation, there would come various tweaks to the system.  Although there are numerous edicts made in the initial years of what is known as the Taika era, leading this change to often be given the nickname of the “Taika reforms”, the earliest formal administrative codes would come much later, firming up in the 8th century. Another thing to keep in mind as we realize, as we start looking at these changes is that the Yamato courtit didn't necessarily discard the old system, either.  Changes like this take time, and something even if it is implemented for a year or two , it might not stick.  This is one of the reasons that it is important that two of the apparent architects of the new system for these changes were there present through much of its implementation, actively guiding and shaping the process direction that the changes would take.  These two individuals at wereas Prince Naka no Oe and Nakatomi no Kamako, later known in this reign as Kamatari, which is the name I'm going to use from here on out as it is the much more well known in case anyone decides to look up information later. Finally, I would also note that many of these changes were being applied at the level of the elites of society, how they organized power and how they approached governance – but  we should also spare a thought for how this affected the majority of people.  After all, it was the majority of people who were working the fields, cutting the wood, or fishing the seas.  The elites were often otherwise engaged, and whichthat isn't to say that they did nothing.  Often they were coordinating and bringing things together, but that was a smaller part of the overall population.  In these reforms we get to see some rare glimpses into how all of thisit may have affected people beyond just the court elites. To set this up, let's start with a look at what brought us here, and how things changed over time and how they had governed things up until now—or at least as best as we can make out from our various sources.  From there we can take a look at some of the earliest edicts related to the changes evolution in the government, focusing how they focused on consolidating the power and support at the center of the Yamato court and starteding to make more concrete Yamato's control across the rest of the archipelago. We've covered much of the development of complex society in Yamato this in previous episodes:  How Yayoi society came with or at least introduced a form of stratification evident in graves, grave goods, as well as other patterns of lifeways.  Local elites rose up to oversee communities, and eventually extended their influence, creating the various “kuni”, or countries—regional collections of communities that came together under a leadership structure and some shared cultural values.   Some of the earliest stories give us the Hiko-Hime leadership structure, often with a male and female head of state, though sometimes shown as elder and younger co-rulers.  This is backed up by some evidence in the kofun era, as we see large, single-purpose tomb mounds built for what we can only assume are the elite.  Their construction would have required control of a large labor force, indicating a certain amount of their power, and their shape and various burial goods have further suggested, at least to scholars like Kishimoto, that there may have been a division of rulership, at least early on. We've talked about the spread of Yamato style round keyhole shaped kofun through the archipelago and how the popularity of that kofun shape demonstrated Yamato's influence but  in the shape of their kofun, but that didn't necessarily accompany a change in  change the actual dynamics of local government, other than demonstrating Yamato's increased influence.  The next thing we see in the record, I would argue, is the change to a familial based system, or the Bemin-sei.  This is what we've talked about periodically in terms of both the uji, familial groups or clans, and the “be” familial or occupational groups, but here I'll give an overview of the whole practice and what its development means in the sense of changing approaches to organizing and governing a complex society. The Bemin system was a means of further dividing and categorizing people in society, .  It is  rooted in continental concepts of a familial group.  Prior to the 5th century, there isn't a clear indication of familial clans in Yamato, though that doesn't mean people didn't know where they were from.  They still remembered who their ancestors were, and that was important, often tracing back to mythical and legendary individuals who are recorded as gods, or kami.  I suspect, however, that in the smaller communities of the Yayoi period, where you were from was as a good an indicator of your relationships as anything else.  Farming is a pretty sedentary lifestyle, and if you know all of your neighbors there isn't as much need to divide each other up into specific familial groups.  It was more important that I'm from this village or region than I'm from this particular family. And so the oldest stories in the Nihon Shoki and the Kojiki only refer to individuals by their names or by locatives.  Occasionally we will be told that so-and-so was an ancestor of this or that uji, or clan, but it is telling that they don't use the clan name with that person. Surnames do become important, however, in the Bemin system.  But they are only really important for those in the upper tiers of society.  Amongst the farmers and other commoners—the heimin—you often won't find specific surnames, or people will use pure locatives or something similar to refer to a person.  Surnames were for people a little further up the social food chain. From what we can tell, the uji structure likely started with the “-Be” families, trying to set up groups of individuals who were in charge of certain economic activities beyond just farming the land.  The Imbe, the Mononobe, the Abe, the Kuratsukuribe, and the Kusakabe are all examples of family names ending in “-Be”.  Some, like Kuratsukuribe, Inukaibe, and Umakaibe are all fairly straightforward:  These are groups that were set up around particular industries.  Kuratsukuri literally means “saddle-making”, so the Kuratsukuri-be are the saddlemakers.  Inukai and Umakai refer to the ones who kept or raised the dogs and horses. Setting up a familial or clan unit around a certain profession was one way of organizing society so that you had the things that you needed.  Such jobs were often inherited, anyway, passing from father to son, mother to daughter, etc.  So it makes some sense.  And the clan, or uji, structure meant that there was a person or persons at the head of the familial unit who could be responsible for coordinating efforts across different, sometimes dispersed, groups of people. The thing is, there is no indication that the people in these professions were necessarily related to each other prior to this organization, and in many ways the idea that they were a family with a common ancestor was a created fiction.  There may have been some relationship—for instance, weaver groups were often centered on immigrant groups that came over from the continent with knowledge of specific techniques, so there was likely some pre-existing relationship, but they weren't necessarily what we would consider family, related by blood, to one another. Over time these groups became actual clans—children were born into them and remained, unless they specifically were split off into a different uji for some reason.  Some of them dropped the “-Be” part of their name—in some instances it seems this may have created a distinction between the line at the head of the clan vice the other members, but that distinction isn't entirely clear.  Furthermore, members of these clans were not, ultimately, restricted to the hereditary jobs for which the clan had been created.  There are also clans that appear to be more about location, possibly local rulers or magnates.  For example, there are the Munakata and the Miwa, referring to local chiefs or lords of the Munakata and Miwa areas, both important ritual areas. The clans formed another function as well, as each clan had a kabane, which was an early form of social rank.  Some of these ranks appear to have come from titles or positions.  So, for instance, you have the Omi, the Muraji, the Kimi, and the Atahe.  Early on, Muraji appears to be the more prestigious title, with the Ohomuraji being the head of a Muraji level house that was also a key member of the government.  Omi, meaning minister, eventually came to be seen as more prestigious, however.  Meanwhile, both were more presitiousprestigious than the term “Kimi”, although that may have originated as a term for the rulers of the local countries, which makes sense if you consider that the Yamato sovereign was the Oho-kimi, or the Great Kimi, much as the Oho-omi was in charge of an Omi group and the Ohomuraji was in charge of a Muraji level house.  There are also Omi and Muraji households for whom there is no Oho-omi or Oho-muraji ever mentioned, but only members of the Omi and Muraji ranked families were considered for positions at the top of the court hierarchy.  This All of this clan and rank system began to change in the 6th century during the reign of Toyomike Kashikiya Hime, aka Suiko Tenno, with the introduction of the 17 article constitution and new rank system.  While both of these developments are of debatable veracity, since the chroniclers likely made this change seem much more structured than it actually was in practice, —there is probably at least something to the idea that the Yamato court y werewas adopting more continental ideas regarding state governance.  The rank system, in particular, was a step towards recognizing individuals above simply their inherited social position.  While kabane rank was applied to an entire uji, the new rank was applied to individuals alone, meaning that an individual could be recognized without necessarily rewarding every other person holding their same surname.  At the same time, more and more books were coming in from the continent.  Some of these were focused on the new Buddhist religion, but there were also other works, based on a variety of subjects and introducing the Yamato court to some of the philosophical ideas of what government should be.  And then there were various envoys sent to the Sui and Tang courts in the early 7th century, where they would have seen how things were working there. Nonetheless, to be clear, we don't know it is unclear just how far Yamato control extended across the archipelago.  We know that in the 5th century there were individuals who considered themselves part of the Yamato court structure from the Kantou to Kyuushuu.  In the Nihon Shoki, we also see the establishment of Miyake up and down the archipelago, from as far out as Kamitsukenu, aka Kozuke, to the western edge of Kyushu, in the early 6th century.  These were areas of rice-land which owed their output to the Yamato court or a particular endeavor.  They would have had officials there tied to the court to oversee the miyake, providing a local court presence, but how much this translated into direct Yamato control is hard to say. Then there is the Dazai , the Yamato outpost in Kyushu,  set up in the area of Tsukushi, modern Fukuoka Prefecture, largely following the Iwai Rebellion, and which we .  We talked about this some in the Gishiwajinden Tour episode about Ito and Na, extending a more directand how the Yamato government extended a more direct, and explicitly military, presence in Kyushu. Still, the individual lands of places like Hi, Toyo, Kibi, Owari, or Musashi were all governed by the Kuni no Miyatsuko, the Yamato court's term for the various chieftains or rulers of the different lands. And that gets us roughly to the situation where we are now, in 645.  Prince Naka no Oe hadand been talking with his good friend Nakatomi no Kamatari about how things should be, ever since the day that Kamatari had helped him out at a kemari game—something akin to group hackey-sack with a volleyball.  As we've discussed in past episodes, a lot of this sense of “how things should be” related to nipping the power of Soga no Iruka and Soga no Emishi in the bud, cutting off what they no doubt saw as a thread to imperial power and the ”right way of doing things”.  But Tthe two had also been taking lessons from the Priest Minabuchi, and, like students everywhere, they thought they had figured this whole government thing out as well.  They'd been reading the classics and would have had access to the reports from various envoys and ambassadors to the Tang court.  The last one had left in 630 and returned in 632.  They would no doubt have seen the workings of the Tang dynasty law code of 624 and the subsequent update in 627.  Naka no Oe and Kamatari may have even heard news of the update in 637. Thise law code, implemented by Tang Taizong, relied on Confucian and Legalist theory.  It wasn't the first law code in East Asia, or even the Yellow River basin , but it is one of the most significant and influential, and the earliest for which we have the actual code itself—though the extant version is from 653, about eight years after the events of 645., butHowever, as we'll see, all of this was well withing the timeframe which the Ritsuryo system was used and updated, itself. So, Naka no Oe and Kamatari have a shiny new document in their hands, promising an organized system of government very different from the status quo in Yamato to date.  However, the Tang law code did have a problem:  It was undeniably centered in the imperial culture of the Yellow River and Yangzi River basins.  These areas had long had the concept of empire, and even in the chaotic period of the Sixteen Kingdoms and the Northern and Southern dynasties, the concept of an empire that ruled “All Under Heaven”, or “Tianxia” was something that people generally accepted.  The Wa polities of the Japanese archipelago, even as they were now consuming media from the continent, still operated under their own cultural imaginaries of how the world was ordered and how government operated.  And so the code couldn't just be adopted wholesale:  It would have to be adapted to the needs and demands of the Wa polity. I should note that this was unlikely the reforms that took place in Yamato were sole effort of Naka no Oe and Kamatari, and much of what is written suggests that this wasn't done simply through autocratic fiat, but included some key politicking.  This started even before the Isshi Incident.  Kamatari already had close ties with Prince Karu before he met with Naka no Oe.  Kamatari and Naka no Oe had also brought Soga no Kurayamada no Ishikawa no Maro into their confidence, a member of the Soga family.  The Fujiwara family history, the Toushi Kaden, compiled by Fujiwara Nakamaro in the 8th century, describes Maro—referenced as Soga no Yamada—as a man of particular and upright character.  He also appears to have had a beef with his cousin , Soga no Iruka, and was ambitious. I'm not sure just how much Naka no Oe and Kamatari were sharing their plans about reforming the State at this point, or if they were simply concentrating efforts on bringing down—that is to say murdering—Soga no Iruka. The Toushi Kaden mentions that others were also brought around to at least the idea that something had to be done about Soga no Iruka, though nobody was quite willing to speak out for fear of Soga no Iruka and his father, Emishi, and what they could do to someone's reputation—or worse.  After all, Soga no Iruka had only   recently killed the Prince Yamashiro no Oe, reportedly as part of a plot to ensure Prince Furubito would be next elevated to the throne.  On the other hand, not much information seems to be given about the reforms until they are enacted. And so after the Isshi Incident, we see our murderous firebrands taking the reins of power.  As we noted back in episode 106, Prince Karu was encouraged to take the throne, while Prince Furubito no Ohoye retired from the world and took orders at a temple in Yoshino.  Naka no Oe had been offered the throne, we are told, but turned it down, as the optics on it would not have been great.  Not only because he was clearly responsible for the death of Soga no Iruka and his father, and thus his mother's abdication.  However, he could still be made Crown Prince, and keep right on going with his ambitions to change up the way things were done in the Yamato government. Although Naka no Oe and Kamatari get most of the credit, the work required the cooperation—or at least consent—of the newly made sovereign, Prince Karu, also known as Ame Yorozu Toyohi, later styled as Koutoku Tennou.  After all, it would be his edicts that would lay out the new system, and his name that would be attached to it.   One good example is a change that came immediately: Meanwhile, in place of Soga no Iruka as Oho-omi, Karu selected two individuals to take his place, dividing up the position of Oho-omi into ministers of the Left and Right.  The first was Abe no Omi no Uchimaro, as Minister of the Left, and then Soga no Kurayamada no Omi no Ishikawa no Maro, Naka no Oe's recently made father-in-law, was made the Minister of the Right.  These positions, later known as the Sadaijin and Udaijin, would continue to be two of the most powerful civil positions in the Ritsuryo and later Japanese governments.  The Minister of the Left, the Sadaijin, was often considered the senior of the two. By the way, “Daijin” is just a sinified reading applied to the characters used for “Oho-omi”, or great minister.  This means that the Minister of the Left, the Sadaijin, could just as easily be called the Oho-omi of the Left, or something similar.  This actually causes a bit of confusion, especially in translation, but just realize that this is effectively just a rebranding, and not entirely a new name.  What was new was this idea that they were broken into the Left and the Right a distinction that would mean a lot more once more of the bureaucratic offices and functionaries were properly defined. Who were these two new ministers? Abe no Uchimaro has popped up a few times in the narrative.  He was an experienced courtier.  The Abe family had been moving within the halls of power for some time, and had even stood up to the Soga family when Soga no Umako had tried to acquire their lands in Katsuraki, making an ancestral claim.  Uchimaro had also been involved in the discussions regarding Princes Tamura and Yamashiro no Oe after the death of Kashikya Hime, hosting one of the dinners during which the delicate issue of succession was discussed.  He was clearly a politician of the first order.  Of course, Soga no Kurayamada had clearly earned his position through his connections with the conspirators. , bBut what about Nakatomi no Kamatari?  Well, he wasn't exactly left out in the cold.  Nakatomi no Kamatari was made the Naijin, the Minister, or “Omi”, of the Middle or the Minister of the Interior, implying that he had some authority over the royal household itself.  This feels like a created position, possibly to allow him the freedom to help with the primary work of transforming the Yamato government. Although Naka no Oe and Kamatari get most of the credit, the work required the cooperation—or at least consent—of the newly made sovereign, Prince Karu, also known as Ame Yorozu Toyohi, later styled as Koutoku Tennou.  After all, it would be his edicts that would lay out the new system, and his name that would be attached to it. One of the first things that is recorded in the Nihon Shoki was the declaration of a nengo, or era name.  Up to this point, years in Yamato were remembered by the reign of the sovereign—typically based on their palace.  So you would see things like the second year of the reign of the sovereign of Shiki palace, or something like that.  In addition, at least since about the 6th century, if not earlier, years would eventually be given the appropriate sexagesimal year name, combing one of the ten stems and twelve branches.  For example, 2024, when this episode is coming out, is the year of the Wood Dragon, or Kinoe-tatsu.  This is still used for various Japanese traditionspractice still continues today in Japan for various reasons. The Nengo was something newly introduced to Japan, however: .  Aan era name would be chosen by the sovereign, often based on important changes that either had occurred or even as a wish for something new.  So you would we see a new nengo with the ascension of a new sovereign, but it couldan also come because of an auspicious omen or because of a terrible disaster and hope for something new.  The current nengo, which started with the reign of Emperor Naruhito a few years back, is “Reiwa”. This very first nengo, we are told, was “Taika”, meaning, as I said up front, “Great Change”.  It certainly was apropos to the work at hand.  So let's go through the Chronicles and see some of the “great changes” occurring at the Yamato court now that the intention had been made clear.  We already talked about the change from an single Oho-omi to ministers of the Left and Right, but there were many other Some of the first things were to set up various newly created officials and positions.  An example is , such as two doctors, or Hakase – doctors in the sense of learned experts, not medical doctors, although medicine was certainly revered.  One of these new Hakase was the Priest Min, presumably the same one who had brought back astronomical knowledge from the Sui dynasty, possibly the same as the one known as Sho'an.  The other was Takamuko no Fubito no Kuromaro, who had gone to the Sui Dynasty with Min and others and come back with knowledge of how things worked on the continent.  The Takamuko family had immigrant roots as descendants of the Ayabito, and Kuromaro was well traveled, returning from the Sui court by way of Silla.  These two were well positioned to help with the work at hand. Now that the rudiments of a cabinet were in place, Oone of the first problems set before things after setting up their cabinet, as it were, was to askthe their new Ministers of the Right and Left, as well as the various officials, the Daibu and the Tomo no Miyatsuko, was how tohey should  get people to acquiesce to forced, or corvee labor—the idea that for certain government projects villages could be called upon to provide manual labor in the form of a healthy adult—typically male—to help as needed.  This was a thorny problem, and evidently it was thought best to get expertise beyond the purely human.  The following day, tThe Udaijin, Soga no Ishikawa no Maro, suggested that the kami of Heaven and Earth should be worshipped and then affairs of government should be considered.  And so Yamato no Aya no Hirafu was sent to Wohari and Imbe no Obito no Komaro was sent to Mino, both to make offerings to the kami there for their assistance, it would seem, in setting up a good government. This is significant, in part, as it shows the continued importance of local traditions focused on appeasing the kami, rather than the Buddhist rituals that they could have likely turned to, instead. FinallyThree weeks later, on the 5th day of the 8th month—about three weeks later— camecomes the first truly major edict of the Taika era, which and it wasis to appoint new governors, or kokushi, of the eastern provinces.  Note that they specifically mention the Eastern Provinces, presumably meaning those east of Yamato, since they only sent out eight of them.  They also did not send them to usurp control, necessarily, from the Kuni no Miyatsuko of those areas.  The Kuni no Miyatsuko were still nominally in charge, it would seem, but the court was getting ready to make some major changes to the relationship. These governors were expected to go out and take a census of the people—both those free and those in bondage to others.  They were also to take account of all of the land currently under cultivation, likely to figure out how to tax it appropriately.  As for things other than arable land, such as gardens, ponds, rivers, oceans, lakes, mountains, etc., the edict commands the governors to consult with the people—presumably the people of the province—to get a better idea of what should be done. And this doesn't sound so bad.  It is basically just a tally of what is already there.  That said, anyone who has worked in a modern office probably knows about the dread that comes over a workplace when people show up from the Head Office with clipboards in hand.  However, apparently many of the people had not yet heard of a “clipboard” and likely didn't realize that this was only a precursor to greater and more centralized bureaucratic control. Now in addition to taking a zero-baseline review of provincial resources, there was also a list of what these new governors y were to avoid – clear boundaries around the power they were to wield.  For one thing, they were not to hear criminal cases.  They weren't there to be an extension of the Yamato court in such matters or to usurp the duties of the Kuni no Miyatsuko, one supposes.  Furthermore, when they were traveling to the capital, they were only to bring themselves and district officials, but not a huge retinue.  Whether they realized it or not, these kokushi were early bureaucrats in a burgeoning bureaucratic state, and they weren't supposed to be going out there to become minor kings in their own right; their power came from and was limited by the royal edict.  They also did not send them to usurp control, necessarily, from the Kuni no Miyatsuko of those areas.  The Kuni no Miyatsuko were still nominally in charge, it would seem, but the court was getting ready to make some major changes to the relationship. When traveling on official business, the governors could use appropriate government resources, such as the horses and food that they were entitled to.  Remember that post stations were set up, previously, to help better facilitate official travel and communication.  In a later edict it would be clarified that officials would be given a bronze token with bell-like figures on it.  The shape of the token would indicate what kinds of resources the individual was entitled to.  This applied to governors and their assistants.  Those who follow the rules could be rewarded with rank and more, while those who disobeyed would be reduced in rank, and any stipend that came with it.  Furthermore, any government official who was found taking a bribe would be liable to pay twice the amount, as well as being open to criminal punishment. The Chief Governor was allowed nine attendants, while the assistant was allowed seven, and a secretary—for which think more of the head of a branch office or department under the governor—could have five.  Any more, and the governor and followers could be punished for it. While in the provinces, the governors were expected to look into any claims of potentially false inheritance.  This included anyone using a false name or title to claim rights that were not theirs.  Governors were to first investigate what was going on before submitting their findings up to the court. Governors were also to erect arsenals on waste pieces of ground—ground that could not be cultivated for some reason.  In those arsenals they were to gather the various weapons and armor of the provinces and districts, presumably so that soldiers could be called up quickly and everyone could just get their equipment from one place, but it also looks like an attempt to take control of the means of violence.  Whether or not that was their direct intention I cannot say.  There was a provision for those on the frontier, with the Emishi, to allow the owners to keep their weapons, probably because the situation was potentially volatile, and it could turn at any moment. And so that was the first major piece of legislation:  Sending out governors to what are translated as “provinces”—though we are still using the term “kuni”, which equally refers to a state or country—ostensibly for the purposes of assessing the land, its value, the number of people, etc, but also to .  They are centralizeing military assets.   and they are given status as true court representatives.  I do notice that it was explicitly stated that these governors were for the eastern lands, .  presumably meaning those east of Yamato, since they only sent out eight of them These are areas that historically appear to have relied more on Yamato or else been something of a frontier area for the ethnic Wa people.  They may have been more open to Yamato's demands on their sovereignty. There were two more pieces to thise edict that didon't directly apply to the governors.  First off was the institution of a bell and a box to be set up at the court.  The box was basically a place to receive complaints about how things were going in the realm.  They are careful to note that complaints should be vetted by the Tomo no Miyatsuko, one of the hereditary government officials, or at least to the head of one's uji, if possible.  If they couldn't come to a decision, though, the complaints would be collected at dawn and then the government would look into them.  If anyone thought that there was a problem with how a complaint was being handled—for example, if they thought there was malfeasance involved or even just neglect, with officials not addressing it in a timely fashion, then the plaintiffs could go to the court and ring the bell, officially noting their dissatisfaction with the process. This idea of a bell and complaints seems to be a wide-ranging practice throughout Asia.  During the reign of the Legendary Yao, people were encouraged to nail their complaints to a tree.  Other edicts suggest that bells and drums were hung in royal palaces to allow common people to voice their grievances.  We have examples of the practice showing up in the Sukhothai kingdom of Thailand, during the 13th century reign of King Ramkhamhaeng, and then a 16th century example in what is now Myanmar, aka Burma.  While they differ in specifics, they are all related to the concept of royal justice even for the lowest of the people.  Granted, if you are a farmer in Owari province, I don't know how easy it was going to be to make your way over to the royal palace and ring that bell, but at least there was the idea that people could submit complaints. This was apparently used relatively soon after, as recounted in the second month of the following year, about six months later.  Apparently some person had placed a complaint in the box stating that people who had come to the capital on government business were being put to work and ill-used.  Basically it sounds like they were being rounded up for corvee labor even though they weren't local residents, they were just passing through.  In response, the sovereign, Karu, put a stop to forced labor at various places—presumably where the offending action was taking place, so I guess the complaint system it was working. The last part of this first set of edicts, kicking off the change was about inheritance.  Not all people in Yamato were free, and the law saw a difference between the status of free and unfree persons—that is to say enslaved persons.  And so they made laws that only the child of two free persons would be considered free.  If either parent was in bondage, then the child was also considered in bondage to their parent's house.  If two enslaved persons of different houses had a child, then they would stay with the mother.  Temple serfs, though technically bound to service of the temple, were made a special case, and their children were to be treated as if the temple serf was a free person. Slavery is something that doesn't always get talked about regarding ancient Yamato, and the Chronicles themselves don't tend to mention enslaved peoplethem often, but more because they belonged to a class of society that was largely outside of the scope of the narrative.  In cases where they are discussed, such as in these edicts, the Chronicles are unapologetic of the practice.  These may have been people who were captured in raids, or their descendants, or people who had been enslaved as punishment for some offence, although it isn't quite clear just what would count.  We know that Himiko sent enslaved persons as part of the tribute to the Wei Court, as she was trying to curry favor, and mention of them certainly shows up now and again. It is unclear how many people were enslaved up to this point, but some estimates suggest that it may have been five to ten percent of the population.  As I've mentioned before, this practice continued up until the Sengoku Period, and was only abolished by Toyotomi Hideyoshi in an attempt to stop the Portuguese from buying enslaved Japanese people and transporting them away from Japan.  That didn't meant that other forms of bondage, often economic in nature, didn't happen, however. So that was the content of the first edict—one of many.  The court sent out newly appointed “governors” to the provinces, but these governors were, so far, limited in their scope.  There is even some evidence that these may have been initially seen as temporary positions, and there was mention of “kokushi” in the previous reign.  Still, this was part of a clearly concentrated effort to assume central authority over the archipelago.  There were even officials appointed over the six districts of Yamato province, the core of the Yamato state, who were likewise expected to prepare registers of the population and the cultivated land. Even the idea that the sovereign had the right to make these appointments was something a bit radical, and indicated a change in way that the court, at least, would view the sovereign.  It likewise placed the sovereign in a position to dispense justice, through the vehicle of the court, and it began to define the citizens of the realm as well. That said, this all could have been argued for by using the Sui and Tang as examples of what government should look like and what a true nation should look like. It is also possible that this didn't all happen of a sudden in the 8th month, as the Chronicles describe it.  This is suggested at based on a separate account, mentioned in the Nihon Shoki, that the gathering of weapons, for instance—one of the things that the governors were charged with—actually took place between the 6th and 9th month, so some of this likely started before the date listed for the edict, and that may just have been one part of the whole.  The Chroniclers often do this, finding one particular date and throwing in everything rather than giving things piecemeal—depending on the event.  In addition, on the 19th day of the 9th month, officials were sent out to all of the provinces—not just the eastern provinces—to take a proper census.  At this same time, the sovereign, Karu, issued another edict, which seems related to their work as well as that of the governors, or kokushi, sent to the east.  In it he noted that the powerful families—the Omi, the Muraji, the Tomo no Miyatsuko, and the Kuni no Miyatsuko—would compel their own vassals to work at their pleasure.  They would also appropriate for themselves various pieces of land, so that people could only work it for them.  Not everyone was doing this, though.  Some unnamed persons were accused of hording thousands of acres of rice-land, while others had no more land than you could stick a needle into.  Furthermore, these powerful families were collecting taxes for themselves, first, and then handing a portion over to the government.  They likely compelled their vassals to work on their own tombs, and such.  And so, the sovereign, Karu, forbade anyone from becoming a landlord and forcing people to pay rent.  Presumably he was also dealing with some of the other aspects, though that may have proved more difficult.  After all, from what we've seen, everything that Karu is complaining about—things that no doubt were considered antithetical to good government based on pure Confucian values—were the norm for the elite at the time.  Heck, the Kuni no Miyatsuko had no doubt thought of the land and the people on it as their own, not Yamato's.  However, things were shifting, and once again we see Yamato exerting royal prerogative over the land and people, something that they would do more and more as the system of laws and punishments eventually came together. Now the big question is how did this all pan out?  Well, it took some time, but we get a report on the second day of the third month of the following year, 646, and to be honest, it doesn't sound like things were going too well.  Of the high officials sent out as kokushi to govern the eastern provinces, six listened and did what they were told, but two did not, and then there were numerous other issues.  A more detailed list was given on the 19th of the month, including a clearer idea of punishments. The decree was given to the “Choushuushi”, apparently other government officials sent to check on how things were going, though it was clearly about various officials. The decree starts by reminding officials that they were not to use their position to appropriate public or private property.  Anyone of Assistant governor rank or higher would be punished by being degraded in rank, and presumably their stipend.  Those officials of clerk, or secretary, on down would face flogging.  If anyone was found converting public property (or someone else's) to their own use, they would be fined double the value of the property, just as with bribes.  So the Yamato government was They were really trying to tamp down on people trying to make a profit from their position. Here are a few of the specific things that the Choushuushi reported back: -             Hozumi no Omi no Kuhi taxed individual families for his own use and though he gave some of it back make, it wasn't all.  His two assistants were at fault for not correcting him. -             Kose no Tokune no Omi did something similar, taking away horses from the farmers for his own use.  His assistants not only did not correct him, but actually helped him.  They also took horses from the Kuni no Miyatsuko of the province.  One of the officials tried to remonstrate with him, but he finally gave in to the corruption. -             Ki no Marikida no Omi sent men to Asakura no Kimi and Inoue no Kimi to look at their horses for his own use.  He also had Asakura no Kimi make him swords and provide bow-cloth.  He also took the payments in lieu of weapons offered by the Kuni no Miyatsuko but didn't properly report it.  As a somewhat strange addition to these charges, he apparently was guilty of allowing himself to be robbed of a sword in his own province as well as in Yamato, presumably one that was actually government property.  Apparently being held up at sword point wasn't considered sufficient justification for letting it go.  This was facilitated by his assistants and their subordinates. -             Adzumi no Muraji apparently made the Kuni no Miyatsuko send government property to someone when they were ill, and he took horses belonging to the Yube clan.  His assistant gathered items at his house that were paid in lieu of hay, and he took the horses of the Kuni no Miyatsuko and exchanged them for others.  At least two other brothers were found guilty as well. -             Ohochi no Muraji broke the decree of not personally judging the complaints of the people in the districts under his charge.  He took it on himself to judge the case of the men of Udo and the matter of the enslaved persons of Nakatomi no Toko, who was also considered guilty. -             Kishida no Omi, as with Ki no Marikida, also allowed his sword to be stolen, showing a want of circumspection. -             In one of the strangest put-downs in this list, Womidori no Omi and Tanba no Omi weren't guilty of anything, but were just considered incompetent.  So make of that what you will. -             Imbe no Konomi and Nakatomi no Muraji no Mutsuki also committed offenses, we are told, but the nature is unclear. -             Hada no Omi and Taguchi no Omi, on the other hand, were free and clear.  Apparently they hadn't committed any offenses. -             Finally, Heguri no Omi was guilty of neglecting to investigate the complaints of the men of Mikuni. A big to-do was made about the punishments to be meted out to all of these individuals, as well as to the Kuni no Miyatsuko who may have enabled them.  However, instead of prosecuting them, Karu declared a general amnesty.  This was like a mass pardon of offenses—a do-over if you would.  Not that anything would be forgotten.  On the other hand, six individuals who did as they were told were all commended for their service.  He also took the lent-rice for the maintenance of the late Kibishima, the dowager queen who had passed away in 643, and distributed her official-rice lands amongst the ministers down to the Tomo no Miyatsuko.  He also gave rice-land and hill tracts, which weren't suitable for farming, over to various temples which had previously been omitted from the official registers for some reason. Over all, this seems to be a rather powerful message:  We're not They weren't fooling around with these changes, and people better get on board or get out of the way.  Whereas previously things in the provinces may have operated under a sort of Vegas Rules, that was no longer going to be tolerated.  On the other hand, Karuhe demonstrated mercy, likely realizing that too harsh an approach would bring the wrath of the other powerful nobles.  Nonetheless, he elaborated what each person had done and effectively put them and anyone else harboring thoughts that they could just ignore these edicts on notice.  These reforms weren't going away. So we've talked about where we were and we can see the powers at the Yamato court starting to make changes.  For now, this is probably going to be a good place to take a break for this episode, but there are a lot more of these reforms to get to, not to mention the rest of the intra-palace politicking at the court, as well as the changing situation on the continent and in diplomatic channels.  We are going to keep looking at these changes as we move forward through the period of Great Change, known as the Taika era. Until then, thank you for listening and for all of your support. If you like what we are doing, please tell your friends and feel free to rate us wherever you listen to podcasts.  If you feel the need to do more, and want to help us keep this going, we have information about how you can donate on Patreon or through our KoFi site, ko-fi.com/sengokudaimyo, or find the links over at our main website, SengokuDaimyo.com/Podcast, where we will have some more discussion on topics from this episode. Also, feel free to reach out to our Sengoku Daimyo Facebook page.  You can also email us at the.sengoku.daimyo@gmail.com.  Thank you, also, to Ellen for their work editing the podcast. And that's all for now.  Thank you again, and I'll see you next episode on Sengoku Daimyo's Chronicles of Japan.

Is reaching A+ quality always the right answer? What happens when you consider factors that are part of the system, and not just the product in isolation? In this episode, Bill Bellows and Andrew Stotz discuss acceptability versus desirability in the quality realm. TRANSCRIPT 0:00:02.5 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today's episode, episode three, is Acceptability and Desirability. Bill, take it away.   0:00:28.1 Bill Bellows: Thank you, Andrew, and welcome back to our listeners.   0:00:30.7 AS: Oh, yeah.   0:00:31.4 BB: Hey, do you know how long we've been doing these podcasts?   0:00:36.6 AS: No.   0:00:40.8 BB: We started... Our very first podcast was Valentine's Day 2023. I was gonna say 2013. 2023, so roughly 17 months of podcast, Andrew.   0:00:53.4 AS: That was our first date, huh?   0:00:55.0 BB: Our first date was Valentine's Day 2023.   0:00:58.9 AS: All right. Don't tell your wife.   [laughter]   0:01:03.1 BB: All right. And so along the way, I've shared reflections from my first exposures to Dr. Deming, as well as my first exposures to Genichi Taguchi. Talked about Edward de Bono, Tom Johnson, others, mentors, Bill Cooper, Phil Monroe, Gipsie Ranney was a great mentor. Last week, Andrew, while on vacation in New England with my wife, I visited for a day my 85-year-old graduate school advisor who I worked with for ten years, Bob Mayle, who lives in, I would say, the farthest reaches of Maine, a place called Roque Bluffs. Roque Bluffs. How's that for... That could be North Dakota. Roque Bluffs. He's in what they call Down East Maine. He's recently got a flip phone. He's very proud. He's got like a Motorola 1985 vintage flip phone. Anyway, he's cool, he's cool. He's...   0:02:15.9 AS: I'm just looking at that place on the map, and looks incredible.   0:02:19.0 BB: Oh, yeah. He's uh, until he got the phone, he was off the grid. We correspond by letters. He's no internet, no email. And he has electricity, lives in about an 800 square-foot, one-floor bungalow with his wife. This is the third time we've visited him. Every time we go up, we spend one day getting there, one day driving home from where my in-laws live in New York. And then one day with him, and the day ends with going to the nearby fisherman's place. He buys us fresh lobster and we take care of them. [chuckle]   0:03:01.3 AS: Yeah, my sister lives in Kennebunk, so when I go back to the US, I'm...   0:03:08.8 BB: Yeah, Kennebunk is maybe 4 hours away on that same coast.   0:03:15.3 AS: I'm just looking at the guide and map book for Roque Bluffs' State Park, and it says, "a beautiful setting with oceanfront beach, freshwater pond, and hiking trails."   0:03:25.9 BB: Yeah, he's got 10 acres... No, he's got, I think, 20, 25 acres of property. Sadly, he's slowly going blind. He has macular degeneration. But, boy, for a guy who's slowly going blind, he and I went for a walk around his property for a couple hours, and it's around and around... He's holding branches from hitting me, I'm holding branches from hitting him and there's... Let alone the terrain going up and down, you gotta step up and over around the rocks and the pine needles and all. And it was great. It was great. The week before, we were close to Lake George, which is a 32-mile lake in Upstate New York. And what was neat was we went on a three-hour tour, boat ride. And on that lake, there are 30 some islands of various sizes, many of them owned by the state, a number of them owned privately. Within the first hour, we're going by and he points to the island on the left and he says it was purchased in the late '30s by Irving Langmuir. Yeah, so he says, "Irving Langmuir," and I thought, I know that name from Dr. Deming. That name is referenced in The New Economics.   0:04:49.1 BB: In fact, at the opening of Chapter Five of The New Economics, the title is 'Leadership.' Every chapter begins with a quote, right? Chapter Five quote is, "You cannot plan to make a discovery," so says Irving Langmuir. So what is... The guy's describing this island purchased back in the late '30s by Langmuir for like $5,000. I think it's... I don't know if he still owns it, if it's owned by a nonprofit. It's not developed. It's privately held. I'm trying, I wrote to Langmuir's grandson who did a documentary about him. He was a Nobel Prize-winning physicist from GE's R&D center in Schenectady, New York, which is a couple hours south of there. But I'm certain, and I was looking for it earlier, I know I heard of him, of Irving Langmuir through Dr. Deming. And I believe in his lectures, Deming talked about Langmuir's emphasis on having fun at work, having fun. And so I gotta go back and check on that, but I did some research after the day, and sure enough came across some old videos, black and white videos that Langmuir produced for a local television station, talking about his... There's like show and tell with him in the laboratory. And in there, he talks about joy and work and all that.   0:06:33.5 BB: So I'm thinking, that's pretty cool. So I'm waiting to hear from his grandson. And ideally, I can have a conversation with his grandson, introduce him to Kevin and talk about Deming's work and the connection. Who knows what comes out of that? Who knows? Maybe an interview opportunity with you and Irving Langmuir's grandson. So, anyway.   0:06:52.7 AS: Fantastic.   0:06:54.7 BB: But going back to what I mentioned earlier in my background in association with Deming and whatnot, and Taguchi, and I offer these comments to reinforce that while my interests in quality were initially all things Taguchi, and then largely Deming, and it wasn't long before I stopped, stepped back and an old friend from Rocketdyne 20 some years ago started focusing on thinking about thinking, which he later called InThinking. And it's what others would call awareness of our... Well, we called it... Rudy called it, better awareness of our thinking patterns, otherwise known as paradigms, mental models.  We just like the way of explaining it in terms of becoming more aware of our thinking patterns. And I say that because... And what I'm presenting relative to quality in this series, a whole lot of what I'm focusing on is thinking about thinking relative to quality.   0:07:58.8 BB: And so last time, we talked about the eight dimensions of quality from David Garvin, and one of them was acceptability. And that is this notion in quality, alive and well today, Phil Crosby has created this focus on achieving zero defects. Everything meets the requirements, that gets us into the realm, everything is good. Dr. Deming and his red bead experiments talked about red beads and white beads. The white beads is what we're striving for. All the beads are good. The red beads represent defects, things we don't want. And that's this... Thinking wise, that's a thinking pattern of "things are good or bad." Well, then we can have high quality, low quality and quality. But at Rocketdyne, when I started referring to that as category thinking, putting things into categories, but in the world of quality, there's only two categories, Andrew: good and bad. This either meets requirements or it doesn't. And if it's good, then we're allowed to pass it on to the next person. If we pass it on and it's not good, then they're going to send it back to us and say, "Uh-uh, you didn't meet all the requirements." And what I used to do in class, I would take something, a pen or something, and I would go to someone in the seminar and I'd say, "If I hand this to you and it doesn't meet requirements, what are you going to say?" You're gonna say, "I'm not going to take it. It hasn't met the requirements."   0:09:36.4 BB: And I would say you're right. All the I's are not dotted, all the T's are not crossed, I'm not taking it. Then I would take it back and I'd say, "Okay, now what if I go off and dot all those I's and cross all those T's?" Then I would hand them the pen or whatever the thing was, and I'd say, "If all those things have been met," now we're talking acceptability. "Now, what do you say?" I said, "Can you reject it?" "No." I say, "So what do you say now that all those things... If you're aware that all those requirements have been met, in the world of quality, it is as good, now what do you say?" And they look at me and they're like, "What do I say?" I say, "Now you say, thank you." But what I also do is one more time... And I would play this out to people, I'd say, "Okay, Andrew, one more time. I hand you the pen, Andrew, all the requirements are met. And what do you say?" And you say, "Thank you." And I say, "What else just happened when you took it?"   0:10:45.4 AS: You accepted it.   0:10:47.3 BB: Yes. And I say, "And what does that mean?" "I don't know. What does that mean?" I said, "It means if you call me the next day and say, I've got a problem with this, you know what I'm going to say, Andrew?"   0:10:58.5 AS: "You accepted it."   0:11:01.5 BB: Right. And so, what acceptability means is don't call me later and complain. [laughter] So, I get a photo of you accepting it, you're smiling. So if you call me back the next day and say, "I've got a problem with this," I'd say, "No, no, no." So acceptability as a mental model is this idea that once you accept it, there's no coming back. If you reveal to me issues with it later, I deny all that. I'd say, I don't know what your problem with Andrew... It must be a problem on your end, because what I delivered to you is good. And if it is good, then there can't be any problems associated with it. So, if there are problems, have to be on your end, because defect-free, everything good, implies, ain't no problems, ain't no issues with it. I'm thinking of that Disney song, trouble-free mentality, Hakuna Matata.   [chuckle]   0:12:04.5 BB: But now I go back to the title, Acceptability and Desirability. One of Dr. Deming's Ph.D. students, Kauro [actually, Kosaku] Yoshida, he used to teach at Cal State Dominguez Hills back in the '80s, and I think sometime in the '90s, he went to Japan. I don't know if he was born and raised in Japan, but he was one of Dr. Deming's Ph.D. students, I believe, at NYU. Anyway, I know he's a Ph.D. student of Dr. Deming, he would do guest lectures in Dr. Deming's four-day seminars in and around Los Angeles. And, Yoshida is known for this saying that Americans are all about acceptability meets requirements, and the Japanese are about desirability. And what is that? Well, it's more than meeting requirements. And, I wanna get into more detail on that in future episodes. But for now, we could say acceptability is meeting requirements. In a binary world, it can be really hard to think of, if everything's met requirements, how do I do better than that? How do I continue to improve if everything meets requirements?  Well, one clue, and I'll give a clue, is what I shared with the senior most ranking NASA executive responsible for quality.   0:13:46.4 BB: And this goes back to 2002 timeframe. And we had done some amazing things with desirability at Rocketdyne, which. is more than meeting requirements. And the Vice President of Quality at Rocketdyne knew this guy at NASA headquarters, and he says, "You should go show him what we're doing." So I called him up a week in advance of going out there. I had made the date, but I figured if I'm going to go all the way out there, a week in advance, I called him up just to make sure he knew I was coming. And he said something like, "What are we going to talk about?" He said something like, "We're going to talk about that Lean or Six Sigma stuff?" And I said, "No, more than that." And I think I described it as, we're going to challenge the model of interchangeable parts. And he's like, "Okay, so what does that mean?" So the explanation I gave him is I said, "What letter grade is required for everything that NASA purchases from any contractor? What letter grade is ostensibly in the contract? What letter grade? A, B, C, D. What letter grade is in the contract?" And he says, "Well, A+."   [laughter]   0:15:01.2 BB: And I said, "A+ is not the requirement." And he's like, "Well, what do you mean?" I said, "It's a pass-fail system." That's what acceptability is, Andrew. Acceptability is something is either good or bad, and if it's bad, you won't accept it. But if it's good, if I dot all the I's and cross all the T's, you will take it. It has met all the requirements. And that gets into what I talked about in the first podcast series of what I used to call the first question of quality management. Does this quality characteristic, does the thrust of this engine, does the roughness of this surface, does the diameter of this hole, does the pH of this bath meet requirements? And there's only two answers to that question, yes or no. And if yes is acceptable, and if no, that's unacceptable. And so I pointed out to him, much to his chagrin, is that the letter grade requirement is not A+, it's D- or better. [chuckle] And so as a preview of we'll get into in a future podcast, acceptability could be, acceptability is passing. And this guy was really shocked. I said, "Procurement at NASA is a pass-fail system."   0:16:21.9 BB: Every element of anything which is in that system purchased by NASA, everything in there today meets a set of requirements, is subject to a set of requirements which are met on a pass-fail basis. They're either, yes, it either meets requirements, acceptable, or not. That's NASA's, the quality system used by every NASA contractor I'm aware of. Boeing's advanced quality system is good parts and bad parts. Balls and strikes. And so again, for our viewers, acceptability is a pass-fail system. And what Yoshida... You can be thinking about what Yoshida's talked about, is Japanese companies. And again, I think it's foolish to think of all Japanese companies, but back in the '80s, that's really the way it came across, is all Japanese companies really have this figured out, and all American companies don't. I think that's naive. But nonetheless, what he's talking about is shifting from a pass-fail system, that's acceptability, to, let's say, letter grades of A's or B's. That would be more like desirability, is that it's not just passing, but an A grade or a B grade or a C grade. So that's, in round terms, a preview of Yoshida... A sense of, for this episode, of what I mean by acceptability and desirability.   0:17:54.7 BB: In the first podcast which was posted the other day, I made reference to, instead of achieving acceptability, now I can use that term, instead of achieving zero defects as the goal, in the world of acceptability, once we continuously improve and achieve acceptability, now everything is passing, not failing. This is in a world of what I refer to as category thinking, putting things in categories. In the world of black and white, black is one category, white is a category. You got two categories, good and bad. If everything meets requirements, how do you continuously improve if everything is good? Well, part of the challenge is realize that everything is good has variation in terms... Now we could talk about the not all letter grade A, and so we could focus on the things that are not A's and ask the question, is an A worthwhile or not? But what I was saying in the first podcast is my admiration for Dr. Deming's work uniquely... And Dr. Deming was inspired towards this end by Dr. Taguchi, and he gave great credit to that in Chapter Ten of The New Economics. And what I don't see in Lean nor Six Sigma, nor Lean/Six Sigma, nor Operational Excellence, what I don't see anywhere outside of Dr. Deming's work or Dr. Taguchi's work is anything in quality which is more than acceptability.   0:19:32.0 BB: It's all black and white. Again, Boeing's Advanced Quality System is good parts and bad parts. Now, again, I'm not suggesting that there's anything wrong with that. And I would also suggest in a Deming-based organization there may be characteristics for which all we need is that they're good. We don't need to know how good they are, we don't need to know the letter grade. And why is that? Because maybe it's not worth the trouble to discern more than that. And this is where I use the analogy of balls and strikes or kicking the ball into the net.  If you've got an open net... That's Euro Cup soccer. There's no reason to be precisely placing the ball. All you want to do is get it into the net. And that's an area of zero defects, maybe all that is worthwhile, but there could be other situations where I want the ball in a very particular location in the strike zone. That's more of this desirability sense. So I want to clarify for those who listened to the first podcast, is what I'm inferring is I'm not aware of any quality management system, any management system in which, inspired by Dr. Deming and Taguchi, we have the ability to ask the question, is acceptability all that is required?   0:20:55.7 BB: And it could be for a lot of what we do, acceptability is not a bad place to be. But I'm proposing that as a choice, that we've thought about it and said, "You know what? In this situation, it's not worth, economically, the extra effort. And so let's put the extra effort into the things where it really matters." And if it doesn't... So use desirability where it makes sense, use acceptability elsewhere. Right now, what I see going on in organizations unaware of Dr. Deming's work, again, Dr. Taguchi's work, is that they're really blindly focusing on acceptability. And I think what we're going to get into is, I think there's confusion in desirability. But again, I want to keep that for a later episode. Now, people will say, "Well, Bill, the Six Sigma people are about desirability." No, the Six Sigma people have found a new way to define acceptability. And I'll give you one other fun story. When I taught at Northwestern's Kellogg Business School back in the late '90s, and I would start these seminars off by saying, "We're going to look at quality management practices, past, present, future." And so one year, I said, "So what quality management practices are you aware of?" And again, these are students that have worked in industry for five or six years.   0:22:17.6 BB: They've worked at GM, they worked at General Electric, they worked for Coca Cola, banking. These are sharp, sharp people. But you got into the program having worked somewhere in the world, in industry, so they came in with experience. And so they would say, zero defect quality is a quality management practice. And I'd say, "Okay, so where'd that come from?" And again, this is the late '90s. They were aware of the term, zero defects. They didn't know it was Philip Crosby, who I learned yesterday was... His undergraduate degree is from a school of podiatry. I don't know if he was a podiatrist, but he had an undergraduate... A degree in podiatry, somebody pointed out to me. Okay, fine. But Philip Crosby, his big thing was pushing for zero defects. And you can go to the American Society for Quality website to learn more about him. Philip Crosby is the acceptability paradigm. So, students would bring him up and I'd say, "Okay, so what about present? What about present?" And somebody said, "Six Sigma Quality." So I said, "So what do you know about Six Sigma Quality?" And somebody said," Cpk's of 2.00." And I said, "So what's... " again, in a future episode, we could talk about Cpk's."   0:23:48.5 AS: But I said to the guy, "Well, what's the defect rate for Six Sigma... For Cpk's or Six Sigma Quality or Cpk's of 2?" And very matter of factly, he says, "3.4 defects per million." So I said, "How does that compare to Phil Crosby's quality goal from 1962? Here we are, 1997, and he's talking about Motorola and Six Sigma Quality, a defect goal of 3.4 defects per million. And I said, "How does that compare to Phil Crosby's quality goal of zero defects in 1962?" And the guy says... [chuckle] So cool, he says, "Well, maybe zero is not worth achieving." 'Cause again, zero was the goal in 1962. Six Sigma sets the goal for 3.4 per million. Not zero, 3.4, to which this guy says... And I thought it was so cool, he says, "Well, maybe zero is not worth achieving." So, there. Well, my response was, "Well, what makes 3.4 the magic number for every process in every company around the world? So, what about that?" To which the response was crickets. But what I want to point out is we're still talking about zero... I mean 3.4 is like striving towards zero and admitting some. It is another way of looking at acceptability. It is... And again, and people claim it's really about desirability. I think, well, there's some confusion in desirability and my hope in this episode is to clear up some of that misunderstanding in acceptability as well as in desirability. And they... Let me just throw that out.   0:25:58.1 AS: Yeah, there's two things that I want to say, and the first one is what he should have replied is, for those older people listening or viewing that can remember the movie, Mr. Mom with Michael Keaton, I think it was. And he should have replied, "220, 221, whatever it takes." And he should have said, "Well, yeah, 3.4, 3.5, 3.6. It's could be around there."   0:26:27.5 BB: Well, the other thing is, why we're on that is... And I think this is... I'm really glad you brought that up, is, what I would push back on the Lean and the Six Sigma, those striving for zero defects or Cpk's of 2 or whatever they are is, how much money are we going to spend to achieve a Cpk of 2, a zero defects? And again, what I said and... Well, actually, when I posted on LinkedIn yesterday, "I'm okay with a quality goal of 3.4 defects per million." What I'm proposing is, instead of blindly saying zero defects is the goal and stop, or I want Cpk's of 1.33 or whatever they are everywhere in the organization, in terms of the economics of variation or the new economics, is how much money are we going to spend to achieve zero or 3.4 or whatever it is? And, is it worth the return on the investment? And this is where Dr. Taguchi's loss function comes in.   0:27:49.2 BB: And so what I'm proposing, inspired by Genichi Taguchi and W. Edwards Deming is, let's be thinking more about what is... Let's not blindly stop at zero, but if we choose to stop at zero, it's an economic choice that it's not worth the money at this time in comparison to other things we could be working on to improve this quality characteristic and that we've chosen to be here... Because what I don't want people to think is what Dr. Deming and Taguchi are talking about is we can spend any amount of money to achieve any quality goal without thinking of the consequences, nor thinking about, how does this goal on this thing in isolation, not make things bad elsewhere. So we have to be thinking about a quality goal, whether it's worth achieving and will that achievement be in concert with other goals and what we're doing there? That's what I'd like people thinking about as a result of this podcast tonight.   0:28:56.0 AS: And I think I have a good way of wrapping this up, and that is going back to Dr. Deming's first of his 14 Points, which is, create constancy of purpose towards improvement of product and service with the aim to become competitive, to stay in business, and to provide jobs. And I think that what that... I link that to what you're saying with the idea that we're trying to improve our products and services constantly. We're not trying to improve one process. And also, to become competitive in the market means we're improving the right things because we will become more competitive if we are hitting what the client wants and appreciates. And so... Yeah.   0:29:46.3 BB: But with regard to... Absolutely with regard to our customers, absolutely with regard to how it affects different aspects of our company, that we don't get head over heels in one aspect of our company and lose elsewhere, that we don't deliver A+ products to the customer in a losing way, meaning that the A+ is great for you, but financially, we can't afford currently... Now, again, there may be a moment where it's worthwhile to achieve the A... We know we can achieve the A+, but we may not know how to do it financially. We may have the technology to achieve that number. Now, we have to figure out, is, how can we do it in an economically advantaged way, not just for you, the customer, but for us. Otherwise, we're losing money by delivering desirability. So it's gotta work for us, for you, but it's also understanding how that improvement... That improvement of that product within your overall system might not be worthwhile to your customer, in which case we're providing a... The classic...   0:31:18.8 AS: You're not becoming competitive then.   0:31:21.8 BB: The better buggy whip. But that gets into looking at things as a system. And this is... What's invaluable is, all of this is covered with a grasp of the System of Profound Knowledge. The challenge is not to look at goals in isolation. And even I've seen people at Lean conferences quote Dr. Deming and his constancy of purpose and I thought, well, you can have a... A non-Deming company has a constancy of purpose. [chuckle]  The only question is, what is the purpose? [laughter] And that's when I thought, a constancy of purpose on a focus on acceptability is good provided all of your competitors are likewise focusing on acceptability. So I just be... I just am fascinated to find people taking Deming's 14 Points one at a time, out of context, and just saying, "Well, Dr. Deming said this." Well, there we go again. [laughter]   0:32:29.9 AS: Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. If you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."

In this episode, Bill Bellows and Andrew Stotz discuss David Garvin's 8 Dimensions of Quality and how they apply in the Deming world. Bill references this article by Garvin: https://hbr.org/1987/11/competing-on-the-eight-dimensions-of-quality TRANSCRIPT 0:00:02.4 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. This is the Misunderstanding Quality series, episode two, The Eight Dimensions of Quality. Bill, take it away.   0:00:30.4 Bill Bellows: Welcome back, Andrew. Great to see you again. All right, episode two, we're moving right along. So in episode one, which the title I proposed, waiting to see what comes out, the title I proposed was, Quality, Back to the Start. And that was inspired by some lyrics from Coldplay. Anyway, but this is a, it's going back to my start in quality and last time I mentioned discovering Taguchi's work long before I discovered Dr. Deming. In fact, Gipsie Ranney, who is the first president of the Deming Institute, the nonprofit formed by Dr. Deming and his family just before he passed away, and Gipsie became the first president and was on the board when I was on the board for many years. And I spoke with her nearly every day, either driving to work or driving home. And once, she calls me up and she says, "Bill," that was her Tennessee accent, "Bill."   0:01:50.5 BB: She says, "It says on The Deming Institute webpage that you infused Dr. Taguchi's work into Dr. Deming's work," something like that, that I... Something like I infused or introduced or I brought Taguchi's work into Deming's work, and I said, "Yes." I said, "Yeah, that sounds familiar." She says, "Isn't it the other way around?" That I brought Deming's work into Taguchi's work. And I said, "No, Gipsie," I said, "It depends on your starting point. And my starting point was Dr. Taguchi." But I thought it was so cool. She says, "Bill don't you have it? Don't you... " She is like, "Isn't it the other way around?" I said, "No, to me, it was all things Taguchi, then I discovered Dr. Deming." But I was thinking earlier before the podcast, and I walked around putting together how, what I wanna talk about tonight. And I thought, when I discovered Taguchi's work, I looked at everything in terms of an application of Dr. Taguchi's ideas.   0:03:29.7 AS: And one question about Taguchi for those people that don't know him and understand a little bit about him, was he... If I think about where Dr. Deming got at the end of his life, it was about a whole system, the System of Profound Knowledge and a comprehensive way of looking at things. Was Taguchi similar in that way or was he focused in on a couple different areas where he really made his contribution?   0:04:03.9 BB: Narrower than Dr. Deming's work. I mean, if we look at... And thank you for that... If we look at Dr. Deming's work in terms of the System of Profound Knowledge, the elements of systems psychology, variation, theory of knowledge, Taguchi's work is a lot about variation and a lot about systems. And not systems in the sense of Russ Ackoff systems thinking, but variation in the sense of where's the variation coming from looking upstream, what are the causes of that variation that create variation in that product, in that service?   0:04:50.9 BB: And then coupled with that is that, how is that variation impacting elsewhere in the system? So here I am receiving sources of variation. So what I deliver it to you has variation because of what's upstream of me and Taguchi's looking at that coupled with how is that variation impacting you? So those are the systems side, the variation side. Now, is there anything in Deming, in Taguchi's work about psychology and what happens when you're labelling workers and performance appraisals and, no, not at all.   0:05:37.6 AS: Okay, got it.   0:05:38.4 BB: Is there anything in there about theory of knowledge, how do we know that what we know is so? No, but there's a depth of work in variation which compliments very much so what Dr. Deming was doing. So anyway, so no. And so I discovered Taguchi's work, and I mentioned that in the first episode. I discovered his work, became fascinated with it, started looking at his ideas in terms of managing variation to achieve incredible... I mean, improved uniformity to the extent that it's worthwhile to achieve. So we were not striving for the ultimate uniformity, it's just the idea that we can manage the uniformity. And if we... And we'll look at this in more detail later, but for our audience now, if you think of a distribution of the variation in the performance of a product or a service, and you think in terms of... It doesn't have to be a bell-shaped distribution, but you have a distribution and it has an average and it has variation.   0:06:50.4 BB: What Dr. Taguchi's work is about in terms of a very brief, succinct point here in episode two is how might we change the shape of that distribution? How might we make it narrower, if that's a worthwhile adventure? It may be worthwhile to make it wider, not just narrower, but in both cases, we're changing the shape of the distribution and changing the location. So Taguchi's work, Taguchi's Methods, driven by variation comes to me, variation impacts you is how do I change the shape and location of that distribution? So on a regular basis, as I became more fascinated with that, I started thinking about, well, how might I apply Taguchi's ideas to these things that I encountered every day? Well, prior to that before discovering Taguchi's work, when I was a facilitator in problem solving and decision making training, I did the same thing, Andrew.   0:07:52.4 BB: I started looking at, oh, is this a problem? Is this a decision? Is this a situation that needs to be appraised? And so prior to that, what I was thinking about is when I was just a heat transfer analyst working on my Ph.D., I didn't look at how the heat transfer stuff affected all these other aspects of my lives. I didn't think about it when I went into a supermarket, but there was something about the problem solving and decision making that just infatuated me. And I would look at, oh, is Andrew talking about a decision or is Andrew talking about a problem? So I started hearing things. And so when I went into Taguchi's work, it was the same thing. And then shifting into Deming's work, it's the same thing. And I've... There's nothing else that I've studied that I look at things through those lenses. Anyway, so in studying, getting exposed to Taguchi, I mentioned that I had some time away from work, I went out on medical for some reasons and went and bought a book, a bunch of books.   0:09:02.4 BB: And one of the books I bought by David Garvin had come out in 1987, is entitled "The Eight Dimensions of Quality." There's a Harvard Business Review article that I wanna reference in this episode, and I'll put a link to the article. It's a free link. And so when you hear people talk about a quality product or a quality service or quality healthcare. We think in terms of it's quality as things, it's either good quality or bad quality or high quality, or somebody calls it low quality, or we just say it's a quality product. But what does that mean? So what I find is very loosely, we think in terms of categories of quality, good, bad, high, low. What we'll look at in a future episode is what would happen if we thought about quality on a continuum, which I believe Taguchi's work really demonstrates vividly as well as Dr. Deming's work.   0:10:07.4 BB: But even to back up before we talk about the eight dimensions of quality, I wanted to give some background on the word quality. The word quality, and this comes from an article and I'll put a link to this article, I wrote it for the Lean Management Journal a number of years ago, the word quality has Latin roots, beginning as qualitas, T-A-S, coined by the Roman philosopher and statesman, Marcus Tullius Cicero. He later became an adversary of this bad guy named Mark Antony. You've heard of him. Feared by Antony, this guy was feared by Antony because his power of speech led, you know what it led to, Andrew, his power of speech?   0:10:54.5 AS: What?   0:10:54.6 BB: His beheading.   0:10:55.8 AS: Oh my goodness.   0:10:56.5 BB: So for those of you with great powers of speech, watch out for your Mark Antony. But meanwhile, he introduced fellow Romans to the vocabulary of qualitas, quantitas, quantity, humanitas, humanities, essentia, which is, essence, he also is credited with an extensive list of expressions that translate into English today. Difference, infinity, science, morale. Cicero spoke of qualitas with his peers when focusing on the essential nature, character or property of an object. And this is kind of interesting. I mean, you can count how many apples do we have. And again, he came up with the term quantitas for quantity, but he is also talking about the essence of the apples. That's the quality word. And then 2000 years later when writing "The New Economics", Dr. Deming provided his definition and a little bit different.   0:12:05.3 BB: He says, "The problem anywhere is quality. What is quality?" Says the good doctor, "A product or service possesses quality if it helps somebody, it enjoys a good and sustainable market." And I said in the article, "As with Cicero, Deming saw quality as a property." And then some other background on quality before I talk about Garvin, "long after Cicero and well before Deming, quality as a property was a responsibility of guilds." Guilds. I mean, now we have writers guilds, we have actors guilds, and it's kind of cool that these guilds still exist and they are associations of artisans who control the practice of their craft, each with a revered trademark. So here in Los Angeles, we have writers guilds, actors guilds. They were organized as professional societies, just like unions.   0:13:00.2 BB: And these fraternities were developed, and within these fraternities they created standards for high quality. All right. So what is this quality management stuff from David Garvin? So this article was written 37 years ago and reviewing it for tonight's episode and I thought it fit in really, really well. I was reminded of... First time I read this article, 1989, I knew a lot about... Well, I knew, I was excited about Taguchi as I knew a lot about Taguchi, didn't know a lot about Dr. Deming. So I'm now reviewing it years later with a much deeper, broader Deming perspective than at that time. But I do believe, and I would encourage the listeners to get ahold of the article, look at it, if you wanna go into more depth, there's Garvin's book. And doing some research for tonight, I found out that he passed away in 2017, seven or so years ago.   0:14:04.6 BB: He was, I guess from, most of his career and education he was at the Harvard Business School, very well respected there. And so in the article it talks about, again, this, 1987, that's the era of Total Quality Management. That's the era in which Dr. Deming was attracting 2000 people to go to his seminars. 1987 is two years before Six Sigma Quality, two years before “The Machine That Changed The World.” And in the article, he says, "Part of the problem, of course, is that Japanese and European competition have intensified. Not many companies tried to make quality programs work even as they implemented them." This is back when quality was an era of quality circles. He says, "In my view, most of the principles about quality were narrow in scope. They were designed as purely defensive measures to preempt failures or eliminate defects, eliminate red beads."   0:15:10.3 BB: "What managers need now is an aggressive strategy to gain and hold markets with high quality," there we go again, "as a competitive linchpin." All right. So in the article, he has some interesting explanations of... Highlights. In the book is more depth. He talks about Joseph Juran, "Juran's Quality Handbook". Juran observed that quality could be understood in terms of avoidable and unavoidable costs. Dr. Deming talked about the economics. The New Economics, right? But Juran is looking at avoidable, unavailable costs resulting from defects in product failures. That's very traditional quality today.  The latter associated with prevention, inspection, sampling, sorting, quality control. And so this is what I found fascinating, is 37 years later, this is still the heavy sense of what quality is all about. Avoiding failure, avoiding defects.   0:16:18.3 BB: Then he talks about Total Quality Control coming from Armand Feigenbaum, who was a big name in the '80s. Again Dr. Deming's work kind of created this big quality movement but it wasn't just Dr. Deming people discovered, they discovered Philip Crosby in a Zero Defects advocacy, Feigenbaum, Juran, sometime later. Again, mid '80s, Dr. Taguchi's name started to be heard. All right. And then the reliability. All right. Now I wanna get into the... Oh, here's, this is good. "In 1961, the Martin Corporation, Martin Company was building Pershing missiles for the US Army. The design of the missile was sound, but Martin found that it could maintain high quality only through massive inspection programs."   0:17:13.0 BB: You know what Dr. Deming would say about inspection? It's after the fact. Sorting the good ones from the bad ones after the fact. No prevention there. But Martin found that it could only do it with inspection. And decided to offer... Again, this is 1961, and this is still the solution today, decided to offer workers incentives to lower the defect rate. And in December, 1961, delivered a Pershing missile to Cape Canaveral with zero discrepancies. Buoyed by this success, Martin's general manager in Florida accepted a challenge issued by the Army's missile command to deliver the first Pershing missile one month ahead of schedule. He went even further, he promised that the missile would be perfect. Perfect. You know what that means, Andrew?   0:18:12.3 AS: Tell us.   0:18:12.8 BB: All good, not bad.   0:18:14.9 AS: All good, not bad.   0:18:15.9 BB: He promised missile would be perfect with no hardware problems or document errors, and that all equipment would be fully operational 10 days after delivering. And so what was neat in going back to this is we still have this mindset that quality is about things being good, not bad. What is bad we call that scrap, we call that rework. That's alive and well today.   0:18:45.0 AS: The proclamations are interesting when you listen to what he's saying, when you're quoting that.   0:18:52.4 BB: Yeah, no, and I remember, 'cause again, I read this recently for the first time in 37 years and I'm going through it. And at the time I was thinking, "Wow, wow, wow, this is a really big deal. This is a really big deal." Now I look at it and say, "This is what we're still talking about today, 37 years later." The absence of defects is the essence of quality. All right. But so I would highly recommend the article. Now we get into what he proposes as eight critical dimensions of quality that can serve as a framework for strategic analysis. And I think even in a Deming environment, I think it's... I think what's really cool about this is it provides a broad view of quality that I think Deming's work fits in very well to, Dr. Taguchi's work fits in very well to, and I think covers a lot of what people call quality. So the first dimension he talks about is performance.   0:20:01.4 BB: And he says, "Of course, performance refers to a product's primary operating characteristics." He says, "For an automobile, performance would include traits like acceleration, handling, cruising speed. For a television, sound and picture clarity." He says "A power shovel in the excavation business that excavates 100 cubic yards per hour will outperform one that excavates 10 cubic yards per hour." So the capacity, that could be miles per gallon, carrying capacity, the resolution of the pixels, that's what he calls performance. Okay. Features is the second dimension of quality. Examples include free drinks on an airplane, but not if you're flying a number of airlines they charge you for those drinks, permanent press cycles on a washing machine, automatic tuners on a color television set. A number of people in our audience won't know what those are, bells and whistles. Features are bells and whistles.   0:21:17.2 BB: There was a time people would say the number of cup holders in your automobile, a feature could be intermittent wipers. So these are features. So again, I mean, so performance is kind of cool. What is the capacity, is it 100 horsepower, 200 horsepower, that's performance. Features, bells and whistles. Okay. Fine. Reliability, now we're talking. The dimension represents the probability of a product malfunctioning or failing within a specified period of time. So your car breaking down, are you gonna drive to work every day and one morning you're gonna go out and it's... That's a reliability issue. Okay. That's... When I think about reliability, that's a Taguchi thing, that's a Deming thing.  And looking at time between failures, okay, fine. Reliability comes down to... And if importance for the impact of downtime, if you're looking at engines not working and you're sitting at the gate, that's a reliability issue. The reliability is, it can be repaired, but it's gonna take some time, perhaps. Conformance. All right.   0:22:40.4 AS: Is number four, right?   0:22:42.2 BB: This is number four, a related dimension of quality is conformance or the degree to which a product's design and operating characteristics meet established standards. "This dimension owes to the importance of traditional approaches," it says, "to quality pioneers such as Juran." All products and services involve specifications of some sort. When new designs or models are developed, dimensions are set for parts or purity, these specifications are normally expressed as a target or a center. Now it's starting to sound a little bit like Dr. Taguchi's work, an ideal value, deviance from the center within a specified range. But this approach equates good quality with operating inside the tolerance band. There is little interest in whether the specifications have been met exactly. For the most part, dispersion within specifications is ignored. Ignored. That's balls and strikes, Andrew, balls and strikes.   0:23:51.2 BB: As long as the ball is somewhere in the strike zone, as long as the characteristic is somewhere within requirements, conformance, this gets into what I talk about in terms of the question number one of quality management. Has the requirement been met, the requirement for the performance, the dimension, is it within requirements? And there's only two answers, yes or no. That's conformance. I used to think that the American Society for Quality might be better known as the American Society for the Preservation of Conformance. I find there's a lot of conformance thinking. I'm reminded of, I'm a member of the American Society for Quality as I'm on the Deming Medal Committee, so I have to be a member of ASQ. So I get a daily or every other day newsletter with comments and conformance is a big part of the conversation. Good parts and bad parts, scrap and rework. All right.   0:25:02.3 BB: Conformance is number four. And it's not to say there isn't a place for the conformance, but conformance is then again different from what Dr. Taguchi is talking about. All right. Durability, the measure of a product life. Durability has both economic and technical dimensions. Durability is how long does it work before I throw it away? So reliability is about, I can repair it. Okay. And that's an inconvenience. Durability is like light bulbs. It runs and runs or a refrigerator and someone says, "Well, it's time for a new one." That's a durability issue. Okay. Durability is the amount of use you get before you haul it off to the junkyard. That's durability. Okay. Serviceability. And back in the '60s, now I'm dating myself, there would be commercials for... I don't know which television brand, but what they talked about is, and these would be commercials. Commercials on television as to "our TV is easy to repair." And I thought, is that a good thing?   [laughter]   0:26:22.4 AS: Is that a foreboding?   0:26:24.4 BB: Yeah. And so... But again, the last couple of days I had to fix the sprinkler system in the backyard. And here in California we have, everybody has a sprinkler system. In the East Coast, people have above ground sprinkler systems. Here, they're all below ground. You don't have to worry about the lines freezing, at least in Los Angeles. And so anyway, one of the valves broke and I thought I was gonna buy a new one and take some of the parts from the new one to put it into the old one. And that didn't quite work. And so meaning to say, serviceability on the design was awful. I couldn't service it.   0:27:11.5 BB: I had to replace the whole damn thing, which was a lot more work than I was expecting. Anyway, however they designed it, serviceability didn't seem to be a consideration in the... That's dimension number six. Again, not to say there's anything wrong with thinking about serviceability. In terms of... Yeah. Okay, I'll leave it with that. Okay, serviceability. Number seven, aesthetics. The final two dimensions of quality are the most subjective, aesthetics, how a product looks, feels, sounds, taste, or smells is clearly a matter of personal judgment. Nevertheless, there seem to be patterns, a rich and full flavor aroma.   0:28:01.0 BB: That's got nothing to do with Dr. Taguchi's work. I mean, you can go off and do market research, find out what is the most appealing flavor, the most appealing taste, the most appealing aroma. And this is what I used to tell students is, and once you understand that or that vivid color that attracts the customer, then you could use Dr. Taguchi's work for, how can I reliably, predictably recreate, week after week, day by day, car by car, that aroma, that flavor, but Taguchi's work is not gonna tell you what it is. And then the last dimension of quality, you ready, Andrew?   0:28:45.8 AS: Give it to me, Bill.   0:28:47.7 BB: Perceived quality. "Consumers do not always have complete information on a product's attributes and direct measure is maybe their only basis. A product's durability can seldom be observed." And so we talk about perceptions of quality. Again, this is 1987, he says, "For this reason, Honda, which makes cars in Marysville, Ohio, and Sony, which builds color TVs have been reluctant to publicize that their products..." Ready? "Are made in America." Because the perception in 1987 is we want them to be made in Japan. And then we could talk about the perception of Cadillac quality, the perception of Jaguar quality.   0:29:35.7 BB: My father's gas station back in the early '70s, it was a block away from the nearby hospital. So a lot of our customers were doctors and they came in in their Cadillacs and Mercedes. And it was just a lot of fun. It was pretty cool. And one doctor against all of his peers' recommendations bought a Jaguar XJ12, V12, 12 cylinders, and they told him again and again, they said, "It'll spend more time in the shop than you driving it." No, no, no, he had to have one, he had to have one. And sure enough, it spent most of the time in the shop, but I got to drive it now and then, which was pretty cool. But that's perceived quality.   0:30:27.5 BB: So I just wanted to, in this episode, throughout those eight dimensions of quality. Again, I encourage our listeners, viewers, I think to get a broader sense of quality before you just look at quality from Dr. Deming's perspective, quality from anyone else's. I think that Garvin has done a really good job covering eight bases, if I can use that term, of quality. And then what I think is neat is to look at which of these tie into Deming's work, which of these tie into Dr. Taguchi's work? And that's what I wanted to cover in this episode.   0:31:01.8 AS: Fantastic. Well, let's just review that for the listeners and the viewers out there, eight dimensions. The first one is performance, the second one is features, the third one is reliability, the fourth one is conformance, the fifth one is durability, the sixth one is serviceability, the seventh one is aesthetics, how it feels and all that, and then the eighth one is perceived quality. Woah, that was...   0:31:29.4 BB: All about... Yeah. And it is reputation. You either have a great reputation or not.   0:31:38.3 AS: All right. Well, Bill, on behalf of everyone at the Deming Institute, I want to thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. And if you wanna keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."

