In Their Own Words

David P. Langford, an expert in Deming in Education, discusses optimizing the education system and preventing problems. He emphasizes understanding the system deeply, rather than just working hard or copying blindly. They also explore the importance of different aims in system creation, intrinsic motivation, tackling hard tasks, and using interrelationship diagrams to identify impactful issues.

Explore the concept of quality education and the impact of the pandemic on the education system. Discuss the aim of public education, changes demanded by parents, and the importance of embracing Deming principles. Examine the broken feedback loop and the need for proactive engagement. Discover the effect of quality education on learning experiences and attract more students. Learn the significance of continually improving quality with a focus on customer satisfaction.

David P. Langford, an expert in applying Dr. Deming's philosophy to education, discusses the difference between continuous and continual improvement in classrooms. They explore issues with state systems in education and the flaws of rewards. Strategies for addressing tardiness and the importance of immediate engagement are also highlighted. The podcast concludes with an exploration of the differences between continuous and continual improvement in education and the importance of individual ownership in the learning process.

David P. Langford, an expert in applying Dr. Deming's teachings in education, discusses the method and transformation in education. They explore recognizing exceptional methods, ethical behavior, transforming competition, and inspiring excellence by moving away from punishment and grading systems.

David P. Langford, an expert in Deming thinking in education, discusses the thorny problem of grading and tracking student progress. They explore the negative effects of grading and the potential for improvement in the education system. The podcast covers optimizing learning, analyzing common cause variation, setting targets and timing, and tracking progress. The importance of personalized help, clear operational definitions, and involving students in setting deadlines is highlighted.

David P. Langford, who has devoted his life to applying Dr. Deming's philosophy to education, discusses tracking progress in learning without traditional grading. He emphasizes the benefits of eliminating grades and the potential for improvement in the education system. The podcast touches on achieving optimal classroom environments, the purpose of education, teaching the Battle of Shiloh, and the characteristics of quality in education.

Andrew Stotz talks with Dr. Mustafa Shraim of Ohio University about Deming's approach to variation, comparing it to Lean and Six Sigma. "When you do Six Sigma, you're basically outsourcing your quality to an external source, providing the training, the titles, and all of that. You can cut it off any time. But when you do the [Deming] theory of knowledge and the Plan-Do-Study-Act, you have to commit. The commitment is really the big deal here...the component that is missing [from Six Sigma] is a commitment to quality." SHOW NOTES4:30 Variation 12:40 The problem with Six Sigma 20:40 Statical Process Control Charts 25:44 Deming chain reaction 30:03 Suboptimizing departments 43:01 Management by visible figures 40:05 Why Deming, why now? Driving out fear 50:52 Continuous improvement and Plan-Do-Study-Act TRANSCRIPTDownload the complete transcript here. 0:00:04.1 Andrew: 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 here with featured guest, Mustafa Shraim. Mustafa, are you ready to share your Deming journey?   0:00:19.8 Mustafa: Absolutely, let's go for it. Thank you.   0:00:21.5 Andrew: I'm excited. Well, let me introduce you to the audience. Mustafa Shraim is an Assistant Professor at Ohio University teaching quality management and leadership. Professor Shraim has over 20 years of experience as a quality engineer, corporate quality manager, and consultant. His PhD is in Industrial Engineering. He publishes widely, and he has a passion for Dr. Deming's system of profound knowledge. Mustafa, why don't we start off by you telling us the story about how you first came to learn of the teachings of Dr. Deming and what hooked you in?   0:00:57.5 Mustafa: Yeah. Thank you, Andrew. Thank you for inviting me back. So...   0:01:01.9 Andrew: Yeah.   [chuckle]   0:01:06.1 Mustafa: The whole thing started when I was doing my master's and that was the late '80s, at Ohio University, and I was concentrating on the area of quality. So, I was doing research, and my research touched up on what Dr. Deming was doing. I was doing it in design of experiments and quality tools and things like that. But of course, you come across Dr. Deming's work when you talk about quality control, in general, and statistical quality. So, that was the first encounter of learning about what Dr. Deming did in Japan and how he used statistical process control and things of that nature to teach how you can improve your processes, your products, and later on, the management. But at the beginning, I did not really get into his management philosophy so I was more on the technical end of Dr. Deming's teaching which was mainly quality control and SPC, and just improving quality in general.   0:02:24.1 Mustafa: So, as I went... So I went, and I started my first job as a quality engineer, and quickly after that, maybe after one year, I moved to another company, and I became a statistical quality engineer, and I was doing... I was a part of a training program there. I was doing training on SPC as a part of a training for employees at that company. It was a union shop, it was automotive, and so we utilized statistical process control and what Dr. Deming was teaching. So, that was the beginning of it, but later on in the '90s, I started learning more about Dr. Deming after I read "Out of the Crisis" and then "The New Economics" about his management method. In fact, his management methods just captured me. I knew I got hooked on the quality part first, but the management method just brought it together for me. And since then, I've been reading and practicing, trying to at least, what Dr. Deming has taught.   0:03:41.9 Andrew: And would you say... One of the things that I started realizing was that the statistical... What I thought was the end was the statistical tools. And what I started to learn is that, actually, the statistical tools start to have limitations if you're not doing the management of the whole operation in a good way. And I think that that's something that really resonated with me when I started putting the pieces together. How do you see the role... And in a little bit I'm gonna ask you about some more specific tools, but just generally, we have statistical tools, but we also have management. Many people may think that you can just apply statistical tools and solve all the problems, but I'm curious how you see that interaction between the tools and the management style.   0:04:30.2 Mustafa: Well, as you know and many, probably, of your listeners already know that Dr. Deming had understanding variation, or some variation, as a part of his system of profound knowledge. So, understanding variation, under it, is really learning how to distinguish between the types of variation that you would have in any situation, managerial or process situation. So, that interaction there is really big. That really captured me because what Dr. Deming says is like, more than 80% of the application for statistical process control is actually, should be in management, and not necessarily just on the line, controlling quality of the product. So that was... It captured me, and because of explaining how many managers, many supervisors, don't understand the difference between common cause and special cause variations, and they start managing people with common cause variation going up and down, and they reprimand if it goes down, and they praise if it goes up, and that actually just makes things even worse in the future. As you probably know, it's tampering with the process.   0:06:08.8 Andrew: The best way that I've ever come up to try to explain this is to say to people, "Imagine there's 10,000 people in a stadium. They all flip a coin, and you say, 'Hey, if you flip heads, go to one side of the stadium. You flip tails, you go to the other. Everybody sit down. Okay, now... '" Or basically say, "Flip the coin again, and if you flip heads again, so two times, stay standing. And if you flip tails two times, then stay standing, but if you hit the heads and tails, then sit down." And now, your audience is getting smaller and smaller. If you do this 10 times, you will have 10 people, generally, you're gonna have 10 people that have flipped heads consecutively 10 times, and people that flip tails consecutively 10 times.   0:06:54.1 Andrew: And if we said, if we started off the whole game by saying, "Tails is bad." Now you've got some people that have done bad 10 times in a row, and some people that have done good 10 times in a row. But we know, because of the design of that example, that it's purely random. So, the question... So, we can understand that, but when we think about random variation, what Dr. Deming started to do is show us how that fits into management and psychology and how we're missing that. I'm just curious if you can help us to understand how that variation fits into that management 'cause you started talking about rewarding and all that. So, just curious about how those things fit together.   0:07:38.7 Mustafa: Right. For example, within the control limits, and those are the limits that are on a control chart, and they are spaced three standard deviations up and three standard deviations down. All the variation within is mostly a common cause variation, and it's due to the system. It's a system variation. It's not attributed to any special cause whether it's operator or something else that changed. So, distinguishing between the two becomes very important because if you don't look at variation from the perspective of a control chart, what happens is that you are in the weeds, and you look at every point as either really high up or high down cause you don't have any perspective as to how to evaluate or filter this type of variation. On the other side, also you don't want to not react to something that is special. For example, if you don't have the control limits, and if you don't have a proper way of looking at the variation, then you might end up also passing a special cause as a common cause, or not reacting to it enough to fix it and to make it a part of your controllable system before moving on.   0:09:16.7 Mustafa: From both perspective, I think it's very important for managers, for leadership, to understand why we do this. It's not just something that you have to do on the production line. It is something that you have to do in management based on performance. Look at your data and see if it's a stable process in control or if it's not, then you need to start eliminating those special causes. Like Dr. Deming said that, "Nothing really is born perfect as far as the processes." I'm paraphrasing here. But when you start a new manufacturing process, it doesn't mean that it's going to be in control; you have to work at it. You have to eliminate one by one all these special causes that come up before you start seeing a stability. And then after stability, then you will be able to work on the system part of the process, which is a long-term continuous improvement projects.   0:10:29.9 Andrew: Yeah, it's interesting. I remember a story. When I was working at Pepsi, we had a bottling plant in Los Angeles that I worked at. And the management were putting pressure on the people that were running the bottling machine because the variation of the level of the liquid in the bottle was getting wider and wider. And so, as a supervisor on the factory floor, my job was to go and kick ass, basically, and tell the guy, "Hey, come on, what are you doing here? You're messing around." And he just said, "Look, Andrew," and I was a young guy who listened to what these guys said, and he said, "Look, look at that machine over there. They spent the money to buy that filling machine over there, and you see there's no variation. Look at the old machine that they've got, and they haven't bought the parts to repair it. I keep telling them, if they don't buy these parts, I can't get to that point." And he was like... And I realized at that point that it was a management decision that needed to be made to reduce that variation at that point. It wasn't an operator that we should be punishing for that. And I think I wasn't that popular bringing that information back to management 'cause they wanted to say, "Well, no. It's the worker," and that's where I started to think about that common cause variation, and how do you improve and reduce variation?   0:11:48.3 Mustafa: Right, right. And if you leave it also to the worker, sometimes if they don't know what to do, they start tampering with the, actually, production process, and it makes it worse. So, a training for them on variation is also important. It's not only for management but also for workers as well.   0:12:08.2 Andrew: Yeah, good point. I know your expertise in this area is so valuable, and I think that it's great to have you maybe break down the following four terms that we hear, and maybe just generally discuss the differences, and then we'll talk about them in more detail. But the first term is Lean or continuous flow, the second is Six Sigma, the third is 14 points, and the fourth is system of profound knowledge. So, maybe just give an overview. What are these things? What do they mean?   0:12:40.0 Mustafa: Okay. Well, the Six Sigma part came about in the mid '80s and started in Motorola, and a lot of people already know that. And the reason it came out is because Dr. Deming's contribution in the '80s just brought a lot of attention to variation. In addition, you have also some big issues like the Ford transmission issue that came up. And there was a study about variation, and so there was a lot of attention being focused on variation. So Motorola... Somebody at Motorola, Bill Smith, an engineer over there, actually, came up with this idea of Six Sigma. And what that means, in general, is that if you have a spec that is a certain width, like upper and lower spec limits, then you want your process to operate in about half that space. Basically, that gives you good capability of the process, and then you don't have to worry about it. The first problem that came about from Six Sigma was the controversy about the shift. The people who invented Six Sigma, or packaged it together, said, "Okay. Well, we know you wanna operate exactly in the middle, but, normally, processes shift like one-and-a-half standard deviation here, or one-and-a-half standard deviation there so we want to allow that."   0:14:18.7 Mustafa: So, that is one of the biggest controversy because when you shift something like that, the process may be out of control without knowing. So, they did not really take that into consideration, although they are teaching control charts within the Six Sigma body of knowledge, so that was not really taken care of there. But that was one of the flaws that is out there in Six Sigma. Now, there are topics in Six Sigma that are... They're okay. We can teach certain topics on continuous improvement, root cause analysis, things of that nature. But the statistical thing here was wrong. And again, the reason Six Sigma was popular is because it is packaged the way it was packaged. You have companies buying this, and you have all the titles that came with it, and you know how companies love titles, especially here in the United States. So, you got all the belts; everybody must have a belt. You gotta go through training, you gotta... And then after you get your belt, what happens? You're gonna save us money. You're gonna have to do projects, and your job is to save me 20, 30, 40, 50,000 or 100,000 sometimes. So, that was the Six Sigma part of the whole thing.   0:15:51.6 Mustafa: And so, the Lean later became Lean Six Sigma. But Lean, by itself, came from Japan, originally. It's eliminating waste. Think about things like over-production, waiting, inventory, extra motion, all of these little things that you think they're little, but when you put them together, that's a lot of waste. So, to make the process flow better, you need to eliminate all of this waste. It's more about productivity and moving things faster within the organization. Then, when we contrast that with the 14 points, the 14 points are the system for management. It's all about... It's about management. It's also about quality, like improving forever the processes and systems for example, and have a constancy of purpose like the first point says. This was the application of what then became the system of profound knowledge as we know it. I don't know... I don't wanna go too far with definitions and things like that, but the Lean Six Sigma, they had the problem of the statistical flow from the Six Sigma part, and then you have all the management by numbers, management by objectives from both the Lean and Six Sigma.   0:17:30.3 Andrew: And I'm gonna try to summarize what you just explained by talking about the Six Sigma. Is what you're saying the flaw or the issue was is that, in order to try to get good quality, why don't we just set our expectations of what we're gonna get out of the system so tight that when we actually produce, we're in a narrow range, but we're never... Let's say we don't allow... We built the system with so much margin of error that even if we move around in our output, that that still is within a very tight range. Is that the concept?   0:18:10.5 Mustafa: Yeah. That is the concept. But the problem with that concept is, if you move around, if you let the process move around one-and-a-half standard deviation, for example, which, what it says, this indicates that you could have special causes that you don't react to. You don't know at that point because you have moved the process. You end up having special cause variation based on that shift because that shift could be real, a special cause and not just allowing natural... Naturally, the process does not move one-and-a-half standard deviation   0:18:53.0 Mustafa: all of a sudden because there are tests on control charts that if the process... For shift. So, if the process, for example, gives you nine points in a row on one side of the center line, that's a flag because that's a shift. That's a shift in the process. Now the process shifted on you, and you're not reacting. You're not doing anything about it, so you have to stop and take a look at it. So, what Six Sigma is saying is, "Yeah, the process could shift one-and-a-half standard deviation." But in statistical process control terms, it can't without reacting to it.   0:19:37.5 Andrew: And a simple control chart, or run chart, will probably reveal this better than looking at a histogram type of chart, like a Six Sigma type of chart where you're observing the output of the system moment by moment. Would that be correct to say?   0:19:56.5 Mustafa: Right, right. So, the control chart... And I did a paper... And there are people that are out there and doing the same thing. I did a paper and showed that if you move the system one-and-a-half standard deviation, you will see all these points beyond the control limits by simulation, simulation of the process. You move it, and you'll start observing so many points being out of the control. And so, if you allow it, then all of a sudden you start seeing all these points beyond the control. And what do you do? So, there is nothing to cover that within the Six Sigma body of knowledge.   