Quality is Key to Minimizing Loss

Where did your "quality journey" start? In this first episode of a new series on quality, Bill Bellows shares his "origin story," the evolution of his thinking, and why the Deming philosophy is unique.

TRANSCRIPT

0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey in the teachings of Dr. W Edwards Deming. Today, I'm continuing my discussion with Bill Bellows, who has spent 31 years helping people apply Dr. Deming's ideas to become aware of how their thinking is holding them back from their biggest opportunities. This is a new series called Misunderstanding Quality, and the topic for today is Quality Management, what century are we in? Bill, take it away.

 

0:00:35.7 Bill Bellows: Thank you, Andrew. [chuckle] All right.

 

0:00:39.5 AS: Exciting. I'm excited to hear what you've got going on in your mind about this Misunderstanding Quality.

 

0:00:45.6 BB: Well, first let me say that whether you're new to quality or looking for ideas on quality and quality management, quality improvement, quality management, the aim I have in mind for this podcast series is to improve your ability to manage quality through deepening your appreciation of the Deming philosophy and how to apply it. But specifically, a focus on quality, time after time, which is where most people heard about Deming, was through Quality, Productivity and Competitive Position. For example, the title of his first book. And relative to the title, what came to mind is an anecdote shared with me by two mentors that both spent a good deal of time with Dr. Deming. The first, Gipsie Ranney, who was a professor of statistics at University of Tennessee when she met Dr. Deming, went on to become a senior statistical consultant to GM and the first president of the Deming Institute, when Dr. Deming and his family, shortly before he died, formed a nonprofit called The Deming Institute. Gipsie and I used to speak literally every day, driving to work, driving home, we... "What's up, what's up?" And we always... It was so cool. I wish I had the recordings. Anyway, she once shared that she once asked Dr. Deming, "What do they learn in your seminars? What do attendees learn in your seminars?" To which she said Dr. Deming said, "I know what I said, I don't know what they heard."

 

[laughter]

 

0:02:26.0 BB: And along those lines, in the same timeframe, Bill Cooper who just turned 90, he and my wife share a birthday. Not the same year. Bill turned 90 last November and he was senior civilian at the US Navy's aircraft overhaul facility in San Diego, known as North Island. So as aircraft carriers are coming into San Diego, which is like the... I think they call it... It's like the headquarters of the Pacific Fleet. So as aircraft carriers are coming back, planes for which the repair work cannot be done on the carriers fly off to North Island. And Bill was in charge of, he said, some 5,000 civilians. And his peer on the military side, Phil Monroe was in charge of all the military people, and they got exposed to Dr. Deming's work in the early '80s, went off, left there, became Deming consultants. Anyway, Bill said he once asked Dr. Demings, says, "What percent of the attendees of your seminars walk away really understanding what you said?" And he said... Bill said Dr. Deming said, "A small percentage."

 

[laughter]

 

0:03:44.0 BB: And so what I had in mind in this series is... One is, what makes it hard to understand what Dr. Deming is talking about? And so for the listeners, what I'm hoping we can help you understand, what might be some invisible challenges that you're having in your organizations trying to explain this to others. So maybe you think your understanding is pretty good, but like Dr. Deming, maybe people are having a hard time understanding what you're saying. And I know what it's like to be in a room, presenting to people. And I had that same experience. I had one Rocketdyne executive... Rocketdyne was sold a few times. Every time it got sold, our Deming transformation efforts got set back a few years. So when the latest management team came in six, seven years ago, I met with one of the very top people, was explaining... Trying to explain to him for the first time what we had accomplished with some, I thought, absolutely amazing work by managing variation as a system. And he said something like, "So are people rejecting what you're saying?" And I said, "No, that's not it." He says, "So they're accepting what you're saying?" I said, "Well... " he said, "What's the problem?" I said, "What they accepted is not what I said." [laughter]

 

0:05:19.5 BB: I said, we're not in disagreement, but what they think they heard is... And that's when I found that I've experienced that. So anyway, so I wanted to get some background. So my first exposure to quality circles, and this is like... So I was living in this parallel universe, a heat transfer engineer working on rocket engines, and Quality comes into the organization. And unbeknownst to me, there's this quality movement going on, inspired by Dr. Deming, and we're on this wave. I had no idea. All I know is all of a sudden, we got Quality Circles, quality teams, every department...

