Integration and understanding variation

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.