In Their Own Words
Our podcasts feature interviews with members of the Deming community, including industry leaders, practitioners, educators, Deming family members, and others who share their stories of transformation and success through innovative management and quality theories of Dr. W. Edwards Deming. Podcast episodes prior to 2022 were hosted, produced, and edited by Tripp Babbitt.
info_outline
Don't Just Do Something
10/12/2026
Don't Just Do Something
What do you fix first when everything seems to need attention? Caroline faced that question while helping former students navigate life beyond United Schools. She wanted to jump in and start fixing everything, but she took a surprising step instead. In this episode, John Dues shares how a simple Post-it exercise helped them clarify what was affecting much of her department’s work and gave Caroline a direction for her energy. Along the way, he and host Andrew Stotz get into "solutionitis," the danger of seeing too much, and why tempting solutions can lead us astray. If you've ever felt the pull to just do something, this one is for you. TRANSCRIPT 0:00:02.1 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. Now, the topic for today is See Before You Solve, and it gets to a tension that I think we all face and leaders face. We know something needs to improve and our instinct is to immediately start figuring out what to do about it. Like, "Do something, don't just stand there." And John, before we turn on the recorder, you mentioned something about the alumni services department at United Schools and what you were doing with it and what was happening a few years ago. Maybe you can kick off with that. 0:01:00.2 John Dues: Yeah, I thought, well, it's good to be back, Andrew. And I thought it'd be interesting... This has come up and in my work, and kind of, applying some of these Deming ideas. The Deming philosophy to something real life sometimes can help kind of bring it alive. So I thought this could be an interesting topic for this episode. And for folks that... We haven't mentioned United Schools in a while, but that's where I work. It's a K-8 system. It's a bit unique in that our relationship with our students doesn't end after that eighth grade year. We don't have a high school in our system right now. And so what we do have, kind of the next best thing, is this alumni services department that serves those eighth graders once they leave our program and then go on to high school. And they not only follow them... The folks in that department... They don't just follow them into high school, but beyond too. 0:01:55.8 John Dues: So once they get through high school and they help them sort of navigate that, then whatever it is they do next, whether that's college or military, trade, or a career, we continue to provide follow-on services. And that department has a director that I work with on a regular basis. Her name's Caroline Durbin, and she was kind of a high school counselor and then came to work for us about seven years ago and has kind of built this department from scratch. And so she... Lots of things kind of went off the rails during the pandemic in schools. And kind of, along those lines, she's thinking about, as we're kind of, turning a corner a few years ago from that pandemic time, or at least the heart of it, she knew that her department needed to improve too. And I think the thing that she was struggling with, though, was where does she start? There's no shortage of possibilities when you run a department like that. 0:02:58.3 John Dues: She was thinking about things like, how do you increase alumni engagement? How do you get kids, once they leave us, to enroll in those services? How do you deal with information about alumni that's incomplete? And there were some other pain points too. Any one of these things could have become its own improvement project. And I think that's a situation that a lot of leaders face. It's like, you know things aren't working as well as they should. You see five or [chuckle] even 10 legitimate problems that you could tackle, and the natural reaction is then, "Okay, which one of these are we going to fix? Where do we start?" That's the kind of thing. 0:03:42.0 Andrew Stotz: Yeah. And before we get to where you're going to start, I want to tip my hat to Caroline and also to my counselor from high school, Fred Zigler. Fred helped a lot of us at a very challenging time in our lives. And I was thinking about this idea of alumni services for you guys. Like, "Oh, just let them go, kids go." But really, the relationships that we build are so critical. And Fred helped me address alcohol and drug addiction and get me into treatment, talked with my parents, helped me. And to this day. Now, that was 1982 when he helped me, and to this day, I'm still in touch with him and still see the value that he brought to my life at that moment. So just tipping my hat there. So, John. 0:04:29.9 John Dues: Yeah, that's incredible. In fact, Caroline, just this week, one of the things they do is they take our alumni once they get into high school, they take them on college visits. So they just went to Kent State and Xavier, two different groups this week, and she led them on those college visits. Pretty cool stuff. 0:04:46.5 Andrew Stotz: I imagine the Kent State campus has changed a lot since I was there studying, but yeah, just a good memory right there. So tell us, where did you start? 0:04:57.8 John Dues: Yeah, I mean, I think that's a great question. What we did was we didn't just pick one of those problems and immediately get to work. The first thing that we did together was just sort of slow things down a bit and really what we were trying to do is just kind of step back and start by trying to better understand what was happening. And so basically, we just literally took the various pain points that Caroline brainstormed, the different things she was seeing in her department. We just literally wrote each one on a Post-it note. Then we took the Post-it notes and kind of grouped them into common themes. And then we basically looked at how each of those themes was impacting the others. And over time, we basically used this exercise to see which one had the most arrows pointing away from it, meaning it was causing other problems. And the thing that came out on top was unknown alumni data. 0:06:09.8 John Dues: So basically, what was happening was that we didn't always have or completely capture students' data as they were leaving us or, over time, things would change. They would change high schools or change programs or whatever. And so we had all this incomplete information about our alumni. And that really was impacting Caroline's ability to understand other parts of the department's work. I mean, it made it hard to know how former students were doing, where did they need support, and it also made it hard to understand where our efforts were actually making a difference. So that gave Caroline a place to start. 0:06:51.5 Andrew Stotz: So she knew she had problems before you did the exercise. So what changed? 0:06:58.8 John Dues: Yeah, I mean, I think she didn't necessarily have more information, but she just had this better way of seeing the information that she already had, frankly. And that's an important distinction. Caroline knew something needed to improve, but she didn't start by choosing a solution. She started by literally stepping back and seeing her alumni system. 0:07:27.0 Andrew Stotz: And I guess this is probably pretty hard for all of us in leadership in that we get caught up in what we're doing and then we kind of narrow our focus, I'm thinking. So we tend to jump from seeing a problem directly to just trying to say, "Let's fix this. Do something." 0:07:45.2 John Dues: Yeah. And I think, that's what we're paid to do as leaders. We're paid to solve problems. And I think it's natural that when something isn't working, we turn our attention toward some type of action because that feels good. What are we going to change? Who's going to do it? How quickly can we get started? And I don't think that bias towards action is inherently bad because organizations, you don't improve your organization by endlessly discussing your problems or admiring your problems. Eventually, you have to act. But I think knowing that a system needs to improve, it's not the same as knowing where to begin. And I think that's really where leaders can get into trouble. This disappointing result appears and then immediately plausible solutions start coming to mind. This happens all the time. Your reading scores are low, adopt a new curriculum. Your team has communication problems, let's add another meeting to the calendar. A department's having trouble keeping track of its work, let's buy a new technology platform. And sometimes those things can be useful, but I think that the key thing is that seeing a problem isn't the same as understanding what's producing that underlying problem. 0:09:13.1 Andrew Stotz: And I think you use the term solutionitis. [laughter] What…tell us about that? 0:09:20.7 John Dues: Yeah, I mean, I like a lot of these ideas. I can't take credit. I'm sure I came across it in a book. I think maybe Learning to Improve, Tony Bryk's book, is maybe where I originally saw that. But basically, solutionitis is this tendency to prescribe changes before we've adequately understood what's happening. So the thing is we make this leap almost immediately from "something isn't working" to "here's what we should do about it." And I think the real problem is when that solution comes before an adequate diagnosis. And one of the dangers there is that then the most visible problem or maybe the most frustrating problem, it isn’t necessarily always the best place to focus improvement or where to start, 'cause problems rarely exist in isolation. They're part of a system, and it's the relationship among those parts that can be just as important as the individual problems themselves. And I think that's really what that Post-it exercise, a very simple Post-it exercise with Caroline, it helped us to kind of, see together eventually. 0:10:31.4 Andrew Stotz: I visualize going into the doctor's office and just about to explain what problem I'm having, and the doctor says, "Here's the prescription." [chuckle] 0:10:41.8 John Dues: Right. Right. 0:10:44.0 Andrew Stotz: Wait a minute, isn't there a diagnosis step in between? [chuckle] 0:10:48.3 John Dues: Yeah. Yep. And sometimes people kind of, I actually asked people recently, like, "Where do I add value as an improvement advisor?" I asked a series of questions. And then I also asked them, "Where when I'm not effective as an improvement advisor, what's the situation?" And one person said, "Sometimes when something needs to happen really quickly, sometimes you want to make it into a process, which most of the time I appreciate, but sometimes you just need to move quickly." And I take that. That is a perfect description of me. But my only pushback to that is almost all the time, even though I tend to slow things down in most situations, it almost always, in the long run, you sort of create a more robust solution. So it's very hard, especially when the pressure is on. [chuckle] 0:11:47.7 Andrew Stotz: I'm picturing them drawing a picture of you sitting, smoking a cigar in a comfortable chair, and behind you is a burning house. 0:11:56.3 John Dues: Yeah. Yeah. 0:11:57.2 Andrew Stotz: And they think, "House on fire, house on fire, you gotta do." But what they don't realize, of course, is that almost all of it is common cause variation, and by reacting to it, you're actually just... So anyways, so you described what you did with Caroline as almost like a funnel. So maybe tell us a little bit more about that. 0:12:20.7 John Dues: Yeah, I mean, I think what I'm trying to get at there is that when you're trying to sort of understand a problem at the beginning, the funnel is very wide, meaning there's all kinds of possible opportunities for improvement. So the challenge isn't necessarily generating more ideas. I mean, I think the challenge is really narrowing those possibilities intelligently. With Caroline, we started with all those pain points that she had pointed out. We put them on Post-it notes. And then the thing about that was we just got them out of her head and made them visible. We wrote them down and then we again grouped them to see those larger themes. And then when we took a look at the relationships among the different themes, it really helped us to sort of distinguish between problems that were relatively isolated and those that were really impacting multiple parts of her alumni services system. 0:13:19.8 John Dues: And that's how the unknown alumni data went from being one problem among many to a really logical place to begin the work, to begin that improvement work. And I think that's really what I mean by “see the system.” So get clear about what you're trying to accomplish, understand what's happening now, look for patterns and relationships, and then use that understanding to identify something of consequence that's an opportunity for improvement. It doesn't give you the solution, but it does give you a more informed place to begin. 0:13:54.6 Andrew Stotz: And once the unknown alumni data emerged as the place to begin, I'm trying to think about how I would deal with that. I mean, for me, that just feels overwhelming. Like it's just every day that goes by, it's harder to get that data. It's just, I'm just curious. So tell us more about what happened. 0:14:19.3 John Dues: Yeah, and then that's where really Caroline then kicked into high gear. She started taking action pretty quickly. And what that action ultimately sparked was this complete redesign of United's alumni data tracking system. She created some new trackers, some new data visualizations, and she actually, we tapped an ex-employee that had gotten into data, advanced data work, and we kind of hired her as a consultant to help us. But she didn't just design this whole new thing and then declare it finished after a month or something. She basically, since we did this work a few years ago, she's kept refining the system and used it and then learned what's working and what's not, and she continually improves this data system. And now sort of, when I kind of followed up with Caroline recently about that work we had started a number of years ago, she said, the alumni data, it's the most complete that it's ever been. 0:15:26.6 John Dues: And I think the sequence that she followed really mattered. She didn't begin with, "We need a new tracker." The tracker was downstream or the visualization dashboard was downstream from the learning about the system. First thing we did was develop enough understanding to identify the alumni data as a meaningful leverage point, and then she started developing the solutions around that basically. 0:15:53.6 Andrew Stotz: And you just said, "enough understanding." So that's another important distinction. Because couldn't "see the system first" become an excuse? I mean, for the whole point is this analysis paralysis, the sitting in front of a burning house. I don't know, tell us more about that. 0:16:15.0 John Dues: Yeah, I think that's absolutely right. I think that's the danger of taking that particular idea too far. "We need to understand the system" can definitely become an excuse for endless analysis. And that's definitely not what I'm suggesting. Caroline and I, we didn't sit down and map every process in alumni services. We didn't collect every possible piece of data. We didn't resolve every uncertainty. We just needed enough understanding to make a reasoned choice about where to focus. And once we chose that alumni data, the unknown alumni data as the focus, as that key leverage point, Caroline began to move forward. So this happened pretty quickly. That sort of see the system, the step back transitioned into action within just a month or so, pretty quickly. But the key thing is that seeing before solving doesn't mean seeing everything before acting. It just means seeing enough to choose intelligently where to begin, then you act. And then once you start acting, you continue that learning process. 0:17:23.2 Andrew Stotz: Yeah, I like that because it's so easy to get into overwhelm when you say, "Let's look at the system." [chuckle] And the next thing you know, there's you're thinking about the US Congress and the system of global trade or whatever. It's like, wait, wait, wait, wait, wait. We went too far. So now there's another part of this story that I found interesting and that's that you describe Caroline as having the inside view and you as bringing an outside view. Tell us more what you mean. 0:17:54.2 John Dues: Yeah, we both work for the same organization. So this can happen with two people that work for the same organization or often this will happen with someone that hires an outside consultant for this reason. But what I'm basically saying is that Caroline knew alumni services far better than I did. She understood our alumni, she understood the department's processes, she knew what information they had and didn't have. She understood the frustrations that came with her work. That's what I mean by the inside view. And I think that type of knowledge is absolutely essential. I couldn't have walked into alumni services and told Caroline what she needed to change because I didn't know enough about it. I brought something different. It's almost a good thing that I wasn't immersed in the department's day-to-day work. Instead, sort of what I was bringing was the improvement methods, basically. So I could bring this process for stepping back from the individual problems and making the system more visible and deciding where to focus. That's what I mean by the outside view. 0:19:00.5 Andrew Stotz: So which perspective is more important? You've got someone on the inside, you can't do what they're doing, and someone on the outside and they can't do what you're doing. How do we think about these two? 0:19:11.8 John Dues: Yeah, I think it's interesting. I think Deming said something to the effect of a person can understand everything about their job except for how to improve it. Right. And so I think that's what this inside-outside thing really gets at. It's neither one is sufficient by itself. And I think that's really one of the most important lessons from Caroline's story. I didn't know enough about alumni services to tell her what needed to change, but Caroline's deep experience with the department hadn't automatically revealed to her where she should begin either. I think the value came from putting that inside and that outside view together. When I asked her to sort of reflect on this work from a few years ago, she really described my role as providing improvement expertise and guidance while giving her the space to identify what needed improvement, and then she was able to create something that worked for her department. And I think that's exactly right. I think that's the right balance for those two things. 0:20:09.2 Andrew Stotz: And that's a very different role for the leader or advisor than coming in with the answer, which I think a lot of people expect that the leader is going to come in and go, "I know how to handle this." 0:20:19.6 John Dues: Yeah, I mean, I think that's exactly right. And I think that's where this becomes a broader leadership principle rather than just a story about improvement advising. I think the people closest to the work often possess knowledge, like Caroline, that someone on the outside can never have. And I think that's incredibly valuable. It's a prerequisite for improvement, I think. But at the same time, being so immersed in that day-to-day work in that system can also make it difficult to step back and see those patterns and relationships and...
/episode/index/show/deminginstitute/id/43197163
info_outline
A New Lens with Balaji Reddie (Part 9)
10/05/2026
A New Lens with Balaji Reddie (Part 9)
What if the way you measure performance is actually making your organization worse? Balaji Reddie and Andrew Stotz dig into Points 7 through 9 of Deming's 14 Points: leadership as a Socratic act of asking rather than answering, why 'drive out fear' is really about removing the fear of telling the truth, and how breaking down departmental silos sometimes means one team taking a loss for the good of the whole. Along the way: KPIs, internal competition, and why they so often undermine the system they're meant to improve. The episode closes with Dr. Deming's own words: leadership carries a responsibility to make a difference. TRANSCRIPT 0:00:02.4 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Balaji Reddie, an educator and trainer in the teachings of Dr. Deming and quality management more broadly. Balaji, how are you? 0:00:17.3 Balaji Reddie: Oh, I'm fine this morning. How are you, Andrew? 0:00:19.8 Andrew Stotz: I'm excited. Last time we talked, we talked about points four, five, and six. We packed a lot into that one. 0:00:25.5 Balaji Reddie: Oh, yeah. 0:00:25.8 Andrew Stotz: I'm interested in what we'll get through today. 0:00:28.9 Balaji Reddie: Yeah, right. And as we logged off the last time, of course, I had a hard stop to be made because I had another engagement at the end of the hour that we had. But it occurred to me later on that I should have mentioned something more. So I thought I'll just do a quick recap about what we did the last time we met, and then we proceed from there on. 0:00:54.4 Andrew Stotz: Oh, that's neat. 0:00:54.8 Balaji Reddie: Best part about doing this is there is no time limit, right? So we're taking it easy to finish whatever we have. But here we go. So points number four, five, and six is what we discussed the last time. And point number four, working very closely with your suppliers, don't go for the cheapest, go for the best, and calculate life cycle cost and things like that. So, I should have mentioned a particular person at that time. This was the lady who was working on behalf of MIT CAES, Center for Advanced Engineering Study, they are the people who originally published Out of the Crisis and The New Economics. And if you know, The New Economics second edition came out in '94, March '94, after Dr. Deming had passed away. And that's when in my early days in the Deming world, and I was when the internet came in and I was sending out emails to people I knew, might've seen... Whose pictures I saw on the net, including Henry. Henry was... We started a correspondence first by what you call snail mail, if I may call it. And then when the internet came a year after we were corresponding, that's when we started corresponding on email. And that too, he was not very conversant with it initially. He had a secretary, and so she would send me the mail and I would send her the mail, and then... It was on her ID. And then slowly she, I think, left the British Deming Association, and then Henry was all on his own. And that's when email, then one after the other started sending. So I needed to cite some portions of the book, and then I got in touch with the Deming Institute, and Dave Nave used to look into the emails in those days. Dave Nave and, bless his soul, Bill Ratcliff, if you know, Dr. Deming's son-in-law. So, they guided me. They said that you need to speak to Elizabeth Dorenzo, the lady who edited the second edition of The New Economics, which came out in March '94. So... 0:03:10.7 Andrew Stotz: It's the one I have right here, second edition. 0:03:13.5 Balaji Reddie: Yeah. That's the one. Yeah. It had a different cover, by the way, but this is an, I think, the 2000 print. This is a 2000 print. 0:03:22.1 Andrew Stotz: Right. 0:03:22.9 Balaji Reddie: Yeah, they changed the cover in the year 2000. In 1994 to 2000, the cover was quite different. I have that. I don't have it with me right now. But she told me something very interesting. First of all, she said she was expecting twins at that time. And the joke was, what will come out first, the book or the twins? [laughter] 0:03:46.7 Balaji Reddie: Because she was racing against the clock and trying to get that book published. And the one point she said that he kept working on, because she kept getting notes from Joyce and Cecelia Kilian, his secretary, typed out notes, handwritten notes, which he wanted to be put into the book, was on point number four. So he was working on that till the day he passed away, about different worlds, different scenarios of working with suppliers, especially the point which we spoke of, work towards a single source. And he said it cannot happen overnight. However, he said in certain scenarios, if all of them are offering the same quality, then you'd be a fool not to go for the cheapest among those, right? And he was giving his... Trying to be... So there were many... There's World 1, World 2. So if you have the book The New Economics, these appear in the appendix: World 1, World 2, World 3, World 4, et cetera. And later on I found that he also gave them these as handouts during his four days... The four worlds in which you work with your suppliers and so on and so forth. So, being very, very practical in the application of what he meant. So that was one. And point number five, of course, we spoke about that you need to constantly improve. But he also cautioned what he meant by improvement, because he said here that improvement is of course taking the performance to another level, but these were in a different sense. He said when people come to you with problems. And remember, a problem is something that you did not anticipate that could happen. So, be welcoming of problems, and you need to look at it as a ways and means of understanding your process better. So the spirit was more of that. That was point number five. 0:05:37.0 Balaji Reddie: And then point number six we looked at, training should be reconstructed from ground up. And he meant in both ways, training on the job and off the job training. But the main thing is, he said that you need to help a person as a part of the training understand how they're contributing to the entire system. Because when a person knows why, they always perform the job better. I think he gave some examples of what that meant. So that was the point number six. Now we get to point number seven, which gets really interesting. So let me just pull up what he had to say in the text of point number seven. So here we go. Right, this is four, five, six, and now we come to seven. Now he says here, "Adopt and institute leadership." And interestingly, in the mimeographed book, the word was "supervision." And then he replaced it. In fact, I have that copy of that book where his handwriting is there, he's scratched out "supervision" and written "leadership." So he had it in mind. The 1982 edition of the 14 points, he wrote "supervision" there. But let's understand why he wrote that word, because I saw that word even in Dr. Juran's book, the 1964 edition of his book called 'Managerial Breakthrough.' And both he and Deming came from the same era, right? And so obviously their understanding of the word "supervisor" was a person with "super vision." In other words, the person who would see things that the people inside the process or system could not see. He actually meant manager, leader, call it what you will, right? 0:07:31.1 Andrew Stotz: Right. 0:07:31.3 Balaji Reddie: And so later on, I think it was Bill Latzko who told Deming to use the word "leadership." And so in the 1986 edition, in Out of the Crisis, he brought in "Adopt and institute leadership." And he said the aim of leadership should be to help people and machines do a better job. And he elaborated this a bit more in the 1990 edition, saying, "Adopt and institute leadership for the management of people, recognizing their different abilities, capabilities, and aspirations." And then he adds, "The aim of leadership should be to help people, machines, and gadgets do a better job. Leadership of management is in need of overhaul, as well as leadership of production workers." So that's what he wrote in 1990. Then he says here, "Transformation in any organization will take place under a leader." Now, this is profound knowledge, when he reworded it. And we started with this, and that's why when we started this series, this podcast series, I started with 14 principles of leadership, if you remember. 0:08:33.8 Andrew Stotz: Yeah. We're back to leadership. 