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."

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