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PDCA
           LEARNING ALONG THE WAY
Mike Rother &
Bill Costantino
August 2012




                                                                                                            Illustration from:
                                                                                                            The Adventures of
                                                                                                            Ned the Neuron
                                                                                                            www.kizoomlabs.com

                                 Copyright © 2013 Mike Rother, all rights reserved
                  1217 Baldwin Avenue / Ann Arbor, MI 48104 USA / tel: (734) 665-5411 / mrother@umich.edu
  © Mike Rother                                                                                                 TOYOTA KATA
                                                                                                                                 1
WHY THIS SLIDESHARE?
      There are many challenges humans face, but we can handle
           them... if we manage ourselves a little differently

                 Why should we manage ourselves
                 differently? Because a scientific,
                 iterative way of thinking & acting is
                 not the typical way adults nor our
                 business organizations think & act.
                 We naturally prefer to define the
                 steps weʼll take, determine whoʼs
                 responsible for each step, assign
     Bill        timing and execute the plan.              Mike
                 We do need to make plans, but the
                 approach we may naturally prefer is
                 often not effective for meeting goals
                 in complex situations.

 It takes a different approach and a little practice to mobilize our
 astonishing collective capability for meeting challenging goals

© Mike Rother                                             TOYOTA KATA
                                                                        2
TAKEAWAYS



                One of the ways we learn is through the steps of
                Plan --> Act --> Evaluate. This is a natural cycle.

                These steps are different from the mechanistic
                model that business is currently comfortable with.

                Plan --> Act --> Evaluate is mirrored by the PDCA cycle.

                When a step along the way goes differently than
                predicted or planned you often learn something new
                that helps you reach the goal. Although this is different
                from what business is currently comfortable with, we
                can practice a way to experiment in the “PDCA Zone.”

                Practicing the Improvement Kata allows us to actualize
                the PDCA approach in business and everyday life.

© Mike Rother                                                    TOYOTA KATA
                                                                               3
SO LETʼS TAKE A LOOK




© Mike Rother                          TOYOTA KATA
                                                     4
HOW DO YOU WORK TOWARD A GOAL?
                Viewed from a distance, any human endeavor
                       seems to involve three steps:




                 Plan            Action          Evaluate




© Mike Rother                                                TOYOTA KATA
                                                                           5
BUT OF COURSE IN REALITY YOUʼRE CONSTANTLY
    CYCLING THROUGH THOSE THREE STEPS
                        When you try to reach any objective
                         you repeat the steps many times




 P        P         P       P       P       P       P       P       P
      A         A       A       A       A       A       A       A       A
  E       E         E       E       E       E       E       E       E


                    Why? Because we canʼt predict the future.
                    No plan we make is 100% correct and nothing
                    goes 100% according to plan.
                    Reaching an objective involves learning and
                    making adjustments along the way.

© Mike Rother                                                               TOYOTA KATA
                                                                                          6
A LEARNING PROCESS IS GOING ON
         AS YOU TRY TO MOVE TOWARD A GOAL



                Take the example of walking toward something.
                Constant sensory feedback and subconscious
                muscular adjustments are happening in order to
                generate effective locomotion.

                While you walk, information from various
                sensors is used to adapt your posture and
                walking pattern to the dynamic characteristics
                of the task, the environment and your body.




© Mike Rother                                            TOYOTA KATA
                                                                       7
HOW DO WE LEARN?
                    Believe it or not... An essential
                mechanism of learning is Prediction Error

                                             What do you
                                 (Plan)      expect to happen?
                              Prediction



                     Evaluate              Action
   What actually happened?
       What did you learn?



          A main way we learn new things is when an actual
          outcome differs from the predicted outcome

© Mike Rother                                               TOYOTA KATA
                                                                          8
HOW PREDICTION ERROR DRIVES LEARNING
 Itʼs the scientific approach: When a result is as-predicted it
  confirms something you already thought. When a result is
different than predicted you are about to learn something new.


                               Strengthens
                  Confirmed    current thinking.
                               Like re-walking a
     Prediction                path in the snow.