0:08:37.6 Balaji Reddie: Yeah. So what I had to say actually for point number seven is in that podcast, because he actually elaborated 14 principles of leadership as an elaboration of this point. And he says here, "The transformation in any organization will take place under a leader. It will not be spontaneous. How may he accomplish transformation? First, he has a theory. He understands why the transformation would bring gains to his organization and to all the people that his organization deal with. Second, he feels compelled to accomplish the transformation as an obligation to himself and to his organization. Third, he is a practical man. He has a plan step-by-step, and he can explain it in simple terms. But what is in his own head is not enough. He must convince and change enough people in power to make it happen. He possesses persuasive power. He understands people.” So, in other words, profound knowledge. You saw people, you saw theory, right? And of course, the variation in the sense that when you're making this transformation, don't expect the system to behave in a predictable manner. Sometimes it'll behave unpredictably. So if you understand that and you know what to do in such circumstances, you need to be prepared. And when you get prepared, you can manage. As he used to often say, "Management is prediction," right? And even if we are faced with unpredictability, if there is a predictability in the unpredictability, you can still manage it if you know the extent of unpredictability. So Walter Shewhart, when he invented the control chart, if you look at it that way, that the control limits, talk about the extent of unpredictability in the process which are predictable. And then you have the unpredictability in the process which is unpredictable, right? And so we tend to work on those, the unpredictable things first, and then the predictability which is unpredictable, we try to reduce the unpredictability in the process. I hope I'm making sense. [laughter] 0:10:44.1 Andrew Stotz: Yeah. 0:10:46.0 Balaji Reddie: So, this is what he meant. Now, when I was speaking to, I think I got this from Bill Latzko, and I think I even spoke to Bill Bellows once about this. So this is what I heard Bill Latzko say. He said that point number seven, he said leadership, he said, "The job of a leader is to create more leaders," he says. And he says managers are no longer just planners or instruction givers, they must be leaders. And then came this input from Myron Tribus. I think I mentioned him once here, the director of MIT, he was at the National Productivity Council in the United States. And he once used to have a lot of discussions and, may I be permitted to use the word, argument with Deming. They used to have it going back and forth. A brilliant man. So, during one of the discussions, I believe Myron Tribus went like this and said, "Okay, okay, Dr. D, I've understood all your 14 points and I've understood Profound Knowledge. What is it I need to do different starting tomorrow morning?" And as usual, Deming answers his question with a question, leans forward and speaks to him and says, "Do you want me to define your job for you?" [laughter] 0:12:15.7 Andrew Stotz: Clash of the Titans. 0:12:17.0 Balaji Reddie: Oh, yeah, yeah, yeah. I was reminded so much of Bill Scherkenbach. Bill Scherkenbach mentioned this in a video where he says, "He does what he does because he wants you to think." He said he's very Socratic. He never answers a question. He answers a question with a question. 0:12:32.0 Andrew Stotz: Yeah. 0:12:37.6 Balaji Reddie: Right? And I think once I mentioned on one of the podcasts here about what the word guru really means. The person is unlocking the knowledge you actually have inside of you. And when I heard Bill Scherkenbach say that in the video, I said, "Wow, this is exactly what we in our culture define as a guru." The guru does not give answers. He only keeps asking questions. The theme, the logic, and the philosophy is that people know the answers, but they do not know they know the answers. And I think Deming was right like that. He pushed you. He provoked you into thinking. And he wanted you to think for yourself. And I think he always believed that every person has that, and it's just that they need to be shown the right direction. Even my boss, whom I worked for so many years, that gentleman, I often saw much of Deming in him when he used to answer a question with a question. And at times when he used to get angry, I realized that even when he got angry and he was yelling, he was not yelling because he was angry with me. He was angry at himself for having expected too much of me. [laughter] And so I used to always... When he used to give any certain instructions, I used to sit down and discuss at threadbare what exactly he wanted, and then I would get to my job. Because I used to find he was well-meaning, and he never wanted to cause any kind of harm to anybody. But when he used to get really upset, then obviously it was upsetting to see him like that. So I saw that he'd never answer questions. "Go find out. Go find out." So the managers are no longer instruction givers, they must be leaders. And then this comes from Myron Tribus. Hear what he said when Dr. Deming said, "Do you want me to describe your job? What's the job of a leader?” So he says here, "People are the most important part of a system. They work in a system to create value for the customer. The leader's job is to work on the system and continually improve it with help from the people in the system and the customer by leading the people, coaching and counseling them in a non-judgmental manner." So he often said, "Coach and counsel, but do not judge." Right? And he said, "If you judge people, they shut up." So point number seven, if you want an elaboration, I've already covered this in our very first podcast on 14 principles of leadership. In fact, there were 17. For anyone who is following this could go back and check the very first, the first or the second one, I can't remember, but we went through these. And in The New Economics, also, the second chapter on this. 0:15:33.2 Andrew Stotz: By the way, I want to show you something. 0:15:34.7 Balaji Reddie: Yeah, sure. 0:15:38.1 Andrew Stotz: This is something I have on my wall, and it's called the 14 Obligations of Top Management. 0:15:45.7 Balaji Reddie: Okay. 0:15:47.0 Andrew Stotz: And it's signed by Dr. Deming in March of 1992. In fact, on the certificate, it doesn't have the date, but now I realize the last seminar I did with him was March in 1992. 0:15:58.4 Balaji Reddie: Okay. 0:15:58.8 Andrew Stotz: These are the 14 points. He called on it, it says the 14 Obligations of Top Management. But just a prized possession I have that I have on my wall with his signature on it. 0:16:08.3 Balaji Reddie: Wow. You guys are so lucky you met him. [chuckle] 0:16:12.5 Andrew Stotz: Yeah, that's just... Anyways, that was just something that just popped up in my head, and so I asked someone on my team to go get it, and then I just want to show you. 0:16:21.8 Balaji Reddie: Absolutely. Wonderful. Wonderful to see that. 0:16:24.7 Andrew Stotz: Yep. So that's good. That's leadership. 0:16:26.8 Balaji Reddie: Yes, that's leadership. 0:16:27.6 Andrew Stotz: Yep. 0:16:28.3 Balaji Reddie: So, we already did a podcast on that, so people can go back and just listen to that because there were a lot of, kind of a to-do that he gave. People often confuse that. I think in one of the last papers he wrote too, there was a compilation made by, I believe Accenture was the company. I can't remember. They were known as Arthur Andersen. Am I right? 0:16:55.8 Andrew Stotz: I don't know how Accenture... Where they came from actually. 0:16:59.4 Balaji Reddie: Oh, okay. Because there was a publication that was released titled Total Quality Management, TQM. And then it contained papers by who's who. You had just about everyone, Feigenbaum and Crosby and Juran, and then Deming was of course right in front. And in that he spoke about 14 principles of leadership. Everybody thought 14 Points, but when you read, he actually wrote about the chapter what he wrote in The New Economics, the principles that we discussed the other day. I of course felt that instead of 14, there should have been 17 because there were three principles which he wrote down in Out of the Crisis which went missing in The New Economics. And so I just added them on and it became 17. So if anyone's interested, they can go back and listen to that podcast, also read both Out of the Crisis and The New Economics about managing people, and you'll find these points there in a very raw form in Out of the Crisis, but more refined in The New Economics. So that was point number seven. So without elaborating much on that, I said just go back and just check that podcast. 0:18:10.4 Balaji Reddie: Now we come to point number eight, one of his most misunderstood points. Right? And let's read. It's incredible what he wrote. He said, "Drive out fear so that everyone can work effectively for the company." This is what he wrote in 1986, and in 1990 he changed it. But I want to talk about this 1986 version because there were many people who misunderstood and misquoted this. When he meant fear, he meant fear of reporting a problem, fear of making a mistake, right? 0:18:57.0 Andrew Stotz: Yeah. 0:18:57.6 Balaji Reddie: Reporting things going wrong. And we just discussed in point number five that you need to be told about problems because a problem is something that you did not anticipate that can go wrong. And so if someone comes to you with that problem, you should be more than happy and instead look at it as a better way of understanding your process. No matter how much, what precautions you take, and there's so many tools available right now to get into this and try anticipation, blah, blah. Yes, it does work to a certain extent and in fact very effective. But there are always cases where things can go wrong. And you can't do everything. You're not the all-knowing person, and you don't have to be. So this was what he meant, that when people come to you with their problems, when they come to you with that we made a mistake and we need to correct it and things like that, then you don't need to steamroll them. It's like what happened, I think I shared over here in one of the podcasts, what happened with my father when he made a mistake. I think I shared this. Right? So, and he was told that if you make a defective product, you have to pull the cord. And when he pulled the cord, the red lamp went on and there was a little siren. So the entire shop floor would know that there was a mistake that was committed here in the process. 0:20:34.0 Balaji Reddie: And he was told to just do that and that you should not make defective pieces, but if you do, do not hesitate to pull this cord. And so they had removed that fear even then. I told you what my father felt that, what if they feel this about me, that here's a guy from India and...
/episode/index/show/deminginstitute/id/43110993
info_outline
John Willis: Why AI's Biggest Problem Isn't Technology
09/28/2026
John Willis: Why AI's Biggest Problem Isn't Technology
What if your AI strategy is creating more risk than progress? John Willis joins Andrew Stotz to trace how Deming's System of Profound Knowledge shaped the way he thinks about organizations, learning, and change. From his early days building DevOps to the AI transformations he's navigating with CIOs today. Along the way, John connects Deming to fast feedback loops, explains why leaders keep mistaking a learning problem for a technology problem, and shares stories that never made it into his book, Deming's Journey to Profound Knowledge. A fresh conversation for longtime Deming thinkers and those just beginning the journey. TRANSCRIPT 0:00:02.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm here with featured guest, John Willis. John, how are you doing? 0:00:15.7 John Willis: Great, Andrew. I was just thinking, I feel like that song, like I got my picture on the cover of Rolling Stone. Like, I'm on the Deming Institute podcast. Yay. [laughter] 0:00:24.9 Andrew Stotz: We finally got you on. 0:00:27.8 John Willis: Yeah, yeah. 0:00:30.3 Andrew Stotz: Actually been a while and I wanna introduce you just briefly and then I'll let you do a little bit more of the introduction. But basically on Amazon, a book popped up and I was just looking at the date of that. That book popped up on, for me, it popped up on September 6, 2023 on Audible and I immediately bought it and I got the Audible book and the book's called 'Deming's Journey to Profound Knowledge. How Deming Helped Win a War, Altered the Face of Industry, and Holds the Key to Our Future'. And I immediately got it. Didn't know you, listened to it, loved it. Later you reached out on LinkedIn and we started communicating and you were kind enough to send a copy of it, which I then went through in more detail. I love the book. I really highly recommend the Audible version because it's just fun. Because the book is opening up a whole new Deming lens, a whole new way from somebody that never met Deming, and I just found that fascinating. So maybe why don't you take a moment and introduce yourself to the audience so that people know who you are, where you've been, what you've been doing and what you're doing now? 0:01:41.4 John Willis: Yeah, no, no, great. I... So, yeah, I... I've been doing technology, usually high consequence business, regulated industry, banks, retail, the biggest of the bigs, where the technology is incredibly important. Right? And I've been doing five decades of basic technology transformations, and I'm kind of the person who gets bored real easy. So I've literally gone through, like, you name it, mainframe, centralized computing, client server, distributed computing, priority systems, the Linux Open systems, you know, owned infrastructure cloud, and I'm consider one of the founders of the DevOps movement. And now today, like the cliché that I am, I've been doing a lot of organizational strategy on AI. So I don't come in and tell you how to turn 4,000 developers into AI coders. I kind of tell your CIOs to slow down. Wait a minute. So, yeah, so my day job today is I'm... I think these days finally in my life I would call myself an author first. I've written a number of books. The one you did, I had... My last book was a history of 100 history, 100 Year History of AI. And... But I'm an advisor, so I sort of... I take inbounds. I don't really look for work. Usually it's a chief of staff for a CIO who either has worked with me in the past and hey John, we're underwater with AI. Can you come in? Or they hear something I've said or I do a lot of podcasts and then I'm sort of a quasi investor. Although I probably should listen to your stuff a little better because I'm typically... I'm one of those guys that like, if I invest in it, you go short on it right away. So... [laughter] But yeah. But, yeah, no, so... But my day job today is really, is doing research. I'm actually just sure, this probably opened up a whole another discussion. Maybe later but I'm writing a book about the history of quantum computing right now and that's been just fascinating. So... 0:03:41.7 Andrew Stotz: Yeah. 0:03:41.8 John Willis: But my day job is helping CIOs and large high consequence organizations try to shuffle through technology transformations. 0:03:50.7 Andrew Stotz: And for the audience there that didn't catch what you were saying at the beginning, it kind of dated you because you were talking about the song called Rolling Stone by Dr. Hook. 0:03:59.9 John Willis: Yeah, yeah, totally. 0:04:01.3 Andrew Stotz: Dr. Hook published this in about 1972. And here are the lyrics. “Wanna see my picture on the cover? Wanna buy five copies for my mother? Wanna see my smiling face on the cover of Rolling Stone?” So here... 0:04:12.8 John Willis: Totally. Yeah. There you go. Deming Institute. Yeah, no, great. 0:04:16.7 Andrew Stotz: And one of the things that I found fascinating was just how you came to Deming from a very different angle. I was lucky enough that my boss at Pepsi sent me to study with him and I did two different seminars. The last one was in 1992. So I was 24, he was 92, was gonna live about one more year. I had... I could literally reach out and touch the man and hold his hand and sit next to him. I got a great picture of me sitting next to him. And I was just a young guy with a fresh mind compared to the 500 guys behind me that were older that he was bashing at times. But tell us a little bit about how you stumbled upon this topic and why you decided to do what you did with writing the book? 0:05:03.7 John Willis: Yeah, no, it's sort of interesting. I sort of say that for the first, I don't know, probably from 1980, my first job was running five distributed large computer systems for Exxon Research and Production, basically the geophysics work, right, during the most hottest period of the oil industry. And there were people doing that part of variation and understanding, but that didn't sort of hit my world. I was supporting geophysical processing and then so I rolled into other jobs. And then probably the closest I came... So in other words, I'm dealing with a lot of these major transformations and always focusing on the meta side, like the organizational. What are the things that are wrong? How do we fix the human and technology? There's a phrase called sociotechnical systems, right? And that's always where I've been most interested. And then even I was at GE Capital and I'll say this with all honesty, I was a Green Belt, but they gave out Green Belts for Six Sigma, [laughter] right? My wife was actually a Black Belt. And... But we would do... And I know Deming hated Six Sigma and all that, but we were doing... It was all around me, right? And then it wasn't until really the DevOps age that we really... That was a major shift in my career because before everything was sort of first generational from a technology or sociotechnical system, very command control, you sort of you installed software in a certain way. There were so many principles that were being broken by DevOps. And I was already an older guy at that point, but I was learning from these young kids and I'm known as the person who introduced DevOps to the US. 0:06:52.3 John Willis: And... But so there is where we started going back and understanding... We thought everything was new. We were creating DevOps, we were doing all this crazy awesome stuff. And I remember a friend of mine, well, a good friend of mine wrote a book called 'The Phoenix Project' by Gene Kim and it's a rewrite of Eliyahu Goldratt's 'The Goal'. And I was like, oh my God. And I read all of Goldratt's books and I was like, okay, this is the way, this is the way. I've seen a glimpse of some 30 or 40 year knowledge that I was missing. And then it was an open space seminar. A good friend of mine says, "John, you know." and I'm going off about Goldratt and he's like, "You know this all goes back to Deming." I'm like, "Who's Deming?" I'm like, "I just spent a year learning everything I could about Goldratt. He is my North Star. And now you're telling me..." And he challenged me. He said, "John, I'll leave it at this. You go read Deming's 14 Points and if you don't... I know you. I know what you're gonna do once you do that." And he was spot on. That was it. I was... And I don't... I'm more into the Profound Knowledge and we could talk a little bit about my journey there. But I was like, oh my goodness, this is the real and I love Eliyahu Goldratt and I love 'The Goal' and I love all his books. But Deming was hitting... Was like punching me right square in the face. 0:08:12.0 Andrew Stotz: So to what gap did it close for you? I mean, Goldratt is very specific about the main limiting point... 0:08:23.2 John Willis: Yeah. 0:08:23.3 Andrew Stotz: The bottleneck, how do we solve this? 0:08:25.6 John Willis: So the 14 Points, sort of one of the jokes is that it's mandatory to put the 14 Points in a DevOps presentation. So we were doing that dance a little bit, but then when I got a little serious about it, actually me and Gene Kim, we did a book. Goldratt has this book called 'Beyond the Goal'. It's an audio-only book, right? And I convinced Gene about five years after he had written 'The Phoenix Project' to do a Beyond the Phoenix Project. And so he did Goldratt, I did Deming. And at that point, I knew enough about Deming to say, "Okay let's..." And then we talked about DevOps and the principles of Lean and we did... I always, when somebody says they bought that audiobook, I'm like, "Oh, you're the 15th person that bought it." right? But it sold more than that. But the... But that's when Gene tapped me on the shoulder and did that. We went to the studio. It was a highlight of my life, literally going to the studio with Gene and literally recording for a couple of weeks. And he's like, "John, you really need to write a book about Dr. Deming." And then I started building a folder. And then the crash course then or the trajectory at that point not really crash course is that you realize the 14 Points are, no disrespect, but vaguely interesting. You're like, "Okay, Mount Everest is System of Profound Knowledge." Right? Because that's the mount... And that's the one where you're like, "Okay, I read 'Out of the Crisis', I think I get it, the 14 Points make sense, but like, what is this stuff he's talking about here?" Right? And then you read 'New Economics' and it's like, "I still..." And then, so for me then, it was, I'm just one of these person like I have... And again, I'm not trying to make myself look like I'm special, but I have to learn. I can't... I'm the worst person in a... If I was in your class, you'd kick me out of your class because I'd be sitting in the front row and you'd be, "Oh no, not you again." 0:09:26.2 Andrew Stotz: Another question. 0:10:26.9 John Willis: Yeah I know just another question. I mean, I've been cut off by professors and... But the... I'm like, "All right, I got to get to the bottom of this." And that was almost a 10-year journey for me of... I had to know. Because it was clear to me that Profound Knowledge or System of Profound Knowledge was not something he invented out of thin air. Like, I had to figure out, where did he get this? And that started the genesis of how I was gonna write the book, which is the journey, 'Deming's Journey to Profound Knowledge'. And that sort of took me into... And what that did, while I was learning that, of course, Deming opened the door to guys like Russell Ackoff and Ashby and just all these other sort of management thinkers and even Drucker or whatever, right? They all sort of started filling out a palette. But meanwhile, I'm still driving hard on Deming. And what that gentleman said to me, good friend of mine, Ben Rockwood, who I give tribute in the book, is when he said to me, almost like tapped me on the head, like, "John, John, John, it all goes back to Deming." Like, you start seeing the clarity of DevOps, Lean, Agile, it all had these things. And so I spent literally a long time really trying to figure out, okay, how did Deming get... We all know variation is relatively simple to understand where he got that from, right? Shewhart's work and all that stuff. And I'm not trivializing the impact of what he did for it, but knowledge was interesting. And knowledge I had to go to pragmatism. You had to understand what C.I. Lewis is. And that's a book that Deming said he had to read seven times. 0:12:03.1 Andrew Stotz: He had to read it seven times...there’s no hope for me. [overlapping conversation] 0:12:05.2 John Willis: That's right. No, actually I did Tom Sawyer. I have a friend who's one of the smartest people I know. He's like, "I'll read that." And he explained it to me. But and then I read it. But so knowledge, this sort of, how do we understand? How do we know what we think we really know, right? That whole epistemology and all that. To me, this is like sort of, just give me more, right? And see more and feed me. And then system thinking was interesting, appreciation for system, because then that got me back to, okay, and there was some missing links there. And I found that one of the guys who came up with General Systems Theory, von Bertalanffy, him and yeah, Ackoff. Him and Ackoff had sat in a seminar of his like in the '40s and so there was some influence there. And there's a lot of work that's been going on in systems thinking after him. But so then I got that and then the psychology is tough, right? But so I put all that together. And then my... The thing I was telling you earlier is, when I do the research for a project like this, I read everything that there is about it. So my AI book, I read 25 books on AI, history of AI. I'm up to like 10 books on the history of quantum computing. 0:13:23.4 John Willis: With Deming, I've read every book that's been written by Deming, at least the ones that I know of, right? And one of the things I noticed, the pattern was that they all... Again, I'm just simplifying it. They all started off with a little bit about the biography, some a little longer than others, but in general, most of the book was about the management theory. And it was really a book that was being sold as a business book more than it was as a biography. And one of the things I've always loved about Michael Lewis or that sort of story of nonfiction storytelling is he tells a biography, it's a disguised biography and I thought, my God this... And as I kept compiling over the years all these great stories, you know, the Doris Quinn story, right? The woman who, she went to New Guinea and Deming... Spent the last two years of her life with Deming. I mean, most of the people that are Deming disciples didn't even know about this woman. And she spent the last two years of life traveling with him. So I met her and interviewed her. And the stories, you know Hawthorne, and there was such... It wasn't just that, I love the idea of trying to explain how he got to management theory and epistemology, how did he get to the science of variation? That's all good stuff. But I wanted the stories, and the stories were just glorious. As you enjoyed the book, right? 0:14:52.4 Andrew Stotz: Yeah. 0:14:53.3 John Willis: I think that was the fun part of not just explaining the sort of tech, if you will, but it was the, like the, oh my God, this... I've got to... I had three chapters like six years before I wrote the book. 0:15:06.9 Andrew Stotz: Yeah. Well, here's chapter 15. And you say, "Being a student of Deming, I came across an untold firsthand account of a beautiful story from one of his acolytes, a woman named Doris Quinn," who you're talking about. 0:15:20.0 John Willis: Yeah. Yeah. 0:15:20.2 Andrew Stotz: And... But the... I also had marked a section related to talking about the final days, saying... 0:15:29.7 John Willis: Yeah. 0:15:29.8 Andrew Stotz: “Doris said he was a very, very driven man. He went nonstop. I remember one time we were in Kansas City and a reporter asked him, "Dr. Deming, when are you going to retire?" And the master said, "Why would I do that?" "Well, so you can do what you want." the reporter said.” 0:15:45.7 John Willis: Yeah, yeah, yeah. 0:15:46.4 Andrew Stotz: “Dr. Deming looked at him and said, "I am doing what I want." 0:15:50.2 John Willis: Yeah. You know what I love about her? There's a really good book from Amazon called 'Working Backwards'. And they tell us... The guys who wrote it were pretty high up early on in Amazon. They tell the story how if they traveled with Bezos and you didn't have a whole set of questions on the plane ride, you got in trouble. And so Doris Quinn tells that story, how she literally, she tells the story of how she traveled with him and he's like, "Doris, what other questions do you have for me?" And if she didn't have one, he'd get mad at her. He wouldn't talk to her. They'd have to wait a day because normally they'd go and have gin together. But if she didn't have questions... And some of it's in the book, some of it was in conversations had... He'd literally get mad at her and not talk to her for the rest of the day [laughter] because she didn't have any questions. You got to love that, right? 0:16:39.2 Andrew Stotz: And you also did a little follow-on about more stories that you didn't get in the book, I believe. 0:16:48.1 John Willis: Yeah. Yeah. 0:16:48.2 Andrew Stotz: Tell us about that. 0:16:50.1 John Willis: Well, so I wrote the DevOps Handbook, right? And that was a collaboration with four other authors and took us six years to write it. So my wife says, "What parts did you write?" I'm like, I don't know, man. There were a lot of parts that went in and out and moved around when you have four authors, and it was really a very techie book. So 'Deming's Journey to Profound Knowledge' was really the first book where I literally... It was my book. And so I had written the book. In fact, my favorite story, and Doris Quinn is a great story, my favorite one was... It was basically called The Devil Wears Prada. And so, and Kevin... I don't think Kevin, his mother even knew this when we were talking that his grandmother literally was... I mean, I think they knew that she worked for the pre-BLS, she was a statistical mathematician and all that. 0:17:45.3 Andrew Stotz: Right. 0:17:45.4 John Willis: But after the war, she worked before she... I don't know if she met Deming, but she certainly wasn't married to him, Dr. Deming. She worked on the mail-order business was getting all these returns for women's sizing. And so whatever the pre-BLS was, Bureau of Labor Statistics, commissioned her to do a study. And she's the one who invented women's sizings. Because before, they didn't really have all the different measurements. So she ran a whole statistical study. And so today... So I use the whole story of the Anne Hathaway, the 14 is the new seven and all. So I start that off. Anyway, so I go to my publisher and my editor, who I love, she'd already knocked out a lot of stories, but this is the one where, "You're not taking this story from me. You're not... This one is not." And then she's so good, she'll be like, "John, let me ask you this. Does it fit the arc?" By this point, she understands System of Profound Knowledge, she's read my book quite a bit, and she says, "Does it fit the arc of System of Profound Knowledge?" "Uh, I hate you." And I took it out. And then she said, "Well, why don't you make a blog post out of it?" And I'm like, "Oh, no. I'm gonna make another book." And I took all the stories we cut out and I...