 

0:06:03.8 AS: What year was that, roughly?

 

0:06:06.1 BB: 1984.

 

0:06:08.9 AS: Okay.

 

0:06:10.5 BB: Yeah. And I remember a book I was... I remember there was a pamphlet... You mentioned that. The company was AVCO, A-V-C-O, the Aviation Corporation, which is nearly as old as the Boeing Company. So it was one of the... So, Boeing gets into airplanes, the Wright Brothers get into airplanes, people are... Investors getting in, and AVCO, A-V-C-O, was formed by someone you likely heard of, Averill Harriman, major Wall Street guy at the time. And so anyway, I remember there being an AVCO book on quality circles. As you mentioned, I remember seeing that. And I remember just going along for the ride. I'm new to corporations, I'm just a subject matter expert in gas turbine heat transfer, and we're going to the... We got these things called quality circles, whatever. And I remember our department formed... Our department was a team, we had goals, and I remember going to these quality meetings, and let's say the goal would be that we read an article about heat transfer or something. I was just kind of fumbling with this thing called quality circles.

 

0:07:28.6 BB: But I remember, looking over the shoulder of the department secretary with a IBM Selectric typewriter, and this is before PCs, so we're using IBM 3270, dumb terminals. And I remember being over near the secretary, Kathy, and she's typing away the weekly activity reports, Friday morning kind of thing. And on a routine basis, I'd be over there and she'd be typing along. And then on the very last page, under the title, "Quality Circles," she would type in "Quality Circles are progressing as planned." [chuckle] 'Cause then these would be distributed to people in the department. So I'm watching her now create the next original. And it dawns on me, two things. One is, it's the very last topic in the meeting, in the weekly minutes, and two is it's the same damn thing every time, "Quality Circles are on plan." And I remember saying to her, "Why don't we just have that printed into the stationary?" [laughter]

 

0:08:39.5 BB: This is before I knew... For me, quality was just a seven-letter word. I don't know. So this is my exposure. And I remember thinking one of the quality goals we're thinking of in our department is... I think somebody even really brought this up, is we're gonna answer the phone by the second ring. That's gonna be our quality goal. And then, I remember we're negotiating for cleaning services. The floors were a mess. Tile floors, they were just a mess. And I remember in our department, we were lobbying to get better janitorial services, have the things cleaned more often. And next thing, we're negotiating with the VP of Engineering relative to, "Well, if your quality circles are on track, then I'll think about that." And it was just like... So it's some really ugly memories [chuckle] of this whole quality thing.

 

0:09:34.3 BB: But then I got into... I mentioned on the very first of our previous podcast, getting involved as a problem solving decision-making facilitator. I was hanging out with the HR training people, they had some... Their director of training, our director of training was a very astute guy and he was... I'm convinced, having met many people in that role, he knew what was going on. He knew a lot of the names in quality, not so... He knew of Deming's name, he knew of De Bono's name, Kepner-Tregoe, but he seemed to know his stuff. He's a fun guy to be with. And so, that's likely where I first heard Deming's name and that first book would've been Quality, Productivity and Competitive Position, which is... It's almost impenetrable, but I can remember at some point looking at that.

 

0:10:29.7 BB: But anyway, but in the fall of '87, I started being assigned a taskforce as helping... 'cause now I'm a problem-solving facilitator. But I still don't know... I don't know what quality is. All I know is I get invited to help solve problems. And we were looking at a very bad wear problem, these gears wearing each other out, enormous visibility to the Pentagon, because the tank engines we were making, 120 a month, were being shipped to the tank plant. And then, these tanks with these engines were being sent... The majority of them, sent to Europe. And they were the frontline of defense in Western Europe. This is the Cold War, Andrew.

 

0:11:17.4 AS: Right.