0:20:40.7 Andrew: And maybe it's a good point just to talk briefly about the control charts and what Dr. Deming taught about that. I think when I started seeing the control charts as he was describing them, I started to see a real intense focus on looking at... at trying to understand what's really happening with this system and trying to observe it in real-time. And the more that you did that, the more you really start to understand what's driving the performance of that system. So, maybe could you just take a moment, think about the listener or the viewer that doesn't understand the control charts yet, maybe just give a big picture about what those are, and what's the value of them?   0:21:27.7 Mustafa: So, the control chart is basically... If you think about plotting points over time, that would be a run chart. So, just looking at your performance over time and just plotting points, that's a run chart. A control chart is basically taking the run chart and creating control limits on it. And the control limits came from Dr. Shewhart who invented the control charts. And he put those control limits to minimize a couple of mistakes: not reacting enough when you have to, and not over-reacting when you see something. They were more economics. They were not statistical in nature. They don't really depend on statistical distribution or anything like that. They are very robust. They can be used in a variety of applications without having to look at the distribution of the data. And they tell you when to react to a special cause and when to leave the process alone.   0:22:41.3 Mustafa: So, when you leave the process alone, it means that you have common cause variation, just the systemic type of variation that occurs over time. But that doesn't mean that you don't work on it as management. This is a management part of the work. So, when you have a stable process, it means that this is a time for management to initiate, maybe, continuous improvement project or initiative to reduce that variation, and not... Because you can be stable and in control, but you still have a lot of variation in the process. So, the spread is very wide in the process or, in the control chart, it will be going all over with a lot of variation, but it's still within the control limits. It could have this kind of scenario. And that's when management has to step in and say, "Okay, we need to look at this from a big picture and try to look at all the causes and do some kind of continual improvement."   0:23:53.3 Andrew: Mustafa, I would think that when you look at it, it turns out that it's like a continuous experiment. And you're looking at the outcome in a control chart, and you're trying to think, "Okay, if we... " Let's just say that we add a new piece of machinery. We upgrade a particular part. Then we look and say, "Okay, how did that impact the output of the process?" And then you start to see that what you're talking about, and I think what Dr. Deming is talking about was the idea that, start to get this intense focus on how do we improve this process? And how do we reduce that variation to a point? There's no point in reducing it beyond a certain point. But just that focus. Whereas with Six Sigma, it's kind of a theoretical thing, and there's other aspects that you've talked about. But just that, a control chart really allows you just to focus on testing and understanding that the whole... The output is a function, not only of the people on the production line. Let's say if it's in a factory, and it's the machinery, it's the way you organize, it's the shifts that you work. It's all of these things. So, I can't help but think that it's kind of like the fun of testing and seeing the result coming out of it.   0:25:09.1 Mustafa: Right. When you say a special cause, it doesn't mean always that it's bad. It could be good. But you have to study it, and you have to see what happened. So, was it intentional? Was it unintentional? But at least you would stop and look and study. And that's the idea. It's not just to let it go without studying it. On the other hand, the common cause, you're just looking at the width of the variation in general. And you try to reduce that, like you just mentioned, over the long run.   0:25:42.0 Andrew: So... Go ahead.   0:25:44.8 Mustafa: No, I was just gonna go back to Dr. Deming before I move to Dr. Deming's chain reaction model. I use that all the time. I use it when I was doing workshops in industry, and I use it now in my classes. And I put that... The chain reaction model. And what the chain reaction model for those of the listeners who are not familiar with it, Dr. Deming says that, "You have to start with improving quality, and the rest is just a chain reaction." So what happens is, when you improve quality, and that is, and what he's talking about here, is a commitment by management to quality. It's not just a one-time improvement of quality, it's a commitment on improving quality. Then you start seeing defect decreasing. You start utilizing equipment better. Errors decrease and all of this becomes much less. Your productivity, as a result, goes up because the cost is down, or your input cost is down so now your output is better, and you have a good productivity which keeps you in business, and you provide better jobs to your community. I think...   0:27:18.8 Andrew: That topic is so interesting because I think most people, at the time of Dr. Deming and even now, think quality is a department; quality is something we apply in a certain area. And when you think about setting the purpose of a company to improve quality, it's a very risky thing. Most people think, "No way. Our company is about sales. Our company is about profit. Our company is about customer satisfaction," or whatever that is. Those things all are the intuitive things that we come up with to say, "That's what drives our business." And Dr. Deming, what you're saying is that... Dr. Deming says, actually, the chain reaction that starts from quality leads to all of those things. Can you elaborate a little bit more on that?   0:28:07.5 Mustafa: Right. So, we know that we have to start on quality. But take, for example, companies that are engaged in Lean projects. So, what they do in Lean projects, you try to eliminate waste. And eliminating waste could also be a risky business if you just arbitrarily start cutting costs of material, of employee hours, or eliminating jobs, for example. If you take it from the productivity block of the chain reaction model, you go nowhere. You gotta go back from the quality, improving quality, and that's where the chain reaction starts. But for many Lean projects, they actually start from the productivity block. So, improve productivity from the productivity block, that doesn't really work because you are not committed to quality at that point. So, what happens is, you start maybe buying cheaper material or eliminating jobs. That might help you in the short run. The short run may be the next quarter. It's going to help you out. You're gonna improve the bottomline. Later on, all of this is going to come back as customer complaints, returns, issues with employees, lack of motivation because now they have to do more with less hours, and so on and so forth. But it creates a whole set of problems that are addressed in the system of profound knowledge from the psychology part to the learning part, and knowledge and the PDSA.   0:30:00.4 Andrew: So, let's go back to then now. I wanna talk about the system of profound knowledge so that the listeners out there, some of them understand it very well, but some of them may not understand what that means at all. So, now we've kind of been through a little bit about Lean. We've been through Six Sigma. We talked a little bit about the 14 points, and I think the point that you're just making is that when you look at Dr. Deming's 14 point, first one is create constancy of purpose. The second one is to adopt a new philosophy, and the third one is to end dependence on quality inspections. It's like those top three are telling the senior management, "Your job is to improve quality." That is what's going to lead this chain reaction. And I think you've illustrated that in your discussion really well. So, take a moment and tell us about system of profound knowledge as you see it.   0:30:49.8 Mustafa: Okay. So, the system of profound knowledge is... There are four pillars or four components to it. And the first one is appreciation for a system, meaning that you have to see systems in place. You have to do a connection of different parts together, that you cannot do things in silos. You cannot suboptimize. You have to look at the aim of the system, and you try to work for the aim of the system, not the aim of each department. But with that comes the idea of creating the variation part, and what is systemic variation and what is a special cause variation? Systemic variation is a part of management's decisions. They have to make improvement on that in the long term. And how you react to variation. So, if the system has a certain capability, and then you ask somebody, "Okay, I want you to get me that which is up here, way up. That's your objective." If the system is not capable, what is the employee going to do? They're going to try to create that number to please the boss. As Dr. Deming was referring to, they tried to please their manager or the boss. So, you might take risky steps to do that, including maybe fudging numbers or coming up with ideas to create that number.   0:32:37.1 Mustafa: And that goes to psychology, so now you are... You don't feel good about it. You have to keep your job. You have to do all kinds of stuff to make sure that you don't lose your job because you could not achieve that. Now you become less motivated. You're not really engaged. And what happens? They provide you with incentives, outside incentives. Bonus is based on work that you have to do, but the system is incapable. You cannot perform beyond what the system is capable of. So, that creates all kinds of problems. And the last part is the learning part or theory of knowledge, and that you have to have a method. You have to have clear definitions and, basically, you have to know what you need to accomplish, and by what method and how you know when you get there. That's a theory of knowledge. There is no knowledge without a theory, and it has to be... It has a temporal element in it, meaning that you revise the theory, and you create more knowledge. So, that's in a nutshell how you... How all of these components are related to each other. But to me, the systems and variation, they're just out there, and I see it everywhere as a problem.   0:34:14.3 Andrew: Yeah. So, to summarize, the system of profound knowledge, as you've explained, is appreciation for a system. Number two is knowledge of variation, number three is a theory of knowledge, and number four is psychology. And one of the things that I came to learn about Dr. Deming is, I always say he's a humanist. He's a person that really sees that people should have joy in work, and he wants to see people reach their full potential, and he understood the powers of incentives like you just explained. So, now that we understand a little bit of the theory of the system of profound knowledge, what is going wrong out there in this world? Let's talk just briefly about, why is this so significant? Come on, I just go get my black belt in Lean Six Sigma and the problems will be solved, but what is it about the theory of profound knowledge that... Or the system of profound knowledge that people should pay attention to now?   0:35:21.5 Mustafa: Well, with... For example, let me just take it from a different perspective. If you look at Lean projects, and you eliminate. for example, waste. if you don't have a system of profound knowledge to check all of the things that needs to be checked, like variation and psychology and making sure that people are not fearful to do their job, then you're creating other problems, not only just... You're not just reducing waste, you are actually, maybe having... overburdening the employees with removing waste because when you remove waste, you may be removing jobs, you may be removing hours, you may be removing employees. That would create a overburden. You could also create problems for the customers and fluctuation and defects and variation.   0:36:21.8 Mustafa: That's why the system of profound knowledge is an integrated system. It's not a just one piece. Once you start going from one door, you gotta address all the other components that are tied together to it. So to me, from whatever door you go in in the system of profound knowledge, let's say you go from the psychology which is you drive out fear. You create a good climate. You do all of these things, then you start seeing people coming up with innovations, reducing variation, and working together collaboratively which creates a good system. So, whatever door you go in, you're going to get to it because they are connected. There is no way that you're not going to address the other points if you have knowledge about the other points.   0:37:15.0 Andrew: It's an interesting thing that I would say in modern management, in modern life, people are trying to compartmentalize things and thinking that being a specialist in a particular area, whether that's medicine or whatever in business, that by compartmentalizing, it gives us comfort that we can become an expert in this area and all that. But what you can see... And I'll tell you, Mustafa, about my mother who I take care of. She's 83. And if we have a problem with her foot, the doctor may say, "Okay, don't walk for a little while." Well, that causes another problem. You start to risk bedsores. You start to have problems with GI system. And what you find nowadays in medicine is it's getting more and more narrow where doctors are not seeing the holistic pieces, and I see myself always constantly thinking about the whole picture to that. And I think what I'm hearing from you is that, that we should be looking at things more holistically, and that's what the system of profound knowledge is teaching, is that... Would you say that?   0:38:24.1 Mustafa: That's exactly right. That's exactly right. So, you have to... The main thing there is, companies, traditionally, they try to just suboptimize through their management by objective, "We want each department to save so much money," and then, once they start doing that, everybody affects the other negatively, but they don't know until later on that they have done that. You might gain the objectives in the short run, but in the long run, it's going to be disastrous for the aim of the organization.   0:39:03.9 Andrew: So, you just raised another point that Dr. Deming teaches about is suboptimization. And what he tried to teach was that the objective of the senior management of the company is to optimize the system, not its component parts. Have you seen...   0:39:19.9 Mustafa: Right.   0:39:20.9 Andrew: In theory, people should know that, but how is that going wrong in this world these days? And why is it important to be thinking in this holistic way that Dr. Deming was teaching?   0:39:32.5 Mustafa: Because companies, if they don't do things systematically, and they don't apply the whole system of profound knowledge, altogether, they're going to rush into money-saving exercises, and those money-saving exercises could be replacing material with lower-grade material. It could be, maybe, not hiring experts and hiring somebody who doesn't know what they're doing, and not providing training, or cutting training, or foregoing maintenance. There are so many things that you can start focusing on because you have issues. So, you have issues with a customer, and you start focusing on cutting costs, arbitrarily, not with a method, arbitrarily starting cutting costs in different departments. When you put it all together, just things don't merge well together because you're trying to suboptimize. You're trying to lower the cost in each department and not really improve the aim, or attain the aim of the organization as a whole.   0:40:48.3 Andrew: We've covered so many different topics. It's pretty exciting, like this sub-optimization. I think is a really interesting one. And I wanna raise a new topic that is the opposite of one of the topics that you raised. You talked about the chain reaction. Let's talk about the opposite chain reaction. I'll tell you a story in my own coffee business. We had put some pressure on some of the people in the procurement part of the business to reduce cost. That's reasonable. Management wants to reduce cost so there we go. We put pressure on them, and we told them... We incentivized them. And what we saw was that they ended up proposing a lower quality coffee bean, green coffee bean. The production people didn't like it because all of a sudden they had to recalibrate the machines. So, there was already a cost right there because the... It was harder to hit the client's demand of what taste that they want, consistently hit it.   0:41:47.9 Andrew: Then the people that were delivering, when we delivered the product to the customer, we had some returns where the customer is like, "No, I don't like this taste," or that we would have much more variability. And all of a sudden, we had customer complaints. And then we started to realize that, "Okay, now we gotta go and replace that with the proper stuff," and then all of a sudden there was all kinds of cost. So, the chain reaction you talked about was, start with quality and you start to reduce costs throughout the chain. And a reverse chain reaction is when you start by trying to optimize one point and not realize that it's a whole system, and therefore what you've caused is a negative chain reaction of cost just when you thought you were cutting costs, you're actually raising costs.   0:42:33.7 Mustafa: Right. That is a great example of that because what you've done is maybe just looking at the productivity part, you wanted to make sure that the costs were down so trying to turn the knobs on certain things, and then it just backfired on the quality part, increasing errors, increasing customer dissatisfaction and all of that, and that happens all the time.   0:43:01.4 Andrew: And that's what Dr. Deming says, "How can you measure the cost of a lost customer? How can you measure the dissatisfaction and the frustration?" Some things are just unmeasurable. So, I wanna...   0:43:15.2 Mustafa: Right. So, that brings about the issue of visible figures. You're managed by visible figures only, and not really the stuff that are behind the total cost, which some of it is unknowable or unknown.   0:43:34.2 Andrew: Now, Professor, this is really strange. Here we are, talking about quality. You're such an expert in all of these statistical methods, and now you're saying, "Wait a minute, you can't just measure by visible figures." So, this is again a paradox of Dr. Deming where you come into his teaching, seeing all of these numbers and all that, and now what you're telling me is it's not just visible figures. Could you just elaborate on that?   0:44:02.7 Mustafa: Yeah, absolutely. Visible figures are figures that are available right there for you, and you just react to it. If things go up, you wanna reduce costs. You just take action. But visible figures are really a limited part of the whole story because the total cost of not doing things right or not following the Deming management method. They're not going to be... You're not gonna see them until later on. You may be able save for a quarter or two but, beyond that, things are going to start accumulating in terms of defects, returns, and things of that nature. So, from the Deming point of view, the visible figures are only a smaller portion of the total figures which cannot be measured at the time you're looking at the numbers and taking action.   