/episode/index/show/deminginstitute/id/43000038
info_outline
A New Lens with Balaji Reddie (Part 8)
09/22/2026
A New Lens with Balaji Reddie (Part 8)
What if your cheapest supplier is secretly your riskiest? Balaji Reddie unpacks Deming's Points 4, 5, and 6 with Andrew Stotz by exploring Deming’s thinking on suppliers, continual improvement, and training. Why do strong relationships matter more than short-term savings? Why should problems be welcomed? Do people perform differently when they understand the purpose behind their work? Balaji uses stories to offer a practical look at what these three points can teach leaders today. TRANSCRIPT 0:00:02.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussions with Balaji Reddie, an educator and trainer in the teachings of Dr. Deming and quality management more broadly. Well, we've had some great conversations so far on various points of Dr. Deming's 14 points. I think we're gonna try to get four or five, four, five, six. Let's see how it goes. So, Balaji, take it away. 0:00:32.5 Balaji Reddie: All right. So, good morning, Andrew. So I think the last couple of times we were together, we've spoken about point number one. I think the first thing I did say is that this is an entire system, so we can't isolate them. But he gave it some sequence and he gave it some structure. So... Is there disturbances that getting recorded? 0:00:54.3 Andrew Stotz: No. No. 0:00:55.0 Balaji Reddie: No? Okay. Right. So point number one, of course, was very much in sync with how he defined a system, where he said that every system must have an aim. Without an aim, there is no system. And when you read the commentary behind that, you see that it's not just aim what he meant was also purpose, the reason why a system exists. And so when we started seeing how he applied this to the running of an organization, that's why the first thing that crossed his mind was purpose. We, of course, discussed that in complete detail, what he meant by that. I think we also discussed about the actual text that he wrote where he said for quality and productivity and things like that. The second one, of course, how he changed the wording of point two, which was adopt the new philosophy. So when he first wrote it, it was philosophy of quality that comes first more than anything else. But when he professed Profound Knowledge, the wording changed to the new philosophy of win-win, right? Cooperate. 0:01:54.4 Balaji Reddie: And that's what we discussed last time, that cooperation in the broadest sense of the term with each other inside the company, with your competitors, with your suppliers, with your customers. And he says, "Teach and practice this." Those were the words. And the third one, of course, cease dependence on mass inspection. And it was a context in which he wrote it, but of course, he elaborated on that. You should understand why we use inspection. It is to keep us updated on what is happening in the process, not so much to sort bad from good. And that was basically, in fact, the wordings of the new point he wrote was understand the purpose of the system of inspection. He said there will always be inspection, but relying on that is not right. Using that to understand the process, that's the way to do it. So that's exactly what we spoke last time. Now we're taking it from there. Now talking about point number four, where... I'll just pull up the wordings for my sake so that I don't make a mistake in reading out what he actually said. Right? So the original wordings and then what it changed to later on, right? When he started professing. Now, so here's point number four, which goes like this. He says, "End the practice of awarding business on the basis of price tag alone. Instead, minimize total cost. Move toward a single supplier for any one item in a long-term relationship of loyalty and trust." And this did not change in 1986 or 1990. 0:03:39.1 Balaji Reddie: Now, he writes there in the commentary, which is taken from his text, "The aim in purchase of tools and other equipment should be to minimize the net cost per hour of life. Price has no meaning without a measure of quality being purchased. Without adequate measure of quality, business drifts to the lowest bidder, low quality and high cost being the inevitable result. Estimate the total cost of use of materials and services, the first cost, purchase price, plus the predicted cost of problems in use of them and their effect on the quality of final product. As the relationship between supplier and customer grows tighter and tighter, renewal of a contract year after year may appear to be a formality. This even tighter and tighter relationship will, under good management of producer and customer, ensure better and better quality and lower and lower costs as the years go by. A long-term relationship with a single supplier may be a wise decision if customer and supplier play their parts for optimization of the system. However, a sudden jump to a single supplier is inadvisable. There are risks. Go slow. It is not a relationship to enter into lightly. An overriding criterion is the supplier's burning desire to work with the customer on a long-term relationship backed up by a demonstrable store of specialized knowledge with management that is trying to adopt the new philosophy." 0:05:01.8 Balaji Reddie: And beautifully written. So the new wordings would now be, "Work towards having an arms-around relationship with your suppliers. Invest in them through education and training so that they can contribute effectively towards the organization. And when purchasing, do not focus on price alone without a measure of quality, and reduce variation by practicing cooperation with your suppliers." Now, coming to this, not many people are aware of what he spoke in Japan to the organizations there, but one of the major points he did say was to work very closely with their suppliers, right? And this text... The funny thing is, you know, about his works in Japan that he never gave any handouts or material, unlike Dr. Juran, who gave a lot of notes before he landed there. Right? Dr. Deming just handed out certain standards and just some pamphlets, I think Z1, Z2, and Z3, the standard copies. But what he spoke there was recorded by them. And the notebook, the book that came out, Elementary Principles of the Statistical Control of Quality, were essentially transcripts of what he spoke there. Right? It's later on when they showed him that they had made a book that he assisted. They expected him to get a little, I can't use a very strong word, upset, but that he would chide them for having done something without his knowledge. But instead, he was very happy, apparently, and added on to it and gave them the second edition and asked them to add an extra chapter and things like that. So when he went through those notes, obviously it was their translation of English to Japanese and then Japanese to English and things like that. But strong messages came out, and one of them was to work very closely with their suppliers and treat them as an extension of themselves, right? Extension of the company itself. 0:07:09.7 Balaji Reddie: Now, the thing about the lectures that he gave there, it's very interesting, that the arrow diagram, if you remember the famous arrow diagram which he drew there. If you see, it appears on Out of the Crisis in the new edition, page three, but the original edition, page four. But that arrow diagram in his mimeographed book, Quality, Productivity, and Competitive Position, comes on page number 103. And if you see the Elementary Principles of the Statistical Control of Quality, the arrow diagram is just directed towards the consumer. That does not have consumer research, right? And I think even he was... When he wrote... When the final edition of The World of W. Edwards Deming came out, the Lecture to Top Management, actually that was a lecture which he gave to the statisticians and engineers. To top management, there were two instances. One was July 1950 where he spoke to 20 people... Or 21 out of the 40 people who were invited. And then there was another one in August 1950. And August 1950, that took place at Hotel Diama, and that's where he added consumer research and completed the diagram. And that's the one he reproduced ever since in all his papers. But funnily, in The World of W. Edwards Deming, they've reproduced the first arrow diagram that he came up with, which did not have consumer research. It just shows the arrow pointing towards. But in both there, there was the presence of suppliers. Right? And he said that now... We used to have this group on the internet. It was called DEN, Deming Electronic Network, the D-E-N, the DEN, and we used to call ourselves the DENizens. And there was a gentleman, Jim Clauson, who used to... Who was a moderator and he had everything. It's unfortunate, I don't know where he is now. Not kept in touch with him. The last, I think, I interacted was many years ago. 0:09:16.7 Balaji Reddie: But all that... That's a treasure house of conversations, emails, which he has. Unfortunately, some cybersquatter hacked into the server and was asking for a ransom of $28,000 or something like that. And this guy didn't... He said, "Obviously, I can't pay that kind of money." So I don't know whether he's managed to retrieve all of that, because that's a treasure house. We used to have a lot of chats on that, and I interacted a lot with two very, very famous people who also worked very closely with Dr. Deming. One, of course, the great Myron Tribus, and the other one was John Dowd. And John Dowd... We had this chat and we said there is a difference between July 1950 and August 1950. And he took it on himself to find out what exactly was spoken in both these. Because July 1950, yes, Dr. Deming himself gave some notes and said, "This is what it needs to be." But August 1950, the people sitting there. So there were 80 people in that room. And I think he got in touch with some of them and he tried to reproduce to the extent possible what exactly was spoken there. I did try to add to it. I sent him some of the notes which my father had when he went to Japan in 1964, which is, of course, almost 10, 15 years later. But I saw some notes there which were typewritten, of course, mimeographed, which had some semblance. So I sent him, I said, "We need to add this in." But when he sort of released that document, he didn't really put that in. I don't know why. We had a discussion, but he didn't put that in. But there is where you get to see he talks about cooperation. He talks about working closely. And the words he used were the famous saying, "The strength of a chain lies in its weakest link." Right. And he paraphrased that apparently and said, "You're only as strong as your weakest supplier." [chuckle] 0:11:31.2 Balaji Reddie: So the suppliers have to be as strong as you are. And I'm going ahead of myself here, but I believe that's the reason why people call it a supply chain. And he kind of sowed the seeds. He never said so in as many words, but definitely he said, "You have to work closely." And he left it to them how they wanted to do it, right? Typical Deming, just give them the idea and you come up with a method. And what they did, typical Japanese way of working, they all worked together. And I think they saw that there was a lot of commonality in the way they were interpreting what Dr. Deming said. And so in 1957, they came out with a document of 10 principles of working closely with your supplier. This has been reproduced by Ishikawa, the famous Ishikawa diagram inventor, in his book Introduction to Quality Control, I think that's the book. Because the next one that came out was Guide to Quality Control. So Introduction to Quality Control has this document, the 1957 document, 10 principles of vendee-vendor relationship, which then got updated, if I'm not wrong, around the year 2000. Because '97 is when the JUSE, that is Japanese Union of Scientists and Engineers, finally decided to adopt the term TQM. They used to use the term TQC up until then, Total Quality Control. 0:13:08.7 Balaji Reddie: And when they finally adopted TQM, that's when they realized they had to revisit many of the documents. And one of them they revisited and updated was this document. And it's a fantastic document. If you get to lay your hands on it, please do read it. I can read out some of the text. I'll just pull it up for my reference. So you'll find out what he insisted on, how you work with your suppliers, right? So let's just... Yeah, let me just get this going. Okay, so here we go. It would be here. Okay. So working closely with your suppliers and the vendee-vendor relationship. Here we go. Okay, so we say here, here it begins. First, the purpose of the entire document. He says, "Both purchaser and supplier should sincerely practice the following 10 principles while fostering a spirit of mutual trust, cooperation, and tolerance, and inculcate a sense of social responsibility." Right? So this is the purpose. The purpose of the document has not changed over the years. So those three words; trust, cooperation, and tolerance. Right? The way it should be practiced. Now, how it is practiced today, I think trust in today's world is we lie a little less to each other. Right? Cooperation would be you scratch my back, I'll scratch yours. And tolerance, I don't even want to go there. I'll create a big controversy. There'll be something else that might get edited out from here. But that's precisely what this is. And social responsibility. I mean, this is 1957, right? 0:14:57.5 Andrew Stotz: Yeah. 0:14:58.2 Balaji Reddie: And they were talking about social responsibility, which has become a fashion today, CSR, et cetera, et cetera. People could argue it's become more structured. Sure, sure. But the seeds were sown then, right? And now I'll read out the wordings of the first point where he says that purchaser... They say, "Purchaser and supplier are responsible for understanding each other's quality control systems and working together to implement quality control." But they updated it by saying, "Purchaser and supplier are jointly responsible for understanding each other's organizational systems and working together to create value for the end user." So understanding each other's companies is important, and each other's systems, the way you operate. And of course, main thing is you work together, which works in sync with Dr. Deming's interdependence in a system where you are independent and mutually dependent simultaneously. So that's point one. Point two, of course, is much more elaborate, saying that... This is where interdependence comes out... "Should preserve their individual autonomy while respecting each other's independence." So that's exactly what I just mentioned. That incidentally happens to be point two. 0:16:10.1 Balaji Reddie: Point three in this is, "Purchaser and supplier must be on the same wavelength. Speak the same language. In other words, talking about operational definitions, there should be no ambiguity in understanding and realizing requirements. Should clearly understand what each one is saying." So the use of operational definitions came in this point number three. Point number four talks about having contracts. But they said the contracts should cover the following; quality, quantity, price, delivery deadlines, and payment conditions. And in the new edition, they say there must be a quest for continual improvement. So putting that as point four. Point five is “go beyond merely conforming to specifications. This could involve studying the end use of component or activity and providing relevant evidence wherever possible.” So this is, I think, the use of testing labs, et cetera, just as to give confidence to each other that we're on the right track. And also go beyond just trying to meet specifications. I think that comes in line with one of Dr. Deming's obstacles, the supposition that you can only meet specifications. And then he talks about evaluation. I mean, they talk about evaluation methods, but they say that “evaluation is not for judgment but for improvement.” Yes, you need to be... Again, that famous statement that you need to be aware of what is happening and nothing more than that. And if you are evaluating the supplier, also help them attain the next level of performance. It's not us versus them; it's us and them. Right? 0:17:56.8 Balaji Reddie: So that's point number six. And then point number seven is very interesting. What if there are disputes, right? There should be some procedure for amicable settlement of disputes. And the word there is empathetic approach should be there towards settling disputes. And then of course, point number eight is improvement, innovation, invention happen only when you work together. So there should be a continual exchange of knowledge, training, information. And point number nine says integrate your processes as much as possible. And finally, the tenth point says do not lose focus on the consumer interest. So you can see here, Andrew, how they interpreted what Dr. Deming had to say. These were 10 principles they wrote way back in 1957, which are as relevant as they are even today. And working towards a single source, yeah, definitely Deming gave us that warning, you can't do it overnight and you can't do it immediately. So how do we approach that? All right. 0:19:04.3 Balaji Reddie: So what we decided to do, we said here in my company when we did this, I said that we need to first do a criticality analysis, right? Which are those items which are critical to the running of our business? Let's identify them first and then we begin with applying these principles, working closely with those items first, right? And once that is done and we learn how to do that, then we can expand our dragnet and include just about everyone. Eventually we want to go there, right? We want to go where we can work that way with just about everyone. But we begin with the critical items first because that's the way. These are critical to the running of your business, like I said, right? But because then you would just be... There could be something which is... I mean, you can't... Let's say I'm just giving an example, automotive industry and nuts and bolts and things like that. I'll start having a long-term relationship with the guy providing me with a nut and bolt, which could be available anywhere, right? There could be so many providers, suppliers of that item. 0:20:13.0 Balaji Reddie: So instead you identify those critical ones, start having long-term relationships with those, and for different reasons, they could be critical for different reasons, could be functionality, could be price, cost, scarcity, right? So all these things. So there is a method of applying Deming's point number four and it's very scientific and he meant it in a very, very right way. So he said invest in them through education and training, not just money, but education and training, making them as competent as you are because, well, that's the link, the supply... The strength of the chain. So I believe that this is a beautiful point. And once again, purpose. If you apply the Profound Knowledge to point number four, the aim and purpose should be explained. Variation. There should be some evidence. And Deming beautifully explains this in, I think, in Quality, Productivity, and Competitive Position. There's a wonderful example. He's given two suppliers, one providing statistical evidence of quality and one also meeting specifications but not providing any evidence, and how a company can work with each one of those. I don't think he's shown that in Out of the Crisis, but I think he's spoken once or twice about it during his seminars about working closely with the suppliers. And this...
/episode/index/show/deminginstitute/id/43000133
info_outline
Are You Learning or Just Staying Busy?
09/07/2026
Are You Learning or Just Staying Busy?
If you've led an organization or a team for more than a few years, you've probably watched the same problems resurface again and again. Different initiatives. Different people. Same underlying issues. In this episode, John Dues joins Andrew Stotz to dig into a puzzle Dr. Deming pointed to decades ago: "Experience without theory teaches nothing." John unpacks what Deming meant: experience doesn't come with its own explanation. It can answer a question, but only if you're asking one in the first place. Without a theory of why something works, all that hard-won experience just repeats itself. This episode is a great listen for anyone who has ever wondered why years of effort don't always add up to real improvement. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is why experience isn't enough, and it leads to a pretty interesting puzzle. If experience is such a great teacher, shouldn't businesses and schools and school districts just keep getting better over time? John, take it away. 0:00:42.7 John Dues: Yeah, thanks for having me back, Andrew. Yeah, I think that's exactly the question that got me thinking about this. When I think about my own experience as a school leader and people I've worked with over the years, once you've been, let's say, a principal for 10 or 15 years or a teacher or superintendent, you're a school leader or a teacher leader, you've probably observed hundreds or maybe even thousands of lessons. You've dealt with all kinds of issues, discipline problems, staffing challenges, parent concerns. You've seen curriculum come and go, state assessments change, new initiatives, budget decisions, all kinds of unexpected problems. And yet, I think organizations, complex organizations like schools, you can spend years wrestling with essentially the same challenges year after year, even as the initiatives change and people sometimes change and terminology changes, but a lot of times the underlying problems can remain really, really consistent. And so I started thinking, if experience naturally produces learning, why doesn't all of this experience that gets accumulated reliably produce better organizations? And then I was thinking about something that I read from Deming, who more than 30 years ago said... Probably more than 40 years ago said now, "Experience without theory teaches nothing." 0:02:24.0 Andrew Stotz: This one... That statement always kind of got me when I first heard it. Sometimes I listen to that, "Experience without theory teaches nothing." and think to myself, I know what that means. And sometimes I listen and I think, I don't really know what that means. And so it is kind of a provocative statement because I'm thinking about, well, how did I learn? Did I learn in my past? Are we talking about individual learning or are we talking about learning within an organization? And also, isn't experience the best teacher? So what do you think Dr. Deming meant? 0:03:02.2 John Dues: Yeah, it's like a lot of things I think that he talked about, you sort of have to stop and think. And even after you've thought about it once or twice, you can come back to it and kind of question yourself, "Did I really understand that?" You might have to go talk to somebody. But when I first read it, truth be told, as I was learning this stuff, I thought he had to be exaggerating. I thought the same thing: how could experience teach us nothing? I mean, obviously, like you were saying, we learn things from experience. But I think my interpretation is that Deming's point is subtler than that. I don't think he's saying, or he wasn't saying, that experience has no value. I think what he was saying is that experience doesn't come with its own explanation. Something happens in our classroom or our school and we observe it, but what does that experience mean? What should we conclude from it? What should we do differently next time? I don't think that experience can answer those questions by itself. And in 'Out of the Crisis', Deming wrote, "Experience will answer a question, and a question comes from theory." And I think that's really the key. I think experience becomes useful when we're using it to answer a question about how we think the world works. Again, in our classroom, our school, our school district, that type of thing. 0:04:27.7 Andrew Stotz: Imagine that you're a kid walking down the street and a pit bull comes running at you and bites you on the arm. It's not too serious. The owner manages to get them off you. There's an experience. And it's experience tied with an emotion, which means it's memorable. You'll never forget that. What could you learn from that? Can you learn from that? Does what you learn from that apply to other dogs? It just, it opens up a Pandora's box that I like to think about in that particular case. 0:05:11.8 John Dues: Well, and I think in a case like that, you go through an experience like that, you're definitely gonna have a theory the next time you run into a dog, what you're gonna do, right? Especially if it looks like a... 0:05:23.4 Andrew Stotz: Yeah. 0:05:23.5 John Dues: Yeah. For sure. 0:05:24.4 Andrew Stotz: And this word theory, most of the time we don't really use that in our daily life, but we have words like theory, hypothesis, guess, hunch. So what exactly do you think he's talking about when he says theory? 0:05:45.9 John Dues: Yeah, I think that that can be, for if you're not in academia, I think that that can maybe be one of the biggest barriers to understanding this idea. I think, kind of like what you're saying, when people hear the word theory, you often are imagining something academic or something abstract. But if you think about it, we're using theories constantly, no matter what our work is. And when I'm saying theory, I'm just talking about an explanation for how and why something works. So, really every decision I'm making as a leader rests on some theory. I'm thinking about, if I'm a principal and I decide that something like weekly classroom observations will improve instruction, there's a theory behind that decision. I'm saying really, by putting weekly classroom observations into my practice, I'm saying if we increase the frequency of classroom observations and feedback, then teaching will improve. Right? That's my theory. If a superintendent who's leading his district and they have some issues with reading and they purchase a new reading curriculum, there's a theory, if teachers use this curriculum, student reading outcomes will improve. And this could apply to any number of things. The leadership team of a school district changes the schedule, they restructure what staffing looks like across their schools. You add an intervention period to your school building, the state changes the teacher evaluation system, or the state launches an attendance initiative in response to this chronic absenteeism problem we've been seeing. Every one of these decisions reflects a theory about cause and effect, basically. 0:07:46.5 Andrew Stotz: And there's two things about theory that I like to do when I'm teaching. I like to ask a question that we could prove what the answer is. And let's just say, how many companies in the world have a strong level of profitability and growth relative to peers sustained over a five-year period? That's a very specific question and I have very clear definitions of all of that. And out of... Then I ask the audience, my students, out of 8,500 companies in the sample that I have, how many companies do you think have sustained this outperformance over five years? And then they make guesses as to what they think the answer is, and then I walk them through, here's how I tried to prove it. Now, you could argue that my... You'd define something differently or you'd do the test differently over three years or seven years. One student said, "Why not 10 years?" All of that. But in the end, I say, "Okay, my answer to that question is 400." 0:08:59.9 John Dues: Interesting. 0:09:01.0 Andrew Stotz: And so then that leads me to another step in the process. And what I'm trying to teach my students in Valuation Masterclass Bootcamp is the idea of how do you think like an analyst? An analyst says they come up with a theory or an idea, like, "I think some stock, stock ABC, is gonna double in the next six months." Okay, that's a theory, and you're gonna put money down on that theory. You may try... You need to try to support it with evidence and all that, and then in six months, if you didn't write it down, you'll probably forget it or you'll misremember it. 0:09:37.7 John Dues: Yep. 0:09:38.3 Andrew Stotz: So the question isn't really whether leaders have theories. I think we all have theories, and we're acting on these theories. So where do we go from there? 0:09:49.9 John Dues: Yeah, I think what you just said is exactly right. The question is, I think, whether those theories are explicit enough to examine. So you talked about writing it down, that's a common misstep. We don't write our theories down. I think most of our theories are implicit. We don't say, "Here's my theory about how this system works. Here's my theory about how this classroom works. Here's my theory about why weekly classroom observation will work to improve instruction." We just sort of act, and then something happens. Sometimes the results improve, sometimes they get worse, sometimes nothing really changes. Probably a lot of the time it's that. And then typically what we do is tell ourselves a story about why that outcome happened, whichever one it is, right? And that's, I think, where experience becomes particularly dangerous, because two people can observe exactly the same event and draw completely different lessons from that. 0:10:52.2 Andrew Stotz: And my lesson is the correct one. So give me an example of when you've seen that? 0:11:01.9 John Dues: Yeah, I mean, I think, imagine a school that introduces a new instructional strategy and then test scores rise the following year. It'd be very easy for that principal to say, "The strategy worked. Now let's expand it." Another might say, "Well, wait a second. The tea... Or sorry, the students were simply a stronger cohort that particular year." Someone else might say, "Well, remember, we also changed how we staffed that particular school last year." Another might say, "Now, I just noticed that the state test that we were looking at actually was easier this year than in previous years." Everybody has access to that same, the same instructional change and then the same exact outcome, but they're interpreting that experience through different theories about what caused the results. So, in an example like that, experience doesn't settle the question. Theory determines what questions we ask of the experience. 0:12:16.1 Andrew Stotz: So once you start looking at organizations this way, you say you began seeing theory everywhere? So what do you mean by that? 0:12:25.5 John Dues: Yeah, I mean, I think once you start to think in this way or see in this way, you almost can't unsee it. It's like a lot of things with the Deming philosophy. For example, a strategic plan. We talked about that last time. A strategic plan, the whole plan in and of itself is a theory. It basically says, "We believe these priorities and these actions will move us toward this aim or outcome." A budget is a theory. In that case, we're saying, "We believe putting resources here rather than there will produce greater value." Our approach to professional development, it's a theory about how adults learn and how changes in adult knowledge will affect student outcomes. Another example would be teacher evaluation systems contain theories about motivation and improvement. Accountability systems contain theories about how performance changes. Hiring systems contain theories about what predicts effectiveness. The point here isn't that any particular theory is necessarily right or wrong. The important thing is that these theories already exist. They're guiding our behavior whether we've made them visible or not. And I think the main point here is that if the theory is invisible, then it's very, very difficult to improve it. 0:13:48.2 Andrew Stotz: And you connect this idea to your own experience with strategic planning, which we've talked about a lot at United Schools. So how did your theory change? 0:13:59.7 John Dues: Yeah, I think I kind of mentioned this in the last episode, but several years ago, my thinking about strategic planning really started to evolve and change quite a bit. We had written strategic plans a number of times before. We've often done it with an outside consultant. And we had done that about a decade ago, and it wasn't a bad plan. It had good priorities, useful ideas, and those types of things. But once it was kind of finalized, increasingly as we got away from the point where it was a new plan, it just kind of really quickly became disconnected from the way we actually manage the organization. But I think fundamentally the problem wasn't the plan itself. Our plan reflected our theory at the time about what strategic planning was supposed to do. And our basic theory was something like, you go through a planning process, you identify your priorities, you create the plan, and then you implement it. And basically over time, I've stopped believing that that's an effective approach basically. 0:15:10.1 Andrew Stotz: Yeah. I mean, one of the things that goes on in my head is the, what's the difference between strategy and planning? And now after doing a lot of work on strategy, strategy is some element that we think is something that could really... It's a pivotal point of what in our business we can change to be able to affect a significant outcome. The plan is kind of how we implement that. And that's where you see a lot of plans are very weak because they're just priorities and plans, but the clear vision of where you're going and the unique way that you're gonna break this down and implement it is something that I think a lot about. So you've talked about how your idea has changed over time. Tell me what's changed? 0:16:05.4 John Dues: I think what I eventually realized was that we didn't just need this document that we put a bunch of time and effort into. And it did describe where we wanted to go, but really what we needed to do was we needed the plan to make our thinking visible. We needed it connected to the way we actually manage the organization. And we needed it to be capable of changing as we learned. So that's a delicate balance there, right? And basically we were changing how we thought about what happened after the plan was implemented. We really needed a management system. It affected how we ran our leadership team meetings, it affected how we reviewed performance, it affected how we connected our long-term strategy to annual goals and smaller quarterly priorities and then down to the daily work. So the important learning wasn't that we finally figured out how to write a better strategic plan. It wasn't that. The deeper learning was we changed our theory about what strategic planning was for. And I think that's really the distinction that's most important here. 0:17:19.1 Andrew Stotz: So you're connecting planning with PDSA. So talk to me a little bit about that, because I think this may be the most important part of what you're talking about. 0:17:34.0 John Dues: Yeah, I think they're closely connected. So if organizations like a school system are gonna learn from experience, they need a disciplined way to do sort of three things. First, what we've already talked about, we got to make the theories explicit. The big theories or the main theories that are gonna guide our work, we got to write them down, make them explicit, let everybody in our organization know that they're there. And then second, we have to have a way to test those theories against reality. And then third, we have to revise the theories based on what they learn. And I think that's really where planning, something like the plan within the strategic plan and something like the Plan-Do-Study-Act cycle, really fit together. In either case, planning exists to make theory explicit. But when we create a plan, what we're really doing is putting our current thinking on the table. We're saying, "Here's our aim, here's what we believe matters, here's what we're gonna do, and here's what we expect will happen." And I think a good plan makes all of those assumptions visible to the entire team. 0:18:42.4 Andrew Stotz: So to the listeners out there, the viewers, ask yourself, "Am I making my theory explicit?" You know, that's one of the things I... We're in the process of testing a new strategic move for my coffee business. And we've pulled together a team of the best qualified people to start to test it. And we've definitely written out a lot, but now, just listening to you, I realize that I think we need to do more to make our theory very explicit so that we don't drift also into just doing the work, that we really are trying to make a strategic move that's gonna make an impact. So when we think about plan and making theories explicit, so tell me about how PDSA will test that? 0:19:38.8 John Dues: Yeah, I think that's how I'm kind of thinking about this. Your strategic plan has your priorities, your goals, and maybe even your quarterly actions. But then where your PDSA comes in, the PDSA cycle, it's basically there to then test and improve that theory. So you know PDSAs well, and probably a lot of the Deming community does as well. You make a prediction, we test a change, we observe what actually happens, and then we compare the prediction with the result. And the difference between those things is really where all the value lies, because that's where the learning occurs. So the goal of PDSA isn't merely to answer, did it work? That's often too simplistic. The better question is, what did this test teach us about our theory? Maybe the result matched the prediction, maybe it didn't, but either way, it generated new knowledge for us to then influence the next prediction, the next test, and eventually the plan itself. 0:20:40.7 Andrew Stotz: So what you're saying is that planning and PDSA are really parts of the same system. And what I'm thinking about myself is that I'm working with my accounting team on PDSAs. And you can say it's a very small and narrow part of our business that they're working on because they don't have the influence across the whole business. And they say that to me, and I understand that. So we focus in on what they can change and what testing out what that would mean. And then... But at the corporate level, at the senior level, it is this strategic planning. So maybe you can explain a little bit more. 0:21:17.6 John Dues: Yeah, the way I have started to think about it is that planning, strategic planning, and PDSA are really parts of the same system. So planning makes our current theory explicit, and then PDSA is what we do to improve that theory over time. So sort of put together, they form the learning system within an organization. So again, the plan sort of represents our best current understanding of how we're gonna achieve our aim. And then we actually meet reality. We start to act. We make predictions, we test the changes, we study what happens, we revise our understanding, and eventually that revised understanding gets reflected back in the plan. So you get into this sort of...