Studio Pierrot's highly anticipated Bleach: Thousand-Year Blood War Part 3 has replaced series director Tomohisa Taguchi to further improve the animation quality, with staff revealing what fans can expect from the upcoming cour. Via VIZ Media's official X (formerly Twitter) account, Bleach series director Tomohisa Taguchi, who previously directed Akudama Drive and Twin Star Exorcists, will be moved to chief series director in place of Hikaru Murata. On the decision, series producer Yoshihiro Tominaga said, "We're all working very hard right now to bring you Part 3, The Conflict. As you may have noticed, some of our job titles have changed. To further improve the animation quality, Taguchi will now serve as the chief series director, with Murata-san joining us as the new series director." Podcast: https://open.spotify.com/show/5knAeTAYpIE0RuswBrKfVe?si=a713499c4f2a42a5 Instagram: https://www.instagram.com/roose366 Gaming Channel: https://www.youtube.com/@RooseJp

Dr. Felice Gersh, Dr. Daved Rosensweet, Dr. Lindsey Berkson, and Dr. Julie Taguchi join us in this episode. Today, we're going deep into the complex world of HRT for women with these four leading experts, debating the nuances of different estrogen types and their roles in the body. We discuss the pros and cons of estradiol-only treatments versus combined approaches with estriol, and the importance of maintaining natural hormone rhythms. We'll help you understand how specialized hormone ratios might offer protective benefits, and check out pioneering studies that have shaped modern hormone therapies. Plus, we'll examine the potential of estrogen receptor beta agonists in cancer prevention. In this episode: Why understanding the roles of estrone, estradiol, and estriol is essential for effective hormone therapy. Why starting hormone supplementation in the perimenopausal phase can support natural hormone rhythms. How estrogen receptors impact immune system adjustments during pregnancy. Why specialized hormone ratios might offer protective benefits against breast cancer. How historical and contemporary studies have shaped modern hormone therapies. Why the potential of estrogen receptor beta agonists in cancer prevention is significant. How proper dosing, ongoing learning, and specialized training in hormone therapy are crucial. How systemic inflammation affects hormone conversion and overall health. Why maintaining natural hormone ratios is important for cancer prevention. How estrogen affects various health aspects like bone, brain, and cardiovascular health. Why individualized treatment plans and proper hormone dosing are necessary for effective HRT. How holistic health optimization, including nutrition and lifestyle, supports effective hormone treatment. How to achieve therapeutic levels of hormones for comprehensive protection and effectiveness. Why proper education and training are essential for safe and effective hormone therapies.   Go to https://eightsleep.com/hormone and get $200 off plus free shipping on the Pod Cover by Eight Sleep. Interested in joining our NEW Peptide Weight Loss Program? Join today and get the details here. Join our Women's Group Coaching Program OnTrack TODAY! Karen Martel, Certified Hormone Specialist & Transformational Nutrition Coach and weight loss expert. Visit https://karenmartel.com/ Karen's Facebook Karen's Instagram Daved Rosensweet MD is the Founder of The Institute of Bioidentical Medicine and The Menopause Method, with over 30 years of experience specializing in andropause and menopause treatment. Currently, Dr. Rosensweet spends the majority of his time training medical practitioners to specialize in menopause and andropause medicine using his organic and solvent-free methods. https://www.davedrosensweetmd.com/find-a-provider/ Book: https://iobim.org/book/   Felice Gersh, a multi-award-winning physician with dual board certifications in OB-GYN and Integrative Medicine. Dr. Gersh is the founder and director of the Integrative Medical Group of Irvine and a globally recognized speaker and author on women's health. You can find Dr. Gersh and work with her in her clinic at the Integrative Medical Group of Irvine https://integrativemgi.com  My past interviews with Dr. Gersh The Best Ways to Use Bioidentical Hormone Replacement Therapy with Dr. Felice Gersh Why You Absolutely Need Estrogen with Dr. Felice Gersh Dr. Devaki Lindsey Berkson is a thought leader in functional medicine, with an emphasis on hormones, nutrition, digestion, and intimacy. Berkson was a distinguished hormone scholar at a world-renowned estrogen think tank at Tulane University. Berkson is often a keynote at prestigious medical and pharmaceutical symposium. Berkson is credited with the in-depth knowledge of Estrogen Vindication and has an eBook on Hormones for Breast Cancer Survivors. Dr. Berkson has a new evergreen course on Everything Hormones with Dr. Brownstein who is also an incredible hormone doctor. https://drlindseyberkson.com https://drlindseyberkson.com/everythinghormones/  My past interview with Dr. Berkson Estrogen Has Been Vindicated! Estrogen HRT & Its Crucial Role in Breast Cancer Prevention with Dr. Lindsey Berkson Dr. Julie Taguchi, M.D., is a renowned hematology oncologist specializing in breast cancer. With a profound understanding of estrogen's significance in women post-breast cancer treatment, she has dedicated her career to enhancing patient outcomes and quality of life. Co-author of “Sex, Lies and Menopause” and principal investigator for physiologic restoration studies, Dr. Taguchi's expertise is sought after globally. Her commitment to compassionate care and groundbreaking research continues to shape the landscape of oncology. She is in private practice in California and is taking new patients you can reach her at https://drjulietaguchi.org 

Where did your "quality journey" start? In this first episode of a new series on quality, Bill Bellows shares his "origin story," the evolution of his thinking, and why the Deming philosophy is unique. TRANSCRIPT 0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey in the teachings of Dr. W Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. This is a new series called Misunderstanding Quality, and the topic for today is Quality Management, what century are we in? Bill, take it away.   0:00:35.7 Bill Bellows: Thank you, Andrew. [chuckle] All right.   0:00:39.5 AS: Exciting. I'm excited to hear what you've got going on in your mind about this Misunderstanding Quality.   0:00:45.6 BB: Well, first let me say that whether you're new to quality or looking for ideas on quality and quality management, quality improvement, quality management, the aim I have in mind for this podcast series is to improve your ability to manage quality through deepening your appreciation of the Deming philosophy and how to apply it. But specifically, a focus on quality, time after time, which is where most people heard about Deming, was through Quality, Productivity and Competitive Position. For example, the title of his first book. And relative to the title, what came to mind is an anecdote shared with me by two mentors that both spent a good deal of time with Dr. Deming. The first, Gipsie Ranney, who was a professor of statistics at University of Tennessee when she met Dr. Deming, went on to become a senior statistical consultant to GM and the first president of the Deming Institute, when Dr. Deming and his family, shortly before he died, formed a nonprofit called The Deming Institute. Gipsie and I used to speak literally every day, driving to work, driving home, we... "What's up, what's up?" And we always... It was so cool. I wish I had the recordings. Anyway, she once shared that she once asked Dr. Deming, "What do they learn in your seminars? What do attendees learn in your seminars?" To which she said Dr. Deming said, "I know what I said, I don't know what they heard."   [laughter]   0:02:26.0 BB: And along those lines, in the same timeframe, Bill Cooper who just turned 90, he and my wife share a birthday. Not the same year. Bill turned 90 last November and he was senior civilian at the US Navy's aircraft overhaul facility in San Diego, known as North Island. So as aircraft carriers are coming into San Diego, which is like the... I think they call it... It's like the headquarters of the Pacific Fleet. So as aircraft carriers are coming back, planes for which the repair work cannot be done on the carriers fly off to North Island. And Bill was in charge of, he said, some 5,000 civilians. And his peer on the military side, Phil Monroe was in charge of all the military people, and they got exposed to Dr. Deming's work in the early '80s, went off, left there, became Deming consultants. Anyway, Bill said he once asked Dr. Demings, says, "What percent of the attendees of your seminars walk away really understanding what you said?" And he said... Bill said Dr. Deming said, "A small percentage."   [laughter]   0:03:44.0 BB: And so what I had in mind in this series is... One is, what makes it hard to understand what Dr. Deming is talking about? And so for the listeners, what I'm hoping we can help you understand, what might be some invisible challenges that you're having in your organizations trying to explain this to others. So maybe you think your understanding is pretty good, but like Dr. Deming, maybe people are having a hard time understanding what you're saying. And I know what it's like to be in a room, presenting to people. And I had that same experience. I had one Rocketdyne executive... Rocketdyne was sold a few times. Every time it got sold, our Deming transformation efforts got set back a few years. So when the latest management team came in six, seven years ago, I met with one of the very top people, was explaining... Trying to explain to him for the first time what we had accomplished with some, I thought, absolutely amazing work by managing variation as a system. And he said something like, "So are people rejecting what you're saying?" And I said, "No, that's not it." He says, "So they're accepting what you're saying?" I said, "Well... " he said, "What's the problem?" I said, "What they accepted is not what I said." [laughter]   0:05:19.5 BB: I said, we're not in disagreement, but what they think they heard is... And that's when I found that I've experienced that. So anyway, so I wanted to get some background. So my first exposure to quality circles, and this is like... So I was living in this parallel universe, a heat transfer engineer working on rocket engines, and Quality comes into the organization. And unbeknownst to me, there's this quality movement going on, inspired by Dr. Deming, and we're on this wave. I had no idea. All I know is all of a sudden, we got Quality Circles, quality teams, every department...   0:06:03.8 AS: What year was that, roughly?   0:06:06.1 BB: 1984.   0:06:08.9 AS: Okay.   0:06:10.5 BB: Yeah. And I remember a book I was... I remember there was a pamphlet... You mentioned that. The company was AVCO, A-V-C-O, the Aviation Corporation, which is nearly as old as the Boeing Company. So it was one of the... So, Boeing gets into airplanes, the Wright Brothers get into airplanes, people are... Investors getting in, and AVCO, A-V-C-O, was formed by someone you likely heard of, Averill Harriman, major Wall Street guy at the time. And so anyway, I remember there being an AVCO book on quality circles. As you mentioned, I remember seeing that. And I remember just going along for the ride. I'm new to corporations, I'm just a subject matter expert in gas turbine heat transfer, and we're going to the... We got these things called quality circles, whatever. And I remember our department formed... Our department was a team, we had goals, and I remember going to these quality meetings, and let's say the goal would be that we read an article about heat transfer or something. I was just kind of fumbling with this thing called quality circles.   0:07:28.6 BB: But I remember, looking over the shoulder of the department secretary with a IBM Selectric typewriter, and this is before PCs, so we're using IBM 3270, dumb terminals. And I remember being over near the secretary, Kathy, and she's typing away the weekly activity reports, Friday morning kind of thing. And on a routine basis, I'd be over there and she'd be typing along. And then on the very last page, under the title, "Quality Circles," she would type in "Quality Circles are progressing as planned." [chuckle] 'Cause then these would be distributed to people in the department. So I'm watching her now create the next original. And it dawns on me, two things. One is, it's the very last topic in the meeting, in the weekly minutes, and two is it's the same damn thing every time, "Quality Circles are on plan." And I remember saying to her, "Why don't we just have that printed into the stationary?" [laughter]   0:08:39.5 BB: This is before I knew... For me, quality was just a seven-letter word. I don't know. So this is my exposure. And I remember thinking one of the quality goals we're thinking of in our department is... I think somebody even really brought this up, is we're gonna answer the phone by the second ring. That's gonna be our quality goal. And then, I remember we're negotiating for cleaning services. The floors were a mess. Tile floors, they were just a mess. And I remember in our department, we were lobbying to get better janitorial services, have the things cleaned more often. And next thing, we're negotiating with the VP of Engineering relative to, "Well, if your quality circles are on track, then I'll think about that." And it was just like... So it's some really ugly memories [chuckle] of this whole quality thing.   0:09:34.3 BB: But then I got into... I mentioned on the very first of our previous podcast, getting involved as a problem solving decision-making facilitator. I was hanging out with the HR training people, they had some... Their director of training, our director of training was a very astute guy and he was... I'm convinced, having met many people in that role, he knew what was going on. He knew a lot of the names in quality, not so... He knew of Deming's name, he knew of De Bono's name, Kepner-Tregoe, but he seemed to know his stuff. He's a fun guy to be with. And so, that's likely where I first heard Deming's name and that first book would've been Quality, Productivity and Competitive Position, which is... It's almost impenetrable, but I can remember at some point looking at that.   0:10:29.7 BB: But anyway, but in the fall of '87, I started being assigned a taskforce as helping... 'cause now I'm a problem-solving facilitator. But I still don't know... I don't know what quality is. All I know is I get invited to help solve problems. And we were looking at a very bad wear problem, these gears wearing each other out, enormous visibility to the Pentagon, because the tank engines we were making, 120 a month, were being shipped to the tank plant. And then, these tanks with these engines were being sent... The majority of them, sent to Europe. And they were the frontline of defense in Western Europe. This is the Cold War, Andrew.   0:11:17.4 AS: Right.   0:11:19.2 BB: And so the problem that came up was that a couple of these tanks had these gears wear through each other within 50 hours. And I've never been on such a high visibility taskforce because the Generals concern was that every one of those tanks was likely to not operate. And that might be the opportunity for the "Russki's" to launch World War III, because, what a great time, the tanks... If they knew these tanks weren't working. So it was a lot of stress, a lot of pressure. And after months of slow progress, the Army said, "Hey, why don't you guys go look at this Taguchi thing. The transmission people from General Motors who make the tank transmission, anytime they have a snafu like this, they use this Taguchi stuff." So I got assigned the action to go look at that. And I remember, this is pre-internet. And somehow, I did a literature search. I remember it was through something called Nerac, N-E-R-A-C. And out comes these pages. And the thing on Taguchi was... So first of all, who is this Taguchi guy?   0:12:29.0 BB: What is this quality stuff? I don't know. I'm a problem solving guy. And then I remember the first article on reference to Taguchi says, "Quality is the minimum of loss imparted to society by a product after a shipment to the customer." And I thought, "What does that mean?" So I don't know what... I mean, minimum of... I'm thinking... And I thought, "This can't be anything." So anyway, went out to General Motors and got exposed to what they were doing, and a few years later, realized it wasn't exactly Taguchi, but it was... There's some nuances there. But anyway, they exposed me to Design of Experiments and what's known as fractional factorial testing. And coupled with shifting how we look at the measurement process, we solved this problem within weeks, a problem that had been going on for months. So then I got excited about... This Taguchi thing's kind of cool. I'm liking this. And it was a lot more exciting than what I was doing. And I thought, "I think I wanna do this." So the following year, I went to the Taguchi conference. So we had the application and I was so excited, Andrew, that I was turned down for funding. The Army would have paid for me to go to this conference, 'cause the Army, by that point, had invited me to work on at least two problems.   0:13:54.4 BB: Once we solved the first one, when problems came up, the Army literally turned to the program management people at Lycoming and said, "Do a Taguchi study, get Bill Bellows involved." So I was walking on water. I thought it was kind of cool. So I wanted to go to this Taguchi conference, and it was turned down. And they said, "It's not your job." So I told my boss when they told me it was gonna be turned down, I said, "I'm going to this conference." I said, "Whether the company pays for it or not, I am going." So I drove 14 hours each way to Detroit. And in the room are all the US experts on Taguchi's ideas at the time. I didn't know who Deming was at the time. I still didn't know what quality was, but I walked outta there thinking, "This is what I wanna do." And then, where I'm getting to is, a few months later, I was gonna go out on medical I had surgery planned.   0:14:53.1 BB: I was gonna be out for about two months. So my wife and I lived in New Haven, maybe 10 miles north of Yale. And I remember going to the... Again, this is pre-Amazon. I mean, talk about dating ourselves. What century are we in? So I remember going with my wife to the Yale bookstore, the Yale co-op bookstore, and every book they had on quality, I bought. And I'm gonna sit home for two months and read all these books. And I remember buying books. I'm pretty sure I got books about Deming, some about Taguchi, some by Phil Crosby about Zero Defects. Six Sigma Quality entry was a year away.   0:15:35.7 BB: And so I sat down... I got out of the hospital, I'm resting at home, sitting on the couch every day and reading, and also calling the Taguchi people that I had met, I think, at the previous conference. I met some big names. So I'm reading the books, calling them up. And again, these are like my personal professors. And I remember saying to a few of them... What blew me away, and I don't... It somehow dawned on me, I was naive. In the world of engineering, we use... Most of my exposure, at least in heat transfer, we use the same terms the same way. We talk about radiation heat transfer, conduction heat transfer, convection heat transfer. So many of the terms are the same terms, so we can have a conversation. So I'm thinking the same thing applies in quality, that we're all like the heat transfer people. It's easy to communicate 'cause we got the same models. We're using the same words the same way. Then I started thinking, I'm no longer... And this is a real shock. I'm no longer thinking we're using the same words the same way, hence my introduction to misunderstanding quality, [laughter] or I would say, the beginning of a journey to better understand the... I think there are incredible opportunities for people in quality organizations, or people that wanna get into quality.   0:17:08.3 BB: I think it's an ideal opportunity to introduce Deming's ideas. And I say that because everybody else is doing their own thing. Engineering's off designing, Manufacturing's off producing, and Quality has an incredible opportunity to bring together Deming's sense of a systems view of quality. Nobody else has that charter. So my hope is in our conversations, we can help people that are trying to do some things, whether it's jumpstart their continuous improvement program or get their quality program out of what it currently is. In fact...   0:17:52.4 AS: By the way, I wanna...   0:17:55.9 BB: Go ahead, go ahead.   0:17:56.0 AS: I wanna ask a question about that, because what you've mentioned is interesting, that the systems aspect... Is that unique? Would you say that's unique to Deming? I mean, if we think about Taguchi and I think about the Taguchi Method, I'm thinking about a really powerful tool for understanding variation. But explain what you mean by that.   0:18:24.0 BB: A couple of things come to mind when you ask that question. One is the predominant explanation of quality. And if we have time, I wanna talk about that. The term quality, "qualitas," comes from Cicero, a Roman in ancient times. But by and large, in manufacturing, in corporate quality, in corporations, the operational definition, what do we mean by quality? This thing is... What are Quality organizations doing? And what I find they're doing is calling balls and strikes. They're looking at a given quality characteristics, whether it's the fuel economy of an engine, of a gas turbine engine, the performance, the thrust level of a rocket engine, the diameter of a hole, and asking, "Does that characteristic of surface roughness diameter, does it meet a set of requirements?"   0:19:30.4 BB: And the requirements are typically set... There's a lower one and an upper one. We don't say the meeting is gonna start at 10 o'clock, because if you understand variation, we can't get exactly 10. We can't get exactly 1.00 inch thickness for the plate, for the hole diameter. So then, we define quality. Typically, this is what people do in organizations. This is what I... I didn't know anything about this until I started... Well, what are quality people doing? They're asking, "Does this thing meet requirements?"   0:20:07.4 BB: And even towards that end, I remember asking a... I had a coworker who's a quality engineer, I've got many friends who are quality engineers, and this one guy came into a class one day that I was doing, and he's just beating his head against the wall over... I said, "What's...what have you been doing lately." He says, "All I'm doing Bill is dispositioning hardware, dispositioning hardware," which translates to trying to find out why something doesn't meet requirements and coming up with a corrective action, or buying it as is. So either changing the requirements or explaining why we can use it as is. But he's just like, "That's all I'm doing lately. I'm just getting overwhelmed with all this." So I said, "Well, what if overnight, by some miracle, you were to come in, and beginning first thing tomorrow morning, everything meets requirements." And that's the goal of quality in most organizations, is that everything meets requirements. So I said, "If everything beginning tomorrow morning, through some overnight miracle, meets requirements, hence forth, how would your life change?" He says, "I wouldn't have a job." [laughter]   0:21:26.9 BB: I said, "What other changes would you begin to see throughout the day, the coming days?" He says, "My boss's job wouldn't exist." I said, "Okay, keep going, keep going." He says, "Well, the whole organization will have no reason to exist." [laughter] And that's not farfetched. And I throw that out, the challenge to our listeners is, seriously, if everything in the organization beginning tomorrow morning met requirements through some... Dr. Deming would say as you know, by what method? Let's say the method exists, what would change? Now, I'm not saying these people necessarily get laid off. Maybe they get moved elsewhere. Maybe we set our sights higher and try to do things we've never done before, 'cause now everything's gonna be a home run. But that's what I find in corporations, I think, a very extremely commonplace 21st century Andrew explanation of quality is, "Does it meet requirements?" And that goes... And this whole idea of setting requirements, setting a lower and an upper, allowing for variation, that goes back to the early 1700s. And I've also read that it might go back even longer in China. We were talking earlier about China.   0:22:58.2 BB: And so if it goes back longer, all the better. And the point being, fast forward to today, that's largely where we are today, in this early 1700s. Does it meet requirements? Yes or no? And what Dr. Deming is talking about is not acceptability. First of all, he would say there's a place for acceptability. There's a place for meeting requirements, maybe based on the circumstances, all that matters is that it meets requirements. So if you're a pitcher and you're throwing a ball and the batter can't hit the ball, and as long as it's somewhere in the strike zone, or if you're kicking the ball into the net in a football match or otherwise known as soccer in the States, maybe the goalkeeper's so bad, all you gotta do is... They'll jump out of the way.   0:23:49.7 BB: Now, on the other hand, there may be a different batter or a different goalkeeper where you've gotta go where they aren't. And that gets into understanding variation and where we are in meeting requirements matters. And what I find is most organizations I've ever interacted with, and this is through Rocketdyne, as owned by Boeing, going to many different divisions of Boeing around the country, doing seminars across England, across New Zealand, university classes and university lectures, hundreds of them. I've never come across... With rare exception have I ever come across anyone who says, "Bill, in our organization, quality is more like what Dr. Deming is talking about." Meaning, "We are doing more than meeting requirements, we are focusing on where the ball is placed in the strike zone, where the ball is placed in the net, and we specialize in that because we have seen great advantage." Most people I present this to don't even know that's a possibility, don't even know it's anything to lobby for.   0:25:12.0 BB: And so to that I'd say, whether you're looking at Operational Excellence, which is kind of a hybrid of Lean and Six Sigma or Six Sigma alone, or Lean alone, everything I've studied in all of those go back to the question of quality being... Quality's defined Phil Crosby-wise, which is striving for zero defects, striving for everything meeting requirements, and then we're done. And when I joined The Deming Institute, part of my excitement was helping the organization differentiate Dr. Deming's ideas over these other quality management ideas and other management ideas as uniquely positioned to differentiate, to understand that there's an opport... There are incredible opportunities for realizing that everything that meets requirements is not the same. And how do we put a value on that? And one is, the better we understand that, the better we can minimize scrap and rework problems if we're paying attention to where we are, if the process is in control, if we can use that concept from variation. And then simultaneously, another...   0:26:35.7 BB: There's two opportunities. One is, I think the better we manage variation, the less likely we're gonna have scrap and rework. Wouldn't that be great? And two is that that buys us time to think about... 'cause now that we're not in that constant firefighting mode, now we can start to think about how to manage variation of the system and to improve how things integrate. And we did both of those at Rocketdyne. But I've yet to find many organizations who say, "Been there, done that. Been there, done that."   0:27:12.1 AS: So, if we think about the takeaways for someone listening or watching this, you've talked about Misunderstanding Quality, you've talked about everything meet requirements, you've talked about, what century are we in? So, what should they take back to their business from this discussion that can give them a foundation of a starting point of this series and what you're saying on this point? What do you want them to take away?   0:27:40.3 BB: First, I would say I wouldn't necessarily go tell anybody about this yet. [laughter] I'd say, "Hmm, this Deming stuff. There's something to this. What I'm hearing from Bill is there's something here that I can't get elsewhere." You can listen to our prior sessions. There's 22 of them. We're gonna be adding new aspects to that...   0:28:07.9 AS: Okay. So, let's talk about that for a second. So, learn on your own first. Maybe it's a personal transformation. Start with that?   0:28:09.9 BB: Yes.   0:28:14.8 AS: Okay.   0:28:16.1 BB: Absolutely... Yes, absolutely...   0:28:18.1 AS: What would be number two that you want them to get away from this?   0:28:22.9 BB: Well, my advice is, you're not crazy that there's things about the Deming philosophy that are unique, that are... I think so much... There's a lot of people excited by what Dr. Deming's offering. I think there's more than meets the eye. I mean...   0:28:46.1 AS: Okay, so let's talk about that for a second. So, there's unique things about Deming, and one of them that you talked about is the systems thinking?   0:28:54.6 BB: Yeah. I mean, imagine... What I liken it to, instead of zero defects being the goal, which is what most organizations are striving for, and their quality systems are about, "We wanna get zero defects over here, over here, over here." We're juggling all these places, trying to get to zero defects all over the place. What if they saw zero defects as not the destination, but the starting point? That, to really understand continual improvement, zero defects is not the goal. Imagine that as the starting point. At least, imagine the ability to go across that apparent finish line and realize... Or the analogy I would use is, go through the door called "zero defects is the end," and realize there's a lot more, there's so much more to do when you start to look at things with a Deming view. And so, instead of thinking, we're striving for zero defects and then we're done, to me, that's the starting point to really begin to appreciate what it means to look at systems.   0:30:07.7 AS: Okay. So we've got, start with your own personal transformation and learn the material, and understand that there's some unique things about the Deming teachings, in particular, systems. And understand that... I kind of visualized while you were talking, a person walking along with no knowledge of many things, but they're inquisitive, and what they find is a wrench. And then they start to find that there's ways to use this wrench in their daily life. And then later, they find that there's other tools like a screwdriver. And all of a sudden, they found this world of tools, and now they have this amazing toolbox. But then all of a sudden, they meet someone that's taking those tools and creating a car, or a this, or a that. And then they realize, maybe the tool has gotta be the starting point, or is a starting point. But what the tools can create and what additional tools can create is so much bigger than just that first wrench that you picked up.   0:31:14.2 BB: It's the appreciation. And I'm glad you brought those points up. Dr. Deming talks about tools and techniques. A control chart is a tool. A run chart is a tool. Design of Experiments are... These are tools. And so that's a tool. A technique is, how do we create a control chart? That's a technique. What I try to do with audiences, whether it's clients or university classes or whatever, is help them differentiate. Tools and techniques are about improving efficiency, doing things well. Doing something faster or cheaper... What's unique to Dr. Deming is not the tools you'll find him talking about, but the concepts he's talking about, and the idea of looking at things as a system. Dr. Deming defines quality, and it can be obtuse for people. I find it fascinating. He says, "Product or service possesses quality if it helps someone and enjoys a sustainable market." So, traditional quality is me throwing the ball to you, Andrew, or passing a football or basketball, whatever it is, and judging the quality of the pass when the ball leaves my hand. And we say, "That was a good pass."   0:32:49.9 BB: What Dr. Deming's talking about is, it's a good pass, just as if it's a good conversation, if you can hear what I say, we can go back and forth. And so, Deming's perspective on quality is not what's good for me, the producer, but it's how well does it fit you that I'm delivering something that matches... That we're synchronous, that... It has to be good for you, not just me checking off and saying, "This is good, this is good, this is good. Boom." That it's not good until you say it's good. That's a different view. It's the same thing as, "Well, I told you." Then you say, "Well, I didn't hear it." I says, "Well, then why don't you have your ears checked?" [laughter] Dr. Deming's talking about, it's not a conversation if you can't hear it. And so, when he's explaining to Bill Cooper and Gipsie that people are having a hard time, he was struggling to improve that 'cause he knew that when you begin to understand that what you're saying is not heard, Deming understood it was his obligation to try harder. And part of the Deming philosophy is understanding that it's not just me throwing it and saying, "There it is." It's listening for the feedback as to, "Did it make sense?" So, quality in that arena is a mutual phenomenon, not unilaterally my thing.   0:34:16.7 AS: Okay.   0:34:17.8 BB: And I would welcome anyone, as we've done in the past, to reach out if there are questions, comments, observation you'd like to share, and we can use that feedback in future sessions.   0:34:30.6 AS: Fantastic. Well, that's an excellent kickoff. And let's end with the idea that quality is a mutual phenomenon. I think that's a good statement. So Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."

Glucagon-like peptide-1 (GLP-1) is a hormone naturally produced in the intestines during meals. It helps regulate blood sugar and weight by increasing insulin, slowing stomach emptying, and promoting fullness. Medications like Ozempic® and Wegovy® mimic the effects of GLP-1 but can be expensive and have unpleasant side effects. Listen in this week as Dee explores research on foods and probiotics that naturally boost GLP-1, offering similar benefits without the high costs and side effects.References:De Silva, A., & Bloom, S. R. (2012). Gut hormones and appetite control: A focus on PYY and GLP-1 as therapeutic targets in obesity. Gut and Liver, 6(1), 10–20. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3286726/Hira, T., Trakooncharoenvit, A., Taguchi, H.;,Hara, H. (2021). Improvement of glucose tolerance by food factors having glucagon-like peptide-1 releasing activity. International Journal of Molecular Sciences, 22(12), 6623. https://www.mdpi.com/1422-0067/22/12/6623Perraudeau, F., McMurdie, P., Bullard, J., Cheng, A., Cutcliffe, C., Deo, A., Eid, J., Gines, J., Iyer, M., Justice, N., Loo, W. T., Nemchek, M., Schicklberger, M., Souza, M., Stoneburner, B., Tyagi, S., & Kolterman, O. (2020). Improvements to postprandial glucose control in subjects with type 2 diabetes: A multicenter, double blind, randomized placebo-controlled trial of a novel probiotic formulation. BMJ Open Diabetes Research and Care, 8(1), e001319. https://drc.bmj.com/content/8/1/e001319Link to purchase GLP-1 Probiotic: https://pendulumlife.com/products/glp-1-probiotic

How do you know that the learning you and your colleagues are doing is leading to changes in behavior? In this episode, Bill and Andrew discuss little tests you can do to see if the transformation you're working toward is really happening.  0:00:02.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunity. Today is episode 22, and the title is, Test for Understanding Transformation. Bill, take it away.   0:00:30.7 Bill Bellows: Hey, we've been at this podcast for about a year now, right?   0:00:36.6 AS: It's incredible how long it's been.   0:00:39.8 BB: And in the beginning you said, I've been at this for 30 years, right?   0:00:43.7 AS: Yeah.   [laughter]   0:00:46.7 BB: Maybe we should change that to 31.   0:00:48.3 AS: Oh, man, there you go.   0:00:51.2 BB: All right.   0:00:53.0 AS: That reminds me of the joke of the janitor at the exhibition of the dinosaurs and the group of kids was being led through the museum and their guide had to run to the bathroom. And so they were looking at this dinosaur and they asked the janitor, "How old is that dinosaur?" And he said, "Well, that dinosaur is 300,032 years old." "Oh, how do they know it so exactly?" He said, "Well, it was 300,000 when I started working here 30 years ago."   [laughter]   0:01:28.8 AS: So there we are.   0:01:31.4 BB: That's great.   0:01:33.3 AS: Thirty-one years.   0:01:34.0 BB: All right, all right, all right. So first thing I wanna say is, as you know and our listeners know, I go back and listen to this podcast and I interact with people that are listening too, and I get some feedback. And in episode 19, I said the Germans were developing jet engines in the late 1940s. No, it turns out the Germans were developing jet engines in the late 1930s and they had a fighter plane with a turbine engine, a developmental engine in the late '30s. They didn't get into full-scale development and production. Production didn't start till the tail end of the war. But anyway, but I was off by a decade. In episode 21, I mentioned that checks were awarded within Rocketdyne for improvement suggestions and individuals who submitted this and it could be for an individual, maybe it was done for two people, three people, I don't know, but they got 10% of the annual savings on a suggestion that was implemented in a one-time lump sum payment.   0:02:36.1 BB: So you got 10% of the savings for one year and I thought, imagine going to the president of the company and let's say I walk into the president's office and you're my attorney. And I walk in and I say, "Hey, Mr. President, I've got a suggestion. You know that suggestion program?" He says, "Yeah, yeah, yeah. Come on in, come on in. And who's this guy with you?" "Well that's Andrew Stotz." "And who's Andrew?" "He's my attorney, and he and I have been thinking about what this is worth." "Well, tell me about it." "No, well, before we get into it, we've got this form to sign here."   0:03:10.9 AS: Andrew.   0:03:11.1 BB: "Right? And you wanna see the idea or not? But we don't have to share it." But I thought, imagine people going to great length and really taking advantage of it. Well, a few of us that were involved in our InThinking Roadmap training, what we started to propose is we want a piece of the action, Andrew. So the proposal we had is that, Andrew, if you come to one of our classes, a study session on The New Economics or Managing Variation of a System, we'll have you sign a roster, right? And so if you are ever given a check for big numbers, Andrew, then we're gonna claim that our training contributed to your idea and all we ask is 10%, right?   0:03:58.1 AS: Of your 10%.   0:04:00.9 BB: I mean, I think that's fair, right? But imagine everybody in the organization becoming a profit center.   0:04:08.7 AS: Crazy.   0:04:10.4 BB: That's what you get. All right.   0:04:14.5 AS: And the lesson from that is focus on intrinsic motivation. People wanna make improvements, they wanna contribute.   0:04:23.8 BB: You start... You go down the slippery slope of incentives, which will be part of what we look at later. There's just no end to that. All right?   0:04:31.4 AS: Yeah.   0:04:32.2 BB: So I mentioned in a previous podcast that I had an interaction, met the army's first woman four-star general, and I just wanna give you some more background and interesting things that happened with her relative to this test for understanding transformation. I don't know April, May, 2008, someone on her staff reached out to me and when they first... When the guy got a hold of me, I said... From the Pentagon, he called me, I think it was like 8:00 or 9:00 o'clock at night here. Whatever it was, it was after hours in LA so it was after hours in DC. I remember saying to the guy, "How did you find me?" He says, "There's a lot of stuff on the internet." So he says, "I came across a presentation you did for Goodwill Industries." And he says, "In there you talk about... " He says, "There's some really good stuff in there."   0:05:29.0 BB: And I said, "Like what?" He said, "You have a slide in there about you can minimize loss to society by picking up nails in a parking lot." And that was an example of what I used Dr. Taguchi's work, minimizing loss to society. I said, "Yeah, I remember that slide." He says, "We don't do enough of that in the Army." And he says, "Hey, we've got a conference next week, late notice. The keynote speaker bailed out." And he's calling me on a Monday. The presentation's a week from Wednesday and he says... And also he said that the Army had an initiative called Enterprise Thinking and Enterprise Thinking was part of what we called our effort within Rocketdyne. We used the terms Enterprise Thinking, organizational awareness, and that InThinking personal awareness. We were using those two terms. So he did a search on that, found my name, and he says, "What do you think?" And he says, "We're gonna... "   0:06:24.3 BB: If I agree, we'll have a follow-up vetting call the next day. So he calls me up the next day and it's him and a two-star general. There are three people in the room, all senior officers, and he says, "Okay, so, but tell us what you do." So I shared the last... It sounds funny, is what seems to have been the last straw in their interest was having me speak, was my last straw story. Remember the executive from the European airline and... Right? So I tell that story about my efforts within Rocketdyne and Boeing about this airline executive and how this deeply resonated with this executive of this customer of this company that buys a lot of Boeing airplanes that we focused on the one cause, not the greater system.   0:07:13.2 BB: And within minutes of sharing that story, they started laughing, leading to it a few minutes later to them saying, "you're the one."   0:07:19.2 AS: [laughter] That's very interesting.   0:07:21.3 BB: You're the one. So for our listeners, I'd say, let this be a reminder of how a personal story guided by insights on how Dr. Deming's System of Profound Knowledge can open doors for you. And you can use that story, come up with your own stories, but you just never know when you're gonna be in a situation where you need a really simple story. So as an aside, they contact me, like I mentioned, 10 years later, and I think I shared with you offline that the speaker I was replacing was the great Richard Rumelt, the strategy professor from UCLA, who for whatever reason needed to bail out. And then when this podcast is posted, I'll put a link to the slides of the presentation.   0:08:05.7 BB: It's about 45 minutes long. What was not covered... I went back and looked at it earlier to say, what did I share with them that got them so excited? All I know is it fit into 45 minutes to an hour. What was not covered was the trip reports, whether Red Pen or Blue Pen, Last Straw/All Straw, Me/We organizations. But after it was done, as I'm coming off the stage, General Dunwoody in uniform comes up to me. She was thrilled. Her exact words were, "You hit it." She says, "Bill, you hit it out of the park." And I thought, well, I had help from a lot of people. She then says something to me that I'll never forget. So we're face-to-face, right? Let me just... Right?   0:08:45.1 BB: And she says to me, "Bill, you've got a real challenge on your hands. Bill, you've got a real challenge on your hands." So prompted by that, I held my hand out, my right hand, which is what you do to initiate a handshake, and then she reaches out to shakes my hand and I said, "General Dunwoody, we have a challenge on our hands." [laughter] And she erupted in laughter. And my only regret, even though we went out for drinks for the next couple of hours, but my regret was not having a photo of her and I doing a double high five as she laughed. So then I remained in touch with her for the next six to eight months when she was promoted to four-star and she looked for opportunities to get me to the Pentagon, which she did. And I was trying to get her or somebody on her staff to come to Rocketdyne to learn more about what we're doing.   0:09:38.1 BB: But I say I share this anecdote as an example of a Test for Understanding of a transformation. So what is a TFU, test for understanding? This is something I got exposed to in my Kepner-Tregoe Problem Solving and Decision Making training, which I talked about in one of the first episodes. And in our training to deliver what was then a five-day course, we were coached on how to interact with seminar attendees, including how to answer questions and how to ask questions. And one of the things we got our knuckles wrapped for was saying, are there any questions? Because no one answers that. There is... And if I had said that when I was being certified, I'd have failed. So instead we're coached on how to ask questions or make comments, which serve as a test for someone's understanding of what I presented.   0:10:27.9 BB: For example, for me to reply to General Dunwoody with we have a challenge on our hands was to test her understanding of what I said and her laughter is a response that I could be expecting with something short. As an aside, an appreciation, we've talked about Ackoff's D-I-K-U-W model data, raw data information. You turn that into what, where, when, extent, knowledge. If we convert that to how does something operate looking inside of an automobile, how do the pieces work together? Remember he said understanding is when you look outward 'cause knowledge looking inward, Russ would say, doesn't tell you why the car is designed for four passengers. That comes from looking outward. And then wisdom is what do we do with all this? Well, the Kepner-Tregoe training was Test for Understanding and now that I'm inspired by Ackoff, well in my university classes, I ask "Test for Information" classes. I have them watch videos and say, what company was Russ working for?   0:11:31.1 BB: This anecdote, that's information. Nothing wrong with those questions. I can ask for "Test for Knowledge" questions asking how something operates. So what I don't know is like, why are they called Test for Understanding? They could be Test for Knowledge, Test for Information, Test for Wisdom. And obviously TFI test for information could be true, false, multiple choice and test for knowledge and understanding could be short, but then I want to go deeper. And so what I wanna share is in one of my university courses, I share the following, true, you can't make it up news stories. It says, once upon a time a national airline came in dead last on on-time performance one month even though it had offered its employees everything from cash to pizza to finish first in the US Department of Transportation's monthly rankings. Does that sound like incentives, Andrew?   0:12:33.0 AS: It's all there.   0:12:33.8 BB: If we finish first, pizza parties. Now if they got exposed to Rocketdyne, they'd be handing out checks for $10,000. So in one of the research essays, for a number of the courses, every week, every module, I give them a research essay very similarly, giving them a situation and then what's going on with the questions is having them think about what they've been exposed to so far. And so question one in this assignment is given this account, list five assumptions that were made by the management team of this airline? And so I just wanna share one student's response. He says, "assumption one..." And also let me say this comes from the second of two Deming courses I do. So these students have been exposed to a one, one-semester course prior to this. So this is not intro stuff. This is getting deep into it.   0:13:34.3 BB: And so anyway he says, "assumption one, offering incentives like cash and pizza would motivate employees to prioritize on-time performance." Okay? That's an assumption. "Assumption two, employee morale and satisfaction directly correlate with on-time performance. Assumption three, the issue of on-time performance primarily stems from..." Are you ready? "Employee motivation or effort. The incentives provided were perceived as valuable by employees." And you're gonna love where this goes. "Assumption five, employees have significant control over factors that influence on-time performance such as aircraft maintenance, air traffic control and weather conditions."   0:14:20.2 AS: Good answers.   0:14:23.0 BB: Again, what I think is cool and for our listeners is what you're gonna get in question two, three, four, and five is builds upon a foundation where these students have, for one and a half semesters been exposed to Deming, Taguchi, Ackoff, Gipsie Ranney, Tom Johnson, the System of Profound Knowledge, hours and hours of videos. And so this is my way of Testing their Understanding. And so if you're a university professor, you might find interest in this. If you're within an organization, this could be a sense of how do you know what people are hearing in your explanations of Deming's work or whatever you're trying to bring to your organization? So anyway, I then have them read a blog at a Deming Institute link, and I'll add this blog when this is posted but it's deming.org/the insanity of extrinsic motivation. All right. And they've been exposed to these concepts but I just said, "Hey, go off and read this blog." And it was likely a blog by John Hunter.   0:15:32.0 AS: Yep.   0:15:32.2 BB: All right, question two. All right. Now it gets interesting, is that "in appreciation of Edward de Bono's, "Six Thinking Hats"," which they've been exposed to, "and the Yellow Hat, which is the logical positive, why is this such a great idea? Listen, explain five potential logical, positive benefits of incentives, which would explain why they would be implemented in a ME Organization." And so what's seen is I have them put themselves in a ME Organization, put on the Yellow Hat and think about what would be so exciting about this. And so logical, positive number one. "Incentives can serve as a powerful motivator for individuals within the organization, driving them to achieve higher levels of performance and productivity. When employees are offered rewards for their efforts, they're more likely to be motivated to excel in their roles," Andrew. Logical positive number two, enhanced performance. Explanation, "by tying incentives to specific goals or targets, organizations can encourage employees to focus their efforts on key priorities and objectives.   0:16:46.9 BB: This can lead to improved performance across various aspects of the business, ultimately driving better results." Number three, attraction and retention of talent. Oh, yeah. Explanation, "offering attractive incentives can help organizations attract top talent and retain existing employees. Attractive incentives can serve as a key differentiator for organizations seeking to attract and retain skilled professionals." Now, let me also say, this is an undergraduate class. As I mentioned, this is the second of two that I offer. Many of these students are working full-time or part-time. So this is coming from someone who is working full-time, probably mid to late 20s. So these are not... They're undergraduates but lifewise, they've got a lot of real-world experience.   0:17:44.0 BB: All right. Logical positive four, promotion of innovation and creativity. Explanation, "incentives can encourage employees to think creatively and innovative in their roles. By rewarding innovative ideas and contributions, organizations can foster..." Ready, Andrew? "A culture of creativity and continuous improvement, driving long-term success and competitive advantage." And the last one, positive organizational culture. "Implementing incentives can contribute to a positive organizational culture characterized by recognition, reward and appreciation. When employees feel valued and rewarded for their contributions, they're more likely to feel engaged, satisfied, and committed to the organization." But here's what's really cool about this test for understanding, I get to position them in the framework of a ME Organization with the Yellow Hat.   0:18:40.9 BB: Now question three, in appreciation of Edward de Bono's, "Six Thinking Hats" and the Black Hat, what Edward calls a logical negative, list and explain five potential aspects of incentives, which would explain why they would not be implemented in a WE Organization. And this is coming from the same person. This is why I think it's so, so cool that I wanna share with our listeners. The same person's being forced to look at it both ways. Negative number one, potential for... Ready, Andrew? "Unintended consequences." Oh my God. "Incentives can sometime lead to unintended consequences such as employees focusing solely on tasks that are incentivized while neglecting other important aspects of their roles. This tunnel vision can result in suboptimal outcomes for the organization as a whole."   0:19:30.7 BB: "Number two, risk of eroding intrinsic motivation. Explanation, offering external rewards like incentives can undermine intrinsic motivation leading employees to become less interested in the work and more focused on earning rewards. Number three, creation of unhealthy competition. Explanation, incentives can foster a competitive culture within the organization where employees may prioritize individual success over collaboration and teamwork. This competitive atmosphere can breed..." Ready? "Resentment and distrust among employees." Can you imagine that, Andrew? Resentment and distrust? That seems like it would clash with my previous positive thought, but it really just points out how careful management needs to be.   0:20:19.0 AS: Yes.   0:20:19.2 BB: All right. Cost considerations. "Implementing incentive programs can be costly for organizations, particularly if the rewards offered are substantial or if the program is not carefully managed. Organizations may be hesitant to invest resources and incentives, especially if they're uncertain about the return on investment if budget is of concern." And then number five, "short-term focus over our long-term goals." Explanation, "incentives often improve short-term gains rather than long-term strategic objectives. Employees may prioritize activities that yield immediate results, even if they're not aligned with the organization's broader goals or values."   0:21:02.7 BB: And then question four, here's the kicker. "In appreciation of your evolving understanding of the use of incentives, share, if you would, a personal account of a memorable attempt by someone to use incentives to motivate you, so that so many pizza parties or bringing a small box of donuts or coffee in for working a weekend I was supposed to have off." And then question five, "in appreciation of your answer to question four, why is this use of incentives so memorable to you? They were very ineffective. I often felt insulted that my boss thought that $20 worth of pizza or donuts made up for asking me to give 50% of my days off that week."   0:21:55.5 AS: Here's a donut for you.   0:22:00.6 BB: Here's a doggy bone, here's a doggy bone. I just wanted to share that this time. Next time we'll look at more.   0:22:09.3 AS: One of the things that...   0:22:10.6 BB: There are other examples of Test for Understanding. Go ahead, Andrew.   0:22:12.3 AS: One of the things that I wanted to... What you made me think about is that you and I can talk here about the downside of incentives but we have to accept the world is absolutely sold on the topic of incentives.   0:22:27.2 BB: Absolutely.   0:22:27.8 AS: A 100, I mean, 99.999% and if you're not sold on it, you're still gonna be forced to do it.   0:22:34.5 BB: Well, you know why they're sold on them, 'cause they work.   0:22:39.7 AS: It's like a shotgun. One of those pellets is gonna hit the target but...   0:22:47.7 BB: That's right.   0:22:48.4 AS: A lot of other pellets are gonna hit...   0:22:50.6 BB: And that's all that matters. And then what you get into is, you know what, Andrew, that that one person walks away excited, right? And that's the pellet that I look at. And I say, yep, and what about those others? You know what I say to that, Andrew? Those others, you know what, Andrew, you can't please everybody.   0:23:07.8 AS: Yeah.   0:23:07.9 BB: So this is so reinforcing. There's one person that gets all wrapped up based on my theory that this is a great thing to do and I hone in on that. And everything else I dismiss as, "ah, what are you gonna do? You can't please everybody." But what's missing is, what is that doing to destroy their willingness to collaborate with the one I gave the award to?   0:23:33.1 AS: Yeah, I'm picturing a bunch of people and laying on the ground injured by the pellets but that one black, or that one... Let's say the one target that we were going after, that target is down but there's 50 other people down also.   0:23:50.6 BB: No, but then this is where I get into the white bead variation we talked about early, early on, is that if all I'm doing is measuring, have you completed the task and we're looking at it from a black and white perspective and you leave the bowling ball in the doorway for the next person, meaning that you complete a task with the absolute minimum requirements for it to be deemed complete. Does the car have gas? Yes. You didn't say how much but when people then... When those people that were summarily dismissed didn't receive the award, when they go out and don't share an idea, don't give somebody a warning of something or not even maliciously leave the bowling ball in the doorway but believe that the way to get ahead is to do everything as fast as possible, but in doing so, what you're doing is creating a lot of extra work for others, and then you get promoted based on that. Now you get into... In episode 22 we talked about, as long as there's no transparency, you get away with that. And then the person at the end of the line gets buried with all that stuff and everybody else says, well, my part was good and my part was good. How come Andrew can't put these together?   0:25:26.8 AS: In wrapping this up, I want to think just briefly about how somebody... So we're talking about understanding transformation, but we're also talking about incentives.   0:25:39.8 BB: Yes.   0:25:40.5 AS: And I would like to get a takeaway from you about how somebody who lives in a world of incentives, how do they, after listening to this, go back to their office and how should they exist? It's not like they can run away from a structure of incentives. Maybe when they become CEO, they decide, I'm not gonna do it that way, but they're gonna go back to their office and they're gonna be subjected to the incentive system. Obviously, the first thing is we wanna open up their mind to think, oh, there's more to it than just, these darned employees aren't doing what I'm telling them, even when I'm giving them incentives. But what would you give them as far as a takeaway?   0:26:27.1 BB: Well, I'll give you some examples of what some brilliant colleagues did at Rocketdyne, as they became transformed, as they became aware, and one is politely decline. Say, I don't, I don't need that. Just again you have to be careful there. There could be some misinterpretations of that. So you have to be...   0:27:03.2 AS: What if you're required to put an incentive system on top of your employees?   0:27:09.5 BB: Well, first, if it's coming down to you to go off and implement this, then one thing you could do is create a system which is based on chance. Everyone who contributed an idea, their name goes into a lottery for free lunch the first Wednesday of the month, and everybody knows. So then we're using the incentive money but using it in a way that everyone deems as fair. So that's one thing. And you just say, I'll... So then if your boss asks, have you distributed the incentive money? You say, yes, but you're distributing it based on a system of chance of which everyone realize they stand an equal chance of winning.   0:27:56.9 AS: Okay. So let's address that for a second. So your boss believes in incentives. They ask you to implement this system. Now you proposed one option, which is to do something based upon chance, but now let's look at your employees under you that have been indoctrinated their whole life on the concept of incentives. And you give them a system of chance and they're gonna come back and say, wait a minute, you're not rewarding the person who's contributing the most here? Now obviously you have a teaching moment and you can do all that, but is there any other way that you can deal with this?   0:28:33.7 BB: No, it could be tough. You've got to... You may have to go along until you can create a teaching moment. And what I did with the colleagues, when there are these a "great minds doing great things" events, and an announcement would go out as to who are the privileged few that got invited to these events, and I would tell people that if you go to the event, then that's what I would say. You can decline, you can politely decline. There's some things you can decline.   0:29:17.4 AS: I guess the other thing you could do, you could also... When you have to, when you're forced to reward, you can celebrate everybody's contribution while you're also being forced to give that incentive to that one person that has been deemed as the one that contributed the most.   0:29:36.9 BB: Well, I'll give you another example that a colleague did, a work colleague. He didn't do it in a work setting. Not that it couldn't be done in a work setting, but he signed up to be as a judge in a science fair in a nearby school. It was a work-related thing. And as it got closer, he realized... It was a... It would involve... What is a science fair without the number one science experiment? And my theory is you can't get a bunch of adults and a bunch of kids together in any organized way without giving out an award that just, it's like, oh, we got everybody together. We got to find a way to single somebody out. So when he realized what was going on, instead of not going, what he did, he took it upon himself to interact with every kid whose science experiment he watched and asked them lots of questions about it, about what inspired them? What did they learn?   0:30:30.6 BB: So what he wanted by the end of the day was that they were more intrigued that someone came and really wanted to know what they learned and less inclined to listen to who won the award. And I've seen that in a work setting, again, where we had events and the next thing you know there's an award and I thought, well, what can we do? Well, we can go around and really engage in the people who's got tables set up for the share fair knowing at the end of the day, we have this. We just can't break this, we just can't break this.   0:31:08.2 AS: Yeah. All right. So...   0:31:10.3 BB: But the other thing I've seen, I've seen people who received rewards, use that money. Literally, one guy in the quality organization at Rocketdyne received an award. It might have been for a $1000. He used the money, Andrew, to buy copies of The New Economics for everyone in the organization.   [laughter]   0:31:31.7 AS: Well, that brings us to another possibility, is that you convince your boss that you at least want to give... You want to reward the whole department.   0:31:40.5 BB: Yes.   0:31:40.9 AS: Any reward that you do, you want to reward your whole department. And so that could be something that your boss would say, "Okay, go ahead and do that." And they're not gonna go against it as opposed to trying to, say, no, I won't do it this way, but...   0:32:02.1 BB: Well, towards that end, I've seen people that are rewards crazy. At Rocketdyne, there's one guy in particular in a machine shop manufacturing environment and some big program wanted to thank five out of the 50 people in his organization with t-shirts. And he said, "You either give me 50 t-shirts or no t-shirts."   0:32:27.6 AS: Yeah.   0:32:28.8 BB: And I thought that was really cool 'cause this... And I don't know to what degree his exposure to what we were doing, but I thought that's what we need more of. Come back with 50 shirts and we'll take them.   0:32:44.1 AS: Okay. Let's wrap this up by doing a brief wrap-up of why you're saying... Why you've titled this Test for Understanding and what can the listeners take away.   0:32:56.6 BB: The idea is again, if in a seminar learning event situation is one thing, but if you're involved in leading in a transformation within your respective organizations, what I'm suggesting is that you think about how to Test the Understanding of that transformation's progress with your audience. And we talked in the past about leaving a coffee cup in the hallway, see if it's still there. That's a Test for Understanding of the culture of the organization. And that's what I'm suggesting here, is there are simple things you can do such when somebody says, come see what my son did. You can say, your son? Or is it, was there a spouse involved? And just as you become aware of the nuances of this transformation, you could be looking at somebody look at two data points and draw a conclusion and they're just a day out of some seminar with you about understanding variation and they're looking for a cause of one data point shift.   0:34:13.0 BB: So it's just, what can you do day in and day out, just your little things to test the organization or test an individual's understanding of this transformation process that we're talking about, which is, how are you seeing things differently? Are you becoming more aware of incentives and their destruction, more aware of theories? That's all. What just came to mind is... And the other aspect of it was this idea that very deliberately with the foundation of ME and WE, Red Pen/Blue Pen, then you can build upon that by saying to somebody, how might a Blue Pen Company go off and do this? How might a red pen company go off and do that? And that's not a guarantee that either one of them is right, but I find it becomes a really neat way on an individual basis to say, as you just pointed out, Andrew, so how would I as a manager in a Blue Pen Company deal with that awkward situation?   0:35:19.2 BB: Well, if I was in a red pen, this is what I would do. And so it's not only testing for understanding, but also the power of this contrast. And that's what I found with a group recently, especially the students. If I give them the contrast, I think it's easier for them to see one's about managing things in isolation and all that beckon such as belief in addition and root cause analysis, and one's about looking at things as a system. So it's not just Test for Understanding, but a test of both foundations is what I wanted to get across.   0:35:57.0 AS: Okay, great. Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. If you wanna keep in touch with Bill, hey, you can find him on LinkedIn and he listens. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. I mean, I say this quote every time until I will be bored stiff of it, but "people are entitled to joy in work."

How can you make lasting change at your organization? Recruit your friends! In this discussion, Bill Bellows lays out his experience recruiting and working with a small group to make big changes in a large company.  0:00:02.5 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunity. Today is episode 21, and the topic is Transparency. Bill, take it away.   0:00:27.1 Bill Bellows: Thank you, Andrew, and welcome to our audience. And I wanna thank a handful of people who have reached out to me on LinkedIn and elsewhere to talk about the podcast, what they're getting out of it, and which has been very interesting meeting people from around the world. And that's led me to a couple opening remarks for clarity on some of the things we've discussed in the past. And then we'll get into our feature topic. And so I say, [chuckle] is that in my early years at Rocketdyne, the Rocket Factory, a few of us started to see the synergy of what we were absorbing and integrating from, primarily from Dr. Deming and Taguchi, not just them, there were others. And we're 10 years away from really beginning to see what Russ Ackoff was able to offer us. At one point, there were eight of us. It started off with one, then another, then another. Next thing you know there's eight of us. We were what Barry Bebb and his cloud model would call advocates. Advocates of a change, of a transformation. We've been using that word. And I started to refer to us as the Gang of Eight 'cause this is the early '90's. And I think in China there was a group known as the Gang of Eight. Maybe that was the '80's. And I remember thinking, "Oh, we're like the Gang of Eight."   0:01:54.7 AS: I thought that was a Gang of Four in China, is that the Gang of Four.   0:01:58.9 BB: Well, there was a Gang of Four, then there was a Gang of Eight. There were both.   0:02:02.4 AS: Okay.   0:02:03.1 BB: But anyway, but I remember hearing that word, and then I thought, "Well, so okay, a gang of eight." We started to meet regularly, perhaps every other week, sharing ideas on how to initiate a transformation and how we operated, again, inspired by Deming. So at first we met quietly, we would meet in another building, not wanting to call attention to our efforts, not wanting to be visible for those who might have been adversaries again to borrow from Barry's model. 'Cause Barry's model was, there's, for every advocate there's a few more adversaries. So we were keeping our heads down. And this is before I knew anything about Barry, but I, we were just kind, a little bit paranoid that people would see what we're doing. And so who were the ones that were the adversary? Well, those were promoting rewards and recognition. Those were promoting individual cash incentives for suggestion programs including, as I mentioned a previous podcast, an individual could submit a suggestion award, get up to 10% of the annual savings in a onetime lump sum. They were giving out checks for $10,000, Andrew. And I would kid people, if the company's giving out checks for $10,000, do you think we've got photographs of me receiving a check for 10,000? You betcha.   0:02:03.5 BB: And there it is in the newspaper, me receiving a check, not that me, [chuckle] but somebody receiving a check for $10,000, a big smile with the President. And it's in the newspaper and did that cause issues? Yes. But anyway, it wasn't obvious for some of us that we might have been, sorry, it wasn't obvious for some time that those we might have considered the adversary to our efforts were very likely not meeting to plan how to stall our efforts. [chuckle] Right. And, but it took a while to realize this, so here we are trying to be very discreet, meeting discreetly. And then it, at some time it dawned on me and some of the others that, those of us that were inspired to learn, think, and work together on transformation efforts as we've been exploring these podcasts, we have the benefits of positive synergy. And the adversaries at best operate without synergy as they're not likely to be inclined to do much more than participate in what some at Rocketdyne called, you ready, "Bill Bellows' Bitch Sessions." [laughter] And they come back from a class with me and they start bitching about me. And then the local people in that area would come by and tell me, and they said, "Anything we can do?" I said, "Yeah," I said, "Ask them what part of Rocketdyne moving in the direction of a Blue Pen Company do they not like." Right? It's just arrrgggggh.   0:02:04.2 BB: And I say, anyway. But once we had more and more results from our efforts, results from applying these ideas with very visible improvements in quality and costs leading to improved profits, it was all the harder for the adversaries to slow our efforts. Again, we were most fortunate to be working on challenges, we had challenges in fighting fires, but we also had challenges in designing hardware that achieved "Snap Fit" status, which translates to dramatically easier to integrate higher performing as well, as we shifted from parts to systems, challenges that required, guess what? A different lens inspired by Dr. Deming. That's, [chuckle] again, listening to the previous podcast, 'cause I thought, "Well, I wanna clarify a few things." Did we have ups and downs, Andrew? Yes, we did. We had days when we're excited, we had days when we were down. But what really worked out well, [chuckle] and the running joke was, there was variation in our excitement.   0:02:04.7 BB: So I may have been down, you'd be up, so you'd lift me up and then when you're down, I lift you up. And so the running joke we had amongst us was, thank God for variation in our moods. Because if we were all depressed at the same time, we'd go off the cliff. [chuckle] But we just took turns as to the ups and the downs. And we're very fortunate to have weekends 'cause that gave us time to not wanna choke some people. So, [chuckle] but come Monday we're relaxed. And then, but another thing that I wanted to point out from things we talked about previous podcasts, years ago, 30, nearly 30 years ago, I met a senior structural analyst from Boeing, Al Viswanathan, who was on the Boeing Commercial side. And he somehow got involved in the commercial side.   0:06:52.1 BB: Well, I don't know if it was the commercial side or military side. Anyway, Boeing had, there were both sides and one side was pro-Deming and the other side was anti-Deming. So he must have been on the defense side. And why would the defense side be pro-Deming? Because the Pentagon was pro-Deming. And so the defense side people would have been watching that. Anyway, Al somehow got involved in studying Deming's work and being a mentor within the organization. And I met him, I know when he worked there, when he retired. Anyway, Al, coming from Al, what I want to share is something he would say relative to Dr. Deming's funnel experiment. There's rule one of the funnel, rule two, rule three, and rule four. So rule one is you have a funnel and you drop marbles from the funnel onto the floor, and you get a pattern of where the marbles lay.   0:07:49.1 BB: And that's called variation. You're holding the funnel, you drop the marble, it lands in a different spot each time. And then rule two is you, if the marble is off a little bit to the right of the target that you're trying to hit, then you move the funnel the other direction. So two and three have to do with compensating. If it doesn't go where you want, then you shift it accordingly. Rule four, remember rule four of the funnel?   0:08:17.4 AS: I don't remember that.   0:08:18.9 BB: And this is... I think it's chapter eight. I know it's in The New Economics. Chapter 8, I'm sorry, rule four of the funnel is wherever the marble lands, position the funnel for the next drop. So in rule one, you keep it where it is and you get a pattern. Rules two and three, you compensate for where it lands. You either go left if it goes right and you compensate. And in compensating, it becomes worse. But what becomes really bad is when you put the funnel in rule four over where the last marble landed, and you end up getting farther and farther from the target leading to, remember the expression Dr. Deming used for that?   0:09:00.9 AS: Well, I remember the word tampering. But it meant when you get way off the target. What was that?   0:09:06.6 BB: He called it going off to the Milky Way. [laughter] And there are computer simulations where if, some people have done, you know, created.   0:09:16.0 AS: You do it in California and you end up in New York.   0:09:17.8 BB: Yep. And you, and you, and you keep getting further and further. Well, so in conversations with Al, and it could have been me and him and Dave Nave, Dick Steele and others, and at some point, Al would say, "How do we know we're not going off to the Milky Way?" Which translates to, how do we know that what we're interpreting from Deming is not getting further and further and further and further away from what he was trying to say? How do we know that we aren't wacky? How do we know? Because we think, "Oh, we're getting, we're understanding this better and better." And what I would say is, how do we know we're not going off to the Milky Way? “Actually,” I say, "We don't know." But part of having a community of people that work closely with Deming, people that know more than me about Dr. Deming's work is you can tap into that community and maybe lessen the chance that we go off to the Milky Way. Now, again, is that a guarantee? No, it's not a guarantee.   0:10:25.9 BB: But I would say, what I appreciate about Al saying that is, it's just a reminder that how do we know that what we're interpreting is true? So we're here, you and I are having these conversations, we're sharing interpretations, lessons learned, are we, is what Dr. Deming would say, "Is this worker training worker?" So, each of us are ignorant, and we think we understand Deming, and we're sharing it with others "well, I know, I know." Now, we can all be right, we can all be going off to the Milky Way. So I just wanted to say that, when I'm talking about diffusion from a point source and getting smarter and smarter and having these conversations within our organization. How do we know we aren't fooling each other? We don't know.   0:11:18.7 AS: I have a couple follow ups here. First of all, the 1991 Washington Post called it the Gang of Eight, as opposed to the Gang of Four, which was before that time, during the Cultural Revolution. And the Gang of Eight included seven men and one woman. And the Gang of Four, of course, included Mao's wife. So there's a little clarification.   0:11:44.6 BB: I wasn't sure if she was part of the four or part of the eight. I knew her name was in there somewhere.   0:11:49.0 AS: And the second thing you talked about the volatility of your feelings, your moods, right. And I just wanted to introduce the concept of volatility in finance, which is that volatility in itself is not bad. What's bad is correlation of volatility. So if all of you are upset on the same day, then it's just an absolute crash. But if one's upset on Monday and another one's happy and productive on Monday, then it starts to balance. And that's what we do in the world of finance is we combine correlation with volatility. And Harry Markowitz got a Nobel Prize in economics for coming up with the concept that risk can be reduced by understanding the correlation between assets and adding a highly risky asset to a Portfolio could, in fact, reduce the risk of the Portfolio overall, if the correlation between that asset and the Portfolio was, let's say negative or very low.   0:12:55.5 BB: Wow what you're talking about is the benefit of not being synchronous, being asynchronous.   0:13:04.2 AS: Correct.   0:13:05.1 BB: So you're up, I'm down, and I'm up, you're down, and then we can get through these periods. And yeah, and that's exactly what we're talking about. But you're right, I'm glad you brought that up because I've heard people talk about that as well. But that's exactly the point we're trying to make is, so for all those who think we ought to shrink variation to zero, I'd say, well, maybe there's value in variation, value in diversity of opinions. And also I have had people in the past say, "Well, so a Blue Pen Company is a bunch of people that go along to go along." I said, "No, it's a bunch of people that have strong disagreements on things and they share those disagreements."   0:13:49.5 BB: Now, at the end of the day by Friday, we've got to make a decision as to releasing this album whatever it is, because we've gotta ship. And we may arm wrestle, we may vote however we're gonna do it. So there can be disagreement. We have the ability to articulate where we're coming from. Borrowed from Edward de Bono, we can use a black hat and I can give you reasons why you don't think it'll work. You can call me on it and say, "Bill, how do I know it's your black hat and not what de Bono would call your red hat, which is my intuition."   0:14:26.4 AS: So if I say it doesn't work, you could say, "Bill, is that you don't feel it'll work or you know it won't work?" And I say, "Andrew, you're right. I have a bad feeling about it." I say, "Well, let's just be honest about it." But again, at the end of the day, we may vote. But we're gonna move forward. And what's not gonna happen is if you decide to take however we decide to make that decision, what there won't be a lot of room for is a bunch of "I told you so."   0:14:58.8 AS: Right.   0:15:00.4 BB: And we just we just dispense with that and just say this time, maybe the idea I had, we'll just have to wait till later and we're just gonna move on. So it's not to say it's a bunch of happiness and we're always in agreement. No, very strong relationships can have very strong disagreements. They just don't result in a civil war. Years ago, when my wife and I got married, she said I was just, it was lucky for me that she liked cats. I said that was non-starters. I said liking cats was a requirement. [laughter]   0:15:44.3 BB: So there's a few things that were non-starters. And if she didn't like cats, I'd have had a hard time with that. But on everything else, there's things we can disagree with. That's okay. All right. So given that I wanna talk about tonight is something that's come up in some other conversations recently. And it's about transparency. And then I have a quote that I've used in the past. I've once in a while attributed to Peter Senge, because I can't remember is actually Robert Fritz, a close associate of Peter Senge. And Fritz's comment is, “It's not what the vision is that is important. It's what the vision does.” And what I like about that is if you have a shared mental model of a Blue Pen Company. And I just began to appreciate how powerful it is that we have a shared vision. And relative to transparency, what I was sharing with some people is the transparency that exists in a Blue Pen Company, a Deming organization, a WE organization, an All-Straw organization and the transparency that which is as simple as me saying to you.   0:17:05.5 BB: Well, I say let's talk about the lack of transparency. I can meet a requirement, as we've talked about, an infinite number of ways to meet any set of requirements. And the letter grade is not A plus. It is not 100. It could be a D minus. I could leave for you the bowling ball on the doorway. And in a non-Deming Organization. I could meet any requirement you give me, Andrew, with the minimal amount of effort. Because all that we're measuring is that it met requirements. And so I give it to you and, and all you do is you look at the measurement and it says, "Yep, the car has gas." You're like, "Hey, I'm excited."   0:17:45.2 BB: Well, the black and white thinking allows me to hide a whole bunch of things. So if I said the car has gas. And you complain because it only has a quarter of a tank, I said, "Andrew. It has gas." But I thought in a Deming organization, I don't think we're gonna play those games. I think we're gonna have a lot more transparency relative to when I meet a set of requirements. Am I gonna leave the bowling ball on the doorway for you unilaterally? I don't think so. Maybe once I learn my lesson because I'm a new hire. I'm bringing something from where I used to work. But I think in a Deming environment, I think the transparency is gonna bring out the best in us.   0:18:33.8 BB: So I just want to throw that, that's part of where I'm coming from with transparency. You know, we don't have this murkiness as to, you know, where are they coming from? And. also we're going to be, you know, as Ackoff was, we're going to go to great lengths to be precise with language, and understand that efficiency is not effectiveness, that management is not leadership. And I think the better we have that clarity, I think that's a trademark of what that environment is about.   0:19:02.2 AS: It's interesting because, you know, the ultimate clarity is doing a run chart or a control chart on a process and seeing the outcome. And that's transparent and clear. And I've done a lot in my own management career by just getting data into a format that people can, you know, go back to and look at and think about. And just the transparency of that data can make a huge difference to the way people interpret what's going on in that unit.   0:19:38.9 BB: You're right. As opposed to the transparency of two data points, quality, I'm sorry, I think I've used this example. You can remind me of, you know, when I was at Rocketdyne once upon a time, and there was a meeting where the safety metrics, number of accidents, per employee in the first quarter was a certain level. Then in the second quarter, it went down. And I mean, the number of accidents per employee went down. Safety got better. And as you know, in this meeting with a bunch of directors and the VP and somebody says to the VP, why is safety improved? And their response was, because “We've let them know safety is important.” Well, who's the we? Who's the they? So, and, but imagine the transparency for somebody hearing that we've let them know. That's a way of saying, so you're, you're believing that because it went down, it's because of things we said, and they're not interested in safety.   0:20:45.3 BB: And then if it goes the other way, we're going to claim what? That they're not listening? So you're right. I mean, the ability, the transparency of looking at a set of data on a control chart and the realization that the process is in control. Then we look at the ups and downs and say, no reason for alarm here.   0:21:12.2 AS: The other thing that I thought relates to transparency is fear. In the sense that what is fear? Fear is, you know, a concern that something is going to happen is about to happen is in the process of happening, or, you know, something's happening to you and you're not being able to see, you know, what's going on. So I was just thinking, you know, another angle on transparency is, you know, reducing fear in an organization by being, you know, let more transparent.   0:21:41.5 BB: Yes. And, and I can even imagine, what's funny is that, a co-worker in my office, once upon a time. And. And she was upset with a decision made by the president at that time was my boss. And so she, so for about two years or so, she reported to me, lovely lady, lovely friend, great friend. So anyway, she was upset. She comes in. Did you hear the decision made? And I said, no, I didn't know. And she says, and she was really upset. And I don't know what it was that she was upset. And at some point she said something like, “I don't know what I'm going to do. I just don't know what I'm going to do.”  I turned to her and I said, if I were you, I would take this personally. Which caused her to laugh. And when I told her, again I get back to transparency, I said, "I may not agree with a decision, but I may never know the choices he had." And so in that situation, Andrew, there may be situations in a Deming company where for whatever reason, there is no transparency, we don't know the options, we don't know what was on the table, all we know is the outcome, and it could be because of, you know, Security and Exchange issues relative to, you know, stock prices, there's, there's all kinds of reasons we may not know.   0:23:03.4 BB: But in that environment, we may, we have to live with it. We just have to say, well, and when I look at it as, and I'm glad you brought that up. Because when I look at it as, there may be decisions, we don't know the choices, we don't know the criteria, we may never know. Instead of agonizing over it, I'd like to think that if we were in the room and knew what they knew and the options they had, we might well make the same decision. And that's something that I became excited about at Rocketdyne was, I didn't have to be in the room for a bunch of decisions, a whole bunch of decisions, I didn't have to be in the room. And what I thought was, if I can help people develop a better and better sense of what a Deming organization, how that operates. And then, and then practice, perhaps, you know, how might they handle a given scenario, and in fact, Kevin's mom, Diana Deming Cahill reached out to me in the late '90s, you know, late '90s, and asked if I would resurrect a Deming Study group for Los Angeles, which existed when Deming was alive, they used to meet at the LA Times.   0:24:51.4 BB: They had invited speakers. And after Deming died it dissolved, and she saw what we're doing within the Boeing sites and asked if I would, you know, work with her to resurrect that. I said sure, I said but here's the deal. When she explained to me how it used to work, invited speakers every month and I thought, that's a lot of work finding a speaker every month. And I said, and it's so easy to be, you know, sit in the back of the room and watch somebody talk I thought. I'm not, I'm not, I don't like that format. And so, a few of us spent a good deal of time coming up with a format. And we went from three hours to two hours and, and then came down to a really neat format that we held for a couple years. We met in two different sites. We met in Canoga Park. We met in the other group met in Huntington Beach where Diana would show up we first we looked at a location there LAX, that wasn't going to work. So we spent the first hour talking about reflections how we're seeing the world through a Deming lens, things that had happened since the last month that we're seeing, that we're seeing differently.   0:26:08.6 BB: That's the first hour. And then the second hour someone would introduce a topic and the topic would be, "How would a Deming organization do X." And what was neat was just to brainstorm. How would a Deming organization go about doing something, that may be way beyond our, our personal responsibility and it just allowed us to play in this space. And, and just, you know, wonder what is, what is going on there. And I throw that out in the spirit of transparency is, it was just to me it was just fun to just practice. How would you deal with, how would you deal with, how would you deal with. And that's what got me thinking that, now going back to, I think that if you get a diverse enough group of people with different experiences and perspectives I think the better they understand, yeah, where Deming and the others are coming from.   0:27:02.5 BB: I think we're going to see a lot of common decision making. And that was for me was very relaxing, that I didn't have to worry about "now they're going to make the right decision." I just thought, if they understand the process, and they use, you know, Edward de Bono's ideas to go through ideas. I thought, the best I can do is say, how did you reach this conclusion, what options did you consider who was involved in the decision making? I can ask those types of questions. I can ask, you know, did you include the supplier did you include... I can ask that. And once I understand that I'd say, if I trust the process. Then I have to trust the result, which goes back to transparency. So I no longer. I mean, that's what parents do - you trust. You raise your kids in a way that you help them develop a sense of a process. And then you just have to live with the results.   0:28:00.8 BB: And same thing as sports. You, I've seen coaches. When I was a youth referee, they're trying to micromanage every minute of the game and I thought it's too late for that you've got to do that at practice. And then once they're playing you just let them go. And that's a demonstration of how well you've prepared them.   0:28:21.6 AS: That's a great, you know, a great one. It's so, it's so amazing to see a team in action and a coach being able to kind of sit back and say now it's up to you. And, you know, I've trained you and everything I can. How would you, how would you wrap this up and provide people with how a Deming organization would apply transparency and maybe give, you know, some one or two ideas about how someone can leave this conversation and bring more transparency back to their organization.   0:29:00.8 BB: I think it's, goes back, to me it goes back to, as a point source within your respective organizations, listening to our podcast, you know, reading articles on, I mean, watching things on DemingNEXT and learning more. And, and yeah. Reaching out and finding people that are, you know, perhaps more knowledgeable than you about Deming's work or Ackoff work. And then Deming once said something about everyone's entitled to a master or mentor or someone, and I was very fortunate to be associated with some brilliant people that worked closely with Deming and Ackoff, and Ackoff himself and Taguchi. I would say, one is, what can you, what can you be doing to improve your understanding, with the appreciation of going off to the Milky Way.   0:29:51.6 BB: And then how can you then practice sharing that with others? Like we did going back to this Gang of Eight and what can be done within your respective organizations to create this group of one, group of two, group of three, group of four. And how might you work together to better appreciate what you think Dr. Deming and Ackoff and others are saying, how you might apply them? How can you support one another? And then, and at least, again, you're gonna have ups and downs, but I don't think there's any substitute for that. And many people I've mentored are solo people within their respective organizations. And what I keep telling them is you've got to find someone else to help you. You can't be the only one in that meeting lobbying for working on things that are good when everybody else is working on things that are bad.   0:30:46.4 BB: It's just gonna sound foolish but imagine being in a situation where you're lobbying for working on something which is good because you want to prevent it from going bad or improve integration. And then someone hears that remark and says, Bill, with all these challenges we have, I can't believe you're going off and doing that. Then imagine you're there in the meeting. And then after that person tries to sidetrack it, you say, "Bill, is that what you were trying to say?" And I say, "no, Andrew, that's not at all what I was trying to say." So you can come to my rescue. And when I'm being shoved aside, I've been in those sessions where I get shoved aside and it takes someone like you to be able to step in and say, Bill, did you say you wanted to do that? I don't think that's what you said.   0:31:10.5 BB: And that's what I would say is, increase the transparency amongst a small group, and then try to increase that transparency. And what becomes a lot of fun is, there are a handful of people at Rocketdyne, we can go into an office of any number of people and take turns exchanging things and reading. And we could see where things are going. And two of us, two or three of us can have a room of 10 and change the course of that conversation because we were incredibly transparent amongst each other. So I just leave it with that, Andrew.   0:32:21.8 AS: Well, Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. If you want to keep in touch with Bill, just find him on LinkedIn. As you can see, he responds. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming. People are entitled to joy in work. And, are you enjoying work?  

