2003 Deming Institute PowerPoint Slides

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I was asked by Ron Moen to help edit some of the slides and create some charts. This is the entire compilation of slide from this amazing four-day seminar offered by the Deming Institute in 2004.

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  • Notes from GM video: Boeing: where’s the crisis? You are – in are in the best position to improve Customer’s expectation: Customer has no expectation, only what we have to offer – what we expect. No customer asked for electric light, photography, telephone, automobiles…. The producer has to watch out for the customer because they keep him alive. Ask, what would he be willing to buy? Educated cust may know about his needs – may specify them, wise customers will listen to his suppliers – work together as a system. People are asking for better school w/o knowing how to improve them. Objective is to have happy customers but is it sufficient? Come back and wait in line? Carburetors are gone yet 35 years ago they all had gone! Fuel injector replaced it in spite of higher cost. Companies in the business of making carburetors were doing great! Happy customers, cont improvements, etc. Problem is that they were in the busines of making carbs – not looking into the future. Never asked what to do in 2-5-10 yrs. Didn’t ask what the best way was to improve the way a carb was working in terms of effectivness. What business are we in? What product or service would help our customers more? Think about the future! Defects – nothing gone wrong, will that keep you in business. S/T more required. Ex. Defects = zero, (pg. 13 of book), demand goes up, performance up, & style up. Best effort, gadget, etc. Ruined by best effort! Knowledge is solution. Best effort w/ knowledge is key – not just hard work. No substitute for knowledge. Annual appraisal, make everyone accountable. For what? MBO & MBR & Ranking! Reward and punish! All work. Applies to the West and industry in general. Addressed many suppliers with GM.
  • Intro to a system Ch. 3 Interconnected components that work together to try to accomplish the aim of the system. See flow diagram on p 4 of out of the crisis shows flow of material and flow of information. Helps predict which components of the system will be affected. Everyone knows which part of the chart they belong to! (This is D’s way of seeing a company). This diagram is far more effective than the pyramid. The pyramid doesn’t describe the job of the system, only the position of people. The pyramid destroys the system and what it was intended to do. It actually fragmentizes the organization. A system must have an aim, w/o an aim, there’s no system. System must be managed. Management should achieve optimization as maximum benefit to the aim of the system. Optimization is the process of orchestrating all components toward the aim of the system. Op is the accomplishment of the aim. Hleps plan for the future, not just the next five years.
  • Deming is right in touting the merits of intrinsic motivation. Indeed, many organizations have shifted that aspect of performance – and they have often done it thought lousy pay and performance management strat. As well as bad supervisions and burec administrative policy. But to say that all extrinsic reward are bad is to miss the point. A well designed compensation prog that is fully aligned with an organization’s valued and culture does wonders for self esteem.
  • If 1 represents performance of the org., 2 shows the need to improve it.
  • 1. Variation studies show that some workers shouldn’t get appraised (red bead)
  • People, materials, methods, Equipment, environment
  • The leader has to create trust otherwise they won’t go along with the leaderships
  • See p122, forces of destruction diagram.
  • 2 17 Research: if can’t answer these probably can’t get improvement If can, do get it Question2: not always measurement step – could be feedback step, sometimes numerical data sometimes not 1. Aim question 2. Feedback question 3. Ideas question 2,3 are ways of managing the current knowledge.
  • See p. 132 Plan: make a prediction to see what’ll happen if we do this. Ask what the basis is for prediction. Planning requires prediction, prediction requires theory. Use this as a tool to help Sarah with the Hotel’s registration.
  • 2 17 Research: if can’t answer these probably can’t get improvement If can, do get it Question2: not always measurement step – could be feedback step, sometimes numerical data sometimes not 1. Aim question 2. Feedback question 3. Ideas question
  • Some groups hat a choice: either predict that cycle is same and went from 2 to 3 or spend cash to see if the pattern would vary. Charge for pattern change and waste $5K.
  • If one counter example doesn’t fit the theory, theory must be changed.
  • Chant éclair's theory: crow and sun comes up. One day doesn’t crow and sun still comes up. Theory needs revision. Multiple cycles are required.
  • See p. 132 Plan: make a prediction to see what’ll happen if we do this. Ask what the basis is for prediction. Planning requires prediction, prediction requires theory. Use this as a tool to help Sarah with the Hotel’s registration.
  • See p. 132 Plan: make a prediction to see what’ll happen if we do this. Ask what the basis is for prediction. Planning requires prediction, prediction requires theory. Use this as a tool to help Sarah with the Hotel’s registration.
  • Started with Hertzberg’s hygiene affecting job dissatisfaction. Motivator factors affect job satisfaction Promotion opportunities Opps for personal growth Jeffrey Pfeffer (leadership expert) Employment security Selective hiring of new personel Self-managed teams, decentratlization of decision making Vs. organization design principles Comparatively hi compansation based on org perfomance Extenesive training Reduced status distiitoncho Extensive sharing of financial performance into (open book management) (all anecdotal evidence) Wholefoods and Southwest Airlines The human equation: building profit by… (his book) Five key dimensions Integrity: honesty, truthfulness Competence: technical, interpersonal, knowledge and skills Consistency: reliability, predictability, walk the talk Loyalty: Openness
  • 2 17 Research: if can’t answer these probably can’t get improvement If can, do get it Question2: not alwaysl measurement step – could be feedback step, sometimes numerical data sometimes not 1. Aim question 2. Feedback question 3. Ideas question
  • Argyris drew from Senge. This applies to 98% of people in the U.S.! Try to win, not lose. Question for Nida : other than the system, is accountability part of the reason for these core values ?
  • Diversity???