/episode/index/show/deminginstitute/id/42650105
info_outline
A New Lens with Balaji Reddie (Part 7)
08/31/2026
A New Lens with Balaji Reddie (Part 7)
What did Dr. Deming really mean when he said to “cease dependence on mass inspection”? In this episode, Balaji Reddie and host Andrew Stotz unpack why one Ford manager’s decision to fire his inspection team missed the point entirely. They explain how inspection can help leaders understand and improve the process, rather than simply sort good from bad. They also explore why Deming’s 14 Points must be understood as a system, including his evolving call for cooperation and win-win thinking among employees, customers, suppliers, and even competitors. Whether you are new to Deming or have studied his work for years, this conversation offers a sharper way to think about quality, systems, and improvement. TRANSCRIPT 0:00:02.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Balaji Reddie, an educator and trainer in the teachings of Dr. Deming and quality management generally. Balaji, how are you doing today? 0:00:25.1 Balaji Reddie: Oh, I'm doing good. We're meeting after a small little gap, and in the interim I think a few things happened. One of the major things, I think you and I were really happy to see that Bill Scherkenbach sent us a lovely photo. So Bill, if you're listening to this, thank you so much, of course we thank you for the photo. We mentioned the last time or rather when we were speaking that I said that there used to be a group of people that used to meet over the weekend. I don't know what the actual protocol was, but all of the so-called core Deming people, you know, like Gipsie Ranney and Nida Backaitis, I hope I'm getting the names right, Barbara Lawton. And I remember Henry Neave saying he was a part of that. So I didn't see that in the photo. So, maybe one of the weekends he was there over in America and so he was there because he mentioned this. And so Bill very kindly said what it was christened. It was christened the Cosmos Club. And then he shared a photo. So Bill, thank you so much. And also helping us identify most of the people in that photograph. If sometime we could share it with the Deming Institute, if they could show it as part of the... If ever we convert this into some kind of video later on with some slides and things like that, they could add that in. 0:01:53.0 Andrew Stotz: Yeah, it's still wonderful. 0:01:53.7 Balaji Reddie: That was wonderful. Yes. 0:01:54.9 Andrew Stotz: It's a great picture. In fact, I'm gonna just make sure that I download it for today's episode. 0:02:00.9 Balaji Reddie: Yes, yes. 0:02:01.7 Andrew Stotz: Because I'll supply it to the Institute and ask Bill if we can use it. Let's see. 0:02:08.4 Balaji Reddie: Yeah, I mean, I presume that he would want us to ask, but he is very big-hearted. I think he wouldn't mind at all. 0:02:14.7 Andrew Stotz: He looks like a spring chicken in that picture. [laughter] 0:02:17.2 Balaji Reddie: Oh, yeah, all of them. There was Joyce Orsini too there. It was nice to see the whole jing-bang gang, as they call them, [laughter] the Cosmos Club. But wonderful. So, yes, so last time we were discussing point number one and we saw his interpretation in the broadest sense of constancy of purpose. I shared also what he was saying towards the end of his life that he said, "Create and publish the statement of the aims and purposes of the company or other organization." So he was envisioning that it's no longer one company. It's a family of companies working together. And so there has to be something that binds all these companies together because today's business is very complex. The family is actually globally dispersed. And so there has to be a common thread that links all of these organizations together and that has to be the statement of purpose. Why do we exist? Each could have their own, you know. Because that's what Deming said in the word interdependent components of a system. And interdependent means being independent and mutually dependent simultaneously. So independent does not mean isolated. It means autonomous, that means you go by yourself. You could have your own purpose, but you need to align it with the purpose of the companies you're actually contributing to, which is amazing. So he asks us to look at it that way. And he said that the purpose should be to impact people in the broadest sense of the term. And you, in fact, brought that up, that quality, and we saw what he meant by quality. And then I think we discussed the purpose of educational institutions, et cetera, et cetera. What should they be? 0:04:07.5 Balaji Reddie: So that was point one. Now we get to point two. And I'll start with the original wordings which he wrote in 1986. So let me just pull that up here. He says here that, "Adopt the new philosophy. We are in a new economic age." And then he very specifically states, "Western management must awaken to the challenge, must learn their responsibilities and take on leadership for change." Now, let's look at it both ways because in 1990 he reworded this completely. But let's get back to what he meant in 1986, the new philosophy. Now, what was the new philosophy? What did he mean then? Recently I heard, or I think I saw, Dr. Joseph DeFeo, that is the current CEO of Juran Institute, release a version of the 14 points, or rather saying that these were Dr. Deming's 14 points. And I saw what he wrote there about point number two, which was his interpretation. Now, when I look deep, actually, it looked more like Dr. Juran's interpretation of the 14 points. Incidentally, talking about Dr. Juran and the 14 points, it's no secret that Dr. Juran always said that Deming did not speak much about management, he spoke only about statistics, blah, blah, blah. But there was, if you know, part of the inner circle of Dr. Deming was Dr. Myron Tribus. And Myron Tribus, if you know, was a director at MIT for some time, right? And around the time Deming was there at the Center for Advanced Engineering Study. And when... He, of course, went and met Dr. Juran to speak to him about the 14 points, and then they had a discussion for half a day on the 14 points, and Dr. Juran agreed with every single one of them. He said, "Yeah." He said, "He's spot on." But then he said that he never spoke of management then, and so he stuck to his version that he taught statistics to the Japanese. Anyway, let's leave that aside. 0:06:19.0 Balaji Reddie: But when he spoke about point two, and that's what Juran's interpretation was, that the new philosophy was quality should be the basis for running a business. That was the new philosophy, right? And he said that top management, of course, Deming always said that top management should be involved because unless that happens, nothing happens inside the company. So the new philosophy, what now we interpret is what Dr. Deming was trying to say in 1986, was "quality is the basis for running an organization," right? And quality, again, what we discussed last time, in the broadest sense of the term, not just of a product or a process, but the way you conduct yourself as a business, as a people. So that was the new philosophy. And he said that you should take on leadership for change, and he aimed it at Western management at that point in time, right? So that was the 1986, and he goes on to explain that, saying that we are living with commonly accepted... Because he was trying to shock the Americans at that time, right? If you try to realize when they woke up to quality in the 1980s, primarily to be... I mean, to their credit, to the American businesses, that they were doing a lot of course correction. They realized that they had done things wrong for 20 years, and a lot of course correction started happening, and they started seeing benefits. So they started interpreting that as improvement when actually it was just a correction. And I think Deming wanted to bring in that shock treatment to them, and he said improvement is not enough, right? So at that point in time, that new philosophy was basically that, okay, you're doing it right, but it's not enough. And that's why it has to come from the top. So top people have to be involved. And that was how they interpreted this. 0:08:12.1 Balaji Reddie: And we also looked at it that way. But in 1990, he changed the wordings of the point two, and that was in light of what he had started professing, which was a System of Profound Knowledge. So I'll just read out what he wrote in 1990. He says now, "Adopt the new philosophy of cooperation and win-win, in which everybody wins. Put it into practice and teach it to your employees, your customers, your suppliers, and" why not "your competitors." So that was, I think, the new philosophy. Much of the stuff, if you start seeing, Andrew, when I look at all the 14 points, the 14 points have to be interpreted through the 14 points. 0:09:06.7 Andrew Stotz: Right. 0:09:07.8 Balaji Reddie: You need to understand the purpose of each point. You need to understand that they're a system. And that's why you can't just read them sentence by sentence and want to implement them, if you know what I'm trying to say here. They're a system by themselves. So you need to interpret them the right way and through the 14 points... I don't know if I'm making sense to you, but that's exactly how these are. He wanted it to be that way. So you can never tell that you've understood it completely. You're getting me? You're learning something new about it every single day. And as you start looking at things around you through the lens of Profound Knowledge, you will see things differently. And sometimes you see some gaps with the sentences that Dr. Deming was uttering, and then you say, "Okay, okay, this, this, this, I understood it now. I need to make this correction." Right? And so you can never say that I've completely understood them. I mean, after all these years, still reading Out of the Crisis, still doing the series with you, has been a catharsis for me. It's revisiting these things all over again. This, despite the fact that I've been teaching this regularly to my students for the last 20-plus years, it's still new for me. 0:10:24.4 Andrew Stotz: And so could I describe what you just said about interpreting it within the system is that really, that's the thing about systems thinking, is that you can no longer look at an individual part. Every time you get a deeper meaning or understanding of an individual part, that changes the way you view the overall system and the interconnectedness of everything. 0:10:48.6 Balaji Reddie: Exactly. 0:10:48.9 Andrew Stotz: Where life would be much more easy if we could just, "Okay, I understand that one thing deeper and deeper. I can make a control chart better and better and better." 0:11:01.1 Balaji Reddie: So, it's crazy. And this realization came on me way back in, I think around '98 or '99, when I was teaching this, the 14 points, for the third or fourth time. I think I mentioned this in episode one and two, where I told you that it was very easy for me to teach the works of Philip Crosby, very easy to teach the work of Dr. Juran, because they gave methods, they gave steps. But Dr. Deming didn't give anything. You just couldn't show the wording on the slide and get away with it. You had to explain what he wanted us to do. And then, I mentioned this before, you can go back and listen to that episode, but I said that it suddenly struck me, "God damn it, these points are a system." And when I was describing this and I explained this to Hazel Cannon, and she said, "We call this in Deming-speak an 'aha' moment. You had your 'aha' moment." She said, "That's the beauty." She told me once that in the middle of the night, at 3:00 in the morning, she understood what he was trying to say, and she called up Dr. Deming. 0:12:11.3 Balaji Reddie: And he was very, very patient. He listened to her. And she said, "I'm sorry. I..." He said, "I knew you'd understand." That's all he said. So he used to be very happy when people used to call back and suddenly say, "We realized it now, what you were trying to say then." So it's a moment of realization. So this point to... If you read some of the notes that he gave to the Japanese in 1950, and incidentally, it's they who made the notebook and then he added on to it, if you know, Elementary Principles of the Statistical Control of Quality, first edition and then the second edition. And when they made the first edition, they had actually done this without his permission. But when they told him that we made these notes, they thought that he would be a little upset because of copyrights, blah, blah. But instead he was so happy that they'd done that, he actually helped them with the second edition. And if you read those notes, a lot of things there where he was speaking about cooperation, about understanding people. So that may not have been explicitly stated by him in his lectures in Japan, they understood it. Right? And that's a very... I don't want to sound communal here, but a very Asian way of looking at it. Because our languages are very metaphorical, so we always look for different meanings to the statements being uttered. And we always look out for what has this person actually not said, which I... Or rather, yeah, has not said, which I have not heard, but I need to hear. Right? 0:13:46.5 Balaji Reddie: So that's amazing, how they looked at what he was saying. I'll give an instance here where he talks about the use of the control chart, and he says that you can use it for training a worker. And then if you see that before and after training, there's been no change in the control chart, well, then the worker's attained his optimum. Then use that worker somewhere else. He talks in a very positive way about understanding people. And then going back to what we spoke in our second episode about the principles of leadership, it comes back there, that choose people in the right way and optimize all of their aims, hopes, et cetera. So coming back here, the new philosophy, basically, now we can interpret it as what he intended it to be in 1990. He said, "Win-win." But the original wordings are also... You don't replace it, you add on to it, right? So we look at it this way, that he meant that quality should be the center point of running your business. People at the top should be involved. And now we talk about cooperation, win-win. And he says this, "Teach and practice this." Now, all these things are easier said than done. We know that. But we should make an attempt. So employees, your customers, your suppliers, and your competitors. Sometimes it could be funny, right? You go up to your competitor and you say, "Look, I think we've done enough of this, going at each other's throat. Let's get together to do something." And obviously the other person will say, "What's the agenda?" They'll think you have some hidden agenda. So it's gonna be difficult when you start doing this. But I think that's become... Slowly people are warming up to that idea of being close to your competitors and learning with them and from them. Right? We don't look at them as a rival in the true sense, trying to cut the other guy down and things like that. But that's the way it is. And if you say that it's a cutthroat thing, but we need to have some things in common before we decide to branch out and go our own way. Right? So there has to be some kind of a cooperation so that win-win... But main thing is to win, that is, everyone wins. He says, "Some may win less than others, but we all win just the same." So the whole purpose was that. Yeah. 0:16:02.4 Andrew Stotz: It's interesting because I remember hearing that when I was younger and the first thing is cooperating just within a team. The second one is cooperating maybe within a department. Another one is cooperating within a business. And then... That's already hard enough to get to. And then he talked about cooperating within an industry. And of course, there are anti-trust laws in America, which he wasn't talking about colluding on prices to take advantage of the position against the customer. But he was also... I think if we look at AI right now, the development of artificial intelligence, and to what extent could the industry work together to safeguard, for instance, or to understand the development of the energy needed to do this, you know. 0:16:54.4 Balaji Reddie: Yes. 0:16:55.3 Andrew Stotz: Or how do countries across the world work together to make sure that one doesn't have an unfair advantage with AI or with energy or that type of thing? So, yeah, it was definitely interesting when I first heard it. But as I look at it now, I get what he's saying about the industry cooperation. 0:17:15.3 Balaji Reddie: Yes, I saw this in our country, in India, where you had the rival mobile service providers getting together and realizing that the hardware needed was the same, the software would be different. So they got together and created a company, you heard that right, a company, that set up mobile communication towers. So there are no multiple towers everywhere for each mobile provider. There's one set of towers, and it was a separate company. And by the way, that company went on to win the Deming Prize. 0:17:48.0 Andrew Stotz: Interesting, interesting. It's interesting that the concept for point number two is... And sometimes I read it and I think, "Adopt the new philosophy." It's kind of obvious, isn't it? 0:18:04.1 Balaji Reddie: Yeah. [laughter] 0:18:05.8 Andrew Stotz: And that's where part of what you're talking about, about understanding all of it through the Deming 14 points lens. 0:18:13.7 Balaji Reddie: Right. Yes. 0:18:14.9 Andrew Stotz: But I can also think... I wanted to highlight back for those people that weren't around at that time. I graduated from university in 1989. I went to work at Pepsi. And so Out of the Crisis came out about 1986. And I remember during my years at university, the Japanese were just killing the American car manufacturers. And the motorcycle companies were killing... Honda and the others were killing Harley-Davidson. 0:18:43.2 Balaji Reddie: Right. 0:18:43.5 Andrew Stotz: Even to the extent that Harley-Davidson and others went to the government to try to get Reagan to give them tariff protection, which he did, in fact. But there was a huge debate I had in class, I remember, about protection versus competition. And it just highlights what was going on. And so Out of the Crisis, as you mentioned, the title, just the idea of shocking people to say, "We're in a crisis," I think at that time it was really apropos. And also the other part is he's talking about Western management. 0:19:21.1 Balaji Reddie: Yes. 0:19:21.4 Andrew Stotz: Western management. And now you look at... Japan was really doing great at that time. And now we have Japan and China that's also made huge strides. And so it's just so fascinating that he was directing it at Western management for sure, that we've got to fix things. And sometimes I look back and I think, "Oh yeah, Western management learned and improved," because we've got so much innovation going on in America as an example and all of that. 0:19:52.6 Balaji Reddie: Right. Right. 0:19:53.4 Andrew Stotz: But sometimes I look at the developments of the Chinese or Japan and I think, "Hmmm...Did we learn? Did we learn?" Look at the trade balance, look at the amount of debt, look at that in the US and you think, "I don't know." I'm curious, how would you score it? 0:20:09.5 Balaji Reddie: Yeah, I mean, that's just what I had to say. So the whole approach towards this whole thing being holistic, not just...