Dr. Deming developed his philosophy over time and in conversations with others, not in isolation. As learners, we tend to forget that context, but it's important to remember because no one implements Deming in isolation, either. In this conversation, Bill Bellows and host Andrew Stotz discuss how there's no such thing as a purely Deming organization and why that's good. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussions with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today is episode 20, entitled, System of Profound Wisdom. Bill, take it Away.   0:00:31.6 Bill Bellows: But not just for 30 years. I forgot to say I started when I was 12.   0:00:36.6 AS: Yes. [laughter] Yes. And you've got the hair to prove it.   [laughter]   0:00:43.7 BB: All right. Now, actually, I was thinking the proposal and the title, I thought... I mean, System of Profound Wisdom is cool, System of Profound Questions. Either one of those is good. Let's see which title comes out.   0:00:57.6 AS: Yeah. And I think we'll have to also understand that may some listeners that may not even know what System of Profound Knowledge means, they've been listening. They do. But if today's their first episode, we also gotta break that down, just briefly.   0:01:10.9 BB: Yeah. Okay, let's do that. All right. Well, let me give an opening a quote from Dr. Deming from chapter three, and then we can explain this SoPK, System of Profound Knowledge, thing. But in chapter three of Dr. Deming's last book, The New Economics, the last edition, edition three, came out in 2018. And chapter three, Dr. Deming says, "We saw in the last chapter, we are living under the tyranny of the prevailing style of management. Most people imagine that this style has always existed. It is a fixture. Actually, it is a modern invention a trap that has led us into decline. Transformation is required. Education and government, along with industry, are also in need of transformation. The System of Profound Knowledge to be introduced in the next chapter is a theory for transformation." So you wanna...   0:02:15.4 AS: That's good.   0:02:16.7 BB: So let's say something. Let's just say something about SoPK. How would you explain that?   0:02:23.1 AS: Yeah. Well, actually, I wanna talk very briefly about what you just said, because it's just...   0:02:27.1 BB: Oh, sure.   0:02:29.6 AS: At one point, I thought, "It's a system of knowledge." But he just said it was a system of transformation.   0:02:38.7 BB: It's a theory for transformation.   0:02:40.1 AS: A theory for transformation. Okay, got it. I see. And one of the things that I... I look at Toyota so much just 'cause it's so fascinating and how they've survived all these years, the continuity in the business, the continuity and the profitability of the business, the continued march to become the number one auto producer in the world, and having faced all the ups and downs and survived. And I just think that what they have is a learning organization. No matter what the challenge is, they're trying to apply learning tools, like System of Profound Knowledge, like PDSA, to try to figure out how to solve this problem. And I think that many companies, including at times my companies, [chuckle] we sometimes will scramble and we'll lose knowledge and we won't gain knowledge. And so the System of Profound Knowledge, to me, is all about the idea of how do we build a base of knowledge in our business and then build upon that base of knowledge rather than destroy it when the new management comes in or when a new management idea comes in.   0:04:00.7 AS: And that's something I've just been thinking about a lot. Because I do know a company that I've been doing some work with, and they basically threw away a huge amount of work that they did on System of Profound Knowledge and stuff to go with the prevailing system of management, is like going back. And now, they just produced a loss in the first quarter, and I just think, "Interesting. Interesting."   0:04:27.6 BB: Well, a couple things come to mind based on what you said. One is I would propose that Toyota, I'm in agreement of "Toyota's a learning organization." And that'll come up later. I've got some other thoughts on learning organizations. And we know that they were influenced by Dr. Deming. To what degree, I'm not sure of. Shoichiro Toyoda, who is one of the sons of the founder of the Toyota Motor Car Company, was honored with a Deming prize in 1990. And I believe it came from JUSE, as opposed to the American Society for Quality. One or the other. He was honored with a Deming Prize.   0:05:32.0 AS: Yep.   0:05:33.5 BB: Again, I don't know if it's Deming Prize or Deming Medal. But I know he was honored. What's most important, the point I wanna make is, upon receiving it he said, "There is not a day that goes by that I don't think about the impact of Dr. Deming on Toyota." But, if I was to look at the Toyota Production System website, Toyota's Toyota Production System website, which I've done numerous times, I'd be hard-pressed to find anything on that page that I could say, "You see this word, Andrew? You see this sentence, Andrew? You see this sentiment? That's Deming." Not at all. Not at all. It's Taiichi Ohno. It's Shigeo Shingo. I'm not saying it's not good, but all those ideas predate Deming going to Japan in 1950. Taiichi Ohno joined Toyota right out of college as an industrial engineer in 1933, I believe. The Japanese Army, I mentioned in a previous episode, in 1942, wanted him to move from Toyota's loom works for making cloth to their automobile works for making Jeeps. This comes from a book that I would highly recommend. Last time we were talking about books. I wanted to read a book, I don't know, maybe 10 years ago. I wanted to read a book about Toyota, but not one written by someone at MIT or university. I didn't wanna read a book written by an academic. I've done that.   0:07:15.1 BB: I wanted to read a book by somebody inside Toyota, get that perspective, that viewpoint. And the book, Against All Odds, the... Wait I'll get the complete title. Against All Odds: The Story of the Toyota Motor Corporation and the Family That Changed it. The first author, Yukiyasu Togo, T-O-G-O, and William Wartman. I have a friend who worked there. Worked... Let me back up. [chuckle] Togo, Mr. Togo, born and raised in Japan, worked for Toyota in Japan, came to the States in the '60s and opened the doors to Toyota Motors, USA. So, he was the first person running that operation in Los Angeles. And it was here for years. I think it's now in Texas. My late friend, Bill Cummings, worked there in marketing. And my friend, Bill, was part of the team that was working on a proposal for a Lexus. And he has amazing stories of Togo. He said, "Any executive... " And I don't know how high that... What range, from factory manager, VPs. But he said the executives there had their use, free use, they had a company car. And he said Togo drove a Celica. Not a Celica. He drove a... What's their base model? Not a...   0:08:56.2 AS: A Corolla?   0:08:57.7 BB: Corolla. Yes, yes, yes. Thank you. He drove a Corolla. He didn't drive... And I said, "Why did he drive a Corolla?" Because it was their biggest selling car, and he wanted to know what most people were experiencing. He could have been driving the highest level cars they had at the time. Again, this is before a Lexus. And so in this book, it talks about the history of Toyota, Taiichi Ohno coming in, Shigeo Shingo's contributions, and the influence of Dr. Deming. And there's a really fascinating account how in 1950, a young manager, Shoichiro Toyoda, was confronted with a challenge that they couldn't repair the cars as fast as they could sell them. This is post-war Japan. They found a car with phenomenal market success. Prior to that, they were trying to sell taxicabs, 'cause people could not... I mean, buying a car as a family was not an option. But by 1950, it was beginning to be the case. And the challenge that Shoichiro Toyoda faced was improving the quality, 'cause they couldn't fix them as fast as they could sell them. And yet, so I have no doubt that that young manager, who would go on to become the chairman, whatever the titles are, no doubt he was influenced by Dr. Deming. But I don't know what that means.   0:10:23.4 BB: That does not... The Toyota Production System is not Deming. And that's as evidenced by this talk about eliminating waste. And those are not Deming concepts. But I believe, back to your point, that his work helped create a foundation for learning. But I would also propose, Andrew, that everything I've read and studied quite a bit about the Toyota Production System, Lean, The Machine That Changed The World, nothing in there explains reliability. To me, reliability is how parts come together, work together. 'Cause as we've talked, a bunch of parts that meet print and meet print all over the place could have different levels of reliability, because meeting requirements, as we've talked in earlier episodes, ain't all it's cracked up to be. So I firmly believe... And I also mentioned to you, I sat for 14 hours flying home from Japan with a young engineer who worked for Toyota, and they do manage variation as Dr. Taguchi proposed. That is not revealed. But there's definitely something going on. But I would also say that I think the trouble they ran into was trying to be the number one car maker, and now they're back to the model of, "If we are good at what we do, then that will follow."   0:11:56.8 BB: And I'm gonna talk later about Tom Johnson's book, just to reinforce that, 'cause Tom, a former professor of management at Portland State University, has visited Toyota plants numerous times back before people found out how popular it was. But what I want to get into is... What we've been talking about the last couple episodes is Dr. Deming uses this term, transformation. And as I shared an article last time by John Kotter, the classic leadership professor, former, he's retired, at the University... Oh, sorry, Harvard Business School. And what he's talking about for transformation is, I don't think, [chuckle] maybe a little bit of crossover with what Dr. Deming is talking about. What we talked about last time is, Deming's transformation is a personal thing that we hear the world differently, see the world differently. We ask different questions. And that's not what Kotter is talking about. And it's not to dismiss all that what Kotter is talking about, but just because we're talking about transformation doesn't mean we mean the same thing.   0:13:10.6 BB: And likewise, we can talk about a Deming organization and a non-Deming organization. What teamwork means in both is different. In a Deming organization, we understand performance is caused by the system, not the workers taken individually. And as a result of that, we're not going to see performance appraisals, which are measures of individuals. Whereas in a non-Deming organization, we're going to see performance appraisals, KPIs flow down to individuals. [chuckle] The other thing I had in my notes is, are there really two types of organizations? No, that's just a model. [chuckle] So, really, it's a continuum of organizations. And going back to George Box, all models are wrong, some are useful. But we talked earlier, you mentioned the learning organization. Well, I'm sure, Andrew, that we have both worked in non-Deming organizations, and we have seen, and we have seen people as learners in a non-Deming organization, but what are they learning? [chuckle] It could be learning to tell the boss what they want to hear. They could be learning to hide information that could cause pain. [chuckle] Those organizations are filled with learners, but it's about learning that makes things worse. It's like digging the pit deeper. What Deming is talking about is learning that improves how the organization operates, and as a result, improves profit. In a non-Deming organization, that learning is actually destroying profit.   0:14:51.8 BB: All right. And early, spoke... Russ, Russ and Dr. Deming spoke for about three hours in 1992. It got condensed down to a volume 21 of The Deming Library, for which our viewers, if you're a subscriber to DemingNEXT, you can watch it in its entirety. All the Deming videos produced by Clare Crawford-Mason are in that. You can see excerpts of volume 21, which is... Believe is theory of a system of education, and it's Russ Ackoff and Dr. Deming for a half hour. So you can find excerpts of that on The Deming Institute's YouTube channel.   0:15:37.0 BB: And what I wanted to bring up is in there, Russ explains to Dr. Deming the DIKUW model that we've spoken about in previous episodes, where D is data. That's raw numbers, Russ would say. I is information. When we turn those raw numbers into distances and times and weights, Russ would say that information is what the newspaper writer writes, who did what to whom. Knowledge, the K, could be someone's explanation as to how these things happened. U, understanding. Understanding is when you step back and look at the container. Russ would say that knowledge, knowledge is what you're using in developing to take apart a car or to take apart a washing machine and see how all these things work together. But understanding is needed to explain why the driver sits on the left versus the right, why the car is designed for a family of four, why the washing machine is designed for a factor of four. That's not inside it. That's the understanding looking outward piece that Russ would also refer to as synthesis. And then the W, that's the wisdom piece. What do I do with all this stuff? And what Russ is talking about is part of wisdom is doing the right things right. So, I wanted to touch upon in this episode is why did Dr. Deming refer to his system as the System of Profound Knowledge? Why not the System of Profound Understanding? Why not the System of Profound Wisdom? And I think, had he lived longer, maybe he would have expanded. Maybe he would have had...   0:17:28.4 BB: And I think that's the case. I think it's... 'Cause I just think... And this is what's so interesting, is, if you look at Dr. Deming's work in isolation and not go off and look at other's work, such as Tom Johnson or Russ, you can start asking questions like this.   0:17:45.7 AS: One thing I was going to interject is that I took my first Deming seminar in 1989, I believe, or 1990. And then I took my second one with Dr. Deming in 1992. And then soon after that, I moved to Thailand and kind of went into a different life, teaching finance and then working in the stock market. And then we set up our factory here for coffee business. But it wasn't until another 10 years, maybe 15 years, that I reignited my flame for what Dr. Deming was doing. And that's when I wrote my book about Transform Your Business with Dr. Deming's 14 Points. And what I, so, I was revisiting the material that had impacted me so much. And I found this new topic called System of Profound Knowledge. I never heard of that. And I realized that, it really fully fledged came out in 1993, The New Economics, which I didn't get. I only had Out of the Crisis.   0:18:49.9 BB: '93.   0:18:49.9 AS: Yeah. And so that just was fascinating to go back to what was already, the oldest teacher I ever had in my life at '92, leave it, come back 10, 15 years later and find out, wait a minute, he added on even more in his final book.   0:19:10.4 BB: Well, Joyce Orsini, who was recruited by Fordham University at the encouragement of Dr. Deming, or the suggestion of Dr. Deming to lead their Deming Scholars MBA program in 1990. Professor Marta Mooney, professor of accounting, who I had the great fortune of meeting several times, was very inspired by Dr. Deming's work. And was able to get his permission to have an MBA program in his name called the Deming Scholars MBA program. And when she asked him for a recommendation, "Who should lead this program?" It was Joyce Orsini, who at the time I think was a vice president at a bank in New York. I'm not sure, possibly in human resources, but I know she was in New York as a vice president.   0:20:10.0 BB: And I believe she had finished her PhD under Dr. Deming at NYU by that time. And the reason I bring up Joyce's name, I met her after Dr. Deming had died. Nancy Mann, who is running a company called Quality Enhancement Seminars with, a, at the beginning one product, Dr. Deming's 4-Day seminar, when Dr. Deming died, and I had mentioned, I was at his last seminar in December '93, she continued offering 4-day seminars. And I met her later that year when she was paired with Ron Moen and they were together presenting it, and others were paired presenting it. And at one point, as I got to know Joyce, she said, "His last five years were borrowed time." I said, "What do you mean?" She said, "He started working on the book in 19'" evidently the '87, '88 timeframe, he started to articulate these words, Profound Knowledge.   0:21:11.0 BB: And I know he had, on a regular basis, he had dinner engagements with friends including Claire Crawford-Mason and her husband. And Claire has some amazing stories of Deming coming by with these ideas. And she said, once she said, "What is this?" And he is, she took out a napkin, a discretely, wrote down the, "an understanding of the difference between intrinsic motivation and extrinsic motivation. Difference between understanding special causes versus common causes." And she just wrote all this stuff down, typed it up. When he showed up the next week, she greeted him at the door and said, and she said, he said, This is Claire. And Claire said, he said, "What's that?" He says, "Well, I took notes last week."   0:21:54.2 BB: And he says, "I can do better." [chuckle] And so week by week by week. And as he interacted with the people around him, he whittled it down. And I'm guessing it put it into some, there's a technique for grouping things, you, where on post-it notes and you come up with four categories and these things all go over here. There's one of the elements of that, one of the 16 had to, or 18 or so, had to do with Dr. Taguchi's loss function. So that could have gone into the, maybe the variation piece, maybe the systems piece. But Joyce said, basically he was frustrated that the 14 Points were essentially kind of a cookbook where you saw things like, "cease dependence on inspection" interpreted as "get rid of the inspectors." And so he knew and I'd say, guided by his own production of a system mindset, he knew that what he was articulating and the feedback were inconsistent.   0:23:01.9 BB: And I've gotta keep trying. And she said, "His last five years on borrowed time as he was dying of cancer, was just trying to get this message out." So I first got exposed to it 19, spring of '90 when I saw him speaking in Connecticut. And I was all about Taguchi expecting him to, I didn't know what to expect, but I knew what I was seeing and hearing from Dr. Taguchi when I heard Dr. Deming talk about Red Beads. I don't know anything about that, common cause and special cause, I didn't know anything about that. And so for me, it was just a bunch of stuff, and I just tucked it away. But when the book came out in '93, then it really made sense. But I just had to see a lot of the prevailing style of management in the role I had as an improvement specialist, become, [chuckle] a firefighter or a fireman helping people out.   0:24:01.5 AS: I noticed as I've gotten older that, I do start to connect the pieces together of various disciplines and various bits of knowledge to realize, so for instance, in my case, I'm teaching a corporate strategy course right now at the university. Tonight's, in fact, the last night of this particular intake. And my area of expertise is in finance, but now I see the connection between strategy and finance, and how a good strategy is going to be reflected in superior financial performance relative to peers. And of course, I know how to measure that very well. So I can synthesize more and more different areas of things that I know things about, that I just couldn't do when I was younger. So I can see, and he was always learning, obviously. So I can see how he, and also I can also see the idea of, I need bigger principles. I need bigger as you said, theory for transformation. I need, I need to be able to put this into a framework that brings all that together. And I'm still feeling frustrated about some of that, where I'm at with some of that, because I'm kind of halfway in my progress on that. But I definitely can see the idea of that coming later in life as I approach the big 6-0.   0:25:37.3 BB: The big 6-0, [chuckle] Well, but a big part, I mean, based on what you're talking about, it ended up... Previously we spoke about Richard Rumelt's work, Good Strategy/Bad Strategy, and I mentioned that I use a lecture by Richard Rumelt, I think it was 2011 or so. It was right after his book, Good Strategy/Bad Strategy came out. He spoke at the London School of Economics, and our listeners can find it if you just did a Google search for Richard Rumelt, that's R-U-M... One M. E-L-T. Good Strategy/Bad Strategy. LSE, London School of Economics. Brilliant, brilliant lecture. And I've seen it numerous times for one of my university courses. And he is like Deming, he doesn't suffer fools. And, it finally dawned on me, Deming organizations, if we can use this simple Deming versus non-Deming or Red Pen versus Blue Pen, and as, George Box would say, all models are wrong, some are useful. If we can use that model, I think it's easy to see that what frustrates Rumelt is you've got all these non-Deming companies coming up with strategies without a method.   0:27:00.0 BB: What Rumelt also talks about is not only do you need a method, but you have to be honest on what's in the way of us achieving this? Again, Dr. Deming would say, if you didn't need a method, why don't you're already achieving the results? And so it just dawned on me thinking the reason he's so frustrated, and I think that's one word you can use to describe him, but if he is talking to senior staff lacking this, an understanding of Deming's work, then he is getting a lot of bad strategies. And organizations that would understand what Dr. Deming's talking about, would greatly benefit from Rumelt's work. And they would be one, they'd have the benefit of having an organization that is beginning or is understanding what a transformation guided by Dr. Deming's work is about. And then you could look up and you're naturally inclined to have good or better strategy than worser strategies.   0:28:02.2 BB: And then you have the benefit of, profit's not the reason, profit is the result of all that. And, but next thing I wanna point out is, and I think we talked about it last time, but I just wanted to make sure it was up here, is I've come across recently and I'm not sure talking with who, but there's this what's in vogue today? Data-driven decisions. And again, whenever I hear the word data, I think backed in Ackoff's DIKUW model, I think data-driven. Well, first Dr. Deming would say, the most important numbers are unknown and unknowable. So if you're doing things on a data-driven way, then you're missing the rest of Dr. Deming's theory of management. But why not knowledge-driven decisions, why not understanding-driven decisions And beyond that, why not, right? How long... [laughter] I guess we can... Part of the reason we're doing these Andrew is that we'd like to believe we're helping people move in the direction from data-driven decisions to wisdom-driven decisions, right?   0:29:13.1 AS: Yeah. In fact, you even had the gall to name this episode the System of Profound Wisdom.   0:29:24.0 BB: And that's the title.   0:29:24.9 AS: There it is.   0:29:28.9 BB: But in terms of, I'll give you a fun story from Rocketdyne years ago, and I was talking with a manager in the quality organization and he says, "you know what the problem is, you know what the problem is?" I said, "what?" He says, "the problem is the executives are not getting the data fast enough." And I said, "what data?" He says "the scrap and rework data, they're just not getting it fast enough." So I said, "no matter how fast they get it, it's already happened."   [laughter]   0:30:00.0 BB: But it was just, and I just couldn't get through to him that, that if we're being reactive and talking about scrap and rework, it's already happened. By the time the... If the executives hear it a second later, it's already happened. It's still old news.   0:30:14.7 AS: And if that executive would've been thinking he would've said, but Bill, I want to be on the cutting edge of history.   0:30:23.1 BB: Yeah, it's like...   0:30:24.6 AS: I don't want information, I don't want old information, really old. I just want it as new as it can be, but still old.   0:30:32.9 BB: Well, it reminds me of an Ackoff quote is, instead of... It's "Change or be changed." Ackoff talked about organizations that instead of them being ready for what happens, they create what's gonna happen, which would be more of a Deming organizational approach. Anyway, we talked about books last time and I thought it'd be neat to share a couple books as one as I've shared the Against All Odds Book about Toyota.   0:31:08.8 AS: Which I'll say is on Amazon, but it's only looks like it's a used book and it's priced at about 70 bucks. So I've just...   0:31:16.2 BB: How much?   0:31:16.8 AS: Got that one down? 70 bucks? Because I think it's, you're buying it from someone who has it as a their own edition or something. I don't know.   0:31:23.8 BB: It's not uncommon. This is a, insider used book thing. It's not uncommon that you'll see books on Amazon for 70, but if you go to ThriftBooks or Abe Books, you can, I have found multi-$100 books elsewhere. I don't know how that happens, but it does. Anyway, another book I wanted to reference in today's episode is Profit Beyond Measure subtitle, Extraordinary Results through Attention to Work and People, published in 2000. You can... I don't know if you can get that new, you definitely get it old or used, written by, H. Thomas Johnson. H is for Howard, he goes by Tom, Tom Johnson. Brilliant, brilliant mind. He visited Rocketdyne a few times.   0:32:17.1 BB: On the inside cover page, Tom wrote, "This book is dedicated to the memory of Dr. W. Edwards Deming, 1900-1993. May the seventh generation after us know a world shaped by his thinking." And in the book, you'll find this quote, and I've used it in a previous episode, but for those who may be hearing it first here and Tom's a deep thinker. He's, and as well as his wife Elaine, they're two very deep thinkers. They've both spoke at Rocketdyne numerous times. But one of my favorite quotes from Tom is, "How the world we perceive works depends on how we think. The world we perceive is the world we bring forth through our thinking." And again, it goes back to, we don't see the world as it is. We see the world as we are. We hear the world as we are. I wrote a blog for The Deming Institute. If our listeners would like to find it, if you just do a search for Deming blog, Bellows and Johnson, you'll find the blog. And the blog is about the book Profit Beyond Measure. And in there, I said, “In keeping with Myron Tribus' observation that what you see depends upon what you thought before you looked, Johnson's background as a cost accountant, guided by seminars and conversations with Dr. Deming, prepared him to see Toyota as a living system,” right? You talk about Toyota.   0:33:53.9 BB: He saw it as a living system, not a value stream of independent parts. And that was, that's me talking. I mean, Tom talked about Toyota's living system. And then I put in there with the Toyota Production System, people talk about value streams. Well, in those value streams, they have a defect, good part, bad part model that the parts are handed off, handed off, handed off. That is ostensibly a value stream of independent parts 'cause the quality model of the Toyota Production System, if you study it anywhere, is not Genichi Taguchi. It's the classic good parts and bad parts. And if we're handing off good parts, they are not interdependent. They are independent. And then I close with, "instead of seeing a focus on the elimination of waste and non-value added efforts, Johnson saw self-organization, interdependence, and diversity, the three, as the three primary principles of his approach, which he called Management By Means." And so what's neat, Andrew, is he, Tom was as a student of Deming's work, attending Dr. Deming seminars, hearing about SoPK, System of Profound Knowledge, and he in parallel developed his own model that he calls Management By Means. But what's neat is if you compare the two, there's three principles. So he says self-organization.   0:35:31.0 BB: Well, that's kind of like psychology and people. So we can self-organize interdependence, the other self-organized, but we're connected with one another. So that's, that's kind of a systems perspective there as well. And the third one, diversity. So when I think of diversity, I think of variation. I can also think in terms of people. So that what I don't see in there explicitly is Theory of Knowledge. But Tom's developing this model in parallel with Dr. Deming's work, probably beginning in the early '80s. And part of what Tom had in mind, I believe, by calling it Management By Means, is juxtaposing it with that other management by, right? You know the other one, Andrew, management by?   0:36:33.8 AS: You mean the bad one or the good one, Management By Objective?   0:36:37.8 BB: Or Management By Results. Or Dr. Deming once said, MBIR, Management by Imposition of Results. But what's neat is, and this is what I cover and with my online courses, Tom is really, it's just such insight. Tom believes that treating the means as the ends in the making. So he's saying that the ends are what happen when we focus on the means, which is like, if you focus on the process, you get the result. But no, MBIR, as we focus on the result, we throw the process out the window. And so when I've asked students in one of my classes is, why does Tom Johnson believe that treating the means as an ends in the making is a much surer route to stable and satisfactory financial performance than to continue as most companies do? You ready, Andrew? To chase targets as if the means do not matter. Does that resonate with you, Andrew?   0:37:44.1 AS: Yes. They're tampering.   0:37:46.8 BB: Yeah. I also want to quote, I met Tom in 1997. I'm not sure if this... Actually, this article is online and I'll try to remember to post a link to it. If I forget, our listeners can contact me on LinkedIn and I'll send you a link to find the paper. This is when I first got exposed to Tom. It just blew me away. I still remember there at a Deming conference in 1997, hearing Tom talk. I thought, wow, this is different. So, Tom's paper that I'm referencing is A Different Perspective on Quality, the subtitle, Bringing Management to Life. Can you imagine? “Bringing Management to Life.” And it was in Washington, DC, the 1997 conference. And then Tom says, this is the opening. And so when Tom and his wife would speak at Rocketdyne or other conferences I organized.   0:38:44.0 BB: Tom read from a lectern. So he needed a box to get up there and he read, whereas Elaine, his wife, is all extemporaneous. Both deeply profound, two different styles. So what Tom wrote here is he says, "despite the impression given by my title, Professor of Quality Management, I do not speak to you as a trained or a certified authority on the subject of quality management. I adopted that title more or less casually after giving a presentation to an audience of Oregon business executives just over six years ago. That presentation described how my thinking had changed in the last five years since I co-authored the 1987 book, Relevance Lost, the Rise and Fall of Management Accounting, and the talk which presaged my 1992 book, Relevance Regained." And this is when he... After he wrote, Relevance Lost, he went on the lecture circuit, he met the likes of Peter Scholtes and Brian Joiner, got pulled into the Deming community.   0:39:45.4 BB: And then he wrote this scathing book called Relevance Regained and the subtitle is... I think our audience will love it, From Top-Down Control to Bottom-Up Empowerment. Then he goes on to say, "in that I told how I had come to believe that management accounting, a subject that I had pursued and practiced for over 30 years." Over 30 years, sounds familiar. Then he says, "could no longer provide useful tools for management. I said in essence that instead of managing by results, instead of driving people with quantitative financial targets, it's time for people in business..." And this is 30 years ago, Andrew. "It's time for people in business to shift their attention to how they organize work and how they relate to each other as human beings. I suggested that if companies organize work and build relationships properly, then the results that accountants keep track of will what? Take care of themselves."   0:40:50.8 AS: It's so true, it's so true.   0:40:54.1 BB: Yeah, it sounds so literally Tom was writing that in 1999, 2000. Well, actually no, that was 1997, that was 1997, but the same sentiment.   0:41:03.4 AS: It just makes me think of the diagram that we see and that Deming had about the flow through a business, it's the same thing as of the flow from activity to result.   0:41:20.6 BB: Yes.   0:41:21.9 AS: And when we focus on the result and work backwards, it's a mess from a long-term perspective, but you can get to the result. It's not to say you can't get to the result, but you're not building a system that can replicate that. But when you start with the beginning of that process of how do we set this up right to get to that result, then you have a repeatable process that can deliver value. In other words, you've invested a large amount in the origination of that process that then can produce for a much longer time. Um, I have to mention that the worst part of this whole time that we talk is when I have to tell you that we're almost out of time 'cause there's so much to talk about. So we do need to wrap it up, but, yeah.   0:42:09.3 BB: All right. I got a couple of closing thoughts from Tom and then we'll pick this up in episode 21.   0:42:21.3 AS: Yep.   0:42:22.9 BB: Let me also say, for those who are really... If you really wanna know... I'd say, before you read The New Economics... I'm sorry, before you read Profit Beyond Measure, one is the article I just referenced, “Bringing Quality to Life” is a good start. I'd also encourage our readers to do a search. I do this routinely. It shouldn't be that hard to find, but look for an article written by Art Kleiner, Art as in Arthur, Kleiner, K-L-E-I-N-E-R. And the article is entitled, Measures... The Measures That Matter. I think it might be What Are The Measures That Matter? And that article brilliantly written by Kleiner who I don't think knows all that much about Deming, but he knows a whole lot about Tom Johnson and Robert Kaplan, who together co-authored "Relevance Lost" and then moved apart. And Tom became more and more Deming and Kaplan became more and more non and finally wrote this article.   0:43:35.6 AS: Is this article coming out in 2002, "What Are The Measures That Matter? A 10-year Debate Between Two Feuding Gurus Shed Some Light on a Vexing Business Question?"   0:43:46.4 BB: That's it.   0:43:47.2 AS: There it is and it's on the...   0:43:47.4 BB: And it is riveting.   0:43:50.8 AS: Okay.   0:43:50.8 BB: Absolutely riveting. Is it put out by...   0:43:54.0 AS: PwC, it looks like and it's under strategy...   0:43:58.5 BB: Pricewaterhouse...   0:43:58.8 AS: Yeah, strategy and business.   0:44:00.2 BB: PricewaterhouseCooper? Yeah.   0:44:01.3 AS: Yeah.   0:44:03.1 BB: And 'cause what's in there is Kleiner explaining that what Tom's talking about might take some time. You can go out tomorrow, Andrew, and slash and burn and cut and show instant results. Now what you're not looking at is what are the consequences? And so... But... And then... But Kleiner I think does a brilliant job of juxtaposing and trying to talk about what makes Kaplan's work, the Balanced Scorecard, so popular. Why is Tom so anti that?   0:44:37.9 BB: And to a degree, it could be for some a leap of faith to go over there, but we'll talk about that later. Let me just close with this and this comes from my blog on The Deming Institute about Profit Beyond Measure and I said, "for those who are willing and able to discern the dramatic differences between the prevailing focus of systems that aim to produce better parts with less waste and reductions to non-value-added efforts," that's my poke at Lean and Six Sigma, "and those systems that capitalize on a systemic connection between parts. Tom's book, Profit Beyond Measure, offers abundant food for thought. The difference also represents a shifting from profit as the sole reason for a business to profit as the result of extraordinary attention to working people, a most fitting subtitle to this book."   0:45:35.9 AS: Well, Bill, on behalf of everyone at The Deming Institute, I want to thank you again for the discussion and for listeners, remember to go to deming.org to continue your journey. If you wanna keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to Joy in work" and I hope you are enjoying your work.    

What happens if you transform HOW you think? In this episode, Bill Bellows and host Andrew Stotz discuss the problem of thinking in one dimension at a time (as we were taught in school) and its impact on our ability to solve problems. BONUS: Book recommendations to broaden your understanding of Deming and more. TRANSCRIPT 0:00:02.1 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is, well, episode 19, Transforming How we Think. Bill, take it away.   0:00:29.9 Bill Bellows: And good evening, Andrew.   0:00:35.8 AS: Good evening.   0:00:36.2 BB: And, but just as a point of clarity, I view it as transforming how we think about our thinking. And that's what I've been focusing on for the, since the mid, the early '90s is not how we think, but what is our awareness of our thinking, and I think that ties in well with SoPK. So first in late breaking news, I am seeing with new eyes, Andrew. Literally, I've got new monofocal lenses in both eyes. The left eye three weeks ago, the right eye, a week ago. I was told about five years ago, eventually I'll have to have cataract surgery. And I spoke with a few friends who had it done, and they said, oh, it's easy. And what was so amazing was it was easier than they said. It was.   0:01:41.0 BB: But one neighbor who's had it done, and kind of a sad note is he claims, and I've not double checked this, he's a sharp guy. He claims 80% of the world's population would benefit from cataract surgery that they don't have access to and eventually go blind. And I don't know, I can believe, and he is in fact he's quoted me twice on that. But I am literally seeing with new eyes. The grays are now, shades of gray, are now shades of blue. When I look at the sky. My depth perception's a whole lot better. And so it ties in well with all this vision therapy stuff. So.   0:02:36.8 AS: Aren't you glad that those machines are high quality and the operations that they do are high quality?   0:02:41.6 BB: Oh, yeah.   0:02:42.4 AS: Just one little mistake on that one. And, that's...   0:02:46.2 BB: Well, and I'm signing the documents and there's a little bit of a flutter when I'm signing, in terms of the liability. And one friend's mom had a bad cataract procedure, so it doesn't always go. And I shared this with Kevin. Kevin's had the same, as likewise had the procedure done. And we shared the anxieties and then it worked out well. But yeah when I signed that form that there was in the event, and I thought, whoa, that'd be, anyway, it worked. All right, so where I want to pick up in episode 19 is where we left off with episode 18. And there near the end, I referenced from Dr. Deming. He says Dr. Deming says in chapter three of The New Economics, and he says, "we saw in the last chapter that we're living under the tyranny of the prevailing style of management. Most people imagine this style has always existed. It is a fixture. Actually," he said, "it's a modern invention, a trap that has led us into decline. Transformation..."   0:04:03.0 BB: You remember that word from last time? Okay. "Transformation is required. Education and government, along with industry are also in need of transformation. The System of Profound Knowledge will be introduced in the next chapter. To be introduced in the next chapter is a theory for transformation." So I've got some bullet points and I want to get into the additional chapters and references from The New Economics on Dr. Deming's use of the term transformation. 'Cause I think what he's talking about... SoPK is a theory for transformation. So I think it's just not enough to talk about SoPK without understanding how does that fit in with what Dr. Deming's talking about?   0:04:49.0 AS: And for the listeners who come out of the blue here, SoPK stands for the System of Profound Knowledge.   0:04:56.1 BB: Yes. And system then gets into elements and the four elements that Dr. Deming proposed in The New Economics, going back to the late '80s when he started to put these thoughts together. We need to think about the elements of Profound Knowledge are looking at things as a system and understanding of variation and appreciation of psychology. That's the people aspect. And then theory of knowledge, which gets into what he would explain as how do we know that what we know is so. So the one thing I wanted to bring up on the System of Profound Knowledge is conversations with Dick Steele. And a neat way of looking at the System of Profound Knowledge is to say, well, what if we were to look at some data points, one element, we look at variation, and we see some data the output of a process.   0:06:00.0 BB: We see it go up and down. Well, if that's the only element we have, then we can't ask what caused that, 'cause that's the upstream system. Well, that's the system piece. We cannot talk about what does this variation do downstream? That's the system piece. We cannot talk about how might we change that. That might get into the theory of knowledge or would get into the aspect of the theory of knowledge and some theories as to how we can go about changing the average, changing the amount of variation. And then what that leads us immediately to is, where do those ideas come from but people.   0:06:44.7 BB: So it's kind of, I think it's interesting. So Dr. Deming says the elements, but it's as connected to each other. So what I explain to the students in my courses is, in the beginning, and I remember when I'm looking at this, I'm looking at the elements. I'm thinking, okay, that variation, that's the Control Chart stuff. Common causes, special causes, well, it also includes variation in people. Oh, now we're talking about the people stuff. And then, so I find it interesting is it is easy to look at them as separate, but then in time they meld together really well. So it's not to say that we shouldn't start out looking at things as the elements 'cause I think that's what our education system does. In fact, there's a great documentary I watched a few years ago with Gregory Bateson, who was born in 1900 or so, passed away in the 1980s.   0:07:52.6 BB: And when I ask people have you ever heard of Gregory Bateson? They say, no. I say, well, have you heard of Margaret Mead? Yeah. Well, they were married once upon a time. That was her, he was her first husband. And so Bateson gives a lecture in this documentary that his daughter produced. And he says, and he is at a podium. You don't see the audience. You just see he's at a lectern. And he says, you may think that there's such a thing as psychology, which is separate from anthropology, which is separate from English, which is separate from... And he goes on to imply that they really aren't separate. But then he says, "Well, think what you want."   0:08:38.1 AS: Think what you want.   0:08:39.7 AS: And I thought that's what the education system does. It has us believe that these things are all separate. And so that's what's kind of neat. Yeah. And, but again, I think when you go to school, you're learning about history, then you learn about math. But one thing I noticed later on, many years later was the history people never talked about, if they talked about the philosopher who was well known in mathematics, we didn't hear that mathematics piece, nor in the math class did we hear about this person as a historical figure. We just learned about... And so the education system kind of blocks all that out. And then years later when we're outta school, we can read and see how all this stuff comes together and it does come together. So the one big thing I wanna say is that, is I think it's neat to look at something with just one of those elements and then say, how far does it go before you need the others to really start to do something?   0:09:47.0 BB: And that gets into the interactions. And by interactions, I mean that when you're talking about variation and you're thinking about people are different, how they feel is different, how they respond is different. Now you're talking about the interaction between psychology, at least that's one explanation of the interaction between people amd psychology. I wanna share next an anecdote. I was at a UCLA presentation. A friend of mine turned me on to these maybe once a month kind of deal to be an invited speaker. 70 people in the room. And these were typically professors from other universities, authors, and there is one story I wanna share is a woman who had written a book on why really smart kids don't test well in secondary schools. And there were a good number of people there.   0:10:45.6 BB: And I'm listening to all this through my Deming lens, and she's talking about how kids do on the exams. That goes back to an earlier podcast. How did you do on the exam? And so I'm listening to all this and she's drawing conclusions that these students are really smart, but they freak out. And then how might they individually perform better? As if the greatest cause by them all by themselves. And so afterwards, I went up and stood in line and I had a question for her that I deliberately did not want to ask in front of the entire room. 'Cause I wanted her undivided attention, and I really wanted to see where she'd come with this. 'Cause perhaps it could lead to an ongoing discussion. So I went up and introduced myself and I think I said something like, are you familiar with W. Edwards Deming? And I believe she said she was. I think she was a psychologist by background. And then I moved into the... Essentially the essence of what if the grades are caused by the system and not the student taken separately, which she acknowledged. She's like, yeah, that makes sense. And I remember saying to her, "Well then how might that change your conclusions?"   0:12:11.2 BB: And so I throw that as an example of... Deming's saying you could be an expert in, you know, you just look at something. Actually, when that comes to mind is Deming is saying something like shouldn't a psychologist know something about variation? Well, shouldn't a psychologist know something about systems? And I didn't maintain a relationship with her, but it was just other things to do. Next I wanna share a story. And I wrote this up in an article. Then when this is posted...   0:12:49.0 BB: Typically these are posted on LinkedIn. Then I'll put a link into the article. And it's a classic story that Russ Ackoff was very fond of saying, and I heard the story told quite a few times before I started to think about it a little bit differently. So the story is he was working for General Electric back in the 1960s. He is in a very high level meeting. And in the room is this, the then CEO of GE, Reginald Jones and all of the senior VPs of General Electric are in the room. And Russ... I'm guessing he was doing, I know Russ did a lot of work with Anheuser-Busch, and he did a lot of work with GE. So Russ says he is in the room. There's maybe a dozen of these senior VPs of plastics of all the different GE divisions.   0:13:41.2 BB: And there's, Russ said there's one of them that was relatively new in a senior VP position, now over plastics or over lighting or whatever it was. And at one point he gets up. And one by one he raises a question with each of his peers. Something like, "Andrew, I noticed last year you installed a new software system." And you would say, "yeah, yep, yep." And I said, "I noticed you went with..." Let's say Apple, "you went with Apple Software", and you're like, "yeah," "that's what I thought. Yeah, you went with Apple." And then you might say something like, "why do you ask?" And he says, "well, the rest of us use Microsoft products. And it just seems kind of odd that you would go off and buy something different."   0:14:41.0 BB: And the point, and Russ didn't get into these details, the essence was every single one of them he'd figured out over the last year had made a decision, pretty high level decision that that senior VP felt was good for that division, but not good for General Electric. And Russ said what got his attention was, he wasn't sitting in that room hearing those conversations and he hears one decision then another, now he's got a whole list. So Russ says, he goes around the room and calls out every single one of his peers. So, and Russ shared this in one phone call, the Ongoing Discussions that I've mentioned. And people said, Russ, do you have that documented? And he is like, well, I don't think I have that any anymore. But somebody else asking.   0:15:35.3 BB: And then no sooner was the call over I had some friends call me up, said, "Bill, can you ask Russ if you have that, if he can get a copy of that? It's probably on his shelf. You're in his office". I said to one friend. I said, "so you'd be surprised that a member of Parliament does what's best for his district and not what's best for the United Kingdom. You think, you'd be surprised that a congressman from Los Angeles is gonna do what's best for Los Angeles, not what's best for the country.   0:16:07.2 BB: So you're telling me you're surprised by that?" Well, "no, no, no." I said, "well then why do you have to have the documentation?" So that's one aspect of it. So I heard that story again and again. And so finally it, I said, wait a minute, wait a minute. So I said, "Russ, on that story, you being in the room with GE?" He says, yeah. He says, I know you don't have the documentation, I said, "but what happened after this guy called them all out? How did that go down?" He says, "one of the peers looks at this guy and says, so what's your point?"   0:16:42.3 BB: And the meeting moved on. And I wrote that for an article for the Lean Management Journal called, "You Laugh, It Happens". And when I look at that through the lens of the System of Profound Knowledge, is that surprising that that goes on? No, not at all. I wanna reference a couple books that I don't think I've mentioned at all. And I share these because for the Deming enthusiasts, these books have some brilliant examples of in different arenas that I think you absolutely love and you can use in your classes, use in your education, whatever. All fairly recent. The first one is "The Tyranny of Metrics" written by a historian. He is an American University historian, Jerry Mueller, and he has, I mean, Dr. Deming would just love this. Oh, bingo! Bingo! Bingo! Thank you.   0:17:48.4 AS: Yep. There it is. "The Tyranny of Metrics".   0:17:50.1 BB: Right?   0:17:50.7 AS: Yep.   0:17:51.3 BB: Right. Is that a great one?   0:17:53.2 AS: That's a great book. And you can follow him on Twitter also. He does do a lot of posts there.   0:18:00.4 BB: Now I reached out to him 'cause I relished the book 'cause the stories were just, you just can't make up all those stories. I mean the story that I shared with Russ is nothing in comparison to what Muller has in the book. I just don't believe that Muller has a solution that can... I don't think, I think the only thing missing from the book is if he had an understanding of the System of Profound Knowledge, he'd have a far better proposal as to what to do.   0:18:31.8 AS: Yeah. I read that and I felt similar that there was something that was missing there. It was, it was great stories as you say, but how do we connect that? How do we apply that? And what's the root cause here? And how do we, this, there was just... That was missing from it. And maybe that should be his next book.   0:18:53.9 BB: Oh, enormously. But it's worth reading regardless.   0:18:57.3 AS: Yeah. Agreed.   0:19:00.1 BB: But I was, I was, I wasn't surprised. I'd say this. He honestly tried to offer a proposal, but I just looked at it and said, Professor Muller, you would just love it. In fact, I believe I reached out to him. I don't know that I heard from him. Alright, that's one book.   0:19:17.1 AS: That reminds me of what Dr. Deming said. "How would they know?"   0:19:21.3 BB: Exactly. Exactly.   0:19:22.4 AS: So if he hadn't been exposed to the System of Profound Knowledge...   0:19:25.3 BB: Oh, no. No, no, no.   0:19:25.7 AS: Then it would be hard to pull it all together. Yep. Okay.   0:19:28.8 BB: Yeah. So the next book, which is somewhere behind you in your bookshelf, is "The End of Average" by Todd...   0:19:36.8 AS: Actually, I don't think I have that one.   0:19:39.4 BB: By Todd Rose, who's a research fellow at Harvard. It's a riveting book. Oh, Andrew, you would absolutely love it. Just, he goes back ages. I mean, hundreds of hundreds of years and looks at how lost we became... How lost civilizations were dealing with trying to make, deal with averages. And the book opens with the most riveting story. And I started reading this and immediately I started thinking, "Okay, okay, okay, okay." And I figured it out. So in the opening paragraph, he says, In one day in 1949, there were 17 military planes crashed. In one day. 17 military planes crashed in one day. And this was... It would have been after the Air Force separated from the Army Air Corps. And so I started thinking, okay, late '40s, planes are going faster. The US industry has German technology, and... Because the Germans had jet engines in the late '40s. So I'm thinking it's about speed. It's about something about speed, something about speed. And there's more and more planes flying.   0:21:06.6 BB: So they grounded the fleet. They had a major investigation, brought in this young guy as a data researcher. And he passed away a few years ago, I did some research with him recently. And what he found was the cockpits were designed, you're writing, Andrew, for the average size pilots. Everything in the cockpit was fixed for the average arm length, the average hand length, the average finger length, the average height, the... Everything about... All these measurements on the torso, the cockpit had, everything was fixed. And that's exactly what I thought was going on. As the planes are going faster and faster, reaction times need to be faster and faster. And they're not. So his research was, they went off and measured thousands of pilots and found out that there was no pilot met the average.   0:22:11.2 AS: Oh, God.   0:22:11.3 BB: And the conclusion was... And again, until the plane started flying faster, that was not an issue. And that's what I was thinking with all my training in problem solving, decision making, what is going on there? What is going on there? And that's what changes the... I mean, the speed was accelerating, but compounded by the fixed geometry. So the solution by the government Pentagon, to the contractors was, add flexibility to the cockpit, allow the seat to move up and down, and then the auto industry picked up on that evidently. And so this is one example of how a fixation on average and a number of other stories outside of engineering it's just fascinating.   0:23:01.4 AS: Let me just summarize. The End of Average by Todd Rose. And it was published in about 2016. It's got a 4.5 out of 5 review on Amazon with 1,000 ratings and has a very high for Goodreads review of about 4.1. So I'm definitely getting that one. I don't have it and I'm buying it.   0:23:22.1 BB: Yeah. And it's again, he, I believe in there he offers what we should do instead, which again, I think would be, benefit from an understanding of SoPK. And so, again, for the Deming enthusiast, there is stuff in those two books, which you'll just love. And the third book came out at, I think, 2020 during the pandemic, The Tyranny of Merit, that tyranny word again, by Michael Sandel from Harvard. And I believe we've spoken about him before. And it's the tyranny of meritocracy, which is the belief that I achieved my success all by myself. I earned the grade all by myself. Everything I've done, I've done all by myself. There is no greater system. And I've written... In fact I sent an email to Michael Sandel complimenting him for the book and trying to point out that everything he's talking about fits in very well with Deming's work and that the issues are bigger than that.   0:24:34.4 BB: And I have not yet heard back, but he's a busy guy. But those three books are I would say, must reads. Then I go on to say that, because I used earlier that Dr. Deming talked about we are living under the tyranny of the prevailing style of management. So then I looked. I wanted to, so what exactly is this tyranny stuff? I mean, I'm so used to the word, so I wanted to go back and get a definition. "Tyranny is often synonymous with cruelty and oppression." And I said, that's... Yeah. Yeah. Oh, absolutely. All right.   0:25:26.4 BB: So, next, I wanna talk about... In previous podcasts I talked about work at Rocketdyne, what we called an... In the beginning it was called A Thinking Roadmap. And then as we got turned on to thinking about thinking, we changed that to An InThinking Roadmap. And that constituted roughly 220 hours of training over a dozen or so courses. So we had a one day class in Edward de Bono's Six Thinking Hats, a one day class in his, in other, actually two days in some of his other. So anyways, we had a number of courses on de Bono's work. I had a 40-hour intro course to Taguchi methods and a 40-hour advanced class in Dr. Taguchi's work. We had a 9-hour session called Understanding Variation. We had a things we were trained in that were developed by others, and then things we designed ourselves.   0:26:36.6 BB: And in the courses are tools and techniques. So tools are a cell phone, a slide rule, a computer. And the technique is how do we use it? And they provide what Ackoff would call efficiency, but also a number of these courses were inspired by Dr. Deming and Russ Ackoff were about improving effectiveness. And I got into concepts and strategies. And then what I wanted to mention that I don't think I've mentioned before is the whole concept of an InThinking Roadmap, and in this thinking about our thinking, which is a big part of the theme for tonight is, as that was inspired by, in the early '90s, Rockwell, Rocketdyne was then part of Rockwell, every division of Rockwell had a technology roadmap. And that had to be presented to higher and higher levels.   0:27:33.3 BB: What technologies are developing? What's the roadmap? And so more and more and more I heard this tech roadmap, tech roadmap. And then with colleagues, we started thinking about thinking, we thought, we need to have a thinking roadmap to combine with the technology roadmap. So the technology roadmap is gonna be helping us enormously in terms of efficiency, but not effectiveness. And I thought to integrate those two is quite powerful, which is, again another reminder of why Dr. Deming's work is a brilliant foundation for the use of technology. Otherwise, what you end up doing in a non-Deming company is with a cell phone you can increase the speed of blame.   0:28:21.4 BB: All right. So then I went back since last time I did some more research into transformation and came up with some great thoughts from Russ Ackoff. Again, our dear friend Russ Ackoff. And this is from an article that Russ wrote on transformations. And he says, "transformation is not only require recognition of the difference between what is practiced and what is preached. He says a transformation called four years ago by Donald Schön in his book Beyond the Stable State," and this is a 1991 book, he said, "it requires a transformation in the way we think.”  “Einstein," Russ says "put it powerfully and succinctly." He says, "without changing our patterns of thought, we'll not be able to solve the problems we created with our current pattern of thought."   0:29:08.2 BB: Russ continues. "I believe the pattern of thought that is required is systemic. It is difficult if at all possible to reduce the meaning of systemic thinking to a brief definition. Nevertheless, I try. Systemic thinking," again from Russ, "is holistic versus reductionist, synthetic versus analytic. Reductionist and analytic thinking derived properties from the whole, from the parts, from the properties of their parts. Holistic and synthetic thinking derived properties of parts, from the property of the whole that contains them." So I thought it was neat to go back and look at that. And then I want, more from Russ. "A problem never exists in isolation. It's surrounded by other problems in space and time. The more of a context of a problem that a scientist can comprehend, the greater are his chances of truly finding an adequate solution."   0:30:11.4 BB: And then, and so when I was going through this over the last few days, thinking, boy, I wish Dr. Deming defined transformation, it would've been, if he had an operational definition. But I thought, but wait a minute. 'Cause part of what I'm finding is, in my research, an article I came across years ago, Leading Change in the Harvard Business Review, a very popular article, 1995, by John Kotter, Why Transformations Fail. So Kotter uses that word and the title is Leading Change: Why Transformations Fail. And he is got establishing... Eight steps of transformation. "Establishing a sense of urgency, forming a powerful guiding coalition, creating a vision, communicating the vision, empowering others to act on the vision, planning for, and creating short-term wins." And under that step, Andrew, he's got a couple of steps, I'd like to get your thoughts on. One is "recognizing and rewarding employees involved in the improvements." So I thought, but of course this is transformation in the realm of the prevailing system of management. And so what that got me... Tossed around on it. I thought, well, wait a minute. There's a bunch of words that Dr. Deming uses that others use, but we know they mean something different. So Dr. Deming...   0:31:56.6 AS: Like I'm thinking, improvement is what he may be talking about.   0:32:02.4 BB: Well, but Dr. Deming talks about teamwork and the need to work together. Everybody talks about that.   0:32:08.1 AS: Yep.   0:32:09.2 BB: But just that we know, in a non-Deming environment, it's about managing actions, completing those tasks in isolation. I can meet requirements minimally, hand off to you, and that in a non-Deming environment, we call teamwork. So what I was thinking is, well, it's not that we need a new, 'cause I was even thinking, maybe we need a new word. Maybe in the Deming community, we should stop using the word transformation and come up with another word. Well, the trouble is, there's a whole bunch of other words that we use from teamwork to work together, to leader, quality. We talk about performance. We talk about root cause versus root causes. We talk about system. And so it's not that we need a new word, we need a new foundation. And that goes back to this notion as you read The New Economics or Out of the Crisis, you're hearing words that Dr. Deming uses that others use like John Kotter, but they're not used in the same context.   0:33:26.2 AS: How would you wrap up the main points you want people to take away from this discussion about transformation?   0:33:38.1 BB: Big thing is, we are talking about transformation. We are talking about seeing with new eyes, hearing with new ears. So the seeing, we talked about last time, is it's not just the systems. We're seeing systems differently. We're seeing variation differently. We're thinking differently about people and what motivates them and inspires them. The psychology piece, the theory of knowledge piece, we're challenging what we know. And then we have to think about all those interactions between two of them, between three of them, between four of them. And so I'd say that it's, the essence is transformation is essential. It is about rethinking our thinking. And I just wanna leave with two quotes. One fairly recent, one a little older. And the first quote, the more recent one from Tom Johnson, "How the world we perceive works depends upon how we think. The world we perceive," Andrew "is a world we bring forth through our thinking."   0:34:44.9 BB: That's H. Thomas Johnson, a dear friend in his 1999 book, Profit Beyond Measure. And my advice to people in reading that book is, do not attempt to read it laying down in bed. It's just, now you can read those other books we talked earlier. I think you can read those lying in bed. But Tom is very pithy. You wanna be wide awake. The last quote I wanna leave is from William James, born in 1842, died in 1910. He was an American philosopher, psychologist, and the first educator to offer a psychology course in the US. He is considered to be a leading thinker of the late 19th century, the father of American psychology, one of the elements of Profound Knowledge. And his quote that I wanna leave you with, Andrew is, "The greatest discovery of my generation is that human beings can alter their lives by altering their attitudes of mind."   0:35:45.2 AS: Whoa. Well, Bill, what an ending. On behalf of everyone at The Deming Institute, I want to thank you again for the discussion. For listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with my favorite quote from Dr. Deming. "People are entitled to joy in work."  

In The New Economics, Deming said “The individual, transformed, will perceive new meaning to his life…” (3rd edition, page 63) But are we ever completely transformed? Discover why Bill Bellows believes that transformation is an ongoing process and how you can keep your learning journey going. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. And the topic for today is, in this episode 17, Diffusion from a Point Source. Bill, take it away.   0:00:29.6 Bill Bellows: And the title coincidentally, was the focus of my Master's thesis. We'll look at that later.   0:00:37.1 AS: It wasn't a rock and roll song. Yes, correct.   0:00:39.9 BB: No, not a rock and roll. [chuckle] Actually, Diffusion from a Point Source. Was that Mick Jagger or Keith Richards? Maybe it was Taylor. Maybe it was Taylor Swift. Okay. So some opening remarks, and then we'll get to today's feature. And I mentioned in the past, I go back and listen to the podcast, read through the transcripts, and it's very much like “Production Viewed as a System” - is to talk with people that have listened to it, listened to it myself and ask, have I... Are there holes in the explanation? Can I add some more clarity to it? The process I use for these podcasts is, some title comes to mind. I've got a long list that we started with at the very beginning, and then some other topics come up for any of a variety of reasons.   0:01:35.3 BB: And we'll have a title, have an outline, but then as we get involved in the conversation, something I say leads to something that you say leads to something that's not on the list. And sometimes some of those ad-libs, I go back and listen to and say, "Well, I don't know that sounded right. I just wanna add a little bit more clarity". Another thing I wanna say at the outset for those listening, is [chuckle] there is... Somebody posted somewhere on social media that one of the sessions was a total waste of time to listen to which I think is unfortunate. But what I like to say is, where I'm coming from to support The Deming Institute, as your ambition is as well, is to help individuals in respective organizations learn about Dr. Deming's ideas, try to apply them, deepen their understanding, explain them to others, and that's the target audience.   0:02:48.0 BB: So, for those who find that boring, well maybe this is not the podcast for you. And so, and the other thing I wanna say along those lines is, for the majority of my time at Rocketdyne, I had the responsibility of being a transformation agent or transformation person was part of my job. Now, I was brought in, I didn't have that job to begin with. The job I had to begin with was to lead the effort to provide training, facilitation of applications of Dr. Taguchi's ideas. And what I've shared in these podcasts is a lot of what I was doing early on was helping people put out fires.   0:03:38.2 BB: And that's not what Dr. Taguchi's ideas are about. His ideas are about improving the robustness of the performance of a product or service. Whereby what robustness Dr. Taguchi means is "it performs as an athlete incredibly well in spite of differing weather conditions." So the ability of a marathoner to run very consistent fast times in spite of the weather, in spite of the altitude. And so you're getting consistently high, or consistently faster and faster times. That's what Dr. Taguchi meant by, means by, his work means by "robustness."   0:04:16.2 BB: And what I was doing was using tools and techniques associated with his ideas to fight fires. And then, I got frustrated by that. And that led me to Dr. Deming's work, led me to revisit Dr. Deming's work. I had met him in 1990 and The New Economics came out in '93, and I had a couple of years of this frustration. The exciting thing was solving, getting involved, working with some really exciting people, and solving some very high visibility issues. But it wasn't breaking in as much as I would've liked into the, into the robustness piece. And when I came across Deming's work, I started to understand, it gave me a lot of food for thought as to why that might be the case. Now what is meant by transformation? And Dr. Deming uses that term, an individual transformed.   0:05:07.8 BB: And I had asked people that were close to him like, what is his operational definition of transformation? And when I explained it to them, I said, this is what I think he means this. And typically people say that's, they agree with that. And so my simple explanation of what I think Deming meant by transformation is as simple as, me saying to you, the professor to the student, “Andrew, how did you do on the exam?” Whereas I've said in the past, that makes me an observer of your learning to changing the question to how are, how did we do on the exam, where I become a participant? So I look at, so to me, the transformation Deming's talking about is that I no longer look around at things and see myself as separate from them. I look at myself as connected to them, and others being transformed or likewise seeing themselves as integral to what's going on, not watching it go by. Another reason I wanna bring that transformation agent piece up is part of my job, not part of my job, so I went from being mostly about Taguchi's work to mostly about Deming's work because I felt it was far more vital to focus on what Deming's talking about, the transform, how the organization and transform how the individuals operate. Another thing I wanna say there is what I think is interesting, if you look at the forward to Out of the Crisis and The New Economics.   0:06:48.1 BB: In Out of the Crisis, which I think was 1986 or so timeframe, Deming talked about the aim of this book is to help transform organizations. And then in The New Economics, he talks about the aim of this book is to help transform individuals. So he went through, he's shifted his focus from I'm trying to help organizations to I'm trying to help individuals. And that's what I'm hoping to do, interacting with you in these podcasts. So, on the one hand, I'd say to those listening, I don't know what your role is. If you're a transformation agent, that's one role. You may be an individual contributor, a senior software person, a marketing person, which means your job title does not include transforming the organization.   0:07:37.8 BB: So, what does that mean? It means some of what we're talking about may not apply to you. You may be personally excited about the Trip Report and, but it may not be your job to hold seminars within your respective organizations and go off and explain that to people. You may alienate people who think that's their job. So, I just wanna say, ask people, to be careful about what your role is in your organization. I've mentored many people and I'm used to going in and being the transformation person. And, one person I was working with, and she was all excited to wanna go share the Me-We Trip Report with her peers in this company doing software. And I said, "You can't do that". And she's like, "Well, why?" I said, "It's not your job". I said, "One is if you call a meeting to talk about transformation of the organization, or you get into that territory. I said, you're stepping on the toes of people who have that responsibility, perhaps. Or somebody's gonna say, wait, I thought we paid you to be a software engineer. Now you're over here. So, now you sound like you're astray, you're a loose cannon".   0:08:56.8 BB: Now I said, to this person, I said, now if you... There may be a place for you to say, "Hey, I wanna show you this neat solution.” If you think they're interested, ideally they ask you to show you how you did that. So, I think there's a difference when it comes to implementing these ideas, I would just advise some caution to people to not overstep their bounds and what it means to bring these ideas to the organization. So, I just wanted to say that.   0:09:32.4 AS: Yep. I just wanted to highlight the word transformation for a second. And the dictionary definition says, "transformation is a thorough or dramatic change in form or appearance. A transformation is an extreme radical change." And that's interesting, 'cause they say in form or appearance that you could have someone do a facelift that dramatically changes their face and the way they appear. But, has it been an internal transformation? Maybe, maybe not.   0:10:10.9 BB: Well, what's funny is, I mentioned that in previous podcasts, 'cause once a month for 17 years, I hosted an Ongoing Discussion where there'd be... I could have you on as a Thought Leader on a topic near and dear to you. And we send the announcement out and people would call in and it took a few years for Russ to agree to do it. And then, he eventually did, and he did it every January. Typically people would, every month be somebody different. But once I saw Russ's excitement by it, then I said, "Russ, every January we're gonna have you", we did it for four years, and every January I'd fly out to Philadelphia and be with him. So, the last time I did it with him, we were in his apartment. We were sitting pretty close together over the small desk. And in the sessions, the term transformation came up. So, the last session ends, we did four one-hour sessions over two days. The last session ends. And I turned off my recorder. And I said, "Russ, it just dawned on me that you and Deming, you and Dr. Deming both talk about transformation".   0:11:26.8 BB: And I said, "Dr. Deming talks about a personal transformation - I see the world differently.” And Russ looks at transformation as an attribute of a solution. That “we used to do it this way, now we do it this way.” And so, his is not transformation of an individual, but transformation of a solution. And I said, I just... I threw it out as I just, "You both used the word, but you use it differently". And I said something like, now I was waiting to see what he would say with that. And he looks at me and he says, "I see no value in that conversation", which followed by "let's go get lunch."   [laughter]   0:12:22.8 AS: Exactly.   0:12:24.0 BB: And so I thought, oh, I was really looking forward to exploring that space with him. And I shared that conversation with one of his peers later that night. And he said, "He said that?" I said, "Not only did he say that", he said, "You know what? I really wasn't surprised". 'Cause Russ was... It seemed to be a little bit too abstract for him. Anyway, but it's, but he would've put it, "What is this transformation stuff?"   0:12:51.0 AS: That, it's interesting because sometimes we talk about the why isn't Deming more widely accepted and that type of thing. And I think one of the things is that he's driving for transformation versus I think majority of people are providing information and here's how you do Lean, here's how you do this, here's how you do statistics or whatever, and here's all the information. And then you use that to to make better decisions. I think Dr. Deming was never about being better in our decisions but about how do we transform the way we think.   0:13:33.9 BB: Yes.   0:13:34.8 AS: And also the second part is that the idea of shifting from transforming an organization to transforming an individual. I guess an organization doesn't transform unless the leadership has already transformed or is in a process of transformation. So, therefore targeting the individuals for trying to help them get a transformation ended up being the most important or first step, I'm guessing.   0:14:00.2 BB: Oh yeah. No, I thought it was just so neat to see that shift. I don't know if we've talked that much in these podcasts about transformation. I'll have to go back and check. But what we were doing within Rocketdyne to help differentiate, 'cause language is so important. What do we mean by transform? Because it's a very casually used term and I was trying to, you know, with colleagues at Rocketdyne trying to differentiate what Deming's use of that term. 'Cause we liked the term but the challenge became if we used it did it adopt a meaning that he didn't have in mind in which case we're off to the Milky Way.   0:14:48.8 BB: But what we did was try to differentiate physical change from mental, a physical shift from a mental shift. I guess to me a big part of what he is talking about is going from seeing parts to seeing systems to seeing things as being connected to start thinking about as Edgar Schein would as Peter Senge quoted Peter Schein, Peter Senge quoted Edgar Schein, "Culture are the assumptions we cannot see".   0:15:21.5 BB: And, so I was focusing on is we talk about, there's culture, culture comes from the assumptions. The assumptions come from beliefs and that's associated with our thinking. And that's the space that I think has... is the space to be to really believe, to really implement what Dr. Deming's talking about for all those benefits we've been talking about. And so the word, so in the training we were doing in our InThinking Roadmap, we differentiated reforming and we said "reforming is a physical change. Giving things a new name, adding more steps to the process. It's change you can, it's rearranging the deck chairs on the Titanic." And there's nothing wrong. You can move people together to be closer physically but that doesn't move them together mentally. So, there's a sense of we want everyone to be in the same room physically but they're... But you can hear they're in separate rooms mentally.   0:16:22.7 BB: And we've talked about this in a Me Organization I hand off something which is good to you and if it's not good, you give it back to me. If it is good, you say thank you and I'm separated. I am physically and mentally separated and there's nothing wrong with being physically separated I have to hand off to you. But how about an environment where I am mentally, we are mentally connected because we're thinking together. So if you come back to me and say, "Bill I'm having trouble getting these things together". And I say, "Well, hey I can, I..." not only do I understand that I caused that but I can possibly do something about that. That's the mental transformation piece. So there's... I look at it as there's nothing wrong. I look at it as there's a place for transforming, reforming, moving things to be closer, minimizing number of steps. Nothing wrong with that. But that's not what Deming was talking about. He was talking about transforming which is a change of how we see the world. How we hear the world.   0:17:25.3 AS: Yeah. And when I look at the System of Profound Knowledge and we look at Appreciation for a System, look at Knowledge about Variation and Understanding the Theory of Knowledge and then Psychology, I would say the one you mentioned about Appreciation of a System is the one that brings true transformation because we are taught to look so narrowly. And when we start to look at the bigger system it just blows your mind.   0:17:58.9 BB: Well, it's...it... No, I absolutely agree. I can remember in the early ‘90s I had met Dr. Deming once and I thought that's fascinating. And, I put it aside and got buried in the Taguchi stuff and then began to see the issues as I had mentioned in previous podcasts as well as today. And I started thinking there's, there's something missing. And, in the Taguchi school it was, we need more tools, more advanced tools. That's not about transformation. There's nothing in Taguchi's work that was about the transformation that Deming's talking about. And I'm not aware of that mindset. Well, I've not come across that mindset in many places. I don't see it in all the...a lot of the traditional improvement techniques whether it's Lean or Six Sigma or Operational Excellence. I don't see that, that focus. I agree.   0:19:07.6 AS: And, I bought this book Guide to Quality Control by Kaoru Ishikawa.   0:19:11.2 BB: Yep, yep.   0:19:12.6 AS: I got it in 1990. And, but it's a great example of, the objective wasn't a transformation. The objective was understand these tools and maybe that leads to a transformation, maybe not. That wasn't what he was aiming for. He was saying, "Here's the tools and here's how you can apply them".   0:19:32.2 BB: Well, I used to debate with some co-workers and his, one co-worker in particular. And his mindset was, focus on the tools, and the language, in the conversation we're having, his theory was, "Get people to apply the tools and the transformation will eventually happen". I had the same thought.   0:20:00.1 AS: If that was the case, we'd all be transformed already because we're all applying tools every day.   0:20:04.7 BB: And 'cause we, I had heard a comment, I was at a Taguchi conference and I heard a comment. And as soon as I got back to my office, and this gentleman we're both at work really, really early, we'd go down and get coffee at a quarter to six, go back and sit in his office for a couple hours and just have some great, great, great conversations. And I shared with him, I was at a Taguchi conference and somebody said, the reference was, "You wait for the... " It was something, "The journey begins after the transformation starts". And as soon as I said that, he said, "I think it's the other way around", that the transformation happens after. And I thought to myself, I knew you'd say that, because that was his attitude. Get 'em to use the tools, get 'em to use the tools, get 'em to use the tools. And I kept looking at it as, no, that does not. Yeah. I mean it doesn't mean you don't do it, you don't do something. But I think when you begin to see the world and hear the world differently as we're trying to convey, to me that's when the rubber really begins to hit the road. That's when you move. And again, as we talked, there's nothing wrong with tools and techniques, but tools and techniques are guided by your understanding of the system and the other things. And it's just not enough to be a tool head.   0:21:48.7 BB: Other things I wanted, oh, okay. [laughter] So let's go back the cloud model from number 16. And what I did not reference again, 'cause I went back and looked at it and there's what we shared, but what I wanted to add to it was, one is the idea learned from Barry Bebb that you're an individual contributor trying to get ideas up to the cloud, the cloud being the executives in their meeting space, and the idea of handing off to somebody above you. And then the idea that that transfer is going to take a few times from person to person to get someone in the cloud transformed with an appreciation. And relative to Deming's work, it involved the transformation.   0:22:34.9 BB: If it involves trying to get Dr. Taguchi's up to the cloud, ideas to the cloud, manner involve what we're talking about relative to Deming's work, fine. But the other aspect that I then neglected to mention is what Barry's talking about is, is once it gets to the cloud, then what rains down on the organization is the beginning of, in our case, transforming the organization. That's the raining down. So the cloud is not just that place on high that things get up to, but the idea of a cycle that things then start to flow down. And so, I mentioned, you know, I got back from that very first meeting with Barry and went into my boss's boss's office and that I had had that meeting, and little did I know what I was gonna learn from Barry.   0:23:26.8 BB: And learning from Barry, you either go back to... You have to be in your organization, find somebody higher, and immediately I thought I wanted that person to be Jim for his influence. And so I would meet with him on a regular basis. And, and what I was looking for is, what could he and I do together? Because some things take time and some things can be done tomorrow. So I would go into him once a month with some ideas, give him some status of what's going on. So one time I went in and I had an idea, I'd mentioned to him that after every launch of a rocket with a Rocketdyne engine, there'd be a loud speaker announcement. And the loud speaker announcement might say, "Congratulations to the Space Shuttle Main Engine team for a job well done.” Congratulations to the Delta team for the engines made for the Delta vehicle or to the Atlas program.   0:24:24.3 BB: And what I shared with Jim is that I had mentioned that loud speaker announcement to a friend in facilities who was a manager in facilities. And I said, "How does it feel when you're in facilities and you hear that announcement?" And her comment was, "You get used to it."   [laughter]   0:24:43.9 BB: You get used to being ignored. Well, I mentioned to a friend in HR, and he shared with me every time he would hear that announcement in HR, he said he and the guy on the other side of the cubicle wall would stand up and give each other a high five and say, "Way to go", 'cause they were not in the announcement. So I went in to see Jim and I said, I mentioned the woman's name. I said, she said, "You get used to it." And he looks at me and he says, "I want everyone in this organization to identify with every launch." He said, "I don't care if you're in janitorial services cleaning the restrooms." He said, "I want everyone to identify." Well then I said, "Well, that announcement doesn't." And I said, "Could we change the announcement?" And he was about to write it down and he says, "Well, we can do that right now." I'm thinking, "Oh, baby." [laughter] So he calls up the Director of Communications who sits across the hall from him and says, "Would you mind coming to my office for a minute?" Okay. So the person comes into the office, he says, "Do you know Bill?" And the person said, "Yeah, I know Bill". And Jim says to this person, "Could we change the loudspeaker announcement to say from now on, "Congratulations to Team Rocketdyne?" And she goes, "Sure, Jim, we could do that." [chuckle]   0:26:17.9 BB: And so, I had a Taguchi class later that afternoon, and somehow I mentioned the announcement. I didn't mention what I had done, but I somehow made reference to it. And people were used to that. And I remember saying to them, so what if you aren't on one of those teams? And people just said... This is how we operate. It's part of the culture to celebrate those individual teams. And I remember saying to them something like, "Well, if that announcement ever changes, call me," or something like that. It was something like that. And sure enough, when the announcement was made within a week, but I felt it was something, I was looking for things that I could do to influence the culture. Little things that ideally could be, and you know, I was also appreciative of what could Jim do? Now, several years later, the announcements went back to what they were. I'm not quite sure why, Jim had moved on. For all I know the programs were tired of “Team Rocketdyne” where, Team Rocketdyne, it's Team Space Shuttle Main Engine. And so some of the people complained to me that the announcement had shifted, and I turned to one of them and I said, "You go and fight that battle". I said, "If you want it to change, you go, go let the communications person, you go fight for it". And the thing I'd like to, a couple other things I want to point out before we get into the features is...   0:27:55.9 AS: Just so you know, we only got, we got less than 10 minutes, it's a tight show today.   0:28:00.7 BB: Alright. Let's jump. Let's jump to Diffusion From a Point Source, Andrew.   0:28:04.2 AS: Yep.   0:28:05.4 BB: So my Master's thesis back in the, was right around the time of Three Mile Island, I was writing my Master's thesis. And for those who may not recall, Three Mile Island and somewhere in the hills of Pennsylvania was a nuclear reactor that nearly melted down and diffused. [chuckle] If things had gone worse, it would've diffused a lot of bad radioactivity downstream from a stack, from a point. And so, my Master's thesis was looking at diffusion, how very much like that. And what was funny is I would explain to aunts and uncles and family members, "What is your thesis about?" And I say, "Well, remember Three Mile Island? I said, what I'm trying to do is model how it is, how does that radioactivity spread out downstream? How does it go wider and wider and higher and higher? How does it spread like smoke does if you blow out a match and how does that spread?" That's diffusion from point source. And part of what I had in mind with that topic for the audience is for each of us being a point source on our respective organizations and how are we diffusing what we're aware of within the organization, which in part has to do with being a transformation agent or an agent of, playing a role in the organization.   0:29:32.7 BB: The other thing I wanted to point out is in, in my engineering studies, and the equations that we would use about diffusion, um, has a role here. And if you think of a bathtub, so I imagine you're in the bathtub, you've got hot water coming in and the heat from that water coming in. And I'm trying to think, yeah, imagine the water is lukewarm and you're laying in there and you want it to be warmer, so you crank up the temperature. And then you can begin to feel that hotter water hitting your toes and then spreading it - diffusing. And there are mathematical equations I was studying that have to do with that. And what the equations are about is how does the temperature at any point in the tub change, and how does it change throughout the tub? So there's two aspects of change, at a given point, how is it changing over time? And then how is that change spreading until it starts to fill the entire tub? And so it could be you've got a 100 degree water coming out or 120 degree water, and in time the entire bathtub is 120 degrees, in time, which means the diffusion has stopped because it's all the same.   0:31:04.0 BB: And then, a couple hours later, it's all about the room temperature. Well, the analogy I wanna make is imagine going off to a Deming seminar all excited by what you've learned, and you go into your organization and you try to diffuse these ideas or, or another way of looking at it is, I would be invited into an organization and present Dr. Deming's ideas. It's kind of a point source. And so the ideas come out and people feel that spread across the organization. But what tends to happen is within a week, everything's back to room temperature.   [laughter]   0:31:47.8 BB: And that's, and that's the idea being, Deming's ideas come in or whatever the ideas come in, and then they're spreading in space and in time, and then we're back to where we were before. What I was very excited about, most fortunate about, and what we were doing at Rocketdyne is that what's missing from that equation that I just explained to you is a point source. And so when you're modeling, when you go back to the thermodynamics laws that I was modeling, if in the bathtub, there's a... If you've got a source of heat, you're generating energy in that environment, then the bathtub's going to get hotter and hotter and hotter and hotter and hotter. But without that point source, that source of transformation, which is constantly going on, everything goes back to room temperature. So what we were trying to do at Rocketdyne was, how do we take the ideas we're given, integrate them with Ackoff's ideas and Taguchi's ideas and try to create...   0:33:04.1 BB: Not let things go back to room temperature, but what would it take in conversations amongst ourselves and sharing that with others, that we had a constant source of energy, which gets things hotter and hotter and hotter and hotter and hotter. When it comes to Three Mile Island, the point source was an out-of-control reaction. But what we were trying to do is create a, have an environment where a lot of energy was being created, and that led to rethinking what these ideas are about, bringing others into the room, whether it be Ackoff or others. And I find without that, eventually things just go back to normal. And so what is...   0:33:50.8 AS: And what is that back... The back to normal thing, is that, like if we think about gravity as a law, it's naturally gonna pull things back to Earth.   [chuckle]   0:34:04.7 BB: If you go back to room temperature, you go back to where you were.   0:34:09.3 AS: What is it that brings humans back? Is it the...   0:34:12.2 BB: Well, you end up, you go back to blaming the willing workers for the red beads. You go back to all the things that Dr. Deming's trying to pull us away from, and there's this natural force to pull them back to that, you end up with a change in management. Dr. Deming's 14 points of lack of constancy of purpose. And so what we're talking about with Deming's ideas is a source of ideas, energy to transform. And what we're fighting is, individually that we stop learning, individually we stop sharing, individually we stop doing something with it. And so you just unplug the point source and you'll be back to room temperature pretty quickly.   0:34:55.5 AS: So how would you... What is the main message you wanna get across to the audience about this as we wrap up?   0:35:03.0 BB: Message is, find a peer group that you can discuss these ideas with. And that's what's missing is find people you can discuss, listen to the podcast, pay attention to DemingNEXT, find people to share the ideas with, and out of it will come more energy. And, but the idea is that don't stop learning. Don't stop sharing. I am very fortunate that every day I have conversations with people around the world, and it's causing me to reflect on things that happened. And to me, it's helping me stay engaged, keep rethinking what the ideas we're talking about. And so the idea is that I think without that, then individually we go back to room temperature, we go back to where we were before we started exercising. And, but I think what I would like to think is that people listening to this podcast can find again peers to share it with and on a recurring basis. And so again, I'm talking with people around the world every week, and to me that's, part of this is what we're doing at Rocketdyne with these monthly phone calls is just staying engaged, staying in the game, staying in the game, staying in the game. So that's the diffusion from.   0:36:24.7 AS: And to bring it back to the beginning of our conversation, I think that, I guess transformation is when you don't go back to room temperature.   0:36:36.0 BB: It's an ongoing transformation. And this is... There's very few things Deming said I disagreed with. One of them is, and [chuckle] he said, "An individual transformed will create an example". I don't think there's any such thing as an individual transformed, I would say an individual, once their transformation begins but I don't... But thinking in terms of, "once transformed," and I think I mentioned on the podcast, 'cause I had a student in Northwestern years ago, and they're doing presentations at the end of the course on how the course hass impacted them, taking notes from their daily journals. And there were a group presenting that night. The other group was gonna present the next night. So one was anxious, one was calm, and I went up to one of the calm students and I said, "Yeah, so what's new?" And he turned to me and he said, "I'm fully transformed".   [chuckle]   0:37:34.3 BB: No, what we're talking about Andrew, is there's no such thing as... Because there's, if you understand the point source concept, there's no "fully transformed."   0:37:43.1 AS: Yep, that sounds...   0:37:44.6 BB: So then the question becomes, how do we enter and individually stay in that group?   0:37:51.4 AS: So transformation is an ongoing journey. Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for the discussion. And for listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work.”

It's time for a MONSTER episode about protein. Naturally, Helms has recused himself because of his heavy biases and conflicts of interest with the shadowy figures behind Big Protein. As a result, Trex and Omar take a trip down memory lane and discuss everything we used to know about protein, and how a surprising percentage of that knowledge has changed over the last decade or so of research.  It wouldn't be fair to say that everything you thought you knew about protein is wrong, but there's no question that evidence-based protein guidelines have been significantly impacted by some paradigm-shifting studies that have occurred in the last few years. In this episode, Trex and Omar discuss what these new studies have taught us about protein, and how we can put this new information into action. 00:00 Intro to another episode with controversy (Helms' one week suspension from the cult) 9:51 Trex leading the charge on protein timing 23:12 The limitations and applications of mechanistic research MASS Office Hours https://www.youtube.com/@MASSResearchReview MASS Research Review https://massresearchreview.com/ 30:40 A short detour to muscle hypertrophy and the pump 35:17 Protein ingestion and the anabolic response: breaking down the latest study Trommelen 2023 The anabolic response to protein ingestion during recovery from exercise has no upper limit in magnitude and duration in vivo in humanshttps://pubmed.ncbi.nlm.nih.gov/38118410/ 56:00 Has protein distribution and timing been debunked?The takeaways Taguchi 2021 Increasing Meal Frequency in Isoenergetic Conditions Does Not Affect Body Composition Change and Appetite During Weight Gain in Japanese Athleteshttps://pubmed.ncbi.nlm.nih.gov/33361498/ Yasuda 2020 Evenly Distributed Protein Intake over 3 Meals Augments Resistance Exercise-Induced Muscle Hypertrophy in Healthy Young Menhttps://pubmed.ncbi.nlm.nih.gov/32321161/ 1:04:49 Quantifying (un)certainty and applying caveats 1:14:53 Omar and Trex's history with protein 1:25:52 Closing out another monster episode

Kumi Taguchi is an Australian journalist, broadcaster and presenter living in Sydney. She's currently the host of Insight on SBS, which many would consider to be one of the most challenging and stressful hosting gigs in the country. Joining Tom Tilley for the Weekend Briefing, Kumi explains what goes on behind the scenes of the show, growing up “feeling on the outer”, reconnecting with her father before his death, and the importance of sharing stories.See omnystudio.com/listener for privacy information.