  • mi
  • 2003 Deming Institute PowerPoint Slides

    1. 1. 09/19/13 1 Quality, Productivity, &Quality, Productivity, & Competitive Position SeminarCompetitive Position Seminar by Nida Backaitis & Ron Moen Las Vegas 13-16 October 2003
    2. 2. 09/19/13 2 DAY 1 (Monday, October 13) 8:00 a.m. Registration 9:00 Welcome and Overview of Seminar Quality and the customer Dr. Deming: “How are we doing?” (Ch.1) Facilitator Presentation: Small Group Discussion 10:40 -Break- 11:00 Small Group Discussion Dr. Deming: “The Heavy Losses” (Ch.2) 12:00 -Lunch- 1:00 Facilitator Presentation: Small Group Discussion Dr. Deming: “Introduction to a System” (Ch.3) 2:40 -Break- 3:00 Facilitator Presentation: Small Group Discussion Dr. Deming: “Destruction of a System” (Ch.3) 4:00 Working Group Session 5:00 Stop
    3. 3. 09/19/13 3 DAY 2 (Tuesday, October 14) 8:00 a.m. Reports of Working Groups Review of Day 1, questions 9:00 -Break- Dr. Deming: “The System of Profound Knowledge” (Ch.4) Facilitator Presentation: Small Group Discussion 10:40 -Break- 11:00 Dr. Deming: “The Experiment with the Red Beads” (Ch.7) Facilitator Presentation: Small Group Discussion 12:00 -Lunch- 1:00 Marshall Industries Dr. Deming: “Motivation”(Ch.4) 2:40 -Break- 3:00 Facilitator Presentation: Small Group Discussion Leadership and Management of People (Ch.5-6) 4:00 Working Group Session 5:00 Stop
    4. 4. 09/19/13 4 DAY 3 (Wednesday, October 15) 8:00 a.m. Reports of Working Groups 9:00 -Break- 9:15 API Model for Improvement: PDSA (Ch.6) Prediction Game 10:40 -Break- 11:00 Dr. Deming: “Education” (Ch.6) 12:00 -Lunch- 1:00 Dr. Deming: “Shewhart and Control Charts” (Ch.8) Facilitator Presentation: Small Group Discussion 2:40 -Break- 3:00 Dr. Deming: “Common Causes of Accidents” (Ch.8) Facilitator Presentation: Small Group Discussion 4:00 Stop
    5. 5. 09/19/13 5 DAY 4 (Thursday, October 16) 8:00 a.m. Review of Day 3, questions Dr. Deming: “The Funnel Experiment” (Ch.9) 9:00 -Break- 9:15 Facilitator Presentation: Small Group Discussion 10:40 -Break- 11:00 Dr. Deming: “Some Lessons in Variation” (Ch.10) Facilitator Presentation: Small Group Discussion 12:00 -Lunch- 1:00 Remarks on Service Industries Common misunderstandings of Deming’s philosophy 1:45 Memories of Dr. W. Edwards Deming 2:00 Reflections of Seminar 2:30 Close
    6. 6. 09/19/13 6 1.0 Overview of Seminar What topics would you really be disappointed if we did not cover them by Thursday afternoon?
    7. 7. 09/19/13 7 1.1 Quality and the customer • Where do customer expectations come from? • Will happy and loyal customers ensure business success? • Will zero defects keep you in business? • What is the source of innovation? • Who in an organization is responsible for the quality of a product or service that the organization produces?
    8. 8. 09/19/13 8 1.1 Quality and the customer 1. Where do customer expectations come from? 1. The company: “customers never asked for TV, etc” 2. Will happy and loyal customers ensure business success? 1. No – look to the future! Duties of a leader. Carburetor example 2. Example: typewriters 3. Will zero defect keep you in business? 1. No. Pg. 11 & 13 4. What is the source of innovation? 1. Employees of company, supplier, study customer. 5. Who is an organization is responsible for the quality of a product or service that the organization produces? 1. Top management is responsible for the system, so they have to decide.
    9. 9. 09/19/13 9 1. A person’s performance on the job is largely under his or her control 2. Weaknesses of an individual that are identified by the appraisal system can be remedied by the individual Strongly disagree Disagree Agree Strongly Agree Strongly disagree Disagree Agree Strongly Agree 1.2 Some Assumptions
    10. 10. 09/19/13 10 3.Everyone has a need for recognition 4.Judging people is not harmful to them Strongly disagree Disagree Agree Strongly Agree Strongly disagree Disagree Agree Strongly Agree
    11. 11. 09/19/13 11 5.Competition will improve performance 6.All variation (in a measure) can be explained Strongly disagree Disagree Agree Strongly Agree Strongly disagree Disagree Agree Strongly Agree
    12. 12. 09/19/13 12 1.3 Dr. Deming: “The Heavy Losses” x + [yx] = 8 Where: x = contribution of the individual y = contribution of the system yx = effect of the system on his performance 8 = performance of the individual Small Group Discussion: Give some examples of jobs where 1. x = 0 (or close to 0) 2. yx = 0 (or close to 0)
    13. 13. 09/19/13 13 1.3 Dr. Deming: “The Heavy Losses” Discuss the pros and cons of the present practice of “Setting numerical goals”
    14. 14. 09/19/13 14 Appreciation of a system • Strong relationships with vendors and distributors – Supplier and customer working together as a system continuously
    15. 15. 09/19/13 15 1.4 Introduction to a System A system is a network of interdependent components that work together to try to accomplish the aim of the system. Properties of a system include: • A system must have an aim. The aim is a value judgment. • A system must be managed. It will not manage itself. If components are left alone, they will tend to optimize themselves. • Optimization of the components does not optimize the whole (because of interdependence). • The larger the system, the more difficult it is to manage. • A system cannot understand itself. Help must come from outside the system. • The performance of a system depends more on how its components interact than how they act independently of each other
    16. 16. 09/19/13 16 Suppliers of Raw Materials A B C D E F G Consumer research Consumers Distribution Test of processes, machines, methods, costs Production, assembly, finishing, inspection Receipt and test of Materials Design and Redesign 1.4 Deming’s view of Production as a System (1950) Aim Stage 0: Generation of ideas
    17. 17. 09/19/13 17 Evolving View • Deming (1950) - anything by this author • Senge (1990) The Fifth Discipline and Fieldbook • Margaret Wheatley (1992) Leadership and the New Science • Russell Ackoff: Recreating the Corporation: A Design of Organizations for the 21st Century (1999)
    18. 18. 09/19/13 18 Whole consisting of two or more parts that satisfies the following five conditions: (1). The whole has one or more defining properties or functions. (2). Each part in the set can affect the behavior or properties of the whole. (3). There is a subset of parts that is sufficient in one or more environments for carrying out the defining function of the whole; each of these parts is necessary but insufficient for carrying out this defining function. (4). The way that each essential part of a system affects its behavior or properties depends on (the behavior or properties of) at least one other essential part of the system. (5). The effect of any subset of essential parts on the system as a whole depends on the behavior of at least one other such subset. Ackoff’s Definition of System
    19. 19. 09/19/13 19 Properties of a System (Ackoff) System is a whole that cannot be divided into independent parts without loss of its essential properties or functions When the performance of the parts of a system, considered separately, are improved, the performance of the whole may not be (and usually is not) improved.
