Deming's approach to lasting organizational change

Great leaders know there's no one-size-fits-all formula. In this episode, Bill Scherkenbach and Andrew Stotz discuss practical lessons on how to connect with people on physical, logical, and emotional levels to truly get things done. Discover why balancing "me" and "we" is the secret to lasting results—and why empathy might be your most powerful leadership tool. Tune in now and start rewriting your own leadership playbook. (You can view the slides from the podcast here.)

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, I'm continuing my discussion with Bill Scherkenbach, a dedicated protégé of Dr. Deming since 1972. Bill met with Dr. Deming more than a thousand times and later led statistical methods and process improvements at Ford and GM at Deming's recommendation. He authored The Deming Route to Quality and Productivity at Deming's behest, and at 79, still champions his mentor's message, "learn, have fun, and make a difference." And the episode today is Getting Things Done. Bill, take it away.

0:00:41.5 Bill Scherkenbach: Okay, Andrew. We will get 'er done today. The reason I put that on there is that in many of his seminars, Deming said that, "I am not a businessman and not trying to be one." But you need to think about these things. And his approach really was to improving organizations was to put people who he thought were masters of his teachings into organizations, and they would be there full time to facilitate the transformation when he wasn't there, such as Ford and GM and a few other companies. There were a few of us who he trusted to be able to be there to get things done. And I'm reminded of the philosopher, the Asian, Chinese philosopher, Mencius, and I'll read it there. It says, "Don't suspect that the king lacks wisdom. Even in the cases of things that grow most easily in the world, they would never grow up if they were exposed to sunshine for one day and then to cold for 10 days. And it's seldom that I have an audience with the king. And when I leave others who exposed him to cold arrive, even if what I say to him is taking root, what good does it do?"

0:02:35.7 Bill Scherkenbach: And quite honestly, that's the lament of every consultant trying to get stuff done in today's world, in Western style management. And so one of the things in this slide, the framework for getting things done, for having fun learning and making a difference, is one of the two, I think, major contributions I do say that I've made to the profession of quality. And that is using this Venn diagram to be able to show that even though other people have used other terms for physical, logical, and emotional, that there usually have been holy wars being fought by people who say, "Well, emotional is better. That's how you get stuff done." And other people saying logic and other people saying physical. And in fact, I think in the last time we spoke, the three major gurus of quality were those ships sailing in the night. Dr. Deming was the epitome of logical thinking, whereas Phil Crosby was looking for the wine and cheese parties and the emotional sell part of it. And Joe Duran was looking at physical, how are you going to organize to get stuff done? Now, they all had their followers who were pretty much on those frequencies, and they reached people in other frequencies. I came up with this idea for the Venn diagram to show no hierarchy, I guess back in 1987, something like that.

0:04:49.3 Andrew Stotz: And for the listeners out there, we're looking at a diagram that shows one circle that says physical, that's interlocked with another one that says logical, and then there's a third, a Venn diagram, that third is emotional. And so those are the three pillars that Bill's talking about. All right, keep going, because you got stuff in the middle too, which is interesting.

0:05:16.1 Bill Scherkenbach: And the thing is that I based it primarily at the time in the mid-60s, there was a theory of brain structure called the triune brain. Now, and it was the limbic system, the neocortex, and the R-complex. And pretty much followed the logical, emotional, physical words that I'm using. Now, our understanding of the brain in the decades up through now, it's a little bit more complicated than that. But physical, logical, and emotional is in all of us. In our body, I mean, the latest looks at neural connections extend to your gut. And nerves are just about everywhere and connected, and that the way the brain works is still not even fully, not begun to be fully understood. Having said that, in order to get stuff done, this Venn diagram shows very, very simply that the intersection of physical and logical, I put as science. It's the logical explanation of physical phenomenon. And the intersection of logical and emotional is psychology, logic of the soul. And the intersection of emotional and physical is art. All art is is the emotional interpretation of sensory input, whether it's a great meal, whether it's a Mona Lisa picture.