 

0:11:19.2 BB: And so the problem that came up was that a couple of these tanks had these gears wear through each other within 50 hours. And I've never been on such a high visibility taskforce because the Generals concern was that every one of those tanks was likely to not operate. And that might be the opportunity for the "Russki's" to launch World War III, because, what a great time, the tanks... If they knew these tanks weren't working. So it was a lot of stress, a lot of pressure. And after months of slow progress, the Army said, "Hey, why don't you guys go look at this Taguchi thing. The transmission people from General Motors who make the tank transmission, anytime they have a snafu like this, they use this Taguchi stuff." So I got assigned the action to go look at that. And I remember, this is pre-internet. And somehow, I did a literature search. I remember it was through something called Nerac, N-E-R-A-C. And out comes these pages. And the thing on Taguchi was... So first of all, who is this Taguchi guy?

 

0:12:29.0 BB: What is this quality stuff? I don't know. I'm a problem solving guy. And then I remember the first article on reference to Taguchi says, "Quality is the minimum of loss imparted to society by a product after a shipment to the customer." And I thought, "What does that mean?" So I don't know what... I mean, minimum of... I'm thinking... And I thought, "This can't be anything." So anyway, went out to General Motors and got exposed to what they were doing, and a few years later, realized it wasn't exactly Taguchi, but it was... There's some nuances there. But anyway, they exposed me to Design of Experiments and what's known as fractional factorial testing. And coupled with shifting how we look at the measurement process, we solved this problem within weeks, a problem that had been going on for months. So then I got excited about... This Taguchi thing's kind of cool. I'm liking this. And it was a lot more exciting than what I was doing. And I thought, "I think I wanna do this." So the following year, I went to the Taguchi conference. So we had the application and I was so excited, Andrew, that I was turned down for funding. The Army would have paid for me to go to this conference, 'cause the Army, by that point, had invited me to work on at least two problems.

 

0:13:54.4 BB: Once we solved the first one, when problems came up, the Army literally turned to the program management people at Lycoming and said, "Do a Taguchi study, get Bill Bellows involved." So I was walking on water. I thought it was kind of cool. So I wanted to go to this Taguchi conference, and it was turned down. And they said, "It's not your job." So I told my boss when they told me it was gonna be turned down, I said, "I'm going to this conference." I said, "Whether the company pays for it or not, I am going." So I drove 14 hours each way to Detroit. And in the room are all the US experts on Taguchi's ideas at the time. I didn't know who Deming was at the time. I still didn't know what quality was, but I walked outta there thinking, "This is what I wanna do." And then, where I'm getting to is, a few months later, I was gonna go out on medical I had surgery planned.

 

0:14:53.1 BB: I was gonna be out for about two months. So my wife and I lived in New Haven, maybe 10 miles north of Yale. And I remember going to the... Again, this is pre-Amazon. I mean, talk about dating ourselves. What century are we in? So I remember going with my wife to the Yale bookstore, the Yale co-op bookstore, and every book they had on quality, I bought. And I'm gonna sit home for two months and read all these books. And I remember buying books. I'm pretty sure I got books about Deming, some about Taguchi, some by Phil Crosby about Zero Defects. Six Sigma Quality entry was a year away.

 

0:15:35.7 BB: And so I sat down... I got out of the hospital, I'm resting at home, sitting on the couch every day and reading, and also calling the Taguchi people that I had met, I think, at the previous conference. I met some big names. So I'm reading the books, calling them up. And again, these are like my personal professors. And I remember saying to a few of them... What blew me away, and I don't... It somehow dawned on me, I was naive. In the world of engineering, we use... Most of my exposure, at least in heat transfer, we use the same terms the same way. We talk about radiation heat transfer, conduction heat transfer, convection heat transfer. So many of the terms are the same terms, so we can have a conversation. So I'm thinking the same thing applies in quality, that we're all like the heat transfer people. It's easy to communicate 'cause we got the same models. We're using the same words the same way. Then I started thinking, I'm no longer... And this is a real shock. I'm no longer thinking we're using the same words the same way, hence my introduction to misunderstanding quality, [laughter] or I would say, the beginning of a journey to better understand the... I think there are incredible opportunities for people in quality organizations, or people that wanna get into quality.