    20. 20. U.S. Fishing Industry - New England Waters
    21. 21. Profitability Brings High Tech Foreign Competition
    22. 22. U.S. Fishing Industry Lobbies •Low interest loans to upgrade technology •Better enforcement of international borders
    23. 23. Results • Help U.S. industry be more competitive by equipping them with better technology and by better border enforcement • Increased yields and profitability • Low interest loans attract additional entry into the U.S. fishing industry • Waters become more crowded with better equipped ships • Decreased yields and profitability Intended Unintended
    24. 24. USG to the Rescue Again Solutions: 1. $Incentives$ to EXIT the Industry 2. Sink ships to create artificial reefs - fertile breeding ground for fish
    25. 25. Sales blitz 1.5 Sub-optimization of a System Design and Redesign Consumer researchSuppliers of Raw Materials Receipt and test of Materials Consumers Distribution Test of processes, machines, methods, costs Production, assembly, finishing, inspection A B C D E F G Stage 0: Generation of ideas
    26. 26. Point of View of Salesperson Quota Quality? Com m ission Hawaii Impact on Organization? Impact on the Customer?
    27. 27. 09/19/13 27 MBO’s Create Local Optimization and Supplant the Aim of the Organization; Customer often Gets Lost • Credit dept: days outstanding • Division managers: division P&L • Marketing: Sales vs forecast • Sales: Gross profit dollars, quotas • Manufacturing: Quality • Operations: On time delivery
    28. 28. 09/19/13 28 Design and Redesign Consumer researchSuppliers of Raw Materials Receipt and test of Materials Consumers Distribution Test of processes, machines, methods, costs Production, assembly, finishing, inspection A B C D E F G Stage 0: Generation of ideas Aim Supplanted Aim Distorts Effort within the Organization “Does anyone give a hoot about making a profit?”
    29. 29. 09/19/13 29 “Does anyone give a hoot about making a profit?”
    30. 30. 09/19/13 30 1.6 Deming’s view of Production as a System (1994) Design and Redesign Consumer researchSuppliers of Raw Materials Receipt and test of Materials Consumers Distribution Test of processes, machines, methods, costs Production, assembly, finishing, inspection A B C D E F G Stage 0: Generation of ideas
    31. 31. 09/19/13 31 1.6 Advantages of viewing your organization as a system The diagram directs the knowledge of the organization to the aim of the system, geared to the market • The built-in cycle to design and redesign allows the organization to develop new products and services • The diagram shows people what their jobs are and how they should interact with on another as part of a system • The diagram makes it possible for managing the components as a system toward achievement of the stated aim (optimization)
    32. 32. 09/19/13 32 • What? Products and services, Processes and systems • Why? To better match the present & future needs of the consumers • Methods? – Plan for improvement • Integrate with business planning • Develop objectives, establish charters – Manage improvement efforts • Provide guidance, remove obstacles • Redirect & redeploy resources Stage 0: Generation of ideas Design and Redesign Consumer research The drivers of the system • What? Communication and feedback between the manufacturer and users and potential users of the product or service • Methods? – Sampling and design of experiments – Art of questioning and interviewing
    33. 33. 09/19/13 33 Deming on Stage 0: Generation of ideas (1994) “The 0-th stage is the foundation for the whole project. The 0-th stage is the place for ideas and brainstorming, to avoid so far as possible changes in direction and backtracking in later stages. Changes in direction cost more and more with each stage” (Chapter 6 on Management of People)
    34. 34. 09/19/13 34 Stage 0: Generation of Ideas Why? Deming (1994): “…it is necessary to innovate, to predict the needs of the customer, give him more. He that innovates and is lucky will take the market.”
    35. 35. 09/19/13 35 Stage 0: Generation of ideas By What Method? • Change Concepts • Using Technology • Critical Thinking • IDEO Brainstorming • Metaphorical Thinking • Observation of customers and users • Provocation • Prototyping • Idealized Design
    36. 36. 09/19/13 36 WORKING GROUP SESSION Stage 0: Generation of ideas • Using the method of observation at a Las Vegas hotel, generate some new ideas for design or redesign of: – A) Hotel registration – B) Gambling at a casino – C) Service at a restaurant – D) All of the above • Report out at 8 am tomorrow
    37. 37. 09/19/13 37 2.1 A System of Profound Knowledge
    38. 38. 09/19/13 38 A System of Profound Knowledge • Is – A contribution to the emerging paradigm in the sciences and in business – Deming, Senge, Argyris, Ackoff, Schein, Wheatley, Capra ……………. • Is NOT – SPC, Quality Circles, self-managed teams, re- engineering, TQM, ISO 9000
    39. 39. 09/19/13 39 W. Edwards Deming • 1900-1993 • Humble beginnings • 1960 - Second Order of the Sacred Treasure - Emperor Hirohito • Deming Prize • 1980 - “If Japan Can, Why Can’t We?” • 1986 - Science and Technology Hall of Fame • 1987 - National Medal of Technology - Reagan • 1988 - National Academy of Sciences - Distinguished Career in Science
    40. 40. 09/19/13 40 What Was Deming Aiming for? The aim of this book is a transformation of the style of American management . . . Not a job of reconstruction, nor is it revision. It requires a whole new structure, from foundation upward. Mutation might be the word, except that mutation implies unordered spontaneity. Transformation must take place with directed effort. Out of the Crisis (1982, 1986)
    41. 41. 09/19/13 41 The New Economics • This book is for people who are living under the tyranny of the prevailing style of management . . . (which has) led us into decline. • Most people imagine that the present style of management has always existed, and is a fixture. Actually, it is a modern invention - a prison created by the way in which people interact. • The Route to transformation is what I call Profound Knowledge.