0:07:27.9 Bill Scherkenbach: But what will make one person absolutely swoon will make another person barf. So it's all personal, but it's physical, logical, and emotional is in all of us. And in the center, we're looking at what Eastern philosophies call harmony, where all of these are working together. And Western philosophies would call them peak experiences. And it's where the whole can be a lot greater than the sum of its parts, but with some slight changes can be a whole lot less than the sum of its parts.

0:08:14.3 Andrew Stotz: Great. I like the harmony in the middle. That's the challenge, really. Now, just out of curiosity, is harmony the goal? Is that what you're thinking with that being at the center? Or what is the meaning of harmony being in the middle?

0:08:28.0 Bill Scherkenbach: Yeah. When I apply this to the individual, harmony would be the goal. When I'm applying it to an organization, the larger an organization grows, the more you really need to use this overarching approach. And the reason I say that is, and it doesn't happen all the time, but most of the time when we're starting up a company, you want to surround yourself with fine people just like yourself. And so if you have a particular way of getting stuff done, you're going to hire people or surround yourself with people that are just like that, and everything is fine. But the more you grow the company, the more you're going to get people that are absolutely vital to your organization that aren't on those frequencies. And certainly, if you're in international business, you're trying to sell things to the world that in the larger the group of people, the more you have to be broadcasting on the physical, logical, and emotional frequencies. I mean, one of the first things that I did at GM when I joined was looked at the policy letters that Alfred Sloan wrote. And Sloan, it was very interesting because in any policy, Sloan had a paragraph that said, "make no mistake about it, this is what we're going to do."

0:10:31.8 Bill Scherkenbach: That's a physical frequency. In the Navy, it's shut up and fly wing. And so make no mistake about it, this is our policy. The second paragraph had, well, this is a little bit why we're doing it. And to be able to get the, and I don't know whether he was thinking that, but to my mind, it was brilliant. He was explained things. And the third paragraph or so in the policy letter was something that would instill the GM spirit, that there's something to do with the values. Hugely, hugely prescient in my viewpoint, but he's Sloan, I'm me, so he knew what he was doing.

0:11:29.9 Andrew Stotz: For people that don't know Alfred Sloan, he took over and was running General Motors at the time when Ford had, I don't know, 50% of the market share by producing one vehicle. And part of the brilliance of Sloan was the idea of building a lineup of different brands that went from the low all the way up to the high of Cadillac. And within a short period of time, he managed to flip things and grab the majority of the market share from Ford at the time, as I recall. Now, I don't recall it from being there, but I recall from reading about it.

0:12:12.3 Bill Scherkenbach: There you go. There you go. Yeah, having saying that, he offered those by buying the various little auto companies, littler auto companies to put that conglomerate together. But as people who have read my works, specifically my second book, The Deming's Road to Continual Improvement, this change philosophy is in there. And as I said, that's one of, I think, my major contributions to the field of quality. The other one being in a process model back in '86, we also were learning about Taguchi, Genichi Taguchi's approach to customers and the loss function, and he used the title or the terminology voice of the customer. And it occurred to me in our process definition, there was something called the voice of the process to go along. And so the voice, I introduced the voice of the process, and the job of anyone is to reduce the gap between the voice of the customer and the voice of the process. And I mentioned that because this matrix that we're showing now has physical, logical, and emotional, and the various process states that you could be in, there's a dependent state where you're completely dependent upon your customers or suppliers.

0:14:00.9 Bill Scherkenbach: There's an independent state where it's just you and an interdependent state. And I have that cross-reference with physical, logical, and emotional. In dependent state, it's essentially feed me, teach me, love me, do it for me, teach me, and love me. Now, in the independent, it's, I do it, I understand what I do, and I take great joy in doing what I do. And in the interdependent is, we do it. I understand how what I do helps optimize our process, and I take great joy in belonging to this team. And joy is the ultimate goal of what Dr. Deming had said for years, the ability to take joy in one's work. Now, I mean, every one of us starts out in life as dependent. It's feed me, teach me, love me, newborns, parents have to do everything. When you're a new employee, you might have some skills and understanding and emotion or pride, but this is how we do it in this company. And so you're dependent upon how you are introduced to that organization. But everyone tries to get out of that. Now, having said that, a pathology is there are givers and takers in this world, and some of the takers would just be very happy for other people to feed me, teach me, love me.