                               Surprise. Potential
                               for new knowledge,
                    Error      learning & discovery.


   Prediction confirmation keeps you in place. Prediction error
   leads you out of your assumptions and forces exploration.
   This is because prediction error reveals a knowledge threshold.

© Mike Rother                                              TOYOTA KATA
                                                                         9
THIS IS EVEN HOW SOME OF
                YOUR BRAINʼS NEURONS WORK
     Learning goes on all the time in your brain. Every time you do
     something the synaptic connections between the involved
     dopamine neurons may be strengthened (+) or weakened (-)
     based on Reward Prediction accuracy (+) or inaccuracy (-)
                      Reward
                     Prediction




       Strengthen             Actual
        or weaken             result        Rapid adaptation to reality
          this one
          synapse                 Synapse   (learning) via a cycle of
                                            prediction, met or not,
                                            evaluated by dopamine.




                Neuron                          Neuron


© Mike Rother                                                  TOYOTA KATA
                                                                             10
PREDICTION --> ACTION --> EVALUATE
                 This cycle is a natural building block of anything
                that humans achieve as they operate in systems
                   P        P        P        P        P        P       P        P        Big
                        A       A        A        A        A        A        A        A
                    E       E        E        E        E        E        E        E       Project
                                P        P        P        P        P            Landing an
                                     A        A        A        A        A
                                 E        E        E        E       E            Airplane
                                         P        P        P            Driving
                                              A        A        A
                 Plan                    E         E       E            to Work
                                                  P
                                                       A       Cooking
   Evaluate                                       E            an Egg
                        Action




                Synapse


© Mike Rother                                                                             TOYOTA KATA
                                                                                                        11
PLAN DO CHECK ACT
                   PDCA (or PDSA) is a 4-step learning cycle
                    that echoes our neural learning process


                                               Wow... a version of PDCA
                                               may be baked into our
                                               neurons that are involved
                                               in learning new behavior!




PDCA drawing
by Jurgen Appelo




  © Mike Rother                                                TOYOTA KATA
                                                                             12
HOW PDCA WORKS

                                                    The “C” of PDCA
       The “P” of                                   is a reflection...
       PDCA is an
       expectation or                               What are we
       a prediction...                              learning from
                                                    this?
       ...a hypothesis
                                                    What do we
                                                    need to adjust?




   Illustration from The Team Handbook, page 3-33



       Unexpected results redirect your thinking, forcing new
       interpretations and steps. They put you at the learning edge.
       When you reflect and attempt to understand why your
       prediction was inaccurate you discover new insights and
       build new knowledge.

© Mike Rother                                                   TOYOTA KATA
                                                                              13
PDCA EXPERIMENTS ARE DONE
                AT KNOWLEDGE THRESHOLDS
         Thereʼs always a knowledge threshold... look for it

                          The knowledge threshold is the point
                          at which you have no facts & data and
                          start guessing.
                          This is where you should do the next
                          PDCA experiment; learning where the
                          facts run out.


 Predictable Zone            Uncertainty / Learning Zone
                                     tacl
                                          e   s
                                                             ?
                              Ob   s
                                                  ?                 Next
                                                                   Target
                                                            r     Condition
                                                       nclea ry
The plan is        Current
                                       ?              U ito
                                                      Terr
                                                                  We want
made here         Knowledge                                        to get
                  Threshold                                         here


© Mike Rother                                                     TOYOTA KATA
                                                                                14
FOR EXAMPLE
     We know how a pull system works, but we donʼt know in
     advance everything it will take to make your pull system work.
     This means you canʼt implement a pull system. Youʼll       Target
     have to experiment your way forward and iteratively        Condition
     learn how to make your pull system operate as desired.

Predictable Zone          Uncertainty / Learning Zone

                                                         Pull system
                                            n   g
                                    rimenti
                                                           between
                               Expe                    processes A & B
                                                          working as
                                                          designed,
The plan is                                                by (date)
                  Current
made here        Knowledge
                 Threshold


                            Spot the knowledge threshold and
                            conduct your next PDCA experiment
                            here as quickly & cheaply as possible!