0:45:04.3 Andrew: It's interesting because we hear sayings like, "What gets measured gets managed," and those types of sayings. And one of the things that I... When I teach young people about this, I oftentimes say, "Well, let's just look at a simple thing. What is the value of a hug? Measure it." It's immeasurable. Particularly, in a particular situation when someone is traumatized, or in a really painful situation, and that hug made a huge difference in their life that could actually have kept them alive and led them to another so that... I think that's the visible figures that you're raising. It's such a small part of this world. The bigger part is how it all fits together. And so, I think you really inspire me to rethink about this concept; that it's way beyond just visible figures.   0:46:03.5 Mustafa: Absolutely, absolutely. This thing is just... One of the things that really captured me with the Deming philosophy is visible versus invisible figures, and the sub-optimization part versus the aim of the system. And those things are just so powerful when you think about them, when you think about why we're promoting, or why we're talking about Deming, and why now and all of that. It's these things that are very common these days. And they have... To have a good system, to have good management, you have to eliminate management by visible figures on... You still have to have visible figures, but visible figures-only is what Deming is... What it was Deming opposing. What he was against, I guess.   0:46:57.8 Andrew: Yup. And you said, "Why Deming? Why now?" And I'm thinking about it myself. And my answer to that is that we have a whole generation of young people who think that successful management is, maybe, sitting at their desk behind a computer looking at KPIs. And then, when someone is down on their KPI, send them an email, kick their butt. And when someone is up on a KPI, give them a bonus, and that's it. And then you go home at the end of the day. And they're so lacking in the psychology aspect of the system of profound knowledge, but just in what management truly is. So, from my perspective, "Why Deming? Why now?" is because we have the risk of it turning into some kind of automation system of management that will always end up underperforming. Why would you say, "Why Deming? Why now?"   0:48:00.5 Mustafa: So, as you can see that, for me, "Why Deming? Why now?" is I don't see management using variation as a way to distinguish between the common cause and special cause, and also their reaction to it, or the mistakes that they make as a part of it. So, that's a big thing. The other thing is the fear that people are experiencing at the workplace. Recently, we've heard about the great resignation. People just don't wanna go back to work anymore. And a lot of people expressed that they just don't like the environment that they work in. And we know that most people, about 70% of people who quit, they don't quit because of a pay or anything like that. It's because of relationship with their bosses and the company, and they just don't feel that. So that the environment has a fear in it. So, when you create fear, you're not going to have people that contribute and collaborate, and I think that's big. If we learn anything from this whole pandemic, it is that you have to create an environment of trust because if people are away working virtually or work in the office, you shouldn't have to worry about them if you have created that environment or the trust.   0:49:34.6 Andrew: Yup. And you mentioned about the pandemic. If there's one thing we've learned, fear is a massive motivator. The level of things that people have gone through in a state of fear, things that people would have never imagined that they would have done. And so, I think what you're talking about is just one more of the many Deming principles, which is to drive out fear. And I just wanna summarize some of what we've gone through, and then we'll wrap up. So, we've talked about the differences between Lean and Six Sigma and Lean Six Sigma. We've talked about Deming's 14 points. We've talked about the system of profound knowledge. We've talked about optimizing versus sub-optimizing. We've talked about the chain reaction, and I gave the example of a reverse chain reaction. And then, we talked about visible figures and understanding that there's much more than that, which is such a paradox for me when I first started learning Deming's teaching because I thought I was gonna take comfort in those numbers and the visible figures, but he told me, "No, no, no. There's much more." And finally, we talk about fear. Is there anything else that you would add to this final wrap-up of the conversation?   0:50:52.3 Mustafa: So, we started talking about Lean and Six Sigma and... Six Sigma is a continuous improvement process, but you don't really need to use it to... You can use the Plan-Do-Study-Act to it. There is no problem if you use it, and you recognize what's wrong with it, and you try to fix it. There's no problem with that. But, I think the Plan-Do-Study-Act and the theory of knowledge is sufficient for you to start working on things. But, like I mentioned, some companies, they like the titles and the tags and the big investment because then they use that as a motivator to get people to start working on projects to bring money back, to save the company the money that was spent on them. So, that's the only thing I wanted to add is just like you can't just rely on something that is big. The Plan-Do-Study-Act was good enough, and I think it's good for any organization. The problem with applying the Plan-Do-Study Act is that you have to have management's commitment because remember, when you do Six Sigma, you're basically outsourcing your quality to an external source, providing the training, the titles and all of that. You can cut it off any time. But when you do the theory of knowledge and the Plan-Do-Study-Act, you have to commit. The commitment is really the big deal here, or the component that is missing is a commitment to quality.   0:52:44.9 Andrew: Well, in wrapping this up, I wanna come back to where we started. Where we started was you were a young master's student and coming out of studying about these tools of statistical methods and all of that stuff, and you entered into our conversation, and you entered into the introduction to Dr. Deming through these tools. But here we are at the end of this interview, and now you're talking about such much bigger issues, and I think, for me, that inspires me about what Dr. Deming has taught because it is expansive. And the more you study it, the more you see it's way beyond just tools. So, Mustafa, on behalf of everyone at The Deming Institute, I wanna thank you again for coming on the show and sharing your experience with Dr. Deming's teachings. Do you have any parting words for the audience?   0:53:41.5 Mustafa: All I have to say, you gotta get started somewhere, and the system of profound knowledge is it. So, I would definitely recommend... I have been through many of the seminars that the Institute offers, and I would highly recommend that and also getting Dr. Deming's book "The New Economics." That's a good start. Of course, the follow-up is also just as important and continuing with the journey.   0:54:15.7 Andrew: Well, great advice. Get "The New Economics;" read it. It really sums up a lot of Dr. Deming's teachings. He put it together right at the end of his life. And that concludes another great discussion within our worldwide Deming community. Remember to go to deming.org to continue your journey. This is your host, Andrew Stotz, and I will leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."

David P. Langford, an expert in applying Dr. Deming's philosophy to education, discusses the concept of joy in learning, highlighting the need to change the education system to achieve true joy. He challenges the misconception that only high-achieving students can experience joy in learning and emphasizes the importance of bringing joy to all students. Langford introduces the consensus gram method for teachers to assess the level of joy in the classroom and create an environment where joy in learning can flourish. The podcast delves into the significance of cultivating joy and learning in education systems, drawing inspiration from Dr. Deming's successful approach to teaching.

In this wide-ranging discussion, Kelly Allan shares his experience with bringing the Deming philosophy into many companies. So much of the leadership principles Dr. Deming taught have seeped into companies in all industries - though most don't know that their methods originated with Deming. Kelly believes we're reaching a tipping point, and shares his ideas on how easily anyone can get started on a path of sustainability. TRANSCRIPTDownload the transcript here. 0:00:02.4 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm here with featured guest, Kelly Allan, who claims we are nearing the tipping point in which Dr. Deming's management methods will more rapidly replace traditional command and control methods. And he has suggestions for organizations that wanna get ahead of competitors to reap the rewards worth millions and billions of dollars depending on company size. Welcome Kelly, and please explain that bold call.   [chuckle]   0:00:40.4 Kelly Allan: Well, it's interesting. When Deming sort of burst on the scenes in the United States in 1980 in a documentary of "Japan Can, Why Can't We?," he was describing, and in his first book, "Out Of The Crisis," he was describing an entirely new way of thinking. A new way of looking into organizations to see how they work, to help them work better, to make them more productive, and so it could be more joy in work. And there was so much, I think, it was such a fresh and new way of thinking that for most folks, it was overwhelming. So, now 40 years have passed, and little by little, so much of what he wrote about in that time and during the next 13 years of his life, have seeped into the way organizations, many organizations, are run, even though the leaders and others in the organizations may not know that those ideas came from Deming, and the combination of ideas came from Deming. And part of the reason that was in my mind is the... In the new... The third edition of... I have a copy here of "The New Economics," the new chapter, chapter 11, there's a dialogue in which Deming makes... This is interesting, kind of a, I thought about this a lot, bold prediction. It's a question to Deming. It says, "Dr. Deming, how many organizations are using your methods 100% today?" And Deming says, "None." "Wow! Dr. Deming, if no organization is using your methods 100% today, how many will be using your methods in 100 years?" And he said, "All that survive."   [laughter]   0:02:39.6 KA: Blows your mind, right? What... Is this hubris? And I thought about this for years. I've known this quote for years and years. And how is that going to happen? Is the Deming Institute, the Deming practitioners, they're suddenly going to be all over the media? And I don't know if that's what he had... I don't know what he had in mind. But, here's what we're seeing is that many of the methods that he was proposing, not just the tools, the technical tools to improve quality of the charts and the graphs and the plots and the lines, et cetera, but the strategic part, the leadership part, we're seeing those become now more and more mainstream. And we're only 30, 40 years away from what he said, and the momentum that we're seeing is getting bigger. So, in another 60, 70 years, I won't be around to see it, but I would not be surprised. And I have a lot of data, not only anecdotal but research studies from universities, et cetera that was showing what's going on with this.   0:03:49.2 AS: It's interesting, as you were talking, I was thinking about, well, what else was going on in kind of the '80s and all that? And I was thinking about one of the things that was just starting was the obesity epidemic in America. And it's like in some ways, if somebody could have seen the future, they'd say, "Hey guys, we're gonna be in trouble."   0:04:09.1 KA: Super-Size Me.   0:04:11.0 AS: If this continues on, we're gonna have 30%, 40% of our population in the obese category. But who listened to that? Nobody listened to that, right? [chuckle] And now it's like, okay, so now we're here.   0:04:24.8 KA: Yeah. Well, I think it's... I'm not sure there's a direct analogy, but there is, are some, certainly some similarities that you mentioned. So, for example, with business, if I was one of those earlier adopters of something that Deming was talking about. Just to try something, right? Just not get my arms around everything but just to try something and it worked. And then, I'd try something else and it worked. And I'd try something else and it worked. So, whether we're talking about thinking about control charts instead of spreadsheets. And thinking about having managers be mentors instead of sheriffs. To be thinking about abolishing performance appraisals and focus on processes, and holding processes and systems accountable rather than just focusing on an individual and try to improve only people instead of the system on which they work. At a certain point, those organizations leapt ahead of their competitors.   0:05:26.4 KA: So it becomes... I mean part of human nature is to just, "Hey, it's familiar, it works, let's just keep doing more of that." And many of them never went back to the Deming well to get more tools. To learn more things because what they had, the few things that they tried were so powerful. Well, fast-forward. A lot of those things that were radical, revolutionary at the time Deming was first talking about them have now become more and more common practice, and they are what you need to get a seat at the table. They don't put you ahead anymore. You have to have them because your competitors are doing them. That's more with the sort of technical quality of service, improved service quality, improved product quality. But we're also seeing the things like having managers be mentors and coaches rather than sheriffs and disciplinarians, and holding people accountable for the output of the system.   0:06:31.5 KA: Younger folks, especially, will not migrate to the organizations that are still using those old tactics. Especially, we see it in technology firms, but we're seeing it everywhere. We're seeing it everywhere. So, a number of Deming-based companies during this time when it's impossible, seemingly impossible to hire people, have people waiting in line to go to work for them. And that's part of the Deming magic is you get both. As you focus on his methods, productivity increases as costs go down. Quality increases as costs go down. Joy in work increases as costs go down. Competitiveness increases as costs go down. That is powerful. Imagine having the lowest-cost service, lowest-cost product, and the highest quality with workers who want to stay and work with you and want to continue to learn. How can you not grow your market? How can you not grow your share of the pie, or grow the pie itself?   0:07:48.2 AS: Just thinking about... You were talking about going back to the well and getting other tools to apply. 'Cause I was just thinking, what you were saying, and one of the ideas I was thinking was that, if a typical person went to a typical Deming seminar and they just walked out of it and said, "Why don't I stop being confrontational with my management team and my workers? Why don't I just stop setting them against each other? And why don't I view things as a system where we're all gonna work together?" And that's the only thing they took back. They could get a huge benefit.   0:08:24.4 KA: Absolutely.   0:08:25.4 AS: There's also a lot of other aspects that can continue and build on that. So, when you're talking about... What you're saying, is that what you mean? Like there's some core principles that you could just pick up and start applying right away without having to understand everything about the technical aspects of Deming?   0:08:43.5 KA: Oh, absolutely. And in fact, a number of firms don't do much with the technical "quality tools." So, some maybe build a control chart or two a year, at the most. Some may have fishbone charts, but not all of them. Because they have focused more on the leadership methods, which are really in "The New Economics," rather than the technical quality. So when you add Professor Shraim, you're talking also about different methodologies, different disciplines to improve quality. Deming didn't make, to my mind, in my reading, it didn't make that distinction between producing a great service experience for a customer or producing a great product, with producing a great strategy in the boardroom or the C-suite, because the thinking is the same. The tools that you would use to improve product or service quality can be applied in the financial CFO's office. Right?   0:09:53.5 KA: You start looking at the numbers differently. You start understanding what the numbers are telling you or not. 'Cause spreadsheets are not really an analytical tool. They're simply a numerical record. Deming's tools provide true analysis. So, in the early days, it was easier for most organizations to grab, not all of them, Gallery Furniture for example, down in Houston, grabbed a lot of the leadership principles. Taking sales people off from commission, sales go up, turnover of employees goes down. Right? So, they did a lot of those things. Most other organizations though grabbed on to the "quality tools," right? They're very concerned about the metrics related to processes, and that's important.   0:10:46.7 KA: The thing is, we're at a point in most organizations now that if you just rely on the "Quality department" to try to improve the service that you're delivering, whether it's a customer service experience, call center experience, or whether it's a product or installing a satellite dish or whatever it is, you're not getting the full benefit of Deming because the improvements and the changes that you want to make to increase productivity and reduce costs run up against that old commanding control, traditional way of management. You mentioned, for example, causing people to compete against one another for rewards and recognition. It's interesting. Stanford did a study several years ago in which they asked, I think 435 CEOs of companies of size, I don't know if they were all public companies, I don't recall. But what was their number one issue that they're worried about? It wasn't competitor's products. It wasn't innovation. It wasn't worldwide issues. It wasn't any of these things. The number one issue was, "My direct reports don't get along, They won't play well together."   0:12:01.7 KA: Well, let's see, you make them compete against one another for your attention, for budgets, for rewards, for recognition, for all those things. Why would they get along? They're not on the same team and it's your management approach that has caused that to happen because you believe, you've been taught to believe, that competition is how you get the most out of people. Deming, of course, saw that people are maybe 3%, 4%, 5% of the results that you get. It's the process, it's the system, it's the culture in which they work that yields those results, and it's much better to have. And it's easy to do, right? That's what's amazing. It's not hard to do to improve. To make your processes and systems, whether they're HR systems, hiring systems, production systems, delivery systems, whatever it is, to make those above average, so that you can get more people who can get above-average results. It's magical. It's so simple, but it's not familiar. It's not familiar. They're in that Deming well. They're in buckets there, but most people have not been exposed to it.   0:13:19.0 AS: So, the next question I'm gonna ask you is gonna go back to what you were talking about. How some people just take some of the starting points in Deming's teaching and apply that and get a lot of benefits. And my question to you is, and you're gonna have a chance to think about this question because I'm gonna introduce you to the audience after I ask it.   0:13:37.9 KA: Okay. [chuckle]   0:13:38.6 AS: So you got a chance to think about it. But what I wanna think about is let's take a listener out there who's just very new. They're like, "Oh Deming, interesting. I've downloaded the book, I've read some of it. Some of it's confusing. It's a bit overwhelming." I want you to think about what you can tell people as far as kind of concrete things that they could do to start to bring the Deming philosophy into their work. And while you're thinking about your answer on that, let me introduce you to the audience. Kelly Allan is Chair of the Advisory Council of the W. Edwards Deming Institute, and he wrote the new chapter for the third edition of "The New Economics," Dr. Deming's seminal book on leadership. Kelly has also published in a variety of journals including "Forbes" and "The New York Times." As you might imagine, he also gives a lot of presentations and seminars on the topic. So now, Kelly, for the beginner out there who doesn't know much about Deming, they're learning. What would be the first kind of concrete things that they could implement in their business?   