0:16:18.8 Bill Scherkenbach: My point or my philosophy is you've got to get out of the dependency and you have to balance that sense of independence and interdependence that is in each of us. Whether you're doing it or whether you're doing it in your family, as part of a family or a company or a motorcycle gang, whatever your group is, you're looking to blend being a part of that. Every human being looks to balance that sense of me and we. And in the thing we're finding in Western cultures, obviously, especially in North America or the US, we celebrate the me. It's the individual. And the team, we talk a good game about team, but mostly we're celebrating the me. In Eastern philosophies, they're celebrating the we. It's the team. It's not necessarily the, well, not the individual. The point is that in the Western philosophies, if you can't feel a part of a family or express that part, what we see in the US, there's a whole wave of people volunteering to belonging to organizations, whether it's sports teams, whether it's volunteer teams, whether the family balance. If you can't be a part of a family at work, you're going to go offline and do it.

0:18:24.9 Bill Scherkenbach: And the problem is your life suffers because you can't fulfill yourself as a person. In the Asian cultures, if you can't feel important as an individual, you go offline. Golf is huge in Japan and elsewhere, and it ain't a team sport. Calligraphy isn't a team sport. Karaoke isn't a choir event. There are ways to be able to express yourself offline if you can't feel important as an individual in your group. And so my philosophy is every human being needs to find that balance for each individual to be able to lead a fulfilled life.

0:19:28.7 Andrew Stotz: I'm reminded of a book by Dr. William Glasser called Reality Therapy, brought out in late '60s, I believe. And his philosophy was that part of the root cause of mental illness was that people didn't have one person they could trust. And that all of a sudden sets up all kinds of defense mechanisms that if prolonged end up leading to mental illness. That was a very interesting book, but the thing I took from it is that people want to connect. They want to belong. They want to be a part of it. They may act like they don't sometimes and all that, but we want to be in this interdependent position. And I'm looking at the bottom right corner of the matrix where it says, "I take joy in belonging to a team or this team." And that to me is, you know, that book helped me understand that it's not just the idea of, "Hey, we should all get along and work together." There is true value for a human being to be able to feel good about being part of a family or part of a business or part of a team. Something that just reminded me of.

0:20:53.7 Bill Scherkenbach: Yeah. Where I'm coming from is that everyone needs to balance that pride that you take as an individual and as you take as a member of a team or a family. That the independence is not, the interdependence is not the preferred state. Everyone, even people who are celebrating team need some time out to be alone, to do whatever they need to do to hone their skills, improve their knowledge, get excited about things that they also do as individuals. So it's a balance that I'm pushing for.

0:21:51.4 Andrew Stotz: Okay, got it.

0:21:53.3 Bill Scherkenbach: Okay. So with that as a framework, I think there are a couple of mistakes, well, there are many mistakes that leaders make, but the two big ones are, is don't think that what works for you must work for everyone. Okay. And don't even think that the sequence that works for you has got to work for everyone. Change is not a predictable hierarchy. And I'll explain that further. Let's see here. Yeah, I can do it on this next one here. I've got the matrix again, and of physical, logical, emotional, and physical, logical and emotional. And if a physical person is talking to another physical person, they're communicating on a similar frequency. And so a physical person is going to say, "Okay, this is the policy." The mother will say, "Because I said so." However, that physical person is communicating, the physical person receiving that communication is going to say, "Aye, aye, roger that, consider it done."

0:23:43.6 Andrew Stotz: Loud and clear.

0:23:45.3 Bill Scherkenbach: Okay. If a physical person is telling a logical person, using those same things, these are the policy, you could be a dean at a college and you're telling your professors, "This is what we're going to do," a logical person would say, "They're ignorant suit."

0:24:11.3 Andrew Stotz: Suit, what do you mean when you say suit? You mean an ignorant executive? What does it mean suit?

0:24:16.4 Bill Scherkenbach: Yeah, executive. Over here, they're called suits.

0:24:19.5 Andrew Stotz: Okay.

0:24:22.3 Bill Scherkenbach: So, no, but I'd be interested, you're logical, what would a logical person respond to a physical person who said, "Do this"?