© Mike Rother                                               TOYOTA KATA
                                                                          15
OUR NEURONS MAY UNDERSTAND THE
     ROLE OF “PLANNING” BETTER THAN WE DO
           Many of us think finding the best path to a goal involves
           developing the right plan and then executing it. Turns
           out, thatʼs incorrect when youʼre operating in an
           interconnected system. The way it works is that you
           make the best possible plan, and then you adjust along
           the way based on what you are learning along the way.

           If you go to business school and learn a planning
           process, thatʼs only half of the matter. You should
           also learn a good iteration process.

           Imagine what would happen if the neurons in
           your brain only planned and executed and
           didnʼt constantly adjust based on micro
           results. You probably wouldnʼt be alive
           reading this today!

           A plan is only a prediction of how things
           will go. A plan is a hypothesis.




© Mike Rother                                                      TOYOTA KATA
                                                                                 16
WHAT ARE WE TEACHING?
                           Too much certainty
    Human capability, passion-driven endeavor and iterative / adaptive
    thinking are alive and well on the planet. But itʼs often overshadowed
    by an unscientific kind of thinking that has become habitual in many
    large business, financial, political and academic organizations.
                                                                Complex
                                                             Interconnected
                                                                 System
                                                                    A
Mechanical System                                             H            B
A    B          C   D
                                                            G                  C
                                                                F          D
           In business schools we teach how to manage              E
           businesses as if they were mechanical systems, not
           the complex, interconnected systems they actually are.  In
           particular we teach using accounting and financial control
           methods to make predictions and strive for financial results.
           Unfortunately, we have a tendency (certainty bias) to put too
           much faith in our predictions, and financial results are only
           an abstraction of reality.

© Mike Rother                                                       TOYOTA KATA
                                                                                   17
WHAT IS SCIENTIFIC THINKING?


   What we          • Quantification and precision
   may think        • Objective and certain
   scientific is    • Reveals what is there


                    Example: We have made the right plan



                    • Involves uncertainty,
   What               ambiguity & incompleteness
   scientific       • Never free from error
   really is        • A process of discovery, via
                      systematic trial and error
                    Example: Our plan is a hypothesis



© Mike Rother                                              TOYOTA KATA
                                                                         18
WHAT SHOULD WE DO NEXT?




© Mike Rother                             TOYOTA KATA
                                                        19
PRACTICE A DIFFERENT WAY!
   We can practice routines (kata) to develop new habits that
    take us beyond mechanistic thinking, to iterative thinking
   thatʼs more in line with how interconnected systems work




  Illustration by Meryl Runion Rose

© Mike Rother                                           TOYOTA KATA
                                                                      20
ONE STEP TO PRACTICING ITERATION
             Whenever youʼre working toward a goal
      ask yourselves the Five Coaching Kata Questions daily



                                     PRESCRIPTION
                            5 Basic Coaching Kata Questions

                           1. What are we trying to achieve?
                           2. Where are we now?
                           3. Whatʼs currently in our way?
                           4. Whatʼs our next step (the next
                              experiment) & what do we expect?
                           5. When can we see what weʼve
                              learned from taking that step?



© Mike Rother                                           TOYOTA KATA
                                                                      21
ANOTHER STEP TO PRACTICING ITERATION
                Conduct experiments inside the PDCA Zone
     Businesspersons are often understandably averse to experimenting
     because it feels uncontrolled; like you may never reach the goal.
     By using the Improvement Kata you can diminish this fear.
     Your Target Condition has a hard achieve-by date and is
     measureable. There are budget constraints and quality parameters.
     Itʼs within these defined limits that you design and conduct rapid
     successive experiments to reach your target condition.