 

0:17:08.3 BB: I think it's an ideal opportunity to introduce Deming's ideas. And I say that because everybody else is doing their own thing. Engineering's off designing, Manufacturing's off producing, and Quality has an incredible opportunity to bring together Deming's sense of a systems view of quality. Nobody else has that charter. So my hope is in our conversations, we can help people that are trying to do some things, whether it's jumpstart their continuous improvement program or get their quality program out of what it currently is. In fact...

 

0:17:52.4 AS: By the way, I wanna...

 

0:17:55.9 BB: Go ahead, go ahead.

 

0:17:56.0 AS: I wanna ask a question about that, because what you've mentioned is interesting, that the systems aspect... Is that unique? Would you say that's unique to Deming? I mean, if we think about Taguchi and I think about the Taguchi Method, I'm thinking about a really powerful tool for understanding variation. But explain what you mean by that.

 

0:18:24.0 BB: A couple of things come to mind when you ask that question. One is the predominant explanation of quality. And if we have time, I wanna talk about that. The term quality, "qualitas," comes from Cicero, a Roman in ancient times. But by and large, in manufacturing, in corporate quality, in corporations, the operational definition, what do we mean by quality? This thing is... What are Quality organizations doing? And what I find they're doing is calling balls and strikes. They're looking at a given quality characteristics, whether it's the fuel economy of an engine, of a gas turbine engine, the performance, the thrust level of a rocket engine, the diameter of a hole, and asking, "Does that characteristic of surface roughness diameter, does it meet a set of requirements?"

 

0:19:30.4 BB: And the requirements are typically set... There's a lower one and an upper one. We don't say the meeting is gonna start at 10 o'clock, because if you understand variation, we can't get exactly 10. We can't get exactly 1.00 inch thickness for the plate, for the hole diameter. So then, we define quality. Typically, this is what people do in organizations. This is what I... I didn't know anything about this until I started... Well, what are quality people doing? They're asking, "Does this thing meet requirements?"

 

0:20:07.4 BB: And even towards that end, I remember asking a... I had a coworker who's a quality engineer, I've got many friends who are quality engineers, and this one guy came into a class one day that I was doing, and he's just beating his head against the wall over... I said, "What's...what have you been doing lately." He says, "All I'm doing Bill is dispositioning hardware, dispositioning hardware," which translates to trying to find out why something doesn't meet requirements and coming up with a corrective action, or buying it as is. So either changing the requirements or explaining why we can use it as is. But he's just like, "That's all I'm doing lately. I'm just getting overwhelmed with all this." So I said, "Well, what if overnight, by some miracle, you were to come in, and beginning first thing tomorrow morning, everything meets requirements." And that's the goal of quality in most organizations, is that everything meets requirements. So I said, "If everything beginning tomorrow morning, through some overnight miracle, meets requirements, hence forth, how would your life change?" He says, "I wouldn't have a job." [laughter]

 

0:21:26.9 BB: I said, "What other changes would you begin to see throughout the day, the coming days?" He says, "My boss's job wouldn't exist." I said, "Okay, keep going, keep going." He says, "Well, the whole organization will have no reason to exist." [laughter] And that's not farfetched. And I throw that out, the challenge to our listeners is, seriously, if everything in the organization beginning tomorrow morning met requirements through some... Dr. Deming would say as you know, by what method? Let's say the method exists, what would change? Now, I'm not saying these people necessarily get laid off. Maybe they get moved elsewhere. Maybe we set our sights higher and try to do things we've never done before, 'cause now everything's gonna be a home run. But that's what I find in corporations, I think, a very extremely commonplace 21st century Andrew explanation of quality is, "Does it meet requirements?" And that goes... And this whole idea of setting requirements, setting a lower and an upper, allowing for variation, that goes back to the early 1700s. And I've also read that it might go back even longer in China. We were talking earlier about China.