    42. 42. 09/19/13 42 The New Economics • The aim of this book is to start the reader on the road to knowledge, and to create a yearning for more knowledge . . . • 97% of the gains have not yet been realized
    43. 43. 09/19/13 43 Deming’s View of his Legacy When asked how he would like to be remembered, Deming replied: “I probably won’t even be remembered . . . Well, maybe . . . As someone who spent his life trying to keep America from committing suicide.”
    44. 44. Reaching Limits of Progress with Current Way of Thinking The present system limits performance and has put us into decline Transformation makes possible new levels of performance
    45. 45. 09/19/13 45 Reaching Limits of Current System • Learn faster - prepare for a future that cannot be predicted • Be more sensitive to environmental change and respond faster • Encourage innovation • Access employees’ intelligence and commitment • Increasingly demanding customers • From - Cheaper better faster • To - Free, perfect, now • To - Anything, anywhere, anytime
    46. 46. 09/19/13 46 Deming’s Organization • People are able to learn and are willing to contribute that learning • Organization is able to benefit from that learning • Organization can respond and adapt quickly to changes in the environment
    47. 47. 09/19/13 47 Paradoxical Proverbs - Waitley • You must learn from your past mistakes, but not learn on your past successes • You must stick to your convictions, but be ready to abandon your assumptions • You must continue to gain expertise, but avoid thinking like an expert • You must act self-employed, but be a team player Dennis Waitley, Empires of the Mind: Lessons to Lead and Succeed in a Knowledge-Based World
    48. 48. 09/19/13 48 Deming: Progress by Reconceptualizing World View • The way we see the world determines how we manage • If we expand our understanding of the world, we can change the way we manage, and change the course of our nation - jump into a new age
    49. 49. 09/19/13 49 Deming Worked on the Individual • “What do you do?” • Attempt to uncover world view • Aim: begin reflection in the individual; first step in opening up thought process; get to level of assumptions • “Need we proceed in ignorance?”
    50. 50. 09/19/13 50 “We have a lot to learn” • What passes for knowledge cannot be looked at outside of the context of assumptions and value systems that generated it • Knowledge develops within a system of beliefs, values, assumptions • “We have a lot to do. Let’s do some thinking.”
    51. 51. 09/19/13 51 Organization • Includes the set of assumptions under which the organization operates as well as the systems, work processes, and management practices built on those assumptions
    52. 52. Aspects of Organization Culture, paradigms, assumptions, beliefs, values Systems • people • work • management Behaviors, methods, practices Economic social political environment
    53. 53. What is this concept called “wet?”
    54. 54. 09/19/13 54 Newtonian/Cartesian/Machine View of World • Developing since 17th century – Galileo, Newton, Descartes, Bacon, Darwin • Many gifts – Man on the moon, food supply, atomic energy, life span, medicine, mass production, management system • Some unintended effects – Acid rain, ozone hole, nuclear bombs, starvation in spite of improved agriculture, deforestation, drop out rate, crime
    55. 55. Facets of Machine-View of World • Galileo (1564-1642) – Science should be restricted to what could be measured or quantified or put into mathematical terms - should not rely on logic alone • Descartes (1596-1650) – Separation between mind and matter – Analysis: anything can be understood by reducing it to its constituent parts – Material Universe is a perfect machine, governed by exact mathematical laws – Scientific knowledge should be used to render ourselves masters and possessors of nature
    56. 56. Facets of Machine View of World • Newton (1643-1727) – General laws of motion govern objects in the universe; events can be understood without reference to the environment – Picture of the world as a perfect machine (Descartes) • running according to Newtonian laws of motion • Completely deterministic • Future can be predicted with absolute certainty • All that happens has definite cause and effect
    57. 57. 09/19/13 57 These ideas applied to Organizations • Organizations are machines that serve the owner’s purpose • Machines are more reliable than people as sources of energy to do work; people assigned tasks that cannot be mechanized • People are poor substitutes for machines • Managers’ job is to ensure results; enforce rigorous rules • Any results that deviate from the expected are to be punished • MBO - manage complex organizations by breaking them into parts
    58. 58. 09/19/13 58 Systems View • World is evolving and dynamic • Whole cannot be understood in terms of its parts • Systemic properties destroyed when system is broken up into isolated elements • Structure arises from interaction of parts • Interrelatedness of body and mind; physical, biological, psychological, social, cultural.
    59. 59. A System of Profound Knowledge Appreciation for a System • Interdependence, dynamism • Non-linear cause and effect Knowledge of Variation • World is not deterministic • Variation is to be expected • Prediction - analytic studies • Measurement is not objective Theory of Knowledge • Theories are not true or untrue; they are useful or not • Theory and experience are needed to learn Knowledge of psychology • Interaction between people • Motivation • Change
    60. 60. System of profound knowledge Ch4 the system of PK provides a new map of theory by which to understand and optimize the organization that we work in and thus to make a contribution to the whole country. – W.E. Deming, The New Economics • Elements of the system of profound knowledge – Appreciation for a system – Knowledge about variation – Theory of knowledge – Psychology Appreciation for a system Theory of knowledge Knowledge about variation psychology benchmarking
    61. 61. 2.2 The Red Bead Experiment
    62. 62. 09/19/13 62 2.3 Lessons from the red bead experiment 1. What information do you need to set the price of white beads? 2. How could the “White Bead Factory” have stayed in business? How do you know? 3. What is the difference between mechanical and random sampling? 4. What is meant by "the results will not change if we follow the same procedure?" 5. What was the impact of the manager? 6. What were the manager’s theories about performance improvement?