© Mike Rother                                                 TOYOTA KATA
                                                                            22
FOR GOOD ORGANIZATIONAL HEALTH...
        Take a daily dose of Improvement Kata practice




            Bill                                                 Mike




        Practicing the Improvement Kata is perhaps the best way
        we've found so far for actualizing PDCA in an organization.
                ~ John Shook, Chairman and CEO, Lean Enterprise Institute

© Mike Rother                                                      TOYOTA KATA
                                                                                 23
Remember... any plan
                is only a hypothesis,
                so be prepared to
                learn on the journey!




© Mike Rother                           TOYOTA KATA
                                                      24
I once believed that PDCA thinking is a natural
                phenomenon, like the way the brainʼs dopamine
                neurons behave.

                But I also see all the evidence in front of me which
                points out that PDCA thinking is not as natural,
                automatic and widespread as I wish it were.

                Just because our brainʼs dopamine neurons utilize
                prediction error to learn doesn't mean that we as
                humans have learned to utilize prediction error. It
                takes practice.



© Mike Rother                                                      TOYOTA KATA
                                                                                 25
WEʼD LIKE TO THANK...

                           Pat Boutier
                           Emiel Van Est
                           Dennis Gawlik
                           H. Thomas Johnson
                           Jeff Liker
                           Bernd Mittelhuber
                           R.R.

                ... for their thoughtful and insightful
                    input to this SlideShare




© Mike Rother                                             TOYOTA KATA
                                                                        26

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PDCA - Learning Along the Way