 

0:22:58.2 BB: And so if it goes back longer, all the better. And the point being, fast forward to today, that's largely where we are today, in this early 1700s. Does it meet requirements? Yes or no? And what Dr. Deming is talking about is not acceptability. First of all, he would say there's a place for acceptability. There's a place for meeting requirements, maybe based on the circumstances, all that matters is that it meets requirements. So if you're a pitcher and you're throwing a ball and the batter can't hit the ball, and as long as it's somewhere in the strike zone, or if you're kicking the ball into the net in a football match or otherwise known as soccer in the States, maybe the goalkeeper's so bad, all you gotta do is... They'll jump out of the way.

 

0:23:49.7 BB: Now, on the other hand, there may be a different batter or a different goalkeeper where you've gotta go where they aren't. And that gets into understanding variation and where we are in meeting requirements matters. And what I find is most organizations I've ever interacted with, and this is through Rocketdyne, as owned by Boeing, going to many different divisions of Boeing around the country, doing seminars across England, across New Zealand, university classes and university lectures, hundreds of them. I've never come across... With rare exception have I ever come across anyone who says, "Bill, in our organization, quality is more like what Dr. Deming is talking about." Meaning, "We are doing more than meeting requirements, we are focusing on where the ball is placed in the strike zone, where the ball is placed in the net, and we specialize in that because we have seen great advantage." Most people I present this to don't even know that's a possibility, don't even know it's anything to lobby for.

 

0:25:12.0 BB: And so to that I'd say, whether you're looking at Operational Excellence, which is kind of a hybrid of Lean and Six Sigma or Six Sigma alone, or Lean alone, everything I've studied in all of those go back to the question of quality being... Quality's defined Phil Crosby-wise, which is striving for zero defects, striving for everything meeting requirements, and then we're done. And when I joined The Deming Institute, part of my excitement was helping the organization differentiate Dr. Deming's ideas over these other quality management ideas and other management ideas as uniquely positioned to differentiate, to understand that there's an opport... There are incredible opportunities for realizing that everything that meets requirements is not the same. And how do we put a value on that? And one is, the better we understand that, the better we can minimize scrap and rework problems if we're paying attention to where we are, if the process is in control, if we can use that concept from variation. And then simultaneously, another...

 

0:26:35.7 BB: There's two opportunities. One is, I think the better we manage variation, the less likely we're gonna have scrap and rework. Wouldn't that be great? And two is that that buys us time to think about... 'cause now that we're not in that constant firefighting mode, now we can start to think about how to manage variation of the system and to improve how things integrate. And we did both of those at Rocketdyne. But I've yet to find many organizations who say, "Been there, done that. Been there, done that."

 

0:27:12.1 AS: So, if we think about the takeaways for someone listening or watching this, you've talked about Misunderstanding Quality, you've talked about everything meet requirements, you've talked about, what century are we in? So, what should they take back to their business from this discussion that can give them a foundation of a starting point of this series and what you're saying on this point? What do you want them to take away?

 

0:27:40.3 BB: First, I would say I wouldn't necessarily go tell anybody about this yet. [laughter] I'd say, "Hmm, this Deming stuff. There's something to this. What I'm hearing from Bill is there's something here that I can't get elsewhere." You can listen to our prior sessions. There's 22 of them. We're gonna be adding new aspects to that...

 

0:28:07.9 AS: Okay. So, let's talk about that for a second. So, learn on your own first. Maybe it's a personal transformation. Start with that?

 

0:28:09.9 BB: Yes.

 

0:28:14.8 AS: Okay.

 

0:28:16.1 BB: Absolutely... Yes, absolutely...

 

0:28:18.1 AS: What would be number two that you want them to get away from this?

 

0:28:22.9 BB: Well, my advice is, you're not crazy that there's things about the Deming philosophy that are unique, that are... I think so much... There's a lot of people excited by what Dr. Deming's offering. I think there's more than meets the eye. I mean...

 

0:28:46.1 AS: Okay, so let's talk about that for a second. So, there's unique things about Deming, and one of them that you talked about is the systems thinking?