0:14:37.6 KA: Well, I'll give you several, because different people have different interests and different ways they like to learn and consume. So, starting with that new chapter in the third edition of "The New Economics," that's 45 pages. It's not a huge commitment, and it gives you lots of examples of what organizations have been doing, and why the thinking makes sense. And part of the beauty of what Deming gives is it's very natural, humane, authentic, genuine, intuitive. So,1 that's one thing. There's a lot of free materials at Deming.org. Just a vast amount of things. There's a new piece that's a new offering that's coming up here. It's called DemingNEXT, which is online learning, so, the self-paced learning or facilitated learning with a facilitator. That's useful.   0:15:34.1 KA: There are also seminars. So, there are one-day seminars. There's a two-and-a-half-day seminar, if you wanna go more deeply. But in one day, it's really more like six hours with breaks and lunch, et cetera, we call it one day, but you can get exposed to some of the key thinking. And it's not really lectures. It's hands-on, fun things that get past the gatekeeper in the brain said, "Well, this will never work." And people have aha moments from that. So, there's experiential, there's reading, there's... And the other nice things about the Deming Institute is a non-profit. So, our aim is about spreading the word, right? Getting people more exposed to this, so we try to make everything as affordable as possible just to cover costs.   0:16:26.0 AS: So, great actionable things. First is download "The New Economics" and read that new chapter as well as what's in the book. I think it's...   0:16:34.1 KA: Well yeah, we say the new chapter first because it's very approachable. And then you can go back and start to read Deming's own words, and it really sort of brings things together, is the theory in any case. That's what we've heard.   0:16:50.2 AS: Well, you can also see in "New Economics," you can just see that Dr. Deming's thinking and philosophy developed over time. He was continually improving. And I think that there was sometimes in early on stages where it wasn't as clear as his writing later like in "New Economics" where it really started to come together a lot more for me. So, we've got "New Economics." The other thing is to visit DemingNEXT, and I think that that's another great opportunity to do. And as far as... I wanna just talk about the first two points of Dr. Deming's 14 points because I think... I've read these over and over again, I've thought about these over over again, and sometimes I just like, "Wait a minute. I'm not exactly sure what he means." And then sometimes I feel like, I know exactly what he means. So, let's talk about create constancy of purpose towards improvement of product and service. And the final part is with the aim to become competitive and stay in business and provide jobs. So, he illustrates an aim of the business, but it's this constancy of purpose towards improvement of product and service. Can you talk a little bit about that 'cause that's one of the first things that people are gonna hit when they come into Deming's teaching?   0:18:07.3 KA: Yes, and I think at Deming.org, there may even be a video of him talking about that. And that's all free. So yeah, to bring into that, one of the deadly diseases is the job-hopping by managers, right? Because you don't really get to know a job. So, with constancy of purpose, it does two things I think that are key. One is it gives you a long-term view, but it also helps you make short-term... You get short-term results as well. And that's also part of the beauty of Deming is that you can start doing stuff after you learn. You can start making better decisions the very next day. It's very immediate. And you'll still have things that you can learn in 20 years. So, that constancy of purpose helps with employees for example, with associates, team members, who want to come and stay, and who are attracted to the organization because what is true and genuine today will be true and genuine six months from now. Twelve months from now. Years from now, because that purpose, that constancy of purpose is to work to optimize the organization, so everybody wins.   0:19:28.0 KA: That's pretty powerful. So, whether it's customers, suppliers, people who work in the organization, the community, the environment. Deming was really pushing for big picture view with that reliable trust that people can have in the organization. Trust is so important. There's so much garbage written about trust.   0:20:02.0 KA: If you'll pardon me saying so, and it's really quite easy. And that is to do the right things and keep doing the right things. And Deming provides a framework for that versus trying to manipulate people. Versus trying to rate and rank people, in a system that is more in control of their outcomes than any individual. And that's some of the things we do in the seminars is to show the famous Red Bead Experiment and the white bead factory, and it's in DemingNEXT as well. So, that people can actually experience for themselves what they experienced when they were willing workers and forgot about when they became managers. It takes them back, that anxiety of not being able to trust the manager. So, I'll bring up another piece here, which might be useful, and it's also on Deming.org. And you can search my name to find it, if you just go to the home page, and then the search box put in Kelly Allan. There's an article that Professor Schramm and I wrote, based on a bunch of research he'd done through the years with his students engaged in the engineering school at Ohio University. And what it's about, it's called using a Deming lens to investigate and solve managerial challenges.   0:21:35.4 KA: The top things that the managers list that are causing them incredible burnout, frustration, job hopping, are all solved by understanding the Deming leadership method. It's just that constancy of purpose of trying to ensure a win-win, not manipulating people, being authentic, working on collaboration rather than internal competition, helping people be successful rather than rating and ranking them. All of these schemes and organizations have, because they think that people have to be manipulated or they won't do their work, in case, and when it just actually just the opposite case.   0:22:22.4 AS: A great way of illustrating that is to think about children. Children, obviously. There are children that are subjected to just brute force by adults, and they don't have that much joy left in them. But the fact is, is that it's like they're born with this abundant energy, a positive and energetic spirit. And when you think about what you see, it's one of the reasons why we love going to kindergarten classes.   [chuckle]   0:22:53.4 AS: And to visit the kids, it's like, "Wow, this is amazing!," 'cause here I am in the corporate world. I gotta fit in this box. I gotta punish all these people, and I gotta reward these. I gotta make the tough decisions and all of that. And it's like the distance between what is natural of just that fun and joy that you have when you went to school when you were a kid, and what you're doing as an adult. Sometimes it just gets painful. Work is painful for many people.   0:23:20.7 KA: Well, and so I think this was Dr. Deming who said this that we were all born with the desire to learn, and then we go to school, and it's beaten out of us. [chuckle] Yeah, yeah, and it's interesting, the number one issue that these managers that were interviewed said was... And it's top three things, it's a Pareto chart distribution. Listen, number one by far, which is, I have to spend so much time trying to motivate people. Why are they so demotivated, right? Most people don't get up in the morning wanting to go to work to do a bad job. We all wanna go to work to make a difference, to improve something, to do something that's a quality. Deming said pride and joy in work. So, we get to the organization, and it's a prison. Deming used that word actually, people in jail because they cannot be all that they can be, that they want to be at work. So, Deming talks about removing the demotivators. Let's get rid of the demotivators of treating people as if they're responsible for the system in which they work. They're not. Treating people for the results they get that are results of a bad process. He said a bad process will beat a good person every time.   0:24:51.7 KA: So, senior leadership is focused, and so many organizations in the past have been focused on making people accountable. The reason I think we're getting to that tipping point is there are more organizations that are realizing it's our role as leaders to provide the system, so that more and more people can be more and more successful. Because that's win-win, optimizing the system for everybody. They treat customers better, they treat each other better. They have a framework of a process they get from analytical thinking, critical thinking skills. Man, it's just fun. It's just fun.   0:25:27.9 AS: Yeah. I wanna go back to this point number one about create constancy of purpose towards improvement of product and service. In some ways what Dr. Deming is saying is ... Wait a minute, as a new listener or new reader of Deming, is that it? Just all we're gonna do is improve and improve and improve? Isn't there... We've gotta focus on quarterly results or we've gotta focus on mergers and acquisitions, or we've gotta produce for the shareholders, or whatever that is. But there's kind of a leap of faith there, and I just wanna talk a little about that. And I also wanna talk about one of the tools like PDSA, and this concept of what do you get if you relentlessly pursue improvement of product and service?   0:26:18.7 KA: Well, you end up owning the market in most cases. If you're doing it in the right way. If you're doing it in a command and control away by setting quotas and targets and goals that have no foundation in reality whatsoever in terms of what is the capability of a process or a system. No, you won't ... That's improvement the old way. The improvement with Deming's approach is to a handful of thinking tools, if you will, that you can apply and start to see what's going on with why are we having so much variation?   0:27:02.8 KA: Why aren't we have really a learning organization? Why don't departments get along? Why do we have so many silos? Why isn't it working the way I thought it would work? So, that constancy of purpose provides the framework for an approach, right? And we don't want people to take more than one leap of faith, and it's not an expensive leap of faith at all. It's read a chapter, reach out to us at the Institute, and we'll start to get you connected with resources, et cetera. But you just have to try one experiment. When you referred earlier to PDSA, a Plan-Do-Study-Act. And we always help people design those so they're low cost, low risk and fast. So it's not a big commitment, some of them can be done in an afternoon, to show the power of thinking differently. So, we want people to start small and then they'll take the next step. One of the things I want to really emphasize though, because I think it's so important, is that if you have not started on Deming journey, and you're the business owner or the leader of the organization, and even if you don't own the business, if you've not started on this Deming journey, you'd better hope none of your competitors have.   0:28:35.8 KA: Because if they have, they will gain momentum. First, they'll eat their breakfast then they'll eat your lunch, and then you're done. [laughter] And my organization, the Kelly Allan Associates, has worked on a number of turnarounds through the years. Companies that were going out of business. And it would be... For me, that's the proof of the Deming approach, right? No resources, in fact, negative resources. The company is going to fail. They're not going to make payroll, right? Fairly soon. We've ever walked into organizations where the lights were out. We met in a conference room that had windows. $250 million top line organization turned the lights out because they didn't know if they're gonna make the electric bill. Money was just bleeding like crazy. That is a crucible. That is a test of the Deming method.   0:29:23.7 KA: To be able to turn that around. Right? So, that if you're not getting started on your Deming journey, you're leaving yourself really vulnerable to a competitor who discovers it. Now, you can catch up if your competitor is not really going quickly, because you can't do three years of work in three months. That's not what I'm suggesting. But you can go fast, and if your competitor's doing a nice steady pace, and that's a good pace to have. But if you need to catch up, then Deming approach allows you to ramp that up pretty quickly, because it's not hard to do. The main barrier to constancy of purpose is our belief system about how things either should be or must be. And that's why when Deming burst on the scenes in 1980 in this country, it was like, people thought he was talking a different language. He was talking a different language. He was thinking differently.   0:30:33.9 AS: Yeah.   0:30:34.3 KA: And that's the leap, and that's what we try to do in the seminars and the book, is to help people make that... See that there's a different universe there that is better, faster, cheaper, smarter and more fun.   0:30:47.0 AS: Yeah, there's two things that I was thinking about too as you were talking and that is Dr. Deming, he constantly refined his thinking in his work. And I just... I'm going back to the constancy of purpose 'cause I think that I've had my own challenges thinking about it, and I think you're clarifying a lot of it. One of the things that I wanna highlight is that he talked about create constancy of purpose for improvement of products and services.   0:31:16.9 AS: Now, it's interesting. Here is a guy that was so committed to quality and all of that, wouldn't you think that he would have said to improvement of quality of products and services? [laughter] But in fact, he was saying you've gotta improve your products and services, and then how do you know if you're improving your products and services? Well, if your customers are buying more, they're feeling satisfied. It's just interesting, as I think about what you're talking about and I'm looking at it, I'm realizing it's interesting that he said improvement of product and services, not the quality of products and services. Why do you think he didn't say the quality of products and services? Instead he said improve them.   0:31:56.6 KA: Well, of course, I don't know, and I don't want to try to channel him. But my sense from exposure to him and to his readings and seminars, et cetera, is that it's the Deming chain reaction that is what gets you to do to a better space. And if you're working on improvement in the ways he suggested, ways that make sense that are not commanding control, but collaborative and insightful, et cetera, there's a methodology there that's again, easy to learn.   0:32:36.7 KA: It doesn't matter whether you are the CFO, the COO, the chief legal officer or anyone else in the organization. Because what your focus is on is trying to figure stuff out. That's the fun of it. That's when you talk about children earlier, they're trying to figure stuff out. And when they get a methodology to figure stuff out, they grab it. And that's what happened in the '80s and '90s with Deming. I think what we were all exposed to was Deming was dubbed the quality guru because so much of the name of the NBC documentary was, "If Japan Can, Why Can't We?" Because the Japanese were producing high quality products, right? From they used to produce junk. Radios, right, that didn't work very well. And then once they got into Deming, quality went way up and cost went way down. So, he was dubbed the quality guru, and that's fine. But it puts him in a box, so people miss the strategic part. The original title of his first book, "Out of the Crisis," had to do with competitive advantage. He saw that. He understood that.   0:33:57.8 KA: So, that competitive advantage comes from thinking about figuring stuff out in ways that are not command control. That are not toxic.   