/episode/index/show/deminginstitute/id/42630275
info_outline
From Teacher to The Deming Institute Leader: Jake Rodgers' Story
08/24/2026
From Teacher to The Deming Institute Leader: Jake Rodgers' Story
"Once you see it, you can't unsee it." What starts as a teacher's search to reduce conflict can become a lifelong journey in leadership and transformation. In this episode, Jake Rodgers shares how discovering Dr. Deming's philosophy changed the way he thinks about teaching, leadership, parenting, and work. From fifth-grade classrooms to leading The W. Edwards Deming Institute, Jake reflects on the lessons, challenges, and breakthroughs that shaped his path. Along the way, he explores why Deming's ideas still matter, how leaders can create more joy in work, and why understanding systems helps us make better decisions for people and organizations alike. A thoughtful conversation about learning, leadership, and what happens when you see the world through a different lens. TRANSCRIPT 0:00:02.4 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today, I'm here with featured guest Jake Rodgers. Jake, are you ready to explain your Deming journey? 0:00:18.0 Jake Rodgers: Absolutely. Yeah. I'm so glad to be here. 0:00:20.8 Andrew Stotz: See, I already made a mistake right from the beginning, Jake, so you don't have to worry at all. [laughter] Let me introduce you to the audience. Jake Rodgers is the executive director of The W. Edwards Deming Institute. He's an educator, leader, and consultant with more than 20 years of experience as a teacher, principal, superintendent, and leadership coach. Jake, really, this has been long overdue to get you on the podcast. I think, everybody wants to understand your Deming journey, so take it away. 0:00:53.6 Jake Rodgers: Sure. Thanks, Andrew. It's so good to be here. This is actually my first podcast and first podcast with the Institute. And like you mentioned, long overdue. So I'm excited to be on here with you, and hopefully it's the first of many. 0:01:10.1 Andrew Stotz: Agree. 0:01:11.1 Jake Rodgers: Yeah. Okay. So how did I encounter Dr. Deming's philosophy? I've told this story a couple times, actually. Once at a Deming in Education conference back in 2015. But I was a fifth grade teacher back in 2008, I think it was. And we had just started, we had redesigned our system for how we support kids, who needed additional intervention, math and reading. And we had all the pieces in place. But once we got things going, the whole psychology piece was tough. We struggled with direction in meetings. There was quite a bit of conflict, even among people that were very good friends. We just couldn't get much done in the times that we were trying to figure out what do we do when kids need extra support? 0:02:23.9 Jake Rodgers: So I reached out to our principal, who said, "Hey, if you can find something, we'll pay for it," which is rare in education, increasingly rare. And I came across David Langford. Someone had referenced him, so I didn't know much about what he did, but we needed help. So I just called his office and he returned my call, and I told him a little bit about what was going on, and he said, "Oh, well, I can help you with that and a whole lot more, too." And I wasn't really interested in the whole lot more. I just wanted to stop the arguments and the conflict. 0:03:11.7 Andrew Stotz: That sounds like the alcoholic going to an AA meeting. "Look, I don't need all of that. I just want to stop drinking." 0:03:18.3 Jake Rodgers: Yes. That's all. Yeah. So, gosh, it wasn't too long after that a small team went out to Montana, and went to one of David's four-day conferences. And it totally transformed the way I thought about teaching, learning, leadership. It was a very memorable trip, because of the conference that David ran, but also with the four of us, we stayed up until 1, 2 o'clock in the morning every single night just talking about what we heard that day and what the implications were for the work we were doing. The things that stood out to me the most were bringing joy and meaning back to learning, getting kids more involved in designing, redesigning the classroom system, their learning. One of the great things that David does, he has, along with in his seminar going through the System of Profound Knowledge, he has a lot of tools that he teaches you to actually do the work, right? And so we went back and we started trying stuff, messed up a lot. I called David a lot, got some what he calls quality therapy, and eventually got a couple other team members involved. So our entire fifth grade team started doing this work. And after, I don't know, probably after two or three years, we started to see some good results. And during that time, I had gone back to school to get my principal accreditation. 0:05:17.2 Jake Rodgers: And I remember people telling me, "Jake, you need to, right after you're done with this program, you need to get a job as a principal, because if you wait too long, people will think you're unhireable." But I couldn't stop doing the work with my team, because we were having fun, and I think the kids were having fun. We were seeing some results, and it was something I wanted to get better at. Around maybe a couple years after that first conference, well, during that time, we had David out, and he did a couple more seminars with our school and then with a couple other schools in the school district. And then I got connected with the Seattle Area Deming Study Group, which was co-facilitated by Dave Nave, who I'm sure some of our listeners know, and also Al Viswanathan, two great mentors. Darlene Suyematsu, who used to work at the Institute, was also a part of that. That was a fantastic learning experience. That's the first time I read The New Economics. 0:06:40.0 Jake Rodgers: And I think, I had a fun time learning about how this applies outside of education. And I think the folks there at the study group also enjoyed trying to think about how does this apply in a fifth grade classroom or from a school leadership perspective. And then, I ended up moving to a new district, got a job as a principal, thought, "This worked so well with kids, adults are just going to eat this up." And they didn't. We had some definite bumps along the road, got some harsh feedback my first year. 0:07:28.4 Andrew Stotz: And when you say adults, what... Describe those who it was that you're talking about. What type of adults? 0:07:35.4 Jake Rodgers: Yeah, it was the teachers, the staff, support staff. It was a hard first year, for sure. When you're a teacher, you always think, "Oh, I could do that job as a principal better than they're doing it." But once I stepped into that role, I just had tremendous respect for the pressure, managing and leading change with a lot, you know in the public education system, there's a lot of required inputs, and so managing those in a way that, and a lot of them are antithetical to Deming's teachings. And so trying to protect staff and kids from some of the things that he would say do harm. Performance evaluations were one of those things that were a requirement. We had school-level evaluations from the state on how you're doing, and you get a report card and you basically get graded. And then your superintendent... 0:08:55.6 Andrew Stotz: Ranked. 0:08:56.9 Jake Rodgers: Ranked, absolutely. Yep. And then your superintendent comes in and says, based on the last data point, you need to do this, you need to change. So trying to navigate that constant pressure was tough. And yeah, like I said, I ended up having a lot more respect for people in that role. I remember, the first day of school, a parent walked into the office who did not speak English. They were Spanish-speaking and they were extremely upset, crying. And I had to find somebody to interpret. And turns out somehow their kid had gotten lost at the end of the day and we didn't know where they were either. I mean, long story short, the student went to the wrong place. We found them, all was fine, right. But I remember in the middle of that walking, I had to walk out of my office to, I think, use the restroom or something, and I just looked in the mirror and thought, "What have I gotten myself into here?" [laughter] 0:10:07.1 Andrew Stotz: It's like you're responsible for everything. Like the buck stops here. 0:10:11.4 Jake Rodgers: Yeah, exactly. But that, as kind of a side note, that actually ended up being a tremendous opportunity. We used some tools with a number of the Spanish-speaking families, learned that, and they were a significant part of our population, 20%, 25%, and had grown quite a bit quickly over the last couple years before I got there. And we had learned that they just didn't feel like a part of the community. And so the system hadn't adapted yet to that change in the community. And so it was a cool opportunity to showcase how the use of some of these tools that we had learned from David and that are common in the quality world, how it raised the voice for people who weren't feeling heard in the community, gave them a lot of agency and autonomy to create some programs that helped the rest of the community understand who they were, what they valued, some of their traditions. So that was kind of a first big success from a situation that was pretty difficult. It turned into a definite win. So anyway, we kind of kept working at things for a couple years. And then in my third year, some of the team members were starting to kind of pick up on the use of some of the tools. We were improving some pretty critical processes at the school. People joked a lot about how much I used flowcharts. 0:12:13.4 Jake Rodgers: That was a good sign that people were starting to approach it with humor as opposed to just avoiding it. And then I had that opportunity to present at the Deming in Education conference in 2015 and brought a couple staff members along. One of them who co-presented with me did a great job. And I think that might have been one of the first couple times I had met Kevin. And we stayed in touch over the years. And then later that year, I got a phone call, it was actually in the spring of 2016. My youngest daughter was four weeks old. And David called and said, "Hey, I just got this job as a superintendent down in Los Angeles for a network of charter schools. I'd like you to come down and work with me, and help train principals, and I think, it'll be a lot of fun." And I said, "Absolutely." And then I got off the phone and I thought, "I probably need to run this by my wife." [laughter] 0:13:34.4 Jake Rodgers: And it was funny, she had just come home from... She was from Spokane originally, which is on the east side of Washington state, and had early in our marriage always wanted to be back there, and had come home and just said, "You know what? Seattle finally feels like home. This is where I want to be." Right? Like a week before that. And then I drop on her, "Hey, let's move to LA." [laughter] So anyway, we end up going down to LA, got to work with David, which was the chance of a lifetime. We had a lot of fun together. I learned a ton, made some mistakes, learned from those, did some cool stuff down there, worked with some fantastic people, got to know the charter world really well. It's, despite it being an alternative for traditional public education, it's not without its challenges. There's still quite a bit of compliance and still quite a few inputs. You have a little bit more autonomy than in a traditional public setting, but that was a good experience. 0:14:48.2 Jake Rodgers: During that time, I had another opportunity to present at a Deming conference, the conference in 2018 that was down in Manhattan Beach. I did, and a couple of my colleagues at Ingenium also presented there on some of the work that we were doing in education. And then kind of fast-forward a couple years. David had left the organization. I took over as the superintendent. And then, we actually ended up moving to Spokane during that time. And so I was flying down to LA a couple times a month, meeting with our central office staff and visiting schools. And we had schools in Compton, and up in the San Fernando Valley. And with the distance and my kids being the ages that they were, and kind of assessing the needs of the charter system or our charter schools, it felt like they need somebody who could be down there more often. It was having an impact on my family. And so we kind of took a leap of faith, and I finished out the year in 2023, and then I started doing some consulting work. So had a large contract with the state. 0:16:17.1 Jake Rodgers: I did some work with a private school here in Spokane, and yeah did that for a couple years. And then it was actually my birthday in 2024 in December, Kevin reached out and proposed the idea to see, if I was interested in being the next executive director. And again, like when I got the call from David, I was just ecstatic and said, "Yeah, absolutely, I'd love to explore." 0:16:51.6 Andrew Stotz: Did you have any hint that that's what he was thinking, or was that out of the blue? 0:16:56.2 Jake Rodgers: No. I had no idea. Yeah, I think occasionally Kevin and I would text, we would stay in touch, maybe by email, but I hadn't talked to him in a little while. And so I thought maybe he wanted to catch up. So, very pleasantly surprised that that was the direction the call went. And I was wrapping up a consulting contract with a school district here just outside of Spokane. And so kind of had a slow start with the Institute around March, and then started full-time in May. And so I've been here for just a little over a year and learned some things, like how amazing of a job Kevin's done and Darlene had done and the staff to steward the Institute to this point. Dissimilar to a lot of other organizations I've joined, a lot of processes were documented, people really knew what they were doing. So for me, it was really just about spending the first year understanding what's going on with operations, how does the Institute work, and learning to trust our amazing team that they know how to get the work done and keep things moving. And so now... 0:18:32.4 Andrew Stotz: I'm curious before we go on to that... 0:18:34.1 Jake Rodgers: Yeah. 0:18:36.1 Andrew Stotz: You got a chance to really understand the history and you see what's in place now. How do you see the history of The Deming Institute? Did it go through phases or did it shift in its purpose? What are your observations about the history of the Institute? 0:19:01.1 Jake Rodgers: Yeah, good question. I think, well, I know that, there have been some iterations on the aim of the Institute. I know, the board has shifted over time. I'm very grateful for the board that we have now. I think, all of them are very passionate about Dr. Deming's work in the sense that, I think they're all progressive in the sense that they want to figure out how can we make sure that Dr. Deming's legacy continues far into the future. They're very supportive, willing to figure out and try new things. And several of them are, I would say, our mentors, folks I connect with frequently. One of the ones that I talk to most often is Kelly Allan. He's been a tremendous mentor for me. Very thankful for the time that he gives. All of our board members are very, very generous with their time and donations and so very, very appreciative of the leadership that we have in place. And then I also want to mention Kevin's, while he stepped away from the role of executive director, he is very much involved, especially on a strategy level. And there's no way I would have made it this far without his guidance. He just has so much institutional knowledge, obviously, very learned in terms of Dr. Deming's, his grandfather's teachings, and still very much involved in directionally where we're headed and a great thought partner. 0:21:07.2 Andrew Stotz: And when you arrived and you've now understood where the organization, where the Institute's been, what would you say has been the objective of the organization, of the Institute? And if that's changed over time. And then I think, obviously, we also want to hear, and maybe we'll do it in another podcast, maybe we'll do it in this one. But the idea of kind of where is it going? 0:21:36.9 Jake Rodgers: Yeah. I think there's a tension in that maybe has... It's hard for me to say because I've only been here for a year, but I definitely know there's a tension to navigate of how do we honor Dr. Deming's legacy and stay true to that, but also how do we connect it and make it relevant and meaningful to people in a new age? Right? I would argue Dr. Deming's philosophy is probably even more relevant now. I wasn't alive when he first started teaching, but it feels very relevant to me at this point. And so I think initially the Institute did a great job trying to figure out how do we preserve Dr. Deming's legacy. We have a tremendous number of his articles, videos, content from Dr. Deming, his papers. We have a lot of contributions from other folks that knew him and that were part of the community at that time. 0:23:02.1 Jake Rodgers: And I think with the development of DemingNEXT, our online learning management program or online learning program, it's starting to create new opportunities. I think the biggest opportunity right now, and maybe some of the shift or next direction, maybe is a better word, is how do we get that out to more people? And where are people? And that's where we need to be, trying to identify and understand what are the common pain points that folks are feeling, I think is one of the things we're thinking about. And then kind of taking the existing programs and assets that we have and translating them, if you will, to those kind of some of the modern expression of those pain points. And I say modern because I think a lot of the pain points now are probably similar to what they've always been. 0:24:21.3 Andrew Stotz: Pain always hurts in almost the same way. It's just unique ways of arriving at it. 0:24:27.0 Jake Rodgers: Yeah, we're finding newer and faster ways to experience pain. [laughter] 0:24:34.1 Andrew Stotz: And I guess, one of the things in obviously in the world of business, we're always talking about target market, who's our ideal client, who are we trying to reach? And then later we talk about market size. Is this a big market, a small market? Who are we trying to reach, do you think, from your perspective, or who has the Institute been trying to reach? Who do you think we should be reaching? 0:25:00.6 Jake Rodgers: Yeah, I think there's a couple groups. There's a group of folks that know who Dr. Deming was, know his teachings, and how do we support them with continued learning and maybe even support in implementing his philosophy in their organization or their system. I think there's another group that lives in the quality world that maybe doesn't know Dr. Deming as well and maybe has heard of him. And so then how do we help them understand how his philosophy can amplify some of the work that they're already doing? And then the third group, I would say, is people who, probably younger generations, who are or are not in traditional quality fields or in some of the industries that have typically been most associated with Dr. Deming. And how do we help them understand that this is a better way? 0:26:23.9 Andrew Stotz: And that group seems like it's huge. 0:26:28.5 Jake Rodgers: It's the whole world. 0:26:29.7 Andrew Stotz: Exactly. And I think they're searching, plenty of them are searching for help. 0:26:39.3 Jake Rodgers: Yeah. 0:26:40.5 Andrew Stotz: And that's one of the things that's unique about that group. Maybe the quality people are searching for...
/episode/index/show/deminginstitute/id/42507330
info_outline
Why Strategic Plans Fail (And What Actually Works Instead)
08/17/2026
Why Strategic Plans Fail (And What Actually Works Instead)
Why do good strategic plans so often fail to produce different results? John Dues joins Andrew Stotz to explore a simple idea: organizations do not run on strategic plans. They run on the routines leaders and teams follow every day. From meetings and priorities to problem solving and learning, those routines form the management system that shapes results. Listen to a practical conversation about strategy, leadership, Deming, and designing an organization that can continually learn. TRANSCRIPT 0:00:00.0 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. Well, John, your most recent blog post, you titled it "The System Your Organization Actually Runs." Interesting title. And it starts with a question that I think every leader has probably asked at some point, which is, how does this strategic plan actually change what leaders do on Monday morning? Why did you start at that point? 0:00:50.1 John Dues: Yeah, thanks for having me back, Andrew. I think the article kind of gets at a question that I've found myself asking over the years as I've led school systems. And I've seen a lot of different strategic plans, and I've seen a lot of different strategic plans at my own organization. And most of them contain worthwhile goals. Most of them are written by leaders that want to genuinely improve their organization. I think the problem is, it wasn't the quality of the goals. It was... After reading the plan, I often couldn't tell how the leadership of that particular organization was actually going to operate once the plan was finished, or how at least how it was going to operate differently. And this is true of my own organization. The plan would tell me or those leaders where the organization wanted to go but it rarely said like how that was going to happen, what was going to happen differently every day in order to get there. And what I eventually basically came to the realization that this wasn't just a minor oversight or omission, it was like the central issue. And so that realization really changed how I started to think about strategic planning, 'cause I do think that's an important component of running an organization, but it's not the management system itself. It's just the starting point basically. 0:02:22.7 Andrew Stotz: There's a great book on strategy that I like called Good Strategy Bad Strategy by Richard Rumelt and he basically focuses in on how bad most strategy is, and it's just lofty statements and generalizations with very little action and trade-offs that the senior management or the leaders are really making. And so it just plops in people's lap like, "Here's a good-feeling thing." So was there a specific moment when that clicked for you? 0:02:59.4 John Dues: Yeah, that's a good question. I mean, I think what I think of when you mentioned that book, which I haven't read, "Good Strategy Bad Strategy," I think there certainly is good strategy and there is certainly bad strategy. But what I most often was seeing is like pretty good strategy that maybe a consultant would write. Like we did a strategic plan with a consultant, a great consultant about a decade ago and the strategic plan that that work resulted in was great and useful in some ways. But by and large, it did end up in the sort of stereotypical fancy binding and all kinds of colors and graphs and stuff like that, but it was mostly sitting on shelves and closets. It really wasn't formatted like literally and figuratively, it wasn't formatted in a way that was going to guide our work on a daily or a weekly or a monthly basis. So that experience, and I went through a couple of those types of strategic planning sessions with consultants over the years. So then I was thinking about what's actually happening is that, well, if the strategic plan mostly gets shelved, what is it exactly that is guiding and running the organization on that day-to-day basis? 0:04:30.4 Andrew Stotz: Interesting kind of distinction between the plan and the day-to-day running. So let's answer that question. If the strategic plan isn't the management system, what is it? 0:04:45.9 John Dues: Well, I think one thing is some people might be familiar with the management system terminology and some people may not. It probably has a technical meaning for a lot of people that are doing this type of work. But whether you use that terminology, “management system,” in your organization or not, every organization has one. And so when a lot of people hear management system, they may picture some type of software system or some more formal operating manual. But that's not what I mean when I say there is a management system whether you realize it or not. I don't mean something formal necessarily. I'm just talking about a management system as a simple collection of like recurring leadership routines that determine how the organization actually functions. So it's things like how are priorities established? When you have meetings, how are they run? How frequently do the meetings occur? What measures are the leaders reviewing on a regular basis? How are problems surfaced in the organization? How do decisions get made? How the information flows? How leaders learn whether the organization is improving. So there's all kinds of these routines, and in some places they are not intentionally designed at all. But some version of those things are happening in every single organization. And in a lot of places they sort of just simply kind of evolve naturally on their own over time. But the thing that's similar, and it's pretty remarkable, is that whether you're doing this deliberately or not, these become like powerful behavior shapers in the day-to-day of an organization. So I think the key thing is that people respond much more to that daily management system, those leadership routines, and those things reinforce more so like the behavior of people that work in an organization more than what leaders say is important or more than what is written in a strategic plan that people often sort of shelve after the initial rollout and don't reference back very often. 0:07:16.7 Andrew Stotz: This makes me think of a quote by a guy named Stafford Beer, who is a systems thinker, and he said, "The purpose of a system is what it does." 0:07:23.8 John Dues: That's it, yes. That is it in essence, yeah. 0:07:31.0 Andrew Stotz: And the meaning of this is like never judge a system by its stated goals. This is also what Rumelt is talking about in "Good Strategy Bad Strategy." Don't judge it by its stated goals or its mission statement or what its designers have intended it to do. Really, we've gotta judge it by what it does. So you're saying every organization already has a management system then? 0:07:57.6 John Dues: Yeah, that's exactly right. I mean, I think that's probably the biggest idea I was trying to get through in that most recent blog post, this idea that every organization has a management system whether they call it that or not. So the question is not its existence. The real question is, is there any intentionality behind the design of that system? 0:08:22.2 Andrew Stotz: So to follow that up, if every organization already has a management system, why do so many strategic plans fail to produce different results? 0:08:33.7 John Dues: Yeah, I mean, I think from what I've seen is that the goals and maybe the tactics and the strategic plans change every three years or every five years depending on how your organization does it but those management routines don't. So you spend all this time creating a new strategic plan and you may even do some things differently for a short time period, kind of like when you make a New Year's resolution, but you kind of settle back into those natural patterns if any changes were made in the first place at all. And so if you're a leader, you kind of just keep holding those same meetings, you kind of keep looking at the same reports, looking at the same data, you make decisions in the same way, you respond to problems in the same way. New initiatives sort of get absorbed up into that old existing management system. And so these initiatives come and they go but the system really doesn't change, kind of just like what you were saying with that quote. And then because the system doesn't change, the results usually don't change very much either. I think one follows from the other. So I think this is why two organizations, like two school systems can have pretty identical strategies and then produce completely different outcomes. And the difference usually isn't the plan, it's that management system that sort of lives underneath the plan. That's kind of how I think about it. 0:10:06.8 Andrew Stotz: It kind of makes me think of like a military. An army is told by their leader, "We're gonna take that hill," and then a new guy comes in and he goes, "I'm gonna change the plan. We're gonna take that hill and that hill." And then a new guy comes in and he goes, "We're gonna take that hill and that hill and that hill." And all of a sudden there's no tradeoff, there's no letting go, there's no sacrifice. And when you don't have a clear tradeoff, you're basically saying that we've got all these resources and we can do all this stuff. So it's interesting because most people would probably say that the problem is execution. 0:10:44.7 John Dues: Yeah. And I think... I mean, you run a business. I mean, execution, obviously... 0:11:01.7 Andrew Stotz: That's hard. 0:11:02.7 John Dues: It's critical. It's very critical. But the execution, how that goes, the execution itself is shaped by that management system. And so I think if you want different execution, you have to design a different set of management routines that people are gonna then follow to implement that plan. 0:11:22.6 Andrew Stotz: Well, it's not only me working in a real business. Of course you are too. So how did this change the way you approach strategic planning at United Schools? What are you doing differently? 0:11:34.3 John Dues: Yeah, I think the last couple rounds of strategic planning, so kind of in the middle of the pandemic, we decided that we were gonna take a stab at creating our own plan internally. And by that, I just mean that we were gonna do it ourselves and not utilize a consultant. And I think there can be times when utilizing someone from the outside, a consultant, there's lots of good ones out there, we've worked with a couple different ones over the years that I'd recommend, but I think there is something to be said for writing the strategic plan yourself if you have that capability. I mean... So we have a very stable senior leadership team, and so because of that cohesiveness, I think that's one sort of condition that allowed us to write it ourselves. And so I think one of the things then that happens when you write it yourself is you internalize it in a different way than if someone else wrote it for you. Even if you're studying it and reading it carefully, there's just something about writing it yourself and workshopping different goals and tactics and things like that that really make you deeply internalize. And that just doesn't happen when you use a consultant for something, in my opinion. And then one other, I think some people might see this as a small thing, but the strategic plan actually is in a Google Document. And the great thing about Google Documents, of course, is that they are dynamic and easy to collaborate in. And so this may seem like a small thing, but when a consultant hands off a finished product, it's often in a slide deck or a PDF. And that's actually kind of hard to change. There are programs where you can obviously change a PDF fairly simply, but there's something about it living in a PDF versus living in a Google Document. Now, it's not something that we're just changing all the time. However, we're regularly in that Google Document and adjusting things, let's say on a quarterly basis as we adjust and as we learn as conditions change and stuff like that. So I think it's sort of like a two-part thing. More internalization happens when you do it yourself, and then we made this decision to put it in a Google Doc and let it live there. And it's sort of a working document that gets continually updated across the life of that particular strategic plan. 0:14:03.5 Andrew Stotz: I've just spent probably 500 hours developing a corporate strategy module for my Profit Bootcamp and I also have been teaching it and developing it with executive education here in Bangkok. And I have 12 activities that, I basically look at the best books on this topic, break it down, and then it's a series of activities. And I just couldn't imagine a consultant, and even myself, what I'm trying to do is guide people through it, but ultimately you gotta think about it and you gotta really... And it starts, in my case it starts with why. Why are you doing what you're doing? And for me, a lot of what I try to do is inspire learning that leads to lasting change. And lasting change is because I had some people in my life that delivered lasting change to me. They provided an environment and the knowledge that allowed me to absorb it and make a lasting change in my life. In my case, it was stop using drugs and alcohol, which has worked for more than 40 years. And so it starts with why and then it goes through a lot of things. But one of the questions is like, what trade-offs are you making? If somebody's not upset with your strategy, you got it wrong because you must... You have limited resources and you're gonna have to pull it from one place to another. And I think that's part of what people miss and what they avoid a lot of times. So I love the idea of developing it yourself and going through it. But the document, of course, itself isn't really the point, is it? 0:15:53.5 John Dues: Yeah, I think the fact that it lives in a Google Document is just kind of one component of it that works for us. But yeah, I think you're exactly right. I mean, I think ultimately what we're looking for the strategic plan to do is kind of reaffirm or reassess what our long-term purpose is. For us, that's a time for us to look at our purpose and our mission, our values, and kind of reaffirm those things or make adjustments if we need to. But I think the key is, and this is where the management system comes, is that the plan then immediately flows into things like annual goals, quarterly priorities. Our senior leaders have management plans that sort of guide their work and outline their work for the year. It's gonna inform what's happening. All of our schools start with a daily huddle amongst the staff team, much like you'll see on the floor of a hospital or something like that. Our biweekly leadership team meetings, the quarterly strategic reviews that we do with our leadership team, and then the annual planning, all that, all of those routines are flowing from the strategic plan, but they're like the management system that sort of brings it alive. And these routines that I just mentioned really create these learning cycles that then feed back into the strategic plan, and that's the sort of updates that it gets over the course of its lifespan. And so if I had to boil it down, it's like the strategic plan provides the constancy of purpose, to kind speak in Deming's terms, and then the management system helps us continually learn and how to achieve that particular purpose. 0:17:35.5 Andrew Stotz: I like your distinction of the routines because that helps us understand like these are cycles that we're going through and routines that we're doing and as long as that routine is serving the ultimate aim of the system, then fantastic. So towards the end of the blog, you say something that really stood out to me, and that is you said, "The real work of leadership is designing an organization that can learn." What do you mean by that? 0:18:08.0 John Dues: Yeah, I think what I was trying to get at is that early in my career, I really thought leadership was mostly about developing better strategy. If you just had better strategy, you'd be on the right course. And today I have a more nuanced view that's only one part of the job. I think the larger responsibility is designing an organization that continually improves its own thinking. And that requires those intentional routines that you were just talking about. And I think, of course, you're gonna review performance over time. If you have a Deming lens, you're gonna study variation. You gotta have some collaborative ways that you're solving problems. For us, that includes running PDSA cycles to refine our methods. And then through it all, you're keeping everyone connected around this common purpose. And I think that when those routines become a part of the everyday work, improvement then becomes much less dependent on a single leader, or sometimes it's a heroic leader that drives the organization. It's the organization itself that's capable of learning then because these various routines have become a part of the behavior pattern of the organization itself. 0:19:24.5 Andrew Stotz: Yeah, that sounds very Deming. 0:19:26.2 John Dues: It's very Deming, very Deming. Yeah, I think I kind of think of one of Deming's greatest insights is that organizations don't improve because people simply work harder. They improve because leaders improve the system deliberately. And this, the article and then this podcast is one particular part of that system, about one particular part of that system, the management system itself. 0:19:54.6 Andrew Stotz: In the strategy course that I do, I talk about identifying strengths. And then I looked at 8,500 companies globally, and I do a measure where I look at each company relative to its global peers each year. And then I say, where is its ranking on two things: how profitable it is and how fast it's growing earnings. Both of these are opposing forces, so it's very hard to have both of them at a high level. But that's what I do as a score I call the profitable growth score. And then I ask the question, how many companies out of 8,500 sustain a number one or number two ranking out of one to 10 over five years? And out of 8,500 companies, it's 400. 0:20:36.7 John Dues: Wow. 0:20:48.2 Andrew Stotz: And I would say that these have a clear competitive advantage that's illustrated in their numbers. Where it's coming from, how they're getting it, okay, those are deeper questions. But this is where I talk with the executives that I work with, the companies I work with, and I ask them, how do we look for a strength in your business that we can convert to a competitive advantage? Because right now, looking at the financial performance of almost everybody, we just have a lot of strengths, which is great. But strategy really is about how do we do that? And the second component of that, which kind of relates back to this learning, is that if you have an all-star in your company and they leave and the sales go down or the business goes down, then you didn't have a real competitive advantage. And so the concept of building learning into a company where everybody's learning creates what I call a hard to copy strength or competitive advantage and that ultimately leads to a long-term performance that is reflected. And it's a little bit like, some people listening may think, "Oh, I'm not into the numbers and all that stuff, Andrew." Well, just imagine that your kid comes to you and says, "Hey, Dad," or "Mom, I'm gonna get A's next semester." And you go, "Right, great. How are you...