 

0:28:54.6 BB: Yeah. I mean, imagine... What I liken it to, instead of zero defects being the goal, which is what most organizations are striving for, and their quality systems are about, "We wanna get zero defects over here, over here, over here." We're juggling all these places, trying to get to zero defects all over the place. What if they saw zero defects as not the destination, but the starting point? That, to really understand continual improvement, zero defects is not the goal. Imagine that as the starting point. At least, imagine the ability to go across that apparent finish line and realize... Or the analogy I would use is, go through the door called "zero defects is the end," and realize there's a lot more, there's so much more to do when you start to look at things with a Deming view. And so, instead of thinking, we're striving for zero defects and then we're done, to me, that's the starting point to really begin to appreciate what it means to look at systems.

 

0:30:07.7 AS: Okay. So we've got, start with your own personal transformation and learn the material, and understand that there's some unique things about the Deming teachings, in particular, systems. And understand that... I kind of visualized while you were talking, a person walking along with no knowledge of many things, but they're inquisitive, and what they find is a wrench. And then they start to find that there's ways to use this wrench in their daily life. And then later, they find that there's other tools like a screwdriver. And all of a sudden, they found this world of tools, and now they have this amazing toolbox. But then all of a sudden, they meet someone that's taking those tools and creating a car, or a this, or a that. And then they realize, maybe the tool has gotta be the starting point, or is a starting point. But what the tools can create and what additional tools can create is so much bigger than just that first wrench that you picked up.

 

0:31:14.2 BB: It's the appreciation. And I'm glad you brought those points up. Dr. Deming talks about tools and techniques. A control chart is a tool. A run chart is a tool. Design of Experiments are... These are tools. And so that's a tool. A technique is, how do we create a control chart? That's a technique. What I try to do with audiences, whether it's clients or university classes or whatever, is help them differentiate. Tools and techniques are about improving efficiency, doing things well. Doing something faster or cheaper... What's unique to Dr. Deming is not the tools you'll find him talking about, but the concepts he's talking about, and the idea of looking at things as a system. Dr. Deming defines quality, and it can be obtuse for people. I find it fascinating. He says, "Product or service possesses quality if it helps someone and enjoys a sustainable market." So, traditional quality is me throwing the ball to you, Andrew, or passing a football or basketball, whatever it is, and judging the quality of the pass when the ball leaves my hand. And we say, "That was a good pass."

 

0:32:49.9 BB: What Dr. Deming's talking about is, it's a good pass, just as if it's a good conversation, if you can hear what I say, we can go back and forth. And so, Deming's perspective on quality is not what's good for me, the producer, but it's how well does it fit you that I'm delivering something that matches... That we're synchronous, that... It has to be good for you, not just me checking off and saying, "This is good, this is good, this is good. Boom." That it's not good until you say it's good. That's a different view. It's the same thing as, "Well, I told you." Then you say, "Well, I didn't hear it." I says, "Well, then why don't you have your ears checked?" [laughter] Dr. Deming's talking about, it's not a conversation if you can't hear it. And so, when he's explaining to Bill Cooper and Gipsie that people are having a hard time, he was struggling to improve that 'cause he knew that when you begin to understand that what you're saying is not heard, Deming understood it was his obligation to try harder. And part of the Deming philosophy is understanding that it's not just me throwing it and saying, "There it is." It's listening for the feedback as to, "Did it make sense?" So, quality in that arena is a mutual phenomenon, not unilaterally my thing.

 

0:34:16.7 AS: Okay.

 

0:34:17.8 BB: And I would welcome anyone, as we've done in the past, to reach out if there are questions, comments, observation you'd like to share, and we can use that feedback in future sessions.

 

0:34:30.6 AS: Fantastic. Well, that's an excellent kickoff. And let's end with the idea that quality is a mutual phenomenon. I think that's a good statement. So Bill, on behalf of everyone at The Deming Institute, I want to thank you again for this discussion. And for listeners, remember to go to deming.org to continue your journey. And if you want to keep in touch with Bill, just find him on LinkedIn. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."