0:34:10.4 AS: I want to talk about what you could argue is the end of an era. And I wanna go back in time to the post-World War II period when Dr. Deming was working with the Japanese and coming back to America and trying to get people's attention. And then we had about a decade of prosperity in America. Why pay attention to quality? It's just all about quantity. Last night, I was giving a lecture in economics and finance, and I was talking about this flow after World War II, and what happened. And I'm gonna share my screen for the people that are watching; and for the people that are listening, I'll read it out as we go through. So, I'm just gonna share one slide, and then let's think about this and discuss it a bit. So, let me do that right now. And this is the slide, and basically, it's a picture of Dr. Deming and a quote with his, what he said. But at the top of it, I wrote down that America was great because every other country was destroyed. And the quote goes like this. "In the decade after the war," meaning World War I or II, sorry, "the rest of the world was devastated. North America was the only source of manufactured products that the rest of the world needed. Almost any system of management will do well in a seller's market." What does that mean to you, Kelly? At that time as he was saying it, probably at that point in the '70s or the '80s, and then where we are right now.   0:35:57.6 KA: Yeah, it is now a worldwide economy, and many different countries are able to produce in volume products that people want to buy. So, that kinda takes me back to what I mentioned earlier is that that is a baseline now, right? Deming was pointing out that there was a period of time where the quality didn't really matter as much as quantity. But, as you say it, that era I think is long gone, and we expect now quality at a lower cost. And indeed, if you start to think about it, so many things that we have are remarkably inexpensive for what they do. And not just technology, but certainly technology is an example of that. So, it ratchets up my point about that is now just a seat at the table. Not only is quality able to produce quantity just a given. You have to be able to produce quantity in a way that produces quality without raising your cost inordinately, or in fact, if you can reduce your costs. And that's probably gonna be the way it is going forward. I talk in some presentations, I talk about the arc of quality being a long one but bending towards Deming. Reverend Dr. Martin Luther King Junior talked about the arc bending towards justice. Well, in terms of production, productivity, service delivery, excellence, if you will, it bends towards Deming. And I see that arc coming much faster now, both anecdotally and in the research studies that I see.   0:38:07.3 AS: It's interesting also because what we saw was a transformation that happened in Japan. And if people my age, your age and others, we knew that when we were young, if it said Made in Japan it was low quality. It was just a low quality item, and Japan really went up this quality scale into a complete transformation. And now something made in Japan is known as a very high quality product in most cases. Now, what's also interesting is China. For many people, younger generation, Made In China may have meant low quality items and possibly low price and low quality. But the quality of the cars that they're making, the manufacturing that they're doing, that the parts and the supplies that they're doing into iPhone as an example, these are very high levels of quality. And what I can imagine is that the Deming philosophy of continually improving could really be applied well in any country, whether that's Africa, countries in Africa, or whether that's in China. To say how do we keep moving up that quality scale. And as you say, if your competitor gets a hold of this, and before you, they're gonna move much faster than you. What are your thoughts about that globalization of it all?   0:39:30.0 KA: Yes, absolutely, so it's not just a competitor in any given country. It's the international. And so as you talk about they're improving quality of the products that they're manufacturing, if they don't adopt to the next one, if they don't adopt the new philosophy of management, Deming's philosophy of management, they will hit a wall. Because the commanding control approach of management by spreadsheets, management by quotas, management by the numbers, management by objectives as it's typically practiced hits a wall in a variety of ways. People don't wanna work for you. They start to sabotage you. You start to break things in the rest of the organization because you're managing through fear, right? That's why with the system of profound knowledge that Deming outlines, and the four elements of that in "The New Economics," that is the future. That is, to my mind from what I've seen in terms of impact, leverage, power, if people think the quality tools, right? And they're important and we have to have them. The charts, the graphs, the plots, et cetera. But if people thought they were powerful... And they were because if you're not doing that in your organization of any size at all, you can't... You're done. It's just... You won't be able to continue.   0:41:16.0 KA: So, almost any organization of any size that's left is doing that and they got great results from that. The system of profound knowledge, I would say, is at least four times more powerful than just using quality tools.   0:41:30.8 AS: You've touched on two things. You've started to talk about point number two: adopting a new philosophy. But you've also talked about the system of profound knowledge. So maybe you could just expound on that for a beginner who may not know anything about that and even for experts who wanna keep thinking and refining their thinking on it. Can you explain what that means to you?   0:41:53.0 KA: Well, it's such a rich area, and I like to think of it in this way. I don't wanna have to learn 400 things. I don't wanna have to learn 40 things. As a business owner, I want to do the least that I need to do to get the best results. The greater results. The system of profound knowledge is four things. I can do four things. I can figure out four things. Deming helps me figure out four things. Now, obviously, I'm over simplifying a bit because when he talks about knowledge of variation, there are some important things in there that we have to understand. What type of variation do we have? That's easy to figure out. You don't even have to do the statistics in most cases to figure out whether you have common cause type variation or special cause type variation. Because reducing variation increases productivity, joy in work, profits, customer satisfaction, et cetera.   0:42:55.9 KA: So, reducing variation is important. I'm not talking about innovation, more innovation. Deming is all about innovation. What we're talking about, variation in terms of how we can rely on output whether it's a service output or a product output. So, understanding what type of variation we have tells us what to do if we get a bad result. It tells us how to fix that, how to investigate that, or to improve the system. So, the next one has to do with appreciation for the organization as a system. People have been taught to optimize every department, which is a natural outcome of that sub-optimizes the organization. So, let me say it this way. Every organization is perfectly designed intentionally or unintentionally to get the results that it does. To produce the results that it does.   0:43:55.4 KA: I don't care if you're a financial institution, a technology organization, or a manufacturer, or a seller, or a distributor, or service organization, or whatever it is you happen to do. Whatever symptoms you're seeing that you don't like and that frustrate you are built-in, designed into your organization, and they sub-optimize it. So, we have to purposely look at the various departments and workflows to say what needs to be optimized to optimize the overall organization? What needs to be sub-optimized? We don't want everybody... And I think Deming gave the example of the symphony orchestra. You don't want everybody coming in playing loudly all the time. That's trying to optimize every person. It sub-optimizes the orchestra, right? So, that's the... So, there are some guidelines on how you optimize and have appreciation for a system, which goes beyond just systems thinking, by the way.   0:45:00.9 AS: So, we have a system, the system of profound knowledge now as you've gone through for the listeners out there that aren't familiar with it. What you've talked about is the knowledge about variation. Now, you've talked about the appreciation for a system, and then we have two other elements.   0:45:17.1 KA: Two. We have two more. Right. One has to do with theory of knowledge, which is, how do we know what we think we know is really so? [chuckle] Right? Deming's first questions was always, how are we doing and how do we know? So, how do we know what we think we know is really so? The numbers on the spreadsheet are not a proxy for reality. We have to have numbers, but let's make sure we don't imbue them with more importance than they should have. And then, how do we take that, and what we learn from that and spread it through the organization? And that's where the Plan Do Study Act experimentation comes in. That's where things like operational definitions come in. What does good mean? What does on time mean? Right? What does clean mean?   0:46:02.1 KA: And then the fourth one, the fourth element of the system of profound knowledge, has to do with psychology. How do we react and interact with one another? What causes us to collaborate? What causes us to compete against one another in our organizations? And let's leave the competition to the sports arena or against perhaps other companies. Deming also gave a lot of examples of how competitors can cooperate and get to win-win as well. Now, I should probably point out that there's one other thing that's really important to me and that is Deming called it the system of profound knowledge not because he thought he had come up with something profound. What he said is if you'll use these four elements: Understanding variation, appreciation for a system, human psychology and how we think we know what we know is really so, use them as a lens. A diagnostic lens to see what's really going on. You will... If you do that by asking just four questions: What's going on with variation? What's going on with psychology? What's going on with the system?, et cetera. You will get profound insight. You will have profound knowledge, and that's what you need to be able to reduce costs as you increase joy in work. To reduce costs that in the causes of costs as you produce things, whether it's a service or a product or whatever. So, productivity goes up, everything good that you want goes up, but the frustrations go down and the causes of cost goes away. Start to go away, get reduced.   0:47:43.0 AS: So for those that are listening or viewing this and you wanna really capture what Kelly is saying, I would challenge you to just write down four words: system, variation, knowledge and psychology. System, variation, knowledge and psychology. And what Kelly is telling us is that if we walk into a situation, and we're able to see things as a system. It's like we can back up and look at all the inputs and outputs and everything that's happening with different departments here rather than focusing in very narrowly. Number two, if we can understand variation and not freak out because something has variation in it knowing that, hey, we have to understand a little bit more about this variation before we react. And then if you think of... If your third part is the knowledge where you think, what do we know and how do we know that, and how are we building knowledge in this? Or are we are just coming at this cold every time? And then finally, what are people's psychology? What do people want? What do people feel? And if you think about system, variation, knowledge and psychology, what Kelly is telling us is that what Dr. Deming is saying is that you will have profound knowledge. Would that summarize it?   0:48:58.4 KA: Yeah, I think that's correct. Now, I think another place where the managers in the research study that I talked about, they've been taught at some seminar or something, that they're supposed... Not in Deming one, that they're supposed to manage every person as in a very special way. How can you scale doing that? I mean there are some Deming-based organizations, and there are no perfect ones, but there are some Deming-based organizations that have hundreds of thousands of employees coming through their doors every day. It makes no sense to try to have 300,000 different approaches to leadership. But because the Deming approach is so humane, it makes so much sense and it engages people. It just is so much easier than the typical things that managers have been taught about how to motivate people and how to give people bad news. And you know with Deming it's working on the work together to figure stuff out. Wow! That's a job I'd work, right?   0:50:09.7 AS: Yeah. You know, Kelly, I had an experience where I was consulting with two different companies, and I was teaching and advising them. And what I was so fascinated about was that both of the CEOs were kind of charismatic, smart, energetic, good guys. And then they had these management teams that if you talk to each of the individual managers--impressive. Cause I was reviewing LinkedIn profiles of the different managers as I was going in to get to know them and all that. Individually they were all impressive. And so, we had a great time. We did two days together, going through a bunch of stuff. And then at the end of it, I left those two different consulting jobs that I did in one week, and at the end of the week, I thought to myself, interesting. They're almost identical in so many ways, but one of them is losing money and crashing their business. And the other one is going from win to win. What's the difference?   0:51:08.9 AS: And what I came up with my conclusion was, there's really... It's intangible, which is very different from what I learned as a financial guy is that look at the numbers and that sort of things, but I learned that numbers are just tools. But it's intangibles. So, I've come to the conclusion that first, you need a good CEO that sets the right direction, that she or he knows where they're going, and they're taking in good input, and they're setting the right direction. If they're setting the wrong direction, you're in trouble. The second thing is it's not about the quality of each individual manager on a team, it's about how the CEO helps coordination of those managers, so that you do optimize that system. And I felt like it's CEO leadership, and it's the CEO's helping the management team to coordinate their activities. How does that fit in with what you've observed as a consultant over the years?   0:52:08.0 KA: Yes. So, one of the things is the gift of a CEO, and Deming writes about this in "The New Economics," and where the power of the CEO comes from the three places... I wish I was going through it right now. But it's basically if that CEO is able to adopt the new philosophy and understand it, you build a culture from that. The way we do things around here, the way we treat one another, the way we work on problems, the way we address issues is who we are. It's a part of the design of the system, and the design of the system produces the results, right? So, it's all linked together. So, charismatic CEOs can get a lot done, but a lot of not charismatic CEOs also can get a lot done with Deming. So, whether you're charismatic or not doesn't really matter. And, the thing is you can get insight about that in a day, and I'm not talking about spend a year to really dig into Deming. No, no. Give us a day at a seminar to get your feet wet, so you can go back and do some things in your organization. As an executive, you get to make some of those choices. A day is gonna pass whether you learn about Deming or not. A week's gonna pass. A year's gonna pass whether you learn anything about Deming or not. And as we interview CEOs say, "I wish I had done this years ago. I wish I had done this years ago."   0:53:48.9 AS: There's also documentation of what you were saying, Andrew. A university study that a couple of universities collaborated on over the course of 30 years, several studies that show that the results of adopting a new philosophy, the Deming approach, has incredible results. So, these are organizations that are long-lived, first of all, makes them very special, because organizations don't last that long these days. So, this is looking at organizations over 30 years who grew prosperous. They had a whole host of criteria that were needed, that they looked at, whether it's turnover rates, and pay rates, and all kinds of things. And in business, if something... If a way of leading or managing gets a 55% correlation to good results, that's pretty darn good, right? That's really very good. That's worth spending some money on, because most don't get anywhere near that. Right? Their research, if people wanna reach out it's a work that Cassandra Elrod and some of her colleagues did at the university, shows in some cases almost a 90% correlation. Unheard of. So, if you're doing things that work about 55% of the time but you're up against the Deming company that's doing things that are getting results 90% of the time. Do the math. Do the math. It's pretty easy.   0:55:35.3 AS: Right. Interesting. Well, let's get that... We'll get that link to that and put it into the show notes. So people can go in and...   0:55:40.4 KA: Yeah, I'll give it to you.   0:55:42.4 AS: I think that's a good one. In the spirit of wrapping up now, what I wanna do is ask you this question. Why Deming? Why now?   0:55:56.5 KA: Well, I think for all the things that I said, but if it's not fun, it's not done. I want to have fun. I mean, most of us want to. Not that we aren't serious about work. That's not what I'm saying, but Deming talked about it as joy in work. It is to create meaning, right? Viktor Frankl's book, "Man's Search For Meaning." It is very meaningful. At the end of the day, you don't leave work feeling like you have to go home and take a shower to wash off the toxicity. You walk out of your job knowing that your best efforts made a difference because you were working with profound knowledge. You are working with people who want to collaborate, want to figure stuff out. So, at a more... The name of Deming's second big book on leadership is "The New Economics." So, it's also about the money and the money being used to create more jobs because... And a friend of his, Peter Drucker, also an economist, recognized as many other have, of course, recognize that democracy rests in part on good jobs. Social unrest and a lot of bad things come from not having good jobs. So, at the end of the Deming chain reaction, it's being able to grow and create job, as he said create jobs, jobs and more good jobs.   0:57:35.1 AS: Beautiful. Now...   0:57:36.4 KA: It makes a...   0:57:38.3 AS: Yeah, it's a great one. And for the listeners out there and the viewers, are you bringing joy to work? Are you helping that process? Or are you causing competition at work? Think about it honestly, and start to work on bringing more joy to work. Kelly, as we wrap up, I wanna ask you a final question about your involvement with the Deming Institute. I think it's important for people to understand what's going on at the Deming Institute? And how people can understand what's going on the Deming institute, what's the direction? And also how can they support the Deming Institute in any way possible?   0:58:21.6 KA: Well, there's a lot more going on at Deming Institute than I can certainly elaborate on because it's a very robust organization these days. And the Institute attracts people who also wanna make a difference, because of the nature of their aim and Deming's principles. So, and the fact that I think it happens to be a non-profit is also a useful thing. So, it's a goodwill, right? It's about really affecting change for the better. And that's... I volunteer as do many, many people volunteer, including the executive director volunteer, Dr. Deming's grandson, volunteer time. He volunteers full-time. I would say the way to get involved is to start on a Deming journey. Deming talked about the transformation in two ways. One was it starts with the individual. Know thyself. Read Deming and think about yourself. Feel about yourself, and what is authentic about you, and how that matches Deming. But he also says that the change of recognizing improvement in quality starts in the boardroom. So, it's a combination, but you don't have to be the leader to affect change, right? And certainly for yourself as well. It applies to families, certainly also. And then once you start on that Deming journey, reach out because we'd love to hear from you and try to engage. We try to engage people, and the Institute offers some scholarships to some of the seminars for folks. It's pretty cool.   1:00:20.7 AS: Yeah, so just go to the... Just type in Deming Institute right now on your browser and you'll go straight there.   1:00:28.5 KA: Or even deming.org. It's easy for me to read. D-E-M-I... Yeah.   1:00:35.0 AS: Thinking about reaching out, I originally met you in 2014 when I saw that Deming Institute was offering a seminar in Hong Kong. And not only did I reach out and go to the event, but I also kept in touch. And you're a testament to the willingness of people within the community to help each other. And so, I really encourage everybody to reach out to Deming Institute and also Kelly and others there. So, Kelly, on behalf of everyone at the Deming Institute and in the Deming community, I want to thank you again for coming on this show. Do you have any parting words for the audience?   1:01:15.5 KA: My pleasure. Start now. Start now. It's so much fun. It's so interesting.   1:01:23.5 AS: It's an endless journey. And that concludes another great story from the worldwide Deming community. Remember to go to deming.org to continue your journey. This is your host, Andrew Stotz, and I will leave you with one of my favorite Dr. Deming quotes. "Innovation comes from people who take joy in their work."