"The Cloud" is a metaphor for the top level of corporate authority - the CEO, CFO, CTO and maybe some Vice President positions. And if you're trying to transform an organization, your ideas need to penetrate the Cloud - but how? In this episode, Bill Bellows and host Andrew Stotz talk about influencing others with the aim of transformation.  TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. Today is episode 16, and the title is, Get Off of My Cloud. Bill, take it away.   0:00:29.5 Bill Bellows: Hey. Hey, hey. [laughter] Mick Jagger, Keith Richards, get Off of My Cloud. Yeah. Alright, so here we are, 2024. So before we get to the Cloud, some opening remarks. And in particular looking at session 15, which is soon to be released. And one thing I... What I tell people is, what's exciting about understanding Deming's work is how revealing, how you see the world differently, and Dr. Deming used the metaphor of a lens. But it's not only what you see, but what you hear.   0:01:19.5 AS: Right.   0:01:22.3 BB: And, and I tell people I can go into an organization and within a few minutes between what I see and what I hear, I can get a pretty good sense, is it a ME or WE organization. And we think back to the comment I shared in episode 15 where the Boeing executive said, "Let's be honest," to the room full of 300 plus internal audit people who just do great, great work.   0:01:54.4 BB: I mean, if they didn't do great work, why would they be there? Everyone in our organization does great work, otherwise, why would they be around? But when they said to them, "Let's be honest, we don't make the airplanes." And I thought, that's right up there with my wife saying to me, "Look at what your son did."   0:02:22.4 BB: My son? Or is it, look at what our son did. Another giveaway expression is, we're gonna do a root cause analysis or RRCA, which is Relentless Root Cause Analysis. Well, every, and from a Deming perspective, instead of talking about a root cause, we can say there's root causes, and there's... They're dozens, hundreds of root causes, or sorry, common causes, common causes. And then every now and then there's a special cause.   0:03:01.0 BB: But even when a special cause appears so does a bunch of common causes. So from a Deming perspective there's never a root cause. So I... One poke I have for people that like to think in terms of root cause, 'cause they have this sense of, you can explain everything by a series of connected root causes. This cause leads... It's like the five whys. That this leads to this leads to this. But it's always, this leads to that, this leads to, and it's singular strands. And I think of it like a strand of spaghetti and everything is along some pathway. And I thought, no, that's not the model Deming had in mind. Deming had in mind a multitude of strands that are all woven together that you can't... What comes out is a bunch of contributions, not just one thing. So my poke at people like to believe in root cause phenomenon is, "If life can be explained by a series of root causes, then why do you need two parents? Why isn't it a single parent?" Sorry.   0:04:18.9 BB: I just finished the fifth cohort at Cal State Northridge in a eight-week class as part of an 18-month program where the students, we start with about 30, by the time it gets to me there may be 24 or so. And one course after another, after another, it's a very rigorous program. And I do a class called Seminar in Quality Management. And I love at the beginning of the course when I ask them about, if all the beads are red, if all the red beads are eliminated, can improvement, can still go on to, all those things we've talked about in this program. And I have them write essays on it, and it's so neat to see where they are in the beginning and where they are at the end.   0:05:07.1 BB: And in the beginning they'll be talking about human error. And so every time I see human error, I just write back, is it human error or is it system error? And one student in the class commented at the end of the course of what she learned, she said, No one had ever pointed that out to her. And she distinctly remembers the very first time I said that it was like, but wait a minute. And then it made more and more sense and I thought, yeah, I mean not... Is there such a thing as a human error? Well, Deming would say that 94 plus percent comes from the system. Another cute story, I used to host a monthly conference call for 17 years, every month for 17 years.   0:06:02.0 AS: Wow.   0:06:02.8 BB: And featured on the call was a thought leader, Russ Ackoff did it four years in a row. He became the January thought leader. And generally it was random, different people. But then when it got to Russ, it was every January Russ did it. And I would go out and stay with him and be in the room with him and the distribution list was at one point in time, 5000 people around the world, that I had somehow interacted with. And the announcement would go off out every month, and it would say, this month's ongoing discussion with thought leaders, is Andrew Stotz, Andrew's gonna talk on this topic. Please find attached his thought piece. You can join us. And there were four opportunities to call in on 12 to one and one to two on the last Thursday and Friday of the month. And there was four different opportunities for the audience to engage with Andrew, and it wasn't a presentation by you. The protocol was they would read the article, then they would say to you, Andrew, on page five, you said this can you clarify? So I said to them, it's not a presentation, it's a conversation.   0:07:08.9 BB: So a friend had in mind, somebody that he worked with as a thought leader. I said, okay, let me, She'd just written a book. And the book title was along the lines of Think Like a Champion, so I read the book and it's sports stories, all these sports stories. Turns out she has an advanced degree in sports psychology and she was hired by his company as a coach. And throughout the book, her story is about people contacting her, I need help with this. I need help with this. I need help with this. A lot of these people are in sales, I need help, I need help with this. So I read the book cover to cover, and I started to notice a pattern. It was all individuals. I need help, I need help. And so when I got on the phone with her and the role of the phone call was to talk about the book, talk about the phone call, let her know what the overall strategy of what we're trying to do with these calls, promote a word as of Deming's work and working together, all that stuff.   0:08:20.6 BB: And then with that, see if that fit, what if she felt, in fact, what I had in mind was that there's things in there she could contribute, but there's things in there that might be slippery. So I shared with her that I had a friend who was a high school coach for the Valencia Vikings and I bumped to him one day in a park. And he's walking towards me and he is wearing a T-shirt, and across the top are the letters V-K-N-G-S. So I'm looking at the letters and I said, I don't get it. To which the author says, there's no I in team, and that's what it was V-K-N-G-S. And so she beat me to the punchline. So I said, so you're aware of that story?   0:09:15.0 BB: She says, oh yeah. I said, "Your book is filled with sports stories." She says, "Yes." I said, "Did you ever consider that story for the book?" She says, "it really wouldn't fit." I said, "that's right." I said, "that is it, it doesn't." I said, "'cause your book is all about the I and not about the team." So at the end of the call, I said you know, when I got your book, I said the cover was revealing. And this is what I find, going back to language. You can be in a meeting and you can hear how people think, which then leads to how they act and you can't separate, you can hear that. So I said, "I looked at title of your book," which is something like, Think Like A Champion. And I said, "as soon as I saw that title," I thought. But I said, well I told her, "I said, there's a lot of good stuff in here." I said, "but, and I'm not saying everyone hears what I hear, but I don't want you to be caught short on that." She said okay. So then I said the title was kind of a giveaway of what the book was really about. She said, "well, what would've been a more appropriate title?" I said, "Think Like a Contributor."   0:10:34.5 BB: And so we are within our respective organizations, we're one of many contributors, we don't do it all by ourself, we contribute to the results and we talked last time about... Sorry.   0:10:47.1 AS: And that's an interesting point because that's a, maybe a difference between let's say American style thinking and Japanese style thinking, where Japanese may see themselves clearly as a contributor in a system. Whereas Americans, we like to think of ourselves as a unique person that fits into a certain place in this world.   0:11:08.9 BB: And I won the game, I won the game and I made it happen. And, um, but sure, and I've heard that about Japanese management, that it's more like, I am humbled and honored to be your executive and there's a real... And it comes across that it's not just talk, there's a real sense of humility and honor to be in this position as opposed to a sense of I'm the smartest guy in the room.   0:11:39.4 AS: Servant Leader.   0:11:41.4 BB: Yes, very much so. So, next thing I wanna bring up is, we talked last time about Myron Tribus's his comment, management works on the system, people work in the system, and the theme was making a difference from where you are and I mentioned that this gentleman came in, was one of our classes, and he wanted to, how often I met with our president. And I said, not very often. He said, oh, it's really important, you gotta go meet with him. And I said, "well what if I spent time talking with senior people at NASA or senior people in the Pentagon," which I did. And a mistake I made, a minor perhaps a minor error that somebody may or may not have caught. So I said, that I had the distinct pleasure of being invited to speak at the Army's largest annual logistics conference back in the 2000s. And the invite came from a senior officer on the staff of General Anne Dunwoody, who went on to become the Army's first woman, Four Star General, and so in the podcast number 15 I said, I was invited and spoke with the Army's first Four Star General, it was the Army's first woman Four Star general.   0:12:57.2 BB: So this is a clarification. I also talk about how pragmatism is being practical, but I think is, if you're trying to introduce these ideas into your respective organizations making a difference where you are, I think it's important to realize that everyone is acting as if they're being practical. And if practical means work on things that are bad to make them good and stopping, that's their, that to them is practical. Now, from a Deming perspective to not work on things that are good, to make them better to improve integration - that is practical, but it might not be practical where you are. And I mentioned, I had a Lean Management journal article that talked about that, and I couldn't remember the title. The title is Profits, Pragmatism, and the Possibilities of Possessing Other Eyes. I told you I like alliteration.   0:13:56.6 AS: Alliteration.   0:13:57.5 BB: Alright, so what is an application? We start where you are. And I would say an application, first of all, relative to an application, it's thinking, can I do this by myself? Do I need help? Do I see opportunities to reduce losses? And it's one thing to see opportunities to do something. It's a whole 'nother thing to realize that the timing might not be right. I may not have the support that I need. I may not have the funding that I need. There could be other priorities. So when I would tell people I was mentoring to see opportunities is a really big thing, whatever those are. An opportunity to shift from managing actions to managing interactions and realizing that addition doesn't work, that things are not adding up and you're realizing, holy cow, there's some opportunities for synergy here. There's opportunities to work on things which are going well to prevent the red beads, work on things that are well to improve integration.   0:15:05.3 BB: There could be opportunities to stop doing incentives within your sphere of influence, to stop handing out awards to your people on your staff. Had a friend who just became a manager years ago and I had been mentoring him and within a few weeks of him being manager in operations, he came to me and he said that somebody on his team helped him do something and he gave him a $10 lunch coupon. I didn't say anything, I just let it pass. A couple weeks later, he comes to me and he says the same guy helped him again and then reached out his hand, he says, “Where's my coupon?” I said, “I was waiting to see how long that would take.” And Andrew, that happened 25 years ago, if I was to have breakfast with him tomorrow, it would come up. Every time we meet, which is not that often, he lives a lot too far.   0:16:05.5 BB: And it was just so cool how, as I said let's just see how this goes. So the idea is that what can you do from where you are to not pass on the pain? And so it may be flowing down to you, but maybe you, if you've got a team, can stop it from where you are. Maybe. Maybe you can't. I mentioned Jim Albaugh, who went on to become CEO of Boeing Commercial, CEO of Boeing Defense. He was my boss for a number of years at the beginning of his doing these amazing things. And one day after we had some really stellar applications of Taguchi's ideas with Deming's improving integration, the hammers went away and things came together. Performance, we had an incredible advances in engine performance and integration. It was really cool. So he was really thrilled by all that. So I go, I would meet with him once a month and I'd poke him.   0:17:10.0 BB: So one day I went in and I said, “I wanna bring something to your attention.” And he looks at me with this smile. And I said, “I wanna put something on the table. And I'm not saying you've gotta do it now, but don't ever tell me I didn't bring it to your attention.” And he is like, “okay, Bill, what?” [chuckle] I said, “we've got to get rid of incentives, rewards and recognition and performance appraisals.” And then he just rolls his eyes. I said, I says, “I know you can't do this.” And I said, “but these are ankle weights on how fast we can run as an organization.” But I knew that was... I mean, he was, at the time he was a VP, even when he was CEO, he can't get rid of those. Those are such an institution. But I just wanted to go on record with him. I just chose the moment to go on record with him knowing the limits, but I wanted to be upfront and honest with him that if I don't go to those events, this is why.   0:18:18.8 BB: And so it's just making a difference from where you are and sometimes you speak up, sometimes you just keep your mouth shut. Another thing I encourage people I mentor is, if you're out managing interactions and things are improving, you've improved integration. Is that, my advice to them is go about it quietly be the change you wanna see in your organization. Be the change you wanna see in the world, to quote Gandhi, I said, but unless your boss asks you how that happened, don't explain it to them.   0:18:53.2 BB: I said, if they ask you how did you know how to do that, that's your opportunity. But if you're not asked that, I mean, in other words, don't do it expecting to be asked for what, you know, to be complimented. You do it because it's the right thing to do. Use it as a learning experience. Be deliberate about it if you're gonna go off and do it. But if you're doing it to get praise, you've missed the whole point. If you're doing it to get your boss's attention, you've missed the whole point. What I tell people is, do it' And maybe at some point in time, they say, ''ve noticed a pattern. Tell me how you do this. 'I've got a manager I work with, with a client, was asking me about how to praise someone. And I said, one is, there's nothing wrong with one-on-one in the office saying, your contributions were enormous. I said, do''t ever imply without you, we could not have done this. You're a contributor. But I said, more important than that is, ask them, how did you know how to do that? Where else could we apply this?   0:20:07.4 BB: I said, I think that is far more, I think being asked those questions are far more thrilling than a pat on the back. Back in ‘93, it was '92, I was nominated to be an engineer of the year at the Rocketdyne, which is a really big deal. I was one of a dozen finalists. And the vice president of engineering invited everyone into his office to ask us a bunch of questions. And he used our answers for the engineer of the year dinner. And what I found out from the others is, he never asked any of us, how can your work, what is your vision, Andrew, for how your work can impact the organization? And I thought that, that never came up. And I would have been thrilled, my whole interest in going through this, 'cause I knew at that time about awards and recognition, but my hope was that, that could create visibility and help me further the cause.   0:21:13.8 AS: Make an impact.   0:21:14.8 BB: This is... But another thing I would say is, I have my knuckles rapped this way a few times. And when I would try to explain to the executives how we achieve these solutions. And once one of the VPs, my VP, his comment to me was, he was watching me, he came by to see the slides I was gonna use. And he says, Bill, don't be tutorial with us. And I thought, oh, man. So what I tell people is, a staff meeting is not the time. This is really important. If you're trying to explain in a staff meeting how you accomplish something, what makes it bad is, even if you're invited, a staff meeting is not a classroom. When I walk into a classroom as the instructor, I walk in, and I know what my role is, and everybody else knows what their role is. But when you walk into a staff meeting, and you're about to present something you did, if it comes across as being tutorial, what makes that offending is, who appointed you to be the professor? But if you have a separate meeting and, but it's just these nuances, can really get in the way, which leads to tonight's feature, the Cloud Model...   0:22:42.6 AS: Before you go to tonight's feature, I'd like to go back in time to November of 1965. It was a tumultuous year. In fact, it was February of 1965 that Malcolm X was assassinated in America. 1963, November, John F. Kennedy Jr. Was assassinated. America was going through a lot of turmoil, and the Rolling Stones were the bad boys of rock and roll. In November of 1965, I was four months old, so I don't remember this personally, but the Rolling Stones came out with a song, and it was called Get Off Of My Cloud. And I just wanted to put it in context, because for us older guys, we know that this lyrics, Get Off Of My Cloud, is referring to this song where they're oftentimes saying, "hey, hey, you, you, get Off Of my Cloud." So with that introduction, tell us why you named it, this episode, Get Off Of My Cloud.   0:23:44.3 BB: Well, you're not gonna believe how apropos that, that intro was. Oh, this is so cool. It's so cool, so cool. In 1995, I met Barry Bebb, a retired, very senior executive from Xerox, who was on a very short list to be the next CEO of Xerox after David Kearns. And Barry left Xerox and became a consultant, and I met him in the Taguchi community. And somewhere in the beginning of '95, I bumped into him. I'd met him earlier at another event with Dr. Taguchi, and, um, and then there was an event in LA, a conference, and I bumped into him, and he said, hey, I know that guy. We knew each other. And he said, hey, I'm putting together this group of people, about a dozen or so people, a couple from Ford, a couple from GM.   0:24:46.7 BB: Would you like to be part of it? I was like, well, what do you have in mind? He said, "we're gonna to meet once a quarter. I wanna mentor you and help you create change within your respective organizations." And it's like "sign me up." And I was there with a very good friend, Tim Higgins, and so we signed up. And we... Barry called the group Impact 95 'cause it was 1995. And we would get together all day Friday, all day Saturday, through Sunday at noon. We would meet either within Ford, because there was a Ford member, within GM. There was a printer company we met at their headquarters, at their site.   0:25:28.7 BB: We met at Rocketdyne. We'd meet in San Diego with Barry. But once a quarter for three and a half years, we met, all on our own time. The company didn't pay for this. I told Tim, we're just gonna go off. We're not gonna tell anybody what we're doing. But what we learned from Barry is how to create change from an organization when you're in the bottom, you're an individual contributor. And so that... And I've got the notes. I've got a big pile of notes. And some of the things that jumped out when I was pulling my notes together are things we learned in that very first session. One is you can't tell anybody anything. He said, "You can lead people on a path to discover, but you can't force them to drink." And that became really powerful that, telling people something's important is a losing strategy. So what I find powerful about the Me and the We Trip Report, Red Pen, Blue Pen, whatever it is, that's not me telling people what the organization is about. That's them telling me what the organization is about.   0:26:43.7 BB: But trying to tell people this Deming stuff will change your life, that's a losing strategy. So he says, you can't tell anybody anything. And then my paraphrase is, "telling is a losing strategy." Even if you tell a loved one. If I tell our daughter, Allison, you gotta go watch this movie. You gotta go... You need to go learn more about the Rolling Stones. She's like "Dad, I'm a Swifty." It's like her telling me, "well, I'll go do that if you go watch the Eras movie with Taylor Swift." I'm thinking, "that ain't gonna happen." But anyway, so even with a loved one telling, telling is a losing strategy. Well, another thing he told us that very first meeting, you're gonna love this. He said, he points at each one of those and he's like a drill sergeant, and he says to us, "you have to be able to do this by any means necessary." You know who used those words, right?   0:27:43.8 AS: Malcolm X.   0:27:44.9 BB: Malcolm X. I remember looking at Barry saying, said that's Malcolm X. He says, and he would say, "every morning you've gotta get up and ask yourself, am I doing everything I can to make a difference in our organization?" And it was just beaten into us again and again and again and again in a very loving way. So back to the, "hey, you Get Off Of My Cloud." Barry came up with a Cloud Model. And I don't know that he had in mind to write a book about it. I don't know that he ever did. I don't know if it was ever published. I have not, I share this in all of my classes and all my consulting. I share it with clients. I'm not sure if it's out there on the internet. Well, what Barry had in mind, his model, his mental model for organizations is there's a Cloud.   0:28:31.7 BB: The Cloud is the top of the organization where all the executives are. And Barry got to the Cloud. He was in charge of Xerox's division that made the, not office copiers, but these really big, big things. And, um, and I don't know how many thousands people worked for him, but he was in the Cloud and he's briefing us. And we're individual contributors in our respective organizations. And what brought us together was each of us was trying to introduce Dr. Taguchi's ideas into our organization. But the Cloud model is universal. It's not just, it's introducing any change in our organization. And what Barry confided with us, and it kind of burst our bubble is, he said, if you get an email that says, we want you next Monday, Bill Bellows, to go to Boeing headquarters and share with them how Dr. Taguchi's work can impact Boeing.   0:29:31.7 BB: And I'd be thinking, "what an incredible opportunity." What I learned from Barry was you have to say no. And I'd be like "well, Barry, isn't that the audience I want?" And he says "no." "Why not, Barry?" He said, "here's how it works." He said, "the people in the Cloud may not like each other, but they respect each other." He said, if you're...   0:29:56.3 AS: And the people in the Cloud, remind everybody who are the people in the Cloud?   0:30:00.2 BB: The top executives of the organization are the Cloud. So that's the...   0:30:05.4 AS: They're living in a, they're living maybe in a comfy zone. They're not necessarily dealing with the nitty gritty of the business, what's going on.   0:30:13.7 BB: They're way up there in the upper atmosphere. They are... And they're the chief executive people, the senior most people in the organization. And what Barry said is, "they create the rain. They create the KPIs. They create all those things that flow down." And what Barry says, "what we're tryna do is influence what flows down. So in order to influence what flows down, you've got to get into the Cloud." He said, but the deal is, what Barry's model was, "Bill and Tim and Larry, you can't go to the Cloud." Well, why not? He said, "because you're an outsider." And he said, "they shoot outsiders, but they don't shoot each other."   0:31:02.8 BB: So what do we do? He said, "when you go back to your respective organizations," this is the very first time we meet, this is how impactful it was. He said, "when you go back to your respective organizations, start thinking about someone in your organization above you. It doesn't have to be your boss. It could be somebody over to the right, but find someone above you that you can get smart about Taguchi's work, about Deming's work, about whatever that passion is that you wanna bring to the organization to rain down. Get them smart, 'cause you can't go to the Cloud, but you can get them smart. So make it your calling to go back to work, begin to meet with someone above you. Help them get someone above them smart. Help them get somebody..." So I, I hand, I get you smart, and then I help you get your boss smart, and then you're...your boss on up. So you have to hand off. So this is not me coaching you, and then coaching you all the way. So I have to let go. I have to be a contributor.   0:32:17.5 BB: And I thought that's not what I... I thought I could be the hero and go in there. And he is like, no, it won't work. And so I went back and immediately began to mentor my boss, Jim Albaugh, who's a VP. And that was my, my strategy was to get him smart on all the things we were doing. And then he, in turn, eventually got his boss, Alan Mulally smart. And I just, but you have to let go. And then you're trying to influence the organization - so it can be done. So in terms of making difference from where you are, it's not running into the Cloud from down there and thinking, Hey, I've got these great ideas. And what Barry said is, it's not gonna work. Don't. And he saw it not work on many occasions.   0:33:08.9 BB: Now, one time I got invited to a Boeing corporate setting, and it was not, it was halfway to the Cloud. It was pretty high up. And my first thought was, No. This, you know, Barry on my shoulder, Barry says, "Bill, don't do it. Bill, don't do it." When I found out who's gonna be in the meeting, and it was all the VPs of engineering across Boeing, space and communications, and they all reported up to the VP of engineering, corporate, senior VP of engineering, who reported to Jim Albaugh. So I thought, okay, against my better judgment, I went in. But being aware of Barry's model, I went around the room and amongst the nine VPs of engineering, I knew half of them. So I went around the room,, and hi, how're you doing?   0:34:14.8 BB: I haven't seen you. And part of what I was doing in my mind, what I was doing was preparing them to help me should the others start to shoot at me. But I knew to do that. And without the awareness from Barry, I would not have known to go around the room. So it was... I mean, it wasn't the very, very top of Boeing. It was a good ways up. But I still took what I learned from Barry and said, okay, I need some help with this. I can contribute, but I'm just gonna stop there.   0:34:56.3 AS: Well...   0:34:56.4 BB: And so when it comes to this, Get Off Of my Cloud, it's the people in the Cloud, it's their Cloud. We just work here.   0:35:04.9 AS: And in the theme of music I'm gonna wrap up my part of this and then ask you to do a final wrap up. I wanna go now to 1976. 11 years after the Rolling Stones came out with their song, Get Off Of My Cloud. By this time I was 11 years old. And in 1976, the band, the Canadian Band, Rush came out with the album 2112. And the song 2112 talks about how, Neil Peart wrote this, the drummer, about how he, that it was a society he liked to show it was like a communist type of society where it was ruled by the elders. And he found a guitar, and it was an ancient guitar, and nobody had heard of a guitar. And he figured out how to play it. And he thought it would be amazing to take this to the priests, to the elders.   0:35:57.4 AS: And he went to them after learning how to play. And he said, "I know it's most unusual to come before you, so, but I found an ancient miracle. I thought that you should know. Listen to my music and hear what it can do. There's something here as strong as life, I know that it will reach you." And the priests respond. The priests in unison respond, "yes, we know it's nothing new. It's just a waste of time. We have no way need for ancient ways. Our world is doing fine. Another toy that helped destroy dah, dah dah, dah, dah." The point is that they were in their comfort zone and they didn't want to be disturbed. And so having an awareness of that, I think is what you're trying to teach us so that when we, make a change where we are and be an influencer rather than a teller. And don't use the telling strategy.   0:36:54.2 BB: Yeah, no, it's... Exactly. It's, um, I had a VP of HR once pulled me aside and he said, "what's your vision for the organization?" I said, "don't ask me." I said, "ask them, ask them." I said, "it's not what I want" is, and this is, I told another group of people I was mentoring. I said, something like this. "I'm not gonna be here forever." 'Cause they're saying, "well, what should we do?" And I said, "my question to you is what do you want to happen?"   0:37:36.3 BB: And what was so amazing when I shared that with this one group, a couple of days later, two of them sent out an email to a bunch of their peers with announcing some opportunities. And I had tears in my eyes. I was reading it on an airplane. I was at LAX and looking at it. And what blew me away was, they didn't call me up and say, Hey, we have an idea. They just went out and did it. They became the change they wanted to see amongst their peers. And I was just overwhelmed with it all. All I said to them, is that, "what do you want? What is it that you want this place to be?" I said, "it's not what I want. It's what do you want?" But the other thing is I'll share some great wisdom from Edward de Bono. And this is the book, Handbook for the Positive Revolution. You can buy it on Amazon for probably 5 bucks. And the original copy, I'm told, this is not an original, it has a yellow cover, and there's significance there that I'll come back to, but what somebody told me is the original book not only was the cover yellow, but all the pages were yellow. Well, yellow in the Edward de Bono world is associated with one of the six colors of his so-called Thinking Hats, and yellow is the Logical Positive. Your ability to explain the benefits of something. Not your gut feel, which would be your Red Hat, but your Yellow Hat is saying, I can articulate the benefits. The Black Hat is the Logical Negative, I could tell you all the weaknesses.   0:39:29.8 BB: So this is coming from that place of yellowness. So the book came out, and I got it for a bunch of colleagues in our InThinking transformation community at Rocketdyne early on. And the introduction, Edward says, "this is a serious revolutionary handbook. The greatest strength of this serious revolution is that it will not be taken seriously." So when I'm reading that, I'm thinking, "what?" Then he goes on and he says, "there is no greater power than to be effective and not to be taken seriously." That way, Andrew, you can quietly go on with things without the fuss and friction or resistance from those who feel threatened. And that was so invaluable to our efforts is, if people don't take it seriously, fine. 'Cause what Barry talked about is, he said, "for every proponent," as you're trying to get this message to the Cloud, he said, "for every proponent, he'd say there's nine opponents." So they're out there. So as I'm trying to get my boss smart, you've got this. And I come across Edward's work, and he says, you just take it in stride. You just try not to be dissuaded. You get up every day and say, what can I do? And how do you get to the Cloud?   0:41:14.2 AS: Bam. Well, Bill, on behalf of everyone at the Deming Institute, I wanna thank you again for this discussion. And for listeners, remember, go to deming.org to continue your journey. And if you wanna keep in touch with Bill, just find him on LinkedIn. He's there. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming. People are entitled to joy in work.

This week Jacob Gettins sits down with Kazuya Taguchi to talk about his move the USA, how Japananese and American drifting compair and what he is going to do with his hair. Make sure to hit the links below and give him a follow.  https://www.facebook.com/kazuya.taguchi123 https://www.instagram.com/kazuya_taguchi123/ https://www.youtube.com/@kazuya_taguchi1236   Produced by    Jacob Gettins https://www.instagram.com/jako13/ Formula DRIFT - https://www.formulad.com/  Edited by Kyle Mayhew - https://www.instagram.com/kaywhy_85/  Audio Engineering by J-One Audio Services -https://www.facebook.com/profile.php?id=100090486859184 Intro Song by Legna - https://www.tiktok.com/@originallegna  Original Concept - Frank Maguire Instagram: https://bit.ly/Instagram-FD Twitter: https://bit.ly/Twitter-FD TikTok: https://bit.ly/TikTok-FD Facebook: https://bit.ly/FacebookWeb-FD Throdle: https://bit.ly/Throdle-FD Discord: https://bit.ly/Discord-FD Shop FD: https://bit.ly/Shop-FD

In this episode, Bill Bellows and host Andrew Stotz talk about where and how to start using your new knowledge when you're learning Deming.  TRANSCRIPT 0:00:02.1 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today in episode 15 is Start Where You Are. Bill, take it away.   0:00:25.0 Bill Bellows: Thank you, Andrew. And for our audience, you may notice there's a different background. This is not a green screen. This is actually a bedroom at my in-laws in upstate New York. Hey, Andrew, I've been listening to some of the podcasts, and I've collected some data on each of them. Would you like to see it?   0:00:53.0 AS: Yeah, definitely.   0:00:54.2 BB: I've got a control chart, I've got a control chart for each of the 14 sessions for how many times I say, holy cow.   0:01:02.9 AS: Holy moly.   0:01:04.4 BB: In each episode. Yeah, and the process is stable. [laughter] So I say holy cow, I think the average is 2.2, and the upper control limit is... I'm just kidding.   0:01:25.4 AS: You're a sick man.   0:01:27.7 BB: But I think outside of this podcast, I don't know if I use that expression. And I don't know where it comes from, I just, it must be...   0:01:37.7 AS: Did you grow up around cows? You said you're near where you grew up.   0:01:44.4 BB: Yeah, I am staying at my wife's sister's place. And my wife's father, when I met her, had cows in his backyard. And we used to chase the cows. When they got out, we would chase them. And let me tell you, they move fast. [laughter] And I came down several times, severe cases of poison ivy, trying to herd this one cow that was always escaping. And I thought, oh, I'll tell my father, let me go out and I can scare this cow back. Now, no the cow got the best of me. I got covered with mud and went home with poison ivy. Those things, they move fast. So that's my only personal experience with cows. [laughter]   0:02:33.5 AS: Did the cows ever go to a nearby church?   0:02:38.9 BB: No.   0:02:39.2 AS: To become holy.   0:02:40.1 BB: That's a good point? I don't... Yeah, how do those words tie together? I don't know.   0:02:43.4 AS: I don't know.   0:02:45.4 BB: I have to go find out who I got that from. So what I thought we'd talk about today is this, Start Where You Are, Start Where You Are. And first share where I... One context for that expression was the first time I saw Russ Ackoff speak, well, first where I met Russ. I had seen him speak before at a Deming conference, but I didn't get a chance to talk with him. But I saw him a few years later, and he was doing a one-day program in Los Angeles as part of a management series that he would do around the country. And there are about, I don't know, 150 people in the room, 25-30 from across Boeing sites in Southern California that I had invited. And at the end of the day, with about an hour to go, Russ says, okay, I'm going to give you a break. I'm going to give you time to formulate some questions and we'll spend the last hour discussing wherever you want to go. Well, I took the time to go up to Russ and ask him a couple of questions. I had met him earlier in the day. He knew that most people in the audience were there from across Boeing and that I had arranged them.   0:04:06.3 BB: And so I had a chance to talk with him. So I went up and said, I said I've got two questions for you that are not relevant to the audience, but I'd like to ask you one-on-one. He said, sure, go ahead. Well, no, I said knowing that you've known Dr. Deming for, since the early '50s, I said, over that period of time, what do you think he would say he learned from you that would stand out? And vice versa, what did you learn from him over those years that you would say stands out? And he looks at me and he says, well, I don't, I don't know what he learned from me. Then he says, then he answers the question and he says, he says, I think Ed, and he liked to say Ed, 'cause he liked to brag that, yeah, everybody calls him Dr. Deming. I call him Ed. I've known him since 1950.   0:05:05.2 BB: But Russ, by the comparison, if I ever introduced him to you as Dr. Ackoff, he would say, Andrew, call me Russ. So he says, relative to what he learned, what Dr. Deming learned from him, first he says, "well, I don't know what he learned from me. But I think his understanding of systems is very implicit and I helped him develop a better explicit understanding." And I think that makes a lot of sense. I think Dr. Deming's understanding of systems is a lot of what he talks about in The New Economics is what he learned from Russ. It's a very, I think you know when Dr. Deming shared the Production as a Viewed as a System that flow diagram in 1950, he always talks about systems, what comes around, goes around. But Russ was a master at systems from an academic perspective, and that was not Dr. Deming's forte. Now, when it comes to variation, that was Dr. Deming's academic forte. And that's where I would find Russ's understanding of variation, I would find to be very implicit, whereas Deming's was explicit. But anyway, he said he thought it gave him a better understanding of systems, that it was very implicit, very intuitive, and it helped him develop a better, a more academic sense of it. So I said, okay, so what did he learn... What did you learn from him? And he says, "well, I never gave that much thought to the whole quality movement.”   0:06:38.7 BB: “But he... I got a better, a warmer feeling of it." Russ would talk about quality of work life, and there's parallels with what Russ has talks about quality of work life that resemble Dr. Deming's work very well. And I'll give you one short story which ties in well with the Deming philosophy. Russ says he was at an Alcoa plant once upon a time, and he happened to be there on a day in which two workers were honored on stage in front of a bunch of coworkers with an award. Now, we both know what Dr. Deming thinks about giving people awards. So, but the fun part of the story is, Russ says he went up to these two guys afterwards, after they came down off the stage and he says, hey. And he says, and Russ was so precise with language. I mean, he walks up to these two guys and he says, ready Andrew? He says to them, I caught them at their point of maximum puffery. I mean, have you ever heard anyone use the word puffery...   0:07:56.7 AS: No.   0:07:57.1 BB: In a sentence? So he says, I walk up to these two guys and I said, I caught them at their point of maximum puffy. Right? And then he punctures them with the following question. "For how long have you two known about that idea that you were awarded for?" And they looked down at their feet and he said, "Come on, for, for how long have you had that idea before you shared it with management?" And they said, "20 years." And then Russ says, why did you wait so long to share it? And Russ says, he says to him, "Those sons of bitches never asked."   0:08:51.8 BB: And so, and Russ would talk about that as a quality of work life issue. Now, I've heard him tell that story many times, and I once asked him, I said, so what was the idea they came up with? And he said they would take these four foot wide rolls of aluminum foil off a machine, and these are the types of rolls that get used to make aluminum cans. And the roll may be, you know, so it's four foot tall. It's a, it could be easily a foot in outer diameter. And he said when they, when they're taken off a machine, they stand them on the concrete floor. And then to move them, the workers would tilt them back a little bit and then roll them.   0:09:43.9 AS: Which damages...   0:09:47.0 BB: The edge.   0:09:47.7 AS: Yeah.   0:09:47.8 BB: Exactly. So their idea was to, instead of putting them on a the concrete floor, to put them on a piece of plywood. So, what Russ saw was, which very much resembles a... The prevailing system of management where you're gonna wait 20 years before somebody asks you a question, until there's a program, until there's an award, then I'll come forward. All right, so let's go back to the audience. So I went up and asked Russ those questions, and now he is fielding questions from the audience. And one question really struck me and he says, Dr. Deming, not Dr. Deming, the guy says, "Dr. Ackoff," he said, "what you're talking about all day makes a lot of sense. And most organizations have little understanding of it, where you're just talking about, you know, managing interactions, the system, whatnot." He says, "but don't we have to wait for senior management to get on board before we do something with it?   0:10:54.2 BB: Don't we have to wait?" Right. And I'm listening to this, and I don't know what Russ is gonna say, but I'm hearing where the guy's coming from. And Russ turns right at him and he says, "Andrew, John, Sally, you have to start where you are." And I told him later, I said, I could've run up and given him a big hug, because if you're gonna sit back and wait for your management to get on board, you know how long that's gonna take? And so I just love that perspective of starting where you are. Now, let's flip to Dr. Deming, and a great quote that I like to use with students and clients with his work is "The smaller the system, the easier to manage. The bigger the system, the more complicated, but the more opportunities." Right? Now we'll go back to Russ.   0:11:54.0 BB: Russ would say, if you're a school teacher, like our daughter's an eighth grade teacher, start in your classroom. Why? Because you're not gonna start at the elementary school level or the junior high's, that's bigger than you. You're not gonna smart start smaller than that because then that's minimizing what your impact could be, but start where you are and then expand. Now, what that also means is it may be that when you start where you are, as you expand the size of the system, you might need to go back and change what you did now that you're looking at a bigger system.   0:12:37.8 BB: And so that's a great likelihood that what is optimum for you in the classroom may not be optimum when you're starting to think about the elementary school. But even if you start at the elementary school, what is optimum may not be optimum if you have the school district. So there's, no matter where you start, there needs to be an appreciation that in hindsight, what you did before may not be what's best for the bigger system. And the same thing applies when you're talking about integration. You know, Dr. Taguchi's loss function and the ideal value of a given characteristic, well, what I tell people is the ideal value depends upon the size of the system. And so if I'm designing two things to come together and I'm looking at the clearance between them, well, there's a clearance that makes it easy for these two things to come together if you're Andrew doing assembly. But let's say downstream of you is somebody who's using that product, you know, where that clearance is important, so the clearance that makes it easy to go together may not be the clearance that improves the functionality.   0:14:00.2 BB: And that will always be the case that you, that what is optimum where you are, may not be optimum when you expand the size of the system. So you have a few choices. One is, don't do anything. You know, for fear of making it worse, do nothing. Or, run a small scale experiment, use the PDSA model, try some things. But, that is still not a guarantee. 'Cause that small scale experiment still could be with me in my classroom and I run that experiment for a month, two months, three months.   0:14:44.4 BB: So even if I use that model, I can't know everything. And that's the... I mean, those are the complications of viewing things as a system, is to know that the system is not closed, it's open. I met a professor years ago at a conference and he had a model in his presentation that was very much a closed system. You know, they're working within this model, looking at these factors and these factors and these factors. And he went up after us. And I said, yeah, there's factors outside of that system. And he says, "Well, yeah, but we're just looking at this in scope." I said, "You have to frame it to a given size, but you know there's always the possibility that what's outside [chuckle] that you're not including, could haunt you for some time to come." And I didn't get the impression... I mean, it was almost like in engineering we talk about a free body diagram where you take whatever is your list you're looking at and you draw a line around it and you say, "That's the system I'm analyzing."   0:15:58.1 BB: But there's always a system which is bigger than that. And then again, bigger. So no matter where you start, again, and I look at the options are, if you're fearful of not including everything, well, then you're gonna do nothing. And that's easily what Deming and Ackoff were not saying. What they're saying is start where you are. Run experiments. Now, what I expect to be the beauty of a Deming-based organization, a "we" organization, is flexibility.   0:16:29.9 BB: And the flexibility is when things don't go as planned and we learn something, that we have the ability to reflect, note what we've learned, share it with as many people that we think could... would benefit from that. Get back on the horse and try again. I've worked with groups who were quite willing to do that. I worked with groups that were quite... They wouldn't get back on the horse. We were running some experiments dealing with hole machining of some small drills, you know, like on the order of a 16th of an inch, very small. And the experiment was, let's say eight... Seven different factors at two values each, eight experiments. And I don't know, they might've been machining in each experiment, 10 holes, say. And I wanted them to measure diameter of the top and the bottom of each hole, something like that.   0:17:29.3 BB: And I get the data prior to meeting with them. They sent me the data and I had enough experience running fractional factorial experimentation using Doctor Taguchi's ideas that upon first blush looking at the data, I either get a warm feeling or I get a queasy feeling. So in this case, I get a queasy feeling and there's... I'm looking at the data and immediately I knew this is... But I didn't know why. I just knew that, I'm not... And I'm wondering how am I gonna say this to them in the meeting? 'cause they're all excited. For a couple of them it wasn't their first study; they had done this before with great success. So I'm in the meeting and I'm listening and then one of them says, you know, in the experiment we're looking at starting each experiment with a new drill. And the experiments we're looking at different speeds of the drill, different cutting fluids, different parameters associated with machining these holes. And one of them says, they didn't... In hindsight, they didn't use a brand new drill for each experiment. So now I'm thinking, okay, say some more.   0:18:50.0 BB: Well, the drills we used in the experiment had all been used before and were resharpened to be like new, I mean, not new, but like new. And I said, "So say more." And then he said, "Well, when they looked at them under the microscope, the very tip of the drill was not in the center of the drill." 'Cause if you look at a drill, there's a cutting edge on the very top, you can say that near the left side or the right side. And those two cutting edges weren't the same length. So when the drill is cutting, it's not... The hole is not gonna be round, it's gonna have an oblong... So now I'm thinking, kind of explains the data. So he says, one of them say, "Can we salvage the data?"   0:19:45.3 BB: I said, no. And they said, why not? I said, because the assumption we had was that that the drills were reasonably the same. I mean, of course, even eight brand new drills are not identical, but now what you're telling me is the biggest source of variation is in the drills that we thought were the same. And that is wiping out the variation that we introduced. That's the issue, is that the signal coming from the drills that we didn't ask for is bigger than what we asked for. "So you mean we have to run all the experiments again?"   0:20:26.9 BB: And now they're, and I said, well, let me ask you this. So here's the good news. The good news is we didn't spend more time than we did on this experiment. That's the good news. I said, the good news is, we now know that the sharpening process needs to be relooked at. And as it turned out, probably the biggest thing we learned in the experiment, was that it ain't worth resharpening the drills. At that size, throw them away. But what I was hoping is that they would get back on the horse and go back to what we originally planned to do with eight brand new drills. It never happened. But we learned something, but what we learned is not what we had planned to learn. And that gets me to what I would tell people, is if you don't look, you won't find. But then you have to be willing to take the existing system and what is...   0:21:39.3 BB: Do anything, but that just means it stays the way... So if you don't look, you won't find. And if you do look, there's no guarantee. So that was a situation where I was very bummed. And every time, I mean, what I, one of the things I learned early on was preparing management and the team for such situations.   0:22:02.6 BB: That everybody was expecting, you know, a grand slam every single time. I said, no, that's not the way it works. In the real world, you try, you fail, you try, you fail, you learn, hey, you learn what we did here is that the sharpening process doesn't make sense. Had another experiment where, and I don't know which is, which was the bigger disappointment, but in the other one, there were 18 experiments with a lot of hard work, oh my God, and incredible precision as to how each of 1080 holes would be machines. So there were 1080 holes in a ring that was about eight feet in diameter. So there are holes about three tenths of an inch in this ring. The holes were all numbered one through 1080. Every hole had a different recipe. Somehow, the machinist wasn't informed of that.   0:23:08.5 BB: And the manufacturing engineer went to a meeting and he came back only to find out that the instructions, so machinists didn't know. And I said, "So, so what'd you learn?" He said "I learned not to go away to a meeting." So these things happen. Another thing I say in terms of starting where you are, my boss at one time knew I was involved in half a dozen to a dozen different Taguchi studies. And he calls me in one day and he says, "So how many studies are you working on?" I said, half a dozen to a dozen. He said, "Which of them is gonna have the biggest improvement?"   0:23:55.8 BB: So like the biggest... So I said, "So you mean like the biggest percent gain?" He says, "Yeah, which one's gonna have the biggest percent gain?" I said, "I guarantee you that we'll be smarter about everyone after we're done, I guarantee you that." He says, "But which one's gonna have the biggest percent improvement?"   0:24:17.2 BB: I looked straight at him, I said, if I knew the answer to that question, would I be working here? I'd be doing what you do, Andrew, I mean, financial forecasting. But he's like, "Well, don't give me that." I said, "I don't know which is gonna have the biggest gain, but I know we're going to be smarter. And I know all the things we try that don't have an improvement, we're smarter about it." But I said, "if you don't look, you won't try." So you have to start where you are. Another thing I want to point out is, and I wrote an article about this for the LEAN Management Journal, and if any of our listeners want a copy of the article, they can reach out to me on LinkedIn, and the article is about the, gosh, pragmatism. And viewing things with pragmatism.   0:25:15.3 BB: And I uh, and the possibilities of pragmatism, anyway, there was a lot of alliteration at the time, there was a lot of P's, 'cause what started dawning on me is this need to be practical, pragmatic. And I've got a dictionary definition, "pragmatic, dealing with things of sensibility, and dealing with things that are sensible and realistic in a way which is practical rather than theoretical," right? And where that comes from, in terms of starting where you are, is...   0:26:04.2 BB: Everyone is right. And there's a philosopher years ago that came across this. He says, everyone is right. And so everyone works in an organization where they believe, firmly believe that what they're doing is right, is practical, is pragmatic. And so in a non-Deming organization, would you work on things, Andrew, that are good and going well, that arrive on time, would you spend any time on those things, Andrew?   0:26:33.0 AS: No.   0:26:33.8 BB: And why not, Andrew?   0:26:37.0 AS: If it ain't broke, don't fix it.   0:26:42.1 BB: And that's very practical and pragmatic of you, isn't it?   0:26:46.6 AS: Exactly. I've got limited time. I gotta put out fires.   0:26:51.2 BB: Yeah. And that started to dawn on me, is that in a non-Deming "me" environment, working on things that are good doesn't add value. And so I thought, I mean, how do you argue with that? Now, in a Deming organization, it'd be pragmatic to work on the things that are not broken to either prevent them from breaking or to improve integration. And to not do so would not be practical. So there's two different environments of practicality depending on how you see the world. Um, oh, and last time I named the company, this time I'm not gonna name the company. So I was in an environment with a very well-known consultant.   0:28:00.6 BB: I was invited to travel with this consultant several times over a few years. I could take notes, I was given access to a lot of information on how these ideas were being used in the organization, but I can't talk about where it was, what they were doing, but it was really cool. So in one of the first scenarios, a team came in, led by this guy, and he presented to the consultant over the course of two hours a situation that he was dealing with. And teams would come meet with a consultant for a couple hours. This is one of the very first meetings, so that the engineer came in and said, here's where we are. We've got this issue. And the issue involved a commercial product with a... Let's just say, something about the product, how the customer interacts with it was very laborious. Let's just say like banging it together.   [laughter]   0:29:08.7 BB: It was very laborious. And the resulting warranty claims were on the order of $10-20 million a year in warranty claims. And the solution was kind of like giving the customer a bigger hammer, and actually along those lines. So that scenario was presented and that 10-20 billion at that time was a fraction of the total warranty claims for the company, which was on the order of 2-3 billion. So this was not the biggest issue, but it was a lot of $10-20 million issues. So the engineer proposes a solution, which I would paraphrase as: Spending, hiring someone to manage the variation in the parts that went together to mind the gap. And his theory was that if we minded the gap, we could make these things go together as the customer used it and get rid of all those warranty claims. So I'm thinking, hiring the person to collect the data because it definitely involved hiring someone to give them responsibility. Let's just say putting in place the use of control charts on the respective parts, minding the gap that, you know common cause variation and whatnot. So at that time I'm thinking, salary and benefits, that's maybe a $100,000. Saving the corporation $10 to $20 million. How's that sound, Andrew?   0:30:42.6 AS: Sounds good.   0:30:44.3 BB: Spent a $100,000, save $10 million. So the consultant says to the engineer, so what did the plant manager say? And he said, the plant manager says no. He said, why did the plant manager say no? He said, the plant manager said, why should I spend my budget to save the corporation?   [laughter]   0:31:08.4 BB: Now, if I told you the consultant's response, then you would know the name of the company. So I'm not gonna tell you what the consultant's response was other than the paraphrase would be, I thought you were looking at things as a system. Isn't that the company's slogan? He says, well, not quite. But if you're the plant manager, you're being practical. You're saying, why should I spend my budget to save the corporation? Does that get me promoted? Does that give me visibility or does it make my boss angry? In terms of starting where you are, this is a story you're gonna love. I had an intern one summer, his father was a coworker, he came to a class I was offering twice. 'Cause we allowed employees to bring family members and our vision was to get these ideas out there, fill the empty seats in the classroom. So one is we're filling empty seats, two is, the thought was if we bring in volunteers from the community, and that was a... The training was open to what we called members of the community. Members of the community are people who are working full-time, part-time to serve society. The fact that they work for, you know, General Electric or Lockheed Martin, that was not the issue.   0:32:28.1 BB: So you get to come in because you're a soccer referee, you're a Girl Scout leader, you sing in your church choir, we're gonna fill the empty seats. So this was not taking the space of employees. This is, we have employee space, we have customers, space for customers, place for suppliers, but we still have extra spaces. Let's fill those seats. Boeing's vision was to help the communities in which we live. So I went to my boss with this proposal and he said, go right ahead. And so the operational definition was we invited members of the community. A member of the community is someone who works full-time, part-time to benefit the community.   0:33:05.5 BB: So this, and also we invited family members. And so this guy brings his son in and it was an evening class and which, you know, second shift, which means it ends around midnight. And the one who came in, the son was a, graduated from high school two years early, one of the brightest people I've ever met in my life. And he's an economist by training. So he starts asking economic questions. And he brings up, because hears me talking about how, you know, this movement within Rocketdyne that moved from being a "me" to a "we" organization, the progress we're making, the improvements we're, you know, that we could at least properly talk about. And he says says in economic theory there's this thing called the freeloader principle. Have you heard of it? And I said, no. I said, how does that work?   0:34:00.8 BB: And he says, well, economists will talk about, there'll be people that do the work, and then people who want to ride the train for free. So in your effort for Rocketdyne to move in the direction of being, you know, more of a "we" organization, how will you prevent people from freeloading? And I said, it's easy. I said, everyone will see them and they will know we see them. [laughter] So what you have at Deming organization is, if I leave the bowling ball in a doorway without asking you, you have the visibility to see that. So anyway, he threw that question out. He contacts me a month or so later and he says, Hey, Bill, he says, I'm, I'm gonna be home from college for the summer. I'm looking for a summer job. If you don't, I dunno if you have budget, if you don't have budget, I'll work for free. So I said, I don't have budget. So I made a deal with him. I said, you can come and attend all this training that we're offering over the entire summer. In exchange, here's some things I'd like you to do. So I arranged for him to get a badge. He came in every day.   0:35:10.0 BB: Everywhere I did training across Southern California, he would come with me, be a fly on a wall. And he got to see some really cool stuff. Well, towards the end of the summer, around middle of August, he comes to me and he says he's gonna quit. He's done. Next week is my last week. He says, did I tell you about my other job? I said, no, what other job? He says, oh, I told, I guess I didn't tell you. He said I wanted to see during my last summer in college, 'cause once I graduate, I'm gonna go get a real job. So this is my last summer in college and I figured if the ideas I'm learning from you are worth anything, I wanna go see now. So I says, so what'd you do? He says, I've had a summer job applying these ideas, starting where he is.   0:36:02.6 BB: And I said, okay. And he says, I got a job at a Western Wear store, in Thousand Oaks, that had a sign, walked into the mall, saw a sign at the door looking for a salesperson. So I hired in as a salesperson. I said, so how'd that go? He said, well, the way it works is the salespeople rotate as to who gets the next customer. So there's like three salespeople at any point of time. While I'm working on this one, you sit behind the counter with the others,   just sitting there, you know, twiddling your thumb. So, I said, so, so what'd you do? He said, well, what I started to do was, instead of just sitting behind the counter, if I saw the person waiting on the customer needed a calculator, I'd have it ready for them. If I thought they needed a stapler, I'd have it ready for them.   0:37:00.0 BB: I said, holy cow. I said, what'd that lead to? He said, well, next thing you know, there's, we're doing that for one another. Well, he ended up, after about a month of working there, he was named manager of the store, as a walk-in. I said, how'd that work?   [laughter]   0:37:01.5 BB: How did you after a month become salesperson, you know, moved from being a salesperson to being a manager? He said, well, they keep track of who sells how much each week. You know, it's not a commission system, but they keep track. And because I had the most sales, I got promoted. I said, well, how did you get the most sales? He said, I started asking questions that I learned from you and Tim and the others in the training. I started asking questions about, so somebody comes in, they're looking for a suit, I'm asking them, what's the engagement? And the better I understand where they're coming from, the better I know, you know, you don't need to buy this, you can rent this. And so I started asking questions. The better I understand the questions, the better I'm serving them. So one is, I'm helping my coworkers.   0:38:08.3 BB: Two is, I have been named manager because I'm helping the clients understand...we're better understanding their needs. So he starts off as a salesperson, wins over his colleague and start mimicking his behavior, gets promoted to manager. Now, what he starts to do, in the manager role, is he, there's a, there's... He in the manager's role gets like 10% of all the sales above a certain value. So he starts sharing that profit with all employees on a prorated basis. And there's, the overall sales for the store have improved dramatically.   0:38:56.6 BB: Now he's gonna go off and work on this other big project which was his senior thesis, which also involved taking Deming's ideas and Ackoff's ideas and putting them into a company that he wanted to start. But before he did that, he hired another student, turns out a Stanford graduate, and brought him to class such that this guy could take over for him and keep this thing going. And I said, so are you gonna bring the owner of the store? And he says, no. He says, they have no interest. I say, so what's gonna happen after you leave and after Sam leaves? He says, this is gonna go back to zero. But he walked away having just tried to do what he could with what he learned that summer and made a difference from where he was.   0:39:45.7 AS: Well, that's a great point to end on. And the idea being that when you look around at your company, at your school, at your job, at your life, and you wanna start implementing these ideas, it can get overwhelming as you look at the bigger and bigger systems or other things. So the objective really is just start small and start where you are. Anything you would add in a wrap-up?   0:40:11.6 BB: Yeah. Another thing I'd like to add to that, have you heard the expression, management works on the system, people work in the system?   0:40:24.8 AS: Yeah.   0:40:27.6 BB: Okay. That's attributed to Myron Tribus. And people have said to me, Bill, management works on the system, people work in the system. Well, I've heard people use that expression as a means of saying, if you aren't in management, then you can't... Then just wait. Just wait. Because if you're a willing worker, Andrew, you're just a machinist in the factory, well, Andrew, you're not, that's not management. I mean, you're working in the system. The people in management work on the system. And so a disagreement I've had with some people is that if I was to believe that expression, then I would wait for management to take action. And that may take forever. And so...   [laughter]   0:41:23.7 BB: In fact, I had a guy who was working with Deming, or a guy who was somehow affiliated with some Deming consultants, and he came to a class at Rocketdyne years ago and he says, so Bill, how often do you meet with the president of Rocketdyne? I said, not very often. He said, does he support what you're doing? I said, of course he does. If he wasn't, you wouldn't be here and I wouldn't be here. But how often do you meet with him? I said, not very often. He says, you know what Myron Tribus says, I say, oh, no. What did Myron say? He says, Myron says, management works on the system, people work in the system. He says, you need to be meeting with him all the time. I said, he's in Washington DC trying to get us next generation contracts, and I think that is far more important a point of work for him than anything else. And he says, oh, no. He says, I think you're wrong. And I said, I look at him, I said, so actually, I said, I think there might be a bigger system.   0:42:27.0 BB: You know, it's something more important to do. "More important than working with the president of your company, Bill?" I said, "What if I am meeting with people at NASA headquarters? What if I am meeting with the Army's first [woman] four star general," which I had. I said, what if that? I said, "So you just want me to start, you think the system is constrained to me just getting the president smart?" And so there I would say is, one is, if you follow the belief, and Myron was brilliant, and I don't... But I think if you take that verbatim, management works on the system, people work in the system, now you're back to Russ Ackoff and that student asking the question, where do I... Yeah, don't I have to work for management to get on board? And I said, no. What I try to do in my classes and with clients is help people on any level get smart about these ideas, try to give them everyday examples that they can share with their peers relative to givng an everyday example of Dr. Taguchi 's loss function.   0:43:40.1 BB: Giving an everyday understanding of the difference between managing actions and management systems, so that individuals can become more articulate in explaining to others. And simultaneously, what Ackoff would say, the best way to learn something is teach it to others. And so, my hope is that people listening to our podcast, don't think you have to wait for senior management to get on board, start to make a difference from where you are, practice your understanding of these ideas, explaining them to people outside of work where you might be given more time to explain it than somebody at work.   0:44:18.3 BB: Use that experience to try to do something with it. Maybe the experiments you run are at home, in some manner. And hopefully that then inspires you to go a little bit further. And another thing I'll point out is in a future podcast, I'll talk about what I learned from a good friend on how to create change within an organization starting at the bottom of the organization, which gets into some more detail, but it's still based on the premise of starting from where you are with a theory and understanding that what people call practical, there's Deming practical and there's non-Deming practical. So if they're saying they're being practical, they are truly being practical, don't be dissuaded by that.   [laughter]   0:45:04.4 AS: Boom. Well, Bill, on behalf of everyone at the Deming Institute, I want to thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. And if you wanna keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."

Many businesses equate "manager" with "leader," excluding potential leaders from across the organization. In this episode, Bill Bellows and host Andrew Stotz talk about leadership in Deming organizations - with a great story about senior "leaders" making a huge error in judgment at a conference of auditors. TRANSCRIPT 0:00:02.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today, episode number 14, is Beyond Management by Extremes. Bill, take it away.   0:00:29.7 Bill: Number 14 already, Andrew.   0:00:32.0 AS: Incredible.   0:00:32.6 Bill: It's a good thing we skipped number 13. That's an unlucky number. [laughter]   0:00:37.0 AS: Not in Thailand. It's a lucky number.   [laughter]   0:00:40.6 Bill: No, we didn't skip number 13. This is 14.   0:00:42.1 AS: Yes, we didn't.   0:00:43.5 Bill: Alright, so I just enjoy going back and listening to all of our podcasts, once, twice, three times. And then I talk with friends who are listening to them. And so I'd like to start off with some opening comments and then we'll get into tonight's feature, today's feature.   0:01:00.9 AS: So let's just, to refresh people's memory, episode 13, which we just previously did, was Integration Excellence, part two.   0:01:09.2 Bill: Yes. And that's what we called it. [laughter] So... [laughter] So last week I...   When we thought about getting together, but I had the wrong time, and it worked out well in my schedule. Last week, Andrew, I did three presentations. A two-hour lecture for Cal State Northridge, which is part of a master's degree program, where I do a class in quality management. That was Tuesday night. Wednesday morning I did a one-hour presentation with one hour of conversation afterwards with the Chartered Quality Institute, which is kind of like the American Society for Quality in the UK, and this... So this was several hundred people from the UK and also the Caribbean chapter from Trinidad Tobago, Jamaica. And so there's a bunch there. And then on Thursday morning I did a three hour session for a group in Rotterdam, which was really early for me and late afternoon for them.   0:02:25.4 Bill: And in all three, I covered similar material for all three groups, which included the trip report that we've done on the ME Versus WE, how did you do on the exam? How did we do? And so it was really neat to present that to the three. And in each case, when I threw out the question, "how did you do on the exam?" And then explained as I did one of our earlier podcasts that if you've got a long list of inputs, which includes - the woman I was talking to and, 'cause I said to her, the question is how did you draw on the exam? What are the inputs? And she said, the inputs are, my energy, my enthusiasm, my commitment that she got stuck. And I said, have other students helped you? And she said, yes, other students have helped you. I said, that's another input.   0:03:17.3 Bill: I said, given that input, how many can you see? And she said, oh my gosh. She said, my professor, my parents, my brother. And then all of a sudden there was this long list of inputs that she couldn't see. And so I explained that to the people and then say, "if you've got that long list of inputs and the original question is, how did you do on the exam? Does that long list of inputs change the question or are you okay with that question?" And what I look for is, and what we've talked about is, does the whole idea, how did we do on the exam jump out at you? No, it doesn't jump out. So, in each case, I said, here's the situation, might you reframe the question? And in all three situations, most of them that I asked said, there's essentially nothing wrong with the question. And if they did restate the question, they kept the "you," "do you think you could have done better?" Do you think... And that's what's so cool is that they just hold onto the you. Well, and for one of the groups it came a... It was kind of like what I was saying was semantics.   0:04:32.6 Bill: And I said this is not semantics. I said, there's a big difference between somebody, you know referring to our kids as my son and my daughter and our son and our daughter. And this, "my," is singular ownership, "our" is joint ownership. And so what I was trying to explain is that, saying “How did you do versus how did we do?” is the difference between being an observer of your learning if you were the student, Andrew and a participant. Those are not... Those are enormous differences. It's not, just, it's not just a simple change in pronouns. And so when I... And when I got to next, I was at a meeting years ago, I was at the annual, you ready Andrew? I was at Boeing's Annual Auditor's Conference.   0:05:40.5 AS: Sounds exciting.   0:05:41.4 Bill: 1999. So I got invited to be a speaker, Andrew at Boeing's Annual All Auditors Conference. Right? So I'm thinking going into this, that these are a bunch of people that don't feel valued. Because it's not like I get a phone call and I say, hold on, hold on. Hey Andrew, I got good news. And you say, you're a coworker, what's the good news? Annual... Andrew, we're gonna be audited next week!   [laughter]   0:06:10.2 Bill: You're like, "Holy cow. Hold on, lemme go tell everybody." So I thought going into this meeting is, these are a bunch of people that don't feel valued. I'm an auditor at least that was, so that was my theory going into this, so it's a Monday afternoon gathering with a dinner and then all day the next, all day for a couple days. So the opening speaker, speaker on Monday night was the senior executive of a big Boeing division, it might have been Boeing defense let's say. And my theory was first of all, you got a bunch of people that don't feel valued and I came away from the three days thinking there's a whole lot going on in audit whether it's financial audit, data integrity audit, quality audit, these are necessary roles. And so I came out of it with great respect for that whole organization otherwise would think right, but I'm thinking this executive is going to come in, going to do the Friday, Monday night presentation and I'm thinking it's like they drew straws and they say well okay I'll go, I'll go up there and talk with them.   0:07:22.8 Bill: Within minutes of him speaking I'm thinking this guy's excited to be here. So I'm thinking he's going to kind of phone it in, now I'm watching this I'm thinking he is, he is really engaged with the audience. He's talking about, the future role of the audit organization being partners and all this and he's talking, I mean he's giving them an enormous bear hug and I'm thinking this is not what I thought and again and so... I'm still thinking he's either a really good actor or he really wants to be here. Then my theory was and I thought, holy cow, now I get it. How many people in the room Andrew would it take to leave the room with their nose out of joint and shut down the F18 program by noon tomorrow? How many people would it take?   0:08:21.3 AS: Not many, one.   0:08:22.9 Bill: Right, so then I'm thinking these, he needs these people to love him, because if he disrespects them, it's a bad day. So I went from thinking why would you want to be here if you were here, then I'm thinking, oh no. Now I'm thinking this is brilliant so then I look at the program and I'm thinking which other executives have figured out how valuable this is and I see the next day at lunch is Boeing Commercials I'm thinking they figured it out but the organization I was within was Boeing Space and they weren't on the program so I contacted a friend that was connected high up in Boeing Space, I said we've got to be in this program, right? So the program ending, it ended nice and I'm thinking wow, wow. So then just prior to lunch the next day is the number two guy for Boeing Commercial. Not the number one. The Monday night guy was the number one. The number one guy for Boeing Commercial at the time was Alan Mulally, it wasn't Alan Mulally, it was his number two person.   0:09:33.7 Bill: So he's up on stage, he's up on stage, he's up on stage. And he's talking to the audience and in parallel Jim Albaugh who at the time was CEO of Boeing Commercial, no Boeing Space and none of Jim's people were there, Jim wasn't there. Jim a couple weeks prior he had asked me to get with his speech writer at a presentation he was doing and he wanted some words in there about investment thinking and all the things we've been talking about in this. He said get with him and put some of that stuff in there put there some of that stuff in there. I said okay. So as I'm listening to the number two guy speak there's a lot of "we" and "you" but who's the we? And who's the you? So I'm making notes to myself to tell Jim don't say "you." Say "we" and make the "we" inclusive, 'cause the guy on stage is, the you and the we and the you and the we, and I said no no stay away from "you" focus on we but make sure they understand that "we" is all of us, right?   0:10:35.1 Bill: So this is what's going through my head and I'm writing it all down, writing it all down and then this guy says and I'll paraphrase. I wish I had the exact words and the paraphrase is pretty close to what he said as judged by what the audience heard, right? So when I heard the comment and I'm thinking to myself, you said what? Then I look around the room and I thought he did. Here's what he said again the paraphrase is: he made reference to those within Boeing that do the real work, and he said it in a way that was present company excluded right? Right, so I hear him say 'cause I'm getting, I'm making literally I'm making notes to myself and then I hear that comment and I'm like, did you just say what I thought you said? And I look around the room with 300 people and I'm thinking, Oh my gosh, you did and I'm seeing I am seeing people irate, you see the body language, right?   0:11:44.3 Bill: And I thought wow, how could you say that? So then the lunch speaker was Harry Stonecipher, the chief operating officer. And he was up, walking around the stage. I don't think he knew anything about what happened prior so he's up there talking, okay. After Harry we're getting back to the program and the guy running the entire event is now up on stage and he's very deliberately he's got a, he's got a piece of paper rolled up, he's walking around on stage, "yeah Scott misspoke no doubt about it. He misspoke, I hear you." I hear you, you are ready Andrew? You are ready, you are ready?   0:12:36.8 AS: Give it to me.   0:12:37.4 Bill: And then he says then he says "But let's be honest we don't make the airplanes." And I thought, really? And as soon as he said that, I had this vision of 250,000 employees, which was about the employment at the time. And so as soon as he said that, I just imagined being at the Everett facility, which is huge, where all the twin-aisle plants are made. And I had this vision of 250,000 people in the building. And the CEO Phil Condit says on the microphone, "Okay, I'd like all of you who make the airplanes to move to the west end of the building."   0:13:26.4 AS: And everybody else.   0:13:27.4 Bill: And it's what you get, is all the flight line mechanics move all the way over there. And then you show up and somebody looks at you and they don't see any grease on your hand, and they say, "ahhh you don't make the airplanes." And you say, "you see that tool in your hand? Who do you think ordered it?" And so this "we" and the "you" stuff, how did "you" do? How did "we" do? It was just, it was...   0:14:00.3 AS: He wasn't deliberately setting up the auditors to be pissed and then to be really, really tough on the rest of the organization. I'm teasing with that.   0:14:12.7 Bill: It was, it is just, I shared that with you and our audience as how uniting language can be and how divisive language can be. And so how did we do, how did you do, and what, with just, this is what I find fascinating is - these words bring people together. What I love, I love watching politicians or State Department people speak and 'cause what dawned on me is they are very deliberate on, I mean they to great lengths to not be divisive.   0:14:57.1 Bill: That's their job. And so they introduce people in alphabetical order, countries in alphabetical order. But they, and I thought, what a neat way of not inferring that the first one I list is the most important one and I just thought there's a just an art of diplomacy. And that's what, to me, that's what diplomacy is, is that the art of uniting, not dividing.   0:15:25.7 Bill: Alright. So now I wanna get into, in the three different groups last week we were doing the trip report and we got down to the hallway conversations and the ME Organization versus a WE Organization. And then a question I asked him was, who are the managers in a ME Organization and what do they do? And you got, those are the ones that set the KPIs. Mark the KPIs, beat you up, sit in their office. Okay. Who are the managers in the ME Organization? What do they do? Who are the managers in a WE Organization? And what do they do?   0:16:01.8 Bill: They are mentors. They're out there on the shop floor, they're working with people. People work for managers in a ME Organization. They work with managers in a WE Organization. So I get that and I think "Okay, pretty good. Pretty good. Pretty good." And then I follow with "Who are the leaders in a ME Organization and what do they do?"   0:16:26.4 Bill: And what's really cool is you get the same answers as the managers. And that's when I started noticing in a ME Organization, we'll refer to the senior leadership team, the senior management team, and we're talking about the same group of people. And I said, what we've just said is that manager and leader are the same. And then I say to people, so what is that message in a ME Organization? The message is, if you're not a manager, Andrew, then you're not a leader. Which means what? Which means you have permission to wait for direction.   0:17:12.5 Bill: Boeing had a leadership center in St. Louis. It was called the Boeing BLC, the Boeing Leadership Center. Yeah, Boeing Leadership Center. And in order to go there, you had to be a manager. You either had to be a first level manager, you would take frontline leadership, a middle manager, which I was, which is leading from the middle or an executive. But the model... So then I think part of the confusion is in a ME Organization, on the one hand we say, our managers are our leaders. If you're not a manager, wait for the direction, wait to be told.   0:17:49.7 Bill: But then we said, we want our managers to be leaders. But that's the ME Organization. In a WE Organization, in a Deming organization, I think of leadership is the ability to bring forth a new order of things, a new order of designing hardware, a new order of designing software, a new order of marketing, we're talking earlier and the ability to create a new order of things and the ability to create a path for others to follow.   0:18:20.6 Bill: And so then in a WE Organization, it's like show and tell. When we were in elementary school, you go in and say, I have discovered this. And I thought, in a WE Organization, everyone has the ability to be a leader on something within their realm. And why would you, why would you make leadership incl...exclusive, which is the ME Organization. And when I tell companies that I consult for I said, when you make leadership exclusive in a ME Organization, to me, that's a kiss of death 'cause you're telling a few people, you're in charge and you're telling everyone else, you're inferring that everyone else, you wait for direction, again.   0:19:09.0 Bill: And I'm not proposing, everyone's all over the place doing it. No. There's got, this is not chaos. And if I have an idea on something and it's not my assigned responsibility, then I know to reach out to you because you're the marketing guy and I just throw the marketing idea to you and then you do with it what you want. But I look at leadership in a WE Organization as being inclusive. And then we get into this idea of, driving...driving change.   0:19:38.0 AS: Let me just ask you about that. Would this really be down to the core principle of Appreciation of a System? That somebody who appreciates a system knows that there's all kinds of components to that system?   0:19:55.5 Bill: Yes, yes.   0:19:55.6 AS: And that you can't say, oh, well this system really is only the people that are working on the production line, when in fact we know that there's all kinds of people working in that system. If I think about my coffee business as an example, we have a hundred employees and not all of them are working on production. And some are moving paperwork and making phone calls and others are out in the field. So an appreciation of a system brings you to the "we" rather than....   0:20:23.0 Bill: Yes.   0:20:23.5 AS: And a person who gets up and says about me, or, tries to identify that there's a certain number of people that are really driving the performance of this company are, they just have no appreciation for a system.   0:20:39.1 Bill: They have a narrow, a narrow view, a narrow view. So what you just said triggered another thought. But, um, the thing I wanted to add to this, in a ME Organization, it's about driving change. And we've talked about this in prior podcast. I go to, you put a gun to your head and I say, I want this KPI by Friday, Andrew. And you're like, yes, sir. And then I said to people in the past is, if driving change is the mantra of a ME Organization, like you're driving cattle driving, driving, and which is not an endearing concept. It is, it is, this is the where we're going. And I say to people, so what would you call it if driving is the ME construct, what is, what's the language of a WE Organization? And people will be wondering "ah," I say "lead, lead, lead." And if we like where you're going, we will follow. That's you creating the path that we will follow.   0:20:40.0 Bill: So I just wanna throw that out. But the other thing you mentioned about the metrics and the design of the organization and the thinking that, these are the critical people. At lunch with an old friend today, and I was sharing with her I taught a course at Northwestern's Business School, Kellogg Business School in the late '90s. And Kellogg then, and today is the number one or number two business school in the country. And I had a friend who was a student there in..., they liked what I was saying. So they hired me to teach a five week course for four years. And I presented, these ideas to them and it was pretty cool. I was, what was exciting is one of them told me that, what I was sharing with them about Deming, you are ready Andrew? contradicted what they were learning in their other classes.   0:22:46.2 AS: Huh. Funny that.   0:22:48.7 Bill: Yep. And so I did that for four years. There were three classes in quality. One was the use of control of charts, mine was called Quality Management, or TQM or something like that. And so there were roughly 80 students in the program, and they had to take two of the three, five week courses. So I got two out three students in the program. Then after four years, they waived the requirement. And so nobody signed up. And so I, um, after, right after 9/11 was when this happened, they invited me back because the person I was working with really liked what the course was about. But they wanted to, make it optional for people to attend. And he said, why don't you come out and talk with them and, that'll inspire them to sign up for the following year. I said, okay, fine. So I went out and he says there'll be 80 people there. I said, why are you so confident? He said, well, we've made it mandatory for everyone to show up. I thought, well that's, I said, that's one way to get people in the room. I said, do me a favor. I said, let them know I'm coming out and I'll have breakfast, I'll have lunch with whoever would like to meet with me beforehand.   0:22:50.7 Bill: So a dozen of them show up. And one of them says to me he says, you're gonna have a, he says something like, it's only fair to say we had a presenter like you last week. And to be honest, it's gonna be a really hard act for you to follow. So I'm thinking, "well, tell me more." "Well, we had a presenter last week who works for a company that makes pacemakers," I'm thinking, okay, "he had a video and showing people before and after their pacemaker one of the fellow students fainted. It was emotional." And I'm thinking, I'm talking about rocket engines. I don't even have a video. It's not gonna be emotional. I let the guy talk. And at one point he says "they keep track." He said "they keep track of who makes each pacemaker." I said "what do you mean?" He says, "they have a list of the people."   0:23:42.9 Bill: Every pacemaker is associated with a team of people who made the pacemaker. And part of what they saw on the video is people who have received a pacemaker now and then go to that company and they meet the people on their team, Andrew, who made their pacemaker. How do you like that concept? Right? Does that, when you graduate from this MBA program, Andrew, isn't that a neat idea that you can take away and use with you? Right? Right? Isn't that a takeaway? Right? So I'm hearing this [laughter] so I said, "let me see if I got this straight. So you're saying they keep track of who makes each pacemaker?" "Yeah, they do." And that's because, when people come well, people come to visit and they keep track. So let's say I said to the student, "let's say I'm the guy who orders the plastic that goes into the pacemaker. Would I be on the list?" you know what he says, Andrew?   0:26:01.9 Bill: No, you didn't make it.   0:26:04.0 Bill: He says, "no," let me try this. I'm the one who wrote the check, Andrew, that paid for the plastic. Would I be on the list? What he says Andrew? "No, you wouldn't be on the list."   0:26:20.2 Bill: So, I said, "well, why not?" And he says, "you have to draw the line someplace." So, I had with me, post 9/11, ready? I had with me a United We Stand two-foot by three-foot poster, which were all over Los Angeles and likely all over the rest of the world, at least the States. So, I held up the poster, and I said, "Have you seen this before?" He said, "Oh, yeah, United We Stand. I'm all about that." I said, "No, you're not." [laughter] I said, "You think you can draw the line and know who contributes and who doesn't, right?"   0:27:02.8 Bill: And you can suddenly see him kind of back up. I said, "Well, let's be honest." I said, "If teamwork doesn't matter, then draw the line any way you want. It doesn't really matter. But if teamwork does matter, be very careful where you draw that line." And to me, in a WE Organization, "we" is, who is the "we"? It's a big list of people. It's the employees, it's the suppliers, it's the customers. And so anyway, it's just that, so what's neat is, go ahead, Andrew.   0:27:41.6 AS: While you were speaking, I was able to go online and find the website of North, what was it? North?   0:27:49.5 Bill: Northwestern.   0:27:50.3 AS: Western, yes. And I was able to actually find the course that you're talking about that was the one that the students said that what you're teaching is contradicting.  The name of that course, I just found it, here it is, "How to apply KPIs to drive in fear and division in your company." No, no, I just made that up. [laughter] "How to apply KPIs to drive in fear and division in your company?"   0:28:16.7 Bill: All right. And so, and we're gonna get to that. So, so as, so I look at management, there's management as a position, but I look at management as an activity of how we allocate resources. And so, are the resources mine or are they ours? And are we proactive or reactive? And then we talked in the past about purposeful resource management, reflective resource, reflexive resource, resource management, which is being highly reactive. Another thing that came to mind. Well, actually, let me jump to the loss function. We looked at last time because I was going through and listening to it. And I thought, let me, let me clarify.   0:29:00.7 Bill: And so when Dr. Taguchi would draw his, his parabolic loss function, a parabola is a curve that goes higher and higher as you get farther and further away from the center. It's like a bell and it just gets steeper and steeper and steeper. And his loss function would be an upward facing bell. And, and then, and he would draw it sitting on the, on the horizontal axis. The idea of being, when you're at the ideal, the loss is zero. And that's, if you're getting exposure to this for the first time, that's okay. But in fact, let me even throw in here a quote from Dr. Deming. Do I have it right here?   0:30:00.4 Bill: Oh, gosh. Anyway, Dr. Deming made reference to, he said, the Taguchi loss function is a better description of the world. And he talks about how loss continuously gets higher and higher and higher. The point I wanted to make is, what I tell people is, once you get used to that concept that loss gets higher and higher, and what matters is how steep that curve is. And so if that curve is very flat, then no matter where you are within the requirements, nobody really notices. And in that situation, you could have a lot of variation 'cause it doesn't show up. It's not reflected in terms of how...   0:30:40.2 AS: And maybe just to help the listener to visualize this, imagine a V.   0:30:44.6 Bill: Yes.   0:30:45.1 AS: And imagine a U. And a V has a very tiny point that is at zero loss. And it very quickly rises to both sides where loss is getting higher and higher. Whereas a very, kinda, let's say, a deep U could have a tiny little loss that's happening for a distance away from the minimum loss point, and then eventually turn up.   0:31:14.4 Bill: Well, but even, even Andrew, and I like the idea of the V. We could also be talking about a V where the sides, instead of being steep, are very flat. So it's a very wide V, and it never goes high because there's situations where, where the impact on integration is very minimal no matter what. All right. So anyway, um, the point I wanted to make is, I would say to our listeners and viewers, loss, the consequences of being off target, are the difference between what happens downstream at integration. And what I love, I went back and listened to the podcast, the one, you talked about your partner in the coffee business.   0:32:12.2 Bill: The point of integration is when they drink the cup of coffee. And that's integration. I mean, the point when they're, when we're eating a food, that's integration. So the piece of coffee is out there, whatever it is. But when the customer's using it, drinking it, that's integration, Andrew. And a...   0:32:32.2 Bill: And so... What I look at is what the loss, loss is the difference between what you see happening at integration and what you think is possible. So if we're at the Ford factory banging things together with rubber mallets day after day after day and you're the new hire and I show you how to do this, as soon as you begin to believe this is how we do things, then loss is zero. Because that's what we think is the norm. But if you have the ability to rise above that and say, I don't think it needs to be that difference, when you look at it and say, I don't think it needs to be the difference between what you think is possible and what it could... Difference between what is and what you think could be that's loss. And what I also say to people is it takes a special eye that you have to see that. It's like your coffee business, somebody's tasting that coffee and you're thinking this is pretty good. Then they say, "well, try this", whoa.   0:33:40.1 Bill: So it takes a special eye to see loss. But then it takes a whole lot of other people to make that happen. So whether that's people in engineering, manufacturing. So a WE Organization is where someone has the ability to see that opportunity, but it's dependent upon all the others to make it happen. So now let's talk about Beyond Management by Extremes. And these are... Has a lot to do with KPIs and also say in one of our last, wasn't the last one, it was a couple before that you had made clear your firm belief that KPIs need to be thrown away in the morning trash. And I remember on the call listening to you and I'm hearing you, we ought to get rid of them, we ought to get rid of them, we ought to get rid of them.   0:34:38.5 Bill: And I'm thinking they aren't bad, it's how they're used. And so I wasn't sure I was in agreement with you on that call. But when I went back and listened to it and that's what what I, what I told the friend is, I said, if you listen to what Andrew says, I don't say anything at the end. And the reason I didn't say anything is I wasn't sure I agreed. But when I went back and listened to it most recently, I said, yes! yes! yes! 'Cause what you said is: if they can be used without an incentive system. And I thought, yes, yes, yes, yes. And so we are in agreement on KPIs, [laughter] they are... But what we have...   0:35:25.2 AS: Which, which my, which my point is, number one, that as long as you don't attach some kind of incentive or compensation system, then, you're not that, you've eliminated a lot of risk that they're causing damage. The second part is a lot of times what I'm looking at is individual KPIs. And what I'm trying to say is that even if you don't add in compensation, it's, it's, it's a fool's errand to try to set up, three KPIs for a thousand people, three thousand KPIs individually and think that now we've got that set. Our organization is going to really rock now.   0:36:06.0 Bill: Well, then what you get is the KPIs are always round numbers. We want to decrease by 5%, increase by... And you're thinking, so how much science getting to these numbers anyway? And you're thinking, but early on in your career, you look at this, you think, well, somebody's thought about this and you realize, no. And so what management by extremes is about is KPIs that are extreme. And so I my PhD advisor in graduate school, I was studying heat transfer and fluid mechanics and and before each of us graduated, went to work in corporations, he'd pull us aside and he'd say, he'd say, "Bill, he said you're gonna be in a situation one day where your boss is gonna come by and is gonna give you.... He's going to give you an assignment, that gives you, he's gone give, that gives you five minutes to figure it out."   0:37:05.7 Bill: And he says, "so, if he or she comes he comes to you, she comes to you and they give you five minutes to figure out, he said there's only three possible answers and I'll tell you what they are and you got to figure out which of them it is and so it'll take you a minute to figure out which one it is. And then the rest of the time you're going to explain it." I remember saying to him, I says, so, "Okay, so what are the three possible answers?" And he says "zero, one and infinity", 'cause it turns out in the world of heat transfer and fluid mechanics, those three numbers show up pretty often as ideal solutions for different cases. And so what he's saying is when your boss comes to you and says, boom, then you have to say, which case is that? 'Cause if that's this case, it's zero.   0:37:51.0 Bill: This case, it's one. This case is infinity. So I thought, okay. Well, in Dr. Taguchi's work, he talks about quality characteristics. So we're running experiments to improve something and a quality characteristic could be as large as possible, infinity being the ideal, the strength of the material. We want to make it stronger and stronger and stronger. But it's referred to as larger is best, meaning infinity is the ideal, smaller is best I'm trying to reduce leakage. I'm trying to make something smoother and smoother.   0:38:25.9 Bill: That's smaller is best. Zero is the goal. And the other one is to get your first who is nominal as best, where a finite number is the answer. And so what I had in mind with this management by extremes, inspired by my Ph.D. advisor, inspired by Deming, Dr. Taguchi, is that, if the KPI is driving to zero or driving to infinity, we want the inventory Andrew to go to zero. We want sales to go to infinity. I said, if you're thinking about things systemically, I don't think zero or infinity is what we're going to do. And so I throw that out as not all the time, but I think quite often if the KPI, if you're working on something where you're heading to zero, heading to infinity, to me, that's a clue that you're looking at something in isolation. And I would say to people.   0:39:25.2 Bill: Let's say you're, you call me in Andrew and you say, "Bill, we need your help getting the cost down of this project." And I say, "well, what'd you have in mind?" You say, "Bill, we'd we'd love to get 10% out of this cost. Boy, 10%." I said, "Andrew, I can double that." "No way. No way" And I say, "Andrew, on a good day, I could do more than that." And then what I say is that the more you get excited by how much we could lower that cost, eventually I'm going to say, "Andrew, gotcha." And you say, "what do you mean?" "Gotcha. Andrew, you're looking at cost in isolation." What's the clue? You'd love it to go to zero. Or... And that's what we end up doing is we want to drive variation to zero. That's the Six Sigma people. Well, first of all, cloning does not produce identical.   0:40:30.6 Bill: Photocopies don't create identical. Dr. Deming would say that of course there's variation. There'll always be variation. And then there are people, and and I cringe. But Dr. Deming was once asked. He was interviewed by somebody I believe with the BBC back in the '80s. And the interview ends with "So Dr. Deming, if we can condense your philosophy down to two, down to two words, what would it be? Or down to a few words, what would it be?" And he said, "reduce variation" or something like that. And I said, "no, it should be manage variation. We should have what the situation needs." And so I'm going to absolute agreement with you. On how can we have KPIs without goals which make make things even more isolated. And then we talk about by what method are we going to achieve those goals? But I think if we're talking about driving variation to zero, then you're looking at things in isolation. If you are driving waste to zero.   0:41:20.8 Bill: then you're looking at things in isolation. If you're talking about, the non value added efforts driving to zero. I'd say value shows up elsewhere. I had somebody within Boeing once say to me "Bill, you know, being on target, you know being on that ideal value, I've had people tell me that once you achieve the minimum size of a hole, going further doesn't add value." And I'd say "If all you're doing is looking at the hole, I can understand that. But if you're focusing on what goes in the hole, that's different." And the other thing I throw out is I was doing some training years ago. There was a guy in the room that I, I mentioned the term "value engineering" 'cause I remember when I got excited by Taguchi's work and Deming's work, somebody said, "The last big training, big thing was value engineering." "What do you mean?" And they pulled out their "That was the wave of the sixties was value engineering." So I asked this guy in class. I said, so, he mentioned he worked at GE back in the '60s and value engineering was really big. So I said, well, "So tell me about that. What was behind that?" He says, “We were taught to look at a contract and all the deliverables. And our job in the value engineering department was to figure out how to, how to meet each deliverable minimally because anything more than that doesn't add value." And I thought, you can't make that up!   0:42:53.0 Bill: Let's look at all the requirements and how do we go to? What's the absolute minimum we have to deliver on the term paper, on the project.   0:43:06.5 AS: How could we kill this through a thousand cuts?   0:43:10.8 Bill: So that's KPIs. Driving to zero driving to infinity. But, but we're in agreement that if you, in a Deming organization where we're not driven by incentives then KPIs are measures of how we are doing. And why isn't that enough to be able to say, how are things? How are things? We can talk about how might we improve this? But then we're going to look at: Is that a local improvement that makes it worse elsewhere? Are we driving costs to zero and screwing this up? So that's what, that's what I wanted to throw out on this management by extremes zero and infinity, and getting beyond that.   0:43:47.6 AS: Well, I think that's a great point to end it went through so many different things, but I think one of the biggest takeaways that I get from this is the idea of appreciation of a system. When you have a true appreciation of a system and understand that there's many parts and, you know, adding value in that system basically comes from more than just being on a production line, for sure and creating value in an organization comes from not only working on improving a particular area but the integration of the many different functions. And if you don't understand that, then you end up in not a Deming organization, not a WE Organization, but more of a ME Organization. That's kind of what I would take away. Is there anything you would add to that?   0:44:51.9 Bill: Well, what, what reminds me of what you're just saying is I was doing a class years ago for a second shift group in facilities people, painters, electricians, managers, and one of them says, he says "so Bill, everyone's important in an organization." I said, "absolutely. Absolutely everyone's important."   0:45:13.2 Bill: Then he says, "everyone's equally important" right? And as soon as he said that, I thought to myself, "I remember you from a year ago." So he says, "So so everyone's important." "Yeah, everyone's important!" "Everyone's equally important." So as soon as he said that, within a fraction of a second, my response was, "No, if you wanna get paid what a quarterback gets paid, you better, you better train to be a quarterback." So what Dr. Deming is not, he's not saying everyone's paid the same. We're paid based on market rates for quarterbacks, for linemen, for software people. And the, and the better we work together, ideally the better we manage resources, the better the profit, we get in the profit sharing, but we're not equal. Our contributions are not equal. The contributions cannot be compared. They are, they're all part of the sauce, but we don't get into who contributed more." Right, and I think that'... We're all contributors.   0:46:28.3 AS: The more you learn about Dr. Deming's teaching, you just realize that there's an appreciation of a system, but there's also an appreciation of people.   0:46:40.1 Bill: There we go.   0:46:43.2 AS: That's really where, as I have said before, when my friend was working with me on my book, Transforming Your Business with Dr. Deming's 14 Points, after many many weeks of working together, he's like, "I figured it out. Dr. Deming is a humanist. He cares about people." It's pretty true. So appreciate the people around you, appreciate the contribution that everybody makes. Nobody makes equal contributions. And even great people who are making amazing contributions could have down months or years where there's things going on in their family or other issues. They're not contributing what they did in the past.   0:47:17.1 AS: That's a variable that we just can't control. But ultimately, appreciation of the system is what I said in my summary. And now I'm gonna add in appreciation of the people.   0:47:30.6 AS: Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion. Again, entertaining, exciting, interesting. For listeners, remember to go to deming.org to continue your journey. And if you wanna keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming. "People are entitled to joy in work".  