  • 1. PDCA LEARNING ALONG THE WAY Mike Rother & Bill Costantino August 2012 Illustration from: The Adventures of Ned the Neuron www.kizoomlabs.com Copyright © 2013 Mike Rother, all rights reserved 1217 Baldwin Avenue / Ann Arbor, MI 48104 USA / tel: (734) 665-5411 / mrother@umich.edu © Mike Rother TOYOTA KATA 1
  • 2. WHY THIS SLIDESHARE? There are many challenges humans face, but we can handle them... if we manage ourselves a little differently Why should we manage ourselves differently? Because a scientific, iterative way of thinking & acting is not the typical way adults nor our business organizations think & act. We naturally prefer to define the steps weʼll take, determine whoʼs responsible for each step, assign Bill timing and execute the plan. Mike We do need to make plans, but the approach we may naturally prefer is often not effective for meeting goals in complex situations. It takes a different approach and a little practice to mobilize our astonishing collective capability for meeting challenging goals © Mike Rother TOYOTA KATA 2
  • 3. TAKEAWAYS One of the ways we learn is through the steps of Plan --> Act --> Evaluate. This is a natural cycle. These steps are different from the mechanistic model that business is currently comfortable with. Plan --> Act --> Evaluate is mirrored by the PDCA cycle. When a step along the way goes differently than predicted or planned you often learn something new that helps you reach the goal. Although this is different from what business is currently comfortable with, we can practice a way to experiment in the “PDCA Zone.” Practicing the Improvement Kata allows us to actualize the PDCA approach in business and everyday life. © Mike Rother TOYOTA KATA 3
  • 4. SO LETʼS TAKE A LOOK © Mike Rother TOYOTA KATA 4
  • 5. HOW DO YOU WORK TOWARD A GOAL? Viewed from a distance, any human endeavor seems to involve three steps: Plan Action Evaluate © Mike Rother TOYOTA KATA 5
  • 6. BUT OF COURSE IN REALITY YOUʼRE CONSTANTLY CYCLING THROUGH THOSE THREE STEPS When you try to reach any objective you repeat the steps many times P P P P P P P P P A A A A A A A A A E E E E E E E E E Why? Because we canʼt predict the future. No plan we make is 100% correct and nothing goes 100% according to plan. Reaching an objective involves learning and making adjustments along the way. © Mike Rother TOYOTA KATA 6
  • 7. A LEARNING PROCESS IS GOING ON AS YOU TRY TO MOVE TOWARD A GOAL Take the example of walking toward something. Constant sensory feedback and subconscious muscular adjustments are happening in order to generate effective locomotion. While you walk, information from various sensors is used to adapt your posture and walking pattern to the dynamic characteristics of the task, the environment and your body. © Mike Rother TOYOTA KATA 7
  • 8. HOW DO WE LEARN? Believe it or not... An essential mechanism of learning is Prediction Error What do you (Plan) expect to happen? Prediction Evaluate Action What actually happened? What did you learn? A main way we learn new things is when an actual outcome differs from the predicted outcome © Mike Rother TOYOTA KATA 8
  • 9. HOW PREDICTION ERROR DRIVES LEARNING Itʼs the scientific approach: When a result is as-predicted it confirms something you already thought. When a result is different than predicted you are about to learn something new. Strengthens Confirmed current thinking. Like re-walking a Prediction path in the snow. Surprise. Potential for new knowledge, Error learning & discovery. Prediction confirmation keeps you in place. Prediction error leads you out of your assumptions and forces exploration. This is because prediction error reveals a knowledge threshold. © Mike Rother TOYOTA KATA 9
  • 10. THIS IS EVEN HOW SOME OF YOUR BRAINʼS NEURONS WORK Learning goes on all the time in your brain. Every time you do something the synaptic connections between the involved dopamine neurons may be strengthened (+) or weakened (-) based on Reward Prediction accuracy (+) or inaccuracy (-) Reward Prediction Strengthen Actual or weaken result Rapid adaptation to reality this one synapse Synapse (learning) via a cycle of prediction, met or not, evaluated by dopamine. Neuron Neuron © Mike Rother TOYOTA KATA 10
  • 11. PREDICTION --> ACTION --> EVALUATE This cycle is a natural building block of anything that humans achieve as they operate in systems P P P P P P P P Big A A A A A A A A E E E E E E E E Project P P P P P Landing an A A A A A E E E E E Airplane P P P Driving A A A Plan E E E to Work P A Cooking Evaluate E an Egg Action Synapse © Mike Rother TOYOTA KATA 11
  • 12. PLAN DO CHECK ACT PDCA (or PDSA) is a 4-step learning cycle that echoes our neural learning process Wow... a version of PDCA may be baked into our neurons that are involved in learning new behavior! PDCA drawing by Jurgen Appelo © Mike Rother TOYOTA KATA 12
  • 13. HOW PDCA WORKS The “C” of PDCA The “P” of is a reflection... PDCA is an expectation or What are we a prediction... learning from this? ...a hypothesis What do we need to adjust? Illustration from The Team Handbook, page 3-33 Unexpected results redirect your thinking, forcing new interpretations and steps. They put you at the learning edge. When you reflect and attempt to understand why your prediction was inaccurate you discover new insights and build new knowledge. © Mike Rother TOYOTA KATA 13