Kevin Cahill, President and Executive Director of the Deming Institute, reflects on growing up with Dr. Deming, learning about his grandfather's impact on the world, and his own Deming journey. Kevin also describes The Deming Institute's origins, the DemingNEXT initiative, and using Deming in the real world. SHOW NOTES Books mentionedThe New Economics and Out of the Crisis, both by Dr. Deming (available via www.deming.org) Transform Your Business with Dr.Deming's 14 Points, by Andrew Stotz 0:00:36 Growing up in the Deming family 0:04:29 Watching If Japan Can, Why Can't We? with my grandfather 09:07 Kevin's own Deming journey 14:21 The origins of The Deming Institute 21:35 Why Deming, why now   39:14 Introducing DemingNEXT 46:06 Andrew's Deming journey 53:34 Deming in the real world TRANSCRIPTDownload: Transcript of Kevin Cahill's Podcast 4-22-22 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 here with featured guest, Kevin Cahill. Kevin, are you ready to share your Deming journey? Kevin Cahill: Absolutely, Andrew. Excited to be here, looking forward to it. AS: Yeah. Well, I think we gotta kick this off by introducing you. Tell us what is your connection to Dr. W. Edwards Deming. KC: Well, I'm very fortunate to be his grandson, and also very fortunate that as I grew up in the Washington DC area, I got to spend a tremendous amount of time with my grandparents, my grandfather, Dr. Deming, and his wife, Lola Deming, who also assisted him in his work for many, many years, and got to know them growing up. And so, it was absolutely fascinating to see this man that I knew as a kindly, gentle, soft-spoken man who worked out of the small basement of his house in Washington DC, not in a big office, this little, tiny basement that used to flood in the rainy season and was just very, very small. And I always wondered what he did because everything that I saw was just figures and numbers and all this stuff, and he never talked about work. When we were together with him on Thanksgivings and Christmases, he was always talking about family and what it was like with my mother and her sisters growing up. So, a very different perspective of who this man was. That all changed at one point in my life but growing up, it was a very different kind of relationship. AS: You know, my first connection with your grandfather was when I was like 24, and I was just in awe, but I was also in terror because I watched him pretty strict, pretty tough when he was dealing with people that just had nonsense questions in some cases, or had the wrong idea, and he really needed to straighten them out in one way or another. And it's kind of surprising, but now that I think about it, in our families, we don't bring that toughness necessarily into the family. Is that the case? KC: That was the case. We never noticed that. He would sit at the dining room table, and he would just be quiet at the head of the table, and occasionally he'd pull this little notebook out and make some notes. I always wonder what he was writing. I found out later. Something came to mind, and then, occasionally, in the middle of the dinner, he would say... He would have this great story about my mother or something that he had. He would tell us growing up, and he just burst into this fantastic laughter of his, and it was so much fun. And we really didn't know what he did. We knew he traveled, and we knew that... Like I said, growing up, we would get scrap paper from his office, and it always just had sheets of numbers on the one side, and my brother and I would always joke that, man, "I'll tell you the one thing we don't wanna do in life is grow up and do what he's doing." [chuckle] AS: That's tough stuff, whatever it is he's thinking about. And I'm just curious. What was his relationship with his wife, Lola? KC: Oh, she was just this terrific lady. They met, and they actually worked together. I believe was at the Fixed Nitrogen Lab in Washington DC, and they co-wrote some papers together. She had a master's degree in mathematics at a time, early in the last century, when women just didn't have advanced degrees, and she helped him for decades with his work. And I remember seeing a lot of photos of her traveling with him to Japan and around the world. That was absolutely fascinating. She was just a brilliant woman in her own time, and with what she was able to do in terms of helping him. And she doesn't get enough credit for what she did to assist him. AS: And before we get into the Institute, I just wanna understand your own personal journey in life. You developed... You saw that stuff, and you thought, "I'm not gonna study that." But tell us just a little bit about your own personal journey in your education and in your work life. KC: Sure. So like I said, I didn't really know much about what he did. But when I was a freshman in college, my family had moved away from the DC area to Los Angeles, and I came back for the summer for a job that I had. I called my grandfather, grandmother, and said, "Hey, you have an extra little, tiny room in your house. Is there any chance I could stay there for the summer?" And they, of course, said, "Yes." So, I stayed there for the summer. And in June of 1980, my mother called me and said, "Your grandfather travels around and has been to Japan. They're doing a show on NBC on June 24th, 1980 called, 'If Japan Can, Why Can't We?' And your grandfather is gonna be mentioned in that show for some of the work he's done in Japan." You can imagine how excited. This was at a time when there were three networks, ABC, NBC, CBS. There was no cable. There was nothing. KC: And this was gonna be on prime time. And so she said, "Just make sure your grandfather watches it." And so, that night of 1980, I had to go downstairs and get him in the office and say, "We've gotta go upstairs and watch this show." And so, we all traipsed up to the third floor and sat down on his couch, and my grandfather, my grandmother, and then my grandmother's sister, who was also living at the house, we all sat down to watch the show. And a few minutes into it, you saw my grandfather who was, at the time, almost 80 years old, and he had about a 15-second part in the show, and I just remember being so excited, "Oh my god. That's you. It's so cool." KC: And then there was nothing. That was it. And for the longest time... And you could tell my grandfather was getting very fidgety. He was ready... He mentioned something... He was unhappy with a few things they were saying in the show that he thought were off-base, and he was kind of mumbling a little bit about that. And he was getting ready to leave and go back down and do some work. And then they started talking about a man who was considered the... Helped transform Japan and was considered the key person in that Japanese transformation. And at that point, I looked over to my grandfather, 'cause I hadn't said anything in about 20 minutes, and I said, "Do you know who that is?" KC: And the announcer, he said, "It's Dr. W. Edwards Deming." And it was just this disconnect. This is the man I know, who I grew up with, and the Emperor of Japan has given you credit for the Japanese economic miracle. I still get goosebumps when I think about that moment. I just could not believe it. And then we watched the rest of the show in just stunned silence. And of course, he had some comments, and at the end, they talked about the National Paper Corporation and how he had helped them, and I just remember thinking, "This is gonna change everything." KC: And you know what, Andrew? I was actually a little bit sad because I thought, "He's 80 years old, almost 80. He's probably..." People are gonna call him, but he may not work for more than another year or two. And then I can tell you, it was astounding because, like I said, his office was in the basement, and my grandmother and my great-aunt and I would stand at the top of the stairs, 'cause my grandfather used a speaker phone, and his assistant would say, "Dr. Deming, you've got Don Peterson, the chairman of Ford Motor Company, on the phone. You've got the head of Xerox on the phone." You've got the head of all these different companies, and we're hearing him talk on the speaker phone, and it was just astounding. It was an amazing, amazing period. KC: So at that point, I knew things were gonna change in my life. I just didn't know what or how or anything like that. And as I moved through college and then graduated, I was just amazed that my grandfather was continuing to work and just being quoted on news articles and everything like that, and on TV shows, just continuously. And as I got into the business world in a media business, I knew a little bit about my grandfather's philosophy, some things like how important systems are and understanding that and operational definitions. KC: And there were some of the elements of the 14 points that I understood, breaking down barriers within the organization. And so even as an assistant, what it did, my grandfather's philosophy, even though I couldn't impact anything at the top, what I was able to do within my own sphere of influence was extraordinary in terms of how it helped me move up through the organization at a much, much, much more rapid rate than I would ever have been able to do. And so... AS: And what would you say were the core... What was the core things if you say, you didn't know all of the different things that he said, but there was those core things that really stuck with you. What would you say was the one or two core things, particularly thinking about the listener or the viewer out there who's thinking, "Wow, I would like to be able to make that impact, and I'm not sure how quickly or how much time I have to learn everything." KC: That's a really interesting question. I would say one of the key things that I did was making the system visible that we were actually working in. So, we were a media company that was selling advertising time on TV stations around the country. And we had all this workflow that we had to do, and nobody was making it visible what that flow was. And I remember when I was trained, and I was started off as an assistant to an assistant, and they were training me, all the training was done by memory that somebody else did it. So, a lot of times they were teaching me things that were erroneous that I was trying to do and so, as I got into that position, I made sure that I put that process down so that when I moved up, and I could hand it off to somebody else, they could see what that process was. And some of it was visual, and some of it was work instructions. Other things were like operational definitions of... Somebody was saying, "Hey, can you get this done for me?" "Well, by when?" "By the end of the day?" "By the end of the week?" "By the end of the month? KC: So, there were a lot of little things like that that made a difference in terms of the way, I thought, that helped the other people within the organization, that really made a difference, and helped me move up very quickly within that organization. AS: And then, how did you go from your career to now, The Deming Institute? Maybe you can talk to us about that and tell us about The Deming Institute and the aims of The Deming Institute. KC: As I continued to move up and took on greater roles and responsibilities within this media organization, again, my grandfather and... I would call him and ask him questions about things that I needed help on. I remember one time, in particular, I had an assistant who could not get a particular job done, and we worked on it and worked on it, and I tried to make it visible. I tried to do different things, and I called my grandfather one day. I asked him a question, and I said... And he gave me some page numbers in one of his books to read. He didn't give me the answer; he gave me some page numbers. And it was fantastic because the way I was explaining it to her what needed to be done was the way I understood how it needed to be done and the way I learned. It was not the way she learned. And so, once we had her learn and express this in a different manner, we never had another issue with the job going forward. All this gave me the understanding after I went to one of my grandfather's seminars and continued to read the books. It gave me a sense that I could go out and start my own business. KC: And so, I did with a colleague of mine, and he and I co-founded a software company that provided the sales systems to these companies like I worked for. And without having my grandfather's knowledge, I would never even begun to start a company like that. So, a startup is at such an incredible advantage if you understand the Deming philosophy. Because at the time we started it up, there were two companies that had about 90 share of the market on two different ends of the market. But when we were doing this in 1999, the internet was just starting to hit. And there were, I remember, about 15, 20 different companies that all were trying to get into the same space. Within two years, they were all gone except for two of us. They didn't have the value of understanding what my grandfather had taught, that I had learned from him. And then my partner had in the terms of the way we ran and operated the organization. So, to fast forward, we kept the company for a while, merged it with another company, and then ended up selling it to a big publicly traded company. And in retrospect, I almost wish we hadn't. KC: But by doing that, I ended up at The Deming Institute. And then what was fascinating was I spent two years of what I call penance, staying at that company because of the contract. And Andrew, that was when I saw in just... What I experienced and what we had to put people through, because of the way they looked at things and the way they operated, was just extraordinary in terms of how much it hurt me, how much I knew it was hurting the people that worked for me in the business units that I was running. And I couldn't wait to get out of there. And when I did, I spoke to my mother, Dr. Deming's daughter, Diana Deming Cahill, who founded the Institute with her father and her sister. And I said, "This is an opportunity for me to give back what I have learned from my grandfather," to take an organization that's an all-volunteer organization, that was really focused on maintaining and gaining as many of my grandfather's assets as possible without really saying, "Well, what are we gonna do with all these things now that we have all the videos?" And they did a phenomenal job of getting the videos and articles, and all these different things in getting the organization started. And so, that was kind of the continuation of my journey, was to move into this role and to be one of the leaders in the organization in terms of helping move it forward. AS: So, let's talk about... What you've described in some ways is something that I think anybody that gets deeper into Deming realizes, is that it's really a management philosophy rather than... Like a lot of times for people that don't know much about Deming, but they've heard his name, they go, "Oh yeah, quality, statistical quality control" or something like that. And they miss the whole aspect that it is a way of thinking, it's a way of managing, it's a way of interacting with other people. Like you said, the idea of trying to put yourself in the other person's shoes to make sure... The job of the senior management is to make sure people are trained to the level that they need to be. Maybe you can just talk about the Institute, generally, and that concept of what it is. What is Dr. Deming's teachings? And what is the Institute about? KC: So the Institute, the aim of the Institute, excellent question, is "Enriching society through the understanding of the Deming philosophy." And that can take all sorts of different directions that you might be able to go in. And so what we try to do is, we look at, "Okay. Here's what the aim is; by what method can we achieve that aim? which is what my grandfather always talked about. And we also understand that people out there, like I just mentioned earlier, learn differently. Some people are auditory learners, some people are visual learners, and there's different ways of creating learning environments for people. That's one of the things that I think is great about this podcast, and I'm so thrilled that we're getting back into it and doing that 'cause many people learn by listening to podcasts like this and gain something out of it. Other people need to be in an environment where they're physically there to actually gain something. Others can do it online. Others can do it through webinars, so there's so many different things. So, I believe our responsibility is to utilize what he has given us in a manner that can reach the broadest number of people and have the greatest impact so that they have that yearning for new knowledge. And then when they have that yearning, we have a means by which that they can continue to learn, understand, and apply it. AS: Maybe you can just talk about what's going on with the Institute, but also before you do that, I think for... Not everybody can understand. What is an institute? Is it for-profit? Is it not-for-profit? Are there 100 employees? Is it a few people? Is there a board? Are they volunteers? What is the Institute? KC: Well, I can tell you. I'll talk a little bit about it, but one of the best things I would say, Andrew, is go to www.deming.org, and they can learn a little bit more. But when my grandfather and my mother formed the Institute, they decided to have it be a nonprofit. And I know there was a lot of questions about that because a for-profit organization, there's a lot of things a for-profit organization can do, but there's a lot a nonprofit can do, and I think it was important for my grandfather and my mother that this be something that is a nonprofit, a 501 [c], not-for-profit organization because it also opens a lot of doors. KC: When my colleagues and I and other board members call people, and we're calling from The Deming Institute, a lot of times they'll take that call 'cause they know we're not calling to sell them something and try to sell them a whole bunch of expensive services and things like that. We're calling to help and make a difference. And so, while sometimes there are constraints with the nonprofit that we can and can't do, as you start to look at them, you realize it also opens up a tremendous number of opportunities that we might not also have as a nonprofit. KC: So, we're a nonprofit organization. We have a board that has a number of family members on it besides my mother. My brother is on it. He's vice chairman, my mother is the chairman, and then I'm on it. And then we have several other board members who have been terrific in terms of supporting us. Paula Marshall is on there, Steven Haedrich is on there, Keith Sparkjoy is on there, Kelly Allan. So, we have this fantastic group that provides guidance for us and support for the organization and helps me... I'm also on the board and serve as the president of the board. And we just have this fantastic group. We also have just a outstanding staff right now that has helped propel this forward, whether it's the online learning that we're launching, whether it's our communication, whether it's our administration or fund development, all these different things that we have responsibilities for as a nonprofit. We've just got an unbelievable team, and they all operate virtually. We don't have a single office. We also have this advisory council. We have a Deming fellow and Dr. Ravi Roy who's out there. We have an emeritus trustee board. So, we have a lot of people that worked with my grandfather, and then a lot of others who have this just belief in this philosophy, in these principles, and they know they need to get out there, and they're helping us get it out there. AS: So, before we go on, I think it's kind of important to talk about, "Why Deming? Why Now?" And I'm curious to hear your idea about that. There's all kinds of new books out there. There's all kinds of gurus. There's all kinds of people talking about all kinds of things, "Come on, Kevin, this is old stuff. The world has moved on." Tell us, "Why Deming. Why now?" KC: Andrew, I get that all the time that... Hey, I remember hearing about this guy that helped Japan after World War II, "We're closing on past 75 years on that. Why do we need this guy now? Why do we need this philosophy now?" And