Should we strive to better understand what happens "downstream" to our defect-free work? No matter the setting, if our work meets requirements and we pass it on, are we responsible for how well it integrates into a bigger system?  In this episode, Bill Bellows and Andrew Stotz expand on the interaction between variation and systems and why Dr. Deming regarded Genichi Taguchi's Quality Loss Function as “a better description of the world.” TRANSCRIPT 0:00:02.8 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W Edwards Deming. Today I am continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is, in episode 13, Integration Excellence, part two. Bill, take it away.   0:00:31.4 Bill Bellows: Thank you, Andrew. Always a pleasure to connect with you. Alright.   0:00:40.1 AS: Mine too.   0:00:40.1 BB: [laughter] In episode 12, I thought it was great. We shared perspectives on the human side of integration, what it means to be connected, to be synchronous, to feel included, to feel connected, to feel included or connected when something good happens where you're like, well, I was part of that, or to feel separated is when something bad happens. And, we somehow have the ability to not feel associated with that. I pass the puck to you and you hit the slapshot, it goes into the stands, off the goalkeeper. Y'know, girl gets hit in the head and you feel bad, but I go home and I can sleep. And so why is that? And so anyway, but I thought, and listening to it, and I thought it was a lot of fun to look at the human side of feeling connected or feeling separated. And what I wanted to get into tonight, and perhaps in another episode as well, is the physical side of connections.   0:01:46.5 BB: One thing I wanted, and I got a couple anecdotes. I had a woman in class at Rocketdyne years ago, and she said, "Bill, in our organization, we have compassion for one another." And I said, "Compassion is not enough." And, and so you, Andrew, could be in final assembly at this Ford plant, where you're banging things together with a rubber mallet 'cause they're not quite snap fit, and you're banging them together. I mean they all meet print perhaps, but where they are within the requirements is all over the place, and you're having to bring them together. That's called integration. And so when this woman said, in our organization we have compassion for one another, I said, well, that's like me saying, "Andrew, I feel really bad that you're, I can't believe, Andrew go home. You can bang that together tomorrow. You've been banging it together all day." And what I said to her is that "compassion is not enough."   0:02:54.7 BB: When I feel connected to what you're doing, when I begin to understand that the parts you're banging together meet requirements, but how they meet requirements is causing you the issue. Now, the compassion plus my sense of connection, now we're talking. But short of that, what I think is we have organizations where as she would say, we might feel bad for others. And it means I hear about your injuries and your ergonomic training because of all this, but I don't, until I feel associated with that, I just feel bad. But feeling bad is not enough. But I like that, that sentiment. But what I wanna look at tonight is a greater sense of Dr. Taguchi's so called Loss Function and look at more why we should feel more connected to what's happening downstream. So I wanted to throw that out. [chuckle] On the topic of variation, I just started a new cohort with Cal State Northridge University. And this is my, fifth year in the program doing an eight week class in, seminar in quality management. And the cohort model is, anywhere between two dozen and 30 some students that start, the ones I'm getting started a year ago.   0:04:23.5 BB: And they have class after class after class after class. Then a year into the program they get to meet for eight weeks so then onto other professors in the program. So I was showing them, first quarter, second quarter data points from an incident that happened at Rocketdyne years ago. And I was in a staff meeting and the vertical axis is number of accidents per employee. And the horizontal axis is quarter one, quarter two. So the quarter one data point is there, and I don't have the original data, the original data doesn't matter. But what I say to the students is, imagine we've got the first quarter data, what would you expect for the second quarter data? And what's funny is a number of them said, it should be lower. And I said, "Well, based on what?" And it's like, said "Well, we're gonna go off and study what went wrong and we're gonna improve the process."   0:05:20.6 BB: And I said, "Okay, that's all right." So then, I said, "I'll accept that, that's a possibility." Well, then I showed them the actual second data point was lower than the first, which in the meeting I was in, led to the question from one of the senior managers to one of the more, let's say the vice president of operations, "Hey, Andrew, why is safety improved?" To which the executive said, "Because we've let them know safety is important." And so I asked him, "So what do you hear in that?" And we went around and we went around and we went around. It's not the only time it has happened that what they're not hearing is the separation that "we" have let "them" this this. And so in part, I think with my Deming perspective finely tuned. I pick up on those things. And they're not picking on it picking up on it yet which is which is fine. And then but I kept asking, kept asking, kept asking. And then one person said, "Well maybe we need to look for a pattern." I said, "Oh brilliant. What if we've got this run chart of all this extra data?" So then I got them to buy into how easy it is to take two data points draw conclusion up and down. That's called variation. And so it was neat to... The first conversation with them on the topic of variation was really cool. And there's so much more to follow. Well then it, what I wanted to follow with this once upon a time our son when he was in third grade this is 20-some years ago invited me to come to his class.   0:07:07.6 BB: And I don't recall why other than he said, Can you come talk to the class? And I said, Okay fine. So my biggest concern was that the teacher wouldn't know I was coming but she knew I was coming so it was good. So I walk in talked with her briefly and I said I've got some things I'd like to do. She's like oh, I didn't wanna monopolize. But she said okay why don't you show your video? I said I got a video of rocket engines blah blah blah. And then I've got a little exercise I wanna do. Okay we'll do the video then we'll do some reading. So we're doing the reading. And so I'm helping her with the reading. And then what I noticed is now and then a word would come up and she'd write the word on the whiteboard and ask the students if they understood the word. So I clued in, I cued in on that. So when it got to me I wrote the word theory on the whiteboard. This is third graders Andrew, third graders. [chuckle] And I said do any of you know what a theory is? And a one of the girls Shelby whose name I'll never forget, she raises her hand and she says a theory is a prediction of the future. Third grade Andrew third grade! [chuckle] right? Now...   0:08:18.8 AS: And you know what they'd say now they'd say Ethereum is a type of cryptocurrency. [chuckle] Oh Ethereum. No no "theory" not "Ethereum." [laughter]   0:08:30.2 BB: You're right. You're right.   0:08:31.6 AS: Okay. That's a great answer.   0:08:33.9 BB: Well oh but what I tell my students is I didn't correct her. I didn't say well technically a theory is a prediction of the future with a chance of being wrong. But we'll just, I just, oh we'll just stop with that. So I invited her to the front of the room. So she comes to the front of the room and I brought with me this little plastic bag with half a dozen marbles in it. And the bag was also a holes from a three hole punch, little dots of paper. So I held the marble up and I said Shelby I'm going to drop the marble from this height predict where it will land. And what I tell students is she was able to predict where it would land without any data.   0:09:18.3 BB: So she predicts the first data point, the marble lands someplace else. I marked the spot with a marble. I then said okay Shelby I'm gonna drop it the second time. Where will it land? And I'll ask people in class so where do you think she predicted, exactly the same spot of the first drop [chuckle] Exactly right. That's what we do as adults. And so we went through this cycle again and again. And and finally after about 10 drops where these you know 10 different dots on the floor I said Shelby where's it gonna land? And she drew a circle, she said somewhere in here which is kind of like a control limit you know kind of thing.   0:09:55.9 BB: So the one thing I'll say is and I'm sure you've heard people say well you can't predict the future. No, as Dr. Deming would say [chuckle] you know he gave the example you might recall of how will I go home? I'm gonna take a bus. Will the bus... I'm gonna take the train. Will the train arrive? And so I'd ask adults in the class that says how many drove here today? All the hands go up. And I said so at the end of the day will you walk in the direction of where you left your car? Yes. What is your theory? It's still there. [chuckle] Is that a guarantee? No! [chuckle] So I throw that out as a predictions and her sense of variation and this sense of a third grader not acknowledging, I mean one understanding having some sense of a theory, not a lot of understanding of variation but I don't think that's unique to third graders.   0:10:51.8 BB: So that brings us to...there's variation. We can look at the variation in the Red Beads. Okay the Red Beads are caused by the system not the workers taken separately. Then we got into variation and things that are good. And when I introduced the students to last night in class is, I asked them "So how often do you go to meetings where you work to discuss things that are good and going well?" And I get the standard answer, "rarely." I said, "Well, why is that?" "Well 'cause we got, we're focusing on the bad." They said, "to make it good." "Well why do we focus on the bad to make it good? Why don't we focus on the good?" "Well the good is good." And we went around the room, went around the room online and and I said "what's the likelihood that we could prevent bad from happening by focusing on the good while it's good?" And it's like, "...interesting." And so where that leads us to is, is two aspects of looking at things that are good.   0:11:57.1 BB: One is the better we understand the variation of things that are good whether that's on a run chart or a control chart. My theory is we could prevent bad from happening by keeping track of the bad. Whether it's your pulse, your weight, [chuckle] how much gas is in your car. And so there's if we focus, if we pay attention to the good with some frequency you know every second, every hour, once a month, whatever it is, we could prevent an accumulation of damage to an appliance at home. Another aspect to focusing on things that are good is that it can improve integration which is boom, here we are. And that integration that I mentioned last time that understanding integration could be looking at candidates for a new hire and looking for who is the best fit because there's degrees of fit. Fit is not absolute. Last time we talked about reflections of an engineer who is worried that his hardware on the space shuttle main engine may have contributed to the disaster of the second... Of the Columbia space shuttle blowing up in reentry. Well let me share another story from a coworker at Rocketdyne.   0:13:19.8 BB: And this guy's father worked at Rocketdyne in the '60s. So in 1999, 30 years after the lunar landing, there's news teams, you know, from the local TV stations and television. It's 30 year anniversary of the Lunar Landing. And Rocketdyne was known for the Apollo engines that get the vehicle off the ground, as well as the engines that got the, Orbiter off the moon. So there's an article in the newspaper a couple days later, and this coworker is quoted and he says, "Boy, I would've loved... My father worked here back in the '60s, just to be a fly on the wall would be so cool. Oh my gosh, it'd be so cool." And the article ends with him saying how exciting it is to feel like you're part of something big. That's what we talked about last time.   0:14:09.8 BB: And I used to use that quote from him on a regular basis because it, the article was about something that happened at Rocketdyne. Then I would share that this is a quote from a coworker. And after quoting him for several years, it dawned on me, I've never met this guy, so I call him up one day and he answers and I say, "Hi, this Bill Bellows." And he laughs a little bit. And I said, "have we ever met?" And he says, "No, no, no," he said, "But you quote me in your class." And I said, "Well, I apologize for never calling you sooner." I said, "I do quote you." And I said, "Let me share with you the quote." I said, "you feel how exciting it is to feel like you're part of something big?" To which he says, "I wish I still felt that way." [chuckle] And I said, "can I quote you on that?" And so you can join an organization with this sense of being connected, but then depending on how the organization is running and you're blamed for the Red Beads, that you may lose that feeling.   0:15:15.6 BB: And on another anecdote, it's pretty cool. Our daughter, when she was in fourth grade, was in a class, they were studying water systems. And the class assignment was to look at a, they had an eight and a half by 11 sheet of paper with a picture of a kitchen sink on it, like a 3D view of a sink with a pipe out and a pipe in. And the assignment was, we're about to study water systems. How does the water get to the sink, where's the water go?   0:15:47.2 BB: And so my wife and I were there for the open house and there were 20 of these on the wall colored with crayons showing all these different interpretations of water coming in, water going out. And I was fascinated by that. And eventually got copies of them and the teacher wasn't sure what I was doing with them. Well, I turned them into laminated posters. And so I gave one to our daughter one day. I said, take this to Mrs. Howe so she sees what we're doing. And so the following weekend I bumped into this woman at a soccer field, but she wasn't dressed like a teacher. She's dressed in a hoodie. And she says to me, "Allison shared with me the posters." And I'm looking at her thinking, "how do I know who you are?" She pulls the hood back. She says "I'm Allison's fourth grade..." Oh! I, her comment was when Allison shared with me how you're using those posters, handing them out, and people are inspired by them. And she says, "I cried." So that you get that emotion for free Andrew. [chuckle] Right. And that's all the integration stuff.   0:16:58.5 BB: Now let's talk about Dr. Taguchi and his Loss Function. So, um, the Taguchi Loss Function says Dr. Deming in Out of the Crisis is a better view of the world. The Taguchi Loss Function is a better view of the world. Dr. Taguchi says following...   0:17:15.3 AS: Wait a minute. I was confused on that. You're saying Deming is saying that Taguchi is better, or Taguchi is saying Deming's better?   0:17:22.3 BB: Dr. Deming in The New... In Out of the Crisis, Dr. Deming wrote "the Taguchi Loss Function is a better view of the world."   0:17:30.3 AS: Okay, got it.   0:17:34.5 BB: And that's what amongst the things that I read into Deming's work and I thought, boy, that's quite an endorsement. Dr. Taguchi is known for saying quality is the minimum of loss imparted to society, to the society by a product after shipping to the customer. So what does that mean? And we'll come back to that. Deming met Dr. Taguchi in the 1950s. There's a, at least once, there's photos I've seen in Deming's archives of the two of them on stage at a big statistical conference in India, and I know they met in September, 1960 at the Deming Prize ceremony where Dr. Taguchi was honored with what's known as the Deming Prize in Literature. There's Deming prizes for corporations, and there's also Deming prizes for individuals.   0:18:35.0 BB: And Taguchi won it 1960 for his work on the, on his, this quality-loss function concept. 1960. So then in 1983, Larry Sullivan, a Ford executive, was on a study mission to Japan, and he wrote an article about this for the American Society for Quality in 1983 the title of the article is “Variability Reduction: A New Approach to Quality,” so if any of our listeners are ASQ members, well I'm sure you can find a copy of it. The Variability Reduction: A New Approach to Quality. Well, Andrew in 1983, Sullivan's article, 23 years after Taguchi's awarded this Deming Prize in literature, I'm convinced that's the first time Taguchi's Loss Function was heard about in the States. 23 years later. And in this article, Sullivan says, he says, "In March of 1982, I was part of a group from Ford that visited Japan, we studied quality systems out of variety of suppliers," this is ostensibly the first time the auto industry in the States is sending people to Japan.   0:19:52.8 BB: Right so 1980, summer of 1980 is the Deming documentary Why Japan? If Japan Can, Why Can't We? And so here Ford is in 1982, sending a team over. I know it was the late '80s, I believe, when Boeing sent executives over. So then in this article, he says, "The most important thing we learned, right, in this study mission, is that quality in these companies means something different than what it means in the US. That it's a totally different discipline." And so this is like the beginnings of people hearing about Dr. Deming in 1980. They're now hearing about Dr. Taguchi's work through Larry Sullivan. And it turns out Larry Sullivan and Dr. Taguchi became business partners and set up Dr Taguchi's consulting company in the States, which still exists. So they became fast friends and I've met the two of them many times.   0:20:53.6 BB: What Taguchi is saying is, is when it comes to things coming together, we talked about integration, whether that's combining, mixing, joining, weaving, this is the synchronicity. So in sports, we're talking about not, not where I am on the field, but where I am relative to the others, in music, and we're talking earlier about music and I've, I've played a musical instrument one time, Andrew with a group and I was with a, hockey band on a road trip when I was in college. And the cymbal player, they were missing, so they asked me to bang the cymbal, "you want me to do what?"   0:21:36.9 AS: When we signal you.   0:21:39.4 BB: So I'm boom! and what I didn't realize is I'm controlling the pace, like being in is like, okay, slow down, slow down. And I and a former student last year in the Cal State Northridge class who plays with one of the Beach Boys, and I went to watch her in the play and I was asking about these speakers, which are on stage, facing the players. And I said, so what are those about? She said, "Those help us stay synchronized." I said, "what do you mean?" She says, "the speakers next to me," she's the keyboard player. She said, "What I'm listening to in those speakers is the drumbeat. I need to make sure that I am playing synchronous with a drummer." And then what about the others? "Well, the others have their own speakers synchronized. They get to select who they wanna be synchronized to." And so I throw that out because we take for granted when we're listening to Coldplay, whoever these musicians are, we're not paying attention, at least I'm not paying attention to what if they're playing it... What if they're not as synchronous? How would that sound? 'Cause we're so used to it sounding pretty good.   0:23:00.1 BB: And, um, so there we go with synchronization and things fitting together, it's not just that the note was good, but is it played at the right rhythm and pace and, um, you know, with timing. So we talked about the Loss Function. We talked about last time about ripeness of fruit. Depending on what we're doing with the bananas, we wanna put it into a muffin mixed or eat, slice it up. Are we looking for something soft and hard? And I say that because what Dr. Taguchi is talking about is for a set of requirements, a min and a max, we're used to a sense of anything between the min and the max is okay, is "good."   0:23:45.2 BB: What Taguchi is saying is there's the possibility that there's an ideal place to be. And how do you know what that ideal place to be is? Well pay it, as you're delivering that piece of fruit to the next person, whatever it is, to the next person, deliver them something on the very low end of the requirement and see what they do with it. Then, it could be the next hour or the next time you give them something a little bit, a little bit further along that axis. How are they doing? How are they doing? How are they doing? And what you're looking to see is, how, how does, what is the effect of where you are within requirements on them? And this is how Toyota ends up with things being snap fit, because they're not just saying, "Throw everything to Andrew in final assembly." They all come together.   0:24:42.3 BB: My theory is they're doing what we do at home, at home I create the part, I cut the piece of wood. I'm, making the part, but I'm also using it. So I'm the one responsible for the part and integration, in a work setting that may not be the case. So what Taguchi is talking about is there could be a sweet spot in the requirement. And so towards that end, if we're talking about baseball in a strike zone, the World Series is teams are defined, not that I was gonna watch this year, the Dodgers, we're out of it. But in baseball, there's, for those understand baseball, there's a strike zone. If the ball somewhere in that rectangular ball zone is called a strike, outside is called a ball. And depending on who the batter is, it might not matter where the ball is in the strike zone, 'cause this player can't hit the ball anyway. But for another player, you may have to put that strike somewhere in particular to make it harder for them to hit. And that's what the loss function is about, is, is paying attention to how this is used and I wanna share a couple of stories that are, one that's kind of hard to believe. Well, I'd say one that's easy to believe. As you're driving down the highway, Andrew, in Los Angeles, right? You've lived out here.   0:26:07.2 AS: Oh, yeah.   0:26:07.4 BB: And no matter where you're driving down, right, do you stay to the left side of the lane, Andrew? Do you stay to the right side of the lane? Or do you kind of go down the middle of the lane, Andrew?   0:26:17.9 AS: I'm kind of middle of the lane guy.   0:26:20.5 BB: Yeah. And I think that people in the other lanes, you know, like that 'cause I know when I drift to the left, you're like, Hey, what are you doing? So being towards the middle is saying, I get the entire length of myself, but being down the middle is probably, what is that? It's minimum loss to myself and others. So I spoke at a, at a NASA conference ages ago and learned, this is uh '97, '98 timeframe, and I learned that the two greatest opportunities for destruction of the space shuttle are at launch, you can have a catastrophic failure, or at landing. And so at launch, it could be a problem with the engine, any of the engines or the solid rocket motors. Okay, so that I can understand. But I'm thinking, what's the issue with landing? Well, I say, well, the issue with landing at that time was the space shuttle's coming in at a couple hundred miles an hour.   0:27:24.9 BB: And when you're landing on a dry lake bed called Edwards Air Force Base, it's not a big deal. You got all that open space anywhere you want. You just get her down. But then in that timeframe, NASA converted. It was easier for them to have the shuttle land in Florida because they don't, they don't have to fly the shuttle across country. The shuttle is going to land there, launch there. So what they were talking about is, a lot of the pilots for the space shuttle are military pilots. They're used to landing in the center of the runway, Andrew, in the center of the runway. Why? 'cause they're landing on an aircraft carrier. And if I'm a little bit too far from the center, one way or the other, I either crash into the structure or I'm in the ditch and enter the water. So they've got these military pilots landing the space shuttle, wanting to be right down the center. And so they said what happened was if they land and they're a few feet to the left or to the right, going a couple hundred miles an hour, should they quickly steer the nose gear to be on the center?   0:28:32.5 BB: And he said, when you're going that fast, if you steer, you may cause the shuttle to just flip. When you're, once you touch down, don't steer to the center of the runway. Just go, go straight. No more steering. And they kept having this message and it kept being ignored and they kept having the message that kept being ignored so what was the solution, Andrew? You ready?   0:28:58.7 AS: Yes, here, tell me.   0:29:00.8 BB: They painted the center stripe to be wider. [laughter]   0:29:05.5 AS: I was thinking they were going to paint like 10 stripes so that there was no center one.   0:29:10.3 BB: So the center stripe is like three feet wide. You can't miss it. Well, and so I use that because what they're saying is when you land at the Kennedy Space Center, you could be off target left and right a lot, and it's not a big deal, we got a lot of space here.   0:29:29.4 AS: Yep.   0:29:29.6 BB: And what does that mean relative to loss of the vehicle, relative to bad things happening downstream? The loss function that Dr. Taguchi would describe as a parabola, and a parabola being a curve that has a minimum, and then the curve goes up faster and faster to the left, faster and faster to the right. That's if the parabola opens up, it could open down. But in this case, Taguchi draws the loss function as being opening upwards as like a bell and it gets steeper and steeper. But, what, but depending on your system, it could be very steep, which is you're landing on an aircraft carrier, or it could be very shallow.   0:30:13.6 BB: So when I ride on a bike trail in Santa Clarita where I live, I go down the middle of the bike trail. And to my right, depending on which direction I'm going is a split rail fence so I don't go into the Arroyo, which is this gully for all the water running off. And so there's... I go down there and the worst, I stay away from that split rail. When I ride in Long Beach where you went to college where our daughter lives, there is no split rail. So I stay not in the center when I ride in Long Beach. I ride to not the center of my lane, I steer closer to the to the center of the overall lane, which means I'm closer to the bikes going the other way. And that's and that's my understanding of: I go off that off that side is gonna be a bad day.   0:31:08.0 BB: And so that's what Taguchi is saying relative to the loss function. But I think a better way to think about loss, I think that may be kind of a weird concept. I think if we think about integration, and in making the integration easier or harder. So again, if we're talking about space shuttle landing, maybe the loss makes sense. But if we're talking about putting things together, we've talked about the snap-fit that Toyota pickup truck that Toyota was producing in the late 1960s. And what struck me when I first read that is, Holy cow, they've developed a system of hardware which goes together without mallets, and I immediately associated that with what I had heard that Dr. Taguchi was influencing, working with them, consulting with them back in the '50s. And I thought that kind of fits. And so why aren't things here in the States, why are they being banged together? Because over in the States, going back to Larry Sullivan's article, we've got an explanation of quality which is "part" focused. Everything meets requirements. And so what really amazed me is that Toyota in the late '60s, had things which were going together well.   0:32:25.9 BB: Ford in 1982/83 timeframe, they had been working with Dr. Deming for a couple years. They discovered that a transmission they had designed and were building was also being built by Mazda. And part because they owned one third of Mazda and they were outsourcing production. And these transmissions went into Ford cars. And what I've mentioned in a previous episode is that the Ford warranty people figured out that the Mazda transmission, which was designed by Ford, but built by Mazda, had one third fewer complaints than the Ford transmission designed by Ford, built by Ford. And in this study that Ford did, led by their executives, and then they sent out the documentation to their supply chain and it, and it talked about the need to... Their explanation was what Mazda was doing was what's known as "piece to piece consistency." And what they found is that the parts, instead of being all over the place in terms of dimensions and whatnot, that they were far more uniform, yet what you won't hear in that video, what they talk about is within Ford, we're all over the place we're consuming the greatest, a big portion of the tolerance. We've got scrap and rework. But these Mazda parts, boy they only consume a fraction of the tolerance compared to us. And that's the difference. And that's the difference.   0:34:02.6 BB: And so what I wanna close with is, having less variation is not the issue that gets us back to precision, but not accuracy. So my explanation is that Mazda was actually focusing on accuracy - being on target of the respective parts. And as a result, they got great functionality outta the transmission. But what Ford, at least, I'm willing to bet the path Ford was going, was saying, "oh look Andrew, their parts are more consistent than ours. Consistency is the name of the game." And that's precision, not accuracy. So what I wanted to do tonight is build upon what we did last time, bring it to this loss function as being a parabola. Depending on what happens downstream, you don't know how steep that parabola is, and not knowing how steep it is, we don't know how much effort we should spend on our end upfront providing those components to improve integration 'cause we don't know how bad the integration is.   0:35:17.6 AS: And that's a wrap. Bill, on behalf of everyone at the Deming Institute, I want to thank you again for the discussion and for listeners, remember to go to deming.org to continue your journey. If you want to keep in touch with Bill, you can just find him right there on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming. "People are entitled to joy in work."

What does it mean that people feel connected and included when something good happens yet dissociate when something bad happens? In this episode, Bill Bellows and Andrew Stotz discuss the human side of integration. TRANSCRIPT 0:00:02.9 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today, in today's episode, number 12, is Integration Excellence. Bill, take it away.   0:00:32.2 Bill Bellows: Thank you, Andrew. So before we talk about integration excellence, I wanted to throw out a couple thoughts. And listening to the podcast, I was reminded that when I share examples, there are times when I mention companies by name, and there's times I don't. And my hope is that people in those organizations don't feel offended. So what I found with students is, if I use the name, there's the risk of someone in the class having worked for that company who feels offended. If I don't use the name, then there's a sense that I'm making the stories up. [chuckle] So I just want to say I um... But there are... What I find is that most organizations are run with what Dr. Deming would refer to as a prevailing style of management, in which case examples such as replacing the cardstock paper with regular paper, and all organizations have those types of stuff. So I just want anyone to feel offended by that.   0:01:40.1 AS: Well, we can make an announcement.   0:01:43.3 BB: Go ahead.   0:01:45.3 AS: Remember those shows that we used to watch that says the names have been changed to protect... but here we're going to say the names have been changed to protect the guilty, [chuckle] not the innocent.   0:01:57.3 BB: Well, there are some stories, I can't share the names for a number of reasons, but they're all the same. Anyway, next thing I wanted to share is, again, on a recurring theme, we talked in the past about red pen companies and blue pen companies, or me and we, or last straw and all straw. And I was recently in... I was in the Netherlands last week doing a class live session for a group that I'm just starting to work with, and we did a physical simulation, a live experiential thing that built upon all the ideas we're talking about here. And I had the group do the trip report, looking at blue pen companies and red pen companies, or however you want to look at the contrast.   0:03:00.1 BB: And we talked about what are the hallway conversations in both organizations? And another was, what are the survival skills in both organizations? And the fairly straightforward survival skills in a last straw organizations are, be really good at shifting blame, be really good at hiding errors, hoarding information is power. And I look at, what are survival skills in a blue pen company or an all straw organization? That's sharing knowledge as power as opposed to hoarding it, it's sharing it. And so we got into those, all those, the usuals. And then I said to them, "Okay, so imagine we are, here we are in a last straw organization, I'm the president of the company and we're in a Friday afternoon staff meeting.   0:03:56.7 BB: And because it's a last straw organization, that means you work for me." I said, "If it was an all straw organization, you would work, and people always say with,": I said, exactly, it's with versus for, but it's a last straw organization. So you work for me. I walk in to the end of the week staff meeting. I apologize for running late. And then I turned to you and say, "I just got off the phone with a customer. I need to know who's responsible for last week's shipment." And then I turned to you, Andrew, and I say, "Andrew, was it you?" And you say, "No, it was Joe." [chuckle] And then I go to Joe and I say, "Joe, according to Andrew, it was you. And he says, "No, no, no, it was Sally."   0:04:44.6 BB: And then I'll go to Sally and actually I won't go to Sally. I'll then go to somebody next to Sally and I say, "It sounds like Sally was involved in this. Can anyone corroborate that?" Then someone else raised their hand and said, "Okay." 'Cause in the olden days, we went by one witness, but nowadays we need two witnesses. Okay, so we've got two witnesses. So, okay, Sally. So then I turned to Sally and I say, "I need you in the front of the room right now." And they're like, "Right now you want me to come?" "Yeah, I want you to come to the front of the room in front of the entire class."   0:05:18.0 BB: And I've had times people get really anxious. I've had times when people walk up on stage and they're like, "You want me to... " "Yeah, I want you up here right now." And they stand alongside me and I say, "So Sally, I understand you're responsible for last week's shipment." And she's like, "Uhhh, yes." And I say, "I just want to thank you. The customer has never seen such high quality before." [chuckle] And then there's this great sigh of relief. And I turn to the audience and I say, "Meet your new boss, same as your old boss." And then kid them that this is a point of time where Andrew says, "Oh, well, I provided the packing tape... "   0:06:00.6 AS: Yeah, I was involved.   0:06:00.7 BB: "That allowed that to happen." And then somebody else says, "And I licked the stamp and put it on... " So what you get is, in a last straw organization, what you have is failure is an orphan, as John F. Kennedy would say, and success has many fathers. So what I point out to them is survival skill in a last straw organization is now and then it might be good news. So when everybody else is playing duck and cover, that might be your opportunity to ask for a little bit more information and find out something good happened. Now you raise your hand, you get promoted because you're now the one who was responsible for this. And then the others then realize, "Well, wait a minute, I played too." And so what I find interesting is in organization is, we don't know if we were connected until we know it's good news or bad news.   0:06:55.2 BB: So what you get is situational association. And that leads me to a real story. I was mentoring a young engineer who worked in the Space Shuttle Management Program at Rocketdyne and I was, had been away, I was in England for about a week. And so I was just getting back to work. And on the day I landed in England, I landed at 9 o'clock in the morning. So it was middle of the night back in Texas. And so I walked in, my friend, Alan Wendlandt picked me up at the airport as usual. We went back to his home, walked in the front door and his wife's in tears because the Columbia shuttle had blown up on re-entry.   0:07:46.9 BB: And so back in the States, people are, yes, middle of the night. So I get back to work the following week. There's an engineer I met with regularly and he comes into my office and he tells me that, you know, what it was like. I said, "So... " I wasn't there. It was the first time I was at Rocketdyne when a disaster happened. Back in '86, I worked in Connecticut, wasn't on the program, wasn't at Rocketdyne. So it was interesting that, so I said, "What was it like?" And he said, "Everyone got a phone call. Everybody goes to their station and we follow this protocol." And I said, "So what was the protocol?" He said, "Every component, team, every component team in the space shuttle and men engine goes through their hardware, looking to see, could they have done something?"   0:08:39.5 BB: 'Cause he said, the early indications were it could have been a spark in the engine cavity, the rear, and that could have led to, led to, led to. I said, "So what'd you do?" He said, "Well, we each went through our planning." And he said, he in particular was thinking, "Oh my God, oh my God, oh my God. We recently came up with a new version of one component. I hope we followed the new process." And he's panicking. He said he was feeling a lot of anxiety over this. Yeah, at first, until he goes in and he's thinking, "Oh my God, oh my God, did we follow the new process?" 'Cause if not, that could have been a contributor. So he found out that he did follow the new process. Which means what, Andrew?   0:09:29.7 AS: He feels relief.   0:09:31.9 BB: A huge sigh of relief, because he followed the process, he's no longer associated. And that's what I started thinking is, we go through life and there's times we feel connected and there's times we dissociate. And I asked a psychologist friend years ago, and I said, is that how we survive? We have the ability to feel connected sometimes and other times we dissociate. There was a hockey game in the National Hockey League in the early '90s where on a shot off the goalkeeper, the puck went into the stands and hit a teenage girl. She would, eventually into a coma, died a few days later. And so I have the headline and the headline says, "Player Distraught Over Death of Girl."   0:10:29.5 BB: And so I would show people that headline and say, "Which player is distraught over the death of the girl?" And people say, "Well, it's the guy who hit the slap shot…was the one feeling distraught." And I thought, why not the goalkeeper? Why doesn't the goalkeeper feel distraught? What about the person who passed the puck to the one who took the slap shot? How do they feel? And so this is this last straw mindset that, and I think psychologically we go through life and if we were that last straw, we feel all this weight. And if we're dissociated somehow, we don't feel it. Well, integration is about understanding how things come together.   0:11:14.7 BB: And in the world of integration, there is no separation. It's it's understanding that there's many contributions to the performance of a system. And I used to ask students, "If I gave you a 10 minutes to list all the people who contributed to who you are, would you miss some people?" "Yes." And then once you come up with a list, could you measure their contribution? And measuring it means that number, if you take all those numbers, like 10% from your mother, 10% from your father, X%, you add them all up to 100. There's no such thing. So in the world of integration that I wanna get into with Dr. Taguchi's work, it's about understanding that things are connected as in an all straw mindset. They are not separate. Okay?   0:12:10.2 BB: So then next I wanna get into, I've taken, I've been fortunate to take some training in the Lean manufacturing, Lean management, Lean thinking, whatever you call it. And it's not uncommon, there'll be simulations where there's a bunch of parts to put together a car, or you're building something out of Legos. And there's a model, you need so many rectangular Legos of this size, so many square ones and you... And, you know, we're creating a flow, putting all these things together. And I've been in situations, university classes where the students are doing that and they're doing that ahead of me presenting something to them. And I remember one time, they're putting, you know, these cars together, they had four wheels and a little motor and a windshield, and they're putting it all together, this assembly line.   0:13:02.6 BB: And I participated in that. And then when it came my turn, I held up a tire. And I said, what is this? And they said, "It's a tire." And what is this?" That's a tire." I said, "Are they the same?" And they're like, "Yeah, they're the same." I said, "Well, actually they're not." If you understand variation, and no two snowflakes are the same, then no two tires are the same. And so I say that because we get stuck in this model of: if the parts are good, which means they conform to a set of requirements, then the sense is because they're good, when we pass them onto the next station, then they all come together, just like that, with no effort.   0:13:48.9 BB: And I say, sometimes that's the case. There could be degrees of effort, but this model that says, because they're good, they fit. And then we treat good as it's good or it's bad, which is black and white. It fits or it doesn't. And then the model we have is because they are good, all the things that are good are equally good, and then they fit equally well. And that's just not the case. And an everyday example would be going to a supermarket and sorting through the fruit. And I would ask students or attendees of a seminar to say, if I told you all the fruit in the supermarket was bruised or otherwise physically damaged, would you sort through it? And there'd be people that say yes, and then people say, no, I don't sort.   0:14:35.8 BB: Well, I point out is the reason we sort through the fruit is because there are different ripenesses of the bananas or the oranges different levels of juiciness. And our needs depend upon either something very juicy or very ripe or something green or something that's gonna be ripe later. What is that? That is saying that we're looking at the integration as we're going to use those oranges and integrate them into our breakfast by making orange juice out of them or taking the banana and turn it into a smoothie. So the bananas and the oranges don't exist in isolation. We have a sense of how we're going to use them. And then we have a sense of how much variation do we want or more so within a set of requirements, we're looking for something in particular and we're looking for a particular parking spot. We're saying there's all these parking spots and we're looking for the one with the most shade because there's degrees of shade. When it comes to hiring...   0:15:39.5 AS: Bananas is a good example because if I'm just gonna buy the banana to eat it, it needs to be reasonably ripe. If I'm gonna buy it to put in a smoothie, it's less critical that it's ripe.   0:15:52.3 BB: That's right. Yes, exactly. And what we're saying is that your integration of that banana depends upon its use. Since you have in mind I'm making banana bread, what does that mean? I want one which is very soft, it doesn't really matter because I'm not eating it as I'm out cycling. Then when it comes to what I've also shared with students, you'll say, well, is there a place for meeting requirements? And that's all. I said, yeah, there's a place for meeting requirements and that's all we need. And then there's a place for going to the next step and saying, I want the juiciest one, I want the freshest one, I want a parking spot which is furthest away from the door, closest to the door. And the same thing happens with staffing.   0:16:37.3 BB: We hire, we're looking to fill a position in our organization, we post something on LinkedIn and we put down the requirements we want and we go from 20 people down to three people. We invite them in for an interview. And what are we looking for? We're looking for, on paper we're saying these people are relatively…on paper, they are the same. The reason we're inviting them in is we want to know what is the degree of fit of each of these people into our organization? And what we're saying is fit is not absolute on a scale from zero to infinity, where are these people on that scale? And our judgment is which one fits in best.   0:17:18.7 BB: I'd say the same thing goes in when you're dating, thinking about marriage or thinking about a long-term relationship even with a supplier, you're looking for degrees of fit. And that's where Dr. Taguchi's loss function comes in. What he's saying is, is all these things meet requirements but depending on how the requirements are met from the very minimum to the very maximum, chances are there's a place in there which has the best integration. And that could be it goes together the easiest. And then, and then in terms of integration excellence, what I want to speak to is shifting from the model that things are good, then they fit. And then when you turn the thing on, it works. That we think about an alternate model, which is there's degrees of good, which leads to degrees of fit, which leads to degrees of performance. And an advantage of that model is it allows for improvement. The model of good equals fit equals works. How do you improve once you get everything good? And that goes back to a far earlier conversation we had over the red beads and the white beads. And of all the beads are red or gone, we're stuck with the white beads.   0:18:39.0 BB: Can we continually improve? Yeah, when you begin to think about improving integration, what we've also spoken about, Andrew, is, you know, we ended a conversation, you said, "So what's the aha moment for people listening?" And I said, "Would you like your organization to be known for products or services that integrate incredibly well in terms of how they perform in the use, as used by a customer, whether their customers are using it exactly or next immediately, or it gets plugged into their system. And do you wanna have... " The reputation that I find... Well, the reason I buy Toyotas is they tend to last very long. And I associate that with their appreciation of Dr. Taguchi's work, which supposedly goes back to the '50s, that they are looking at the parts as a system, how they work together and looking, not just meeting requirements minimally or maximally, but trying to find out where in the requirements of the associated parts should you be for this entire system to come together easily on a scale from zero to infinity and perform incredibly reliably. Andrew, you're gonna say?   0:20:01.0 AS: There's a couple of things. The first one, when you talked about the act of separation that people go through when blame's being tossed around, as an example, let's say, but it's happening all the time. What I was just thinking about is that act of separation is in their mind only.   0:20:20.5 BB: Yes, absolutely.   0:20:21.6 AS: Just because, just because you declare separation doesn't mean that there's not integration of the system. You're just denying it, running away from it. And the other thing I was thinking about about Toyota, it's a very interesting situation with Toyota because the company's being totally beat up for not having electric vehicles to the level that the market wants them to have, the investors want. And when you go against the, the EV crowd, the people that want this for climate or whatever reason, you're gonna get beat up. And they really have been attacked. And to the point that their share price went down seriously low. But when you listen to the CEO of Toyota, he's trying to speak in a system thinking way.   0:21:13.2 AS: He's trying to develop hydrogen as a possible solution. He's got hybrids. Yes, he hasn't moved as fast on the EV, but he also sees other problems. And he sees the research and development that they're doing, which they've just recently announced that they've got some fast charging and long mileage EV vehicle. And so he's trying to manage this whole system. Whereas take a weak manager or a manager, maybe he just... The CEO came in for the last five years or so at Ford or at GM or wherever. And they're like, "Hey, the market says EV, let's go." And then without thinking about the whole system, they end up losing billions of dollars in EV. Whereas now I think that what I've seen with Toyota, and the reason why I'm talking about this is because I've been working with students in my valuation masterclass.   0:22:10.5 AS: They're valuing Toyota and some say it's a buy, some it's a sell, some are beating them up just like the crowd is on EVs, but others are seeing, some, that integration. But ultimately the job of a manager, I guess, is to figure out, I like the degrees of fit. That is such a great thing of how it's good enough. Like Taguchi's loss function was specifically can be a tool to look at one particular thing. But the idea of then bringing that all into the whole system is fascinating. And it's hard.   0:22:44.3 BB: Oh, yeah.   0:22:44.9 AS: The last thing I would say is it's hard. And I think most people, most managers spend their lives trying to break that because it's just too hard to manage. I would rather say, "Okay, you guys do this. You're responsible for this. You're accountable for this. And you guys do that. And I want accountability around here." It's just, it's easier. It's hard and complex what you're talking about.   0:23:12.2 BB: Well, and let's go back to this, this separation. And I don't, and a couple of things come to mind is, one is when the young engineer found out on the Space Shuttle Main Engine that his component was manufactured using the most current process, he was able to go home and sleep. So what I would propose is that we live in a society where when our task meets requirements, we don't, we can separate it. And that's what that, failure is an orphan. It wasn't...It wasn't…I didn't contribute to that. I passed the puck to you. You're the one, Andrew, who hit the slap shot. It wasn't... Yet, let's be honest that, where the, where the puck ended up that you hit did contribute. But that's what I find is, is that the newspaper article says, "Player Distraught," which player? You who hit the puck last.   0:24:39.9 BB: And then I thought, well, I wonder if we ran a study at what point would the goalkeeper, the goaltender feel responsible? Yeah, because it's just, it's off his or her stick. And that's what I find is that we have the ability to separate physically. So when I hand my part off to you, I'm separating physically, but then, when you're having trouble putting those parts together, my claim is that I didn't cause that. So I hand off to you because it's good you accept it. If it's not good, you give it back to me. But when I hand off to you physically, and there's nothing wrong with handing off physically, we have to hand off physically. But I find in a, in an all straw organization, I do not hand off mentally. So if you come back to me, "Bill, I'm having trouble getting these together." I'm thinking, but of course, of course.   0:25:37.9 BB: Right? I am contributing to that. So I don't have... This is... What I also find is, if you understand the psychology of an all straw organization, success has many fathers, but then failure has many orphans. And so you have to be able to go both ways. We're used to associating, all of us associating with success. But what I would want to, Andrew, going back to Toyota's, how do they deal with an organization where everyone feels responsible for the good times, and then but we also feel responsible in some way for the others. And this is the psychology piece of Dr. Deming's work, but notice how it's, there's a bit of variation in terms of how each of us feel contributed.   0:26:25.9 BB: We're talking about systems. And so there's a psychological piece of this. There's a physical piece of this. And what I admire, I think what we both admire about Dr. Deming's work is that he's tying all of this together in his System of Profound Knowledge, that in order to improve integration, integration is not just a physical thing, how these parts go together, but it also requires us to mentally be connected and, and, and feel each other's pain. And that we're not, instead of this, we've got a few hidden figures associated with putting man on the moon. You know what, Andrew? There's a lot of hidden figures that help helped put man on the moon and everything else that happens. But the other thing is I wanted to throw... Go ahead, Andrew, you want to say?   0:27:14.4 AS: I was just going to say that one of the interesting features living in Thailand, and I often wonder after 31 years in Thailand, if I went back to manage people in America, you know, how would I do it? I don't really know, 'cause Thais are so different. And one of the ways that they're different is if you're working in an office with a bunch of people and one person is going to have a late night, they're gonna have to work instead till 6:00, they're going to work till 7:00 or 7:30. The other people in the office, many of them, not all, but the ones that are closest to that person, they'll stay with that person.   0:27:53.2 AS: They won't leave until that person leaves, even though they don't have any work to do. They may ask them if they can help, but they may not. They just will be there. And I just thought that's so fascinating because in America, I remember, you could be like, "That's your problem, dude. You didn't plan or you didn't do this or you didn't think about that. So I'm out of here. Have fun, see you tomorrow." But here there's this connection in the workforce that's really important to Thai people. And I would say probably important to Asians in general, but Thais specifically is what I know best. And it's just, there is that connection that I think particularly for Americans, it's a lot easier to disconnect than it is maybe for the Thai worker.   0:28:40.3 BB: Well, what we're talking about in large part is, what does it mean to work together? And that second word “together” is not separate. This is not working independently. You and I opposite ends of the ditch, one plus one equals two, one plus one equals...you know, right? The opportunities we find appealing in Dr. Deming's work is that when we focus on relationships, not just I hand the part to you and you know you say, so you say, "It's good." And so I say, "Whew." So I separate physically... And I would do that with people in a classroom. I would hand the part to you, Andrew, and I say, "What if I deliver a part to you that doesn't meet requirements? What do you do?" And you say, "Hey, not on my watch." You didn't dot that I, you didn't cross that T. Hey, and you send it back to me. Then I cross the T, dot the I, and I give it to you. And what do you say? And I would physically give you something. And I say, "What do you say now, Andrew?"   0:29:44.8 BB: Actually, what I would say is, "What just happened?" So I would say to the audience, I just gave Andrew something, which is good. What just happened? I don't know what just happened. I said, I separated physically and mentally. So when you come back to me the next day and say, "I can't get this to fit quite right." I'll say, "Why are you calling me?" But I mean, so this integration is about together, working together, thinking together, learning together. And I think what Dr. Deming is offering us is insights that one plus one could be three, could be four, could be five, in terms of the positive synergy within the organizations. And really what it comes down to is, do we want to have no synergy? One plus one equals two. Do we want negative synergy? We're working at odds because how we're meeting requirements is pushing us against one another. And, and we're none the wiser for it.   0:30:47.1 BB: Or are we interested in what's called positive synergy in terms of getting performance out of the system, which you cannot explain by looking at the parts taken separately. So there's a lot of economics here when you begin to shift from looking at the parts in isolation, there's good/bad thinking. And again, there's a place for good and bad thinking. What we talked about last time is compliance excellence. But there's also an opportunity where depending on how we manage the components, we can end up with exceptional performance that they are, "Snap fit," that the transmission lasts much longer. And there's plenty of examples that when you manage the system that way, you get something out of it, which cannot be explained by looking at the parts taken separately.   0:31:39.3 AS: I wanna wrap up, but I also wanna just tell a quick story. In my ethics and finance class that I teach, which I was mentioning I'm teaching this afternoon, I have debates because part of ethics is independent and objective thinking. And I want to help students think independent and objectively. And so the first debate topic that I have, which will come up next week, the proposition is: individual performance-based compensation such as KPIs are the best way to get the most out of an organization. I'll have a group arguing for that proposition and a group arguing against that proposition. And I don't get involved in the... I raise the questions, you know, at the end of the debate, but I let them go and try to see what they come up with. But the point is, is that individual performance-based compensation is a great way to destroy integration.   0:32:48.5 BB: Yes. Yeah, exactly.   0:32:51.0 AS: So, all right, I'm gonna leave you with the last words on this. So let's have you sum up, we talked about integration excellence. Let's wrap up all the different stuff that you've talked about and say, how can we apply this in our lives?   0:33:09.1 BB: Well, one is I would say the recurring theme we've been focusing on from the very beginning is an understanding of systems variation, the psychology piece, that's the human spirit piece and the opportunities. And the last piece being that, this Theory of Knowledge from Dr. Deming, all we know is what we know and can we articulate our theories and a theory being a prediction of the future with a chance of being wrong. And I find that what Dr. Deming is offering is great insights on to how to, how to prepare your organization for an uncertain future. And I find that what a last straw organization does is get people to focus on themselves as you're just describing, avoiding blame, shifting blame to others when mistakes happen.   0:34:11.3 BB: And when you're living in that environment, now you're back to, you get into firefighting modes, you get into, is this a manufacturing problem or a design problem? And all that finger pointing associated with that. And I find is what you're really doing as an executive team in such an environment is you're praying that the future is like the present. And why do I say that? Because when you turn your people into concrete, when you turn your people inward as opposed to outward and they become all about avoiding blame, then boy, what's gonna keep your organization in business is if the future is like today.   0:34:58.0 BB: But if the future is not like today, then you're in a really bad situation because your people have become concrete, they have ossified. And the beauty of a Deming organization is that you've got people who have flexibility. So after the concrete is poured for the walls and after the tables and the equipment are put in place, yeah, you've got chairs on wheels, you can move some equipment around. But boy, if the most flexible part of your organization, your people, aren't flexible, then boy, you better hope the future is like the present. But if you're a betting man, as you and I would be, boy, I would not bet for the future to be like the present. I'm expecting there's gonna be changes going on either caused by people, caused by who knows what. And we want an organization where people are flexible and I'll just close on that thought.   0:35:55.2 AS: Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion and for listeners, remember to go to deming.org to continue your journey. And if you wanna keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, “People are entitled to joy in work.” Now go get yours.

In this podcast, I discuss the Taguchi Loss Function again, this time using some real-life examples. I discuss hotel pool temperatures, solar eclipses, and fruit ripeness. I originally talked about this topic in Episode 37, explaining how an increase in variation away from the target value (even within specification limits) leads to an exponential increase in customer dissatisfaction. This is different than the traditional approach of viewing results within the specification limits as good, and results outside of the specification limits as bad. Hope you enjoy this topic. If you think of other real-life examples, please let me know! Links Solar Eclipse Video: https://www.youtube.com/watch?v=VKsVT5tzPY4 Podcast episode #37 - Taguchi Loss Function: ⁠https://podcasters.spotify.com/pod/show/leansixsigmabursts/episodes/E37-What-is-the-Taguchi-Loss-Function-e11qlov⁠ What is the Taguchi Loss Function?: ⁠https://www.leansixsigmadefinition.com/glossary/taguchi-loss-function/⁠ Need help in your organization? ⁠⁠⁠⁠⁠⁠⁠Let's talk! Schedule a free support call⁠⁠⁠⁠⁠⁠ Podcast Sponsor: Creative Safety Supply is a great resource for free guides, infographics, and continuous improvement tools. I recommend starting with their 5S guide. It includes breakdowns of the five pillars, ways to begin implementing 5S, and even organization tips and color charts. From red tags to floor marking; it's all there. Download it for free at ⁠⁠⁠⁠⁠⁠creativesafetysupply.com/5S⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠BIZ-PI.com⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠LeanSixSigmaDefinition.com⁠⁠⁠⁠⁠⁠⁠ Have a question? ⁠⁠⁠⁠⁠⁠⁠Submit a voice message at Podcasters.Spotify.com --- Send in a voice message: https://podcasters.spotify.com/pod/show/leansixsigmabursts/message

When we answer a question with "it depends" we are asking for more information about the possible variables that will inform the answer. In this episode, Bill Bellows and host Andrew Stotz discuss how, in the Deming world, "it depends" can trigger improvements in processes or products and services. TRANSCRIPT 0:00:02.6 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is, in this episode 10, It Depends, Rethinking Improvements. Bill, take it away.   0:00:34.6 Bill Bellows: Rethinking improvement, yes.   0:00:38.3 AS: You're always teasing us with your titles, Bill.   0:00:43.2 BB: I hate when that happens, I hate when that happens. No, I uh, what I would tell managers when I was doing these one-day seminars all over Boeing for year after year after year after year, and the managers would wanna know, so what should I expect from the people afterwards? And I said, or I would warn them, I said, here's what's gonna happen, just so you're ready. I'd say, you're gonna hear a lot more of people saying, "It depends." 'Cause to me, Andrew, "it depends" is the beginning of an appreciation of a system. So Andrew, you and I are going out to dinner and then you say, would you like to have some wine? And I say, sure. Then you say, red or white? And I say well, it depends Andrew, what are you having? Right, I mean, so to me, it depends is an understanding of what Ackoff would call interactions, that I cannot order the wine without knowing the meal. Planning a wedding, we can't order the food without knowing the guest list, can't order the music without going to the guest list. The colors of the flowers depend upon, the color of the tuxes depend upon it. And what is that? It is looking at things, not in isolation, but as a system. So when I tell my students, graduate and undergraduate is, you already manage systems, you already manage interactions.   0:02:09.0 BB: You don't use that word, but you couldn't plan a vacation without looking at things in context. You couldn't run errands on Saturday morning without knowing what time the store is open, what time... So, so I think we have a natural proclivity of looking at things as a system, quite often, quite often. It could be better. But I... So I just throw out, I just, I mean, if somebody asked me a question on a topic I've never heard about before, what I find is, one is I think, well, how would a red pen company, a me organization, a last straw organization look at that? And they'd look at things in isolation. Which reminds me of an Ackoff quote. He says, "getting less of what you don't want doesn't get you what you want." So we're gonna drive variation to zero, and when I was listening to the last podcast, it was talking about this driving variation to zero. You can't go to zero, 'cause Andrew, cloning does not produce identical, twins are not identical. So for those who think you could drive variation to zero, you can't. Get under a microscope and you're gonna see differences in snowflakes. The question behind reducing variation is, is it a worthwhile investment, which gets us into this continual improvement thing.   0:03:32.6 BB: But, so whether we're reducing variation to zero, reduce... Eliminating waste, eliminating non value-added efforts, what Ackoff asking is, he is challenging us saying, getting rid of what you don't want, what is it that we want? And here I had a great quote from a good friend, Dr. Deming, he says, "it would be better if everyone worked together as a system with the aim for everybody to win."   0:04:00.2 AS: He was saying, win-win before everybody was saying it.   0:04:06.3 BB: Well, what I like about that quote is, did the word quality appear in that quote? Did you hear the word quality anywhere in there, Andrew?   0:04:14.8 AS: No, I didn't hear it.   0:04:17.1 BB: Huh. And Dr. Deming was that quality guy, right?   0:04:20.9 AS: Mm.   0:04:22.4 BB: So he's got quotes that don't have to do with quality? [laughter]   0:04:25.0 AS: Yeah, and so that's one of the things that I think people come, when they first come to Deming, they're looking at, they're thinking of quality in terms of tools, you know...   0:04:35.6 BB: Tools, techniques, yeah...   0:04:36.8 AS: And then they find...   0:04:37.1 BB: And so part of the reason that I wanted to throw that quote out is, to reinforce my point, that I look at what Dr. Deming is doing, is providing guidance for how to manage resources, time, energy, money, space, equipment, tools and techniques, ideas, as a system. And the ideas as a system, is the idea that things are interdependent; I depend on you, you depend on me. And I think the better we understand that, you realize is that improved quality, what he would call quality, would come from that, improved safety would come from that, improved profit would come from that. Again, Ackoff would say, you know, profit is the result of how well we work together, which is how well we manage resources and the idea of being deliberately proactive, deliberately reactive, we talked about last time. And I also made reference last time through the term purposeful resource management, purposeful... And then also reflexive resource management, which is the "me organization," the non-Deming organization being reactive, why?   0:05:58.3 BB: I'm not thinking about it. [laughter] I just, why would I be proactive? I'm gonna be reactive. I'm not gonna work on things that are good. I'm gonna focus on the problems. I'm gonna focus on the defects. Whereas in a Deming organization, a "we organization,: I think there'd be, we're gonna be reactive, where it makes sense, it depends. When does it make sense? We're gonna be proactive when it makes sense, it depends. And another term I'm gonna throw out to build upon this purposeful resource management, which I would... I look at management as an activity, we're managing resources, we're thinking locally...   0:06:33.3 BB: Thinking globally, acting locally. And I think everyone in a Deming organization has that responsibility. You don't ask for twice as much resources as you need. So you don't, so you make sure you get things done as you would at a non-Deming company where you ask for way more than you need on everything, because you don't wanna be the bad guy, so you protect yourself. I would believe in a Deming organization, you would ask for what you need. But again, when I'm working on a project in the backyard, it involves going to the hardware store, you know, I'm gonna go there a few times that day. And, but I anticipate that. And in fact, now I get smart and instead of on one visit, and then going back, I'll say, I'll buy, if it's three different things I might need, I'll buy all three.   0:07:19.8 BB: I say it to myself, what am I doing? Managing resources. But a new term, to build upon purposeful resource management, so purposeful resource management is, "I know when I go to the hardware store, I buy more than I need. I can always return it next week and when the project is done." And that's how I manage projects. But I didn't always do it that way. So what I wanted to say is that purposeful resource management is how I currently manage resources. And then when you and I come up with a whole 'nother way of managing resources, I refer to that as purposeful resource leadership. And leadership is about creating a path for others to follow. And you say, holy cow, I should do the same thing, you know, in my part of the organization, again, where it makes sense.   0:08:05.2 BB: So whether that's focusing on an ideal value when it comes to improving integration or managing and improving how we manage interactions, purposeful resource leadership to me is everyone...I mean, someone coming up with a, then again, better way of doing it, and then we spread it around the organization, then somebody else takes the lead on their thing. The other thing I wanted to share with you is, is a quote from, quotes from two friends who spent a good deal of time with Dr. Deming, conversations. I met him twice, never asked him a question. The first time I didn't have a question to ask. And the second time he was health-wise, not in good shape. I just wanted his autograph. And I just wanted to just be thankful for being in the room. But Gipsie Ranney, who was the first president of the Deming Institute, and before that she was a professor at the University of Tennessee and a senior consultant at GM, she told me, she was a mentor for many years, she said she asked Dr. Deming once, she said, "so, um what are people getting outta your seminars?" And he said, he says, "I know what I told them. I don't know what they heard."   0:09:21.1 BB: And I think... And the more I thought about it, it's just I think that's part of the problem. So a big part, of what I was trying to do at Rocketdyne was to make it easy to read The New Economics. 'Cause I think there's, I think yeah, you can read it on your own, but I think the meaning you'll get being guided by others first, and that could be listening to the pod... You know, listening to these podcasts, watching videos on DemingNEXT. I think It's important to realize that there's words he's using that have perhaps a different meaning than you're using where you are at work. I just throw that out. And the other quote I wanted to share was from Bill Cooper. And Bill Cooper is approaching 90, he lives in San Diego, and he's a great guy.   0:10:07.7 BB: And I, I met him 20 some years ago and remained in touch. And he was a senior civilian officer, senior civilian at the US Navy's Overhaul facility in San Diego at a place called North Island, in the early '80s he came across Deming's work and became riveted, along with Phil Monroe, who was a senior military officer. And they went off to do Deming Consulting around the world. And, and Bill said he asked Deming once, Dr. Deming once, he said, "so what percent of people who attend your four-day seminars really walk out understanding what you said?" And his explanation, his answer to Bill was, "very few." And I think that's consistent with Gipsie, because I think you have to step back and realize that there's, there might be something more going on than what you're thinking. And I'm hoping these conversations help to spur that. Now, relative to teamwork, I had a colleague within Boeing, he was at Boeing Corporate, and somebody went by his office one day knowing that he was very fond of Deming's work and Taguchi's work. And the guy sticks his head out and he says to him, "you know the reason I don't like Deming, there's no equations, you know there's no equations.   0:11:30.0 BB: If you had equations, it means something." And so I told my friend, I said, next time the guy comes by and says that, say to him, "do you believe in teamwork? Is teamwork important?" 'cause at that time, within Boeing, Boeing's corporate slogan was "people working together as, as a one global aerospace companies"... But people working together. And I said, ask him, does he believe in working together? And he'll say yes. And then say, "so what's the equation? What's the equation?" And so I wanna share in advance of a, of another session where we get more into this, an example of teamwork. And I think, I think... I think if executives had an understanding of what teamwork is, that it improves profitability, no one would be against it. Now again, I've also come across people who think teamwork means everyone's involved in every decision, and they get turned off by that.   0:12:30.2 BB: And I'm not saying I agree with: everyone's involved in every decision. But what if, Andrew, in terms of a task, let's say you and I have to dig a trench that's 50 yards long. And I give you a shovel. That's a tool. I take a shovel. That's another tool. We start at opposite ends. And let's say we can each dig the trench at one foot an hour. So that means in one hour we're digging two feet, in two hours we're digging four feet. And so what is that? That's one plus one... One hour plus one hour equals two feet. That's addition, right, Andrew, addition. But if you're at one end of the trench and I'm on the other end of the trench, where's the teamwork? [laughter] There's no teamwork in that model. But Andrew, what if I came along with another tool called a pickaxe, and what if I get in there and start softening up the dirt? And then as it's softer, you can shovel faster. That's teamwork, Andrew. Teamwork is that you and I, again I'm changing tools, but what I'm showing is that you and I working together, my work depends upon yours, yours depends upon me. Two of us can be digging three feet an hour. So what's that Andrew? One plus one is three. My wife and I, a number of years ago, were scraping the spray off the ceiling in our hallway, and the work split was, I climbed the ladder and scraped off the acoustic spray. Right?   0:14:07.2 BB: And her job was to be ahead of me spraying it with water to soften it. And I use that example at class because we were doing far more together than the example I gave you. But if her ambition was to get to the end of the hallway before me, then the acoustic spray would be dry long before I got to it. That ain't helping. And so this is an example of would you like to be in an organization where two people are doing the work of two, or two people are doing the work of three, or two people doing the work of four or five or six. Or, or worse than that Andrew, would you like to have two people doing the work, falling behind [laughter] and get into the... 'Cause I also think people think, well, what's the worst case scenario? Two people equals zero? No, falling behind each day.   0:15:00.9 AS: Two people equal negative one.   0:15:02.7 BB: 'Cause they think well, how bad can it be? It can get better and better or worse and worse. And the other thing I'll add relative to the, "it depends" and the answer to every question. I think if you think of in a Deming organization, you're thinking about, "it depends." And so Andrew, if we're in a red... If we're in a non-Deming organization and I say to you, "Andrew, will that report be done by tomorrow?" How would you answer it in a non Deming organization, Andrew?   0:15:34.7 AS: In a non... Yes, sir.   0:15:36.1 BB: You're gonna salute and you're gonna say, "yes sir." All right. And I do this with my students and they'll be quick enough to figure out the answer is yes. Then I'll say, I'll call on a different person and I'll say, "Okay, let's say we're in a Deming organization, a 'we organization' will the report be done by tomorrow?"   0:15:55.5 AS: It depends.   0:15:57.6 BB: And they're like, it depends. It depends on what Andrew? It depends on what time tomorrow. It depends on those other five things you've asked me to do. And you might say, is this a five minute task or a 20 minute task or a two hour task? And so if you're unwilling to answer "it depends," then what's the chance the effort you're gonna apply? And so that's what I find is, I think the beauty of it is not, "it depends" is a smart-alecky response, it's trying to get a better sense of the system. And they, but I also say that I confess of thinking about "it depends" all the time. If my wife, of 40 years, was to ask me, do I have plans for Saturday morning? You know what my answer is, Andrew?   0:16:50.5 AS: For whatever you want, dear, I am free.   0:16:54.2 BB: I do not say, "it depends." [laughter] So it depends is the answer other than when your significant other says, do you have plans for...? And you say, no, I don't.   0:17:07.5 AS: Yes.   0:17:07.8 BB: All right.   0:17:08.3 AS: All right. So I got so many different things that you triggered.   0:17:12.2 BB: Good.   0:17:13.4 AS: The first one I wanted to mention was I have a friend of mine, Bevin in Bangkok, and he helped me edit my book, Transform Your Business with Dr. Deming's 14 Points. And he didn't know anything about Deming, so it's kind of fun to write it and have him going through it. And he actually worked with me side by side in my office and he was reading it and going through and editing and going back and forth chapter by chapter. And then after he was pretty deep into it, he looked at me and he says, I think I just figured it out. Dr. Deming is like is a humanist that cares about people.   0:17:49.8 BB: Yeah.   0:17:51.2 AS: And that was such a... And I think for the listeners and the viewers out there, you're gonna get to a moment where you move beyond tools and techniques into the way you think about getting the most out of a system, getting the most out of people. And that's really where you really get into the meaning to me, the most powerful part of the meaning of Dr. Deming.   0:18:14.5 BB: Well, when you start to think about the potential for one plus one, and then you realize that in a non-Deming organization, you deliver the report by, you know, without understanding the context, you deliver the part without understanding the context. You have the ability to, as we've talked, spoken before, meet requirements minimally, leave the bowling ball in a doorway and... 'Cause I say, Andrew was the task completed? And you're like, yes sir, it was completed. But to do so with the absolute minimal effort and then to realize that that then is creating a ripple effect for the next person. And what we end up doing is a one plus one is a big negative number, or you go off and get the cleaning solution, which is really, really cheap, but it doesn't cut whatever the grease is on the table. And we're saving a lot of money, but we're putting all this manpower. When you start to realize how easy it is to end up in a situation where one plus one is a big negative number, why would you treat people other than with the greatest of respect? And I've had people say, "Well, oh, so it's a feel good thing." I said, are we... Is the result at the end of the day to make... I'm not saying we're in business to make a profit, but I said if we wanna be sustainable, then the better we work together, the more sustainable we are. So, do we wanna be sustainable? And you get what you get.   0:20:00.0 AS: I had some other things that came up. First one is, for the audience out there, you may not know what Bill's talking about when he kept saying Ackoff, Ackoff. But what he's talking about is Russell Ackoff.   0:20:12.5 BB: Russell Ackoff. Yes.   0:20:15.7 AS: And I just wanna go back to an article that he wrote in 1994, and it's titled Systems Thinking and Thinking Systems. But what's critical for our discussion is his description of a system, which is very brief. So let me go through it.   0:20:32.4 BB: Yeah, please do.   0:20:33.5 AS: "A system is a whole consisting of two or more parts, one, each of which can affect the performance or properties of the whole, none of which can have an independent effect on the whole, and no subgroup of which can have an independent effect on the whole. In brief then, a system is a whole that cannot be divided into independent parts or subgroups of parts." Now, I just wanna talk briefly about my... One of my areas of expertise is in the financial markets. And I say something a lot like what you say, when I go into my class and I said it last night in my valuation masterclass boot camp, when you finish my class, you'll be less confident than when you started. If you are less confident when you finish this class, I have succeeded. Well, this is very painful and difficult for people to think about because we're going to school to become more confident. But the stock market is not like physics where we have immutable laws that we can...   0:21:52.2 BB: That's right.   0:21:52.7 AS: Grasp and understand and then watch the interplay of those laws. The world of finance is a messy ball of activity. And the fact is, is that the minute you touch that ball, you have now affected that ball. If you place a buy order, you have just affected that ball. If you maybe place a very big buy order, you've really affected it. Some people could even say that just by looking at that ball of activity, you could influence it. When you face a complex, constantly changing system, then you start to realize that we have so little...to expect definitiveness, I'm just gonna do this.   0:22:49.0 AS: I'm just gonna take care of my department, if... And you're talking about a company, you are ignoring that the system, in this case I'm talking about the stock market, but now let's take it into a factory or into a business or into an office environment. All of these component parts. And if you write an email, a scathing email and you send it into that group of people that is working in a system, congratulations, you have made an effect or an impact on that system. For better or for worse, that system must react to every interaction. It cannot be divided into independent parts or subgroups. And therefore, the typical manager nowadays, that's all they wanna do. "I got my KPIs, that's my subgroup."   0:23:39.2 BB: Yes.   0:23:39.5 AS: We'll take care of that. And they're missing the word that I love in... When I work with management teams, the word I love is "coordination."   0:23:49.9 BB: Yeah. Synchronicity.   0:23:52.2 AS: Yep. So there's a lot there. But I just wanna highlight one other thing. You made me think of a book and earlier I was looking around for that book. So I'm gonna get out that book 'cause my books are right here and for everybody that's in business that's looking at competitive strategy of your business, Michael Porter is the guy...   0:24:14.3 BB: Yes.   0:24:14.8 AS: That's the best of all. But what I can say is that Michael Porter can be a bit dry. And the lady who worked with Michael Porter is a lady named Joan Magretta and she wrote a book called Understanding Michael Porter, a simple, small book to teach all the main things that Porter teaches. But what he teaches, the most important thing is that to develop a competitive advantage in a company, you wanna build that competitive advantage in the supply chain of that business, the flow of that business. And then he talks about the importance of fit, of how different components of that supply chain fit together.   0:24:57.3 AS: That that's the right person running the right part and that they're coordinating their efforts. And when you build that competitive advantage in your supply chain through the coordination of efforts, it's almost impossible for the competitor to copy. A great example is if General Motors, if the CEO of General Motors came in and he says, what I wanna do is start building cars like Toyota. Good luck. It's never going to happen because they've built their whole competitive advantage in their supply chain and it's not something that you can just go out and replicate.   0:25:36.0 BB: Well, to add to that, and I have a...students in one of my classes watch a one hour lecture by Porter. And then I explained to them Porter's five... I think it's a five forces model.   0:25:49.9 AS: Five forces. Yep.   0:25:52.1 BB: And all of that, I think it's absolutely important to know about. What I learned from Tom Johnson, is a retired professor from Portland State University and we'll talk more about Tom in a later session. What Tom pointed out to me that I would have paid no attention to in Porter's model is, in Porter's model it's about "power over." Power over your customers. Where else are you gonna go, Andrew, for Internet? Right? Power over your suppliers, power over your employees. I think and when we get into this "power over" model, so we're gonna go to our customers, start demanding things, put a gun to their head, drive change and they're gonna respond by leaving bowling balls in the doorway when it... So what's missing in that model is... I mean, if the model's based on all white beads are the same, everything which is good, everything is, there is no variation, then it might work. But if you now go back to the humanist, if you've got people in the loop who have vested interest in their survival as an employee, their survival as a supplier, and you go to them and start wrenching them and squeezing them and driving them to...   0:27:18.4 BB: And they respond with things that are thinner and break more often or still meet requirements, it doesn't work out as well. To your point on Toyota, my sense is Toyota has a sense of relationships with suppliers, which is not mutually self destructive. I think there's a better understanding, I think, again, not that I've spoken and gone to visit Toyota's suppliers. But I'm thinking, in order to deliver what they deliver, there's got to be some sense of, shall I say win-win, because if it's win-lose... Boeing, when Rocketdyne was owned by Boeing, you know, severe downturn in the market, there was a lot of pressure within Boeing to improve things and it was a pretty stressful situation. And Boeing was going to suppliers, not only asking them to take back inventory, all those parts you bought from the last six months and we're having trouble selling airplanes. But the reason we want you to take them back, Andrew, is it's not so much that we need the space. We want you to buy them back from us. [laughter] Yeah. Are you okay with that, Andrew?   0:28:44.9 AS: Absolutely not.   0:28:45.6 BB: And I'm thinking, what's gonna happen when you go to that supply chain and say, we're ramping up, we've got customers, and we... Andrew, we need your help, we need your help. Are you there for us? And you're like, remember five years ago? Remember? You get into this rainy day friends kind of thing. It's one thing if we're mutually suffering or mutually benefiting, but anything short of that is not win... I wouldn't define it as win-win. I also want to point out the production viewed as a system, the loop, the loop model that Deming showed the Japanese in 1950. And what I've done in the past is, is I've taken a class and I said, okay, you over there, you are the beginning, the raw material comes to you and then you do your thing, hand off to the next person, off to the next person, off to the next person. Then you over there, I go around the room, and I just show the flow of work from the first person to the last person, last person is a customer. And I say, so, where's the best place to be in this situation? And everybody wants to be way upstream. And you say, why? I say, well, when people start leaving the bowling balls in doorway...   0:30:07.2 AS: What does that mean, leaving bowling balls in doorways?   0:30:10.7 BB: If they start delivering minimally, minimally meeting requirements as they hand off as they hand off as they hand off as they hand off, and that system, the last... The worst place to be is at the end. And I say, but what if what comes around goes around? What if it's actually a loop? [laughter] Now, where would you rather be? Then you begin to realize that whatever goes into the air, I have to breathe, whatever goes into the water, I have to drink. So I think what, going back to the humanist side, I think the better you understand others, and they understand you, this is not done invisibly. So when I'm in a Deming environment, leaving the bowling ball in the doorway, meeting requirements minimally without asking for your permission, you know that, others know that, and then you might call me on it.   0:31:10.3 AS: Yeah.   0:31:11.9 BB: Because instead of black and white thinking - it met requirements, we've got shades of gray thinking - you call me over and you say, "I don't know, you're kinda new here, right Bill?" And I said, "yeah." And he says, let me take you aside. You might be able to tap into the humanist in me. So one is I'd say, I think the better our understanding of what comes around goes around, the better the understanding of what a good friend, Grace used to call boomerang karma. [laughter] But let me also say that Dr. Deming came up with that model...   0:31:49.2 AS: There's a bit of redundancy in that.   0:31:49.3 BB: Say again.   0:31:49.3 AS: There's a bit of redundancy in that. Those words kind of mean the same thing. But yes.   0:31:54.5 BB: Yes. [laughter] That's right. It's like connected as a system. That's what system means. But when Dr. Deming showed the Japanese in 1950 production to view it as a system, and there's an idea of what comes around goes around. And it took me a while to figure this out. If everyone's meeting requirements minimally in that system and you end up with something where there are problems, then if your model is meeting requirements is okay, then it wouldn't dawn on you that some of the problems could be coming from how we meet requirements. And there's a story we'll look at in a future session of a transmission designed by Ford, built by Ford, also built by Mazda in the early '80s. And Ford somehow found out that the Mazda transmission had an order of magnitude fewer complaints, with the shifting of the transmission than the Ford transmission. It was the same design, but one was built with an understanding of managing the variation between the parts and how they work together.   0:33:09.8 BB: Very much as you would do if you're working in the garage, you're gonna get the pieces to come together, not just meet requirements any way. But I thought if Ford operated with a Deming model in everything, and they end up finding out that these transmissions are performing differently, well, if you go back in and check with quality and all the parts meet requirements, you couldn't explain what's going on. And you're left thinking, well, our transmission must have some bad parts. So part of the reason I throw that out is, in the world of improvement, when you shift from this black and white parts are good, what Ackoff would call managing actions, looking things in isolation, you might find that the requirements are met to one extreme or the other. And maybe if we started to mix and match how they come together, there's an opportunity for incredible improvement when you shift your thinking from the black and white...   0:34:10.1 BB: My parts are good, to how they work together. And also, how can you have continual improvement if your mental model, your mindset is things are good and bad, but if we look at things in a relative sense, then we could say our... If we look at understanding as relative, improvement as relative, then there's room for improvement. But if quality is defined as good and bad, there's no room for improvement. And relative to the title, what I want to bring out is, there's a sense among people in the Deming community, people like a few years into Deming, we can go off and improve everything.   0:34:51.4 BB: Now, what we have to be careful about is what does improvement mean? Does improvement mean having less variation? Does improvement mean having lower cost? The important thing is to look at things, right, Andrew, as a system, and then start to ask where can we spend some, where can... I look at it as a resource management model. Where might we spend an hour to save five hours, spend a dollar to save five? And that's what I refer to not as continual improvement, but rather continual investment. And so I look at in terms of managing resources is within an organization, we've got red beads, we've got things that are defective, things that are behind that are not quite good, and we can use a control chart or run chart to manage those, see those ahead of time. And so we have a fire, Dr. Deming, he said, of course we're gonna have fires.   0:35:41.9 BB: Let's put the fire out. We end up back to where we were before, which means the process is...we wanna get it from out of control to in control. But I think the better we are in responding to that, we don't end up shut down for long periods of time. That then gives us the opportunity as you would be as a homeowner... Again, as a homeowner it's the same thing. You end up with a leak, you gotta go fix it, whether it's the faucet, the toilet, but then every now and then you're thinking about, maybe I can improve how the watering system is done. Maybe I can improve how the air conditioner works. Maybe by cleaning the filter more often. And what is that to me, Andrew, paying more attention to the filter, because if I wait six months to change the filter in the air conditioner, now all of that dust is way up inside the coils and I'm gonna spend forever.   0:36:32.0 BB: But if I'm changing that filter on a more regular basis, what am I doing? I am overall reducing the amount of effort spent on this maintenance. And I just wanted to say, I don't look at that as improvement thinking. I look at that as investment thinking, and I just wanna go from, okay yes, we can go past "all the beads are white" and we know that we don't stop at a hundred percent white beads. So that means improvement is possible, it doesn't mean, I'm not suggesting let's go improve everything. What I'm next looking at in terms of, you know, how I interpret Dr. Deming's The New Economics is asking where's the stitch in time saving nine, where's an ounce of prevention worth a pound of cure? And that I refer to as not improvement thinking, but investment thinking.   0:37:22.3 AS: Yep.   0:37:23.4 BB: And that's what I was trying to say last time. I think reading to your kids is investment thinking, listening to these podcasts is investment thinking, going to a concert, I think everything we do is based somehow on, "I think that's a worthwhile use of my time."   0:37:39.0 AS: Yep. Okay. Let's wrap up. I just want to go back to the title, which was, It Depends, Rethinking Improvements, and what you said is that, if you're working in a Deming organization, it's not gonna be as definitive. When we ask questions, we're gonna get answers like, well, it depends. Everything's a trade off. We need to know...   0:38:03.7 BB: That's right.   0:38:03.8 AS: How many things... We need to know many things, as you said, before deciding what to do because we want to think about the impact of the system... On the system. And also I would argue, and I think you make this point, that this is hard and I think there's a rush to simplification in KPIs and things like that to try to corner people into little areas and little boxes. And that's destroying the system and... Or the potential of the system.   0:38:37.5 AS: And then I mentioned the word coordination, the idea. We talked about Porter and his idea of building competitive advantage happens through the supply chain. His example, one of them that he uses is IKEA that makes flat, it ships everything in flat boxes.   0:38:52.5 BB: Yes.   0:38:53.2 AS: And that has built something in the supply chain that's not easy to replicate. And so, but that also requires fits that you're designing your supply chain around a new way of thinking. And then you've talked about Russell Ackoff and also I discussed his definition of a system that's saying that nothing can be independently... Can act independently. Everything has an impact. I talked about the stock market and how that is an interacting system. And then I just wanna finish up my kind of review of what we've talked about by a discussion, Bill, that I had with my father before he passed away.   0:39:35.4 AS: And my father had a PhD in organic chemistry and he created a career all of his life at DuPont in selling, he was a salesman and a technical salesman. And he raised three kids; my mom was a housewife. And I asked my dad, what was your proudest accomplishment? And he said, I built a trusting family.   0:40:01.4 BB: Cool.   0:40:03.1 AS: And I didn't really... It hit me then, but it just hits me more and more whenever I think about that. My mom and dad never betrayed my trust. I never was in a situation where I could see that they were acting for their benefit and...   0:40:14.3 BB: Yeah.   0:40:16.8 AS: Not considering mine. So now I wanna go back to Toyota. One of the things that makes Toyota successful is that it's the quintessential family business. It is a family business that built certain values in the family business that are ongoing. Because what we're trying to do, and when we talked about Dr. Deming being a humanist, we're trying to build trust.   0:40:42.5 AS: He's telling us to build trust in the system. In other words, don't beat up your suppliers, work with them. Don't beat up your employees and make them fearful. Don't rank and rate your employees. Build a system of trust. And what I realized, I want to just go back to the story of my father, if my father had done something that was selfish only for him and neglected the impact on me and my mom or the family, he would have broken our trust. And it just takes one time to cause a system, like a family system, to be permanently broken, unless there's effort made to try to resolve that. And it's no different in a business. What would you like to add to end up this episode?   0:41:33.3 BB: No. I think that's a good point. A number of things is, and I really like the way you described that, because I thought about that recently as well as, it's one thing to have trust in others, but I think what you're saying is that a Deming organization we have trust in the system. And when you, when you lack that trust, what do you do, Andrew? You look out for yourself.   0:41:57.7 AS: Yep.   0:42:00.4 BB: Because you've learned. You've learned the hard way. You fool me once, shame on you, fool me twice, shame on me. But I think if you have trust in the system, then there may be a new direction. But you say, "I don't know where we're going, I just got the announcement, but I have trust in the system. I'm not gonna get tossed overboard." And I think you're right. When you have trust in the system of the company or of the family, then you know that you're being looked out for. And lacking that, when people say something to you, you're like, "what's their ulterior motive?" And when you start thinking about ulterior motives behind coworkers or friends, then they're really not friends for long when you start wondering about ulterior motives.   0:42:51.6 AS: And that stifles innovation.   0:42:53.3 BB: Oh, yeah. You say to me, Andrew, or you say to me, Bill, hey, what do you say we go do this? The first thing comes to mind is, what's Andrew up to now? But that's the humanist.   0:43:04.4 AS: Yeah.   0:43:04.8 BB: And what I love about what Deming is saying, and when you put psychology in the System of Profound Knowledge, is that it's an understanding that that psychology gets me to think about me and not the system. That psychology, then we're looking at also an understanding that each of us is different, that's the variation piece. Right, the theory of knowledge piece or am I willing to share my theories or hide my theories? But if you're not tapping into the... That people... I mean, the most flexible part of the system, once you pour the concrete, so yeah, the chairs are on rollers and you put casters on some machines.   0:43:40.6 BB: But at the end of the day, the potential most flexible part of the system is the people. And when you turn people into concrete, now you've got trouble. So I just wanna... And I know you've got a favorite Deming quote, so let me share with you my favorite Russell Ackoff quote, and then you could sign us off. And so to borrow from Russell Ackoff, "a system is never the sum of its parts. It's the product of the interactions of its parts. The art of managing interactions is very different indeed than the management of actions. And history requires this transition for effective management, not efficient management, effective management." And that's my closing quote, Andrew.   0:44:25.2 AS: Bill, once again, on behalf of everyone at The Deming Institute, I want to thank you again for our discussion. For listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. Oh, wow, we have a lot of good discussions there and all of this stuff is posted there. Share your ideas and opinions. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming: "People are entitled to joy in work."