    63. 63. 09/19/13 63 2.5 Leadership and Management of People
    64. 64. 09/19/13 64 Job of a Leader 1 2 Leaders work to improve the systems that they manage, not just analyze and dissect the results of the past
    65. 65. 09/19/13 65 Ranking vs. Improvement 1 2 1 Ranking Focus on individual results within the system Improvement Focus on cause system to improve performance Does ranking help improve performance?
    66. 66. 09/19/13 66 Deming on ranking . . . In place of judgment of people, ranking them, putting them into slots (outstanding, excellent, on down to unsatisfactory), the aim should be to help people optimize the system so that everybody will gain
    67. 67. 09/19/13 67 What may happen when people are asked to reach a goal that is outside the current system? • People tend to do what makes sense to them: – Improve the process so that the goal is achievable – Distort the process to achieve the goal – Fudge the numbers
    68. 68. goal UCL LCL People material methods equipment environment
    69. 69. 09/19/13 69 Another look at Ranking and Rating Do they help achieve the aim? • Shift focus away from aim and from serving the customer – Is the job to get a good rating? – What about the customer? • Demotivating • In a world of limited time, is this the best way to spend it?
    70. 70. 09/19/13 70 Job of a Leader A B •Identify and remove obstacles to the organization working as a system, serving the customer, and making a profit •Continuously enhance the conditions that would permit people to learn and be willing and able to contribute their knowledge and energy to the organization
    71. 71. 09/19/13 71 Deming on People • “Precious gems” • Dignity, self-esteem: bedrock of creativity and joy in work • People have intrinsic motivation • People like to learn • Right to “Joy in learning, joy in work” • Sources of creativity
    72. 72. 09/19/13 72 “We have been destroying our people, from toddlers on though university, and on the job” Forces of Destruction Diagram, p122
    73. 73. Forces of destructions (p.122) Life beginsLife begins Life endsLife ends Suboptim iztion.Every group, Suboptim iztion.Every group, every division,a profitcenter every division,a profitcenter Explanation ofvariance Explanation ofvariance Num ericalgoals Num ericalgoals withouta m ethod withouta m ethod Incentive pay. Incentive pay. Pay forperform ance Pay forperform ance M eritsystem .Judge people, M eritsystem .Judge people, Putthem into slots. Putthem into slots. Com petition Between Com petition Between people,groups,divisions people,groups,divisions Forced distribution ofgrades Forced distribution ofgrades In schools.G old stars. In schools.G old stars. These forces cause humiliation, fear, self-defense, competition for gold star., high grade, high rating on the job. They lead anyone to play to win, not for fun. They crush out joy in learning, joy on the job, innovation. Extrinsic motivation (complete resignation to external pressure) gradually replaces intrinsic motivation, self-esteem, dignity.One is born with intrinsic motivation, self esteem, dignity, cooperation, curiosity, joy in learning. These attributes are high at the beginning of life, but are gradually crushed by the forces of destruction.
    74. 74. 09/19/13 74 Human Relationships • Must be informed; understand aim and how they fit in • Cooperation, participation, trust; organization needs everyone’s mind and heart • Leadership through knowledge and influence throughout organization; formal power may be needed occasionally but should be used sparingly • Education and development of people crucial to organization’s ability to learn and adapt
    75. 75. 09/19/13 75 What kind of work is suited to human beings? • Humans must have a chance to take pride in their work – Must know the context of the work they do and agree the contribution they make is worthwhile – Must have a chance to be creative, have some discretion, choice (Edelman)
    76. 76. 09/19/13 76 WORKING GROUP SESSION A. Review the 14 points of Dr. Deming in Chapter 2 of “Out of the Crisis.” 1. What are your 14 points are for today’s world? Why? 2. Which of your 14 points will still be around in 2020? Why? (What will work look like in 2020?) B. Review the deadly diseases of Dr. Deming in Chapter 3 of “Out of the Crisis.” 1. What are your deadly diseases for today’s world? Why? 2. Which of your deadly diseases will still be around in 2020? Why?
    77. 77. 09/19/13 77 Working Group Session 2 (October 16, 2002) Which of your deadly diseases will still be around in 2020? Why? 1. Lack of constancy of purpose 2. Emphasis on short-term profits 3. Annual performance review 4. Mobility of management 5. Running a company on visible figures alone • Failure to honor people • Erosion of Ethics • Lack of spirituality
    78. 78. 09/19/13 78 3.1 PDSA and Responsibility
    79. 79. What are we trying to accomplish? How will we know that a change is an improvement? What change can we make that will result in improvement? Model for Improvement Act Plan Study Do
    80. 80. 09/19/13 Fundamental Questions for Improvement • What are we trying to accomplish? • How will we know that a change is an improvement? • What changes can we make that will result in an improvement?
    81. 81. 09/19/13 The PDSA Cycle for Learning and Improvement Act • What changes are to be made? • Next cycle? Plan • Objective • Questions and predictions (why) • Plan to carry out the cycle (who, what, where, when) • Plan for data collection Study • Complete the analysis of the data •Compare data to predictions •Summarize what was learned Do • Carry out the plan • Document problems and unexpected observations • Begin analysis of the data
    82. 82. 09/19/13 Use the PDSA Cycle for : • Developing a change • Testing a change • Implementing a change
    83. 83. 09/19/13 83 Sequential Building of knowledge Include a Wide Range of Conditions in the Sequence of Tests Breakthrough Results Theories, hunches, & best practices Learning and improvement A P S D Evidence & Data A P S D A P S D A P S D Develop a change Test a change Test new conditions Implement a change
    84. 84. 09/19/13 What are we trying to accomplish? Create a “revolutionary product” by using a new technology How will we know that a change is an improvement? Application of this new technology is given by solving a number sequence What changes can we make that will result in an improvement? Don’t know the number sequence! 3.1 Exercise
    85. 85. 09/19/13 85 Prediction Game: Application of the PDSA Cycle • Teams start with $50,000 • Purpose of the game is to predict the number sequence • Teams have three options for their plan: 1. Develop a change (gather more information) 2. Test a change 3. Implement a change
    86. 86. 09/19/13 86 Prediction Game You are bankrupt if your losses exceed $50,000!