  • 14. PDCA EXPERIMENTS ARE DONE AT KNOWLEDGE THRESHOLDS Thereʼs always a knowledge threshold... look for it The knowledge threshold is the point at which you have no facts & data and start guessing. This is where you should do the next PDCA experiment; learning where the facts run out. Predictable Zone Uncertainty / Learning Zone tacl e s ? Ob s ? Next Target r Condition nclea ry The plan is Current ? U ito Terr We want made here Knowledge to get Threshold here © Mike Rother TOYOTA KATA 14
  • 15. FOR EXAMPLE We know how a pull system works, but we donʼt know in advance everything it will take to make your pull system work. This means you canʼt implement a pull system. Youʼll Target have to experiment your way forward and iteratively Condition learn how to make your pull system operate as desired. Predictable Zone Uncertainty / Learning Zone Pull system n g rimenti between Expe processes A & B working as designed, The plan is by (date) Current made here Knowledge Threshold Spot the knowledge threshold and conduct your next PDCA experiment here as quickly & cheaply as possible! © Mike Rother TOYOTA KATA 15
  • 16. OUR NEURONS MAY UNDERSTAND THE ROLE OF “PLANNING” BETTER THAN WE DO Many of us think finding the best path to a goal involves developing the right plan and then executing it. Turns out, thatʼs incorrect when youʼre operating in an interconnected system. The way it works is that you make the best possible plan, and then you adjust along the way based on what you are learning along the way. If you go to business school and learn a planning process, thatʼs only half of the matter. You should also learn a good iteration process. Imagine what would happen if the neurons in your brain only planned and executed and didnʼt constantly adjust based on micro results. You probably wouldnʼt be alive reading this today! A plan is only a prediction of how things will go. A plan is a hypothesis. © Mike Rother TOYOTA KATA 16
  • 17. WHAT ARE WE TEACHING? Too much certainty Human capability, passion-driven endeavor and iterative / adaptive thinking are alive and well on the planet. But itʼs often overshadowed by an unscientific kind of thinking that has become habitual in many large business, financial, political and academic organizations. Complex Interconnected System A Mechanical System H B A B C D G C F D In business schools we teach how to manage E businesses as if they were mechanical systems, not the complex, interconnected systems they actually are.  In particular we teach using accounting and financial control methods to make predictions and strive for financial results. Unfortunately, we have a tendency (certainty bias) to put too much faith in our predictions, and financial results are only an abstraction of reality. © Mike Rother TOYOTA KATA 17
  • 18. WHAT IS SCIENTIFIC THINKING? What we • Quantification and precision may think • Objective and certain scientific is • Reveals what is there Example: We have made the right plan • Involves uncertainty, What ambiguity & incompleteness scientific • Never free from error really is • A process of discovery, via systematic trial and error Example: Our plan is a hypothesis © Mike Rother TOYOTA KATA 18
  • 19. WHAT SHOULD WE DO NEXT? © Mike Rother TOYOTA KATA 19
  • 20. PRACTICE A DIFFERENT WAY! We can practice routines (kata) to develop new habits that take us beyond mechanistic thinking, to iterative thinking thatʼs more in line with how interconnected systems work Illustration by Meryl Runion Rose © Mike Rother TOYOTA KATA 20
  • 21. ONE STEP TO PRACTICING ITERATION Whenever youʼre working toward a goal ask yourselves the Five Coaching Kata Questions daily PRESCRIPTION 5 Basic Coaching Kata Questions 1. What are we trying to achieve? 2. Where are we now? 3. Whatʼs currently in our way? 4. Whatʼs our next step (the next experiment) & what do we expect? 5. When can we see what weʼve learned from taking that step? © Mike Rother TOYOTA KATA 21
  • 22. ANOTHER STEP TO PRACTICING ITERATION Conduct experiments inside the PDCA Zone Businesspersons are often understandably averse to experimenting because it feels uncontrolled; like you may never reach the goal. By using the Improvement Kata you can diminish this fear. Your Target Condition has a hard achieve-by date and is measureable. There are budget constraints and quality parameters. Itʼs within these defined limits that you design and conduct rapid successive experiments to reach your target condition. © Mike Rother TOYOTA KATA 22
  • 23. FOR GOOD ORGANIZATIONAL HEALTH... Take a daily dose of Improvement Kata practice Bill Mike Practicing the Improvement Kata is perhaps the best way we've found so far for actualizing PDCA in an organization. ~ John Shook, Chairman and CEO, Lean Enterprise Institute © Mike Rother TOYOTA KATA 23
  • 24. Remember... any plan is only a hypothesis, so be prepared to learn on the journey! © Mike Rother TOYOTA KATA 24
  • 25. I once believed that PDCA thinking is a natural phenomenon, like the way the brainʼs dopamine neurons behave. But I also see all the evidence in front of me which points out that PDCA thinking is not as natural, automatic and widespread as I wish it were. Just because our brainʼs dopamine neurons utilize prediction error to learn doesn't mean that we as humans have learned to utilize prediction error. It takes practice. © Mike Rother TOYOTA KATA 25
  • 26. WEʼD LIKE TO THANK...  Pat Boutier  Emiel Van Est  Dennis Gawlik  H. Thomas Johnson  Jeff Liker  Bernd Mittelhuber  R.R. ... for their thoughtful and insightful input to this SlideShare © Mike Rother TOYOTA KATA 26