In this episode, Bill Bellows and host Andrew Stotz talk about resource management in a non-traditional sense. Bill explains how managing the variation and integration in your product or service is just as important as increasing consistency and removing waste.  TRANSCRIPT 0:00:02.3 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is episode nine, Resource Management. Bill, take it away.   0:00:28.9 Bill Bellows: Thank you, Andrew. And thanks for our audience and thanks for joining in again. So we're picking up following episode nine, which was, I called it the Paradigms of Variation. It was, I think the title on the podcast may be a little bit different, but what we've been building up to from the beginning is, parallel tracks. But one aspect that I've been trying to bring forward is this idea of variation in the white beads. We talked about the white bead experiment and the idea that the red beads are not caused by the workers, they're caused by the system.   0:01:13.5 BB: And then what if we got to the point that there were no more red beads? Yes, we can make the red beads faster, we can make the red beads cheaper, but could we make, I'm sorry, we can make the white beads faster. We can make the white beads cheaper with the elimination of the red beads, but if we're dealing with nothing but white beads that are cheaper and made faster, can we improve the quality of the beads? And what I found is, when I press on people, they'll say, "Yes, everything can be improved. Everything can be improved. When I press, press, press, they'll say faster. They'll say cheaper. I said, "Yeah, we said that." I said, "But can they be better?"   0:01:53.4 BB: Is that what Dr. Deming's trying to say with continuous improvement that we stop it a 100% white beads? Or can we go further? And I find people get stuck. And I think it's very easy to get stuck, because that's the world we live in of good parts and bad parts. We focus on the bad to make them good. And what do they do when they're good? Well, they met requirements. But what's missing is this key word called variation. And yes, there's variation in the red beads and Dr. Deming would plot that on a control chart. But Dr. Deming also discovered in, definitely in 1960, from Dr. Taguchi who he met a few years earlier, this notion of variation in the white beads and that the, so I talked earlier also about question number one and quality management.   0:02:44.0 BB: Does this quality characteristic meet requirements? There's only two answers, remember Andrew, yes or no. But then question number two is how many ways are there to meet requirements? And I'd say there's an infinite number if you take into account, how many decimal places you can go. And that, the idea that you can have anywhere from the absolute minimum to the absolute maximum of the requirements is there's all those places be in between. That's called variation. And does it matter where you are within spec? Within spec? And again, by spec I mean specification. You've met the requirements for the activity. And so what we did in episode nine, I'm sorry, episode eight is look at what I call the Two Distribution exercise. And you may have caught me saying there are four suppliers.   0:03:41.7 BB: And at the end I said, forget about the four. There's actually two. I've done it with four, I've done it with two but the important thing is when I show people a number of distributions within requirements, and one of them will be, we'll go from the minimum to the maximum with near zero and frequency at either end to then high in the middle. And I'll say, "The middle is the ideal value." And then I'll say, let's say you also have a really narrow distribution consuming, and I said, last time, 10% of the variation, what I meant to say, and I said at least once, is 10% of the tolerance that, so you're using a very small portion of the tolerance, but you're far away from the ideal value.   0:04:27.0 BB: You're shifted to the right. And so when I give people the choice of buying from one of those two suppliers under the idealized situation, you may recall, Andrew, of same price, same schedule, everything's guaranteed to meet requirements. We've got histograms, we've got control charts. The processes are in control with all those, what Ackoff would call idealized situations. Make it really, really simple. Do I go with the wide one centered on the ideal value or the narrow one over to the right? And time again, people take the really narrow one, which we said was about, why do you like the really narrow one? Because they're more consistent. Then I explained that that's precision. And that's the most popular answer. And I'm reminded of that every time I use the exercise. Within the last few days, I've used it again.   0:05:19.6 BB: And that narrow one gets people's attention. What I find really fascinating is if the goal is to meet requirements, then why is the answer not, I'll take either one of them, which was one of the choices. You could take the wide one in the middle that covers the entire, or the narrow one. Why does it matter? Why not say in the world of meeting requirements, what's the driver behind the narrow one? Why don't people say it doesn't matter anymore? And I think because there's something about variation and consistency. I was talking with somebody the other day and they said, "Being consistent is, that's everything in terms of quality." And I said, "Not quite. Not quite." What... And this will become the focus of a later episode, that you could, ideally you could put the variation where you want it to be along the ideal and end up with improved what?   0:06:18.4 BB: The answer is improved integration. Because the very simple model we use in organizations is that if the parts are good, whether it's two parts, three parts, four parts, number of parts going together, you have to have at least two. And I say if the parts are good, then they fit. That's the model. If the parts are good, then they fit, then is there anything wrong with that model? And people are like, "No, that's the model we use." If the parts are good, then they fit. Now, if you're developing an airplane or a rocket engine, you've got a wing and a fuselage, then you've got all the parts to make the wing, all the parts to make the fuselage, all the parts that do these separate components, you could say the same thing for a play. You have all the elements of the first act, all the elements of the second act, and then you put them together for the entire play. So the point is that what I'm talking about is that integration is not black and white.   [overlapping conversation]   0:07:23.2 AS: What... Just... Can you define integration just so we can make sure we understand it?   0:07:27.5 BB: Yeah. Integration is when I'm going to put the cap onto the bottle of water. That's integration. The cap is good, the bottle is good. Now I'm trying to put the cap, which is good, and the bottle, which is good, and I'm trying to put the cap onto the bottle.   0:07:46.0 AS: Okay.   0:07:46.5 BB: Yeah. That's integration. Or I'm trying to put the, I'm trying to put two parts of something together. I'm trying to put the cap on top of the pen. What I love about water bottles as a prop is wherever I'm presenting, someone in your room will have a water bottle. And I'll say, can I use this as a prop? Sure. And I say, if all the requirements for the cap are met, what do we say about the cap? It's good. And if all the requirements for the bottle are met, what do we say about the bottle? It's good. Then I'll say, see what we're doing? We're managing parts in isolation. We're saying the cap is good, the body is good. Then I say, why don't we focus on how well the cap mates with the bottle? And I had a co-worker once said, well, if the cap is good and the bottle is good, then won't it fit. Fit as in absolute fit, right?   0:08:39.7 BB: Not relative fit ‘cause remember in early episodes we talked about black and white thinking versus shades of gray thinking. Good versus bad is black and white. Fit is black and white. It fits or it doesn't. What I'm talking about Andrew, is the idea that there's variation in good and the variation in good cap, and the variation in the good bottle show up when I go to put the cap onto the bottle. Because if the, if the outer diameter of the bottle is on the high side and the cap, inner diameter is on the low side, then I'm gonna have trouble putting the cap onto the bottle, ‘cause one's too small, one's too large. Boom. And, so what I'm trying to imply, [chuckle] not what I'm trying to imply. What I'm stating is fit is not absolute.  It's relative. Integration, which is about fit, is relative. And I don't, did we talk Andrew about a hundred percent…?   0:09:41.1 AS: Wait a minute. You gotta say that again. I didn't catch that. I know many of our listeners are a little faster than me. But say that again about relative versus...   0:09:56.6 BB: Okay, so what I'm saying is the fundamental model we're using is if the cap is good of the water bottle and the bottle is good, then the cap will fit onto the bottle. It'll fit when you go to...   0:10:05.7 AS: Yep.   0:10:07.8 BB: Put the, put it on it fits just like that. What I'm talking about…   0:10:12.1 AS: And when you say fit, are you using that as a general term in a system or are you just talking specifically about the cap?   0:10:17.8 BB: No, no, I'm really, I'm glad you brought this up. What the suggestion is that fit, there's only one degree of fit. It goes together you know with a, technically what we're talking about is how much torque is required to screw it on, how much force is required. And so fit is about how much force is required to screw it on. And the implication behind them being good and fit is that they always fit the same. So the model is that parts that are good fit together the same way each time. And that's not the case. So there's a... And I, one of my first exposures to this was reading a book by David Kearns and I mentioned this, I don't know which episode. And I said that Frank Pipp, an assembly plant manager at this Ford factory had his assembly team routinely buy competitor's cars and put them together.   0:11:19.4 BB: Because at the Ford plant, most of the time when they're putting parts together, they needed rubber mallets to bang them together because they didn't quite fit. And, so they needed help. And the help was the hammers to bang them together and out. Every now and then two parts went together without a hammer. That means fit is easy as opposed to hammers, which means fit is difficult. So imagine you've got everything between I can put them together, with little effort at all to I need a hammer to bang them together. That's degrees of fit, which I'm saying Andrew is degrees of integration.   0:12:00.4 AS: Okay.   0:12:01.2 BB: And, so the point I was trying to, what got me excited about Taguchi's work and then really excited when I saw Dr. Deming realizing it, is that when I came across this a hundred percent snap fit Toyota pickup truck story account, I thought, well, holy cow. And I found in listening to these podcasts that I use a expression quite a bit.   0:12:24.1 AS: Holy cow cow, holy spicoli.   0:12:26.3 BB: Holy... Holy cow, Andrew [laughter] But what was cool is this Ford plant has discovered that Toyota, where I know Dr. Deming had some influence, but some influence, okay, what influence? that's a whole ‘nother topic, but I know Taguchi had an influence there. So I'm looking at that with my understanding of variation and thinking, that's incredible. And brought that awareness to my coworkers at Rocketdyne. And we developed, with, I provided the education, they provided the hands-on go make it work. They developed hardware that went together beautifully. And why is this important, Andrew? And this is one of the things we got to in the end of the last podcast is if you would like your customers to have products that go together easily if they're assembling it or going together means that it, this product fits well with how they use it.   0:13:22.7 BB: That the car starts each time or the stopwatch, whatever they're using, works really well, which means there's degrees of performance. That's what excites me about the idea that if we can pay attention to the variation, we can either have designs that require hammers to assemble or we can design them to go together well. And, and all of this is to say that's what prompted me to get people excited by the paradigms of variation to get them to better understand that a mindset of meeting requirements is different from a mindset of precision, which is different from a mindset of accuracy. And what I've just repeated is Paradigm A is meet requirements. Get the darts somewhere on the dartboard. Meet requirements be anywhere within the requirements. Paradigm B is this idea that we're striving for consistency, incredible uniformity, otherwise known as, as precision.   0:14:30.7 BB: And, and there may be a place for that. But what Dr. Taguchi's talking about is different than that, that's precision is Paradigm B. Paradigm C is trying to be close to target. So that's taken the distribution, which is precise, and then finding a way to adjust it to be on the bullseye. And what does that gain us, Andrew? That, well, first of all, I would say when we're working at home looking for, working on the recipe, trying to get exactly one cup of flour, exactly 350 degrees, exactly one hour in the oven.  As we pay attention to how close we are to those values, chances are we're gonna end up with an incredible product. And that's, we're trusting that the person who developed the recipe has done that.   0:15:23.2 BB: But so whether it is woodworking or working on any project, it could be making things out of cloth where you're, you're putting together some outfit out of cloth that my father used to do for my sister when he was in the textile business. That is about the idea that things come together well is about accuracy in improving integration. And that's what I find the Deming philosophy offers an understanding of what does it take to inspire an organization where, where it takes the people working on their different elements, not to meet the requirements any way they choose, but to meet requirements in a - ready Andrew - synchronous way. So you and I are on the soccer pitch, and it's not about your position, it's about my position and your position on defense that we're trying to win the World Cup.   0:16:25.2 AS: Yeah.   0:16:26.4 BB: And so all of that is about the Paradigms of Variation. Go ahead, Andrew. You were gonna say.   0:16:29.0 AS: You referenced sports and I was just thinking about how easily we work together in team activities, team sports that are just, clearly great teams are the ones that integrate each individual's doing their own personal work and they're doing training and they're improving themselves, and then they're practicing together. How do we bring this together into an integrated system that then wins?   0:16:54.9 BB: That's right. And so when you say bring together, that's what integration is. It's bring together, right? And we're looking, we we're screened a bunch of candidates on the phone, now we bring them in for face-to-face interviews. What are we looking for? Why isn't it enough that they meet the requirements that are on the website? We wanna know which of these potential employees is the best fit with our team, whether it's to play first base, or play senior researcher. Are they a fit? They may be very consistent in what they do, but is that consistency...I mean, they have to be, their consistency has to mesh what we want. So they may be consistently tardy, they may be consistently dominating the meeting, but what we want them to do is fit into the meeting.   0:17:50.0 AS: And the other thing that I always think about when I hear you talking about this stuff is, I think about when I was younger, when Lexus came out, if you remember Lexus, when they first...   0:18:01.8 BB: Absolutely.   0:18:02.5 AS: Launched...   0:18:02.5 BB: Oh yeah.   0:18:03.7 AS: Their great video or the great advertising was stacked up champagne glasses...   0:18:09.5 BB: Yes, yes.   0:18:11.6 AS: Onto the hood of this car. And then they lifted the wheels off the ground and then, or not off the ground, but like they had a roller that they were rolling it on, and then they revved that car up to as fast as it could possibly go, and those glasses did not fall. And you know the only way you can get that is by improving not only each individual part, but how those parts work together with the end result being less vibration, less friction.   0:18:39.9 BB: Yes.   0:18:41.1 AS: All of those things.   0:18:42.0 BB: Yes. Exactly.   0:18:42.5 AS: And you couldn't do it by just improving one part.   0:18:45.6 BB: That's right. And that's a great example because together you've got minimum vibration. That's not an accident. That's they have figured out how those things come together to have an incredible product, which is consistently, it works consistently. But the consistency, there's nothing wrong with consistency. Consistency is not the issue. But it, the issue is is the consistency we're talking about striving for precision or accuracy. So a car that consistently doesn't start is consistent, but that's not helpful. I want a car that consistently starts, right? I wanna be consistent around... I want you to bring your consistency in concert with others' consistency where those consistencies matter, you know? And if we don't need you to be consistent, then that's okay. Then we save money by having lack of consistency because why have consistency if you don't need it? But all of that's about...   0:19:50.6 AS: It's hard. It's hard. Consistency is hard and fit is hard.   0:19:55.4 BB: Yes. And, and, and, to build upon what you just said, consistency is about managing variation as a system. And so, another thing I wanna point out, and I got some comments from some friends about, you know, the last podcast.  The Paradigms of Variation are about the paradigms of white bead variation. So, so, Paradigm A is we've got variation within the requirements and, and is that okay? Is it enough to have variation in requirement? It doesn't matter where we are? That's Paradigm A. Paradigm B is precision. We're consistent, but we're not around the ideal. That's accuracy. And then paradigm D is....and I was searching for the word, the expression Dr. Taguchi used. He calls that Technology Development, that we're developing an advanced technology for use in... And I, the example I used last time is, let's say we're fac…we're developing a new way of making tubes for plumbers to use.   0:21:07.6 BB: And I said in the beginning let's say we just have one inch outer diameter tubes, and that's Paradigm C because everything we make is one inch outer diameter tubes. And then somebody comes along in our research labs and comes up with a novel way to make tubes of different sizes. That's variety. So they can make them down to quarter of an inch, half an inch outer diameter. And then what we're doing with what Paradigm D is about is developing the technology that allows us to be really accurate around all these different values. That's what Dr. Taguchi calls Technology Development. I called it Paradigm D, he called it Technology Development. And in the world of sports, we talk about sports. That's the ability of the soccer player to kick the ball, or I should say a football player. [laughter] To put the ball anywhere in the net during at any time. Whether it's...   0:22:03.6 AS: That's within spec.   0:22:05.4 BB: Yeah, it's so the goalkeeper goes one way and they can hit any point in there. Because if you come up and the goalkeeper knows, oh, here comes Andrew, Andrew's gonna go to the lower left 'cause that's all he knows how to do. But you don't think I know that as your opposing goalkeeper. I know Andrew, Andrew's gonna fake, but I know what Andrew's gonna do. So the Paradigm D is in sports is the ability to move the ball around. If you're the pitcher, if you're the tennis player, and that's how you become a professional athlete, is that ability to move it around. That's Paradigm D. So, years ago, and this, I was developing this and sharing this, refining it with co-workers.   0:22:44.4 BB: And I was at a Deming Institute conference. True story, in Washington DC with Tim Higgins, a co-worker, and got a call from a really good friend, Jim. So Jim calls up and Jim was in this professional development program within Boeing doing a lot of travel. Every time he called, he was somewhere different in the country doing some really cool stuff in this incredible program to develop next generation leaders. And he definitely fit the mold. So he calls me up and he says, so he says, Dr. Bellows, have you discovered Paradigm E yet?   [laughter]   0:23:17.9 BB: I said, Jim, there is no E. He said, yeah, there's letter A, there's letter B, there's letter C, there's letter D. Oh, so there's also E. I said, Jim, A meets requirements, B is consistency anywhere, C is being on target, D is being on any target. I said, there's nowhere else to go. I said that we've run out. He said, we haven't run out of letters. [laughter] So I said, so he pushed on me and I pushed back. He pushed on me. We literally pushed on each other because I kept saying, Jim, you're you... Let's find another topic. No, no, no, no. I wanna hear about Paradigm E. And then it dawned on me, and I can remember it like it happened yesterday.   0:23:58.8 BB: And every time I have lunch with him, I say, Jim, I give him a big hug because I could not explain with the Paradigms of Variation, why would I pick up a nail in the parking lot, right? Why would I pick up a piece of glass in a parking lot? '‘Cause I viewed that as minimizing loss to society, that if I pick up the nail, prevent the flat tire, pick up the piece of glass, prevent the flat tire. I am, to quote Dr. Taguchi, "minimizing loss to society." But I don't know how to put that into his loss function, which is a subject of an of a future episode. And the idea of the loss function is there's an ideal value somewhere within the requirements. And the closer we are to the ideal value, the better the integration, and therefore the easier the effort.   0:24:55.2 BB: And, so now I'm stuck trying to say, so Jim's poking me, and I'm thinking, I'm stuck trying to explain everything through Dr. Taguchi's loss function, which is looking at the impact of variation relative to meeting requirements. And it dawns on me, and what Jim is saying is, I'm stuck in the world of variation. And, so when he mentioned...as, as he pushed and pushed and pushed, and it dawned on me that there's another whole world called managing, not... There's managing resources. I'm sorry, managing variation is Paradigms A, B, C, and D. What Jim got me to do that he called Paradigm E, and later we called it Resource Management, he realizes variation is a resource. Variation is a result of how we define our processes. There's managing cost.   0:25:52.3 BB: What is the cost of what we're doing? How much time is required? So, I look at resources as all the things we have in our organization from people to equipment to software to hardware and tools and techniques. Those are all resources. And picking up a piece of glass in the parking lot is a way of managing resources to improve the system, just as being on target is a way to improve how resources are managed. I started, I just jumped back and thought, holy cow, it's bigger than variation. And I think Dr. Deming really had this in mind. It's not just about variation, it's about the system includes variation, but it also has resources. Again, people, time, ideas, money. How do we use our money? That's a resource.   0:26:39.4 BB: Are we using, 'cause the other thing that was bugging me was are we using our money to improve things that are good? No, we're using our money and our time and our resources to focus on what is bad to make it good. And so that's what started off as Paradigm E then became Resource Management. So that's the genesis for Paradigm E. Managing resources is, should I get a college education, right? Should I exercise? How often should I go to the doctor, right? How often should I go shopping for groceries? Should I go shopping every day on my way home or should I go once a week? Those are resource management questions. Should I have a garden in my backyard? Should I buy the groceries? What's a better use of my time when I'm running errands?   0:27:33.2 BB: So on Saturday morning, I'm gonna run out and I'm gonna pick up the dry cleaning, go to the drug store, go to the veterinarian, pick up something for the cats. Do I do each of those randomly, come home and I say, what do I do next? Or Andrew, do I line up the errands and figure out what time the store opens? When do the lines occur? What time does traffic start to pick up? Am I making right-hand turns or left-hand turns? And I find what I do is I'm trying to figure out how do I get all these things done as fast as possible? And that directs my route. What I'm I doing, Andrew? I'm managing resources.   0:28:11.7 AS: And you remind me of the book I'm reading right now, Steve Jobs by Walter Isaacson.   0:28:16.8 BB: Yes, I listened to it, it's fantastic.   0:28:18.9 AS: Yeah, and there's just these times that Steve Jobs would just go into an absolute focus into some minute detail that all the people around were thinking that, and rightly so in some cases, that he was wasting resources, the resource of time. But there was another component that I think they couldn't see maybe was the passion that he was conveying to people around them that this matters.   0:28:48.0 BB: Yes, well, I don't know if this story shows up on that book, but that book was a fantastic read, oh I just loved it. Do you know the subject of Walter Isaacson's next biography? I don't know when it's due, but the very next auto, biography that Walter Isaacson is doing, take a guess who it is?   0:29:07.7 AS: No idea.   0:29:08.4 BB: Elon Musk.   0:29:10.9 AS: Oh, great.   0:29:12.7 BB: Yeah, yeah. So I think Fortune Magazine had an article that Jobs, well, first of all, let's go back, let's say 15, 20 years when I would go into work with others and we'd turn on our computers and then go get a cup of coffee. You know what I'm talking about, Andrew? You know where I'm coming from?   0:29:35.4 AS: I remember that very well.   0:29:37.8 BB: And why are we going to get our coffee, Andrew?   0:29:41.1 AS: Man, it takes minutes to boot up.   0:29:43.1 BB: Yes, so because we're going to go, we gotta turn on the computer and it's going to take minutes, five, 10 minutes. And for those of you that are, I mean, really, now we're so used to turning on the iPhone and it comes right up. Yeah if you shut off the iPhone, it may take 30 seconds to turn on, but you start your computer and it, from scratch and it's within 30 seconds, your computer's up and running. No, what we're talking about, Andrew, is you go into the office, turn on the computer, go get a cup of coffee, talk with some friends, you come back in 10 minutes, your computer's up.   0:30:18.9 BB: So Jobs supposedly went to people that were working on that boot-up system and told them that if we could shave a few seconds off of the boot-up time, multiplied by the million or so users around the world, we can save society big numbers. And the person that went off and did this, or the team that went off and did it, went way beyond what he was talking about, but he's the one, he Andrew, saw that as a loss. All right, so when you're banging things together at the Ford plant and I come in on day one and, Andrew, what are you doing? You're like, and you're banging things together. I said, "Andrew, why are you doing that?" And you say, "Bill, this is how we assemble cars here." I said, "Andrew, look at those calluses on your hand." You're thinking, "Bill, you'll get used to it, but this is how we put things together." In the world of automobiles, this is how you do it, Bill." And I think, "Geez, I don't think it needs to be done that way." And what's fundamental here is, and again, the whole idea of the loss function, the integration loss function, we'll look at in a future episode, but what I want to point out here, Andrew, is if I believe you that banging it together with hammers is as good as it gets, then there is no loss.   0:31:51.6 BB: Meaning that as soon as I say that's as good as it gets and I stop, then I'm saying that this is how we do things here. But if I come in and look at that with an understanding of Taguchi's work and how to manage variation as a system or manage resources as a system, I have the capacity to look at that and say, as Jobs did, and say, "I think it can be better." And the difference between what it is and what it could be is loss. But as long as I look at what we do and say, "That's it, let's stop right here." Then what I'm saying is... What I'm acknowledging is that, that's okay. And so what I was looking for within Rocketdyne and got the president of the company to agree to this is finding some people that I was mentoring for several years and their role was to go around the organization and look for loss.   0:32:54.8 BB: And, loss is the ability…Ready Andrew, to look at what is in terms of integration and wonder what could be. And then look at the components and then ask, "Can we change the variation of the components to improve integration?" And of course, the big question is, is it worth the effort? But it's having the vision that the integration and I think that's a great example. The integration is all that time we're spending waiting is not only is it lost, but that's integration time. [laughter] Bingo. So, the next thing I wanna point out before we close is... So this conversation with my friend Jim got me out of being stuck on the loss function and then stepping back and saying that's... There's... It's a global thing. It's all about managing resources, which also means it's more than quality. It's not managing quality, it's managing resources.   0:33:51.8 BB: And if we improve how we manage resources, quality goes up, integration improves, all these things improve. Well, the next thing I wanna point out is, I started thinking in terms of a model that says, how do we allocate our resources? Again, resources are time, energy, equipment, software, ideas. How are we using them? And the first model I had in mind was, are we applying... Are we allocating the resources proactively or reactively? Are we applying the resources to go to the doctor for annual checkups just to see how we're doing. We're going to the dentist for an annual checkup. Are we having somebody come by and look at our plumbing system and getting a feeling for how is it running? Are we taking the car in for routine things. Or are we reactive? We call the plumber when it breaks, we go to the doctor when we're sick. We bring the car in when it's broken. And, so what I started focusing on is what is our preference? How are the resources being allocated?   0:34:55.6 BB: And, without a doubt, what I found is the majority of the resources, time, energy, equipment are being used reactively. Focusing on things that are broken, not good. And, and I would go into big production meetings and say, "How much time are we... How much time do you ladies and gentlemen spend every day discussing parts which are good that arrive on time?" And, no matter where I went, the answer was “little to none.” And, so what I found is the resources were being used reactively, reactively. Now, let me also throw in that if the company's doing research and developing, developing next generation products, that is proactive use of resources. But what I also found is for the products that are in production, rarely did anybody ever come to me for something in production and say, "This could be better."   0:35:52.0 AS: Mm-hmm.   0:35:53.1 BB: That's rare. So the other dimension of this model. So the first dimension... I was just... In fact... It wasn't till I discovered Taguchi, Deming's work that got me to realize this is focusing on things that are broken is the norm. It wasn't just where I work. I started to see that pattern play out elsewhere. Well, the other axis of this resource management model, so the vertical axis is... Are the resources being applied proactively or reactively? So that's let's say the vertical axis going up. Top versus bottom. The horizontal axis are, is are the resources mine or are they ours? Is it my equipment, my people, my department? Or is it ours, Andrew? And so on the horizontal axis, the left hand side is the resources are mine, my department, my, my, my... And the other side of the horizontal axis is ours.   0:36:53.1 BB: And so in this two dimensional model, the vertical axis is, are the resources applied proactively, that's the top. Reactively, that's the bottom. If you think of a two by two matrix, the top row is proactive, the bottom row is reactive. And then when it comes to columns, so the left hand column is the resources are mine. The right hand column is the resources are ours. So we've got a two by two matrix. And I say to people, so given your understanding of Red Pen and Blue Pen companies, me and we organizations, last straw, all straw. I say, according to that matrix, how do you see resources managed in a Red Pen Company, a non-Deming company? And people will say the lower left quadrant, which is what, which is my resources applied reactively. Right?   0:37:43.4 AS: Yep.   0:37:44.9 BB: And then I'll say, "Okay." [laughter] And the name for that is... And it took a while to come up with a name and you're gonna love this. We started calling that at Rocketdyne, Reflexive Resource Management. Reflexive Resource Management. Because a wise man, born in Iowa in 1900, Andrew [laughter], by the name of W. Edwards Deming, once said, pulling your hand off of a hot stove requires no thought. It's all reflex action. When I saw him and that, I don't know where it was, I said, but I know he said that. And I thought, that's it. It's all reflexes. There's no thought involved. Why are we reactive? Because! I mean, why would I be proactive? I mean, why would I work? So when I started realizing is there's no thought involved in being reactive in a Red Pen Company. It's just that's what we do. So then the question is, well, how are resources managed in a Blue Pen Company? A We Organization, a Deming organization. And, what people will say is the upper right quadrant, which is proactive ours, the resources are ours.   0:38:56.1 BB: We're gonna be proactive. And wherever I go, that's people's answers. And I say, you, are you ready? And okay, what? I say, the entire right hand side is a Deming organization. What does that mean? It means I'm smart enough to know when to be proactive, and I'm smart enough to know when to be reactive. I choose, I choose to replace the light bulb when it goes out, it's a choice. Or I choose to replace the battery in the smoke alarm when it goes out. I, being reactive in a Deming organization is a choice. Being proactive is a choice. And so the right hand side, it's about choice. And it took some time to figure this out. What do we call that? What do we call this? So we call it the left hand side, the left lower left quadrant, Reflexive Resource Management. So it took a while to find out what's the adjective for the right hand side.   0:39:55.6 BB: And I come up with an adjective, find out that it's an acronym used by somebody for something else. No, can't use that. Try it again. Try it again. Try it again. Try it again. Try it again. It took about an hour to, at least an hour and finally came up with a term used by the Bureau of Land Management in the late 1800s. And it, and it's, it was known as Purposeful Resource Management. And I thought, bingo! One is nobody's got a trademark on it, [laughter] And so we started calling the deliberate use of resources to be deliberately proactive, or we choose to be proactive, or we choose to be reactive. We started calling that purposeful, thoughtful resource management.   0:40:45.5 AS: Yeah, that choice. It made me think about there's a lot of things in business that you just, your choice is to be reactive. When that breaks, we're gonna fix that because it's not so critical, whereas we cannot have a situation where we're reacting to this particular process. Like, think about my coffee business as an example. We cannot be reactive to downtime on the roasting machines. Well, we're not just waiting for that. We're doing preventive maintenance. We've got stocks.   0:41:17.7 BB: That's right.   0:41:18.5 AS: Stock of parts. We've got, so we make a deliberate effort and resource allocation to make sure we never in that situation, but there's other parts. Let's say we have a few grinders and something like that, we'll fix those when they break. [laughter]   0:41:35.0 BB: Yeah. Well, I've shared this with a woman who, the hairstylist I go to. My kids used to go there and I've been going there ever since. And she is awesome. Just awesome. So I, these are the things I discussed with her, all kinds of things. And so I have a photograph of her, Andrew, holding a hairdryer in her hair salon. And the hair salon is called Kids Cuts because a good part of her business is kids. And then people like me bring the kids in there and next thing you know, I'm a customer, too. Well, so I'm explaining this to me and she says, "Bill, every 6 months I get rid of all the hair dryers". I said, why? She says, "I cannot afford to burn somebody's hair". And so, so I've got a photo of her holding it, so she doesn't monitor how it's performing.   0:42:24.1 BB: She just knows 6 months, get rid of it now. You know, does she donate it? I don't know where it goes. And I don't wanna get into recycling, but she deliberately, she's not gonna burn somebody's hair.   0:42:35.0 AS: Right.   0:42:38.1 BB: Alright. And, what else? Oh, but you and I talked earlier in one of the episodes, this idea of choice, that instead of following the domain that says you can't have inventory, we gotta have blah, blah, blah, you realize this? No, we can choose to have inventory, or we can choose not to have inventory. And so what we're talking about in resource management is, which gets into all those things we talked about earlier, is it's about choices. And so I would say to people, I've got a slide, then I say, it's like you get to the end of the road and you turn right and turning right is being reactive.   0:43:21.3 BB: And I say, Andrew, I've been patterning you, and you get to the end of the road and you turn right, you're always reactive. Why do you turn right? And you say, "Bill, there's only a right-hand turn". And I said, "No, Andrew, there's a left-hand turn, but you can't see it. It's in your blind spot". So the right hand turn is to focus on what's bad, to make it good, what Ackoff would also call managing actions. And that's the road that's well traveled, [laughter], the road less traveled is the left-hand turn, which is to be proactive, again, when it makes sense. I'm not saying being proactive all the time, I'm saying there's a place for it. Consider being proactive, consider being reactive.   0:44:04.0 AS: So, on that note, I think we ought to leave. Why don't you leave the listeners and the viewers with a concise statement of what you want them to take away from this discussion. We went through a lot of different things, but if you wanna bring it down to something clear and concise, how would you describe that?   0:44:24.5 BB: I'd say the, um…I'd like, I'd encourage our listeners, viewers, students of the Deming philosophy, those new to it, to expand their appreciation of quality management and realize that to managing resources period. And the better we manage our resources in our organization, knowing when to collect data, when not to collect data, when to meet requirements, when to be on target with minimum variation, when having lots of variation. Should we be proactive or re…. These are all choices. And they're, and I think the better we understand those choices about how we manage variation as a system in concert, I think the better the performance of the organization and improving productivity, improving quality, improving profit. So I think all those things we're striving for come from a better understanding of how to manage resources. And so instead of just being narrowly focused on the quality dimension, I think if we step back and realize that that's one aspect of how an organization operates.   0:45:42.4 AS: Bill, on behalf of everyone at the Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to Deming.org to continue your journey. If you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz. And I'm gonna leave you with one of my favorite quotes from Dr. Deming, "People are entitled to Joy in work."

RIP Terry Funk. RIP Bray Wyatt. This weeks episode was supposed to be a celebration of all things Taguchi. The world had other plans. Watch a Terry Funk match. Then watch another Terry Funk match. #TerryForever #TerryFunk #AEWDynamite  #WWERAW #AEWRampage #WWESmackdown #AEWCollision #njpw #ASJF2023 #Stardom #Impact #MultiverseUnited2 Rate and Review on Itunes! Reach out on Social Media! www.WeNeedWrestling.com  Youtube WeNeedWrestling@gmail.com Twitter: @WeNeedWrestling IG: WeNeedWrestling    

Renaud and our senior engineer Paul Adams discuss the Taguchi method, also known as Robust Design. The Taguchi method is a tool used in engineering and manufacturing to improve product and process quality and reduce defects at an early stage. It is a statistical analysis approach used early in the product development process that reduces your costs and improves product quality and reliability, so is a popular way to develop products that are less risky to manufacture.   Show Sections 00:00 - Introduction. 01:07 - What is the Taguchi method? (Summary) 04:01 - Would a Taguchi method analysis point out risks and provide solutions about how to change the product design and/or manufacturing processes so the product could be made consistently well? 06:36 - Example: Plastic injection molding. 12:25 - Taguchi method is not a recent innovation, it's a well-established methodology. 18:03 - What do you need for good finished products? 21:05 - Benefits of doing early Taguchi analysis. 24:54 - The concept of value loss. 30:49 - How do teams who try to develop a new product without using the Taguchi methodology usually get on? 34:13 - When to follow a Taguchi testing approach? 36:50 - Caution: Statistical approaches are not a magic bullet. 38:49 - Wrapping up.   Related content... Robust Design: Enhancing Product Quality and Performance New Product Launch: Planning & Discovery Phases Are So Important  Don't Send Immature Product Designs To A Chinese Manufacturer! Basic Statistics Any Chinese Factory Can Understand   Get in touch with us Connect with us on LinkedIn Send us a tweet @sofeast Prefer Facebook? Check us out on FB Contact us via Sofeast's contact page Subscribe to our YouTube channel   Subscribe to the podcast  There are more episodes to come, so remember to subscribe! You can do so in your favorite podcast apps here and don't forget to give us a 5-star rating, please: Apple Podcasts Spotify Google Podcasts TuneIn Amazon Podcasts Deezer iHeartRADIO PlayerFM Listen Notes Podcast Addict Podchaser

In this episode, Bill and Andrew discuss the shades of variation: meeting requirements, accuracy, precision, and precision around variety. Is reducing variation to zero a good thing? Plus, Bill and Andrew share stories that offer practical ways to think about these concepts. TRANSCRIPT 0:00:02.4 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for the day is The Paradigms of Variation. Bill, take it away.   0:00:28.1 Bill Bellows: Ooh.   0:00:28.1 AS: Exciting, exciting.   0:00:33.1 BB: Alright. So let me start off by saying this is episode number eight, and I wanna just make a couple comments about episode number seven, where we talked about "all straw" and "last straw" organizations also otherwise known as "me" or "we" organizations, or red pen or blue pen companies. And I just wanna burst a bubble and say neither one of them, neither organization exists, whether it's all or last or me or we. I view it as a... It's really a matter of which direction your organization is moving, it's a really simple model that I've seen get people to begin to appreciate what Deming's talking about, because I think that contrast is very much like a Deming organization versus a non-Deming organization. But instead of black-and-white thinking, there's really a continuum, and so I think... I just want to say at the beginning, it's really a question of which direction is your organization moving? Another thing I wanna throw out is... I don't think people know, I think absent an understanding of the System of Profound Knowledge, if you're in a last straw organization or a me organization, or a red pen company, I don't think you know that. I think if you become aware of Deming's work, you become aware of what could be. And I liken it to Dr. Deming saying, "How could they learn? How could they learn? The answer is frightening, how could they know?" So I think absent an understanding of The New Economics - Deming's work, I think it's hard to appreciate what you're missing.   0:02:11.4 BB: That you're being blamed for the grade, you're being blamed for the red beads. You're being blamed for the weather, if you're the weatherman. And the other thing that comes in mind there with that, "how could they know" is... There's a great video with Peter Senge, which he did a case with Dr. Deming, and there's a blog I wrote about it on the Deming Institute website if you just search for Peter Senge and my name. And you can find the blog as well as the link to the video. And in there Senge is talking about the present state of education systems and very much in this contrast of industrial and post-industrial, and he says, very much what it comes down to is, he says it's the water. He says, "We don't know what fish talk about, but you can be damn sure it's not the water." And likewise, I think people in a red pen company are not getting together. You and I talking about, "Andrew, this system sucks. I'm being blamed for the red beads," and I don't think we're the wiser. Now, if you turn me on to The New Economics. And we started listening to DemingNEXT and we became aware. But absent that, I think we're both frustrated, but we wouldn't know better. Alright, it's on the topic of variation.   0:03:30.8 AS: It's...   0:03:31.5 BB: Go ahead Andrew, you wanna say something?   0:03:32.4 AS: I was just gonna say that... That's where I think Dr. Deming's making the point of the difference between training and education. Education is the idea of bringing outside ideas into your mind, into your business, as opposed to training, which is trying to upgrade skills. And I had a little story of that when I was a head of research at an investment bank in Thailand. The whole job of a head of research is managing all these analysts who are writing research reports on company A, buy company A, sell company B for our institutional clients. And the job of a head of research is to try to manage that schedule. And you know that analysts are always gonna be interrupted and clients are gonna call, the market's gonna do this. So they're very rarely on time when they say that they're gonna finish something. So you're constantly scrambling for the morning meeting, because on the morning meeting you gotta have a story.   0:04:22.0 AS: And so that was just the job of a head of research. So I did that really well, managing them and, kind of, all that. And then I went to the number one investment bank, the number one broker in Thailand as the head of research. And I asked them, "So how often do you guys miss?" And they said, "Never." I said, "That's impossible." Because I've spent my whole career managing the flow of analysts. They said, "No, we never miss." When an analyst is gonna be on, they're always on. "And how do you do that?" "Well, we do a three-week-ahead schedule, everybody knows that you are held accountable for being that person on that day. And if you find out that you can't do it, you're gonna talk to someone else and rejigger it and say, hey, could you do Friday? And I'll do Monday the next week?" But they never miss. And I just thought, like the water, I never even knew I could go to a different level.   0:05:15.0 BB: Yeah.   0:05:16.8 AS: And then I went to a different level.   0:05:19.8 BB: Yeah, it's...it's the ability to step back. Alright, so on the topic of the paradigms of variation, I wanna throw out four words. Variety, variation, accuracy, and precision. A variety is, there's red beads and white beads, that's variety. There could be, eight different colors, that's variety, sizes of pants 32 waist, 32 length, that, to me that's variety. As opposed to variation is that a 32-inch waist or a gallon of gasoline, every time you go to get the gallon, you get a gallon of gasoline, it might not be exactly a gallon, that's variation. The reason I throw those out to begin with is that Dr. Deming is known in some circles back in the '80s, he was interviewed by somebody at the, I think at the BBC in England and an interview ends with him, with the interviewer saying, "Dr. Deming, if you could condense your philosophy down to a few words, what would it be?" And I thought, he's gonna say... He is just gonna reject that, that "I can't be condensed." No instead of that, he says, "Reduce variation." And I thought, "Oh, no... "   0:06:50.4 BB: So, and there are people alive and well today in the Deming community, who will quote that to me? "You know, Bill, Dr. Deming said, we gotta shrink variation to zero." And I said, "So, is he saying we all ought to be the same size? We ought to be the same skin color? Is he saying that he doesn't like diversity? What does that mean? And same religion?" I mean, you could look at religions as variety, and then you could say within each religion there's variation. So part of what I wanna get at today is what I think is confusion as to what he meant by shrinking variation to zero. So there's variety, variation. Accuracy is that when I get a gallon of gas, is it a gallon, or is it a couple ounces high, a couple ounces low? You go to the gas station, you'll see a sticker on the pump that says that it was calibrated to some standard, when you go to buy a pound of meat, are you getting a pound? Are you getting 15 ounces? And so the National Bureau of Standards is looking at accuracy, are all these things... Is every customer in the United States getting a gallon's worth of milk?   0:08:15.3 BB: Now, so that's accuracy. Precision is the idea that you get the same value each time, so I could go to the scale and it measures exactly a pound, exactly a pound, exactly a pound. But is that pound the same pound as the National Bureau of Standards pound? So I could be. 0:08:37.3 BB: Sorry about that. I could get the same value each time, and that's precision, but that's not to be confused with accuracy, so I just wanna throw those terms out. Relative to shrinking variation to zero, shrinking variation to zero which I, for the record, do not believe in. Dr. Deming would say anyone could accomplish anything if you don't count the cost. I think if you start to look at what is the benefit of having less variation versus the cost of that, then we can get to some point that makes sense economically as in The New Economics. But this idea of driving defects to zero, driving variation to zero without looking at cost.   0:09:24.1 BB: And you can look in The New Economics, we'll come back to this in a future episode. He definitely had in mind that you have to consider the cost, in fact, Dr. Deming would say, anyone could accomplish anything if you don't count the cost. But there's a... What I wanted to reference is a book by Peter Block called 'The Answer to How Is Yes' and what Block talks about is... Could be like, how...we get focused on, we're gonna go off and reduce variation, we're gonna go off and drive variation to zero or non-value added to zero. What Block talks about that I really appreciate, that I think Dr. Deming appreciate is, why? Why did... Let's step back a minute, and so part of what I wanna get at tonight in this paradigms of variation is the 'Why' piece. Okay. So the first example I wanna look at a variation is throwing darts okay? And hopefully that makes sense, you're throwing darts in a dart board and imagine meeting requirements is being on the dart board, so imagine it could be a foot in diameter.   0:10:29.4 BB: And in terms of meeting requirements, you wanna be on the dart board. So I throw it three times, and if you get three that are really close together, they may not be on the bullseye, and that says, I'm very precise, but if the three are not on the bullseye, then that's not very accurate. So again, throwing three and getting really, really consistent is one thing, but then how do I move that to the bullseye? So that's an idea that I could first focus on precision, and then often I find that if I could just slightly adjust my release or my arm, then maybe I could then move it over, so I wanna look at that.   0:11:14.7 AS: And moving over is accuracy or?   0:11:17.5 BB: Moving it over is accuracy.   0:11:19.2 AS: Okay.   0:11:19.5 BB: I mean, so the first thing could be, I'm just looking for three...   0:11:22.5 AS: Get on the board.   0:11:23.6 BB: I wanna be consistent.   0:11:25.9 AS: Yep.   0:11:26.6 BB: And then make the adjustment, 'cause I find often it's easier to make the adjustment, I think it's a lot of work to get consistency. So I just want to separate those out as two different strategies.   0:11:39.2 AS: Yeah, just go to the bar and start throwing darts and you'll see it's a lot of work. Yep that helps, that helps, that helps us to understand it.   0:11:45.9 BB: Alright, so next. Next I wanna talk about what I refer to as the Two Distributions Exercise, and so here's the context. Imagine that you are in the procurement organization, and your job is to make a decision as to who to buy a given product from. So your company goes out and gets quotes from four different suppliers, and they provide you with the information. And for simplicity, let's say what you're buying are these metal tubes and... Short metal tubes perhaps used in plumbing, they're a given length, a given diameter. And imagine these four suppliers come back to you. And again, you're the procurement person, "Who are we gonna buy from?" They come back and they say, they quote you the price, and they quote you exactly the same price. All four of them quote you exactly a dollar each, $10 each. It's like, "Holy cow, they're the same price."   0:12:46.2 BB: Imagine also, they quote the same delivery schedule. So you've got a plumbing supply, you need lots of these, they all tell you they're gonna give you the volume that you need. So I think, "Gosh, volume-wise that's the same, cost-wise, it's the same." Now imagine what they tell you is relative to meeting the diameter, let's say it's the outer diameter is really critical to how these things fit together. And they quote you and say, "All the outer diameters will meet requirements." They're gonna take care of the scrap and they're gonna get rid of the red beads. All the tubes they will send will meet requirements, guaranteed. And you're thinking, "I want that same schedule, same costs, same quality," now what? Well, now imagine they send you the distributions from the control charts and they tell you that these distributions, you're thinking, "Holy cow, these suppliers are using Cisco process control." And they provide you with the histograms, and they say, "These distributions will never change, shape or location." Holy cow.   0:13:49.6 BB: And then added onto that is that you're gonna use them as is. So you're not gonna take them and modify them, you're just gonna bring them into the inventory and send them off to the plumbers to use. So you're saying, "Okay, the process is in control, the level amount of variation, location is predictable, stable, forever. How could I go wrong?" And then the last thing they tell you is, procurement that, "Here's the lower requirement, here's the upper requirement, and here's the ideal value." And so then you end up with two distributions. If I was confusing, I meant to say two, not four [chuckle]   0:14:24.1 BB: Alright, so imagine you've got two suppliers and the one distribution goes from the lower spec to the upper spec. And let's say it's a normal Gaussian distribution and it starts at the low end, goes up, high in the center, then off to the other, and that's supplier A and then imagine the other supplier uses 10% of the variation, but is towards the upper spec so it's far more uniform, but it's off of the ideal value. And so I've been using those two distributions with people as an ideal scenario saying, "You're never gonna have all that information, let alone that's all the same." And very deliberately, what I want people to do is say, if it's the same price, same schedule, zero defects, guaranteed, distributions never change and you're looking at the lower spec, the upper spec, and you're saying, "Okay, so one distribution, it has more variation, but the average is right in the middle, which is the ideal value. And the other one is shifted towards the high end of the tolerance, but incredibly uniform," who do you choose?   0:15:38.3 AS: So it's a tall curve?   0:15:39.4 BB: It's a very tall curve, let's say it uses 10% of the variation, 10% of the tolerance and so I've been using that going on 30 years, and I'll have 30 people in the room and I'll ask them to write down on a three by five card, "Who would you buy from?" And I'll say, "Here are the choices you can buy from the, the one that's the widest, we'll call that supplier A and supplier B is the narrow one to the right, or You could say it doesn't matter." And what I find is incredibly consistent inside and outside of Rocketdyne and literally around the world is the majority of people will take the narrow distribution, to the right will call that supplier B, what I ask them, "Why do you like supplier B?" To a person they will say, "It's more consistent, there's less variation." And I say, "Less variation from what?" "Well, less variation from each other." Well Andrew, that's precision.   0:16:40.9 BB: And then I ask the others, and my find is three quarters of the room will take that distribution, the one which is precise. And for the ones who are focusing on the wider distribution, where the average is on target, I say, "Why do you like that one?" And they say, "Because it has less variation from the ideal value." Alright? And so I wanna throw that out is part of the confusion I find inside and outside of the Deming community, in the world of Six Sigma quality distribution B, using a smaller percent of the tolerance, is, has the higher process capability index. 'Cause what that index is doing is comparing the amount of variation, the width of the variation to the overall tolerance. And the idea that you're using a smaller portion is valued. And I said, "Okay, well that's not quite the same as what Dr. Taguchi is talking about. What Dr. Taguchi is talking about," and this one we'll get into in a later episode, "is the closer you are to the ideal value, what you're doing is affecting how this is used in a greater system, so if I'm at home cutting a piece of wood to a given length and I want it to be closer and closer to the ideal value, then what I'm gaining is making it easier to put that piece of wood, or whatever I'm making, together.   0:18:00.5 BB: And I find that people who preferred distribution B are really confused 'cause in a big way what they're saying is, "I don't care about where I am within, all I care about is using a small portion of the tolerance." And then when I press on that more and more, they say, "Well, I want fewer and fewer defects." I said, "Well, zero defects is guaranteed, so if you really believe in zero defects as the goal, then you should have said it doesn't matter." And so the reason I wanna talk about the paradigms of variation is that one: variation is one of the elements of the System of Profound Knowledge and it's not just the variation in the number of red beads, right?   0:18:58.0 BB: And not to dismiss that the variation of the red beads is caused by the system. But what I've tried to bring to these episodes interviews with you is what I learned from Dr. Taguchi is the variation in the white beads and what is the impact of the variation on the white beads. And if we ignore that, then what we're saying is, "As long as you meet print, that's all that matters at the end of the day." And I'd say if that's where you're going then, then you could do the same thing with Lean or Six Sigma operational excellence. What differentiates Dr. Deming's work, I believe in terms of his appreciation of variation as an element of Profound Knowledge, is what he learned from Dr. Taguchi. That the closer we are to the ideal value, that affects how the system, which is another element of Profound Knowledge, comes together.   0:19:53.8 BB: All right, so going back to those two examples, what I started to do, one is I was detecting that less variation, less, I was detecting within Rocketdyne and elsewhere that there was a far greater regard for less variation, less variation from each other than being on target. And I was just wanting to one; find out why does it matter if all you have to do is meet spec? Why does it matter? So relative to the paradigms of variation, and this was back into the mid '90s when I was working with some people in manufacturing and was greatly confused over this, and the confusion was, "Is it enough to meet print, Bill? You're not sure? And then we've got these capability indices. We want to use a small portion of the tolerance and then we've got this, "Bill you're telling we wanna be on target, help me understand that."   0:20:49.7 BB: Was what these guys were asking for. And the paradigms of variation that I come up with. And I described it, I said, "Well, let's look at it this way." I said, "There's this thing called... Let's call it paradigm A, and Paradigm A is meet print." All that matters at the end of the day, we wanna meet spec. So.   0:21:06.4 AS: When you say meet print, print is a kind of a word that maybe not everybody understands what that means.   0:21:12.7 BB: Thank you.   0:21:12.9 AS: What, that means spec?   0:21:13.6 BB: Meet the requirements.   0:21:14.6 AS: Meet the requirements.   0:21:15.6 BB: Meet the requirements. And so we want the meeting to start anywhere between here and here. And as long as we're in between... So "meeting requirements" such that everything is good, is paradigm A. And so if you went back to those... Looking at those two distributions, if you said it didn't matter which one to take, that would be the paradigm A answer. And that's rarely the case. And so what I was poking at with people is, "You tell me you're striving for zero defects, and then when I give you that information that there's zero defects, why does that not trigger you to say it doesn't matter?" Because there's something else going on. So then the idea that we want incredible uniformity, precision, that's what I refer to as paradigm B.   0:22:07.3 BB: And as I mentioned earlier, that is the dominant choice. We want narrow distributions. We want what people refer to as "piece to piece consistency" to be differentiated by the second most popular answer is being on the ideal value what Dr. Taguchi would call the target, which is what I refer to as paradigm C. So in explaining these three paradigms to these manufacturing folks, I said each of them has a goal. So the goal of paradigm A is to meet requirements, but they not only have a goal, they also have an approach. And their approach typically tends to be, "If you're slightly out measure again, if you're slightly in you're good. Can we change the requirements?" And so I thought as... The paradigm A solutions are all about playing with those lines, moving them in, moving them out.   0:23:01.1 BB: Paradigm B, which has a lot to do with, I find within Six Sigma quality, is we wanna have a given fraction of a percent of the tolerance. And these indices, the Cpk Cpk, Cp Cpk, and others, there'll be goals of, "It needs to be 1.33 or 2.0, or 1.67, and we wanna strive for Six Sigma quality." Well, the question I ask those people is, "How much money are we gonna spend to achieve Six Sigma quality? And is there a corresponding benefit?" And I don't get an answer. But so the paradigm B approach would be to take the distribution, and try to make it narrower, but narrow to the point that we're only using, 10% of the tolerance. And again, what bothers me about that is that it's not addressing what Taguchi's talking about, which is what we're doing at home.   0:24:04.8 BB: Whether it's baking something, we want the temperature to be close to 350 or, whatever it is we're doing. We're, looking for accuracy in how we're pulling something together, is we're looking for an ideal value. And there, what we're trying to do is, as I mentioned earlier, we're striving for, "Can we get precision and then can we make the adjustment to achieve accuracy?" And instead of just saying, "We wanna achieve some given value." To me, what I tell clients I work with and students in my classes is, "What is it gonna cost to achieve precision, to then focus on accuracy? How much money are we gonna spend on that? And what is the benefit?" And the benefit will be improvements downstream, which is looking at things as a system. And what we'll talk about in a future session, looking more at this is examples of things I've been involved with, that address this idea of not reducing variation to zero, but to me it's about managing variation and having the appropriate amount of variation, knowing that it could never be zero.   0:25:18.1 BB: But, does it...am I in a situation where meeting requirements is all I need to be. In the world of baseball there's a strike zone. You've got a batter coming up who can't hit the ball no matter what, and you say, "Well, it doesn't matter where it is. Just get it into the strike zone." The next batter comes up. And that batter is very determined to make... And you're trying to get the ball around the bat. Now it depends on where you are within the strike zone.   0:25:46.6 BB: Alright. So the other paradigm I wanna get into, and then we'll call it over, is, paradigm D. So there's A, is meet requirements, that's all that matters. B is, I'm looking for precision. C is, I'm looking for precision followed by accuracy. Paradigm D when I explained this to Dr. Taguchi in the late 1990s, and he said, I need to differentiate having one ideal value so I can be working in a place where all the tubes we make are one inch in outer diameter. And, so there's one ideal value, well, maybe what the company is doing is getting into variety and having different outer diameters. One inch, half inch, three-quarters of an inch. And in each case they're looking for accuracy, but accuracy around different values. And that's what Dr. Taguchi would refer to as... Well, he and I agreed to call it paradigm D, which is precision around an ideal value. But depending on your product line, you may have ideal values for different customers. And that's called variety. And so paradigm D is about precision coupled around varieties. So I just wanted to throw that out as well in our session.   0:27:16.7 AS: And the risk that you're highlighting is that somebody who's skilled in Six Sigma or some other tools will be patting themselves on the back, that they've got a very narrow distribution in that... And it's inside of spec and therefore they've done their job.   0:27:39.4 BB: Yes. Well...   0:27:40.1 AS: And what you're highlighting is that there is, there is an additional cost to the business or additional benefit if that narrow distribution could be moved to the target value?   0:27:58.2 BB: Well, here's what I've seen. I've seen organizations go from a really wide distribution where, in the assembly process, they need all those different sizes to put the puzzle together. And then somebody comes in and shrinks the variation to a fraction of that, not taking into account how they're used, and instead of going around and having all the different sizes to put the puzzle together, they can no longer do that. So what I'd say, I've seen plenty of examples where a given amount of variation that people are used to, that they're accommodating could be quite well until somebody comes along and gets rid of those other options.   0:28:48.2 BB: So I've seen variation reduction gone sour, a few times leading to some near catastrophic failures of a rocket engine because we're just looking at something in isolation. And, so I went to a very senior executive in that timeframe and I said... 'cause there's this big push in the company and we gotta reduce variation, "We gotta reduce variation." And I went to him and I said, "If we have a choice between shrinking the variation and doing nothing, I'd say do nothing." And he is like, "Well, what do you mean?" And I went through and explained this scenario with him and he said, "Oh, I've never seen anything like that." And I thought to myself, "You must have worked for companies that make the tubes, but don't use the tubes."   [laughter]   0:29:33.4 BB: I said. And so, this is why when I hear people talk about reducing variability, reducing cost, trying to make improvements, and again, we'll look at this in a whole nother episode, is my concern is are they thinking about that part in isolation? Are they thinking about how that fits into a greater system? So whether it's reducing the variation in the outer diameter, whether it's reducing the cost, if they're focusing on that as a KPI, and not looking at how that KPI fits into a greater system, I'd say I'd be nervous about that.   0:30:17.4 AS: One of the interesting examples I remember from when I was young and in maybe business school or whatever, was when Toyota came out with Lexus and they talked about how they spent a huge amount of time reducing variation in every part so that you had a much smoother and more quiet ride, and the reliability was better and better. And they talked about the pursuit of perfection was the tagline that they did. But it made sense to me that, many people would be... Many companies are satisfied with a certain amount of variation.   0:30:54.8 AS: When if they could get it more narrow around the desired outcome, then the knock on effects, particularly for a new company, maybe for an old company, and the knock on effects basically lead people to go, "Go back we want more variation," because you're screwing up everything downstream. But if you're building an operation where you can get more and more narrow distribution around the target output, the target desired output, then you're bringing benefit all the way down the line for the business. What have I got right and what have I got wrong out of that?   0:31:33.2 BB: Well, that's fantastic. And a couple things come to mind. I really appreciate that question. Andrew, if you were to do a Google search for Dr. Taguchi and Toyota, because this idea of being on target associated with what he referred to as the quality loss function, which again, will be a focus of another episode, I'd rather one, look at it as an integration loss function, just to reinforce the idea that being close to the ideal value is about improving integration. And that's it.   0:32:12.7 AS: When you say integration, what do you mean?   0:32:15.5 BB: Who's gonna use that tube? What are they gonna do with it?   0:32:18.1 AS: Okay. So downstream, integrating the process with the downstream.   0:32:20.5 BB: And so if I'm not looking at how the doctor fits into the system, how the tube fits into the system. So what I find is in the Taguchi community, people will say, Dr. Taguchi worked with Toyota back in the '50s and '60s. Dr. Taguchi and Deming met for the first time in the mid '50s in India. Dr. Taguchi was honored with the Deming prize in literature in 1960, and they would've met then. Don Wheeler in his books on Statistical Process Control, and inside the cover it will say, "In September 1960, a new definition of quality being on target with minimum variation." So there's all that. So what I've tried numerous times over the last 30 years is searching for documentation of Taguchi's influence on Toyota. I found nothing.   0:33:10.7 BB: And, so here I'm flying back from Japan, having gone there while Rocketdyne was owned by Boeing to explain these concepts to people at the Mitsubishi Heavy Industries, which is the largest aerospace company in Japan.   0:33:25.1 BB: There was a big partnership going on between Boeing, the division I worked for at Rocketdyne was part of Boeing. And, Boeing's, at that time, largest supplier in the world was MHI. So I was on a study team to go over there to... And I explained these ideas to them. They knew nothing about this. They were focusing on uniform... They were focusing on... Their quality system was precision, not accuracy.   0:33:47.6 BB: And I was explaining what we were doing with that. Well, flying home, I was sitting in business class, sitting next to me is a young engineer, flying out of Tokyo. He is Japanese. And now we started talking. Turns out he is a graduate of Cal Poly San Luis Obispo in California working for Toyota at the NUMMI plant. And I explained to him red pen and blue pen companies, he loved it. I explained to him the paradigms of variation. And he says, "Bill," he says, "I'm coming back from working with supplier to get them to focus on the ideal value." He says, "That is the thinking we use."   [laughter]   0:34:29.2 BB: He says they wanna change the tolerance. And I'm telling him, "No, you've got to hold that target value." So you can search the Internet, you won't find this. And so there's two data points I want to get before we close. So one is that the majority of the flight coming home was me explaining this stuff to him, and then afterwards maintaining a relationship with him and his boss and looking to see if I could learn more.   0:34:56.0 BB: But he was... For him to say, "That's exactly what we do." Well then I spent several years poking Dr. Taguchi about his loss function concepts and all, and he said, "No company in the United States uses the loss function." And I said, "Really?" He says, "No." He said, "The leading users in Japan are Toyota and Nippon Denso," now known as Denso, a major supplier to Toyota.   0:35:21.1 BB: And I said, "What do they do with it?" He says, well, he says, "Bill, they have a database of loss functions for how different things come together." He says, "They have a database for the impact of variation." And I said, "Really?" I said, "How do they use it?" He said, "They use it to guide their investments." That's what you're talking about, Andrew. But you won't find that on the Internet. I've not found that in any literature.   0:35:51.1 BB: So, those are two things that I hold there. I believe Toyota is using this somewhere deep in the organization as evidenced by this young guy. And my interest is to expand that appreciation within our community in The Deming Institute, that it is not about uniformity. It is not about precision. And, that improving precision could make things worse. [chuckle] If you're not focused on accuracy, then the question becomes, "Is every situation worth accuracy?" And the answer is, "No. You've got to look downstream."   0:36:29.6 AS: Okay. Now it's time for me to ask the question that was asked of Dr. Deming.   0:36:34.8 BB: Okay.   0:36:35.9 AS: Explain it in one short sentence. What do you think the key takeaway is from this excellent discussion?   0:36:44.8 BB: I think what's really important is the need to manage variation, which is the same thing as Akoff would say, the difference between managing actions and managing interactions. The idea is that how I accomplish my task depends upon how you're using it. And so for me to blindly meet a requirement from you not knowing how you use it, well, whether that's you asking me to clean the table and I don't know anything about the table, you saying, "I need you to meet these requirements."   0:37:21.2 BB: You saying, "I need this by tomorrow." And I say, "What do you mean by tomorrow, Andrew? Tomorrow at eight o'clock, tomorrow at nine o'clock?" And so I think what Deming's talking about is if I just blindly take a set of requirements and meet them in a way that I interpret without asking you for clarification, is not teamwork.   0:37:41.7 AS: Great.   0:37:44.1 BB: So I need to know how you're using this.   0:37:47.1 AS: And, that's a great lesson. And I think what it's telling us is the idea of communicating and cooperating and getting to the next level has to do with really understanding what the next process is doing with it, and how what you're delivering could be improved so that the improvement is measured by a benefit to the next and the next and the next profit process. Not as a loss to the next one, which is what you explained about if variation got reduced, all of a sudden people weren't built for handling that.   0:38:23.2 BB: Well, and let me throw one other thing out along those lines. And as a colleague of mine in Amsterdam says to people in the Lean community says, "How does Lean...how does implementation of Lean explain why we love Toyota products? How does it explain the reliability of the products? We buy nothing but Toyotas." Now, we've had bad luck with Toyotas, which people I met in business school classes told me, "You never buy anyone's first model even Toyota."   0:39:03.8 BB: So we will only buy Toyotas, but we'll never buy the first model year. And I'm buying it because I want it to start every single time. I don't want a car where I've gotta replace the water pump. And so for our listeners, if you wanna have customers revere your products for the reason, I think, many people revere Toyota products, I think what we're talking about tonight is a significant part of what makes those parts come together and those cars last so long.   0:39:41.3 AS: Bingo. Bill, on behalf of everyone at The Deming Institute, I want to thank you again for the discussion. And for listeners, remember to go to deming.org to continue your journey. This is your host, Andrew Stotz, and I'm gonna leave you with one of my favorite quotes from Dr. Deming, which is, "people are entitled to joy in work."

Kazuya Taguchi is one of the very few drifters who have competed in drifting at the top level in multiple countries. He came to the United States from Japan a little over three years ago and had to learn English and a lot more along the way. He came here to win and has been working his way up to being a force in Formula Drift while still making time for building cool cars with the JDM style we love so much. Kazuya is also part of the famous Japanese drift team Moccomans whose headquarters is Garage Yamaguchi. We get into Kazuya's origin story back in Japan and his early days street drifting stories. Kazuya has a very high drift IQ and there's a lot to learn about his evaluation of driving and techniques. Guests: https://www.instagram.com/kazuya_taguchi123/  Sponsors: https://koruworks.com/ code “goodestboi”  https://tirestreets.com/ "goodest651" for 20% off Accelera 651s “goodest15” for 15% off the rest Goodest Co: http://goodestco.com (grab some merch or follow us on other channels)  Host: @palmer_sndrsn, @goodestcast

Learning Deming is like seeing the world through a different lens. In this episode, Bill Bellows uses various examples to show us how powerful that new vision can be.  TRANSCRIPT 0:00:03.4 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is Vision Therapy. Bill, take it away. 0:00:29.9 BB: Welcome back, Andrew. Yes, I wrote an article, gosh, maybe 10 years ago now for the Lean Management Journal under the title Vision Therapy: Shift from Big Problems to Great Opportunities. And in the article, I talk about vision therapy - as getting glasses is one form of vision therapy or perhaps you need surgery on your eyes. I also talked about therapy our son once went through which is hand-eye coordination. And all of that is leading up to a vision exercise I put together 1998 timeframe and was inspired by a number of things. One is I had read a book written by David Kerns, former CEO of Xerox, and it's called 'Prophets in the Dark.' And he shared a story in there of a senior executive who had come from Ford. And he said, this guy named Frank Pip, who went on to become an outstanding leader within Xerox. If there was... I get the feeling if there was a hall of fame within Xerox, David Kearns would be in it. Frank Pip would be in it. 0:02:02.0 BB: And quite likely Barry Bebb, who's a mentor of mine, would be in it. And others, and... Anyway, relative to Frank Pip: Pip started his career at Ford and he got to the point of being a plant manager for the Ford final assembly plant. And there was an account he gave to Kearns of whenever they did final assembly of automobiles, rubber mallets were used to bang the mating parts together. They didn't quite fit. And every now and then, two parts would go together without a mallet. And the Ford, at Pip's plant, they called the parts that assembled without a mallet Snap-fit - everything else required mallets and mostly it was mallets. But every now and then there'd be Snap-fit. And then he explains how they, Pip was inspired to go off and buy competitor's cars for the purpose of buying them, taking them apart, putting 'em back together. And unfortunately, Pip died a few years ago, and I... And it never dawned on me to reach out to him. I thought by the time I heard of him, it was maybe too late then, it turns out I had plenty of time to reach out to him. So I don't know what inspired him, but I get the feeling he was routinely buying competitors' cars, taking 'em apart, putting 'em together, just alike, and they assembled just like theirs, just like theirs, just like theirs. 0:03:26.7 BB: And then there was a pickup truck they took apart, put together, and never used a mallet. It was, in Ford's language, 100% Snap-fit. And Pip was so astounded by the results he had the assembly team take it apart again and put it back together again 'cause he couldn't believe it was a 100% Snap-fit. Well, when he found that it was 100% Snap-fit twice, now he thought, "Holy cow," he calls up corporate, had someone come out from Dearborn, which was Ford's corporate headquarters, and I don't know if it was his boss, whoever the person was, came out very, very senior. And he says, they met with the team. The team's answering his questions. And as I explain it to people, you can imagine what it's like when somebody from corporate comes out. That's typically in my experience, somebody coming from corporate that's either, they're there to celebrate something or it's a bad day or it's a routine, but it... Anyway, it's a big deal for him. And as Pip's account was when the plant manager, when this executive came out from Dearborn and heard this account first hand, blah, blah, blah, his comment to the team was "The customer will never notice the difference." 0:04:38.1 BB: And in the book it said Pip was so frustrated with that attitude that he quit 'cause he thought, "We have uncovered something and this guy is treating it as no big deal.” Well, then I point out to people that was the late '60s and which was at the beginning of Ford, I'm sorry, of Toyota selling cars in the States. It was a Toyota pickup truck. So I just... I shared this story in part for this term, Snap-fit. Well, then in the late '90s I was teaching a graduate class in quality management at the Kellogg School of Management, Kellogg Business School, Northwestern University, which I checked very recently. It's the number two business school in the United States. And I'm teaching a class there. Through some interesting occurrences, I was invited to teach this class there. And I wrote up this contrast between the very simple black and white model. And we've been talking black and white models and I was using a black and white model of organizations which were about continuous improvement versus black and white thinking in that kind of contrast. And I gave them pairs of words and I said... 0:06:16.5 BB: You could have "good versus bad" - is one model. What I was showing 'em is, is black and white words versus continuum words versus relative words. I said, there's, let's see the good versus bad, and then that would be a black and white. And I said, "If you take the good versus bad and put it into a continuum, what would it be? And people would joke, "Gooder." And I said, "Well, faster, it could be tall versus short - taller, cheap versus expensive - cheaper." And I was using those pairs, getting them a sense of relative thinking versus black and white thinking. And I put out the word Lean, L-E-A-N and I said, "Let's say you don't know anything about the word. In which category does this word apply? Does it fit into the black and white mold or the continuum mold?" And a first of them would say it's shades-of-gray thinking. And I said, "Well, why?" And they come up with explanations and finally one guy says, he says, "It's black and white thinking." And I said, "Why?" He says, "There's no 'er' in the end." 0:07:36.4 BB: Lean, Lean. It's right? And then there's a woman who pushed back on that. And she said, "No, I disagree." She said, "You can continuously eliminate waste." And I said, "How far are you gonna go with that?" And she said, "Until there's no waste." And I said, and I was trying to point out is, well then we're done. I said, "Where is the continuous improvement, the continuum thinking behind being done?" And I said, [laughter] what'd I tell her, saying to her, I said, "So if you're done, well then what do you do?" She said, "Well, you continuously eliminate waste until you're done." Well, then I said, "Well, describe to me what an organization looks like that has no waste. Is what does it look like?" She says, "I don't know." Well, I think those two things inspired me in a class later that year, this is 1998, to throw out as an exercise, a vision, and I call it vision therapy exercise. 0:08:38.0 BB: And I said to them, "Yeah, I want you to take a piece of paper, divide it into half, into half, left and right, and then top and bottom. So there's four quadrants." And I said, "Label on the left hand side Blue Pen for Blue Pen Company. The right hand side for Red Pen as in Red Pen Company." And I held up, I would have these transparency markers. I had eight different colors. And I pulled out one, which is blue. And I said, "Imagine each of you have recently visited a company which makes blue pens, only Blue Pens. And every week I'd buy one that costs a dollar." And, I pulled out a Red Pen. Why red? 'cause I wanted something the other end of the spectrum. So I had eight different colors to choose from. So one was blue, one was red. Later somebody said to me, "Why did you pick blue versus red?" 0:09:31.2 BB: And I said, "Well, Rocketdyne was owned by Boeing at the time." And when I looked at the colors, you know a lot of the, advertising the logos of Boeing were blue and white. And I thought, blue is the company I have in mind for one side, and then something not blue, not green, not brown, red is the other side. So I said, "So imagine you've recently visited a Blue Pen Company, that only makes blue pens. You buy one every week, it costs a dollar. When you need a Red Pen, you buy that from the Red Pen Company, and they only make red, you buy it, it cost a dollar." So I had them create this - left and right. Imagine you've recently visited both organizations for two weeks each. All right? And then I said on the, you've got a left side and a right side, one's red, one's blue, top versus bottom. 0:10:24.1 BB: I said, "So imagine for the first week as you're visiting these two companies, nobody's there. So give us some additional information. What I want you to do is describe the physical layout of both organizations." And this ties in really well with... So my idea, as I shared in a recent session from Edgar Schein who had passed away back in January. He was an organizational therapist for most of his career at MIT. And in his book, 'Organizational Culture and Leadership,' he talked about organizational culture can be analyzed at three levels. And I didn't know about these levels back in '98 and found about them later. And I found it fits really well. And he said the first level is artifacts. And he says, I just wanna read, he says, "The constructed environment of an organization, including its architecture, technology, office layout, dress code, visible or audible behavior patterns, public documents like employee orientation, handbooks." 0:11:27.8 BB: And, what Schein says is that those artifacts come from values, the reasons and/or rationalizations of why members behave the way they do. And values come from assumptions. And again, I'm quoting from Schein, "Typically an unconscious pattern that determines how group members perceive, think and feel." And again, I didn't know about those at the time, but going back to the exercise, there's a left side and a right side. One is Blue Pen Company, one is Red Pen Company. The top two cells are, what would you see physically as Schein would say: what are the artifacts of these two organizations? And all you know so far is that one makes blue, one makes red, they both cost a dollar. And I buy one from each. Well then in the bottom two cells, what I want you to imagine is, so for the first two weeks, you visit both organizations, write down what are the physical characteristics of both organizations for the bottom two cells. 0:12:25.5 BB: And I apologize for coming back to this. In the first week you visit, there's no one there but you, no one there but you. So you're walking around both organizations, you're the only person around. You've got a clipboard. All you can talk about are the artifacts. What do you see? And the bottom two cells, imagine the second week in both organizations, there are people there. So for the bottom two cells, describe the people in both organizations. So all of this is artifacts and they come from values, they come from assumptions. But all you're doing is saying...but what I specifically wanted to differentiate is, what does the place look like different from what are the people like? And so everybody's ready to go. I'm gonna give you five minutes to put something in each cell. And here's the additional information. Andrew, you're ready? 0:13:12.7 BB: When I go to use the Blue Pen. So I would take the Blue Pen out and I would say, "When I use the Blue Pen, the cap goes off, the cap goes on, it goes off and it goes on nice and easy." And at the time I'm explaining this, they don't know anything about the prior story of Toyota, the pickup truck, 100% Snap-fit, Frank Pip. I usually... I save that for later. I said, all you know is the cap goes on, goes off nice and easy. Now the Red Pen, when I go to use the Red Pen, I need pliers to get the cap off. And there were times I had a little pair of pliers and I would use the pliers to pull it off and I need a hammer to get it back on. And I would have a little hammer and I boom, boom, boom. Now however, the Blue Pen... The cap is said to be Snap-fit. Then I would say just like snap your fingers, it comes off nice and easy goes on nice and easy, it doesn't fall off. That's all the information I have. Spend the next five minutes putting something in each cell. 0:14:14.3 BB: I've done that exercise around the world over 500 times of all different audiences, as young as college students, people working in the fishing industry, all over. And what's really cool is what shows up in those four cells is nearly identical. There may be some caveats due to language and whatnot. 0:14:40.8 AS: Identical across the 500, or again, identical... 0:14:44.1 BB: Yes. 0:14:44.5 AS: Across the red and blue. 0:14:46.5 BB: Yes, I... Well... What shows up in those four cells is nearly identical. So I would give people five minutes. And the other thing for those who are listening, my advice when you're doing this, that it took me a while to figure out the additional benefit is, what I would do is go around the room in each cell, the Blue Pen physical and ask if anyone has an example. So for the Blue Pen physical, someone will say: an open environment, bright lights, windows. All right. Then I'd go to the Red Pen Company, physical, "Okay, what do you see over here?" People might say, "Closed doors." Then I'd go to the Red Pen people, what about the people? And the... There might be "rigid,” “looking over their shoulder,” “on a time clock." Blue Pen Company, people might be happy and smiling. So I would go around the room before I give 'em five minutes just to make sure most of us are on the same page 'cause now, and then there'd be some people who are lost. And... But in general, people are pretty good. So then I give 'em five minutes and then depending on the size of the room, I might go around the room, table by table, look over your shoulder, see how you're doing, onto the next one, onto the next one and I get a feeling that they're doing pretty good. So then when I have them stop and there's different things I do at this point. I've had people at this point after five minutes stand up. Okay, there's a couple hundred people in the room at a conference. 0:16:31.0 BB: And I'll say: okay what I'd like you to do is find someone you've not met today and go introduce yourself and spend five minutes comparing trip reports. What's in your trip reports? And the room will very quickly erupt in laughter, whether I do it having you stand up, go find somebody or whether you are sitting at a table of four or five and I say across the table share. And then after they're done with that I'll say, "Okay, what did you find when you share your answers with others at the table?" And again and again, they'll say, "Their answers are just like mine." And I'll say, "Did anything come up in any of those quadrants that you were lost? That you said, Andrew, I... What do you mean by this? I don't know where you're coming from." And that's never happened. Every single time, they may have... They're looking at a factory and somebody may be looking in the kitchen, someone's looking in the lobby area. So they may be looking at different places, but it always fits together well. In the very beginning, what I would do, is I would give them five minutes. I wouldn't have 'em share anything yet. And I would go around the room and I'd say, get in the front of the room and the very first person, and I'd say if it was you say, "Andrew, what's the first thing you have for Blue Pen Physical?" And you'd say, "Clean." In fact, what's really cool is "neat, clean and organized" came up in order again and again. 0:18:13.6 BB: So I would ask you, "Andrew, what do you see?" You would say, "Neat," next person "Clean," next person "Organized." And I go all the way around and just fill up one cell with the very first... One thing you have that you haven't heard yet. Then I would jump over to the Red Pen, fill it out, then I'd go to the Red Pen people. So I would fill up a given cell and in the beginning I would write these on flip charts. And again, I don't know exactly what I was... I had in mind, "It's gonna be interesting," but I didn't appreciate how powerful this has become. And in the beginning I would write these on flip charts and then at the end of the class, I would throw them away. Then as I began to see how common the patterns were, then I would write them onto transparency and save them and I would date them. And at one point of time I've a colleague who's working on a PhD thesis, University of Texas and his PhD research, Andrew, [laughter] came from 200 trip reports that I still had in my files that I hadn't thrown out. And he and his brother took the data 'cause we knew exactly who was in each class. And so he had... He and his brother had some methodology in his... So his research data for his PhD thesis, looking at the leadership styles of these two organizations. And so let me... 0:19:52.3 BB: So in the Blue Pen physical, it's: an open layout neat, clean, organized, what else? Harmonious and as needed, if you were to say harmonious, then I might say, "Andrew, what do you mean by that? What do you mean? What do you mean clean? What do you mean this? What do you mean?" And so there's nothing wrong for our listeners who are trying this out with people. It's just keep asking them: "What do you mean by, what do you mean by." What's most critical is write down exactly what people say. Don't interpret. Don't yeah I would just say don't interpret. So I go all the way around and people would be astounded. 0:20:40.9 BB: I mean, I'd say a couple of things. One is quite often what people see in the contrast is where they work [laughter] versus where they would love to work. [chuckle] Now let me also say, in the very beginning when I did it, I did not explain to them what Snap-fit meant. So I did not say Snap-fit is good. I just said Snap-fit. Now, there would be people who would say, "Well, does it mean because it's Snap-fit, that it's good." And I would just say, "I didn't say one is good, one is bad. All I'm saying is one goes together with the hammers, one doesn't," and then I would eventually explain to them the a 100% Snap-fit Toyota pickup truck, and it would come together nice for them. Well, when I found the uses of this are one, people can, but Dr. Deming talked about prevailing style of management, but talking about it and having conversations about it is, what I found is this exercise... 0:22:00.1 BB: I think helps people in their own words, explain to them. It allows them to create a sense of: what is the prevailing system of management? And it's the Red Pen Company's side in many ways, and then: what is a Deming organization? It's the opposite. Now this is a very simple black and white model. And as George Box's quoted saying "All models are right. Some models are useful." I have found it enormously useful to look at the two organizations and ask people, what are the conversations like in both organizations? And I would say, "Okay, you're walking around a Red Pen Company, you come across two people in the hallway, what are they talking about?" 0:22:48.4 BB: And what you'll get is: it's second-shift people complaining about first-shift people, or it's engineering complaining about manufacturing. And then people would say, there's a lot of "us and them" and I said, okay. What I've also heard people say, is they'll say, "Well, on second shift where they work, we're a Blue Pen Company." "Also on second shift we're a Blue Pen, but those first-shift people, those are Red Pen." And you know, I said, what's a conversation like in a Blue Pen Company? "I've got an idea. Hey, let me hear about it, blah, blah, blah. Tell me more. Tell me more." I'll ask them, what are survival skills in both organizations, survival skill in a Red Pen Company? What'd you find there? And people would say you know, being able to finger-point, not being blamed, protecting yourself, you know, the CYA mentality. Mentality. Don't ever... 0:23:52.8 AS: Surviving the occasional backstabbing. 0:23:55.9 BB: Oh yeah. Don't ever try anything new. You know, what will also come out is, you know, "stodgy, stiff, inflexible." Whereas I said, what about people in the Blue Pen Company? And they'll present this. And I'll ask them, "Which organization would you call a learning organization?" And people will always say, the Blue Pen Company. And I say, why? And they say, "Well, you know, they're always trying to figure out, you know, they're doing PDSA cycles, trying to figure out improvement, improvement." And I'll say, you don't think people in a Red Pen Company have learned how to survive [laughter]? You don't think they've learned how to finger-point, you don't think they've learned how to duck and cover? 0:24:39.9 AS: In a Red Pen. You were saying in a Red Pen Company or in a Blue Pen? 0:24:40.7 BB: Oh yeah I meant Blue Pen, I meant red I mean Red Pen. I said, what I was trying to point out is people will say a Blue Pen is a learning environment. What I'm trying to point out is, don't underestimate the ability of people in a Red Pen Company to also learn, but that learning is about self-protection. And, you know, so the survival skills in that environment are protecting oneself, hoarding information, not allowing others to know how to, you know, do things. So they have secret tools, secret analysis methods, and I say, what are survival skills in a Blue Pen Company? And people will say, "Sharing knowledge is power in a Blue Pen Company." And so I constantly wanna make sure that I'm sharing. And, but it's not that I inundate everyone with everything, but a week later after Andrew, you've asked me for something, a week later I come to you and I say, "Hey, I've been thinking about it. 0:25:34.3 BB: And something else occurred to me that I thought you might value." What I would also add to the conversation is, "What percent of organizations are Red Pen companies?" And I just say, just, you know, in your experience. And then I would say in this unscientific survey, people would say the majority, 80% to 90% of companies, they would say, are Red Pen companies. And I would say, "Well, what keeps them in business? I mean, how could, what is, if 80% of them are Red Pen companies? What keeps all of these companies in what Deming would call the prevailing style of management and business?" People are like, "I don't know." 0:26:17.0 BB: In my response, I shared with my boss who was once President of Rocketdyne. I said, "What keeps us in business?" He said, "What?" I said, "Lousy competition." [laughter] 0:26:27.1 AS: Yeah. That's what I was gonna say. What keeps us in business is the other 80, 90 percent that's in the same boat as us. 0:26:32.7 BB: Exactly. Because they blame their people. Their people become dejected, withdrawn, only do as they're told, hide mistakes, which caused others to make the same mistakes. How can you keep in business focusing on the past to get back to the present when you're in this constant firefighting mode? How do you stay in business other than: others run the same way. And Deming somewhere in The New Economics, I believe in The New Economics. He says, "Be thankful for a good competitor." So that's what I mean by the vision therapy. This Blue Pen Company, Red Pen Company. I've done variants of it. The very first one was blue and red Snap-fit versus not snap-fit. I've, in the last few years, we'll get exactly the same results with a different starting point. 0:27:30.2 BB: And the starting point I use is, I tell the story of the executive sitting next to me that I think I've shared about the last straw. The straw that, what if you're in an organization where you believe the last straw broke the camel's back, what would it be like to work there? And people would say, "Oh, I wouldn't wanna work there is a culture of blame." So I would explain, imagine you recently visited an organization where everyone believes that the last straw did it, and that's called the Last Straw organization. And then there's also this All Straw organization where you understand the systemic aspect of all the straws getting together. And so if I was to start this exercise and explain this belief in the last straw that we have in society, that the basketball game has won on that last shot, or lost in that last shot, versus an all straw, I can use that starting point, Andrew, and have people go through and compare the physical aspects of both organizations and people and get exactly the same results and if it's, 'cause what I found with people, they'll say that... 0:28:31.9 AS: When you say exactly the same, you're saying exactly the same as the Red Pen Blue Pen? 0:28:36.1 BB: Yes. If you were to look at the... If you had a group of 30 people and get a composite score in those four quadrants, you wouldn't necessarily know if it was started with Red Pen, Blue Pen, or All Straw, Last Straw. And I've also done it when I worked for the Deming Institute in that timeframe when I left Rocketdyne, I started explaining it as what if there was one organization where there's a sense of "we," look what we did, how did we do on the exam? Andrew, you're the student, I'm the professor. A collective sense of all for one and one for all versus a "me" organization. Where the question I ask you, Andrew, is "How did you do on the exam?" And inferring that your ability to learn from the exam is separate from my ability to teach. 0:29:28.6 BB: Like I could be saying, "How are you doing in sales" versus "How are we doing in sales?" So if I was to describe it as a "me" organization, everything I do, everything is accomplished by me alone breaking things into parts. My task is done. A lot of this question one stuff that we've been talking about in terms of quality versus a "we" organization, if I explain the "me" and the "we," and there's ways to do that and then get into the trip report, me, we, and the four quadrants, very, very similar. And so I found is in terms of a vision exercise, first of all, depending on who the audience is, I'll get a... I'll figure out do I wanna use Red Pen, Blue Pen, All Straw and Last Straw, me versus we. And there's a couple others that I've used, but I know that once I get them thinking about, I just have to come up with what is the differentiator. 0:30:26.7 BB: And then I get them thinking about the artifacts. And then from the artifacts, once that is done, then I can talk about the conversations in both, the survival skills in both, the what if an... What is an ethics issue in both organizations? And I'll just say a little more about that. And I've worked in large corporations and ethics training. Really, what does it come down to the end of the day is that I didn't misuse company resources, that I didn't charge Project A using the Project B charge number [laughter], right? And I didn't fill out my timecard deliberately wrong. I didn't try to cheat the company on a trip report kind of thing. Well, then what I start thinking about is what's an ethics issue in a Blue Pen Company? 0:31:23.5 BB: And I believe, I think this comes from Dr. Deming, he would say, if, I'm pretty sure it was Deming, Deming would talk about a salesperson for a copying machine. And so Andrew, I'm the salesman and I come to your company and wanna sell, you're in need of a copier. And Deming would say, if I tried to sell you a copier that was bigger than you needed, because there's a bonus for me, Andrew, or a copier that was smaller. If I sold you a copier that I knew was much less than what you needed or much more than what you needed, then Deming would say, that would be unethical. He'd say, "My job is to sell you exactly what you need." And I view that, and I thought, "Well, that's a Blue Pen phenomenon where ethics is about how am I treating others with a sense of sharing or hoarding or whatnot?" So what I found is... 0:32:21.3 AS: Well, also ethics is how am I treating the customer? 0:32:24.4 BB: All of that. Well, how am I treating my coworkers? There's a poem I use with a great quote from Robert Frost and he said "What's the secret to selling a horse?" Have I ever shared this with you? 0:32:35.0 AS: No. 0:32:36.1 BB: The secret to selling a horse. Are you ready? 0:32:36.8 AS: Yep. 0:32:39.5 BB: Just sell it before it dies. [laughter] 0:32:41.7 AS: There you go. 0:32:44.3 BB: And so, and what Frost says in the poem is that we go through life handing off our problems to others. And I've written about this and I said, well, you mean like selling a coworker a horse? And then you come back the next day and you say, "Bill, you know this horse is dead." And I say, "Andrew, it was alive when I gave it to you." What? So I look at it as whether you're a coworker or a customer, what's that all about? And so I throw that out because... 0:33:12.2 BB: I find that that simple model is an incredible mechanism. Earlier today I was in a conversation with a coworker and the word that came up in conversation was you're "driving change." Driving change. And I said, "Driving change is what happens in a Red Pen Company." And the explanation I gave, in the Red Pen Company, I come to you Andrew, and I said, "I want this by tomorrow." And driving change is: I've got a gun to your head. And I say, "Do you understand what I'm looking for?" And you're like, "Right, 'cause I can find somebody else to do this, Andrew. I need this by tomorrow." That's driving change. And so what I'll say to people is, if driving change is a Red Pen Company, then what's the word we use in a Blue Pen Company? 0:34:05.2 AS: Coaxing. 0:34:07.4 BB: And people will say, "I don't know, what's that word?" And I'll say, "Lead, lead!" [laughter] That's what leadership's all about. You want to follow. And so, what I find is this model has allowed me to get a great number of people to explain in their own way, envision the two different organizations. And there's no doubt where they wanna work. They'd much rather be in the Blue Pen, "we" organization, an All-Straw organization. And then we can talk about, how does... The next thing I look at is with an understanding of the System of Profound Knowledge. Can you understand how a Red Pen Company might become a Blue Pen Company? Or my other proposal is that all organizations start off as a Blue Pen Company. So I started off an organization in my garage. I'm the only employee, I have customers, I have suppliers, but I know where everything goes and everything is Snap-fit because it's all about me and I wanna make sure these things integrate really well. And so how does that become a Red Pen Company? 0:35:19.7 BB: Well, here's what happens Andrew is, I hire you right outta school. You're all excited and you come in, you wanna join this organization, and I need help. Andrew, I need help. And I like your attitude. But then what happens is, I go to you and I say, "Andrew, here's what I want you to do. Your job is to answer the phone. Your job is when people call in, here's an instruction sheet, here's the order sheet. I want you to take the order. Here's what we do. We offer different sizes, different colors. You're gonna sell them what they need, not more, not less. You're gonna take their credit card information, you're gonna repeat it back to them, blah, blah, blah." 0:35:54.0 BB: And what I point out is that what I'm slowly doing, once I hire you, is putting people in separate roles. And next thing I know, I've got a baseball team where everybody's covering their own base instead of being incredibly flexible. And so I use that to point out that with the best of intentions, you could go in that direction. And, but what I've seen is I can use the four elements of Profound Knowledge to explain how one becomes the other. I can also use the System of Profound Knowledge to explain why the behaviors are the way they are. Which goes back to: what are the value systems in both organizations? What are the fundamental assumptions? Now relative to what is meant by big problems? Well, Red Pen companies, again, going for those listeners who have heard the earlier podcast. Well, Red Pen companies, all straw, I'm sorry, Last Straw organizations. 0:36:57.7 BB: They're focusing on parts in isolation. They don't work on things that are good. They focus on the things that are bad. So it's always big problems. They're focusing on the past to get back to the present, kept in business by competitors who waste their resources exactly the same way. And it's not to say you never have a problem, but it's to say instead of having a full-time fire department where that's all we're doing, all the doing all the time with a significant portion of our resources, we're using control charts in places where it makes sense. Run charts when a control chart doesn't matter as much. Or we are not even collecting data 'cause intuitively we have a sense of how things are going and where we get blinded, we have problems, but we're also in that environment. We know where can we be spending time to save a lot of time. That's the great opportunity. 0:37:49.7 BB: Things are, so I'm saving time by not having things break. I am managing variation in my resources accordingly, just to allocate my resources for the greater good. A stitch in time saves time. And that's the great opportunity focus that Red Pen companies don't know anything about 'cause they're so focused on the firefighting. And to me, what allows the shift from the Blue Pen to the Red Pen. I mean, what, either if you're unaware of these dynamics, then my Blue Pen Company will gradually become this Red Pen Company nightmare. Because I'm not paying attention to what Deming's talking about. I'm unaware of the System of Profound Knowledge. And I just lapse into that unknowingly. It's not intentional. I just don't know that addition doesn't work, you know, only works when the activities are independent. I think things that are good are equally good. 0:38:47.1 BB: And so to me, I can explain with the System of Profound Knowledge how red becomes blue, how blue becomes red. I can explain the conversations. And the last thing I wanna mention is, is when people come to me with, "Hey, how can I handle an X, Y, Z situation, something we've never talked about in the class or in a seminar?" And people will bring this to my attention and say, "Here's the issue I'm dealing with. Here's that problem I'm dealing with. How can I solve that?" And what I find is, is what I tell people is, here's my advice. 0:39:24.0 BB: And you can do it on your own, or ideally if you can explain this to others and have some others understanding this contrast, then you can - with a group - do what I'm about to explain. And that is first ask yourselves, "How would a Red Pen Company address that issue?" "We're gonna do a root cause investigation. We're gonna find the person who screwed up, we're gonna replace him, blah, blah, blah. We're gonna go that way." And then I would say, "Okay, after you've exhausted that, now ask yourself, what would a Blue Pen Company do by comparison?" 0:40:51.0 BB: And I'm not saying one of those is right, one is wrong, but my belief is that as a starting point, no matter where you are in your Deming journey, I believe, again, and the more people are involved in this, the better - I think the better we can get our minds around how a Red Pen Company handles it. And then say, "Okay, what if we become aware that the ability to learn together and work together is based on the our ability to think together?" Now you go the other way and I have individually done that when someone has asked me. And so I just want to throw that out that I find the model, this vision therapy model to be immensely valuable in brand new situations as a starting point. 0:40:51.1 AS: And in wrapping up, how would you describe kind of the number one takeaway without talking about Blue Pen, Red Pen and the exercise, how would you describe the takeaway that you want our listeners and our viewers to get from this? 0:41:07.6 BB: The number one takeaway is: don't underestimate the value proposition of a shared mental model. And this is what I find is, I can within a half hour have people imagining both organizations, imagining the conversations and that for the, and this is what is so cool that I wasn't anticipating in the beginning, is how quickly people can, without reading The New Economics, just by, 'cause essentially what you're getting them to do without talking about assumptions, they are focusing on assumptions and values. So we're not talking about the artifacts, but we're taking the artifacts and without getting... This is what's so cool is without reading Edgar Schein's work, we're really doing what he's talking about is going from the artifacts down to the values, and then we can talk about the values within organizations. And I find, and another thing I would say is, I've never met anyone that thrives to work in a non-Deming organization. 0:42:15.6 BB: They wanna work in a Blue Pen Company. And so I would, that's what I also find is without mentioning Deming's work, which is also pretty cool about this, I don't have to mention Deming, Taguchi or Ackoff. I could very simply get them and they will self-identify, reveal things. And another essential aspect of this is, this is not me telling you where you wanna work. This is me not telling you what you see. This is you sharing with others. And I learned from a colleague years ago that you can't tell anybody anything. So another immense value proposition here is that people are telling you, and then all you have to do is guide them. And that's what I find is immensely valuable. 0:43:02.6 AS: It's like you're teasing out the intrinsic desires, values and all that. 0:43:08.1 BB: All of that is coming out... 0:43:10.5 AS: Without... 0:43:10.5 BB: They're sharing frustrations. They're articulating frustrations in areas that they've not thought about. And then when they share and realize... In fact, I had a guy in a class once going through this exercise and he came up to me actually, we went through...I did this with a bunch of co-workers at an offsite location where all of them knew each other. And we went through the exercise and then took a break. As we're going to a break, one of them come up to me and he saw all the things on the whiteboard and the four quadrants. 0:43:50.3 BB: And he says to me, "These people, my co-workers," this is one-on-one. He's looking, and he says, "My co-workers got all of that over the cap fits or it doesn't." [laughter] 0:44:09.6 BB: And he wasn't denying, but he's like, "I don't get it." He came up to me two hours later when the class is over and he said, "I can't believe what I couldn't see." [laughter] And that's when I realized this is a really exciting exercise that I've written about and helped others present literally around the world. And I find it works amazingly well to create a framework that people aren't realizing is helping them achieve what they really all want. I believe. I believe. 0:44:46.2 AS: Yap. Well, Bill, on behalf of everyone at the Deming Institute, I wanna thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. This is your host, Andrew Stotz. And I'll leave you with one of my favorite quotes from Dr. Deming. "People are entitled to joy in work."