/episode/index/show/deminginstitute/id/42469020
info_outline
A New Lens with Balaji Reddie (Part 6)
07/27/2026
A New Lens with Balaji Reddie (Part 6)
What happens when an organization gets so focused on results that it forgets why it exists? Andrew Stotz and Balaji Reddie dig into the first of Deming's 14 Points, constancy of purpose, using stories like Harvard's answer to Deming's challenge to define a business and Indian manufacturers who pivoted to build PPE during the pandemic. This conversation may change how you think about success, profit, and the real aim of a business. TRANSCRIPT 0:00:02.4 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Balaji Reddie, an educator and trainer in the teachings of Dr. Deming and quality management generally. I'm really excited for today's topic, which is the 14 Points. Take it away, Balaji. 0:00:27.5 Balaji Reddie: Thank you. Thank you, Andrew. So the last time we spoke, we had discussed all the four sciences that Dr. Deming put together. In a nutshell, we said his words, appreciation for a system. That means appreciating that there are no events, there are eventualities, and there is a huge myriad or a huge system of myriad components that create these outcomes. So we need to understand that. We need to appreciate the fact that these are all interconnected, interdependent, these components. Right. And we saw some other attributes that when they interact with each other, the cause and effect are not closely related in time or space. Seemingly disconnected events then turn out to be connected. There exist synergistic relationships. So you can't just straightaway say, "I know." You can say, "From what I understand or what knowledge I have right now about the system, I think." 0:01:34.7 Balaji Reddie: And you always dig deeper. Right. And that gave us the next thing, that the performance of any system, the outcomes are subject to Variation. You will never get the same outcome every single time. It keeps on fluctuating. And then we realize there is a difference between normal and abnormal fluctuations. The typical term that Walter Shewhart said was Variation, and Deming took that forward. He said, "Understand Variation." I would say learn how to think statistically. Right? And statistical thinking is about knowing when to act and when to leave a process alone. Okay. So we said understand the Variation, and you should know when to... There's that normal fluctuation, you would need to work on it continually. But abnormal fluctuation is a little easier to understand, isolate, and take immediate action. So the low-hanging fruit comes from the abnormal fluctuation, what he called as special causes or assignable causes, as Walter Shewhart said. 0:02:41.0 Balaji Reddie: And once you work on them, then your long-term work on the process continues. That never stops because it helps you understand the process much, much better. Right? But there you are faced with the dilemma sometimes. There's so many complications there, and you just need to understand them if you want to know completely what happens in a system. And that's why he said the complete knowledge is never... Is unknown and unknowable. But he said there's a way of doing that, and that's where the Theory of Knowledge came in. We needed to understand that we build upon what we have right now. We start asking questions, and you begin with theories. "I think, I believe." And once you start doing that, you start unraveling the mysteries of the system under study. And last bit here is all this, of course, he was speaking about man-made systems, organizational systems, which all this work is being done by people. 0:03:38.0 Balaji Reddie: And he said that's where the best part comes in. You can never do things all by yourself. You need to cooperate with others. Each one comes with their own theories, and each one has their own system of learning, their own way of thinking. So we need to understand that, whether you are employees inside a company, whether you are people outside the company contributing in the sense of suppliers, or people who are recipients of this in terms of consumers. So everyone, you need to understand people, that they're a part of this entire system. And that's where Psychology comes in. Of course, I used the word empathy. I said understanding them and on. And on a lighter note, I ended by saying that if you really want to sharpen your empathetic skills, you need to either understand your pet or a baby, because these are people who can't express what they want and you just have to have your own theories and then understand them better. 0:04:34.9 Balaji Reddie: But that's what we saw last time. Now we're gonna get to, funnily, what he espoused as his philosophy [chuckle] when he first presented it in the United States in a structured form, right? These were the 14 Points. Now, first of all, the 14 Points are not his philosophy, but they're 14 consequences of his philosophy. You can never really set out to say, "I'm gonna do these 14 Points." But when you start, how do I say, asking the right questions and want to gain Profound Knowledge of what's happening and start looking at things differently and start asking questions, the right kind of questions, just like I said, "What is the purpose of the system? What are the components? How are they connected? How do they work? What is happening right now? Does this normally happen? Is this abnormal?" And then, of course, what are better ways of explaining or expressing what I'm seeing right now? 0:05:43.9 Balaji Reddie: And then finally, taking help from everybody else and bringing their thought processes. When you start asking these questions and start structuring and understanding the organization much better, you eventually see the 14 Points. So they are consequences of his philosophy. They are not his philosophy. You end up with the 14 Points, you don't start with them. Right? Having said that, does that mean we just go through this and be done with it? I said, "No." Now let's understand how he structured these and why he structured it the way he did. Now, they are in no order of preference. In fact, I remember speaking to Bill Bellows about this, and he said when he asked Deming, "Which of the 14 Points are the most important ones? Where do I start?" and he said, "All of them." He said, "Where do I start?" "Start anywhere," he said. You could start anywhere, eventually they're all connected. 0:06:40.7 Balaji Reddie: So the 14 Points are a system themselves. They are all connected to each other. You could start anywhere and you end up with the 14 Points in any case. But since we have to follow a kind of the sequence in which he wrote them, which he presented them, I'm following that sequence to begin with. Now, I'm gonna start with the 1986 edition of the 14 Points, which are there in his book, Out of the Crisis. But in 1990, he updated the wordings of the 14 Points. So I shall pull up my document right here so that I can read out the 1990 edition. Just give me a minute. 0:07:36.0 Andrew Stotz: Just for the audience, go out there and get yours in your hand. Get ready. I'm just going through and getting mine ready. 0:07:42.8 Balaji Reddie: Yes, so. Okay, so here it goes. Let's get to the 14 Points. So here we are. Right. And in what I normally say here, that he often said too, that when you apply Profound Knowledge, the 14 Points help you apply this in the most structured manner. So here we go. So the first is the 1986 edition, point number one, where he says, "Create constancy of purpose toward improvement of product and service with the aim to become competitive and to stay in business and to provide jobs.” I think this is an amazing set of words which he's brought here, especially saying to provide jobs, where he said that quality is a ways and means of really contributing to society and not sucking the worst 10%, but adding something more to it to provide more jobs. Now in the 1990 edition, right, now the commentary for this, if you read Out of the Crisis, I've taken an excerpt from there, "Management must demonstrate unshakable commitment to quality, productivity and continual improvement. 0:09:09.8 Balaji Reddie: Your customers, your suppliers, your employees need your statement of constancy of purpose, your intention to stay in business by providing product and service that will help man to live better and which will have a market." So this was his definition of quality. A product or a service possesses quality if it helps someone live better in every way and enjoys a large and sustainable market. So for him, quality had two aspects. One, it must make someone's life better. Whatever you do, whether it's a product or a service, service being an activity. Right. So it should add value to the customer's life. It should make that person's life better. But it should be at a price the customer is willing to pay. Right? So that's the way he looked at it. 0:09:55.2 Balaji Reddie: Now, he changed this in 1990 to this, "Create and publish to all concerned a statement of the aims and purposes of the company or other organization. Management must demonstrate constantly their commitment to this statement." Now he says to publish the statement. And he says not just purpose, but aim. So aim, I think this came from his definition of a system, where he says that a system must have an aim. Without an aim, there is no system. So the aim provides a direction and purpose provides the reason why the system exists. So they go hand in hand. You can't separate these two. But now the commentary for this is, "A system must create something of value, in other words, results. The intended results, along with consideration of recipients and of cost, mold the aim of the system. It is thus management's task to determine those aims, to manage the whole organization towards accomplishment of those aims. 0:11:07.1 Balaji Reddie: It is important that an aim never be defined in terms of a specific activity or method. It must always relate to a better life for everyone. The aim precedes the organizational system and those that work in it." So... 0:11:23.4 Andrew Stotz: What was that part? "It's important that it's not" what? 0:11:27.2 Balaji Reddie: Yeah, that it's not an activity or a product. It should be something broader than that. It's about adding value to someone's life. Now, you can't go into the other extreme and come up with a motherhood statement like "I want to boil the ocean" or "I want to solve the world's poverty problems," alright? But it must translate into something doable, alright? And it should tell where the organization is heading. But the key word here is "publish it," right? And he says, "and other organization," that means "of the company or other organization." So I believe he started envisioning that in the future it's not gonna be one company, but a family of companies working together, which very simply today we use the term "supply chain" to express that. And I think, I think I mentioned this before in one of my earlier chats that I don't like that term because. It falls woefully short to explain what actually is happening there. 0:12:29.2 Balaji Reddie: I like to use the word provider network. Right? It's a network. It's not just a chain. Chain is more linear. Network is more lateral, all over the place. And these are not just suppliers. These are providers. So, right, he talked about a supply chain in those days. And he also says publishing, that means it should exist in some hard form, right, so that people see it, read it. Okay. Now this kind of, I thought was quite amazing because if you know about, for those who are into ISO 9000, the standard, of course, the latest one which is coming out this year, I'm not well-versed with what they've written or what they've changed in it, but up until 2015, the ISO insisted that companies have a documented statement of their policies, right, a quality policy and objectives. It should be written down. So to say that they could have got this idea from here is not fair, but I guess that you can see the parallel in what he was saying. 0:13:44.8 Balaji Reddie: So publishing. Now, in 2007, this is what I wrote after talking to many, like I said, who attended or helped Dr. Deming in his seminars till the day he passed on, right? And they said, of course, because I was quite intrigued, initially his four-day seminar had a perfect structure and everyone knows who attended that on the second day after lunch you had the red beads experiment. So that never changed even after Profound Knowledge came in. So anyway, coming back to what I was just saying, so initially he spoke a lot about the 14 Points, but after he professed Profound Knowledge, the stress on the 14 Points came down, but it did not disappear altogether. And this I heard from many of those and I asked what he would speak of. So based on that, I just came up with these words. The words are all Dr. Deming's, I've just edited and put it together. 0:14:50.1 Balaji Reddie: So create a statement of the aim and purpose of the organizational system. It must bring out the long-term vision of the organization, preferably stating how it intends to stay in business by making life better for all those impacted in any way. So there could be a direct or an indirect impact. Stakeholders is the term we use right now, right? So purpose describes why you exist. And if you go deeper to find out why a company exists, it has to last beyond the founding father's vision, right? So the statement of purpose must be very clear. Like Walt Disney, we spoke about this, he said, "I'll do anything to make a child smile." That was his purpose, and that's how everything stemmed from that, right? So if you start looking deep, why are we here? Why do we exist? 0:15:46.3 Balaji Reddie: Then once the company starts growing, you don't forget why you set up the company in the first place. You go back to your roots and the statement of purpose is like a North Star. It reminds you of where you're supposed to be, where you started, what you had in mind, right? So it's not that companies don't have it, but we need to revisit it from time to time. And sometimes you need to, it may undergo a change because things don't remain the same, right? Systems keep changing and if everything keeps changing, then you have to revisit the purpose. You don't do it every day though, because it's something that you spoke about and you say that it took me time to come out with this statement of purpose. So I was trying to understand even Apple's statement of purpose where Steve Jobs said making technology accessible, making technology simple, making technology productive is what we are supposed to do here as a company. Right. 0:16:46.4 Balaji Reddie: So he always believed in simplicity. He believed in seeing that people are more productive with the work, the software, or the products that they offer. Right. And it should be something that at times goes beyond just what the customer expects so that that one part is always there. So that's point number one, the statement of purpose. 0:17:11.3 Andrew Stotz: Can I ask a couple questions about that? 0:17:14.2 Balaji Reddie: Yeah, sure, sure, sure. 0:17:15.3 Andrew Stotz: Before we go on, I'm assuming you're gonna go on to number two. 0:17:18.4 Balaji Reddie: Yes. 0:17:20.5 Andrew Stotz: So a couple of things. First thing is about aim. You know that statement, "the purpose of a system is what it does," meaning that ultimately every system, there's an aim. It just may not be the aim that you think it is or that you want it to be. So part of this idea is recognizing that we have to state the aim or else people just, they're gonna just do things the way they've done them. Am I correct in saying that? 0:17:51.2 Balaji Reddie: Yeah. And it brings clarity to whatever you are doing. You start realizing, okay, I thought that we were actually doing this when we should be doing something else. For example, in Out of the Crisis, he gives that example of that trucking company. And he said when that gentleman took Dr. Deming's four-day seminar and then went back to his company and asked his employees, "What business do you think we are in?" Because that's what he used to ask, "What business are you in?" He used to ask that question, right, to the audience. "Any CEOs here? What business are you in? What business do you need to be in? What are you gonna be doing five years from now, ten years from now?" Right. So these are questions which I think you need to look at. If you want a list of questions, then in Out of the Crisis, there is a chapter on just the questions. Right. 0:18:57.0 Balaji Reddie: And that's, if I believe, let me just check. It comes after chapter seven. Is that where it comes in? No, I think... Yeah. Diseases and Obstacles. Okay. It's chapter five, "Questions to Help Managers." So you can find a host of questions there. These are rhetorical questions, most of them, telling you to focus on the job you have on hand. Right. And helps you define your purpose and your aim, both. And it gives clarity. Like I said, sometimes it gives clarity to yourself. What exactly am I doing here? All right. You always begin by saying that. I mean, if you ask people who set up businesses, they'll start by saying, "I did this because I was good at it," and the money came, but "I was good at doing this." And why did you do that? What do you mean by good? "Well, when I did this, I saw people feel happy." Right. And that's why I wanted to do this. 0:20:06.8 Balaji Reddie: And I thought this is the best way for me to earn my money, but the purpose was mainly to make them happy. Right. And then the money came. So that should be the focus. I think I mentioned this once when 1983 was when Harvard Business School was celebrating 75 years of existence. And everyone knew at that time, because Deming had just been rediscovered in America, and he was hot property. But everyone knew his ideas about Harvard. [chuckle] He was scathing. He said they prepared managers for the past and not for the future, and blah, blah, blah, blah, blah. He was very angry. But when they sent him a letter saying that we are making a souvenir of sorts, so can you pen a few words for us? So he was quite lavish in his comments and in his praise. He said, "It's not easy to run a business school and y'all have done it for 75 years. So all credit to you." But he said, "I have just one question for you. 0:21:18.7 Balaji Reddie: In these last two, three years that I have come back into American industry, I see with pain that many people do not understand the purpose of their business. And I see that Harvard has not defined the purpose of a business. Could you define the purpose of a business?" And Harvard came out with an answer which went, "The purpose of a business is to create value at a profit." So the sequence of the words is so beautiful. Create value at a profit. Right? And for a business, you need both. If you're only creating value and no profits, that's not a business. That's social service. And if you only want profits but no value, then that's not a business either. Then you might as well go loot a bank, get 100% profit and no value. And I remember Myron Tribus writing about this at the Kobe shipyard in Japan, right? And this was before Deming landed there, apparently, because there was someone sitting at Kobe who later on had taken Deming's lectures on statistical quality. 0:22:39.4 Balaji Reddie: And then of course, the leadership thing, right, where Deming spoke about the flow diagram. And he said that, he said the light bulb went on because they had a statement there at the Kobe shipyard, "We shall make good ships. At a profit if we can, at a loss if we must, but we...