what I can tell you is it has worked. Every time it is used in an organization, as they begin that journey and continue down, I never hear that it doesn't work. Now, there are some companies who've tried it, and they're already too far gone to be able to even come back from the abyss that they've already gotten in. As my grandfather put it, "the pit they've already dug themself in," and sometimes you just can't do that. KC: But when these organizations do use this, and we have so many of them that do, it is astounding how it works. And so, the books that you're talking about and all these, what we call, oftentimes, "flavors of the month" that you hear about, just wait five years and see, does anybody really using them anymore, or have they moved on to the next flavor of the month and the next flavor of the month? You go back 20 years and look, a lot of those things are gone, or they've morphed into something completely different where they may have kept the name, and now they've kind of combined a few things to try to keep it going. But the one constant is Deming works and works, and the research shows that it makes a difference. And to me, in this world right now, where we are seeing all these issues with supply, with polarization, with the need to break down barriers, whether it's between countries or within different organizations, there is an answer. Deming, my grandfather, provided that answer, and he showed that pathway. How do you do it, and then how do you get to that next step that, all of a sudden, leads to resolution of these issues that we're facing right now? AS: Yeah, it's a great point, and there's so much there... KC: What do you think? AS: Yeah, it's interesting 'cause I was thinking... The question that we often get, I often get too, I'm sure you get it, it's like, "Well, why isn't this everywhere? Why isn't his teachings everywhere?" And I was thinking about it, and my answer to that is, one of the most powerful things in this world is probably meditation. If you could meditate properly for 30 minutes a day, it would probably calm your mind, and it would make the world a better place and all that. But how many people actually do it? Very few. And I would say that my answer to that is that what Dr. Deming talked about was a transformation. And how many people are ready to make a transformation in their life? It's easier to pick up the flavor of the month and say, "Oh, let's do that, and let's do that," But what he's talking about is moving to a whole other level of starting to think of things as a system. And you and I have talked about caring for the elderly folks in our lives. And nowadays, doctors get more and more specialized, and they can't see the bigger picture. And everything operates in a system, and it's difficult to think in that way. AS: And so, part of what I feel like is that what he's challenging, the challenge that he has put before us, is to start to transform our thinking, to understand statistics, to understand systems, to understand how to acquire knowledge, and to bring this together into something that can really make a difference. And that's not easy. That's a journey. KC: No, it's not easy, and I think you hit it right on the head, Andrew. And I think part of the challenge is, if you're leading an organization, and you came out of, whether it's business school or you moved up through a certain way, well you are leading that organization because you learned how to do it a certain way. Well now, all of a sudden, your organization is having trouble. Because I can tell you right now, and I think it was a Rob Rodin, who worked with my grandfather, said this, "Somebody right now around the corner, around the world, believes they can do what you're doing better, cheaper, and faster than you." KC: And they're just looking at you as an opportunity because you can't innovate as fast anymore. You can't do this as much. I can build a better this, better mouse trap, and all that type of stuff. But the challenge is, is that you've now... If you're leading that organization, you've gotten there. You have gotten to this point by doing it a certain way. Well now, all of a sudden, you're being asked to learn to do something differently, and I think that was... One of the big challenges my grandfather had was that in... When that program aired on June 24th, 1980, there were companies who were in crisis. Don Peterson, who was the Chairman and CEO of Ford when I met with him, when he spoke at one of our conferences at University of Michigan, and he said... KC: One of the things he said to me was, he said, "We were two billion dollars in debt, and we were close to going under, and two years before," I believe it was two years before, "I was named 'CEO of the Year' in the U.S." And he said, "But even for me," he said, "It was so hard for us to change because we'd always done it this way. We always had these already systems in place, and now you're asking us to do these different things." And so, I think sometimes it gets rejected. The other thing that I would say, Andrew, is in 1980, while these companies did Deming at that point, they were in a crisis. And oftentimes, it's not until you're in the crisis that you end up saying, "Hey, I need to do something." And you can listen to podcasts by Paula Marshall and Steven Haedrich, who are on our board, where they were in deep crisis when they came to Deming and now, all of a sudden, they're huge advocates 'cause it not only pulled them out, but it made their organization successful. So oftentimes, it takes a crisis to have people say, "Hey, it's worth looking at something else." AS: It reminds me of one of his quotes, "Learning is not compulsory, neither is survival." And I was thinking, when you were talking about, "Hey, your competitors are learning this," think about the transformation. When we were young, if you saw "Made in Japan" on a product, it meant low quality. And there was a transformation that happened and, all of a sudden, Japan became high quality. Now, think about China. Everything that most people have seen in the, let's say, past 20, 30 years, China, "made in China," was low quality. But they are moving up the quality ladder so fast. And I would argue that, in fact, they haven't really even gotten to some of the Deming teachings of taking that to a real transformation where you start to really bring the quality into the brands and all of that. And there is a possibility that China could go through that transformation, or at least some Chinese companies, just like the Japanese companies did. And then, "ho-hum," I'm sitting in middle America, and I'm realizing, "Whoa, wait a minute. They're transforming. What about me?" And I think that that's a lesson that you're talking about, too, is this idea that, "If you don't wanna learn, other people are learning around you, and by implementing this, you can protect yourself." KC: You make a really good point. That's a very salient point. That's really key that if things are going well for you... And a lot of companies we're looking at before, for example, COVID hit, everything was going well. They weren't planning on a COVID hitting. They weren't... Supply chain was not an issue, and now, all of a sudden, people are having to rethink how they run and operate their business. And I'll tell you, it's fascinating, my colleague, Kelly Allan, and I have... A matter of fact, you went through one of the seminars that he put on, I believe, in Hong Kong if I remember correctly. And when he and I were traveling through the Asia-Pacific region, Singapore area, and we were going to a lot of different companies, one of the questions we would ask... And it happened to me when I started my business, my start-up, and we were struggling for a while, and we sat down at the table one day, there were only about 12 employees in the company, and we were really having a hard time. And we sat down and we talked about, "Does everybody understand what the aim of the business is?" And of course, they knew that... We had put some Deming ideas, and we were using Deming in there, they were like, "Oh yeah, yeah, we know that, Kevin. That's really important that we all know the aim of the business." KC: So, we all wrote down the aim of the business. Well, guess what? All 12 people, including myself, wrote down different aims. So, we were working hard and giving our best efforts towards different aims. Can you imagine how much money, time, energy, and effort were being wasted because, Andrew, you were working for... You thought the aim was this, Kevin thought it was this, somebody else thought it was this. We saw the same thing in these companies as we traveled all around the country and around the world, and we would ask them, "What is the aim?" And these people, it wasn't from lack of... They were all working hard and giving their best efforts, but they all had a different understanding of the aim. Can you imagine how much more efficient and effective you'd be if everybody understood what the aim was? Just that alone... We have never once... Kelly and I together, going into different organizations and talking, never once have we seen one, unless they were a Deming organization, where everybody in that room understood what the aim was, had the same understanding of what the aim was, put it that way. AS: They all had an aim. KC: They all had an aim. Somebody thought it was making money, somebody thought it was selling more products, somebody thought it was... So... AS: It reminds me of this... After many years of myself in the financial world, and I'm advising companies, and I'm... And I had these two clients and... Individually, the CEOs were fascinating and smart and all that. And individually, each member of the team, from both of these companies of the management team, were highly qualified, very experienced in their areas. And one of those companies was doing really well, and the other was doing really poorly. And I just remember thinking about that, and I thought to myself, "Number one, success is, you gotta have the right CEO." And the right CEO or the right leader, let's say, has gotta set the right direction. But more importantly, that's not enough. You can have a great guy, a man or a woman that's great, and they've set the direction. But if you let people fight against each other, you're never gonna get there, so it's that coordination amongst the management teams that's like, that's the magic. And you can't get coordination if everybody doesn't know what's the aim that we're working towards, so that coordination is kind of the systems-thinking aspect of Dr. Deming that I learned. Let's talk about the aim of the podcast. Here we are, and I'm just curious, what are your thoughts on where this podcast goes and what's the purpose? KC: So what I see, the aim of the podcast is also tied into what listeners can expect, and that aim... What I see as the aim of the podcast is raising awareness and understanding of the Deming philosophies and teachings by presenting stories, sharing knowledge of the Deming philosophy, in a variety of different voices and from a variety of different types of organizations. And I think we look to do this by providing real-world examples of what makes Deming such a ground-breaking, unique, and unrivaled successful approach, which we just talked about a little while ago. I think we... We're also going to... And you and I've talked about this, is explore why is Deming different and so much more valuable than the wide variety of improvements and improvement programs and flavor-of-the-months out there? And I think with this podcast, it's really valuable for us to explore the Deming advantage in all of those type of organizations, how it's been implemented in different types of industries and businesses. Because one of the things, Andrew, and you and I have spoken about this before, is a lot of people think, "Well, I'm not gonna do Deming. That's manufacturing. When your grandfather was alive, he focused on manufacturing. It was Ford, it was General Motors, it was Xerox, it was... And all manufacturing companies, and if he wanted it for more than manufacturing, why didn't he spend time?" KC: Well, the thing I would say on that is, that's where the greatest need was at that time, was in the manufacturing. But he spent time; he knew it was important to have this in education, in nonprofit, in government. He started to work, towards the latter part of his life, with Congress several times, trying to get them, as you can imagine how polarized they are, they all wanna help the country, but they all see, "We gotta do it this way or this way. And it's my way or the highway." How do you get to work together, think together, learn together, act together? And so, for us, if we wanna explore that, how it's been implemented in different types of organizations and businesses and industries, and what that transformation is like for these individuals, what challenge... Because it's not all a piece of cake, as you know. What "aha moments" did they have? What challenges were along the ways? Impacts and benefits? And then, talk to people at different stages of their Deming journey. KC: We've got a couple of people that you and I've talked about that are on... That have been doing this... Like Paula Marshall who is the CEO of Bama Companies. She worked with my grandfather. I think she is the only one who not only worked with my grandfather, but has been the CEO all the way through to this day and is still implementing it within her organization. And so, I think the last thing I'd say is we believe that by providing people information and inspiration, they're gonna yearn to learn more, and they're gonna wanna delve deeper into Deming and hopefully apply it in their lives and organizations. And what could be better? AS: Yeah, yeah. And I just wanna highlight that one word. One of the first words that you said is "stories," and this is a great podcast or a great platform for telling stories. We're not gonna go into super technical details about things. We've got great resources, we've got great books, we've got all that stuff. But the stories, and importantly, as you just said, to chronicle the stories of the people who knew Dr. Deming at the time while we have that opportunity, but also all the other people that are going through... And I think the other word that I like is the "journey" and the "transformation," and highlighting that journey and transformation. That's very exciting. So, how do people get the podcast? KC: So, there's a couple of different ways that you can get the podcast going forward. For those of you.. There's many of you that have listened to the podcast in the past. We've had almost 1.6 million podcast... What would you call it downloads or listens? AS: Yeah, downloads. KC: And so, what we're gonna do is we're still gonna make that available just like we always have. But in one of our newer programs, which is called DemingNEXT that we're just launching right now, that program is a subscription program, DemingNEXT. We're gonna put the podcast in there with the video that you and I are talking right now, through Zoom that we're using, so that it will be in there with the video, audio, and then the transcript. And then our producer on the programs, in DemingNEXT, is also putting it in a different format so that you're not just watching a video with the words right next to it, it's in a very, very nice format. I think you saw a sample of that that I sent you the other day, and it's gonna be really cool how it's gonna be accessible through that mechanism so that within that subscription service, you'll be able to see it. But for those who aren't in the subscription, they'll still be able to hear it, just like they always have. AS: So, if somebody is listening to it, let's say they've never really heard that much about Dr. Deming, they're listening and thinking, "This is good stuff. I like what I'm hearing on the podcast." Where do you want them to go so that they get that? Is it... Tell us the website and tell us where they should start. KC: So, what I would suggest is you go to www.deming.org. And then from there, depending upon what you're looking to do, as an individual or with your organization, you're going to see that we have this online program, DemingNEXT, that we're just launching. We have workshops, in-person that we're gonna hopefully going back to soon, seminars in-person. We also have virtual workshops, webinars, some conferences coming up. So, there's a whole different, wide variety of ways that you can learn. But I think one of... The big thing that I would say is the launch of our DemingNEXT program which is an online learning program. It's a blended learning program where we're building in all sorts of webinars into it as a part of it. So, it's not just online. KC: That opens us up to a whole different world that, as you know. You attended a seminar in person in Hong Kong, and I wanted to talk about that in a few minutes, but I don't know how many people were there, maybe 40, 50, 60, whatever that is. It's not 400, 800, 600, that we need to get that pivotal number of people that are learning this stuff, understanding, and applying it. So, the DemingNEXT online is a mechanism for us to be able to do that around the clock, around the world, at any time, with organizations of different sizes where they can use these in their own learning management systems. They can use it in our learning management system. They can use it in working with their consultants who they're... Who are advising. There's all sorts of different ways to do that. AS: So, if someone is listening and think, "My goodness, I need my management team to get, to understand, some of these things," they can use the resources that DemingNEXT, just directly and say, "Hey, you guys, I want you to... Everybody to listen to this particular module," or that type of thing. Or if there's a consultant out there that's helping people implement, they could say, "Wow, why don't I use that as a tool within my toolbox?" So, it sounds like... It's really gonna be something that can be implemented across a company without having to go to a seminar if they can't or whatever. KC: You hit it right on the head because what we have is that... We'll oftentimes have CEOs and executives come with their management teams to a workshop or seminar like the one you went to. Well, then they come to us afterwards and say, "This is fantastic. We're gonna start to implement it, but I've got another 200 people in my company. I don't have the ability to send them to the seminar, or have you bring the seminar to us." Some companies are doing that, but others are saying, "We don't have the ability to do that, yet I want everybody within the organization to have an understanding of the common language, what we're talking about when we talk about a special cause, a common cause, an operational definition, system, system of profound knowledge, understanding variation theory of... Just a basic understanding." KC: And so, that was one of the things that pushed us to develop this DemingNEXT is, to not only have it available for leadership and management, but for all levels of the organization to be able to understand, learn, and apply it, and not to push back. Because that was one of the things, again, going back to Don Peterson and Ford was, even though they sent hundreds of people every month, sometimes thousands, he had 150,000 people around the world, they couldn't send everybody through. And the people that didn't go through were the ones that were a challenge. Not because they wanted to be a problem, but because they didn't understand what was being talked about when management was saying, "Hey, we need to look at our suppliers differently." KC: Well, no, that's not how we do it. And so, it's hard. You know what it's like. When you push against somebody, they push back. They always do. So, what you need to do is provide them a level of understanding, and then it's accepted, and then they're not pushing back and fighting you. They're actually embracing it. And so, that's one of the advantages of using this approach, is that it can be blended learning. It can be done at your own and, like you said, with consultants. We already have a number of consultants that have their own specific external portal tied into our DemingNEXT where they're working with clients in a completely different environment to help support what they're already teaching them. AS: It's exciting. That's a whole other level. When you think about my own Deming journey, I think about, there was limited resources. There are some books, and I found what I could find and that type of thing, but you kinda had to piece it together. And so, I think I'm really excited, and I feel like the journey going forward, it's so important to get this message out. But the ability to get it out now is really there, and so I would say that's really accomplishing the main aim of the Institute. KC: You're right, and for those who are listening who know about it, a lot of my grandfather's videos, writings, case studies, articles, things like that that he did, they're also in there. But we've spent a lot of time using subject matter experts, some of whom worked directly with my grandfather, to help us develop specific courses that are tied into the way adults learn. Adults, a lot of times, don't wanna sit and watch my grandfather go through the red bead experiment for an hour and the lessons of the red beads on a video recording that is 40 years old. The audio is not that great, the video is not that great, but you know what's interesting, Andrew, what we have found is once they go through some of the developed courses that we've worked on, then all of a sudden they wanna learn more. They then go and watch it. They'll spend the hour watching my grandfather do the red beads and lessons of the red beads or talk about the 14 points in these long-form video formats that were acceptable back in the '80s and early '90s. But we need to get them there to be able to say, "I wanna learn and go ahead and do this." AS: Yeah, it's... The method of learning has changed so much. But it's so fun to watch those old videos 'cause you see his reactions, and you see the way he's berating people and making... He was also a very funny guy at times. He would really have some great cracks. [chuckle] KC: Yeah. He really did. Let me ask you a question if you don't mind. How did you come to know about my grandfather, and what was kind of your Deming journey? You and I came across each other years and years ago, but I'd love for the audience to also hear that. AS: So, I was a young guy, studying finance at Cal State Long Beach in Los Angeles, and I got a job at Pepsi in operations in Los Angeles. And Pepsi was also kind enough to pay for my MBA if I got good grades, and I did. And basically, I worked in operations, and I just saw all of these troubles. Now, I happened to be... It was 1989 when I went to work for Pepsi. And I had learned how to use a computer so I could make charts and graphs, and I started charting stuff and putting stuff up on the walls. And I had this habit I've had all my life, is I just chart performance of different people and put it up there, and then I don't say anything about it. And then, I just let people go and look at it, and then they start asking questions. And then you start getting information from that, and so that was kind of where I... And then there was a manager at Pepsi, he's like, "Oh, you're really into statistics." I wasn't necessarily into statistics, but he thought I was, and he said, "You ought to go to listen to this guy." AS: And so, Pepsi flew me in 1990, in October of 1990, to George Washington University and to take the instituting Dr. Deming's methods for management of productivity and quality. And I got 1.44 continuing education credits for it. But I remember... KC: Wow, you got some CEUs. AS: Yeah, I remember going to this event. It was a huge room. I was 23, maybe 24. I was a young guy, all the older people in there. And I just thought, the only thing I'm gonna do is, I'm just gonna go to the front row. And I just sat in the front row listening, and it just... Everything was blowing my mind. I had been working for a year or so in Pepsi, and I'd seen all of the problems we had in the factory, and then here was the solution. And so, I really caught on to that, and I went back and I started to try to implement that. And then, I started to realize what he was talking about. Change has to happen from the top because a young guy trying to make an impact, you can do something, but you can't make a huge impact. And that was kind of my first beginning. And then I got Dr. Deming's book, "Out of the Crisis." I still have the one he signed at that time, and I got a great picture of me with him at that time. AS: And then I went back, and my roommate, Dale, and I used to read chapters and discuss them in my apartment, in our apartment where we lived in L.A. And then another time in 1992, he had a seminar done by quality... What was it called? A quality enhancement seminar. Yes, that was 1992. And so, I got a double dose, and I listened to him and was blown away. I just kept learning. And then I eventually moved to Thailand, and I was a young guy teaching finance, and I went to work in finance. But the point was, my best friend, that he and I were reading those chapters of Dr. Deming's teaching. Dale came, and we set up a company called CoffeeWORKS here in Thailand, and we just really wanted to implement Dr. Deming's teaching. We weren't fanatical about control charts or anything like that. We were operating in pretty much chaos here on the outskirts of Bangkok, but we definitely tried to implement ideas like systems thinking and treating people with respect and dignity and trying to get out fear in the workforce. That's a little bit of my journey. KC: So, how is the company doing? AS: Well, we've survived, and we've survived COVID, that's for sure. And basically, we've been in operation about 28 years. And so, we have about roughly 100 employees, and we're growing, and we're profitable, and we've learned a lot. I would say that also operating in a foreign country has always been a challenge. But I would say we're doing okay, and our objective is to try to make sure that we are making an environment where employees really enjoy their work and feel trust and feel cooperation in particular. KC: And with you saying that, we're hearing in the States, and you're experiencing it, how many... So many companies seem to take it for granted that, hey, the employees are gonna stay because this is really their only job opportunity here, and that has been just spun completely out of control with the advent of COVID. And now, all of a sudden, people are saying, "Wait a second. I wanna be at a company where I feel I can make a difference, and I enjoy being there because I've now realized that life can be pretty darn short, and I need to have, as my grandfather always talked about, joy in work." And we would talk to executives in organizations in years past, a lot of times, we would never bring up joy in work because they didn't see it that way. It was just "grind it out," have these people just work. And now, all of a sudden, there's this realization how important that is, and I think that's another... Once you implement that Deming philosophy, it has an enormous impact on employee retention, on joy in work which is keeping people there, that they wanna stay. They wanna be a part of something where they enjoy being there, and I think that's just one more reason why the Deming philosophy, we talked about it earlier, is still even relevant today, and more so than ever. AS: And that's part of driving out fear, is making a trusting place and Dale's... Now, it's interesting situation in my case. I never worked as an employee in my own company. Dale is the managing director, and we own it equally. But we decided in Thailand, it would be better if I focus my efforts on building my career in the world of finance. AS: Now, this is where I think my experience with Dr. Deming becomes interesting. The first part is that I felt like I really wanted my employees in the coffee business to understand it, and that's the reason why I started taking notes about the 14 points and thinking about how would I explain this. The way he talked, I don't think it's gonna translate very well into Thai language and for Thai people. How do I simplify that? And that's when I started writing the book, "Transform Your Business with Doctor Deming's 14 Points," and ultimately translated it into a Thai language so that the employees would be able to get some access to this and understand it, and that was my only real goal. I did put it up on Amazon. But the main thing was how do I bring this teaching to these people who really didn't know anything about it? KC: Oh, that's interesting, I didn't know that was really the basis for the book. I know there's some companies that we've mentioned already today who actually have purchased your book and use it as kind of a book club type thing that they do with their team members as they go through the one that you wrote. So, that's pretty interesting. I didn't realize that about... With you about the 14 points. AS: Now, the other angle that I think it's been interesting because one of the things that Dr. Deming talked about was the idea of "don't be focused on quarterly results," but isn't that the whole financial world? KC: Well, it's funny 'cause I was just about to ask you. With all your focus on finance and understanding it, you've gotta run up that... Even if you're not a publicly traded company, we talk to organizations that are always focused on that. One of the suppliers that we work with at the Deming Institute, we literally left them about six months ago because you could always tell it was it... I'd always look, and I'd go, I'd start getting the phone call going, and if I hadn't thought about it, it's gotta be the end of the quarter 'cause, man, they're just trying to sell me something now. And they were always trying to gain their numbers, do something by the end of the quarter. And I said, "You know what, I'll let you watch it, as my guest, go through some of the DemingNEXT stuff because as long as your management will do it because you have no idea the impact you're having," and we left them because... KC: And we ended up going with a different vendor because we could see this happening, and it was getting worse and worse. And we were told there was a new CFO that had come in. There was a real focus on, "we've got to get the numbers up." And so, what they ended up doing was cutting customer support because that was an easy one. People like us already had a contract with them for a certain amount of time, and they figured they might be able to get us to renew it. But the impact... Stop. I can keep going on and on. AS: Well, maybe I'll just explain it. I grew up as an analyst in the stock market in Thailand, and I was eventually voted the number one analyst in Thailand. And I was the head of the CFA Society for Chartered Financial Analysts which was an honor of a lifetime. And I had seen, maybe... I've met with maybe a thousand fund managers, and I've taken them to meet with a thousand CEOs. And a CEO asked me, "What would be your advice from everything you learned?" And I just said, "Never listen to analysts. They don't know about your business. They don't know how to run your business, and you have to be very careful. All they wanna do is set a fire of quarterly earnings." Which brings me to, having taught finance all my career, when I walk into a finance class nowadays, I tell the students, the first thing I tell them is, "Finance adds no value." And that puts their head in a spin, particularly, 'cause they're studying that topic, and I said, "What adds value?" AS: And we have a long discussion about what adds value in a business, and I say, "Ultimately it's the products and the service, and finance is a support function just as human resources. And the purpose of finance is to operate as a mirror to reflect management's decisions to help us see the consequences, short term and long-term, of management decisions. And it's when finance starts being the head of the business that you get into trouble." Never make, as I say, "Never make the right finance decision over the right business decision." AS: Always make the right business decision over the right finance decision. So, I've come at finance from a very, very different perspective, and that's allowed me also to help my clients improve their profitability and help them really think about profit very differently than a lot. And that's where I think the combination of my experience with Dr. Deming, as well as my finances, bring me to a place that I really enjoy talking about the finances of a business. KC: Yeah, and I think what you said is really important because if the focus of the company is on... is solely on making a profit, they may make a profit to the detriment of the organization that eventually puts it out of business. I always loved what, I think it was Isaacson's book on Steve Jobs, where he was talking to Jobs about what was really the... I don't think they use the word aim, but what was the aim of the organization? And it wasn't to make money. Apple wasn't there to make money. It was to make insanely great products that help people. And then, the money was a byproduct of it. They sure did well taking that approach. Now, you look at somebody like Enron, for those of you that remember Enron. Well, their goal was to make money. Well, that didn't work out so well. And you can see that the finance, like you said, if that's where it becomes the focus on is how do we just make money, and every decision is based on making money, eventually that is going to bite you big time. And the companies that focus on that are usually gone at some point within a certain amount of time. AS: Yeah, and that's one of the reasons why I feel like Deming is such a critical tool, or critical knowledge, that people need to have now because we're slipping into an era of data. And we are very fast, quickly slipping into this era where a young person graduating from university today may think that their job is setting key performance indicators and tracking them, and you can almost imagine the ideal job... I have a cartoonish picture in my head of a young manager these days with a bunch of screens in front of them and KPIs going. And then they've got this button that sends an electrical shock to the employee who's not hitting their KPIs, and then that's it. There's business and there's management, and I fear that a lot people are feeling like being tough on KPIs is what good management is, and they're lost on that. KC: Well, and I can say if they come in and start to learn Deming, whether it's using DemingNEXT, whether it's using other resources or videos or books or things like that that we have, if their focus is on solely on KPIs, I encourage you. Come in and read and go through and learn some of this, whatever the best way for you to learn is, because it will open up a completely new world in terms of understanding what the impact of those on the organization. KC: And it's usually a detrimental impact. And what the potential is by looking at things a little bit differently, or a lot differently, depending upon where you are, but you're right. There's so much stuff, and you hear about big data all the time, and we've all seen so much. So many journalists, and I always feel bad for them because they're looking at these data figures, whether it was COVID or other different things, and they make interpretations that are oftentimes erroneous. And we see it all the time. Andrew, it must drive you crazy when you see, "Well, the stock market was down yesterday, it must mean this is happening." Two days later, "Well, the stock market is up because this is happening." Talk about not understanding variation and special and common cause and reacting to a common cause as a special cause. It's unbelievable. But once you understand it, you start to see things, and it opens up a completely different world for you. AS: And one part of my business is managing people's money. And for that part of my business and investing, it's so critical what I learned from Dr. Deming about that they're ultimately... What I say is that we can understand the variation and the randomness of a flip of a coin or at the roulette wheel. We understand these core principles of randomness and variation, but we then kind of abandon all that when we go into life, and we don't... We miss that there's this subtle thing happening below the scenes and the outcomes of things that we're seeing. There is a portion of those outcomes being driven by randomness and variation. And if we don't have awareness of that, we will get misled, and it will happen all the time to amateurs in the stock market that will assign special causes to different things. And they get all excited about things, and they miss the whole randomness and variation. And that is a carryover from the world of what Dr. Deming taught in statistics into the world of the markets and investing. KC: Yeah, it's a big problem. I talk to people all the time. And that treating a special cause as a common, you know, common variation as special variation, and vice versa, ends up being huge. And the thing is, we already know it in our lives. We know to get to the grocery store is gonna take us between 9 1/2 minutes and 11 minutes, and the average is, whatever, 10 minutes. But we know we're never gonna arrive there exactly at 10 minutes. We know. And when you ask people, "Why is it?" Well, because there's variation in there. It's 9 1/2 to 11 minutes to get there. Yet they go in their companies and they teach. They, all of a sudden say, "Well, I got there in 9 1/2. Oh my gosh. I got there really quickly." That's great. Okay. Well then, the next time when you get there at 10 1/2, "What did I do wrong?" And they try to fix that instead of understanding that, "Well, wait a second. I know how this works when I go to the store. Why do I not apply the same concepts when I'm in the business?" AS: And every now and then, they come home, and they say, "It took me two hours to go to the store." Oh, what happened?" "Well, I had a flat tire, or there was a fire, and there was a..." And all of a sudden, you start to understand special causes. Now, I think I would like to wrap it up at this point and ask you, do you have any parting words for the audience? What would you like the audience to understand about what's going on at the Institute? What's going on with the podcast? Let's leave them with something exciting. KC: Well, I don't know how exciting this is, but one of the questions that I get right now, Andrew, is what would your grandfather say about DemingNEXT? Because it's completely different. It's not always using just him because there's people out there that tell me, "Unless you're using Deming's exact words, then it's wrong." And I'm like, "No, no." My grandfather, when I look through his books, quoted people all over the place, whether it was Don Wheeler, whether it was Ed Baker, Joyce Orsini, he was always learning. Bill Scherkenbach. He was learning from everybody. KC: And I would say the one question I get a lot now is, what would your grandfather think about DemingNEXT? And I gotta tell you, I believe he would be absolutely thrilled because he would see that as another means, another way that we have done a PDSA Plan-Do-Study-Act where we have tried to improve the means for us to get his message out to a broader audience. And I think he would be absolutely thrilled with what we've done, how we're doing it, why we're doing it. And I believe he would be very excited about what that impact is to get that message out. Because I know when he departed from this earth, I think the thing that probably bothered him the most was he didn't have more time to get his message out. He knew that he was running out of time as he got older, and he formed this organization to get that message out. And I think that, to me, is an important thing, is by what method are we getting this message out that will accommodate the needs of how people learn, understand, interact within their own organizations? AS: Well, ladies and gentlemen, you've heard it from the man who probably is the closest to understanding the ultimate aims of Dr. Deming. Kevin, I wanna thank you for this great time together and sharing your personal experiences, as well as divisions, and the opportunities that I see at the Institute and what you're doing. That concludes another great story from the worldwide Deming community. Remember to go to deming.org, as Kevin has told us, to continue your journey. This is your host, Andrew Stotz, and I will leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."