In this episode, Coaches Georgie, Shannon, and Ariel hash out aspects of intermittent fasting that don't get talked about enough.  Why has not eating been sold as the pinnacle of good nutrition? If someone crashes and burns from time-restricted feeding, what should they do next? If the whole idea makes you want to scream and run for the pantry, does that mean you are weak and need to toughen up? Could every problem in your life have arisen because... you're not fat-adapted? How did a symptom of disordered eating come to be encouraged? If intermittent fasting appeals to you, we'll share some ideas to approach it in the least-risky way. And if you never want to fast at all, you'll be glad to hear there are other ways to obtain its purported benefits. While intermittent fasting is often hailed by acolytes as the ONLY way to lose weight, promote metabolic flexibility, stabilize blood sugar and improve cardiovascular health, that's simply untrue. While some individuals find fasting or time restricted feeding to be non-stressful and beneficial, others' experience it as unpleasant and ineffective, or even as a cause of long term mental and physical harm. Connect with Georgie and the Confident Eaters Coaches: WebsiteFacebookInstagramHave you ever thought, "I know what to do, I just need to consistently do it"? Who hasn't? Sometimes we need accountability. Sometimes we need specific strategies, new tools, or a bit of help. If you want help to become a confident, sensible eater with 1:1 personalized attention, sign up here.  Spoiler: There's no fasting in our program! We enjoy eating and get great results. If you are someone who struggles with binge eating or emotional eating, be sure to check out Coach Georgie's other podcast Breaking Up With Binge Eating.Additional Reading: Channon, S., & Hayward, A. (1990). The effect of short‐term fasting on processing of food cues in normal subjects. International Journal of Eating Disorders, 9(4), 447-452. Forbush, K., Heatherton, T. F., & Keel, P. K. (2007). Relationships between perfectionism and specific disordered eating behaviors. International Journal of Eating Disorders, 40(1), 37-41.Ganson, K. T., Cuccolo, K., Hallward, L., & Nagata, J. M. (2022). Intermittent fasting: Describing engagement and associations with eating disorder behaviors and psychopathology among Canadian adolescents and young adults. Eating Behaviors, 47, 101681.Placanica, J. L., Faunce, G. J., & Soames Job, R. F. (2002). The effect of fasting on attentional biases for food and body shape/weight words in high and low eating disorder inventory scorers. International Journal of Eating Disorders, 32(1), 79-90.Cuccolo, K., Kramer, R., Petros, T., & Thoennes, M. (2022). Intermittent fasting implementation and association with eating disorder symptomatology. Eating disorders, 30(5), 471-491.Pelz, M. (2022). Fast like a girl: A Woman's Guide to Using the Healing Power of Fasting to Burn Fat, Boost Energy, and Balance Hormones. Hay House, Inc.Kim, B., Joo, Y., Kim, E. K., Choe, H., Tong, Q., & Kwon, O. (2021). Effects of intermittent fasting on the circulating levels and circadian rhythms of hormones. Endocrinology and Metabolism, 36(4), 745–756. https://doi.org/10.3803/enm.2021.405Varady, K. A., Cienfuegos, S., Ezpeleta, M., & Gabel, K. (2021). Cardiometabolic benefits of intermittent fasting. Annual Review of Nutrition, 41(1), 333–361. https://doi.org/10.1146/annurev-nutr-052020-041327Wasserfurth, P., Palmowski, J., Hahn, A., & Krüger, K. (2020). Reasons for and consequences of low energy availability in female and male athletes: social environment, adaptations, and prevention. Sports medicine-open, 6(1), 44. https://link.springer.com/article/10.1186/s40798-020-00275-6Fahrenholtz, I. L., Sjödin, A., Benardot, D., Tornberg, Å. B., Skouby, S., Faber, J., ... & Melin, A. K. (2018). Within‐day energy deficiency and reproductive function in female endurance athletes. Scandinavian journal of medicine & science in sports, 28(3), 1139-1146. https://onlinelibrary.wiley.com/doi/abs/10.1111/sms.13030Lee, S., Moto, K., Han, S., Oh, T., & Taguchi, M. (2021). Within-day energy balance and metabolic suppression in male collegiate soccer players. Nutrients, 13(8), 2644. https://www.mdpi.com/2072-6643/13/8/2644

If something is "good" is that good enough? Who decides? In this episode, Bill and Andrew discuss how people define "good," what interchangeability has to do with morale, and the problem with a "merit-based" culture. Bonus: Learn how Americans became the first to use the French idea of interchangeable parts in manufacturing. Note: this episode was previously published as Part 5 in the Awaken Your Inner Deming series.  TRANSCRIPT 0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is, Deming Distinctions: Beyond Looking Good. Bill, take it away. 0:00:30.4 Bill Bellows: Funny you mentioned that. You remind me that I've been at this for over 30 years, and coming up in July, I'll be celebrating 40 years of marriage. Like 30 years, 40, where do these numbers come from? 0:00:44.5 AS: Okay. Yeah. Who defines quality in a marriage, Bill? 0:00:47.0 BB: Alright. 0:00:50.8 AS: Okay, we won't go there. Take us, take it away. 0:00:52.2 BB: We won't go there. So we are gonna talk about who defines quality, and to get into "beyond looking good." As I shared with you, I've listened to each of the podcasts a few times. And before we get into who defines quality, I just wanna provide clarification on some of the things that came up in the first five episodes. And so, one, and I think these are kind of in order, but if they're not in order, okay, well, I made reference to black-and-white thinking versus shades-of-gray thinking. And I called black-and-white thinking - black and white data - category data, and the word I was searching for that just wasn't coming out was attribute data. So for those who are keeping score, attribute data is probably the most relevant statistician term in that regard. 0:01:44.9 BB: Attribute data versus variable data. And what I've made reference to, and we'll talk more in a future session, is looking at things in terms of categories. And categories are black and white, or it could be red, yellow, green, that's three categories, or looking at things on a continuum. So I'm still excited by the difference that comes about by understanding when we're in the black-and-white mode or the category mode or the attribute data mode versus the variable mode, and still have a belief that we can't have continuous improvement or continual improvement if we're stuck in an attribute mode. 0:02:22.9 BB: And more on that later, that's one. I talked about Thomas Jefferson meeting Honoré Blanc and getting excited about the concept of interchangeable parts. And I had the date wrong, that was 1785, if anyone's keeping score there. He was ambassador to France from 1785 to 1789, but it was in 1792 that he wrote a letter to John Jay, who was a...I think he was a Commerce Secretary. Anyway, he was in the administration of Washington and shared the idea. I was doing some research earlier and found out that even with the headstart that Blanc had in France, 'cause back in 1785, Jefferson was invited to this pretty high level meeting in Paris where Blanc took a, I guess, like the trigger mechanism of 50 different rifles. Not the entire rifle, but just the...let's just call it the trigger mechanism with springs and whatnot. And he took the 50 apart and he put all the springs in one box, all the other pieces in their respective boxes and then shook the boxes up and showed that he could just randomly pull a given spring, a given part, and put 'em all together. And that got Jefferson excited. And the...what it meant for Jefferson and the French was not just that you can repair rifles in the battlefield quickly. 0:03:56.9 BB: Now, what it meant for jobs in France was a really big deal, because what the French were liking was all the time it took to repair those guns with craftsmanship, and Blanc alienated a whole bunch of gunsmiths as a result of that. And it turns out, Blanc's effort didn't really go anywhere because there was such a pushback from the gunsmiths, the practicing craftsmanship that jobs would be taken away. But it did come to the States. And then in the early 1800s, it became known as the American System of Production. But credit goes back to Blanc. I also made reference to absolute versus relative interchangeability. And I wanna provide a little bit more clarification there, and I just wanna throw out three numbers, and ideally people can write the numbers down, I'll repeat 'em a few times. The first number is 5.001, second number is 5.999, and the third number is 6.001. So it's 5.001, 5.999, 6.001. And some of what I'm gonna explain will come up again later, but...so this will tie in pretty well. So, what I've been doing is I'll write those three words on the whiteboard or throw them on a screen, and I'll call... 0:05:28.9 AS: Those three numbers. 0:05:31.4 BB: A, B, and C. And I'll say, which two of the three are closest to being the same? And sure enough people will say the 5.999 and the 6.001, which is like B and C. And I say that's the most popular answer, but it's not the only answer. People are like, "well, what other answer are there?" Well, it could be A and C, 5.001 and 6.001, both end in 001. Or it could be the first two, A and B, 5.001 and 5.999. So what I like to point out is, if somebody answers 5.999 and 6.001, then when I say to them, "what is your definition of same?" 0:06:14.9 BB: 'Cause the question is, which two of the three are close to being the same? And it turns out there's three explanations of "same." There's same: they begin with five, there's same: they end in 001. And there's same in terms of proximity to each other. So I just wanna throw that out. Well, then a very common definition of "quality" is to say, does something meet requirements? And that's the black-and-white thinking. I've also explained in the past that requirements are not set in absolute terms. The meeting must start at exactly 1:00, or the thickness must be exactly one inch. What I've explained is that the one inch will have a plus or minus on it. And so let's say the plus and minus gives us two requirements, a minimum of five and a maximum of six. Well, then that means the 5.001 meets requirements and the 5.999 meets requirements. 0:07:15.4 BB: And so in terms of defining quality, in terms of meeting requirements, A and B are both good. And then what about the 5.999 and the 6.001? Well, those numbers are on opposite sides of the upper requirement of six. One's just a little bit to the left and one's a little bit to the right. Then I would ask people, and for some of you, this'll ring - I think you'll be smiling - and I would say to people, "what happens in manufacturing if, Andrew, if I come up with a measurement and it's 6.001?" Okay, relative to defining quality as "meeting requirements," 6.001 does not meet requirements. So what I'll ask people is, "what would a non-Deming company do with a 6.001?" And people will say, "we're gonna take a file out, we're gonna work on it, we're gonna hit it with a hammer." And I say, "no, too much work." And they say, "well, what's the answer?" "We're gonna measure it again." 0:08:25.7 AS: Until we get it right. 0:08:27.7 BB: We will measure it until we get it right. We will change the room temperature. We will take the easiest path. So then I said, get people to realize, they're like, yeah, that's what we do. We measure the 6.001 again. Well, then I say, "well Andrew, why don't we measure the 5.001 again?" And what's the answer to that, Andrew? [laughter] 0:08:51.5 AS: 4.999. [laughter] 0:08:54.7 BB: But what's interesting is, we'll measure the 6.001 again. But we won't measure the 5.001 again. We won't measure the 5.999 again. And so to me, this reinforces that when we define quality as "meeting requirements," that what we're essentially saying in terms of absolute interchangeability, what we're pretending is that there's no difference between the 5.001 and the 5.999. At opposite ends, we're saying that Blanc would find them to be interchangeable, and putting all the things together. I don't think so. 0:09:36.7 BB: I think there's a greater chance that he'd find negligible difference between the 5.999 and the 6.001. And that's what I mean by relative interchangeability, that the difference between B and C is nothing, that's relative interchangeability. The closer they are together, the more alike they are in terms of how they're integrated into the gun, into the rifle, into the downstream product. And I just throw out that what defining quality as "requirements" is saying is that the first two are...the person downstream can't tell the difference. Then I challenge, I think there's...in terms of not telling the difference, I think between 5.999 and 6.001, that difference is minuscule cause they are relatively interchangeable. The other two are implied to be absolutely interchangeable. And that I challenge, that's why I just want to throw that out. All right, another thing I want...go ahead, Andrew. 0:10:38.3 AS: One of the things I just highlight is, I remember from my political science classes at Long Beach State where I studied was The Communist Manifesto came out in 1848. And Karl Marx and Friedrich Engels were talking about the alienation of the worker. And what you're talking about is the kind of, the crushing of the craftsmen through interchangeable parts that was a lot like AI coming along and destroying something. And after 50 or 60 or 70 years of interchangeable parts, along comes The Communist Manifesto with the idea that when a person is just dealing with interchangeable parts, basically they're just a cog in the wheel and they have no connection to the aim of what's going on. They don't have any connection, and all of a sudden you lose the craftsmanship or the care for work. And I think that the reason why this is interesting is because that's, I think, a huge part of what Dr. Deming was trying to bring was bring back...it may not be craftsmanship for creating a shoe if you were a shoemaker, but it would be craftsmanship for producing the best you could for the part that you're playing in an ultimate aim of the system. 0:12:02.6 BB: Yes. And yes, and we'll talk more about that. That's brilliant. What you said also reminds me, and I don't think you and I spoke about it, you'll remind me. But have I shared with you the work of a Harvard philosopher by the name of Michael Sandel? 0:12:24.3 AS: I don't recall. 0:12:27.0 BB: He may be, yeah, from a distance, one of the most famous Harvard professors alive today. He's got a course on justice, which is I think 15 two- or three-hour lectures, which were recorded by public television in Boston. Anyway, he wrote a book at the beginning of the pandemic. It came out, it's called The Tyranny of Merit. 0:12:54.0 BB: And "merit" is this belief that "I did it all by myself." That "I deserve what I have because I made it happen. I had no help from you, Andrew. I had no help from the government. I didn't need the education system, the transportation system. I didn't need NASA research. I made it happen all by myself." And he said, what that belief does is it allows those who are successful to claim that they did it by themselves. It allows them to say those who didn't have only themselves to blame. And he sees that as a major destructive force in society, that belief. And I see it tied very well to Deming. Let me give you one anecdote. Dr. Deming was interviewed by Priscilla Petty for The Deming of America documentary, which was absolutely brilliant. 0:13:49.8 BB: And she's at his home, and he's sharing with her the medal he got from the Emperor of Japan, and he's holding it carefully, and I think he gives it to her, and she's looking at it, and she says to him something like, so what did it mean to you to receive that? And he said, "I was lucky. I made a contribution." He didn't say I did it all by myself. He was acknowledging that he was in the right place at the right time to make a contribution. And that's where Sandel is also heavily on, is don't deny the role of being born at the right time in the right situation, which is a greater system in which we are. Well, for one of the college courses, I was watching an interview between Sandel and one of his former students. 0:14:48.1 BB: And the point Sandel made that I wanted to bring up based on what you just said, he says, "what we really need to do is get people dignity in work." And that's what you're talking about, is allowing them to have pride in work, dignity in work instead of as they're making interchangeable parts, having them feel like an interchangeable part. And I'm really glad you brought that up because when we talk later about letter grades, I would bring back one of the reasons I find Deming's work astounding, is that he takes into account psychology in a way that I hope our listeners will really take heart to in a deeper way. 0:15:30.2 AS: And so for the listeners out there, just to reinforce, the book is called The Tyranny of Merit: What's Become of the Common Good. Published in 2020 by Michael Sandel. And the ratings on Amazon is 4.5 out of five with about 2,446 ratings. So it's a pretty well-rated book I'd say. And looks interesting. Now you got me wanting to read that one. 0:15:57.0 BB: Oh what I'll do is I'll send you a... Well, what I encourage our listeners to do is find the interview... Harvard Bookstore did an interview in 2020, 2021, with Michael Sandel being interviewed by his former student by the name of Preet Bharara. [laughter] Who used to be the... 0:16:24.3 AS: SEC... 0:16:24.4 BB: Head of these...no, well, he prosecuted a number of people for SEC crimes, but he headed the Justice Department's long oldest district, which is known as SDNY or the Southern District of New York. And so he was a...in one of the first classes his freshman year at Harvard, Preet Bharara's freshman year at Havard was one of Sandel's first years. And so they had an incredible conversation. So I would encourage the listeners to... 0:16:51.8 AS: Yeah, it's titled: Michael J Sandel with Preet Bharara at Harvard. And the channel is called Harvard Bookstore. 0:16:58.6 BB: Yes, absolutely. All right. So another topic I want to get to in terms of clarification and key points, last time we talked about tools and techniques and what I'm not sure I made much about.... First of all, I just wanna really reinforce that tools and techniques are not concepts and strategies. Tools are like a garden tool I use to dig a hole. Technique is how I go about using it, cleaning it, and whatnot. Not to be confused from a concept...and what is concept? We talked about last time is a concept is an abstract idea and a strategy is how do we apply it? So tools and techniques within Six Sigma quality could be control charts, could be design of experiments. And all, by the way, you're gonna find those tools and techniques within the Deming community. So it's not to say the tools and techniques are the differentiator. 0:17:50.8 BB: I think the concepts and strategies are the differentiators, but I don't wanna downplay tools. Lean has tools in terms of value streams, and you won't find value streams per se in Dr. Deming's work. Dr. Deming looks in terms of production viewed as a system. In a later session, I want to talk about value streams versus Deming's work. But I just wanna point out that I find it...it's easy to get lost in the weeds with all we find within Lean, Six Sigma, Deming and whatnot. And this is why last time I wanted to focus on tools and techniques as separate from concepts and strategies. And what I think we did speak about last time, again, for just as a reminder, is what's unique that we both enjoy with Dr. Deming's work is that KPIs are not caused by individual departments, assigned to individual departments. 0:18:46.0 BB: KPIs are viewed as measures of the overall system. And if you assign the KPIs across the organization and give every different function their own KPI, what you're likely to find - not likely - what you WILL find is that those assigned KPIs are interfering with others' abilities to get their KPIs met. And in the Deming philosophy, you don't have that problem because you understand that things are interdependent, not independent. And so I just wanna close by saying what I find in Deming's work to be most enlightening is this sense of "what does it mean to look at something as a system?" And it means everything is connected to everything else. When you define quality in terms of saying "this is good because it meets requirements," what you've just said is, "this is good in isolation." Whether it's the pass from the quarterback to the wide receiver, saying the pass met requirements. 0:19:52.0 BB: What I think Dr. Deming would ask is, "is the ball catchable?" [laughter] And yet, what I've seen in my aerospace experience is parts being measured for airplanes in Australia that they meet requirements because the measurements are taken early in the morning before the sun has had a chance to heat the part up. And we get the 6.001 is now 5.999. You know what that means, Andrew? It's - we can now ship it. [laughter] 0:20:23.9 BB: And send it off to America for some airplane factory. 0:20:26.2 AS: When we shipped it, that's what it was. 0:20:28.9 BB: Exactly. And so, again, interdependence is everything. Go ahead, Andrew. 0:20:34.6 AS: I wanted to point on, there's a company in Thailand that really has gotten on the KPI bandwagon, and I was talking with some people that work there, and they were just talking about how they've been rolling out the KPIs for the last couple of years and down to the number of seconds that you're on the phone and everything that you do is tracked now. And then I just witnessed that company basically use that KPI as a way to basically knock out a whole group of people that they were trying to get rid of by coming in with tight KPIs and then saying, "you're not keeping up with 'em and therefore you're out." And I just thought...and the manager that was involved I was talking to, you could just see, he saw how KPI can just be weaponized for the purposes of the senior management when you're doing KPIs of individuals. And the thing that I was thinking about is, imagine the CEO of that company in a couple of years, in a couple of months, they happen to listen to this podcast, or they pick up a book of Dr. Deming and they think, "Oh my God, what did I just do over the last five years implementing KPIs down to the individual level?" [laughter] 0:21:48.5 BB: Oh, yeah. And that's what we talked about last time is...as I told you, I had a friend of a friend who's worked for Xerox, and he said there wasn't a KPI that was flowed down that they couldn't find a way to beat. And that's what happens, and you end up getting things done, but what's missing is: at whose expense? All right. So we talked about...now, let's get into beyond looking good, Deming distinctions. Who defines quality? Well, from Philip Crosby's perspective, quality's defined by the...it could be the designer. The designer puts a set of requirements on the component, whatever it is. The unit, the requirements have latitude we talked about. They're not exact. There's a minimum of six, a maximum of...or a minimum of five, maximum of six. 0:22:48.8 BB: There's a range you have to meet, is the traditional view of quality. And in my 30 years of experience, I've not seen quality defined any other way than that. It has to be in between these two values. Sometimes it has to be five or below or six or above, but there's a range. But also what we talked about last time is Dr. Deming said "a product or service possesses quality if it helps someone and enjoys a sustainable market." But what I found profound about that definition, it is not me defining quality and saying, "Andrew, the parts met requirements when I threw it. Now, it's your job to catch it." It's me saying, "I've thrown the ball and you tell me, how did I do? You tell me how did I do?" And if you said, "Bill, if you throw it just a little bit higher, a little bit further out, a little bit faster," that's about synchronicity. Now, I'm realizing that my ability to throw the ball doesn't really matter if you can't catch it. So if I practice in the off season, throwing it faster and faster, but don't clue you in, until the first game, how's that helping? So I've got a KPI to throw it really, really hard. And you're thinking, "how's that helping?" So that's... 0:24:19.9 AS: And can you just go back to that for a second? Quality is on a product or service, you were saying that how Dr. Deming defined that, it helps someone... 0:24:26.7 BB: Yeah. Dr. Deming said "a product or service possesses quality if it helps someone and enjoys a sustainable market." And so my interpretation of that is two things. One is, it's not me delivering a report and saying the report met requirements. It's saying, "I get the report to you, and I ask Andrew, how did I do?" And then you say to me, "I had some problem with this section, I had some problem...." But the important thing is that you become the judge of the quality of the report, not me. And it could be information I provide you with in a lecture. It's you letting me know as a student that you had a hard time with the examples. And I'm thinking, "well, I did a great job." So it's not what I think as the producer handing off to you. It's you giving me the feedback. So quality is not a one-way...in fact, first of all, quality's not defined by the producer. It's defined by the recipients saying, "I love this or not." And so that's one thing I wanna say, and does it enjoy a sustainable market? What I talked about in the past is my interpretation of that is, if I'm bending over backwards to provide incredible quality at an incredible price, and I'm going outta business, then it may be great for you, but it may not be great for me. So it has to be mutually beneficial. I just wanna... Go ahead, Andrew. 0:26:03.1 AS: You referenced the word synchronicity, which the meaning of that according to the dictionary is that "simultaneous occurrence of events which appear significantly related, but had no discernible causal connection." What were you meaning when you were saying synchronicity? Is it this that now you're communicating with the part of the process ahead of you, and they're communicating back to you and all of a sudden you're starting to really work together? Is that what you mean by that? 0:26:33.1 BB: Yeah. When I think of synchronicity, I'm thinking of the fluidity of watching a basketball game where I'm throwing blind passes to the left and to the right and to the observer in the stands are thinking: holy cow. That's what I'm talking about, is the ability that we're sharing information just like those passes in a basketball game where you're...I mean I cannot do that without being incredibly mindful of where you are, what information you need. That's what I meant. That's what I mean. As opposed to - I wait until the number is less than...I'm out there in the hot sun. I get the measurement, 6.001, no, no, no, wait. Now it's five. Where's the synchronicity in that? Am I concerned about how this is helping you, or am I concerned about how do I get this off my plate onto the next person? And I'd also say... 0:27:32.6 AS: Yep. And another word I was thinking about is coordination, the organization of the different elements of a complex body or activity so as to enable them to work together efficiently. You could also say that the state of flow or something like that? 0:27:48.7 BB: I'm glad you brought up the word "together." The big deal is: am I defining quality in a vacuum, or am I doing it with some sense of how this is being used? Which is also something we got into, I think in the, one of the very first podcasts, and you asked me what could our audience...give me an example of how the audience could use this. And I said you're delivering a report to the person down the street, around the corner. Go find out how they use it. I use the example of providing data for my consulting company to my CPA, and I called 'em up one day and I said, "how do you use this information? Maybe I can get it to you in an easier form." That's together. I mean relationships, we talked earlier about marriage, relationships are based on the concept of together, not separate, together. Saying something is good, without understanding how it's used is not about "together." It's about "separate." 0:28:54.1 BB: And so what I find is, in Lean, we look at: how can we get rid of the non-value-added tasks? Who defines value? Or I could say, and Lean folks will talk about the...they'll say this: "eliminate things that don't add value." My response to them is, if you tell me that this activity does not provide value in this room for the next hour, I'm okay with that. If you tell me this activity doesn't add value in this building for the next year, I'm okay with that. But if you don't define the size of the system when you tell me it doesn't add value, then you're implying that it doesn't add value, period. 0:29:43.4 BB: And I say, how do you know that? But this is the thinking, this is what baffles me on the thinking behind Lean and these concepts of non-value-added, value-added activities. I think all activities add value. The only question is where does a value show up? And likewise in Six Sigma quality, which is heavily based on conformist requirements and driving defects to zero, that's defining quality of the parts in isolation. What does that mean, Andrew? Separate. It means separate. Nothing about synchronicity. And so I'm glad you brought that point up because what I...this idea of "together" is throughout the Deming philosophy, a sense of together, defining quality in terms of a relationship. 0:30:31.1 AS: And I remember when I was young, I was working at Pepsi, and they sent me to learn with Dr. Deming. And then I came back, and what I was kind of looking for was tools, thinking that I would...and I came back of course, with something very different, with a new way of thinking. And then I realized that Dr. Deming is so far beyond tools. He's trying to think about how do we optimize this whole system? And once I started learning that about Dr. Deming, I could see the difference. Whereas, you may decide - let's say that you wanna learn about Lean and get a certification in Lean or something like that. 0:31:15.5 AS: Ultimately, you may go down a rabbit hole of a particular tool and become a master in that tool. Nothing wrong with that. But the point is, what is the objective? Who defines the quality? And Dr. Deming clearly stated in the seminars that I was in, and from readings that I've read, that the objective of quality isn't just to improve something in...you could improve something, the quality of something and go out of business. And so there's the bigger objective of it is: how does this serve the needs of our clients? So anyways, that's just some of my memories of those days. 0:31:52.4 BB: Yeah. But you're absolutely right. And the point I'm hoping to bring out in our sessions is: I'm not against tools and techniques. Tools and techniques are incredible. They're time savers, money savers, but let's use them with a sense of connections and relationships. And I agree with you, I've done plenty of seminars where people are coming in - they're all about tools and techniques. Tools and techniques is part of the reason I like to differentiate is to say....and again, I think people are hungrier for tools and techniques. Why? Because I don't think they've come to grips with what concepts and strategies are about. And I'm hoping our listeners can help us...can appreciate that they go together. Tools and techniques are about efficiency, doing things faster, doing things cheaper. Concepts and strategies are about doing the right thing. Ackoff would say "doing the right thing right." And short of that, we end up using tools to make things worse. And that's what I'm hoping people can avoid through the insights we can share from Dr. Deming. 0:33:05.4 AS: And I would say that, would it be the case that applying tools, and tools and techniques is kind of easy? You learn how they work, you practice with them, you measure, you give feedback, but actually going to figure out how we optimize this overall system is just so much harder. It's a complex situation, and I can imagine that there's some people that would retreat to tools and techniques and I saw it in the factory at Pepsi when people would basically just say, "well, I'm just doing my thing." That's it, 'cause it's too much trouble to go out and try to negotiate all of this with everybody. 0:33:50.7 BB: I think in part, I think as long as they're managing parts in isolation, which is the prevailing system of management, then, I agree with you. Becoming aware of interdependencies in the greater system, and I'll also point out is whatever system you're looking at is part of a bigger system, and then again, bigger system, then again, bigger system. What you define is the whole, is part of a bigger system. No matter how you define it, it's part of a bigger system because time goes to infinity. So your 10-year plan, well, why not a 20-year plan? Why not a 30-year plan? So no matter how big a system you look at, there is a bigger system. So let's not get overwhelmed. Let's take a system, which Ackoff would say, take a system which is not too big that you can't manage it, not too small, that you're not really giving it the good effort, but don't lose sight of whatever system you're looking at - you'll begin to realize it is actually bigger than that. Again, what Dr. Deming would say, the bigger the system, the more complicated, which is where you're coming from, but it also offers more opportunities. I think we're so used to tools and techniques. 0:35:14.3 BB: I don't think people have really given thought to the concepts and strategies of Deming's work as opposed to Lean and Six Sigma as being different, which is why I wanted to bring it up with our listeners, because I don't think people are defaulting on the tools. I just don't think they appreciate that concepts and strategies are different than tools and techniques. And I like to have them become aware of that difference and then understand where black-and-white thinking works, where continuum thinking has advantages. There's times to look at things as connected, and then there's times to just move on and make a decision, which is a lot easier because the implications aren't as important. But at least now we get back to choice, be conscious of the choice you're making, and then move on. All right, so also on the list we had, who defines quality? 0:36:09.0 BB: We talked about that. What is meant by good: the requirements are met. Who defines good? Again, if you're looking at Phil Crosby, who defines good? Someone has to set, here are the requirements for being "good." I could be giving a term paper and me saying to the students, this is what "good" means. Next thing I wanted to look at is, "why stop at good?" And, I'm pretty sure we've talked about this. A question I like to ask people is how much time they spend every day in meetings, discussing parts, components, things that are good and going well. And what I find is people don't spend a whole lot of time discussing things that are good and going well. So why do they stop? Why not? Because they're stopping at "good." 0:36:57.1 BB: And that goes back to the black-and-white thinking. They're saying things are "bad" or they're "good." We focus on the bad to make it good, and then we stop at good. Why do we stop at good? Because there's no sense of "better." All right. And what does that mean? So again, we have why stop at good? Why go beyond good? And this is...'cause I think we're talking about really smart people that stop at "good." And I think to better understand what that means, what I like to do is ask people, what's the letter grade required for a company to ship their products to the customer? What letter grade does NASA expect from all their suppliers? And I asked a very senior NASA executive this question years ago. He was the highest ranking NASA executive in the quality field. 0:37:50.5 BB: And I said, "what letter grade do you expect from your contractors?" And he said, A+. A+. And I said, actually, it's not A+. And he is like, "What do you mean?" I said, "actually the letter grade, your requirement is actually D-." And he pushed back at me and I said, what...he says, "well, what do you mean?" I said, "how do you define quality?" And he said, "We define quality as requirements are met. That's what we require." I said, "so you think A+ is the only thing that meets requirements?" He's like, "well, where are you coming from?" I said a pass-fail system, now we get back to category thinking, if it's good or bad, what is good? Good is passing. What is passing? What I explained to him: passing is anything from an A+ down to a D-. 0:38:38.9 BB: And he got a little antsy with me. I said, "well, the alternative is an F, you don't want an F, right?" I said, "well, what you're saying is that you'll take anything but an F and that means your requirements are actually D-." And then when I pushed back and I said, "is a D- the same as an A+?" And he said, "no." I said, "well, that's what I meant earlier" in the conversation with him. And I told him that they weren't interchangeable. So when you begin to realize that black and white quality, Phil Crosby-quality, allows for D minuses to be shipped to customers. Again, in this one way I define quality, I hand it off to you. 'Cause in that world, Andrew, I make the measurement, it's 5.999, it meets requirements, I ship it to you, your only response when you receive it is to say, "thank you." [laughter] 0:39:33.2 BB: For a D minus, right? Well, when you begin to understand relationship quality, then you begin to understand that to improve the relationship, what's behind improving the relationship, Andrew, is shifting from the D- to the A. And what does that mean? What that means is, when I pay attention to your ability to receive what I give you, whether it's the pass or the information, the more synchronously I can provide that, the letter grade is going up, [laughter] and it continues to go up. Now, again, what I'm hoping is that the effort I'm taking to provide you with the A is worthwhile. But that's how you can have continuous improvement, is stop...not stopping at the D minus. 0:40:17.6 BB: Again, there may be situations where D minus is all you really need, but I, that's not me delivering to you a D minus blindly. That's you saying to me, "Hey, I don't need an A+ over here. All I really need is a D minus." That's teamwork, Andrew. So on the one hand, and what I think is, our listeners may not appreciate it, is who defines the letter grade? So in your organization, I would say to people, you give everyone a set of requirements to go meet, what letter grade does each of them has to meet to hand off to a coworker, to another coworker, to a customer? Every single one of those people, all they have to do if they're feeling disenfranchised, as you mentioned earlier, they're feeling like an interchangeable part, well, under those circumstances, Andrew, I don't have to call you up, I just deliver a D minus. And you can't complain because I've met the requirements. 0:41:14.2 BB: So what I think it could be a little scary is to realize, what if everybody in the company comes to work tomorrow feeling no dignity in work and decides to hand off the minimum on every requirement, how does that help? And what I find exciting by Deming's work is that Dr. Deming understood that how people are treated affects their willingness to look up, pay attention to the person they're receiving and deliver to them the appropriate letter grade. So I'm hoping that helps our audience understand that if it's a black and white system, then we're saying that it's good or it's bad. What that misses is, keyword Andrew, variation in good. So the opportunities to improve when we realize that there's a range, that "good" has variation. Another point I wanna make is, what allows the Deming philosophy to go beyond looking good? 0:42:16.2 BB: Well, if you look at the last chapter 10, I think, yeah, chapter 10 of the New Economics is...like the last six pages of the New Economics is all about Dr. Taguchi's work, and it's what Dr. Deming learned from Dr. Taguchi about this very thought of looking at quality in terms of relationships, not just in isolation, Phil Crosby-style meeting requirements. And the last thing I wanna throw out is I was listening to a interview with Russ Ackoff earlier today, and he gave the three steps to being creative. This is a lecture he gave at Rocketdyne years ago. And he said, the first thing is you have to discover self-limiting constraints. Second, you have to remove the constraint. And third, you have to exploit that removal. And what I want to close on is what Deming is talking about is the self-limiting constraint is when we stop at good. [laughter] 0:43:20.7 BB: And I'm hoping that this episode provides more insights as to the self-imposed constraint within our organizations to stop at "good." What happens when we go beyond that? And how do you go beyond that? By looking at how others receive your work and then expand that others and expand that others and expand that others. And then what I find exciting is, and the work I do with students and with clients is, how can we exploit every day that idea of synchronicity of quality, and not looking at quality from a category perspective? Again, unless that's all that's needed in that situation. So I don't want to throw out category thinking, use category thinking where it makes sense, use continuum thinking where it makes sense. So that's what I wanted to close with. 0:44:12.1 AS: Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. This is your host, Andrew Stotz, and I'm gonna leave you with one of my favorite quotes from Dr. Deming, and it's very appropriate for the discussion that we've had today. "People are entitled to joy in work."  

We're halfway through Season Two of Tough Love! So we're taking a hot minute to catch our breath and share part of the one off Live Show we did at the Sydney Opera House in March 2023. It was sold out and part of the esteemed All About Women festival.  This conversation is about Making Tough Decisions.  Linda is joined by some fascinating & funny friends - comedian Becky Lucas and journalist Kumi Taguchi. Hear why Linda feels guilty about everything, how Kumi held onto her dream job, and what Becky said to get her banned from a social media giant for life.    Make sure you listen until the end to hear an ultra special guest who salsa dances her way on stage.  Tough love lessons on all the shit that counts. Host @LindaMarigliano with guests @Becky Lucas & @Kumi Taguchi This podcast was produced by Linda Marigliano, Amelia Chappelow and Adair Shepherd with support by Mike Williams. Photography by Jess Gleeson, Artwork by Tom Cotton @MadeinKatana Say hi: hellotoughlove@gmail.com Sponsorship? hellotoughlove@gmail.com Follow IG: @toughloveteam  Linda's book ‘Love Language' is out now - https://linktr.ee/LindaMarigliano Follow Linda: https://www.instagram.com/lindamarigliano/?hl=enSee omnystudio.com/listener for privacy information.

If something is "good" is that good enough? Who decides? In this episode, Bill and Andrew discuss how people define "good," what interchangeability has to do with morale, and the problem with a "merit-based" culture. Bonus: Bill gives us a short history lesson on how Americans became the first to manufacture using interchangeable parts even though the originator was a Frenchman. 0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is, Deming Distinctions: Beyond Looking Good. Bill, take it away.   0:00:30.4 Bill Bellows: Funny you mentioned that. You remind me that I've been at this for over 30 years, and coming up in July, I'll be celebrating 40 years of marriage. Like 30 years, 40, where do these numbers come from?   0:00:44.5 AS: Okay. Yeah. Who defines quality in a marriage, Bill?   0:00:47.0 BB: Alright.   0:00:50.8 AS: Okay, we won't go there. Take us, take it away.   0:00:52.2 BB: We won't go there. So we are gonna talk about who defines quality, and to get into "beyond looking good." As I shared with you, I've listened to each of the podcasts a few times. And before we get into who defines quality, I just wanna provide clarification on some of the things that came up in the first five episodes. And so, one, and I think these are kind of in order, but if they're not in order, okay, well, I made reference to black-and-white thinking versus shades-of-gray thinking. And I called black-and-white thinking - black and white data - category data, and the word I was searching for that just wasn't coming out was attribute data. So for those who are keeping score, attribute data is probably the most relevant statistician term in that regard.   0:01:44.9 BB: Attribute data versus variable data. And what I've made reference to, and we'll talk more in a future session, is looking at things in terms of categories. And categories are black and white, or it could be red, yellow, green, that's three categories, or looking at things on a continuum. So I'm still excited by the difference that comes about by understanding when we're in the black-and-white mode or the category mode or the attribute data mode versus the variable mode, and still have a belief that we can't have continuous improvement or continual improvement if we're stuck in an attribute mode.   0:02:22.9 BB: And more on that later, that's one. I talked about Thomas Jefferson meeting Honoré Blanc and getting excited about the concept of interchangeable parts. And I had the date wrong, that was 1785, if anyone's keeping score there. He was ambassador to France from 1785 to 1789, but it was in 1792 that he wrote a letter to John Jay, who was a...I think he was a Commerce Secretary. Anyway, he was in the administration of Washington and shared the idea. I was doing some research earlier and found out that even with the headstart that Blanc had in France, 'cause back in 1785, Jefferson was invited to this pretty high level meeting in Paris where Blanc took a, I guess, like the trigger mechanism of 50 different rifles. Not the entire rifle, but just the...let's just call it the trigger mechanism with springs and whatnot. And he took the 50 apart and he put all the springs in one box, all the other pieces in their respective boxes and then shook the boxes up and showed that he could just randomly pull a given spring, a given part, and put 'em all together. And that got Jefferson excited. And the...what it meant for Jefferson and the French was not just that you can repair rifles in the battlefield quickly.   0:03:56.9 BB: Now, what it meant for jobs in France was a really big deal, because what the French were liking was all the time it took to repair those guns with craftsmanship, and Blanc alienated a whole bunch of gunsmiths as a result of that. And it turns out, Blanc's effort didn't really go anywhere because there was such a pushback from the gunsmiths, the practicing craftsmanship that jobs would be taken away. But it did come to the States. And then in the early 1800s, it became known as the American System of Production. But credit goes back to Blanc. I also made reference to absolute versus relative interchangeability. And I wanna provide a little bit more clarification there, and I just wanna throw out three numbers, and ideally people can write the numbers down, I'll repeat 'em a few times. The first number is 5.001, second number is 5.999, and the third number is 6.001. So it's 5.001, 5.999, 6.001. And some of what I'm gonna explain will come up again later, but...so this will tie in pretty well. So, what I've been doing is I'll write those three words on the whiteboard or throw them on a screen, and I'll call...   0:05:28.9 AS: Those three numbers.   0:05:31.4 BB: A, B, and C. And I'll say, which two of the three are closest to being the same? And sure enough people will say the 5.999 and the 6.001, which is like B and C. And I say that's the most popular answer, but it's not the only answer. People are like, "well, what other answer are there?" Well, it could be A and C, 5.001 and 6.001, both end in 001. Or it could be the first two, A and B, 5.001 and 5.999. So what I like to point out is, if somebody answers 5.999 and 6.001, then when I say to them, "what is your definition of same?"   0:06:14.9 BB: 'Cause the question is, which two of the three are close to being the same? And it turns out there's three explanations of "same." There's same: they begin with five, there's same: they end in 001. And there's same in terms of proximity to each other. So I just wanna throw that out. Well, then a very common definition of "quality" is to say, does something meet requirements? And that's the black-and-white thinking. I've also explained in the past that requirements are not set in absolute terms. The meeting must start at exactly 1:00, or the thickness must be exactly one inch. What I've explained is that the one inch will have a plus or minus on it. And so let's say the plus and minus gives us two requirements, a minimum of five and a maximum of six. Well, then that means the 5.001 meets requirements and the 5.999 meets requirements.   0:07:15.4 BB: And so in terms of defining quality, in terms of meeting requirements, A and B are both good. And then what about the 5.999 and the 6.001? Well, those numbers are on opposite sides of the upper requirement of six. One's just a little bit to the left and one's a little bit to the right. Then I would ask people, and for some of you, this'll ring - I think you'll be smiling - and I would say to people, "What happens in manufacturing if, Andrew, if I come up with a measurement and it's 6.001?" Okay, relative to defining quality as "meeting requirements," 6.001 does not meet requirements. So what I'll ask people is, "what would a non-Deming company do with a 6.001?" And people will say, "We're gonna take a file out, we're gonna work on it, we're gonna hit it with a hammer." And I say, "No, too much work." And they say, "Well, what's the answer?" "We're gonna measure it again."   0:08:25.7 AS: Until we get it right.   0:08:27.7 BB: We will measure it until we get it right. We will change the room temperature. We will take the easiest path. So then I said, get people to realize, they're like, yeah, that's what we do. We measure the 6.001 again. Well, then I say, "Well Andrew, why don't we measure the 5.001 again?" And what's the answer to that, Andrew? [laughter]   0:08:51.5 AS: 4.999. [laughter]   0:08:54.7 BB: But what's interesting is, we'll measure the 6.001 again. But we won't measure the 5.001 again. We won't measure the 5.999 again. And so to me, this reinforces that when we define quality as "meeting requirements," that what we're essentially saying in terms of absolute interchangeability, what we're pretending is that there's no difference between the 5.001 and the 5.999. At opposite ends, we're saying that Blanc would find them to be interchangeable, and putting all the things together. I don't think so.   0:09:36.7 BB: I think there's a greater chance that he'd find negligible difference between the 5.999 and the 6.001. And that's what I mean by relative interchangeability, that the difference between B and C is nothing, that's relative interchangeability. The closer they are together, the more alike they are in terms of how they're integrated into the gun, into the rifle, into the downstream product. And I just throw out that what defining quality as "requirements" is saying is that the first two are...the person downstream can't tell the difference. Then I challenge, I think there's...in terms of not telling the difference, I think between 5.999 and 6.001, that difference is minuscule cause they are relatively interchangeable. The other two are implied to be absolutely interchangeable. And that I challenge, that's why I just want to throw that out. All right, another thing I want...go ahead, Andrew.   0:10:38.3 AS: One of the things I just highlight is, I remember from my political science classes at Long Beach State where I studied was The Communist Manifesto came out in 1848. And Karl Marx and Friedrich Engels were talking about the alienation of the worker. And what you're talking about is the kind of, the crushing of the craftsmen through interchangeable parts that was a lot like AI coming along and destroying something. And after 50 or 60 or 70 years of interchangeable parts, along comes The Communist Manifesto with the idea that when a person is just dealing with interchangeable parts, basically they're just a cog in the wheel and they have no connection to the aim of what's going on. They don't have any connection, and all of a sudden you lose the craftsmanship or the care for work. And I think that the reason why this is interesting is because that's, I think, a huge part of what Dr. Deming was trying to bring was bring back...it may not be craftsmanship for creating a shoe if you were a shoemaker, but it would be craftsmanship for producing the best you could for the part that you're playing in an ultimate aim of the system.   0:12:02.6 BB: Yes. And yes, and we'll talk more about that. That's brilliant. What you said also reminds me, and I don't think you and I spoke about it, you'll remind me. But have I shared with you the work of a Harvard philosopher by the name of Michael Sandel?   0:12:24.3 AS: I don't recall.   0:12:27.0 BB: He may be, yeah, from a distance, one of the most famous Harvard professors alive today. He's got a course on justice, which is I think 15 two- or three-hour lectures, which were recorded by public television in Boston. Anyway, he wrote a book at the beginning of the pandemic. It came out, it's called The Tyranny of Merit.   0:12:54.0 BB: And "merit" is this belief that "I did it all by myself." That "I deserve what I have because I made it happen. I had no help from you, Andrew. I had no help from the government. I didn't need the education system, the transportation system. I didn't need NASA research. I made it happen all by myself." And he said, what that belief does is it allows those who are successful to claim that they did it by themselves. It allows them to say those who didn't have only themselves to blame. And he sees that as a major destructive force in society, that belief. And I see it tied very well to Deming. Let me give you one anecdote. Dr. Deming was interviewed by Priscilla Petty for The Deming of America documentary, which was absolutely brilliant.   0:13:49.8 BB: And she's at his home, and he's sharing with her the medal he got from the Emperor of Japan, and he's holding it carefully, and I think he gives it to her, and she's looking at it, and she says to him something like, so what did it mean to you to receive that? And he said, "I was lucky. I made a contribution." He didn't say I did it all by myself. He was acknowledging that he was in the right place at the right time to make a contribution. And that's where Sandel is also heavily on, is don't deny the role of being born at the right time in the right situation, which is a greater system in which we are. Well, for one of the college courses, I was watching an interview between Sandel and one of his former students.   0:14:48.1 BB: And the point Sandel made that I wanted to bring up based on what you just said, he says, "what we really need to do is get people dignity in work." And that's what you're talking about, is allowing them to have pride in work, dignity in work instead of as they're making interchangeable parts, having them feel like an interchangeable part. And I'm really glad you brought that up because when we talk later about letter grades, I would bring back one of the reasons I find Deming's work astounding, is that he takes into account psychology in a way that I hope our listeners will really take heart to in a deeper way.   0:15:30.2 AS: And so for the listeners out there, just to reinforce, the book is called The Tyranny of Merit: What's Become of the Common Good. Published in 2020 by Michael Sandel. And the ratings on Amazon is 4.5 out of five with about 2,446 ratings. So it's a pretty well-rated book I'd say. And looks interesting. Now you got me wanting to read that one.   0:15:57.0 BB: Oh what I'll do is I'll send you a... Well, what I encourage our listeners to do is find the interview... Harvard Bookstore did an interview in 2020, 2021, with Michael Sandel being interviewed by his former student by the name of Preet Bharara. [laughter] Who used to be the...   0:16:24.3 AS: SEC...   0:16:24.4 BB: Head of these...no, well, he prosecuted a number of people for SEC crimes, but he headed the Justice Department's long oldest district, which is known as SDNY or the Southern District of New York. And so he was a...in one of the first classes his freshman year at Harvard, Preet Bharara's freshman year at Havard was one of Sandel's first years. And so they had an incredible conversation. So I would encourage the listeners to...   0:16:51.8 AS: Yeah, it's titled: Michael J Sandel with Preet Bharara at Harvard. And the channel is called Harvard Bookstore.   0:16:58.6 BB: Yes, absolutely. All right. So another topic I want to get to in terms of clarification and key points, last time we talked about tools and techniques and what I'm not sure I made much about.... First of all, I just wanna really reinforce that tools and techniques are not concepts and strategies. Tools are like a garden tool I use to dig a hole. Technique is how I go about using it, cleaning it, and whatnot. Not to be confused from a concept...and what is concept? We talked about last time is a concept is an abstract idea and a strategy is how do we apply it? So tools and techniques within Six Sigma quality could be control charts, could be design of experiments. And all, by the way, you're gonna find those tools and techniques within the Deming community. So it's not to say the tools and techniques are the differentiator.   0:17:50.8 BB: I think the concepts and strategies are the differentiators, but I don't wanna downplay tools. Lean has tools in terms of value streams, and you won't find value streams per se in Dr. Deming's work. Dr. Deming looks in terms of production viewed as a system. In a later session, I want to talk about value streams versus Deming's work. But I just wanna point out that I find it...it's easy to get lost in the weeds with all we find within Lean, Six Sigma, Deming and whatnot. And this is why last time I wanted to focus on tools and techniques as separate from concepts and strategies. And what I think we did speak about last time, again, for just as a reminder, is what's unique that we both enjoy with Dr. Deming's work is that KPIs are not caused by individual departments, assigned to individual departments.   0:18:46.0 BB: KPIs are viewed as measures of the overall system. And if you assign the KPIs across the organization and give every different function their own KPI, what you're likely to find - not likely - what you WILL find is that those assigned KPIs are interfering with others' abilities to get their KPIs met. And in the Deming philosophy, you don't have that problem because you understand that things are interdependent, not independent. And so I just wanna close by saying what I find in Deming's work to be most enlightening is this sense of "what does it mean to look at something as a system?" And it means everything is connected to everything else. When you define quality in terms of saying "this is good because it meets requirements," what you've just said is, "this is good in isolation." Whether it's the pass from the quarterback to the wide receiver, saying the pass met requirements.   0:19:52.0 BB: What I think Dr. Deming would ask is, "is the ball catchable?" [laughter] And yet, what I've seen in my aerospace experience is parts being measured for airplanes in Australia that they meet requirements because the measurements are taken early in the morning before the sun has had a chance to heat the part up. And we get the 6.001 is now 5.999. You know what that means, Andrew? It's - we can now ship it.   [laughter]   0:20:23.9 BB: And send it off to America for some airplane factory.   0:20:26.2 AS: When we shipped it, that's what it was.   0:20:28.9 BB: Exactly. And so, again, interdependence is everything. Go ahead, Andrew.   0:20:34.6 AS: I wanted to point on, there's a company in Thailand that really has gotten on the KPI bandwagon, and I was talking with some people that work there, and they were just talking about how they've been rolling out the KPIs for the last couple of years and down to the number of seconds that you're on the phone and everything that you do is tracked now. And then I just witnessed that company basically use that KPI as a way to basically knock out a whole group of people that they were trying to get rid of by coming in with tight KPIs and then saying, "you're not keeping up with 'em and therefore you're out." And I just thought...and the manager that was involved I was talking to, you could just see, he saw how KPI can just be weaponized for the purposes of the senior management when you're doing KPIs of individuals. And the thing that I was thinking about is, imagine the CEO of that company in a couple of years, in a couple of months, they happen to listen to this podcast, or they pick up a book of Dr. Deming and they think, "Oh my God, what did I just do over the last five years implementing KPIs down to the individual level?" [laughter]   0:21:48.5 BB: Oh, yeah. And that's what we talked about last time is...as I told you, I had a friend of a friend who's worked for Xerox, and he said there wasn't a KPI that was flowed down that they couldn't find a way to beat. And that's what happens, and you end up getting things done, but what's missing is: at whose expense? All right. So we talked about...now, let's get into beyond looking good, Deming distinctions. Who defines quality? Well, from Philip Crosby's perspective, quality's defined by the...it could be the designer. The designer puts a set of requirements on the component, whatever it is. The unit, the requirements have latitude we talked about. They're not exact. There's a minimum of six, a maximum of...or a minimum of five, maximum of six.   0:22:48.8 BB: There's a range you have to meet, is the traditional view of quality. And in my 30 years of experience, I've not seen quality defined any other way than that. It has to be in between these two values. Sometimes it has to be five or below or six or above, but there's a range. But also what we talked about last time is Dr. Deming said "a product or service possesses quality if it helps someone and enjoys a sustainable market." But what I found profound about that definition, it is not me defining quality and saying, "Andrew, the parts met requirements when I threw it. Now, it's your job to catch it." It's me saying, "I've thrown the ball and you tell me, how did I do? You tell me how did I do?" And if you said, "Bill, if you throw it just a little bit higher, a little bit further out, a little bit faster," that's about synchronicity. Now, I'm realizing that my ability to throw the ball doesn't really matter if you can't catch it. So if I practice in the off season, throwing it faster and faster, but don't clue you in, until the first game, how's that helping? So I've got a KPI to throw it really, really hard. And you're thinking, "how's that helping?" So that's...   0:24:19.9 AS: And can you just go back to that for a second? Quality is on a product or service, you were saying that how Dr. Deming defined that, it helps someone...   0:24:26.7 BB: Yeah. Dr. Deming said "a product or service possesses quality if it helps someone and enjoys a sustainable market." And so my interpretation of that is two things. One is, it's not me delivering a report and saying the report met requirements. It's saying, "I get the report to you, and I ask Andrew, how did I do?" And then you say to me, "I had some problem with this section, I had some problem...." But the important thing is that you become the judge of the quality of the report, not me. And it could be information I provide you with in a lecture. It's you letting me know as a student that you had a hard time with the examples. And I'm thinking, "well, I did a great job." So it's not what I think as the producer handing off to you. It's you giving me the feedback. So quality is not a one-way...in fact, first of all, quality's not defined by the producer. It's defined by the recipients saying, "I love this or not." And so that's one thing I wanna say, and does it enjoy a sustainable market? What I talked about in the past is my interpretation of that is, if I'm bending over backwards to provide incredible quality at an incredible price, and I'm going outta business, then it may be great for you, but it may not be great for me. So it has to be mutually beneficial. I just wanna... Go ahead, Andrew.   0:26:03.1 AS: You referenced the word synchronicity, which the meaning of that according to the dictionary is that "simultaneous occurrence of events which appear significantly related, but had no discernible causal connection." What were you meaning when you were saying synchronicity? Is it this that now you're communicating with the part of the process ahead of you, and they're communicating back to you and all of a sudden you're starting to really work together? Is that what you mean by that?   0:26:33.1 BB: Yeah. When I think of synchronicity, I'm thinking of the fluidity of watching a basketball game where I'm throwing blind passes to the left and to the right and to the observer in the stands are thinking: holy cow. That's what I'm talking about, is the ability that we're sharing information just like those passes in a basketball game where you're...I mean I cannot do that without being incredibly mindful of where you are, what information you need. That's what I meant. That's what I mean. As opposed to - I wait until the number is less than...I'm out there in the hot sun. I get the measurement, 6.001, no, no, no, wait. Now it's five. Where's the synchronicity in that? Am I concerned about how this is helping you, or am I concerned about how do I get this off my plate onto the next person? And I'd also say...   0:27:32.6 AS: Yep. And another word I was thinking about is coordination, the organization of the different elements of a complex body or activity so as to enable them to work together efficiently. You could also say that the state of flow or something like that?   0:27:48.7 BB: I'm glad you brought up the word "together." The big deal is: am I defining quality in a vacuum, or am I doing it with some sense of how this is being used? Which is also something we got into, I think in the, one of the very first podcasts, and you asked me what could our audience...give me an example of how the audience could use this. And I said you're delivering a report to the person down the street, around the corner. Go find out how they use it. I use the example of providing data for my consulting company to my CPA, and I called 'em up one day and I said, "how do you use this information? Maybe I can get it to you in an easier form." That's together. I mean relationships, we talked earlier about marriage, relationships are based on the concept of together, not separate, together. Saying something is good, without understanding how it's used is not about "together." It's about "separate."   0:28:54.1 BB: And so what I find is, in Lean, we look at: how can we get rid of the non-value-added tasks? Who defines value? Or I could say, and Lean folks will talk about the...they'll say this: "eliminate things that don't add value." My response to them is, if you tell me that this activity does not provide value in this room for the next hour, I'm okay with that. If you tell me this activity doesn't add value in this building for the next year, I'm okay with that. But if you don't define the size of the system when you tell me it doesn't add value, then you're implying that it doesn't add value, period.   0:29:43.4 BB: And I say, how do you know that? But this is the thinking, this is what baffles me on the thinking behind Lean and these concepts of non-value-added, value-added activities. I think all activities add value. The only question is where does a value show up? And likewise in Six Sigma quality, which is heavily based on conformist requirements and driving defects to zero, that's defining quality of the parts in isolation. What does that mean, Andrew? Separate. It means separate. Nothing about synchronicity. And so I'm glad you brought that point up because what I...this idea of "together" is throughout the Deming philosophy, a sense of together, defining quality in terms of a relationship.   0:30:31.1 AS: And I remember when I was young, I was working at Pepsi, and they sent me to learn with Dr. Deming. And then I came back, and what I was kind of looking for was tools, thinking that I would...and I came back of course, with something very different, with a new way of thinking. And then I realized that Dr. Deming is so far beyond tools. He's trying to think about how do we optimize this whole system? And once I started learning that about Dr. Deming, I could see the difference. Whereas, you may decide - let's say that you wanna learn about Lean and get a certification in Lean or something like that.   0:31:15.5 AS: Ultimately, you may go down a rabbit hole of a particular tool and become a master in that tool. Nothing wrong with that. But the point is, what is the objective? Who defines the quality? And Dr. Deming clearly stated in the seminars that I was in, and from readings that I've read, that the objective of quality isn't just to improve something in...you could improve something, the quality of something and go out of business. And so there's the bigger objective of it is: how does this serve the needs of our clients? So anyways, that's just some of my memories of those days.   0:31:52.4 BB: Yeah. But you're absolutely right. And the point I'm hoping to bring out in our sessions is: I'm not against tools and techniques. Tools and techniques are incredible. They're time savers, money savers, but let's use them with a sense of connections and relationships. And I agree with you, I've done plenty of seminars where people are coming in - they're all about tools and techniques. Tools and techniques is part of the reason I like to differentiate is to say....and again, I think people are hungrier for tools and techniques. Why? Because I don't think they've come to grips with what concepts and strategies are about. And I'm hoping our listeners can help us...can appreciate that they go together. Tools and techniques are about efficiency, doing things faster, doing things cheaper. Concepts and strategies are about doing the right thing. Ackoff would say "doing the right thing right." And short of that, we end up using tools to make things worse. And that's what I'm hoping people can avoid through the insights we can share from Dr. Deming.   0:33:05.4 AS: And I would say that, would it be the case that applying tools, and tools and techniques is kind of easy? You learn how they work, you practice with them, you measure, you give feedback, but actually going to figure out how we optimize this overall system is just so much harder. It's a complex situation, and I can imagine that there's some people that would retreat to tools and techniques and I saw it in the factory at Pepsi when people would basically just say, "well, I'm just doing my thing." That's it, 'cause it's too much trouble to go out and try to negotiate all of this with everybody.   0:33:50.7 BB: I think in part, I think as long as they're managing parts in isolation, which is the prevailing system of management, then, I agree with you. Becoming aware of interdependencies in the greater system, and I'll also point out is whatever system you're looking at is part of a bigger system, and then again, bigger system, then again, bigger system. What you define is the whole, is part of a bigger system. No matter how you define it, it's part of a bigger system because time goes to infinity. So your 10-year plan, well, why not a 20-year plan? Why not a 30-year plan? So no matter how big a system you look at, there is a bigger system. So let's not get overwhelmed. Let's take a system, which Ackoff would say, take a system which is not too big that you can't manage it, not too small, that you're not really giving it the good effort, but don't lose sight of whatever system you're looking at - you'll begin to realize it is actually bigger than that. Again, what Dr. Deming would say, the bigger the system, the more complicated, which is where you're coming from, but it also offers more opportunities. I think we're so used to tools and techniques.   0:35:14.3 BB: I don't think people have really given thought to the concepts and strategies of Deming's work as opposed to Lean and Six Sigma as being different, which is why I wanted to bring it up with our listeners, because I don't think people are defaulting on the tools. I just don't think they appreciate that concepts and strategies are different than tools and techniques. And I like to have them become aware of that difference and then understand where black-and-white thinking works, where continuum thinking has advantages. There's times to look at things as connected, and then there's times to just move on and make a decision, which is a lot easier because the implications aren't as important. But at least now we get back to choice, be conscious of the choice you're making, and then move on. All right, so also on the list we had, who defines quality?   0:36:09.0 BB: We talked about that. What is meant by good: the requirements are met. Who defines good? Again, if you're looking at Phil Crosby, who defines good? Someone has to set, here are the requirements for being "good." I could be giving a term paper and me saying to the students, this is what "good" means. Next thing I wanted to look at is, "why stop at good?" And, I'm pretty sure we've talked about this. A question I like to ask people is how much time they spend every day in meetings, discussing parts, components, things that are good and going well. And what I find is people don't spend a whole lot of time discussing things that are good and going well. So why do they stop? Why not? Because they're stopping at "good."   0:36:57.1 BB: And that goes back to the black-and-white thinking. They're saying things are "bad" or they're "good." We focus on the bad to make it good, and then we stop at good. Why do we stop at good? Because there's no sense of "better." All right. And what does that mean? So again, we have why stop at good? Why go beyond good? And this is...'cause I think we're talking about really smart people that stop at "good." And I think to better understand what that means, what I like to do is ask people, what's the letter grade required for a company to ship their products to the customer? What letter grade does NASA expect from all their suppliers? And I asked a very senior NASA executive this question years ago. He was the highest ranking NASA executive in the quality field.   0:37:50.5 BB: And I said, "what letter grade do you expect from your contractors?" And he said, A+. A+. And I said, actually, it's not A+. And he is like, "What do you mean?" I said, "actually the letter grade, your requirement is actually D-." And he pushed back at me and I said, what...he says, "well, what do you mean?" I said, "how do you define quality?" And he said, "We define quality as requirements are met. That's what we require." I said, "so you think A+ is the only thing that meets requirements?" He's like, "well, where are you coming from?" I said a pass-fail system, now we get back to category thinking, if it's good or bad, what is good? Good is passing. What is passing? What I explained to him: passing is anything from an A+ down to a D-.   0:38:38.9 BB: And he got a little antsy with me. I said, "well, the alternative is an F, you don't want an F, right?" I said, "well, what you're saying is that you'll take anything but an F and that means your requirements are actually D-." And then when I pushed back and I said, "is a D- the same as an A+?" And he said, "no." I said, "well, that's what I meant earlier" in the conversation with him. And I told him that they weren't interchangeable. So when you begin to realize that black and white quality, Phil Crosby-quality, allows for D minuses to be shipped to customers. Again, in this one way I define quality, I hand it off to you. 'Cause in that world, Andrew, I make the measurement, it's 5.999, it meets requirements, I ship it to you, your only response when you receive it is to say, "thank you."   [laughter]   0:39:33.2 BB: For a D minus, right? Well, when you begin to understand relationship quality, then you begin to understand that to improve the relationship, what's behind improving the relationship, Andrew, is shifting from the D- to the A. And what does that mean? What that means is, when I pay attention to your ability to receive what I give you, whether it's the pass or the information, the more synchronously I can provide that, the letter grade is going up, [laughter] and it continues to go up. Now, again, what I'm hoping is that the effort I'm taking to provide you with the A is worthwhile. But that's how you can have continuous improvement, is stop...not stopping at the D minus.   0:40:17.6 BB: Again, there may be situations where D minus is all you really need, but I, that's not me delivering to you a D minus blindly. That's you saying to me, "Hey, I don't need an A+ over here. All I really need is a D minus." That's teamwork, Andrew. So on the one hand, and what I think is, our listeners may not appreciate it, is who defines the letter grade? So in your organization, I would say to people, you give everyone a set of requirements to go meet, what letter grade does each of them has to meet to hand off to a coworker, to another coworker, to a customer? Every single one of those people, all they have to do if they're feeling disenfranchised, as you mentioned earlier, they're feeling like an interchangeable part, well, under those circumstances, Andrew, I don't have to call you up, I just deliver a D minus. And you can't complain because I've met the requirements.   0:41:14.2 BB: So what I think it could be a little scary is to realize, what if everybody in the company comes to work tomorrow feeling no dignity in work and decides to hand off the minimum on every requirement, how does that help? And what I find exciting by Deming's work is that Dr. Deming understood that how people are treated affects their willingness to look up, pay attention to the person they're receiving and deliver to them the appropriate letter grade. So I'm hoping that helps our audience understand that if it's a black and white system, then we're saying that it's good or it's bad. What that misses is, keyword Andrew, variation in good. So the opportunities to improve when we realize that there's a range, that "good" has variation. Another point I wanna make is, what allows the Deming philosophy to go beyond looking good?   0:42:16.2 BB: Well, if you look at the last chapter 10, I think, yeah, chapter 10 of the New Economics is...like the last six pages of the New Economics is all about Dr. Taguchi's work, and it's what Dr. Deming learned from Dr. Taguchi about this very thought of looking at quality in terms of relationships, not just in isolation, Phil Crosby-style meeting requirements. And the last thing I wanna throw out is I was listening to a interview with Russ Ackoff earlier today, and he gave the three steps to being creative. This is a lecture he gave at Rocketdyne years ago. And he said, the first thing is you have to discover self-limiting constraints. Second, you have to remove the constraint. And third, you have to exploit that removal. And what I want to close on is what Deming is talking about is the self-limiting constraint is when we stop at good.   [laughter]   0:43:20.7 BB: And I'm hoping that this episode provides more insights as to the self-imposed constraint within our organizations to stop at "good." What happens when we go beyond that? And how do you go beyond that? By looking at how others receive your work and then expand that others and expand that others and expand that others. And then what I find exciting is, and the work I do with students and with clients is, how can we exploit every day that idea of synchronicity of quality, and not looking at quality from a category perspective? Again, unless that's all that's needed in that situation. So I don't want to throw out category thinking, use category thinking where it makes sense, use continuum thinking where it makes sense. So that's what I wanted to close with.   0:44:12.1 AS: Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. This is your host, Andrew Stotz, and I'm gonna leave you with one of my favorite quotes from Dr. Deming, and it's very appropriate for the discussion that we've had today. "People are entitled to joy in work."  