    87. 87. 09/19/13 87 Prediction Game Options: Cost Gain 1. Develop a change $1,000 (gather more information) 2. Test a change $2,000 (predict the next number) If prediction is correct $6,000 If prediction is off by 1 ($3,000) If prediction is off by > 1 ($6,000) 3. Implement a change $5,000 (predict all numbers) If prediction is correct $40,000 If prediction is wrong ($40,000)
    88. 88. 09/19/13 88 1, 2 Options: Cost Gain 1. Develop a change $1,000 (gather more information) 2. Test a change $2,000 (predict the next number) If prediction is correct $6,000 If prediction is off by 1 ($3,000) If prediction is off by > 1 ($6,000) 3. Implement a change $5,000 (predict all numbers) If prediction is correct $40,000 If prediction is wrong ($40,000)
    89. 89. 09/19/13 89 1, 2, 3 Options: Cost Gain 1. Develop a change $1,000 (gather more information) 2. Test a change $2,000 (predict the next number) If prediction is correct $6,000 If prediction is off by 1 ($3,000) If prediction is off by > 1 ($6,000) 3. Implement a change $5,000 (predict all numbers) If prediction is correct $40,000 If prediction is wrong ($40,000)
    90. 90. 09/19/13 90 1, 2, 3, 6 Options: Cost Gain 1. Develop a change $1,000 (gather more information) 2. Test a change $2,000 (predict the next number) If prediction is correct $6,000 If prediction is off by 1 ($3,000) If prediction is off by > 1 ($6,000) 3. Implement a change $5,000 (predict all numbers) If prediction is correct $40,000 If prediction is wrong ($40,000)
    91. 91. 09/19/13 91 1, 2, 3, 6, 7 Options: Cost Gain 1. Develop a change $1,000 (gather more information) 2. Test a change $2,000 (predict the next number) If prediction is correct $6,000 If prediction is off by 1 ($3,000) If prediction is off by > 1 ($6,000) 3. Implement a change $5,000 (predict all numbers) If prediction is correct $40,000 If prediction is wrong ($40,000)
    92. 92. 09/19/13 92 1, 2, 3, 6, 7, 8 Options: Cost Gain 1. Develop a change $1,000 (gather more information) 2. Test a change $2,000 (predict the next number) If prediction is correct $6,000 If prediction is off by 1 ($3,000) If prediction is off by > 1 ($6,000) 3. Implement a change $5,000 (predict all numbers) If prediction is correct $40,000 If prediction is wrong ($40,000)
    93. 93. 09/19/13 93 1, 2, 3, 6, 7, 8, 21 Options: Cost Gain 1. Develop a change $1,000 (gather more information) 2. Test a change $2,000 (predict the next number) If prediction is correct $6,000 If prediction is off by 1 ($3,000) If prediction is off by > 1 ($6,000) 3. Implement a change $5,000 (predict all numbers) If prediction is correct $40,000 If prediction is wrong ($40,000)
    94. 94. 09/19/13 94 1, 2, 3, 6, 7, 8, 21, 22, 23, 66, 67, 68, …Options: Cost Gain 1. Develop a change $1,000 (gather more information) 2. Test a change $2,000 (predict the next number) If prediction is correct $6,000 If prediction is off by 1 ($3,000) If prediction is off by > 1 ($6,000) 3. Implement a change $5,000 (predict all numbers) If prediction is correct $40,000 If prediction is wrong ($40,000)
    95. 95. 09/19/13 95 Prediction Game: Application of the PDSA Cycle • Planning requires prediction • Prediction requires a theory • A single observation may require us to modify our theory • Multiple PDSA cycles can accelerate the learning process • Choice of plan depends on our “degree of belief” about the change
    96. 96. 09/19/13 Act • What changes are to be made? • Next cycle? Plan• Objective •Improve the process • Questions and predictions (why) •Cycle time improvement from 20 min avg queue waits for 150 people through 15 queues. • Plan to carry out the cycle (who, what, where, when, how?) •Manual simulation (use mockups) • Plan for data collection •Use pre-registration via other means •Identify sample number (7) (due to the nature of the existing system) Study • Complete the analysis of the data •Compare data to predictions •Summarize what was learned Do • Carry out the plan •Populate representative databases • Document problems and unexpected observations •Insert card correctly, dbase could be wrong, machine failure possibility • Begin analysis of the data •Take stop watches and measure time of 7th person. Divide by 7, multiply by 150.
    97. 97. 09/19/13 The PDSA Cycle for Learning and Improvement Act • What changes are to be made? • Next cycle? Plan • Objective • Questions and predictions (why) • Plan to carry out the cycle (who, what, where, when) • Plan for data collection Study • Complete the analysis of the data •Compare data to predictions •Summarize what was learned Do • Carry out the plan • Document problems and unexpected observations • Begin analysis of the data
    98. 98. 09/19/13 98 Education
    99. 99. 09/19/13 99 Peter Senge Video (learning organizations) http://www.fieldbook.com/FDF/FDF.html http://www.josseybass.com/WileyCDA/Section/id-101959.html • The 5th Discipline (give me a lever long enough and I can move the world) – Leg of stool: • aspiration – Policy decision vs. the system – S Africa: a person exists in relationships – Zulu greeting: I see you – You can be sure that fish in a fishbowl don’t talk about water. – “our prevailing system of management…” – School and work are the same institution – Kids learn that: • “school is about performing for approval!” • Also learned by mistake • Student/teacher relationship is similar to employee/boss relationship • Video games: bad guy is sometimes called the boss.
    100. 100. 09/19/13 100 Peter Senge Video (cont.) – No standardized measures for cost control at Toyota, Ford spent most of its time measuring components to check on the system – “Zero to landfill” program (only 3% to landfill). This has saved major cash to the company. – The “machine” isn’t self controlled/maintained. School is totally patterned after an assembly line. Ex: why K-12? Where did the idea of stupidity come from? Are you stupid because you can’t keep up with the pace? – “No one really understood that you really understood but when you understood, you understood!” – Everything is speeded up – Nature doesn’t quantify, nature’s model of intelligence is awareness of where things stand. – Measuring is SECONDARY to learning. – We’ve almost convinced the species that what’s most REAL is MEASURABLE. – Love, inspiration, and persistence can’t be measured – we can create measures for them but that’s meaningless.