0:24:34.5 Andrew Stotz: Yeah, I think without any logical backing, it's rejection maybe is what I would say is that ignorant, this guy doesn't know what he's talking about, he thinks just do it.

0:24:51.0 Bill Scherkenbach: Yeah. Yep, yep, yep. Okay. So, and again, if that same physical leader is saying, "Well, get this done," to an emotional person, that person might say, "You Neanderthal, you don't, you don't feel what the value system is." Okay. So, I'm trying to come up with sayings or whatever that these particular people would be saying. So if the logical person tells the physical person, "We've got to do this," it could be, well, the physical person is going to say, "That's too academic, spray some paint on it so I can see it." So, and that's the diss. Logical person talking to another logical person, "Yep, I got it, I understand it, it'll be done." A logical person talking to the emotional person, "You're heartless," or, "Quit mansplaining," as they say over here. So, and again, an emotional person trying to talk to a physical person to get stuff done, the physical person's going to say, "There's no crying in baseball." And so, and the logical person will say, "That's too touchy feely," and the emotional person reacting to the emotional signal, "Oh, they really like me." So, I'm trying to use movie quotes there to express the feelings and the understanding and the, what to really get done.

0:27:04.4 Andrew Stotz: So, people really come from different places, and if we don't take that into consideration, we may, it's one of the things I teach, Bill, when I teach a course on presenting, and I say, "Are you more of a logical person or are you more of an emotional?" And half the audience will say logical, half the audience will say emotional, let's say. And I said, "If I look at your presentations that you create, they're going to be based around what you are, logical or emotional. The problem with that is that you're only going to connect with half the audience. So, you need to build the logical and emotional aspect into your presentation to capture the whole audience."

0:27:50.8 Bill Scherkenbach: Well, I would argue that you're missing a third of it because you didn't check for the physical folks. I mean, in the story I tell about what we were doing at Ford, our vice president of supply purchasing was listening to Dr. Deming and said, "Well, we need longer term contracts." And so he had his people talk to the buyers down through the ranks and we need longer term contracts. And at Ford, a longer term contract was a contract that was more than one year. And so, yep, there were classes. It's important to get it done. Everyone's enthused. We look at it six months later, no change. A year later, no change. And so we looked at, because some people react to physical stimuli. And so we looked at the policy. And in order to get a long term contract, then you had to go through three levels of supervisory approval. No person in their right mind is going to go through that hassle. So we changed one word in the policy and it changed overnight. So now if you need a contract that's less than a year, you need to go through three levels of supervisory approval.

0:29:48.5 Bill Scherkenbach: And the long term contracts were magically appearing. So there are physical people. That is not a pejorative. I know that the educators are saying, "Well, the logical and emotional, but physical is a very viable way of getting stuff done." That should not be a pejorative.

0:30:14.1 Andrew Stotz: So I think now when I'm looking at my teaching in presentation, when I think about physical and presentation, there's people that really like props. They like having physical things to bring up on the stage. They like people, "Hey, stand up and raise your hands," or "Turn and talk to the person next to you," or something like that. So maybe that's what I need to do is bring that physical into my thinking and teaching.

0:30:44.0 Bill Scherkenbach: Yeah, I would recommend that. Find a way. There are many dimensions of physical. But you've got my second book. There are a bunch of ideas.

0:30:58.9 Andrew Stotz: Right here.

0:30:59.8 Bill Scherkenbach: Okay. Yep, yep, yep. Let's see here. Now we're going to go that transformation is not hierarchical. And this is hugely, hugely important. Again, if it works for you, don't make the mistake that it's going to work for everyone. And one of the sequences is everyone knows form follows function, form follows function. Physical form follows logical function. And in the automobile industry, if an automobile is to be fuel efficient, that's the function. It's got to have a jelly bean form. It's got to be aerodynamic. If the function of the vehicle is to carry passengers in comfort, the form has got to be a shoebox. Okay. And so that certainly form follows function. A screwdriver, whether it's the tool or the drink, the form follows function. If the function is to, no matter what the screw head is, you need to be able to screw it in or unscrew it, the form of it, you're going to give that head some leverage to be able to turn it.