What's the difference between "perfect" and "that will work?" We use them interchangeably all the time. In this episode, Bill and Andrew discuss what "perfect" means and why it's standing in the way of innovation and improvement at work and at home.  TRANSCRIPT 0:00:02.8 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussions with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is The End of Perfection. Bill take it away.   0:00:29.0 Bill Bellows: The finish line of perfection. [laughter] Andrew, here we are, session four. And welcome to our audience.   0:00:39.7 AS: Yeah.   0:00:43.0 BB: And the end of perfection is a topic of a number of presentations that I've done for The Deming Institute and for others. Part of the reason it's on our list is a focus, is that I come across people who are improvement specialists, continuous improvement zealots, specialists, professionals who speak in terms of striving for perfection. And I just start sort of become... Actually, for some time now I've been bothered by that concept, but so let me just say, if I walk into a hardware store where you work, Andrew, and I'm looking for a bolt or something, some tool, something for some project I'm working on, and I'm just hoping you have it. And I come up to you and you say, How can you help me? And I say, I'm looking for this, and you bring me over. And again, I'm just praying that you've got it. And you say, Is this what you're looking for? And I say, perfect. Oh man, I am so excited. I don't have to run across town. You've got what I'm looking for. Perfect.   0:01:52.8 AS: So easily pleased.   0:01:55.5 BB: Yeah, but when I say perfect, what I'm saying is that's exactly what I'm looking for. I'm not saying it's the best saw blade ever known to man, beyond which they'll never be a better one. So I look in terms of casually, I hear the reference, the context of perfection being exactly what I'm looking for versus as lean professionals will use it and other continuous improvement professionals use it, they're implying perfect means you can't go past that point. It's a... And so what it means, Andrew, is that continuous improvement stops at perfection.   0:02:46.5 AS: There's an event horizon.   0:02:49.4 BB: And that I have a problem with. And so what I like to say that people is... Again, I don't have a problem with... I walk into the hardware, I would call it lower case perfect, small p, not capital P. Capital P, I don't believe exist, or I would say to people, you can't believe in continuous improvement and capital P perfection. And people will say, "Well, Bill, but we're... When Toyota's striving in pursuit of perfection, they're implying that, we'll never get there." I say, I don't believe there exists. And I said, it's like getting in the car saying, are we there yet? Are we there yet? So I would say a mindset of capital P perfection is the antithesis of continuous improvement.   0:03:41.2 BB: And why is that important? 'Cause I think there are incredible opportunities for improvement in any organization. I'm not saying they're all worthwhile to pursue, they have to be worthwhile, meaning the benefits from it have to offset the investment of time and energy, so I'm not saying we should improve everything in the organization. And that mind set exist. That is alive and well, that we can improve everything, we can improve everything. I say, when... People don't improve every aspect of their home, they improve bathrooms and kitchens, 'cause that's the highest return. And so likewise, we have a... I think there are people out there in their personal lives of a very pragmatic sense of we don't improve everything. So I think that's understood, but I think there's some confusion. So there, I just wanna say that capital P perfection, I challenge what that means, but where I wanna go next is how that mindset comes about and how prevalent it is. And in a future session, we're gonna talk more about this, but I just wanna hit the word perfection today. I gave some examples of where that thinking comes from. So we were talking earlier of, that Dr. Deming's Red Bead Experiment, and we appreciate, Andrew and I appreciate there are people in the audience that are wondering Red Bead Experiment, what is that all about? Another is saying, I've got a red bead kit right here in my office.   0:05:11.6 AS: Exactly.   0:05:14.3 BB: In fact, I've got a red bead kit right... Two kits right behind me.   0:05:18.0 AS: So for those people that don't know, Red Bead Experiment, we have that on The Deming Institute website. You just type in Deming Red Bead Experiment, and you can get there. There's videos also on the YouTube channel and in DemingNEXT, so there's a lot of resources and of course, there's also other people that are doing it. But for those people that know it, we've decided we're not gonna go through all the details of it, but rather talk about it.   0:05:44.1 BB: Yeah, so as a refresher for those who are familiar with it, and again, if this is brand new to you, then the suggestion is you pause here, go watch the videos on Deming Institute's web page and then come back and join us. But for those who are familiar with it, Dr. Deming, came up with this. I think someone at Hewlett-Packard exposed it to them him in the early '80s, and the way Dr. Deming had run the Red Bead Experiment as it's called, is he'd have a bowl with roughly 4000 beads that are you used to make a necklace, very small beads, maybe an 8th of an inch in diameter. And then the bowl would be mostly small white beads, and then roughly 20% red. Same diameter, roughly, again, about an 8th of an inch, and he would start off by having the beads, the mixture, and one bowl poured into another to mix them up and then pour them back into the other bowl, and then he'd have willing workers from the audience one at a time come up and put a paddle in. And the paddle is maybe the size of a 3 inch by 5 inch pad. And he put a paddle in with small holes. In those holes, the beads would collect. And in a given paddle, there would be 50 divots for the beads to collect, and so the workers with Dr. Deming's instructions would put the paddle in, shake it a little bit, remove the paddle, go to inspector number one, who would count how many red beads are in the paddle, go to inspector number two, count how many red beads, and then they'd be announced, the total is 13 red beads.   0:07:37.2 BB: Andrew, dismissed. Next worker. And so he would go through and have one worker at a time, go through this four or five times, each time being, say, a day of production. So what are red beads? What's implied in... Again, there's a chapter in The New Economics on the Red Bead experiment. The implications is red bead are defects, things the customer doesn't want, the customer wants white beads. So what are the red beads? Things that don't meet requirements: scrap, rework, defects. And if we go back to last our previous sessions, the difference between white beads and red beads is, question one, white beads meet requirements, they are good. Red beads don't meet requirements, they are bad. And so in the Red Bead experiment, Dr. Deming would go through and collect data from four workers, perhaps four times each, and the data being a spreadsheet, and then he looked row by row and point out there's highs and lows in the number of red beads in he'd start...Dr. Deming as the manager of this white bead factory, would start to berate the workers who created more red beads as if they did it all by themselves. And so the punch line, the reminder punch line for those who have seen this before, what Dr. Deming, what he was doing was blaming the workers for the red beads.   0:09:04.8 BB: And the workers had no choice but to think that they were causing the white beads. And so one of the big takeaways for people in the Deming community who really love the Bed Bead experiment is that the red beads are not caused by the workers, they are caused by the system, which includes the supplier of the red beads and the white beads, the instructions, the bowl, the paddle, the worker, the instructions. And you don't blame the workers separately, and so that becomes a really big takeaway. Well, where I would like to go with this beyond that, what I like doing in an audience or a class in a university class is we'll get to the point of collecting the red bead data, the number of red beads per day per worker, and we'll move it from a control... From a run chart to a control chart. We'll will calculate control elements, we'll talk about common cause variation, and the idea that the system is most likely not gonna produce special causes because the system is semi-closed, unless there's an earthquake and the paddle is broken or something like that.   0:10:18.0 BB: Well, the question I'd like to ask people is, now we appreciate that the red beads are caused by the workers... Are caused by the system which includes workers. But what I like to ask is, is your understanding of the Deming philosophy that the objective everywhere in the organization is to strive to eliminate all the red beads everywhere in the system, which can include going to suppliers, no longer buying them, working with their suppliers? And so I just like to ask people this, and I've had a couple of hundred people in the room and I'd just say, is that what you think where Dr. Deming is talking about, that the objective, one, is to understand that red beads are caused by the system, not the worker, but then we go the next step and say, let's strive to eliminate all the white beads everywhere, and if we do achieve that, are we done?   0:11:10.8 AS: Right. Wipe out all red beads everywhere?   0:11:12.8 BB: I'm sorry. Wipe out all the red beads everywhere? Are we done? Have we achieve perfection? And people will say... Or I'd say, but simultaneously Dr. Deming told us about the value proposition of continuous improvement. So then I'll say to the audience, do we stop at a 100% white beads, or can we improve? And if we can improve, what does that mean? And then we get, we can make them faster. I say, Okay, fine. We can make them cheaper. I say fine. I said, but can we make them better? And then people will say, "Well, we can make them faster," and I I'd say fine, we can make them cheaper, and I'd I say fine. And we're going around, around, and they'll say, everything can be improved. And I say, well, but how do you improve the white beads once they're all white? And people will say, you can always have a better mouse trap. Then I'll hold up the beads, and I say, I'm not talking about a better mouse trap, I'm saying, these beads, you can't get any... So what I love about the red bead experiment is, it's not a mouse trap with springs and wires, it's a really simple... It's just a bead.   0:12:24.4 BB: We've got white ones and red ones, how can you make the white beads better once they're all white? Now they're stumped. They are stumped, and they are... And when I lead them to... And this is the part of the Red Bead experiment that I enjoy is this piece, and the punch line is, it comes from what I learned from Dr. Taguchi is that the white beads are not uniformly white, they actually have different shades of white, which is question two, they have different diameters, which is question two, different weights, and point out that you can continuously improve the white beads once you understand that there's, questions two, that there's degrees of white degrees of diameters and things like that. And the idea being that in order to understand why that variation matters, now we get to what we look at the end of module three is we have to look at how the beads are used.   0:13:33.9 AS: And just to summarize, question one is, does it meet requirements, I think is right?   0:13:38.6 BB: Yes. Question one is does it meet requirements? Is it white or is it red. Well, it's white.   0:13:45.0 AS: Yep. So that was a fine...   0:13:48.1 BB: Good question.   0:13:49.5 AS: That was a definite or yes or no answer, as you said. So...   0:13:54.7 BB: Absolutely. That is a question one, does it meet requirements. Yes or no. Black and white thinking, we also talked about it. Question two is, there's shades of grey. And in this case, there's shades of white, there's shade... They're different diameters. And now we begin to understand, again, that the impact of different diameters and different shades shows up in how they're used, in terms of how they're used to make a necklace or however they're being used by the person downstream. And so at the end of module three, we talked about what are the types of things we could do at the end of module three to help people begin to understand the implications for Dr. Deming's work. And is go downstream and see how your work is being used. So instead of striving to make sure all you send downstream is white beads, not red beads... Again, I'm not underestimating the value proposition of getting to that point. But what I'm saying is, that's not perfection. Actually, if you look at it as perfection, then we say we are done, now let's go elsewhere, get all the red beads done and get the white. So the strategy is to... I think the overall strategy is, what's the best use of our time? Is it going from some red to all white, or is it going from all white to then look at the variation in the white, which is then looking at what are the opportunities for improving the organization by looking at how the beads are used?   0:15:28.4 AS: And if we think about this, it made me think like, let's just say that somebody's implementing Deming's teachings, and they've done a lot of great work to get down to that point of, let's say eliminating red beads, we've rooted out the red beads, and there is a huge gain there for the organization, for the customer, for costs and all of that. So you could even say that in some ways, that that's what they call the low-hanging fruit, but what's fascinating that you've talked about is going through the looking glass to the other side, and now you go to the step further where you have... It seems like it's incrementally not worth it, in some cases, because it's just tinkering around with something that's pretty close enough, but yet, if you go deeper to that, it's very possible that you reach a level of precision that brings an exponential improvement, not only in the system, but also in the outcome and also in the competitive position relative to your peers.   0:16:38.4 BB: A few things on what you just said, one, is... And I really like the metaphor you're using, and I like to say that people is that you have no idea what's on the other side of the doorway. So question one is getting to the point of, we want all the beads to be white, and then we're done. That's perfection. And so what I'm saying, there's more, there's more, and the more is going through the doorway and beginning to look at how are the beads used and what opportunities are there. But right, there's this economic sense of diminishing returns and measuring returns. I'd tell you, the excitement you're hearing is that I've seen so many situations where the gains are so significant for such a small additional effort, that I no longer... This idea that we run out of opportunities for improving. Nonsense, absolutely nonsense. What I say to people is, if you don't look, you won't find. If you do look, there's no guarantee, but also, as I said, there's three things, One is get to the doorway and move through the doorway and look at the variation in the white beads, and that gets us beyond perfection into the world of continuous...   0:18:06.8 BB: For the time, we'll call it continuous improvement. In a later session, we'll switch to continuous investment. And the reason I call it that investment is that it has to be worthwhile. We don't improve to improve, we improve because the gain we get in the marketplace, economically, market share, has to be more than what we're putting into the effort. It's gotta be worthwhile. But the other thing I wanna say is, I've seen people strive to make things... Well, just, I will save this for later. There's a lot more than meets the eye when it comes to everything being good. And again, which is why we've been talking for four sessions now about question one and question two, and the idea that I've not seen anywhere in quality management, let alone management, period, an appreciation of question two, whether it's program management, have the requirements for that task been done? In program management, they'll talk about red, yellow, green, green is good. We passed the floor. What does green mean? Mean green is good. So even in the world of program management, I see the same mindset of striving for everything being good, missing opportunities to manage the variation of things that are good to improve integration. And ultimately, everything has to integrate.   0:19:46.0 AS: Yeah, it's making me think a lot about the idea of once you get through the doorway, through the looking glass to the other side, that you're now really investigating what's happening further on down, and you may even find that the requirements, that the setting actually can be improved, then maybe they didn't even come with improved requirements 'cause they thought, Well, you can't even meet the requirements I've given you, so forget it. But then you just see that opportunities start to open up. And I think the other thing that...   0:20:21.6 AS: I remember a light bulb going off in my head about the Plan-Do-Study-Act, and thinking about it a lot and thinking about if you were to do a Plan-Do-Study-Act on one particular operation in a business, and let's say that you did it properly where you did it, you learn new information and you incorporate that information into the training manual for the people that are working in that operation, then you do another Plan-Do-Study-Act, and then you again, improve and then codify that in training. Then you do it again, and then you codify that in the training, so that you're never going back, number one, so you're never making prior mistakes, and you're bringing your operation to a higher and higher and higher level. Let's say you go through 10 iterations of that. The fact is that you've got all kinds of different improvements that have happened, but the biggest improvement is you have acquired knowledge in your company that your competitor doesn't have.   0:21:26.9 BB: Well, and let me add to that. Again, in the world of: if you don't look, you won't find, and if you do look, there's no guarantee, I've seen many a PDSA effort lead us in a direction we were not expecting, which can be disheartening. And essentially what you're discovering is not what you plan to discover. [chuckle] And I've seen people kind of fall off the horse because we discover something in the experiment... We discover something in the PDSA process which we never knew about, which turns out to be vital information, but because it wasn't what we were looking for, there's a disappointment more than a chagrin, of "darn." It's like we're using this piece of equipment, and we're trying to improve the equipment and in the process, we find out there's something wrong with how it's plugged in. Well, now, we know that. And so I've seen PDSA efforts result in great improvements, I've also seen the result and great learning. What do I mean by learning? From Russ Ackoff. Russ would say, learning is what happens when things don't go as planned. And what does that mean? It means there's financial pain, 'cause we spent a whole lot of time not expecting...   0:23:01.9 BB: Yeah, It just we fall flat. I've fallen off my bike. And as a result, changed how I ride my bike, which is a learning process. Ended up in physical therapy for months. So I say to people, learning could be financially painful, emotionally painful, physically painful, but improvement requires learning. Ackoff would say, "If we're not learning," which means making mistakes, "then how can we improve without that?" So you have to have a mindset. I think where we're coming from is, we wanna go through that doorway, we wanna continuously look for opportunities to improve, but we have to also be mindful. Let me throw another Deming quote based on what you were saying earlier. Dr. Deming would say, "The bigger the system, the more complicated to manage." So we can keep it really, really small. Deming says, "The bigger the system, the more complicated to manage, but the more opportunities... " Well, the reason I wanna throw that out to our viewers is, you may have... I've seen people focus on little things, little things, little things, and unknowingly create big trouble over here that they couldn't see. But what I don't want them to do is use that to become gun-shy that we shouldn't change anything.   0:24:25.6 BB: It's just the idea that don't underestimate how connected these aspects of the system are. Now, we go back to learning. And so it takes... It's so easy, Andrew, to just stop at the doorway, to stop at all white beads, to not go downstream and see how people use our work. What differentiates the Deming philosophy from all the others is going through the doorway, realizing that the white beads... The Red beads are not caused by the workers, they are caused by the system. But also realizing there are opportunities to improve the system, and you can't talk about system without asking how are the beads used?   0:25:08.9 AS: Yup. When I think about what you've described, to get to the door, that, I guess what I'm thinking about is, what do we call that? I wrote down some notes when you were talking, I said System of Profound Knowledge, implementation, improvement.   0:25:25.7 BB: Yeah.   0:25:27.5 AS: Getting in control, fixing the system. It's just the simple awareness of System of Profound Knowledge and that systems will get you to the door.   0:25:37.7 BB: Yes.   0:25:41.3 AS: And that's step one, and you're way beyond where you were in the beginning, so congratulations. Now, I'll use a little analogy, in that I'm in a 12-step program, and in this 12-step program, they had a thing called the 12 promises, and they said, you're gonna know a new freedom and a new happiness. You won't regret the past nor wish to shut the door on it. You're gonna know freedom and all these different things. And I thought, I want every single one of those. But what I found when I went to that 12-step program, which I've been in now for more than 40 years, is that there's many people that go to a meeting to stop drinking or stop using drugs or stop, let's say over-eating or whatever that thing is, and then they stop there. And they don't take it to the next level of really pushing themselves to dig deep and follow the 12 steps to get to the 12 promises. And that's kind of what I'm thinking about because there's a great word in the 12 promises called... It says, "If we are painstaking about this phase of our development, we will be amazed before we're halfway through," and I thought about that word, painstaking. And if you reverse it around, it's called taking pain.   0:26:50.3 BB: Yes.   0:26:52.8 AS: And that made the difference of whether someone went through the door. Getting to the door is good enough for most people, but getting through the door and to the other side is the real Holy Grail.   0:27:03.8 BB: Well, let me come back to that point you just made. There's a point of time, and I thought that I had co-workers, I thought, whose wish was for a job that I could take where I can kinda do the same thing every day for like a career, and then retire. That's the kind of job I'm looking for, where I don't have to learn new things. I could just come in, hang out, get into the routine and then go home. Do you have jobs like that at your company that I could apply for? And I think there are people that... I think there are people that have that attitude.   0:28:00.5 BB: Now, I would also say, given our mutual understanding of System of Profound Knowledge, I think people have developed that attitude by working in organizations where they're blamed, and that becomes, just get me out of here. I don't wanna raise my hand, I don't wanna be blamed, so I'm gonna keep my head down. So I'm not saying these people grew up that way, I think they become conditioned that way. But what I would also point out is that, [chuckle] for those people that want that job, I would say, how many of you would like a cell phone which has far more capacity in terms of storage and speed than your current one? And it's also cheaper. Andrew, can I sign you up for that? Or maybe a television system.   0:28:48.5 BB: Can I sign you up for that? Oh yeah, so you wanna be... What you're saying, Andrew, is that you wanna be the beneficiary of people out there doing things above and beyond, but you just want a job where you can just kind of do it... Is that what I'm hearing? You wanna receive blood, but you don't wanna donate? Because that, I think, becomes the societal compact, is we come into this world receiving... Well, we have an obligation to contribute. And I think... But again, I'm not saying people... I'm not trying to imply that people are bad, I think we have conditioned people to want that. But I don't think that's their real nature, I think organizations that follow the Deming philosophy, I've seen people have incredible turnarounds in attitudes and to become people that are willing to take on challenges. Of course, there's variation. I'm not saying everyone's gonna be watching how the beads are used, so maybe that's not you, maybe that's somebody else. But I'm gonna need you in the implementation, Andrew.   0:30:03.1 AS: Yeah.   0:30:04.2 BB: And that goes back to variation. It's hard to say that. I think we all want the same thing. And I think for many people, it gets beaten out of us in terms of our obligation to society.   0:30:19.9 AS: Okay, so let's try to pull this together, the end of perfection, what we've talked about is the idea of... We've used the red bead experiment to get through this, but I think that tool is now served it's purpose. What we're really talking about is that in the initial stages of maybe implementing Deming's teaching or getting a particular system into control, there's a lot of fantastic gains that happen, and they get you to a point that is very satisfactory.   0:30:54.4 BB: Yes.   0:30:54.4 AS: And some people may confuse that point to perfection. But the reality is, is stepping through that point brings us to a whole another phase where there's so much more that we can consider so that we can improve the outcome for the end result that we're trying to do. But we'll never get there if we don't go through that doorway that goes beyond perfection.   0:31:23.1 BB: Yeah, and it's... The bigger thing I'd like people to appreciate, continuous improvement is a real deal, that... I mean we are constantly surrounded by technologies that are advancing. We have opportunities to get to continuously learn, and that's "continuum thinking" as opposed to black and white thinking. And what Dr. Deming is talking about is... With an appreciation of the System of Profound Knowledge, we have organizations with people with joy in learning. Learning is about making mistakes, trying to figure it out as we're talking about. So again, so let's not underestimate that to really love learning, is to really love the pain of learning [laughter]   0:32:12.9 AS: Painstaking.   0:32:13.1 BB: And in willing to... If you're leading a team, you need to know this, maybe the others don't, and you need to help them get back on the horse, you need them to understand that what we've learned is not what we expected, but that's all part of this journey that we're on. And so I think it's important for those that wanna lead these efforts to be vigilant and not... Just realizing that learning is about... As again Ackoff would say, "Learning is when things don't go as planned." Russ would also say, "When things go as planned, we have an illusion of understanding."   [laughter]   0:32:54.1 AS: Shall we...   0:32:54.7 BB: We just don't know when that learning is gonna happen.   0:32:58.7 AS: Shall we wrap it up?   0:33:00.1 BB: And the other thing I was going to say is, relative to achieving perfection, I would say Thomas More, I think an Englishman, I don't know, in the 14th century, whatever, wrote a book about a place called Utopia.   [laughter]   0:33:19.7 BB: And so what I wonder is, Andrew, do you think people in the Utopia were having conversations about continuous improvement?   0:33:29.4 AS: Okay, so I think we'll leave it on that? What do you think, Bill?   0:33:34.1 BB: Okay. [laughter]   0:33:35.5 AS: Alright. Bill, on behalf of everyone at The Deming Institute, I wanna thank you again for this discussion. Fascinating. For listeners remember, go to deming.org to continue your journey. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."  

Dr. Deming encouraged lifelong learning for everyone, but particularly for managers and leaders. In this episode, David and Andrew talk about Deming's fourth point in his list for The Role of the Manager of People After the Transformation: "He is an unceasing learner. He encourages his people to study. He provides when possible and feasible seminars and courses for advancement of learning. He encourages continued education in college or university for people that are so inclined." TRANSCRIPT 0:00:02.4 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with David P. Langford, who has devoted his life to applying Dr. Deming's philosophy to education, and he offers us his practical advice for implementation. The topic for today is Learning to Learn. And just as a reminder, we're going through the section of The New Economics third edition, it starts on page 86 for those who want to follow on, and for those who have the second edition, it starts on page 125, and the title of the list that we're going through is called Role of a Manager of People. This is the new role of a manager of people after transformation. And we are now talking about the fourth point on this list, which reads as follows: He is an unceasing learner. He encourages his people to study. He provides when possible and feasible seminars and courses for advancement of learning. He encourages continued education in college or university for people that are so inclined. David, take it away. 0:01:16.8 David Langford: Yes, good to be back, Andrew. So I always have to caution people, Dr. Deming wasn't into all the pronouns and everything that we use today, so he just means everyone. So if you're a manager... Yeah. So all of these points I, over the years, have taken to heart, and even as a classroom teacher I started figuring out, "Where do I start? What do I do?" Once I have been to a Deming seminar everybody wants to know, "What do you do Monday morning?" And these are really good places to begin, and you certainly can't do them all at once. It's sort of an inter-related system, and so when you start concentrating, you're always wondering, "Well, what do I do next as a manager?" Go back to one of these points to say, "Okay, have I done anything about that?" And so when you think about your role as a manager and if you think about yourself as a teacher, you're a manager, you're administrator, you're a manager, he's talking about... Anyway, if you're a parent, you're a manager of a family, right. And so you wanna think about it in those terms all the time. 0:02:31.2 DL: I never forgot even the very first seminar or the very first time I ever got to talk to Deming, and he was really interested in talking to me because there weren't very many educators at the time talking with him, and he was an educator. He was taught at New York University for 40 years, so I was really interested in talking to him about education and we were just chatting about the application of his thinking and theories to education. And while we're talking, he says, "Just a moment," and he pulls out this little notebook and he starts writing down what we were talking about. And I was just like, "Dr. Deming's writing down something I said, or we said, or we were talking about or whatever." And then come to find out his whole life he kept these little notebooks and sometimes if you were around them at the end of the day and people would be talking, he'd pull out his notebook and he'd say to people, "Look what I learned today." And that was just - flabbergasted about that, and not only is this guy 90, 91, 92 years old, but he was actually living this point every single day of his life. He was consulting... 0:03:48.8 AS: Yeah. And you can realize that when you read his work too, because he's always highlighting, someone said in a seminar or so and so said this, and that you now picture, he's taking a note and then later he's put in into his book. 0:04:03.2 DL: Yeah. When you're at the seminars, you hear him say, I'm eternally grateful to so and so for this point, or the Taguchi loss function, or all these amazing economical ways of thinking and management and all those kinds of things. He's really great at giving credit like that, but he was also very great at explaining that, hey, he'd learn something new. Even at his age, 90 years old, he was still learning things that were new to him. 0:04:35.3 DL: I was living in Alaska, at the time we were remodeling a house built in 1898. I happened to find a box of photographic plates in the attic, and when I was cleaning out stuff and everything, and these were late 1800s, and they were photographic plates on glass. The wedding that had taken place at the house that we then owned and we were remodeling, so that was pretty cool. As I was looking at the box, it said if you find any defect, anything... I can't remember exactly the wording on it but, "If you find anything wrong with these photographic plates, please contact us at this address, and also please add the box number of photographic plates, so we may find the person guilty of making the error and remove them." [laughter] 0:05:41.6 AS: What? [laughter] 0:05:41.6 AS: They're terminated. 0:05:44.4 DL: "Thereby improving the quality of our product." And this is... I'm not gonna say the name of the company, but it was a major company at the time, and I was so blown away by this so I took the box, took the plates out. I took the box to Dr. Deming at one of the seminars and brought it up to him and said, "I have a gift for you," and he said, "You do?" And I said, "Yes," and I told him where I found it, and I said, "I think you will really enjoy this label." And he read it and his mouth dropped open. He said, "Oh my god." I said, "I'm gonna give it to you as a gift." And he said, "Oh no, this is too valuable for you to give it to me." And then... So he made somebody go down and make a copy of it and turn it into an overhead thing, and he started using this at seminars because it was exactly everything that he was reversing in management thinking at the time, for the next 100 years he was reversing that thinking. 0:06:50.0 AS: It was just to put some context... 0:06:52.8 DL: And I was always so proud of that that I was one of those people that said... 0:06:57.3 AS: Look at this. 0:06:57.8 DL: Thanks to David Langford for this. That was my big contribution. 0:07:01.7 AS: There you go. And for the listeners out there who... To put this in a frame of reference, back in those days, the way that we presented, and I didn't so much 'cause I was pretty young when I went to my first Deming seminar, is that we had acetates or meaning transparent pieces of A4 or letterhead paper, letter paper, the size of that, it was just a clear plastic thing and then you would write on it, and then you would put it onto a screen which would then project up on to a wall. And so it was either that or we had rollers where you could roll the acetate across, so you'd write a little bit and then you'd roll it, and so that was the way that he did his presentations in those days. 0:07:46.5 DL: Yes. He was constantly rolling forward, rolling backwards and drawing right on the screen and working through, so... He was well-known for being very, I'm going to say, curt, but very direct, very short with people. When they asked a question, like people would line up at different points in time and get ready to ask him a question, somebody would come up and ask a question, and he'd say something like, "We already covered that this morning. Where were you, in the parking lot? Next question." 0:08:23.2 AS: Yeah, which is kinda scary for people in the audience. 0:08:25.4 DL: Yeah. Well, a lot of people viewed that as, "Oh well, he's not really interested in people learning about things." But no, it's just the opposite. If you are trying to ask a question simply to discredit him or to take him down in front of, or make yourself look better in front of other people, or things like that, he had no time for you and he would openly say, "I don't have time for this. I'm 90 years old or 92 years old. I don't... " 0:08:57.0 AS: I'm on a mission. 0:08:58.7 DL: "I don't have much time left and I don't have time to waste on you." And he wouldn't ever say that... 0:09:00.7 AS: But he would... 0:09:01.7 DL: But he would cut people off, for sure. 0:09:04.8 AS: And I remember that I felt pretty safe as a young guy with pretty innocent questions coming to him. I felt like he was very welcoming to the majority of people. But there was a certain thing that either someone that completely missed what was going on and he could get a little bit annoyed with that, or if it was someone at a senior level that should know this and they don't know it and, "I'm gonna make sure you never forget this interaction." And I remember the one that I remember from being in the seminar was when someone got up and said, "Since you're the father of TQM, I wanted to ask you a question about X, Y, Z." And Dr. Deming looked at him and he says, "What is TQM?" 0:09:48.7 DL: Yeah. He knew full well. 0:09:50.9 AS: And he goes, "Wait, wait, what? Wait, what? I don't understand 'cause I didn't know what he meant." 0:09:56.4 DL: Yeah. Well, not only was he an avid learner like that himself, he wanted everybody else to be like that too. You wanna do continually questioning, continually trying to understand, continually learning, apply, thinking on a level that most people were never taught to think on that level. 0:10:19.3 AS: I wanted to ask you a question about this from a bigger picture perspective, and that is to say that you're a learning company or you're an unceasing learner or we're into learning and all that. It's such an easy thing to say. 0:10:36.9 DL: Cliche. 0:10:39.4 AS: Yeah, it's cliche, yes. But it feels good to be able to say, we're a learning organization. We're trying to learn. But the fact is, is that he's... The reason why he's raising this is maybe most people really are learning or they're not a learning organization. Can you put it in that framework before we get into a little bit more detail on it? 0:10:58.8 DL: Yeah, absolutely. I thought the first time I went to see Deming, I was a year out from getting my Master's degree, right. And so I'm thinking, well, yeah, I'm a learner, right? I got my Master's degree and like you have a whole bookshelf behind you, yet people just listening can't see it, but you have a ton of books behind you, and I might have an entire library here myself, etcetera. And so I'm a learner, but at that time, I suddenly had this realization in probably the very first four-day seminar, I had never read anything that wasn't assigned to me. I've been going through school my whole life or being a teacher myself and teaching a curriculum or dictating what other people should read based on that curriculum, but I'd been... I don't know, probably since I was a little kid that I just went to a library and looked around and just picked out a book I wanted to read. And that started really my journey of thinking, "Okay, I have to be just learning all the time, I have to be reading all the time and thinking all the time," and have never forgotten that. And so that also causes you to have a very open mind about things. 0:12:23.7 DL: In the politically charged realm that we are now, there are so many people that you can't even talk about the opposite point of view. It's just a complete shut down of, "No, I'm not gonna talk... I'm not even gonna talk about that." I think Deming would just be shocked and dismayed about that, that if you can't argue with your boss he's not worth working for. 0:12:53.8 AS: Yeah. And also as a person that's lived outside of the US for many years and look back at the US, I realize that the collision of ideas and opinions is actually the whole process of learning. 0:13:09.0 DL: That's the whole point. Yes. 0:13:10.5 AS: That is how... That is kind of the history of how we've acquired new knowledge. 0:13:18.9 DL: Quickly and move a society for it or a business forward or whatever it might be. And so what he's talking about here in a company or a school, etcetera, if you're not constantly encouraging people to think and to learn and to understand, you're gonna become stagnant or not only stagnant, you're gonna go backwards, and I think about things. 0:13:44.1 AS: Can you explain this again? Going back to the big picture. I bet you that if you and I did a survey of top US companies that are successful, or the companies they're gonna all say... They're gonna all say, we're a learning organization. 0:13:58.5 DL: Right. 0:13:58.6 AS: And I just want to understand... 0:14:00.5 DL: When I started this journey, yeah, I studied Toyota because Deming had done a lot of work with Toyota and everything at the time. And one of the things I learned from one of the managers there, I said, "Well, how much time do you spend in training and development of employees?" And he said, "20% of the time." He said, "We're hoping to get to 40% of the time." "What? You mean 20% to 40% of the time you're actually training, developing people, giving them information, etcetera, instead of actually producing their products?" That didn't make any sense. So I went back to my school, I did an analysis, how much time did we actually spend with our staff and faculty in training, and it came up to be like 5% of the school year was actually spent in us training them in new concepts or ways to think, etcetera. 0:15:00.5 AS: And it's a great point... 0:15:03.8 DL: And I thought how much time do we spend training the students in thinking? 0:15:09.6 AS: Yeah. 0:15:10.4 DL: Well, zero. 0:15:10.6 AS: Yeah. It's a great point to stop for a moment for the listeners and the viewers to ask yourself, how many hours, what percent of the time, of the week, of the month, of the year do you spend or does your school or your firm spend in learning and training, in both training and education? I bet you it's not 20%. 0:15:39.5 DL: Well, the students that I was working with, these were just high school kids, and so we were going through these points and we're having this discussion, and I showed them the data, and they said, "Well, when do we get to learn?" And... "So what are you talking about? You're going to school." And they said, "No. You're learning all this stuff about Deming and discussing it and watching videos and everything. When do we get to do that?" And I realized I wasn't doing that with students, and so I put them to work because the teachers all said, "Oh, we don't have time for that. We're already crammed. We can't get through the curriculum. We don't have time for anything like that," and so I put the students to work to come up with a new master schedule and then come back and present it to the staff, and they came up with two... I think it was 60 or 90-minute sessions per week that they wanted to come together and just and learn, and it was just an amazing way to think about it. 0:16:42.7 DL: So one of those sessions I had each week with the entire student body, and basically I'd show them a Deming film or I'd show them something new or something that's happening in education, and I'd put them into groups and have them discuss about it, and what do you think about that and how could that be applied here, and what should we do differently? And then the other session was a session where they wanted to go anywhere that they needed to go in the building to get help and catch up on anything they needed to catch up on. And this is totally a foreign concept because we were constantly following every kid down, "Where are you going? You're going to the bathroom. Here's a bathroom pass and you're gonna go here and... " What? We're going to actually trust these kids to do stuff? So it took us probably a whole year to convince the staff, the administration and everybody that, "Okay, well, let's at least try this." Right. 0:17:41.0 DL: So the first time we ran a session like that where the students could go any... They could go to the science room, they could go to the computer lab, any place they needed to go to learn and catch up and get help or work or however they wanted to do, but they just had to be learning during that hour session. Well, the principal went around and actually counted kids in all these rooms and everything else, and lo and behold found out there were like 10 kids that took off and went to town. Right. So he calls an emergency meeting after that day and says to the whole staff, "We can't keep doing this. We got 10 kids that took off and just blew the whole thing off, and so we gotta change the whole master schedule and redo it and everything, and we gotta start over again." And I'll never forget 'cause we're just sitting there, sort of stunned. Trying to think, "Well, okay, now what are we gonna do? And then we're gonna have to redo everything." 0:18:46.0 DL: And all of a sudden, the science teacher said, "You know, in my room, I must have had 60 kids doing science, and he said, I'd say a majority of them weren't even doing stuff that was assigned to Science class. They were exploring all kinds of new concepts, asking me questions about all kinds of things in Science." And English teacher said, "We were having the greatest discussion about applied Romeo and Juliet to modern issues." She said, "I never had time for that in my classroom, but a whole bunch of us just ended up sitting around and we just started talking about the application of these things in a modern society." And almost every single teacher said the same thing. And then finally somebody said, "Well, how many students we have?" And I think at the time we had about 300 students, so 10 of them left. That means 290 students were actually engaged in learning and doing exactly what we want them to do, and we wanna throw this out because of special causes. And that's when I realized, oh, special and common cause - people are getting it. Our training is actually seeping into the terminology and the way of thinking about people. So we didn't throw it out and we kept it, and within a few weeks there wasn't anybody gone, because the kids that had took off came back. 0:20:19.3 AS: They got it out of their system. 0:20:21.5 DL: While the other kids said, we're talking about the great time they had, and not only that they were catching up on work that they didn't have time to normally, and all kinds of other things that went on. It even happenened in sports, a whole bunch of them went to the gym and just worked on basketball techniques, and even the PE teacher was amazed that I just had all these kids in their learning and wanting to know about, "How do you do a shot and how do you do this and how do you make this happen?" And teachers were just sort of dumbfounded about this, that students would actually learn on their own without being given a grade or forced to do something. 0:21:01.9 AS: And what I wanted to also think about is the idea that if we read the 14 points and trying to understand what Dr. Deming is telling us, there's this, number one, constancy of purpose, there's this real focus on improvement, there's a focus on the customer, not the competitor, to try to improve what you're delivering to the customer, and then you combine this focus on learning and training. You bring these things together and in some way, it's almost like you've created kind of a tunnel vision that's between your company and the customer and your company and the suppliers, and it's this obsession on these things. And at first, it's hard to understand, but as you start to see this obsession you realize this type of focus can... And because you're learning, everything you're gaining it's taking you to another level and another level, and then you're applying it for your customer, for your student, for your school, and next thing you know, you do that over and over again, and you will be at a very different place, and you'll also be at a place where people really feel great about it. That's not what's happening in learning organizations, companies that say we're a learning organization. Tell me more about that? 0:22:25.4 DL: Well, if you're continually learning like that as an organization and constantly expanding the ways of thinking, etcetera, when you get to major hurdles like Covid, etcetera, you have a whole staff, learned staff that's used to learning and used to figuring things out and used to thinking and coping with disasters or anything that goes on, and so the system doesn't fall apart, that's what I saw happening over and over in companies and schools and universities that I worked with for a long time, that those organizations could just overcome obstacles that would just be a huge thing to other systems, because they weren't used to learning or coping or understanding. They're usually used to just being told what to do. The same thing in education, the curriculum is coming down from the state or the national edict on X and... Oh, well, we just got... So they just learned to constantly be in a response mode, so they're not in a mode of constantly innovating, thinking, what can we do next. 0:23:41.7 DL: So I know in my school, I started... Not only did we have this one time a week where we could work with all the faculty and...or all the students, we just started having a faculty come in and learn with the students, which was a novel idea. Right? 'Cause normally we segregate them out and the faculty goes off and learns this stuff and comes back and does it to people. Right? But we just set up this learning session with students, faculty, everybody and faculty were learners and lo and behold, that's probably the best model that you could be in a school, is to show students that you're constantly learning, that you're constantly reading, you're constantly figuring something. "Hey, I read this thing last night. This book, it's really great. Da da da da da." 0:24:38.9 DL: I didn't fully realize the impact of what we had done until after the first year that we'd really tried to implement this and get stuff going. And during the summer time, teachers are usually... The school year ends and all the kids leave and you never hear from them until start the next school year up, right. So I'm out mowing the lawn in the summer time and my wife comes out with the phone and she says, "Hey, one of your students is on the phone." Well, I'm thinking that there must be some kind of accident that happened or something that goes on. And I'll never forget because when I'm talking to this student, I actually stopped. I was looking at the phone like, "Who are you?" Because he said, "Hey, I read this book and I just wanted to know if you read and there's some really interesting concepts that I picked up on it and wanna know if you'd heard about it." And I was so stunned 'cause 15 years, no student had ever done that. It never ever come up to me like that? Well, that summer, I had 12 students do that. Twelve of those kids called me over the summer, and I started to learn... When they'd call up, "Hey, what have you been learning?" And they, boom, they just tell you, because we had taught them to be learners, learning to learn. 0:26:00.9 AS: And what about people that are listening that are in, let's say, public schools or other places, and they feel constrained, they've got the mandates from on high, as you mentioned, and I think what I guess what I'm hearing is the idea that you may be less constrained than you think in that there may be more room to do and still be able to follow what you got to follow. What would you advise to them? 0:26:27.6 DL: Yeah. Well, if you have management of your organization, etcetera, that wants nothing to do with this and they're not really interested in making big changes or doing anything differently, etcetera, that doesn't preclude you from doing something as a teacher and I did the same thing. I'll give you an example, one of the classes I was... I can't remember the title of it now, but it's media management or something like that. I can't remember what we called it. But I just set up the first 10 minutes of class, I said the first 10 minutes of class we would get all the newspapers from the library that were used up the previous two or three days. And you got 10 minutes to go through the paper and pick out the most relevant things happening, and then share that with the rest of the group, and then we're gonna talk about Deming Management as applied to those issues. And it was such an amazing, amazing thing because the kids would talk about how stupid some of the things were happening politically, or this was happening, and it was totally contrary to what Deming talked about, and then they talk about what should happen, etcetera. 0:27:37.6 DL: So after about three or four years, I started taking students out on a tour, and we'd take any students who wanted to go and we'd raise money throughout the year and everything else, but we wouldn't go just on a field trip just to go to Disneyland or something. We went to universities, we went to major corporations, we went to places where we could learn stuff. And I'll never forget, the kids were at Motorola, Motorola, I think, it was in Phoenix, Arizona. And they had heard all about us and everything, and they set up all this thing, and our students would come in and give this whole presentation about Deming management applied to education. Well, when we got there, we walked into this room that they had set up for us, and there was literally a red carpet laid out, and in the back of the room was this whole banquet of seafood and just huge tables of food and everything else. Kids all walked in. And the CEO from Motorola is there and everything. And the kid says, "Who's this for?" And he says, "It's for you, we think you're the most important people in the country right now." 0:28:49.6 DL: These kids, a lot of them Native American kids, a lot of them from very rural background, you could literally see them grow 14 feet in that instance. I'll never forget because after we finished our presentation the CEO got up and he said, "I wanna know two things." He said, "Number one, how do I get my son in your school because he's not learning this in his school? And number two, I'm gonna set up a room across the hall, and I just wanna start interviewing people so you can come to work for us when you get out of high school." And some of those kids did actually get hired and go there. 0:29:32.3 DL: I'll tell you another story. The same thing, we took a group of kids to Texas and we went to one of the, I think, it was one of the oil companies, I think it was. And so the whole thing was, we said, "Hey, we'd like to come in and give you a presentation about what we're doing, how we're applying quality methods and thinking to education. We'd also like your managers to give us a presentation about what goes on here, what do you do, how do you apply these things and work things through." I'll never forget, we've finished our presentation at 45 minutes, kids were very efficient, they were all... That was part of it. Everybody was helping everybody do the presentations and work through that. And so their manager, I can't remember his title, but it had something to do with quality, the quality manager for the corporation or something, he gets up and start... He's got his presentation stuff and he starts giving a normal business presentation after these kids giving multimedia presentations for 45 minutes. And he talks for about 30 seconds about some of the things they're doing, and he said... He said, "Forget it," he said, "You guys already know more about this than we could ever hope to know about it." So he said, "What we wanna do is we've got all of our executives in the room, we just wanna pair up with these kids, high school kids, 15, 16, 17 years old, and have conversations about this and why it's applied. 0:31:00.3 DL: And I'll never forget, I walked by this girl that was talking to this high level manager at this petroleum corporation and they're arguing about intrinsic motivation and how employees have to be extrinsically motivated and everything else, and this girl, 16 years old is not backing down and she's just taking this guy to task. And finally they end their conversation and she leaves, and I walked over to him and I said, "Do you realize she's only 16 years old?" And he just looked at me, he said, "I forgot all about that." 0:31:34.1 AS: Yeah. 0:31:39.2 DL: See. And... 0:31:39.4 AS: Potential. The potential. 0:31:40.2 DL: Yeah. Deming often said that profound knowledge is not limited to age, and I didn't know what that meant for a long time until I started seeing young kids adapt these... Or absorb these concepts and take them to heart and be able to do it much better than us as adults, learned a different management thinking and we had to sort of transform ourselves. These kids they didn't know anything different. I think somebody asked one of the students one time how did you learn to do this or how did this happen or whatever? And they just looked at him and said, "Well, doesn't everybody do this?" 0:32:20.9 AS: Yeah. We stamped that out. 0:32:24.6 DL: They couldn't understand. 0:32:26.3 AS: We stamped that out at an early age. 0:32:26.3 DL: I'll give you one more quick story. We took the kids to visit a huge high school in California at the time, and that was probably about around 1991 or something like that. So computer technology was really starting to get into the schools, but our schools are already one-to-one technology and we had advanced technologies for all kinds of stuff and STEM and things like that. And so the principal is... Big high school in California, a pretty brand new high school, that's why we went there to cut and I wanted them to see what a big high school looked like, and we were going around, and he goes and he says, "We're really proud of this room," and he goes and unlocks the door. And this was in the spring probably around about March, unlocks the door and turns on the light and there's like 60 computers in there, all set up, all ready to go and everything. And one of the kids says, "Well, where is everybody? Why aren't people using them?" He said, "Oh well, you know, we haven't got the teachers trained and we're not ready to start using this, but we got it all purchased, we got it all set up and we're gonna start using it for... We're starting, using it next fall in September." And I'll never forget one of our students said, "Can we just take all those back with us and we'll ship them back to you in September." [laughter] 0:33:48.9 AS: Yeah, exactly. 0:33:50.8 DL: Said, "We know what to do with those." 0:33:52.3 AS: And if you unleash group of kids in there, before you know that they would be training the teachers on that. 0:33:57.7 DL: Yeah, absolutely, they'd be training the staff about how to do the stuff so. 0:34:01.2 AS: Yeah. I wanted to wrap up with a little bit of kind of discussion about the idea of... I'm gonna talk briefly just about business, just 'cause that's something I understand pretty well, and that is a lot of times when managers in businesses see the same mistakes happening, they're like, "We've got to stop. Who is responsible for this?" Or as you started the whole discussion, "We got to get rid of the person who's the problem." Or, "Why is everybody making these same mistakes or whatever?" And that's really the problem actually at leadership level, really it's the idea of how can we study this situation, how can we get together, pool our resources and our knowledge and make some scientific style analysis, like a PDSA, a Plan-Do-Study-Act, and try to understand and learn here what the problem is and how can we solve this problem. And that is the process of acquiring knowledge through the scientific method, but acquiring knowledge is meaningless if it's not continually applied, so then we take that knowledge and we build it into our training of the new workers or new employees that are gonna be in that area, so we never go back and make the same mistake. We've fixed it permanently, and we've trained people to another level. But of course we're gonna come up with another common problem that's showing up all the time, and we do the same thing, and then we improve that and we gain knowledge on that, and then we train so that everybody's operating at that next level. 0:35:33.4 AS: Now, when you do this over a period of years with this constancy of purpose of continually focus on learning, what ends up happening is that you have actually acquired a large amount of knowledge in your organization that does not exist in your competitor. 0:35:52.2 DL: That's right. 0:35:52.4 AS: In addition, you've codified it, you've quantified this to be in the behavior of your employees. So let's say you do that for one, two, three years, all of a sudden you have created a deep level of knowledge on a particular topic that your competitor does not have that deep of a level of knowledge on that particular topic. Now they may be... If they're a good competitor then they may be learning in another area, but let's just say that most new companies aren't learning. And the end of, end result is that you start to build a competitive advantage and that... 0:36:26.3 DL: Even though. 0:36:27.2 AS: Competitive advantage just shows that... That competitive advantage just could last for decades. 0:36:34.7 DL: Yeah. Even though defeating your competitor was not your aim. Your aim was learning and getting better all the time, but by doing that you became a very fierce competitor, you became very good at solving problems, moving forward, understanding new concepts, applying things quickly, adapting to new technology, whatever it might be. You become a very good competitor even though you're not actively trying to compete. People sometimes blame Deming saying, "Oh, you don't want... You're against competition," 'cause he talked about cooperation a lot. And he said, "No," he said, "The best thing you could have is a good competitor. Right? Somebody else that's innovating, somebody else that's thinking something. Getting you to think differently about things." So the great irony is the greater you cooperate and learn together, the greater you compete, even though you're not necessarily trying to compete. You see the same thing in sports. We have March Madness going on now. If you listen to coaches at the end of games or coaches getting ready to play really big games coming up, they'll say things like, "Well, this will be a good learning experience for us, or this will be a really good test for us." Those are the really good coaches because they're looking at every single game about, "What can we learn, how can we apply that to the next one, and how can we move forward?" 0:38:03.0 DL: One of those trips I took with students, I took them to an electronics corporation in Phoenix, I can't remember the name of it, I don't really remember what they were making, but it was very sophisticated electronics with chips and all of that kind of stuff in a dust-free environment and it's a huge room in which these panels... I think it was very sophisticated art tablets that they were making, but they had all these lights up around the room and everything red, yellow and different things, and so most... Every one of the stations had green lights and everything, and then all of a sudden a yellow light came on at one of the stations. And I said to the guy giving me the tour, I says, "Well, what happens now?" And he says, "Well, immediately, any managers that are available, we rush to that center to find out what's going on. There's an error or a problem or somebody has observed something that is going on there, and we try to actively fix it and try to understand it and fix it for tomorrow too and make sure it's not gonna happen again. 0:39:13.3 DL: And I said, "What's the red light for?" And he says, "Well, anybody in the entire corporation has the ability to stop the entire line and turn on the red light. And when the red light comes on the whole place shuts down." And this was like 300 employees that they had. The whole place shuts down and everybody has the authority to do that. And I said, "What happens then?" He said... Then he said, "All management empties out, comes down in a learning environment and tries to study what's going on, what has happened, how do we fix this, how do we make this." Well, that's totally different than if you make an error or you screw up, you might get fired. And if that's the case, you're not gonna share an error or a problem that's happening, right? You're gonna keep that and hide that or cover it up or do something else, because you have managers that don't understand this thinking so. 0:40:08.7 AS: Yeah. I saw just the opposite of that when I was working in Pepsi, that in the production and process, basically, you constantly running around trying to patch things up and not raise them to a higher level, and so you're constantly making the same mistake. I wanna wrap up this discussion by just going back to point number four now that we've been through so much about it. So this is, again, we've been reviewing the role of a manager of people. And the fourth point that he talks about here is, he is an unceasing learner, he encourages people to study, he provides when possible and feasible seminars and courses for advancement of learning, and he encourages continued education in college or university for people that are so inclined. David, is there anything you would add as we wrap up this discussion? 0:41:03.6 DL: Yeah. He does mention college or university classes, things like that, but he also was a very strong proponent that they just need to be learning. Learning a new language, learning new concepts, new things that are happening because you have active minds then and you have people making new connections and thinking, and it does something to your personality and the way you think about things, etcetera. And so he just said it could be anything, they can be learning basket weaving, but they just need to be learning all the time. 0:41:38.2 AS: Fantastic. Well, David, on behalf of everyone at the Deming Institute, I wanna thank you again for the discussion. For listeners, remember to go to deming.org to continue your journey. And listeners can also learn more about David at langfordlearning.com. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."

In this episode, Bill and Andrew discuss variation, the impossibility of true interchangeability and why we need to apply "shades of gray" thinking at work. Bill shares the key question that will take your organization beyond "meets specifications" and help improve your processes, so you can delight your customers. TRANSCRIPT 0:00:02.8 Andrew Stotz: My name is Andrew Stotz. I'll be your host as we continue our journey into the teachings of Dr. W Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is 20th century quality, Bill take it away.   0:00:28.2 Bill Bellows: Thank you, Andrew. So the running joke on the 20th century quality is we could have said 19th century, and sadly it's still 21st century. And what do I mean by that? In our second episode, we've talked about the two questions of quality management. Question one, does this characteristic, does this product, does this thing meet requirements? There's only two answers. That's 19th century quality, that's 20th century quality, and by and large, that's 21st century quality. And my hope is that our conversation inspires people to move into question two, which opened opportunities for as you're talking about opportunities for investment, opportunities for doing amazing things, when we get out of the black and white of question one into the shades of gray, of question two. That's, that's so...   0:01:26.5 AS: So what century are we in now?   0:01:29.1 BB: I think the 21st.   0:01:30.5 AS: 21st. My goodness. People always get, I always get confused. We're in the two thousands, but that's a 21st century. And 19th century is the 1800s.   0:01:46.7 BB: Well...   0:01:47.5 AS: 20th century would then be from 1900s until 2000 or 1999.   0:01:54.3 BB: The... And just for some more clarity, and I was doing some research earlier today, but there's a great tie between question one and 19th century 20th centuries still: question number one, does this meet requirements? A lot of that ties back to this whole concept of interchangeable parts. Which is not what we do in the garage when we're in the garage building something - that's 21st century quality, because we design it, we buy the stuff again, whether you're building something in the kitchen, in the backyard, and we put it all together with a 21st century, a Deming-Taguchi approach to quality, which means we're not looking at the parts in isolation we're looking at how they come together, the idea of interchangeable parts, and the... A name that I usually find as being the father of this concept of interchangeable parts. People talk about Eli Whitney.   0:03:02.3 BB: But Eli Whitney heard about interchangeable parts from the first American to hear about this concept, who was Thomas Jefferson. And he heard about it when he was US Ambassador to France, in 1802 timeframe, he was Jeff, he was George Washington's ambassador to France. And while there he came across a Frenchman by the name of Andre Blanc, B-L-A-N-C. And Blanc is considered the... Not the father of interchangeable parts. There's a French general in the 1770s had this idea of you're in the battlefield, you've got all these broken weapon systems and I can't cobble together this cannon with these wheels to be able to continue fighting the battle because they're all crafts built with craftsmanship, which means these things don't come together. So this general had the idea, and I like to tell people, Blanc is the one who got the marching orders to go put this concept into practice. And so he's given credit for being the one to work through the details.   0:04:17.1 BB: And what I was reading earlier tonight I've done other reading on this before, but it was, Jefferson went to a presentation by Blanc, heard about the ideas. Jefferson wrote a letter to John Jay and I don't know exactly, I, John Jay's name, I... Name I've heard before. I don't know exactly what his role was in government. But he wrote a letter back that there's this thing, this guy Blanc, this concept of interchangeable parts. And as the story goes, Jefferson offered Blanc the opportunity to come to the States 'cause Jefferson saw this, not just on the battlefield, the ability to repair weapons quickly, quickly, quickly, but what this means to a growing society. And Blanc had no interest. And so Jefferson took the idea, gave it to Whitney. Whitney gets credit for the first contract with Congress ever for a product with interchangeable parts, which turned out to be rifles. And it took on the order of 20 years for him to figure out how to do that. But in the process, he was working on the design protocol, the quality system, which is 18th century quality, which is looking at all these parts, giving them requirements. And that's what we do today.   0:05:39.8 AS: So the US Congress kind of funded that research and development basically.   0:05:44.3 BB: Well, there's a fun story and [chuckle] is it a true story? It has the making of a true story 'cause he figured Jefferson is the, you know, the godfather of this movement. And the story is in the early 1800s John Adams is president and Jefferson goes to the Oval Office with Whitney to give John Adams an update on this thing called interchangeable parts. And so he brings in Whitney, you know, this is, you know, Mr. President, okay, this is Eli Whitney. And evidently Whitney comes in with two rifles and Jefferson says, okay, make me proud. And he takes the rifles apart and he moves the parts from one to the other and shows them this is what we're working on. And evidently Adams is blown away by the whole thing. Well, the punchline is that Jefferson working with Whitney's, hoodwinked Adams because the parts were handcrafted to be identical. What took another 18 or so years was his effort to create the tooling to mass-produce these, not hand-file them. It took some time. It took some time. But Whitney gets all that credit, but it goes back to Blanc. And also, in the very same timeframe, I've read of incredible efforts by the British in using this for pulleys and warships. And so this was going on elsewhere.   0:07:24.6 BB: What I've also heard... And I'll just throw out, I don't wanna go there. But I've heard accounts that the Chinese centuries before were looking at this. If somebody's thinking, "Well, was it them or... " I don't know. And so in the Google searches I was doing about an hour ago, I didn't find anything on China. But the important thing for our conversation is the idea of taking a product, breaking it into parts, giving the parts requirements, and having this sense of, "All these springs meet requirements. They're all good," which is question one. "All the bars are good, and we can interchange them." What I also say is that the concept behind question number one, saying that all these things that make requirements are good, all the barrels are good, all the locks are good, I would define that as absolute interchangeability, meaning the sense that any one of these can be put together with anyone else, and I could take any doctor, any of this, and I can absolutely plug and play. And what that ignores is variation. From a Deming perspective, which is question two, when you realize that all these parts that meet requirements have variation, that means they're relatively interchangeable, but they're not absolutely interchangeable.   0:09:01.2 AS: Which makes me think about the before interchangeability, which we're so familiar with in this modern world. Before...   0:09:08.4 BB: Everything is.   0:09:09.3 AS: Interchangeability, there was craftsmanship, whereas the difference is in those parts of a shoe, even though they may... My uncle and myself got the same shoe, there are some unique differences to those exact same shoes that the craftsman's not trying to get rid of. They're part of what... It's not a pressure that the craftsman feels.   0:09:33.7 BB: Well, handcrafted is expensive. These are handcrafted, a handcrafted guitar, a handcrafted... There's a place down the street where they... Essentially, it's handcrafted car wash, by hand. In the early days, handcrafted was the only thing. Then we went to interchangeable. And so we could have handcrafted truck, handcrafted this. But the point I wanted to make for our audience is question one does it meet requirements. There is a sense of absolute interchangeability, that I could replace this doctor with this doctor because they're both board-certified, this engineer with this engineer. It's like in the world of computers and software, it's this idea of plug and play. "I can take this one out, plug this one and just move on." And we have that sense of everyone in the organization is relatively interchangeable. The idea of interchangeability from a Deming perspective is workers are treated as interchangeable, products are treated as interchangeable, and what's missing is a sense of differences, that the people are actually different. They're not... And that's what we... The running joke we used to have with friends is that we've got... People are making parts that are interchangeable, and we're treating the people as if they are interchangeable.   0:11:03.5 BB: And that mindset of interchangeability is alive and well. Now, another thing just throw out, just for those that might not be familiar with this conversation, is that when requirements are set and I just like to say to people is, "Can a company go to a supplier and say, 'We want this part to be exactly 1-inch thick'?" And they'll say, "Yeah, we can pull that out." And I say, "Well, technically, no." 'Cause what exactly does 1 inch mean? Does it mean 1.000 inches? Does it mean we're gonna have that thickness all the way around the table? And what that is ignoring is variation. Even if I measure it and it's exactly 1.000 all the way around, well, when I ship it to your company, Andrew, and you measure it, are you gonna get the same value? And if you get a different value, does that mean I can't sell it to you? What we do is we take the 1.00 and we say, "Plus or minus some small number." We can say, "10 plus or minus 1/16 of an inch." And then we get into the world of requirements where there's a maximum and a minimum. And now what we're saying is good, which is question number one, is everything in between. And my explanation is, if we didn't allow for that wiggle room, we couldn't have commerce because we're not acknowledging variation.   0:12:49.3 BB: And that goes back to... Again, it goes back to Whitney and Blanc is a sense of, "We're gonna put bounds on it, anywhere in between." In the world of American football, that saying... Or international soccer, "Anywhere within the net is a goal. Anywhere within." What's missing from that is if, is what happens if we're at different values within that range, what, where does that, what do the differences in meeting requirements mean? And what I point out is the differences in how we meet requirements shows up when you take the thing from me and try to do something with it.   0:13:37.9 AS: So it's related to the application that it's being used in.   0:13:43.6 BB: And I don't... A question that I like to ask that I don't, I'm not sure if we've gotten into in the first or second session is, I'll ask people, what do you call the person that graduates last in their class in medical school? Doctor. They meet the requirements. So does the first person in class. Well, they, that's from a question one perspective, those two doctors are absolutely interchangeable. I need a doctor. Well, what I ask is, is there a difference between those two doctors? And if there is a difference, when does that difference appear? And that's what you're talking about. From a question two perspective, the difference between those two doctors shows up when they walk into your room. They know when they're providing the whatever procedure you need, when they interact with you and your family, when they interact with other professionals at the hospital. The difference between any two things that meets requirements shows up when they, when all these things come together. And my excitement over Deming's work is he learned about that from Dr. Taguchi, who I learned it from.   0:14:47.1 BB: And what Dr. Deming did was integrate that sense of understanding variation and systems with the psychology of theory of knowledge of the system of profound knowledge. And that's provides an incredible theory by which to run organizations. That's the potential of 21st century quality that I hope we can inspire.   0:15:08.7 AS: And if I kind of try to piece together what you're putting out there, I think the first thing you're saying is that absolute interchangeability doesn't exist.   0:15:18.7 BB: No, no.   0:15:18.8 AS: Because nothing can be perfectly interchangeable. The other thing...   0:15:22.5 BB: If no two snowflakes are the same, if twins aren't identical, then you can't have absolute, absolute interchangeability. If you understand variation, it can't be.   0:15:32.9 AS: Okay, so then the next thing is that because we can't have absolute interchangeability, we need to understand some parameters or requirements and of what we need for this application. And then the other part of that is to understand that then there's variation even within, once you've set those parameters or requirements, there's going to be variations within that. Help me to continue to understand this.   0:16:06.4 BB: Well, first, let me give you an example outside of manufacturing just to make it easier to understand. So one is you put out a job search that you're looking to hire someone with these skills and 10 people meet the requirements. And does a given company take those 10 people and say, "Okay, put their names in a box, we're going to randomly pull them out?" I don't think so. We narrow it down. We take the ones that meet requirements. We call them up. We do an interview. What are we doing? We're sorting amongst things that meet requirements. Why? Because they aren't absolutely interchangeable.   0:16:50.3 AS: But when we're sorting amongst those, we're sorting, as you just described it, we're sorting by different characteristics like from the way they respond to something, or.   0:16:58.3 BB: Well, we're saying these... So we're saying these 10 people all meet the requirements of number of years of experience, a bachelor's degree, this and this. But now what we're doing is seeing through phone call, likely the scenario would be we're going to interview them by phone and get it down to three, bring the three in. What we're looking for is, what we're saying is those 10 are different. They all meet requirements, but they're different. And what we're looking for eventually is which one's the best fit. Why? Because fit is relative, not absolute. If fit was absolute, we would just roll the dice and say they're all the same. It doesn't matter. No, we don't do that. And like I say, I kid people, "Is that how we find a spouse? We just go to some dating app. We end up with three people. We say, this one?" No. We're looking for which is the best fit.   0:17:52.9 BB: So this idea of understanding fit as relative is an everyday thing. All the parking spots meet requirements, which is the best fit for what I'm doing that day? That's what we're talking about. And I mean, aside from manufacturing, it's the same concept. We're saying all the fruit is not the same. I want one which is about this juiciness. These applicants are not the same. What we're looking for is which is the best fit into the system of the product or the service or the company.   0:18:29.7 AS: And this discussion helps people to think about the idea that it's kind of nonsense just to think that by defining something kind of loosely, like I want this one inch long, as an example, that there's just so many flaws to that, that it's not the best way to do it. We need to understand more. What does it take away from this?   0:18:58.6 BB: Well, let me say this, because I don't want to make it complicated, but there's a time and a place for absolute interchangeability and moving on. We go to McDonald's, that's how they make their food. We're just saying, okay, I mean, I'm not saying absolute interchangeability, get rid of it. What I'm saying is use absolute interchangeability where it's not worth doing more than that. And then where it makes sense, whether it comes to staffing, a relative... And even in every feature of a product that you make, not every aspect of it has the same fit issue. So the big thing is, where fit is most difficult, or most important, that's where you apply the meaning of question two. So if it's not worth the effort, then you don't do it because the strategy is the amount of time I put into sorting the things that are good has to pay for itself.   0:20:06.9 BB: So I go through all that trouble when it comes to who I wanna date, who I wanna marry, where we're gonna have the reception, where we're gonna go on vacation, alright? But it doesn't mean we apply that same degree of effort everywhere. Again, when you're selecting a doctor, you might wanna go to that extent. When you're selecting an attorney, but the idea is that you can, as we've talked prior, is become aware that's it's a choice. Do we focus on question one, which is absolutely interchangeability. It's a very simple model. Does the application... Is it worth any more time than that? No. Then that's the way to go versus question two. Let it be a choice.   0:20:49.5 AS: So let's wrap it up by thinking about the listener here and saying, okay, they're gonna go back into their job after listening to this. And what part... What can they do with this knowledge? Let's say an exercise at work or a way of thinking about how this can help them in their everyday job.   0:21:11.2 BB: I think the big thing is, and it's very straightforward, I don't know how much work it takes, but pay attention to how people use what you give them whether it's data you're handing off in a spreadsheet. Last week I met with our CPA who does our taxes year after year. And for my business, I give him a spreadsheet with a bunch of different columns and rows, and every year I add a couple more columns and a couple more rows. And I cut and paste and put it into a PDF file and send it to him. And I was talking with him last week and I said," You know, Mike, I can put that in a spreadsheet. It's a little bit more work for me." Because I said, "How legible is that fine print?" And he said, "It would be helpful if you did that." I said, "Boom, I can do that. I'm gonna do that." But if I didn't know, I would keep sending it to him, and he's squinting, squinting, squinting.   0:22:14.1 BB: And that's exactly what I'm talking about, is pay attention to how people use your work. It's as simple as that. Going around the corner and just asking for more clarity 'cause then the question is, "Is it possible that with a little bit more effort, I could save you a lot more effort?" [laughter] And that's what we're looking for. And relative to our accountant, it's not that hard for me to cut and paste and send him a different spreadsheet. That's a few seconds, and I think I could save him a lot more than a few seconds. So that's... The big punchline is in the world of interchangeable parts, I just say, "Hey, this is good. It meets requirements." Now what I'm paying attention to is, "What if I put a little bit more effort in this, can I make your life easier?" And that's the essence of teamwork.   0:23:11.8 AS: Yep. Well, I think that's a good place to wrap it up, Bill. On behalf of everyone at the Deming Institute, I wanna thank you again for this discussion. For listeners, remember to go to Deming.org to continue your journey. This is your host, Andrew Stotz, and I'm gonna leave you with one of my favorite quotes from Dr. Deming: "People are entitled to joy in work.”

What is quality? Does it mean always meeting specifications? What if the calculus for specifications means little and tells managers almost nothing about the process or its potential for improvement? Dr. Bill Bellows discusses the negative consequences of this kind of black-and-white thinking and what to do about it. 0:00:03.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I am continuing my discussion with Bill Bellows, who has spent 30 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. The topic for today is: What is quality? Bill, take it away.   0:00:27.5 Bill Bellows: Thank you Andrew. That question brings me back literally 30 plus years. I was at home studying on leave from work. I got a bunch of books on quality. I bought every book on quality I could find at the Yale Bookstore. I started reading them. And I'm reading Phil Crosby, I'm reading Six Sigma Quality, I'm reading Genichi Taguchi, I'm reading Deming. And I, naively, am thinking that quality means the same to all of them. As a heat transfer engineer, in the world of engineering, heat transfer engineers have a common language, they use common terms, so I naively thought everyone in the world of quality has the same explanation of quality. And I'm looking through these books. I had met some seasoned experts in the field. I started calling them and saying... I remember talking one guy and I said, "I don't think these books are the same." And he laughed. He said, "Bill, you're onto something."   0:01:24.0 BB: Well, the traditional way of looking at quality in most organizations gets me to what I now refer to as question number one and that is, Does something meet requirements? Does the task meet requirements? Does the dimensions meet requirements? Does the product meet requirements? And, Andrew, there's only two answers to that question, yes or no. That's how most organizations look at quality. Boeing's advanced quality system... How do I know? I worked for a company that was owned by Boeing for nine years. Boeing's advanced quality system, which is no different than anyone else's quality system, is question one, Does is meet requirements? Yes or no.   0:02:08.5 AS: Is that like go/no-go?   0:02:11.4 BB: That's go/no-go. It's black and white thinking, Andrew. It meets requirements or it doesn't. Question two is, How many ways are there for this thing to meet requirements? And there when I tell people if you take into account decimal places, an infinite number of answers, I have somebody laugh and say, "Infinite?" And I say, "Okay, 463." But the idea is there's variation in how you meet requirements. And so going back to the question "What about quality?" what I began to see is that most quality thinkers are thinking question one. I had been exposed in that same timeframe to Dr. Taguchi and his thinking is more about question two. And what got me really excited by Dr. Deming's work when I saw The New Economics is that I realized that his quality focus was also question two and that's what got me really, really curious. But the big thing was, holy cow, we've got different explanations of quality.   0:03:15.0 AS: And can I ask you a question about this? When you talk about how many ways are there for this to meet the requirements, are you saying how many methods are there to get there or how many outcomes are in the range of what is quality?   0:03:31.6 BB: What I'm saying is question one is, Does your car have gas? Yes or no.   0:03:38.2 AS: Yep. Yes it does.   0:03:39.3 BB: Question two is, How much gas is in the car? Is it a quarter of a tank, an eighth of a tank, a sixteenth of a tank, a full tank? So there's a lot of different answers. And that's what I mean the infinity is, there's a lot of degradations from empty to full and that's a much different question than, "Does the car have gas?" Now, why is that important? What I began to realize when I started my first job as a quality professional after leaving engineering and joining Rocketdyne as a quality professional, people were coming to me because things were broken, which was like out of gas. And the exciting thing was I got to work and help them solve it but the pattern I started to notice is that most often when people came to me, it was because the process, the product was out of gas.   0:04:42.5 BB: And I began to realize that if we operated with a gas gauge mindset and not a black and white mindset, we could have seen these just as you would driving a car. You see you're on E. Yes, I have gas but being on E and being full. But the people in the organization weren't equipped to think that way and that's when I began to get very excited by Dr. Deming's work and after learning about Taguchi's work 'cause they both helped me realize that most organizations view quality from question one. Is this good or bad? And then what we do is we leave ourselves open to running out of gas 'cause we can't see the trouble coming.   0:05:24.7 AS: I was just thinking about when I worked at Pepsi in our factory in Torrance, California, many years ago. There was a group of maintenance engineers that worked on the production line and all that. But there was one guy, he could solve any problem and he would come in and solve every problem. And he took great pride in that and everybody saw him as the problem solver. But when you think about it, it just perpetuated the system.   0:05:49.0 BB: Yes.   0:05:50.9 AS: And so who was the hero was the guy that can come in and fix it. "I'm the fixer."   0:05:55.9 BB: Well, and to that point, I came into a new organization, very excited to move across the country with the family, a lot of excitement moving into this new career, and I could not have been happier working on problems. That's the good news. But then I began to see that the customer was getting frustrated with this pattern and that was leading us to lose business. And now I'm thinking, yeah, I'm excited being called in to be the hero but I'm thinking this is a lousy way to run the company. We ought to be preventing these problems. And I just thought, here I am using sophisticated techniques from Dr. Taguchi when all we needed was a simple gas gauge to see trouble coming. And so, yeah, I was happy being the hero for a while but the more I understood where Deming was coming from, the more I realized it would be nothing but selfish to maintain that system.   0:07:02.0 AS: Yeah, because when you say selfish it's because you're kind of the hero saving the day, fixing.   0:07:06.1 BB: I'm loving it.   0:07:07.4 AS: Yeah.   0:07:08.2 BB: I'm receiving awards. I'm going to NASA headquarters, presenting solutions. You get priority. People get out of your way. You're working on very high-visibility issues. But what I was thinking was, "Holy cow. We could prevent these problems from happening in the first place." Not all problems, Andrew, 'cause I can't know everywhere to put a gas gauge. But now you have to start to think about where is that an issue. So if the light bulb in the kitchen burns out, okay, I can deal with that. But there's other situations where I don't wanna deal. I don't want the car to run out of gas. So then you start to think about, Where does the variation in good, which is question two, cause me heartache? And when is it just go get another light bulb? And this led me to become aware, to start to think about our thinking patterns. Are we thinking black and white, good and bad? Or are we understanding, which is question one, two answers?   0:08:12.6 BB: Question two is viewing things on a continuum, shades of gray. And, holy cow, how about we start asking how much gas is in the car, not, "Do we have gas?" And so I would go in to audiences, big audiences within Rocketdyne, within Boeing and suppliers and what not. And again, I mention Boeing. Rocketdyne was owned by Boeing. Most companies around the world that I've interfaced with think the same way. It's the same pattern. A standard question I have asked at lunch time presentations, "How much time do you spend every day discussing parts that are good, that arrive on time?" I've had 110 people in the room laugh, just emerge in laughter. That's what they do. And so that's when I became aware this is not just a Boeing thing, not just a Rocketdyne thing. This is a very elementary way of operating, even in our personal lives at home.   0:09:09.6 AS: Describe that again. Describe that. You talked about talking to the people in the factory and asking them. Tell us an example of that or kind of help us understand more about what you're saying there.   0:09:21.3 BB: Well, when I would ask audiences, "How much time do you spend discussing parts that are good, that arrive on time?" And they'll say, "Very little." And I say, "Why is that?" And the standard answer is, "If it ain't broken, don't fix it." But then I say to them, "Hold that thought. What if you use that thinking to drive your car, what would happen?" "We'd run out of gas." "What if you use that thinking relative... " I said, "If you use that mode of thinking, when would you put gas in the car?" "When it runs out." "When would you call the plumber? When would you go to the doctor?" And the idea is I think we are unnecessarily in a mode, we're putting ourselves in a mode of being reactive without realizing we have a choice to be proactive. The gas gauge gives us a choice.   0:10:11.3 BB: Lacking the gas gauge, we slip back to, "Well, it's working, it's working, it's working." And then we get into the rut of spending precious time focusing on the past to find out why we had the problem and simultaneously what we're gonna do is blame the driver of the car, which creates a mess within the organization. And next thing you know, people become reticent. When I look at the System of Profound Knowledge, I look at the variation piece. Lacking this awareness, Andrew, we don't see variation in good. We wait for bad to happen. We then blame whoever is close to it because we don't understand the system. And then you tie those together, we create this rut that I think many organizations are stuck in.   0:11:01.8 AS: So it sounds like, if I was to think about what you're saying, a lot of this is about the idea of becoming proactive? But I know that that's a tiny part of the puzzle but that sounds like that's one part of it. Tell me more about that.   0:11:18.9 BB: Well, I'm not suggesting that being proactive is better than being reactive. What I'm suggesting is that being reactive is a choice and being proactive is a choice. I don't think there's anything wrong with being reactive if we've planned it that way. So the light bulb in our kitchen when it goes out, we'll replace it.   0:11:42.5 AS: It's just not worth putting an inventory together and having to deal with all of that.   0:11:46.2 BB: All of that, and in that regard...   0:11:47.2 AS: It's just down the street.   0:11:49.0 BB: Well, good point, Andrew. Depending on how far the store is, I'll carry a few bulbs, right? But the idea is that if I'm going to be reactive then I need that spare. If I'm going to be proactive, then I get out of that rut of waiting for the crisis and I get to save that time, whether it's waiting for the heart attack, being on top of my health. Paying attention to the plumbing system and hearing that it's beginning to slow down and, well, keep using it, keep using it. Next thing you know, Sunday night at midnight, your spouse says, "The toilet's backed up." You're thinking, "Well, there goes Monday." That's at home, and I see the same thing at work.   0:12:32.0 AS: Yep. What I was thinking about was some experience that I... When I teach finance and I teach people about the balance sheet, the accounts receivable and the accounts payable and, specifically, give credit terms to companies and you have inventory in your factory, what I like to tell them is that giving credit terms is a choice.   0:12:52.3 BB: That's right.   0:12:53.2 AS: And they say, "No, it's not a choice. I have to do it. The customer demands it and my competitors do it." And I always say, "That doesn't mean it's not a choice. You're now making the choice to just follow what your competitor is doing."   0:13:07.3 BB: That's right.   0:13:08.7 AS: And what Dr. Deming talked about too is the idea of focusing on your customer, not your competitor. And then I started to talk to them and then I show them some companies that have no inventory or some companies that have no accounts receivable. And then they start thinking, "How do they do that?" And then we start discussing it and I show there is some interesting ways to do this, or thinking about accounts receivable from a strategic perspective. So I have a company that I show my students that has massive inventory. This is bad in the world of finance, for sure, in the world of business. But they have a 50% gross profit margin versus 25% for their nearest competitor. What do they do? They hold the inventory of their customers on the site of their customer. The customer only receives the inventory when the guy takes it out of the bin and then puts it into the production process. So on the one hand, their inventory's super high but on the other hand, they're making a huge profit from it. And I'm telling people that you gotta think differently about these things and not just think that it has to be done this way. What are your thoughts on that?   0:14:30.9 BB: Andrew, what you're saying fits in very well. We get stuck in these ruts of thinking "always". Inventory is always bad. It's always better to be... Why would I be proactive? I think that's a brilliant example of the value proposition of choosing. Choosing. A big thing I've seen in the industry going back 30 some years is what people call a single piece flow. We don't want a batch. Batching is bad. And so I went through a couple of days of training and the big theme of this training was a single piece flow. We're gonna make one at a time. One at a time. We're gonna process one at a time. One at a time. So then I thought, well, wait a minute. So we have this cleaning tank that can handle thousands of parts in this tray that go into the solution. So now that I've taken this training, Andrew, now I'm being told, no, I'm gonna clean one bolt at a time, one bolt at a time, without understanding there's a place for lots of bolts and there's a place for one. And so what you're getting is we get stuck in these solutions that don't quite make sense when you begin to look at things as a system, which is what you're talking about.   0:15:50.6 AS: Yeah. And this is where, when I went through the intro, it's how you help people become aware of how their thinking is holding them back from the biggest opportunities and I think that this really is what we're talking about.   0:16:07.7 BB: Absolutely. And it's understanding choices; the choice to be proactive, the choice to be reactive. And I also use the analogy of I say it's like, Andrew, you got to the end of the road, you made a right hand turn. You're like, "Yeah, I made it right-hand turn." Well, the right hand turn is being reactive. You made a right-hand turn, Andrew. Why didn't you turn left? "There's no left-hand turn." I say, "No, Andrew. There is a left-hand turn but it's in your blind spot." And so we have these ruts, as you're describing, these ruts of "inventory is bad" and all these other things. And as, I forget, Deming quotes... I think it's Will Rogers who used this quote and Deming has a quote similar to it in the beginning of chapter one, "I'd rather know less than so much that ain't so."   [laughter]   0:17:03.9 AS: Yes. And that's where I would say what's interesting about this discussion is it kinda reminds me that so much of my behavior in this life was shaped from when I was a young guy learning and studying Deming's teaching. And then you start to see it come into your thinking like this idea of teaching finance in a way that helps people open up their mind to a different way of thinking about it. And then I show them a company that's massively profitable because they made a choice to hold all the inventory of all their customers.   0:17:39.3 BB: With an appreciation of a greater system.   0:17:42.0 AS: Yeah. And Bill, I'd like to tell you a funny story of my uncle, Uncle Ham. He was in the military, he was logistics, retired as a Lieutenant Colonel. He was in Germany and he ran this huge base and logistics on it. And he said the Commanding General was coming the next week so they got everything ready and they really spit shine the whole place. The Commanding General comes through the whole place and they reach, finally, the parking lot were all the trucks and tanks and everything are out there. And then they were standing there in front of this row of trucks that was really long. And he said, "Well, sir, how was it? What did you think?" And he says, "Ham, it was excellent except for one thing." And he says, "What's that?" And he looked down the front of the vehicles, as he could see all the vehicles lined up, and he said, "Next time I come, could you line them up in a row so that the front of each of them lines up." And then Ham said... He got the General, he said, "Well, can you walk with me over here." And he walked up to the back of him and he saw that they were lined up in the back but they were of different lengths. So Ham said, "Sir, would you like them lined up in the back or in the front? But you can't have both."   [laughter]   0:19:05.8 BB: No, it's a choice.   0:19:09.3 AS: Yeah. I just love that and I think I'm gonna summarize what we've just talked about because I think there's a lot to that. So let me go through a few points and then maybe you can add any final bits to it. What you were talking about was the idea that when you first got into the quality movement, you started realizing that people had different ideas of what quality was but ultimately you came down to this, the idea that most people had was, Does this meet requirements? This is kind of a yes or no answer. It's a black or white. No shades of gray. And then the second part you talked about another question, which is, How many ways are there to meet requirements?   0:19:50.3 AS: And you also talked a bit about how people kept coming to you with things that were broken and how you can be a hero putting out fires all day long but you didn't really advance the business as opposed to starting to prevent problems and see how we can fix things rather than saying if it ain't broke, don't fix it. And then finally, we've wrapped this session up by what I think is the most powerful point of the session, which is that being reactive or proactive is a choice. And you're trying to help people see that just doing it the standard way, they're making a choice and there are consequences to that choice and it may be the right choice. But once you become aware of your thinking, that you have choices on every single thing, then it starts to open up people's minds. What would you add to that summary?   0:20:43.7 BB: A couple of things. One, what I didn't mention that I think is worthwhile pointing out is what did Dr. Deming mean by quality. So I mentioned the traditional quality, Bill Crosby, most others, is quality is conformance. It meets requirements, yes or no. So what I didn't mention is how did Dr. Deming define quality. In The New Economics, Dr. Deming says, "A product or a service possesses quality if it helps someone and enjoys a sustainable market." So what I think is really neat about that is, and that's more about question two which I'll get back to, question one is I define quality. When I hand off to you, Andrew, I say, "This meets requirements." I didn't ask you for your input. I'm just saying, "This met requirements. Boom!" And then I hand it to you. If you don't like it, you say, "Bill, it's not done." But if I give it to you and it meets requirements, I have let go of it physically and mentally.   0:21:48.7 BB: You call me up later and tell me the car had a quarter of a tank of gas, I said, "Andrew, the car has gas." Because we're focusing on question one. Question two. What Dr. Deming is defining is quality, a product or service possesses quality if it helps someone, now I'm saying, "Andrew, what do you think about... How does my work affect you?" Whether I'm giving you a report or a part or something to put together, now I'm judging quality by how well were you able to catch the pass that I gave you, the information that I gave you. That makes quality a relationship issue. And question two, for reasons we'll get into in future sessions, question two is about relationship quality because the infinite number of answers to the question of number two is how well can Andrew catch the ball depends upon how well I throw it to him. And I could throw it a little bit to his right, a little bit to his left. I can still meet the requirements of throwing it within two or three feet of him but I'm not thinking about how easy it is for him to catch it if I'm more direct about that.   0:23:04.3 BB: So question one is traditional quality. Dr. Deming is more about question two. And the other thing I'd say is relative to the choices, I think in terms of organizations as unusual, unusual as adopting Deming's work or business as unusual. And I couch it with shift from big problems, which is focusing all of our time unknowingly fire fighting, to great opportunities in the subtitle. And the caveat there is opportunities for investment, where can I be spending time to save time, and we're missing that category. The more time we spend on black and white thinking, question one, the less time we have to think about how can we improve the system which, again, in our future sessions involves looking at things in context, not in isolation.   0:23:57.9 AS: Fantastic. All right. Well, that I think is a great start. And Bill, on behalf of everyone at the Deming Institute, I wanna thank you again for this discussion. For listeners, remember to go to deming.org to continue your journey. This is your host Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming: People are entitled to joy in work.