    101. 101. 09/19/13 101 Peter Senge Video (cont.) – “thought shape reality” physicist said. – People in malls aren’t smiling much but most people in huts do. Tribal organizing has been around for a while. – “we have to go upstream!” Deming • Focus on reinventing the process of education or there is no hope. • Learning Organization – He still hadn’t seen one. Some companies and schools had gone down the wrong paths to be learning organization – Deep rhythm that transforms institutions • Team and communities • Team is a group of people who get together to get s/t done • Communities aren’t abstract, they’re real (he talks about Visa International) as the largest market cap company that isn’t actually a system. – Talks about a program that no instructor – kids actually worked well together and they actually tested well – Kids actually arguing about work! – Teacher wanting control is bad. ASK ABOUT LEADERSHIP – Parents, political apparatus, and the kids are all part of the community! • What meetings to the kids attend? Etc. Aktay is producer.
    102. 102. 09/19/13 102 America 2000 Assignment (p. 45) • P. 16 Whatever their approach, all new American schools will be expected to produce extraordinary… • What questions would you now ask to the people setting these goals? – What is the Aim? – What is the benchmark that will rate: • Learning • extraordinary – What is the gap between current and benchmark – What resource are required to close/address the gap – How do you know when you’ve succeeded – Who will it be sustained – When do expect result? • What suggestions might you make in terms of methods? – Apply PDSA! S: study existing system? – What will the pilot group consist of? – How widespread is the pilot group? – What is the methodology of the pilot group?
    103. 103. 09/19/13 4.0 Exercise Using the lens of profound knowledge, how do we see: • The red bead experiment • The practice of benchmarking • The practice of rating and ranking employees
    104. 104. 09/19/13 104 The first step is the transformation of the individual . . . Once an individual understands new knowledge, he will apply it in every interaction with people. He will perceive new meaning to his life, to events, to numbers, to interactions between people. W. Edwards Deming
    105. 105. 09/19/13 105 Appendix: Changing Our Minds
    106. 106. 09/19/13 106 Nida’s (post profound knowledge) • FAA experience as a consultant • Swart’s book on facilitation by creating different types of interaction between human beings (ref. D’s prism idea) • Looked at patterns of humans in terms of interaction
    107. 107. Current State Possible State Changing from . . . To . . .
    108. 108. Two primary modes of thought have been distinguished Process Thinking Reflective Thinking Using what we already know to be true, to make sense of and understand the world, so that we may take action that is appropriate and consistent with what we already know Suspending what we already know to be true and using openness and curiosity regarding the world to explore, learn and gain new insights, ideas and experiences
    109. 109. 09/19/13 109 Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everybody gets busy on the proof. - John Kenneth Galbraith
    110. 110. 09/19/13 110 Process Thinking Reflective Thinking  Rigid reality  Deliberate processing of data  Bound by memory  Automatic, conditioned and habitual  Controlled and self-confirming  Past and future focus  Functional for known variables  Dynamic reality  Open exploration of data  Accesses memory + wisdom  Reflective, unconditioned and intuitive  Uncontrolled and new  Present focus - “in the moment”  Functional for unknown variable Process and Reflective Thinking can be compared
    111. 111. 09/19/13 111 Thought is at the base of human experience and that Thought leads to Feelings, Behaviors and ultimately Results Thinking Internal External Feelings Behaviors Results GUNN PARTNERS © 2002
    112. 112. 09/19/13 112 Results Feelings Behaviors Thinking • Activation of one’s neurons and cells • Transformation of raw data into information • Generation of beliefs, assumptions, etc. • Includes knowledge and skills • Actions that are taken in response to Thinking and Feelings • Outward verbal, physical and emotional expressions and manifestations of the combination of our Thinking and Feelings • Physiological reactions to Thinking • Physical manifestations that are experienced within one’s body • The observable and often measurable consequences of one’s Behaviors • The ultimate outcome of one’s Thinking, Feelings and Behaviors The domains of the Thinking Path can be defined in the following manner GUNN PARTNERS © 2002 Rein forcers • The people, places and things in the external environment that support and sustain the Thinking Path • The internal states of the individual that support and sustain the Thinking Path
    113. 113. 09/19/13 113 The Current/Possible States Log • If I do not speak, there is a strong chance that what I wanted to say will be said • I will get a chance to share my thoughts • Everyone cares about what others have to say • Conversations are driven to their logical end one by one • No interruptions + use of 3-second rule • Reflective listening is employed • Statements begin with liaisons • Team meetings accomplish their objectives as conversations are effective and well managed • Team members enjoy working with each other Thinking Feelings Behaviors Results Current State Possible State • Team meetings often do not accomplish their objectives due to lack of structure in the conversations that drag on • Team members are frustrated with and cynical about working with each other • Piling on issues during a conversation • Frequent interruptions • Listening not actively practiced • Most statements begin with ‘no’ or ‘but’ • Anxious to speak and get a word in • Uncomfortable letting the same individuals always speak • Angry that no one will listen • If I do not jump in, no one will listen to me • Every one thinks their point of view is best an must defend their opinion to succeed • No one cares about what others think • Curious about the conversation • Honoring what others are saying • Assured that voice will be heard GUNN PARTNERS © 2002
    114. 114. 09/19/13 114 Thinking Feelings Behaviors Results Current State Possible State GUNN PARTNERS © 2002 Current/Possible States Table Sharing and Structuring
    115. 115. 09/19/13 115 Observable Data And Experience I select data I add meaning I make assumptions I Draw Conclusions I adopt beliefs I Do or Do Not Take Action The Ladder of Inference Reflexive Loop Available data
    116. 116. 09/19/13 116 C#1 C#2 C#3 E#1, short E#2, short E#3, short E#1, long E#2, long E#3, long C#4 C#6 C#5 We can begin with the same data available, but our theories and assumptions guide us to select a subset that fits them. Available data Beliefs Select data Interpret data Draw conclusions