0:32:36.9 Bill Scherkenbach: And if the function is to relax, you need to have a good vodka in the screwdriver, in the drink anyway. So if we look at how animals have evolved, a bird's beak is a prime example of over the years of whatever you want and whatever you want to say happened, the beaks went from blunt to very peaked so that they could get into a particular flower and be able to feed themselves. Dr. Deming used the example of what business are you in and the carburetor people went out of business because they only thought in terms of form. But if the function of the carburetor was, as Dr. Deming said, provide a stoichiometric mixture of air and fuel to the combustion chamber, then you might expand the number of forms that could be useful. So a number of examples of form following function, but function also follows form. The logical follows physical. And we're looking at it in the US government today. If your headcount is cut in half, you can't keep doing the same functions you were doing.

0:34:43.4 Bill Scherkenbach: You've got to figure out what your function is. So your function is going to follow form. Logical is going to follow the physical because you don't have the resources. In other times, when I was in Taiwan, I used the example of, if the price of petrol gets to 50 new Taiwanese dollars, the function of the automobile is to sit in the parking space because gas is too expensive to go anywhere. And again, the function of, I mean, if the function is security on the internet, one of the forms is the CAPTCHA. You have to identify, click the picture of all of the cars in this picture to prove you're a human. Next week, I'm going back up to Michigan to be with some of the grandchildren, but my daughter has toddlers, twins, that are 19 months old now. And whenever she is lying on the ground or on the floor, the twins sit on her. And I keep thinking of these large language models who are, that are in the AI approach to, she could be classified as a chair because her function is something for babies to sit on.

0:36:43.3 Bill Scherkenbach: And so it even applies in the AI generation. Okay, so now we come to seeing is believing. Physical leads the emotional. In Christianity, the doubting Thomas must see for himself. Some people don't really appreciate, it's not necessarily believing, but the emotional impact of going to our Grand Canyon or seeing something that is so indescribably beautiful and vast is, you have to see it to believe it or appreciate it, actually. The use of before and after pictures, if unless I see the before picture, I don't believe you did lose 150 pounds or whatever the before and after is, seeing is believing. Other, who is it? Thomas Kuhn in The Essential Tension wrote of Foucault. There's something called Foucault's Pendulum. It's a weight on maybe a 20 meter wire that back in the 1850s, he really was able to unequivocally get people behind the Copernican view that the earth really is rotating because that was the only explanation that this big, huge pendulum and the figure it was tracing in the sand, he had a spike at the end of it. Absolutely, okay, I believe the earth is spinning before the space shuttle.

0:39:07.4 Bill Scherkenbach: So, and yet, okay, seeing is believing, believing is seeing. Emotional leads the physical. Many times our beliefs cause us to use or see or miss seeing something I've said or quoted a number of things. The greatest barrier to the advancement of knowledge has not been ignorance, but we think we already know it. And so we're not going to even consider another perspective. Our friendships, our like of someone or dislike of someone can blind us to other qualities. The placebo effect, conspiracy theories, they're all believing is seeing. You believe in UFOs or unidentified aerial phenomena now, you're going to see a whole bunch of them based on your belief. And then there's feeling should drive reason. Emotional drives logical. You use your gut or intuition to make decisions. I mean, impulse sales, what's on the cap in any grocery store. You're going to buy the sizzle, not the steak. At least that's what they're selling, the sizzle. Political battles often play on the heart. So rescuing someone, emotional drives logical. If you see on YouTube, but even before that in the newspapers. I don't know if anyone remembers newspapers, but yeah, they would show pictures of someone running into a burning building and try and rescue someone or a crashed car getting them out before it explodes.

0:41:30.3 Bill Scherkenbach: If you had to think about it, you wouldn't do it perhaps, but the spur of the moment, the feelings driving over reason. Choosing a career for fulfillment and not the money. A lot of people do that and that perfectly fine. None of these as I go through them are a pejorative. They're perfectly, everyone uses, well, all of these at various points in time in your life. And last but not least, reason should prevail over passion. That logical rules the emotional, make a decision on the facts. Don't cloud your decision with emotions. Some of the ending a toxic relationship or diet and exercise. You're using reason. I've got to stick to this even though I'm hungry and sore. I've got to do this. And hopefully investing. You're not going to go for the latest fad. And there hopefully is some reason to investment strategies.