/episode/index/show/deminginstitute/id/42209525
info_outline
A New Lens with Balaji Reddie (Part 5)
07/20/2026
A New Lens with Balaji Reddie (Part 5)
"Every time this child was proven wrong, he learned something new." In this episode, Andrew Stotz continues his conversation with Balaji Reddie as they explore two essential elements of Dr. Deming's System of Profound Knowledge: the Theory of Knowledge and Psychology. Through the memorable story of a young boy trying to understand how his father's scooter starts, Balaji illustrates how we build theories, test them through experience, and improve them through learning. The discussion also explores why PDSA begins with theory, why experience alone is not enough, and why understanding how people learn is fundamental to leading improvement. Whether you're new to Deming or deep into his work, this episode offers practical insights into how better questions lead to better knowledge and, ultimately, better management. Are you ready to learn more about the System of Profound Knowledge? Check out DemingNEXT online learning! TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Balaji Reddie, an educator and trainer in the teachings of Dr. Deming, and quality management generally. The topic for today is: The theory of knowledge and psychology. Take it away. 0:00:29.8 Balaji Reddie: Well, thank you. Good morning, Andrew. And it's great to continue our series. So the last time we met, we had begun with the Profound Knowledge, where we said that Dr. Deming brought together four, seemingly disconnected, sciences. He never invented any single one of them, but he saw the connections, and he created, what you could say is, a bootstrap theory of management, if I may say so, a very all-encompassing view of things happening around you. That's why he had no other word to describe it except profound. Because you see things that you normally would not see. That's what we said the last time. And when he proposed that, all of a sudden, I told you the funny thing was that experts in each of those sciences jumped in. I think they realized that they were caught napping, that they did not see the connections, and they did not see a bare minimum set of competencies that you need to have in order to understand things in their entirety. It was very, very... It was amazing that he actually could put that all together. 0:01:44.3 Balaji Reddie: So we started off with the four sciences, in no order of preference. We said here... His words were appreciation for a system. That means, taking into consideration the fact that everything... Having a holistic view, that what we see is not an event but an eventuality, that there's a huge big system behind it. Whatever we get to see in front of our eyes, we're just getting to see the effect. So appreciating that, that's what he said, for a system, a systemic view. I just used a different word, I said connectedness. And I said that from now on, we say that there are no events, there are only eventualities. Which means when something happens in front of our eyes, we always question... We bring in the concept of time and space; that the origins of this, what I'm seeing in front of my eyes, lie somewhere else and maybe actually in a different time frame. So I need to study deeper in order to understand why I'm seeing this in front of my eyes. And you gave that fantastic example of coffee beans, where you said everything has to happen at the right time. So that was the first one. 0:02:54.1 Balaji Reddie: Second one, was about understanding variation. And I would say, that's statistical thinking. I think around 1998, I saw someone come out with the definition of statistical thinking. And they said that it's a holistic view of looking at a process, that everything in the world, happens in the form of a process, and all processes are subject to variation. And understanding and reducing that variation, is synonymous to increasing quality. Now, I'd just like to make a slight change there. Yes, all processes are subject to variation, but talking about reducing... I think, understanding and managing that variation, would lead to better quality. And his entire insistence was understanding variation. Although, let me tell you this, in Henry Neave's book, he wrote about this, where he said that in one of the weekend chats that they had with Deming, he made a statement that if I had to reduce my message to managers in two words, I would say: reduce variation. And this, I've heard from both Henry Neave and David Kerridge. For those who are unaware of who David Kerridge was, because he passed away, I think, around 2018 or 2019, I can't remember... Or maybe before. I'm forgetting the year. 0:04:32.1 Balaji Reddie: But this was... He was from Aberdeen, Scotland. And people used to say, he's like an unofficial person who could be the successor to Deming. So he wrote a lot of wonderful papers. So David Kerridge, Henry, and I, were sitting together having dinner, and they were talking about Deming, and they said that, yeah, he did not... There were some things where he could get really, really upset about when he... About performance appraisals. But there are some things when he spoke of Shewhart, Walter Shewhart, he spoke in a very different tone. And then came this topic, that when we told him that you said reduce variation, he said, "I never said that." They said, "But you said it. We have it... We wrote it down, both Henry and I." And he said, "I could have said that in a context, but I don't think I meant it in that way." So for the record, yes, he uttered it; but he meant it differently. I'm quite sure he said to understand and manage that variation. 0:05:35.4 Balaji Reddie: So what is that managing variation? Okay. We saw this last time, in the very narrow sense of the term, that is when Walter Shewhart invented the control chart. He said there are two kinds of variation that exist: natural variation and unnatural variation. And to distinguish between these two, he created the control chart, which was based on... It was an empirical formula, and people confused it to be a statistical thing. He demarcated, brought in two lines, what he called as the upper control limit and lower control limit. And he said as long as the outcomes of any process or system, if you could measure them and you're plotting them on a graph, as long as they lie within these limits, well, that's the natural behavior of the process or system under study. And the moment their performance crosses the limits, one of these limits on the higher side or the lower side, then you can say there's something unique, special, that has happened. So he used the term, random variation, and assignable cause variation. Because he said you could assign a particular cause to the points that lie outside limits. But when you are studying the variation that lie within limits, the variation that lies within limits, then you can't ascribe a particular cause. There is a system of causes acting. This particular difference in approach... 0:06:58.1 Andrew Stotz: That's a great point. The assignable thing is a great, great point. It really helped me just understand it better. 0:07:04.7 Balaji Reddie: Oh, yeah. Because you could assign a particular, that's why he said assignable. And this is random. Assignable, has its advantage that you can isolate it. And initially, he said you could isolate, and you could eliminate, that cause because it is something which is alien to the system under study. And one by one by one, when he said you eliminate all those causes, you land up with a system or a process that fluctuates only within limits, and he called that as a statistically controlled process. Now, he said your real work begins when you start looking into the reasons for each of those points lying within limits, and I made that statement. You don't have one cause, you have a system of causes. Here's where we studied systems the last time, and I'm just refreshing all of this. I said that in a system, you have interconnectedness, you have interdependencies. And then cause and effect are not closely related in time or space. You have synergistic relationships. So when you start studying, it becomes very, very complicated. Because the performance of each of those causes is also subject to variation. So you can never, ever tell with absolute certainty, what is causing the system variation. Because each of the causes is part of a bigger system. So he made that statement that the complete knowledge of any process or system, is unknown and unknowable. He was not being pessimistic; he was being realistic. We discussed this the last time. And so I said, what do we do then? Yeah, we'll come to that. But now comes the other part, which gets really, really interesting. 0:08:46.7 Andrew Stotz: By the way, I want to... Before you move on from the variation, I want to add something. But continue on. 0:08:55.2 Balaji Reddie: Okay. So he said the reason for the point lying outside... And I said it's assignable, what Dr. Deming called as, special cause variation. You can assign a cause, and I said it's alien to the system under study. And I started by saying you can eliminate it. And even Walter Shewhart began by saying, eliminate it. But now, I'm going back on my words slightly. If you eliminate that special cause, it could be a special cause for the system under study, but it could be the common cause of another system which is related to this. And so what can you do? Well, here's the best part that comes in. You reduce the effect of that cause, to the extent that it does not cause any harmful variation here, to the system under study. And that, Andrew, is optimization. "I want this, and I want that", not, "I want this, or I want that." So I need that. 0:10:01.0 Balaji Reddie: Because I can begin with eliminating, but then I have to keep my eyes and ears open. Because this is what I did in my own company when I started implementing all of this. I'll be honest, I drew a control chart, and when I found points lying outside limits and we discovered causes, I used to eliminate them. But since I was exposed to Profound Knowledge, and what Dr. Deming said about optimization, I kept my eyes and ears open to any change that we observed in the company, anywhere. If I... Even if I got a feedback within a day, two week, month later, saying, "See Mr. Reddie, this is what's happening," and I said, "Wait, wait, wait. Let's see the connection." And invariably, the systems would be connected. And so we could not eliminate, we had to reduce. So we had to go back and check. And that's optimization. Because what happens is if you just keep eliminating... Which is a good place to start... The system under study could get attacked by that interrelated, the other system which you have just actually disturbed. And the problem would resurface with a new face. And you would then say, "Wait a minute. We had solved this problem. Why is it back?" So here's where Profound Knowledge comes in. And that's why the word is continual, it's not continuous. You gotta keep at it, you gotta keep learning. So when he said, yeah, that for common causes, or what he called as random causes, they're so complicated... And for these special causes too, they become complicated... Then how do we understand, and what action do we take? Do we just wait on our haunches and do nothing? That's where he brought in the Theory of Knowledge. And I'll begin with his... 0:11:44.1 Andrew Stotz: And maybe I can add something. 0:11:46.3 Balaji Reddie: Yeah, sure. Now you could. Yeah. 0:11:48.7 Andrew Stotz: The first thing I was thinking about, a special cause, or an assignable cause in a factory, particularly in Asia... But maybe also in the US and maybe more in Europe these days... Is a fluctuation in the electricity. Not necessarily a blackout, but that can be a special cause. 0:12:12.1 Balaji Reddie: Right. 0:12:13.6 Andrew Stotz: But just fluctuations in electricity, can cause an impact on a system, so it can be a special cause. And then once you understand it, you may decide, "Hmm, is there a way we can smooth this? Is there a way we can think about the electricity input into this system, which is really critical for this system, by putting something in between the electrical source and this particular system?" So that's an example of the idea of a special cause, potentially, that is just a common cause, possibly, of another system. 0:12:55.3 Balaji Reddie: That's right. In fact, in India, we did have this problem in the 1990s, when the whole world descended into India because of the cost advantage. The rupee got devalued, the dollar really sprung up. And so people found India as a gold mine, when it came to establishing organizations. And what they would do is bring in much of their semi-automatic technologies that they had in the US, or wherever, Europe at that time, into India, which were largely electronic, had components which were electronic. And in India, the temperature conditions are... I mean, you're in Thailand, you know how it is. It's extreme. 0:13:35.1 Andrew Stotz: Yeah. 0:13:36.9 Balaji Reddie: And so it was not ready for that. And we would have these problems with the components conking off. We had to come out with some remedial stuff, some short-term stuff. And then we started discovering things, we started inventing things. And they almost started losing the cost advantage. Then they said, "Okay. Let's get a little smart." When the next set of machines etc., started coming to India... This was in '91-'92, if I remember right. By '93-'94, that realization came in and so they said, "Why don't we send it in with a cooler," the cooling system, "so that no matter what happens outside, the components would be unaffected." But that led to another problem in cities like Mumbai, where you had extensive humidity. 0:14:24.2 Andrew Stotz: Yeah. 0:14:25.3 Balaji Reddie: And that would cause droplets, which would short-circuit the electronic components again. And so they came up with climatizers. It was crazy. 0:14:34.4 Andrew Stotz: Round and round you go. 0:14:36.7 Balaji Reddie: Yeah. 0:14:38.5 Andrew Stotz: That's interesting. 0:14:39.8 Balaji Reddie: You see, when I was exposed to Profound Knowledge for the first time, and when I wanted to teach it, I remember, I used to want to look out for examples; but I found none. And then when I started digging deeper and deeper, I said, "Wait, I do have examples. It's just that I didn't know that I was looking at it differently." And so it was amazing. Like I said, what Dr. Deming said, you see things that you normally would not see. And I began seeing things in retrospect. 0:15:09.4 Andrew Stotz: Yeah. And that's sometimes... I think the teachings of Dr. Deming have made me a very calm and relaxed guy. I no longer freak out over, what I now know, is just normal variation. And I feel like it's a world of people, that you have to react. If you don't react, you're not doing something. And it's almost impossible for most people to see that the next outcome of this, is not a special cause. And I spend a lot of time in my ethics class trying to help young people understand, that there's just normal variation. Which brings me to my last point I wanted to make with what you said. It reminded me of my studies... Which are limited... Of insight meditation, concentration meditation, or Buddhist... What the Buddha taught. And I remember sitting in a temple in Los Angeles many, many years ago, and I thought, "I'm gonna try to learn from this monk." 0:16:24.6 Andrew Stotz: And I left there thinking... So we did meditation, and he said, "Just try to clear your mind. And just..." And so I left that meditation going home thinking, "My brain was on fire," and there's so many things going on. So I went to him, and I studied more, and I learned more. And I realized that I had misunderstood. You're not trying to control your thoughts, or reduce your thoughts. You're trying to observe your thoughts. And once I started to realize, just observe, then I started to make progress in really understanding that reduce will come over time; maybe, maybe not. But observing was really the step. Because once you observe something, particularly with your mind, if you observe thoughts coming out, then that actually means you're somewhat disconnected because it's hard to observe something that's happening. So therefore, you're starting to look at it from a different perspective. And that's what I thought about when you were saying, it's not just reduce, reduce, reduce. It's first, observe. 0:17:40.1 Balaji Reddie: That's right. Yes, understand, see what's happening, ask the right questions, "Does this happen every day? Or has it happened only today?" things like that. And then you could say, "Okay. If it's happened only today, why did it happen only today? Is today a special day?" So that's the understanding of variation in the broadest sense. And that's why statistical thinking is about asking the correct questions, even in the absence of data. It's thinking, statistical thinking. Don't confuse it with statistical methods, where all kinds of mathematical mumbo jumbo come in. This is thinking statistically. And that's where theory of knowledge, where Dr. Deming said, comes in to help us, first, enlist what's unknown. And then from that, you start pinpointing, or segregating what is knowable, faster. And then you... Once you do that, then you start recycling your thoughts and trying to understand those systems much better. And that's the theory of knowledge. 0:18:45.5 Balaji Reddie: Now, just a statement which he said, what is a theory of knowledge? He said, "A statement conveys knowledge, if it relates some cause to some effect; It fits without fail, all the observations of the past; It helps us predict the future with the risk of being wrong." So I'll repeat the whole thing. He said, "A statement conveys knowledge, if it relates some cause to some effect," it provides us information, it relates some cause to some effect. "It fits without fail, all the observations of the past; It helps us predict the future, with the risk of being wrong." Now, if you go through this step by step, when you say here, take this example of a small five-year-old child. At least this is a very, very Asian and an Indian kind of an example, but I'm quite sure people all over the world will relate to this. A five-year-old child, here in India or in Asia, watching his father go to work every day. Father goes to work on, what we call as, a two-wheeler, a scooter as they call it. And if you know, in the old days, you could kickstart the scooter. We didn't have push-button starts, we used to kick the lever. And so this kid is very intrigued as to how does this scooter start. And he knows that he's at that age, if he keeps asking questions, he'll be told, "You'll learn when you grow up," or "Don't waste my time." 0:20:18.2 Balaji Reddie: And so he decides to observe and learn. And so he starts observing his father every morning from the small little balcony that they have. The daddy brought the scooter out into the compound and then put it on stand. And he did a big ritual around the scooter, and then he kicked the lever and the scooter started. And so he would write down. This is happening every day. And then he noticed that the scooter wouldn't start till he kicked the lever. And so he wrote down his first theory: kick is equal to start. Now, he decided to test this theory. A couple of days where he wasn't even in the balcony, he would sit inside the house and he would hear the kicking sound, and he would tell his mother, "Now the scooter's gonna start." And guess what? The scooter started. So this theory can't be wrong....
/episode/index/show/deminginstitute/id/42037465
info_outline
Go Small or Go Home
07/13/2026
Go Small or Go Home
What if the best leaders are not the ones with the biggest ideas? In this episode, John Dues argues that the leaders who make the greatest impact are the ones who create the fastest learning cycles. John and Andrew Stotz explore why small tests often outperform large initiatives, how PDSA builds real organizational knowledge, and why improvement is a learning process, not an implementation process. If your organization is launching new initiatives, this conversation offers a different question to ask: What's the smallest test we can run to learn whether this idea actually works? TRANSCRIPT 0:00:02.3 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is the Fastest Way to Learn What Works. I love that title, John. Take it away. 0:00:30.0 John Dues: Hey Andrew, it's good to be back. Yeah, I was thinking about talking about leadership today, and I was thinking about who are the leaders that we tend to admire? I think the typical person would say these leaders with big, bold ideas. In my world, a superintendent launches this district-wide initiative, or maybe it's a principal has this sweeping school improvement plan that they've put in place. In your world, maybe some CEO unveils this new strategic direction. We think about these leaders, if they're described, they're visionary, decisive, courageous. But I think, as I've done this study, I've become increasingly convinced that we're paying attention to the wrong leaders in a lot of cases... 0:01:31.6 Andrew Stotz: So the right leaders are the ones that have their pen over their right ear. 0:01:36.9 John Dues: Always. That's the mark. That is the mark... 0:01:39.6 Andrew Stotz: I think I see that on you. 0:01:43.9 John Dues: I'm definitely not describing me. I'm just an observer, observer of the world. But I think these leaders make these big promises, but I'm increasingly convinced that the leaders who we should be paying more attention to are the ones that create these fast learning cycles. So in a typical place, a company or something, a school, they're faced with a problem. These leaders don't immediately ask, "How do we scale this? How do we scale this idea?" I think they're turning to a different question, and that's, "What's the smallest test we can run to learn whether this idea actually works?" It's a very different, very different question. And I think it's tough because this is a question that's not gonna make headlines, but I think it's one of the more important questions that a leader can ask... 0:02:49.9 Andrew Stotz: Isn't a great leader supposed to be doing the big things? You're talking about the smallest. 0:02:52.8 John Dues: The big things, right, the large initiatives, that's what gets attention. But I think the larger the initiative, the problem is the longer it takes to learn whether that thing, that idea, is helping or hurting or maybe having no effect at all. And I think what happens is, and what I've seen in schools repeatedly, I'm sure it's probably the same in the private sector, is oftentimes by the time the evidence actually arrives, if it ever does, so much time, money, and goodwill has been spent that it almost doesn't matter whether the idea itself was successful. All this cost was sunk into training people, all these new expectations have been established, and then we almost become more invested in proving the initiative was the right decision. And then once that happens, it's almost impossible to go about learning if it's actually having the effect that we intended to. And I think a lot of this has to do with many improvement efforts that I see. They start with a solution. They're sort of starting with not a clear definition of the problem, but this idea that they think is gonna have an impact, whatever that is. It could be a new curriculum in a school, an attendance campaign because attendance has been a big thing lately, some type of new evaluation process that they're gonna use with teachers or workers, whatever. But the point is that the assumption is that the solution's known at the beginning and that success really just depends on implementation. But I think the problem I see is that no one stops and thinks, "What if this solution actually doesn't work in our system?" We copy these ideas, we've seen this thing, whatever it is, work somewhere else, and we almost don't even consider whether the context matters. And it's maybe the most important thing to consider. 0:05:11.7 Andrew Stotz: I think about Deming, Dr. Deming, saying, "How would they know?" 0:05:16.0 John Dues: How would they know? Yeah. And I think, again, so much gets sunk into the initiative, all that training, all the money, all the resources, whatever. At a certain point, the organization is so invested that they almost sort of solidify into defending the idea rather than trying to learn whether it's actually working. That tipping point, I think, can happen pretty quickly, especially if it's a large, organization-wide initiative. 0:05:50.5 Andrew Stotz: Yeah, and I can imagine a new person coming... A superstar coming in from another place where they implemented something that really worked, and now they're going, "Let's do it in our..." and that may or may not have the same impact in that new location that that person's responsible for. 0:06:09.6 John Dues: Yeah. And I think almost immediately the conversation then shifts from learning whether the idea is working to confirming what everyone hopes will happen. I think that might be the most dangerous moment in an organization. And so the purpose that I'm talking about, testing on a small scale, is not actually to verify the idea. The purpose is to learn whether the idea survives contact with reality. A good scientist, for example, their first step when they have a hypothesis is try to falsify it. And I feel like if it was ever taught to education or business leaders, that idea has been completely lost to history. And maybe even in some respects in the science world too, that falsification principle is sort of... That's the first step when you're testing an idea. That is not what I've experienced as an educator. I don't know if you've had that same experience in the business world. 0:07:21.9 Andrew Stotz: Yep, yep. I'm just thinking about that quote about no plan survives first contact with the enemy. I know von Clausewitz said it. There was another guy that said it, I think, before him, but it's just so, so true. 0:07:41.2 John Dues: Yeah. And I think this other way of thinking that I'm talking about is so counter to how most organizations operate. Once that solution is selected, whatever it is, the focus completely shifts to implementation and adoption. But the thing is, improvement, at its most fundamental level, it's a learning process. It's not an implementation process. And so... So often we're asking, how do we roll this thing out? I think a good leader, what they're gonna ask, is how can we learn more about this idea as quickly as possible? Right? This other way of thinking, this small testing, it reduces risk, generates feedback, reveals obstacles that you're blind to initially. But most importantly, it creates knowledge, like real working knowledge in your system, in the context where this idea is eventually... When it does roll out system-wide, where it's gonna have to work. And the thing is, is if it works at that small level, you can expand it. If it fails, you can cut your losses when not much has been lost in the way of time, resources, that type of thing. But either way, the organization is gonna learn from that small test... 0:09:09.2 Andrew Stotz: I found it, by the way. 0:09:10.6 John Dues: Oh, go ahead. 0:09:11.9 Andrew Stotz: Helmuth von Moltke the Elder, a Prussian field marshal and military strategist. The closest translation was, "No plan of operations extends with certainty beyond the first encounter with the enemy's main strength." Or summarized as, "No plan survives first contact with the enemy." So it wasn't Mike Tyson who said it first when he said, "Everybody has a plan until you get punched in the face." 0:09:45.3 John Dues: Yeah, right, same idea. I think the Prussians had quite a bit of revolutionary ideas coming out of their military prowess. I think the organizational structure maybe came even from Prussian military hierarchies and stuff like that. 0:09:54.0 Andrew Stotz: Definitely. 0:10:02.8 John Dues: Yeah, but I think, going back to my original sort of statement about which leaders get branded as outstanding or great or leaders to pay attention to, is those large initiatives attract attention, right? And we tend to celebrate those leaders with bold visions or these big plans, sweeping announcements. They're decisive and courageous because when you make those pronouncements, it appears as if they know exactly where the organization could go next or should go next. I think the problem here is that confidence can so easily be mistaken for knowledge. And often, especially in the world that I live in, not just schools but urban schools, the average superintendent is only in their seat for three or so years. Some a little more, some, a lot, a lot less. And so by the time you find out whether the thing worked or didn't, the person's gone. They're on to the next thing, and no one remembers what exactly they promised to do when they got here three years ago... 0:11:18.7 Andrew Stotz: He was really good. "I liked him. He was nice. I thought he had some good ideas." 0:11:21.5 John Dues: Right, right. 0:11:24.4 Andrew Stotz: "Who's our new boss now?" 0:11:27.4 John Dues: Yeah. And so they get this recognition for these big announcements, and it's before any evidence exists that this thing works, right? And so meanwhile, there's these other leaders who I think deserve more attention, are frequently doing something that's much less visible. And what they're doing is building a system that learns. 0:11:40.2 Andrew Stotz: Mm. 0:11:53.1 John Dues: And so instead of asking people to just trust their ideas, they're really thinking about ways to design tests of those ideas. So they're not really trying to prove themselves right like this first camp of leaders is. What they're trying to do is discover where they might be wrong. And that's just not as flashy. It just doesn't garner the same type of attention as that first type of leader. But I think if we really want to improve organizations, schools in my case, or businesses in your case, the thing is, if you're really gonna improve, it depends on actual knowledge, not just enthusiasm, not just charisma. When I think about a promising idea, that's not the same thing as a good idea. And a good idea, even a good idea, is not the same thing as an idea that works in your system, right? And so what we're trying to do is learn, learn, test, not confirm, learn what actually happens when we put something to the test in our system. 0:13:04.7 Andrew Stotz: It makes me think about what I mentioned to you before we turned on the recording, which is that I've been starting to do PDSAs with my accounting and inventory team. Every month I go and sit down with them after they've closed the books, and I've designed a simple format for them. And the way I've explained it to them is that imagine that you want to lose weight, and you think, okay, there's three things I read on the internet: get good quality sleep, eat less carbohydrates, and walk every day. If we do all three of those things, we're probably gonna lose weight. And as an individual, that may be good enough. But if we do them separately, we'll actually acquire knowledge as to which one has the biggest impact. Now, it gets even more difficult because if you do them consecutively, it's harder to make an impact as you start to lose weight. But the point is, is that... And the reason why it's important is because we need to think about how we as an organization are acquiring knowledge. And so I've got a golden three-ring binder, and each of the PDSAs we put in there, and then we're starting to collect them. Once a month, our impact that we're expecting from that PDSA may take six months to occur, but we're revisiting and discussing and deciding, do we continue with this or do we improve it? And we just have two things that we're focusing on, the accounts receivable and also reducing the amount of inventory that we have in the business. And those two things, the beauty of doing PDSA with accounting is that it's a repetitive cycle. Marketing's not a repetitive cycle. Sales, not necessarily a repetitive production, but accounting is the same thing over and over again. So what a great opportunity to improve. 0:15:10.8 John Dues: Yeah, and that's really interesting because a lot of times financial or accounting functions in businesses sort of get left out of the improvement equation. And that's a big mistake, I think, because especially if those people are sort of left to their own devices and the sole focus is on the bottom line, right? And so you could cut cost in an area and actually cause the business, obviously, great harm if you don't have the full picture in mind. So I think that's a great... 0:15:44.0 Andrew Stotz: And that's a whole another area of misusing finance. But the point that I'm thinking about as I'm going through this, because I was thinking about where is the best place to really start strong implementation of PDSA, and my conclusion is accounting. Because accounting is not even like finance saying, "Oh, we need to hit this target" or something. They're just cranking through a process over and over again. And I told my accounting team, I said, because it's a pretty big team of people in both accounting and inventory, I said, "We're gonna work on this for 12 months until we've got the format, the structure, everybody understands it, we have it all translated into Thai from English so it's very clear." I said, "And then you guys are gonna then teach the rest of the organization how do we do PDSA." 0:16:34.0 John Dues: The accountants are, huh? 0:16:36.1 Andrew Stotz: Which is pretty exciting. 0:16:38.4 John Dues: What's... How are they receiving it? 0:16:40.8 Andrew Stotz: It's confusing. It's hard. They're thinking about things and writing stuff down. The first few ones, they realize they didn't really make it that clear, so it's a struggle. And I can say for myself, being an expert in this area, that bringing it to them in a simple way, not easy. And it's also easy to abandon. And I suspect that many employees would think, "Okay, this is the next initiative," versus something that I'm just gonna, every single month, review, work with them on, and keep improving. And then we want to build that competency to understand what works. Because if we can test things one at a time, they also can see how you really got to narrow it down. 0:17:30.8 John Dues: Yeah, that's a great application of continual improvement where you're learning by doing. There's no better way. It's gonna feel clumsy at the start, the first few cycles that you go through. But I think once people see it's not a test, it's not an evaluation especially, it truly is a learning process that can have a big impact on whatever the problems in your area are. That's what I've found. After people go through this a few times, and you make the predictions, and people think they're gonna get judged on their predictions, or the predictions are gonna be wrong, especially at the start, I've continually had to tell people, "No, you're not failing. Yes, your prediction may have been off quite a bit, but that's in the first cycle." We do this a few times, and you're gonna get your sort of understanding of reality and that gap is gonna get closer and closer as you run those cycles. 0:18:28.5 Andrew Stotz: Yeah, and I've been teaching more and more on corporate strategy, and I've identified what I call 11 Ways to Win, how great companies win. And so I've kind of tried to narrow it down to what I think are the core ways that companies win. And one of them is know-how. And Toyota is a good example. 0:18:40.2 John Dues: Yeah. 0:18:52.0 Andrew Stotz: And part of the question for know-how is, does this company have a method of acquiring knowledge? Because know-how can't just be, "We got a couple really smart guys," because when they leave, that competitive advantage is gone. 0:19:00.4 John Dues: Yeah. 0:19:08.8 Andrew Stotz: And that's where the process of how do we acquire knowledge, this idea of narrowing it down as you're talking about, yeah, exciting. 0:19:19.8 John Dues: Yeah, that is exciting. And the PDSA is a great, I think, technique to use to introduce people to continual improvement methods. Because I think after you've gone through it a few times, it becomes pretty intuitive pretty quickly. And it basically combines all the elements that Deming taught into a single sort of learning process. You get the psychology in there, the systems thinking is in there, understanding variation, obviously the theory of knowledge, the PDSA is core to that. So you get all four components right there with the PDSA. 0:19:55.1 Andrew Stotz: Well, shall we wrap this up? What do you want to leave people with? 0:20:13.3 John Dues: Yeah, I think one thing I was gonna say right before the wrap-up was one of the areas that we're trying to do this actually in is actually strategic planning, which is a broad area of an organization that's sort of comprehensive. But we've, I think, tried to incorporate that same sort of PDSA thinking into our strategic planning process. Because schools, like any organization, they're dynamic and the conditions are unpredictable, especially over an extended period of time. And so what we're thinking through is how do you have sort of this combination of a long-term constancy of purpose, because you have to have that, what's our long-term purpose, our long-term aim? But then how do we also continually adapt? And we've tried to build both of those things into our strategic plan. So I think that's sort of a unique approach, a unique way of thinking, even down to the fact that the strategic plan document itself, what we used to do is the culmination would be this color spiral-bound document that looked really, really nice when the consultant would hand it off to you at the end of the process. Now we're doing this all internally, and the strategic plan is in a Google Doc, and it is literally continually updated as we learn through the various tests that we're running over the three-year period. So it's more like a management system than a static document. So even a thing like a strategic plan, which of course there are components that we have locked in for the three-year period, these are some long-term priorities, but there are some annual and quarterly things that we're updating all the time based on what's actually happening on the ground and what the data is telling us. So you kind of have to sort of do a hybrid of both those things in certain areas of your organization, I think. And I think the most important thing is that we're creating a system that's capable of generating knowledge that we're learning over time, all while focused on a sort of clear long-term aim. I think that's kind of the key thing. So... 0:22:15.2 Andrew Stotz: Excellent. I don't think I can add anything to that. So on behalf of everyone at the Deming Institute, I want to thank you again for this discussion. And...