    117. 117. 09/19/13 117 Available data Beliefs Select data Interpret data Draw conclusions When testing inferences, stay LOW on the ladder . . . Usual level of debate Suggested level of conversation
    118. 118. 09/19/13 118 “What are we disagreeing on?” “What is your thinking on this matter?” “Is my interpretation ‘x’ of what you said, what you meant?” “What are the facts behind what we are talking about?” “Can you run me through your reasoning?” “What are the assumptions behind what you’re saying?” “How did you interpret the event?” “What are your beliefs on the matter?” In the Reflective Thinking, we can ask others certain questions
    119. 119. 09/19/13 119 “What beliefs am I holding on to?” “What could I stand to learn?” “What else could be possible here?” “Do I know what the facts are?” “What am I feeling right now?” “What thoughts are driving these feelings?” “What caused these thoughts to occur?” “What assumptions am I making?” In the Reflective Thinking, we can ask OURSELVES Questions
    120. 120. 09/19/13 120 Argyris: Unilateral Control Model • Most people act with these core values and assumptions (theories in use) – Achieve my goal through unilateral control – Win, don’t lose – Minimize expressing negative feelings – Act rationally – I understand the situation; those who see it differently do not – I am right; those who disagree are wrong – I have pre motives; those who disagree have questionable motives – My feelings are justified
    121. 121. 09/19/13 121 Argyris: Unilateral Control Model • Which lead to the following strategies: – Advocate my position • “I am my position” -- Senge – Keep my reasoning private • We tend not to ask others about their reasoning – Don’t ask others about their reasoning – Ease in – Save face
    122. 122. 09/19/13 122 Argyris: Unilateral Control Model • Which lead to the following consequences: – Misunderstanding, conflict, and defensiveness – Mistrust – Self-fulfilling, self-sealing processes – Limited learning – Reduced effectiveness – Reduced quality of worklife
    123. 123. 09/19/13 123 Argyris and Schwarz: Proposed New Values and Assumptions • I have some information; others have other information • Each of us may see things that others do not • Differences are opportunities for learning • People are trying to act with integrity, given their situation • Valid information • Fee and informed choice • Internal commitment • Compassion
    124. 124. 09/19/13 124 Proposed New Strategies 1. Test assumptions and inferences 2. Share all relevant information 3. Use specific examples and agree on what important words mean 4. Explain your reasoning and intent 5. Focus on interests, not positions 6. Combine advocacy and inquiry 7. Jointly design next steps and ways to test disagreements 8. Discuss undiscussable issues 9. Use a decision-making rule that generates the level of commitment needed Excerpted from Roger Schwarz, The Skilled Facilitator
    125. 125. 09/19/13 125 Argyris and Schwarz: Potential New Outcomes • Increased understanding, reduced conflict and defensiveness • Increased trust • Fewer self-fulfilling, self-sealing processes • Increased learning • Increased effectiveness • Increased quality of worklife • Possibility for change
    126. 126. 09/19/13 126 Shewhart and control charts (Ch.8) • Common causes and special causes • Two mistakes – Minimize net economic loss of the two kinds of mistake was Shewhart’s objective • Stable and unstable systems • Capability Vs. stability – Meeting specifications (bead experiment: no more than 5 was spec) – The bead experiment was a stable system but not a capable system • Shewhart control chart – Plotted over time, a measure – Run chart with control limits • Shewhart set his control limits based on economic loss • GM used to just draw lines around variations
    127. 127. 09/19/13 127 Why distinguish between common and special cause variation • Different management approaches
    128. 128. 09/19/13 128 Common cause variation • Variation is due to process/system design • Produced by interaction of inherent variables in process • Causes affect everyone working in process and all outcomes of process • Process having only common causes affecting the outcome is called stable – Performance is predictable
    129. 129. 09/19/13 129 S control charts action on a signal of a special causes: • Immediately try to understand when special cause occurred • Study what was different when special cause occurred • Identify ways to prevent or use it
    130. 130. 09/19/13 130 The funnel (ch. 9) See page 190
    131. 131. 09/19/13 131 Service comp • Non-visibility • No inventory • More flexibility in delivering quality • Challenge is to do work right 100% • Manuf brags about 2% yet airline never brags about crashing 2% of time. Service can’t advertise its defects
    132. 132. 09/19/13 132 Extrinsic Motivation • Report on 1st day of class to parent – Report cards • “doesn’t get along well with others” • “unsatisfactory” • Kids ask a lot of questions when they’re young. We lose that curiosity as we get older • This stays with us when we work as we focus on performance reviews • Boeing: closest thing to a learning organization, Bellos, in Canoga Park. • Lots a companies are adopting this model but they’re keeping it quiet so as to avoid subversion.
    133. 133. 09/19/13 133 Dr. Orsini • Improvement – Product/service • customer – Process • Employees • Innovation – Product/service – Process
    134. 134. 09/19/13 134 RFP • Paper example – White #37 – 20% moisture – Etc. • 3 bids – A, B, C co submit bids – Lowest price gets it • This does NOT guarantee quality or benefit in the long term • Company needs to work with supplier to understand the manufacturing and development for the long term. • Incentive is to service company well in the long term.
    135. 135. 09/19/13 135 Manufacturer, assembly production and steel supplier • Car company wants manufacturer and dist to share ideas on production cost savings – Manufacturer asks why car co wants 30+ diff types of steel for the door • Maker explains safety standards – Manufacturer explains that producing diff types of steel costs more because they cant use economies of scales. Solution was to buy thicker steel to meet standards and help cut cost my large margins. – Production team asks why edge of door is at existing angle because lesser angle helps production team fit door in better so as to ease with the install of the door and help reduce the amount of leaks in the car • Maker explains
    136. 136. 09/19/13 136 Deming’s 14 points • Metaphor – Long strand of spaghetti on a plate – Twirl fork and find out that you have the whole thing – That’s the 14 points – or nothing.

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