0:43:04.7 Andrew Stotz: And when...

0:43:06.8 Bill Scherkenbach: Go ahead.

0:43:09.1 Andrew Stotz: Let's just take one just to make sure that we understand what you want us to take from this. So seeing is believing and believing is seeing. And I think in all of our lives, we have some cases where we don't believe something and then we see it and then we think, "Okay, I believe now." And there's other times where we have a vision of something and we believe that it can occur and we can make it happen. And eventually we get it, we get there. So seeing is believing happens sometimes and believing is seeing happens sometimes in our life. And then some people may be more prone to one or the other. So what is the message you want us to get is to recognize that in ourselves, we're going to see it. It's going to be one way sometimes and another way and other times. Or is it to say that we want to make sure that you're aware that other people may be coming from a different perspective, the exact opposite perspective?

0:44:04.5 Bill Scherkenbach: Yeah, it's the latter. This whole thing is really what management, how is management going about communicating. And if they think if what works for them is form follows function or feelings should drive reason, then they have to be aware that other people need to, might look at it the other way around and approach their communication. Again, and this goes to the voice of the customer and the voice of the process. Every one of us has an individual voice of the customer. And people, psychologists would say, "Well, that's internal motivation or motivation's internal." Many of them do. Having said that, it's management's job who manages the process to be able to, if someone is motivated by money, that's important to them, then management needs to talk on that frequency. If they want retirement points or time with their family or recognition in other ways, what will, and Deming mentioned it, what will, he gave a tip to someone who just wanted to help him with his luggage getting to the hotel room and gave him a tip and completely demoralized him. And so management's job is to know their people, they're the most important customers that management has if you're going to satisfy whatever customer base your organization is trying to meet. And so how to get stuff done, getting things done, this applies to all of it.

0:46:15.5 Andrew Stotz: Fantastic. All right, I'm going to stop sharing the screen if that's okay?

0:46:19.9 Bill Scherkenbach: Yeah.

0:46:20.6 Andrew Stotz: Okay, hold on. So an excellent run through of your thinking, and I know for listeners and readers out there, you've got both of your books, but one of them I've got in my hand, Deming's Road to Continual Improvement, and also the other one, which we have right here, which is The Deming Route to Quality and Productivity, both of these books you can find on Amazon, and you go into more detail in it, in particular in The Deming's Road to Continual Improvement. Is there anything you want to say either about where people can go to find more and learn more about it, and anything you want to say to wrap up this episode?

0:47:04.1 Bill Scherkenbach: Yeah, the first book, my second edition, is in e-book form on Kindle. You can get it through Amazon or Apple Books. And in Apple Books, that second edition has videos of Dr. Deming as well as audio. And a whole bunch of stuff that I put in my second book. And that's in e-book format, immediately available from Apple or Kindle.

0:47:37.0 Andrew Stotz: So let's wrap up this episode on getting things done. Maybe you can just now pull it all together. What do you want us to take away from this excellent discussion?

0:47:49.6 Bill Scherkenbach: As we began, if what works for you doesn't necessarily work for everyone else. And the larger your span of control, the larger your organization, you have to understand to be broadcasting on physical, logical, and emotional levels, as well as trying to help people balance their sense of individual and their sense of team and family.

0:48:22.5 Andrew Stotz: Great, great wrap up. And the one word I think about is empathy, and really taking the time to understand that different people think differently, they understand differently. And so if you really want to make a big change and get things done, you've got to make sure that you're appealing to those different aspects. So fantastic. 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. And also, you can find Bill's books on Amazon. And as he mentioned, on Apple, where there are videos in that latest book. You can get them on Kindle, on printed books. I have the printed books because I love taking notes. And so this is your host, Andrew...

0:49:12.0 Bill Scherkenbach: Yeah. But old people like that.

0:49:15.4 Andrew Stotz: Yes. We like that. So this is your host, Andrew Stotz, and I'm gonna leave you with one of my favorite quotes from Dr. Deming. And that is, that "people are entitled to joy in work."