/episode/index/show/deminginstitute/id/42037090
info_outline
A New Lens with Balaji Reddie (Part 4)
06/29/2026
A New Lens with Balaji Reddie (Part 4)
What if better management starts with seeing connections that were there all along? In this conversation, Balaji Reddie and Andrew Stotz unpack one of the most powerful and overlooked ideas in management: that everything is connected. Drawing on Dr. W. Edwards Deming's systems thinking, he explains why the problems we face today were set in motion long before we noticed them, and why the solutions are rarely where we think to look. Along the way, a cup of coffee becomes a window into five years of invisible effort, hydrogen and oxygen defy everything we'd expect, and a classroom game reveals that cooperation isn't a soft ideal — it might just be human nature. Whether you run a team of two or a global organization, this episode will quietly shift the way you read a situation, ask a question, or respond to a problem. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussions with Balaji Reddie, an educator and trainer in the teachings of Dr. Deming and quality management generally. The topic for today is connectedness, which will help you see things you normally would not see. Balaji, how are you? 0:00:30.7 Balaji Reddie: I'm good, I'm fine. 0:00:32.5 Andrew Stotz: Nice to connect with you. 0:00:34.1 Balaji Reddie: Yes, same here. 0:00:35.3 Andrew Stotz: Connectedness day. 0:00:36.5 Balaji Reddie: Yeah, connectedness, absolutely. Yeah, we chose this term very carefully, right? 0:00:42.6 Andrew Stotz: I suspect you have, given your precision. [laughter] 0:00:47.4 Balaji Reddie: Yeah, to see things that you normally would not see, let me attribute this to Henry Neave, who said that he heard Deming say this during his last three or four seminars in England, right? In Britain rather. Yeah, I think it was mostly in England. And he said, when he heard him say that, he said, "I am not here to teach you anything new. I'm here to make you see things that you normally would not see." And I would like to just expand on that and say when you see things differently, obviously, you observe, you record different things. And when you record different things, you ask different questions. When you ask different questions, you get different answers. And when you get different answers, you draw different conclusions. When you draw different conclusions, you take different decisions. And when you take different decisions, you get different results. It's insanity to expect different results by asking the same questions every single time. So management is not so much about giving the right answers as much as it is about asking the correct questions. And I think Dr. Deming helps you do that. He helps you ask the correct questions. 0:02:02.2 Balaji Reddie: Now coming to the word connectedness. We spoke about the System of Profound Knowledge, a unified theory of leadership and management, where Dr. Deming brings together four sciences. And the first one he says about systems thinking, or what he called as appreciation for a system, appreciation for a fact that everything is systemic. There's nothing that happens in isolation, right? And the second one, of course, he said was understanding variation, then understanding theory of knowledge and understanding psychology. But he said, all four are equally important, et cetera. And then comes the, I won't say contradictory, but a chapter before Profound Knowledge on systems especially. So that's where I decided to use the word connectedness, that all these are connected. What did he mean by that? So I believe he wanted people to learn about connectedness and systems first. 0:03:01.6 Balaji Reddie: So let's dive right there. What did he always say about systems, or connectedness as we say here? And let's get into his definition for system. And he says that “a system is a network,” right, “of interdependent components that work together to achieve the aim of the system.” And then he says “every system must have an aim. Without an aim, there is no system.” And very well articulated throughout this book which he wrote, he always began with aim of the chapter. Even in Out of the Crisis, he always started with aim of a chapter. So network of interdependent components. So let's just break it down, because the three important words are network, interdependent, and aim. And he says aim comes first because without the aim, there is no system. 0:04:00.6 Balaji Reddie: Right. And he goes on to tell us what the aim of a system should be. Okay. He says here that the recommended aim should be for everybody to gain. Now, in one of the paragraphs there, management's job, where he says should be to make it clear, the first step is clarification. Everyone in the organization must understand the aim and how to direct their efforts towards the aim, right? And everyone must understand, okay, this is important. The danger and loss to the whole organization from a team that seeks to become a selfish, independent profit center. Right. So he says here we need to give both, why we need to do what we need to do. And he says the aim precedes the system. Now, I would like to leave this discussion right here. We will cover this in our 14 Points, our session on the 14 Points, because I believe the word aim and purpose are, they go hand in hand. Aim gives us a direction and purpose gives us the reason why we exist, right? And so the direction of all the efforts, you can see the development. He says here, he gives some examples that the system must create something of value. In other words, results. The intended results along with consideration of recipients and of cost mold the aim of the system. So he said it should be something that makes life better for everyone. 0:05:39.8 Balaji Reddie: Now, he was talking about a man-made system here. Remember, he wrote this for organizations, but I think I mentioned this before that this can equally be applied to natural systems, if you want to really study them in detail. I remember talking to Barbara Lawton about this, and I said, "Natural systems, they do have an aim. It's just that we've not understood it." The purpose and aim of, in fact, that was the basis for my paper, which I delivered at the Deming Research Seminar in 2002. And the title of my paper was Deming and Ecology. And I was trying to put together the thoughts of the physicist Fritjof Capra, who wrote some wonderful books like The Tao of Physics, The Turning Point, The Web of Life, and The Hidden Connections. And The Systems View of Life is also one of the sub-books or booklets that he came out with. But these were his wonderful books. At the time, he had not yet written The Hidden Connections, right? So based on his three books that I had read up until then, of course, one was called Uncommon Wisdom, where he reproduced some of the interviews he had with some systems thinkers in the world, including people not from conventional systems thinking. For example, he also reproduced his interaction with the then Prime Minister or the ex-Prime Minister of India, Mrs. Indira Gandhi, and how he spent time with her, because he was over here in India for quite some time studying the language Sanskrit and studying the texts over here, because he learned about systems thinking even deeper. 0:07:25.1 Balaji Reddie: So over there, he wanted to, he raised a question, what is the purpose? So I wanted to use Dr. Deming's theories to understand the purpose of a natural system and what is the purpose of man [laughter] in this natural system. So that was my theory. And that's when this aim thing became more and more clear. And Barbara said, "No, you're right. There is an aim. It's just that we're trying to understand it. Without that, you won't have the system working so beautifully. There is something that is at work." Right. And he says here, management of a system. And then he says that a system includes the future. And now here's where, when you talk about system includes the future, he mentions Peter Senge in his book, if you know about The Fifth Discipline: The Art and Practice of the Learning Organization. And that's where this fantastic statement comes in because he says delayed effects. So although, Deming never used these words directly, but here I am putting among the first principles of systems thinking is that cause and effect are not closely related in time or space. Right. And that gives a lot of frightening conclusions, or inferences that you can draw from this. If I say that, by the way, that cause and effect are not closely related in time or space, and if I ask you what you understand by this statement, your first knee-jerk reaction would be what I do today, the consequences would be felt in another time at another place. Absolutely right. That's exactly what this means. But the converse is also true. What we get to see in front of our eyes, the origins are at another time and another place. 0:09:15.9 Balaji Reddie: So we only see the event, but systems thinking teaches us there are no events in this world. There are only eventualities. Now, this comes into play when you start doing a study, typically when people learn about quality, and then the first thing they learn is to, okay, identify a problem and try to solve it, right? And then they start asking the question, "Why did this happen?" And then you draw a fishbone diagram, which is, you know, one of the most popular tools. But the problem there is you need to arrange the causes logically and not categorically. And you also need to take into account that these causes are also related to each other. You can't isolate them. And the fact that, there could be an element of time over here, right, that this is a delayed effect that you're seeing. So the effect comes much later. And sometimes it could be weeks and months. So you have to take that into account, right? So the cause and effect are not true, which means then the next corollary from this statement is that seemingly disconnected events turn out to be connected. And so when you are studying something that's happening in front of your eyes, very quickly you ask the question, "What else happened a month ago, a week ago, that we seem to have missed? Are we missing something here?" So that's one of those things that we need to get into, right? We need to go backwards in time and not look at the localized stuff here. We need to look in space all around and try to figure out where and how we need to change things. 0:11:06.1 Andrew Stotz: It's also interesting to think about all the things that have to have happened for an outcome to occur today the way you want it, that is the right outcome. 0:11:19.8 Balaji Reddie: Yes. 0:11:21.4 Andrew Stotz: And a good example I use for that, and I was just talking two different times this week with my team, is coffee. Coffee is a really interesting one, because when you go to a coffee shop, they make you a cup of coffee, they give you a cup of coffee, but what you don't realize is that there was a farmer, took him five years to grow that tree. And then they had to pick it at the right time. You pick it at the wrong time, it goes wrong. 0:11:47.4 Balaji Reddie: Oh, yeah. 0:11:48.3 Andrew Stotz: They put it into some water. They leave it in too long, it's fermented. They leave it in too short, it doesn't, the shell doesn't come off. And then if they, once they've worked on it, if they have their grinders that are getting off the mucilage off of it, if they're too tight, well, then you're going to get a little slice off the top of the bean. And then when that goes to the roasting machine, that's going to burn right there because there's no protection in that area. But they got to get all of those things right all the way to that barista. And if that barista just basically doesn't check the water temperature, it's done. 0:12:29.5 Balaji Reddie: It's done. [laughter] 0:12:29.9 Andrew Stotz: You throw it away. And when you think about it, I have another lesson that I give to young people about capitalism, that how all of these decisions are happening all along the way. And when that happens, there's waste in the system. And that waste goes back all the way back to the effort of the farmer five years ago when they planted that tree. 0:12:51.8 Balaji Reddie: That's right. 0:12:52.3 Andrew Stotz: And so reducing waste is not only good for you and good for costs in general, but it has a respect for the process, a respect for the system. 0:13:04.0 Balaji Reddie: Yes. Connectedness. Reconnected. [laughter] 0:13:07.6 Andrew Stotz: Well, and the other thing I tell them is I say, and here you have a coffee bean coming from this country that's then being shipped to this country. They never met. 0:13:16.8 Balaji Reddie: Yeah. 0:13:17.1 Andrew Stotz: And that's capitalism. You trade. In fact, they may not speak the same language. 0:13:23.1 Balaji Reddie: Absolutely. 0:13:23.5 Andrew Stotz: Or they may even be enemies. They may hate each other. 0:13:26.9 Balaji Reddie: Yeah. 0:13:27.4 Andrew Stotz: And yet they trade. 0:13:29.5 Balaji Reddie: Yeah. 0:13:31.1 Andrew Stotz: And so it's a voluntary connectedness that happens through capitalism. Anyways. 0:13:37.2 Balaji Reddie: Yeah. The right quality and uniformity are foundations for commerce, prosperity, and peace. [laughter] That's Deming for you. 0:13:46.1 Andrew Stotz: Yeah. 0:13:46.3 Balaji Reddie: I think he chose that sentence so beautifully. It goes into the Deming Medal. He knew what he was talking about. So he was talking about systems, and I think profound knowledge came towards the end of his life, and rightly so. It came as a revelation, as a catharsis. I think he went through all of that, especially, I think it was between '88 and '89, if I'm not mistaken. Jaki Graham talks about this very, very funnily. She says that they were giving him pure oxygen and maybe that made his brain cells go alive. [laughter] And he could think so clearly. He was getting pure oxygen. And so his thought process... 0:14:31.0 Andrew Stotz: By the way, for the listeners out there, you may feel like I feel when I think about how Dr. Deming didn't really come out with the System of Profound Knowledge until he was, early '90s, let's say, '90s. You think to yourself, okay, I still have time to come up with my incredible insight on... 0:14:52.4 Balaji Reddie: Correct. 0:14:52.9 Andrew Stotz: Bringing together all my experience. 0:14:55.1 Balaji Reddie: Yeah. So because I think I shared this with you before that when you read Mary Walton's book and he says, "No, I don't think I'm ready to establish an institute," and he only did it one month before he passed. So I think by that time he was quite sure what he created was quite amazing, and it'll stand the test of time, right? And although, the title of the book is The New Economics for Industry, Government, Education, I believe it is industry, government, education, and healthcare. Because when he was in Japan, he said Japan must see itself as a system. And when he got the Deming Medal, that's what he said. Oh, sorry, when he got the Emperor's Medal, the Second Order of the Sacred Treasure. And he was talking to the Japanese Prime Minister. And he said, "You all must see yourselves as a system." And the four sectors of industry, government, education, and healthcare must work together. So he meant it as in the broadest sense of the term, right? And that's why this word system. So the first thing, of course, cause and effect are not closely related. Seemingly disconnected events turn out to be connected. The third important thing here in systems thinking is the reductionist thinking that we have. 0:16:12.0 Balaji Reddie: We believe the word analysis means dissection. And if you look deeply and read the book Mind and the World Order, what is the purpose of analysis? The purpose of analysis is not dissection. That's just the act of breaking a system down. But the purpose of analysis is interrelationships, establishing the interrelationships or understanding the connectedness. And I find it quite funny because people say analysis is dissection, and so they came up with a new term, really not necessary, synthesis, bringing it all together. There was no need for that term. You're not engaging in what, tautology? [laughter] You didn't need that. Analysis itself means dissecting and understanding relationships, right? 0:17:02.2 Andrew Stotz: Hmm. 0:17:03.3 Balaji Reddie: And so he said here, we have that reductionist thinking, but we forget that in a system, you have what are called synergistic relationships. You cannot understand a system by breaking it down into its components and studying the components separately and then believing that the components and their attributes and what they do gives the output of what we see. No, you could be completely wrong here. It's not what they do separately. Okay, it's a good thing to understand the components of a system and study them and maybe even establish connectedness, but sometimes what the results you see are quite contrary to what they could be giving separately. I'll give you an example here. Take the case of water. Water is composed of hydrogen and oxygen. You cannot study and draw conclusions about water by studying the attributes of hydrogen and oxygen separately. You'd be making a mistake, a grave error. Okay, let's do that. Hydrogen, a highly inflammable gas, catches fire like this. Oxygen feeds fire. But you put them together and they give you something that quenches fire. Hydrogen is not wet. Oxygen is not wet. But water is wet. [laughter] How do you explain this? 0:18:25.9 Balaji Reddie: All right. If you take the case of sugar, it's a hydrocarbon. Try tasting hydrogen. All right, try tasting carbon. Now put them together and see what you get. Now, can it not be then that you are studying a system and when you break things down and you're studying the components separately, you could be making the same error? It's not what they do separately, it's what they do together. It's the same with sections in a company, departments in a company, companies themselves. Today, we use this sophisticated term, supply chain, call it what you will. I love to use the word provider network. I don't like using the word supplier any longer. I like to use the word provider, because today we're living in a different world. We're getting activities done by someone else, and you can't say he's supplying me this activity. He's providing me this service, right? So provider is a better term to use than supplier. And it's no longer a chain. It's a network, right? It's more lateral. It's all over the place. It's not linear. You're doing a huge disservice by using the term supply chain, because it's not bringing out what exactly is happening right there. 0:19:38.3 Balaji Reddie: And today's supply chains or provider networks are globally dispersed. So you need to have something that connects them. You just said that, the farmer could be in a different country, speaking a different language, maybe he didn't even know where it is being used, and they could hate each other, but they have to work, [laughter] you need to work together. So there's some kind of connectedness that comes in once again. But here's where people make mistakes. So you're talking about synergistic relationships. So sometimes in a team, now here's where all that incentive pay and choosing employee of the month can destroy a system. 0:20:18.8 Balaji Reddie: It could have been the entire team that did well, and they did well because they worked as a team. And it was...
/episode/index/show/deminginstitute/id/41796930
info_outline
A New Lens with Balaji Reddie (Part 3)
06/22/2026
A New Lens with Balaji Reddie (Part 3)
"I'm not here to teach you anything new. I'm here to make you see things that you normally would not see." — Dr. W. Edwards Deming In this episode, Deming educator Balaji Reddie reveals the practices that are hiding in plain sight within most organizations. Practices that feel normal. That get celebrated. And that quietly undermine everything you're building. One example: arbitrary targets. An employee collected 2 million rupees in a single day — four times his target. He told no one and did nothing for four days. Because he knew his manager would just raise the bar. That single moment of silence cost the company a genuine breakthrough. This is what Deming called a "faulty practice." And there are many more where that came from. Host Andrew Stotz and Balaji dig into Chapter 2 of The New Economics — Deming's most overlooked chapter. They cover why ranking employees is built on a mathematical illusion. Why chasing quarterly results destroys long-term value. And why the best leaders, from Steve Jobs to Walt Disney, ignored the pressures that trap most organizations. TRANSCRIPT 0:00:02.4 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussions with Balaji Reddie. He's an educator and a trainer in the teachings of Dr. Deming and quality management generally. And the topic for today is becoming aware of faulty practices. Take it away, Balaji. 0:00:26.0 Balaji Reddie: Good morning. Thank you, Andrew. So part three of our series, what we're looking at. So last time we met, we spoke about essentially Point number 14, because we outlaid his profound knowledge. And then I always said that he gave us a lot of clues as to what needed to be done. So I started out by reading some of the excerpts from the book, which we tend to ignore. And then he said, "Here's what I expect." So he expected leadership, a critical mass to be created, and then he gave attributes of a leader. So we listed 17 of those points, which we said principles of leadership. And now once you've created that critical mass and there's someone who's taken the lead and there are a bunch of leaders, maybe, so what do we do next? So when you start becoming aware that you are now in a prison, so to say, because that's what he said here, that they feel it's a fixture, and this is the way things are, this is how things always have been. So he says, "No, you need to understand that these things are wrong." Right? And you first need to become aware, and then we need to look at what needs to be done, perhaps. So he's given some suggestions, and you could always adapt and adopt this. So most of this would be taken from the book, The New Economics, chapter two, which he has titled as "The Heavy Losses." Now, remember, when he wrote this book, it was after the other book, Out of the Crisis, where he had listed his 14 Points. Yes, but he also listed diseases and obstacles. And people tend to ignore that. 0:02:18.9 Balaji Reddie: In fact, I remember having a chat with Bill Bellows on this, and I said, "Diseases and obstacles." And he said, "Obstacles?" I said, "Yes, he has listed 16 obstacles in Out of the Crisis." And he said, "Oh, wow." And he took his copy and he said, "Oh, yeah, you're right. There are 16 of them." And so sometimes you see things that you normally would not see. So when he wrote this, initially, I think many people thought that it was just an extension of those Diseases. But when you start looking deeper, you'll find that he became more elaborate in what he listed as the heavy losses. So he says here that these are things that you start observing and you say, "This is not normal." So the language that he's used is pretty, pretty clear. Present practice, so faulty practices. The present practice, and he says these are only reactive. You only need certain skills and not nearly any theory of management. Whereas when you opt to go to a better practice, you need a theory. So let's start with the very first faulty practice. And this stems from his 14 points too. He says, "Lack of constancy of purpose, short-term thinking, and emphasis on immediate results. Think in the present tense, no future tense." And then he becomes more elaborate and says, "Keep up the price of the company's stock and maintain dividends." 0:04:02.0 Balaji Reddie: Which, well, okay, it seems like you should not do that. No. He says here, you fail to optimize through time. Make this quarter look good, ship everything on hand at the end of the month or quarter, never mind its quality, mark it as shipped, show it as accounts receivable, and defer till the next quarter repairs, maintenance, and orders for material. Just a word here, in the new edition of The New Economics, there's been a spelling mistake there. So if anyone's listening, you can just correct it in the next edition that comes out. Instead of "defer till the next quarter," he's written "defer toll the next quarter." So we need to correct that in the next printing. Now he says here, a better practice... 0:04:52.1 Andrew Stotz: And before you go to there, can we just talk about this for a second? 0:04:56.1 Balaji Reddie: Sure. 0:04:57.8 Andrew Stotz: One of the things that, having been a financial analyst all my career, we get quarterly results from companies in the stock market. And in my own business, of course, I look at monthly results because we close the books every month. And it's definitely one... Donald Trump recently came up with the idea of telling companies not to report quarterly results. And I believe the Singapore Stock Exchange also came up with the idea of maybe we'll reduce the amount of reporting to maybe half-yearly, because we do have half-yearly reporting in some countries, right? 0:05:39.6 Balaji Reddie: Right. 0:05:40.9 Andrew Stotz: But having learned the teachings of Dr. Deming many years ago, long before I became a financial analyst, I always thought, I never really got this one because I thought, what an idiot you would be if you're running a company and all you could see was the market's demand for quarterly performance. And I've always admired those people, I think Jeff Bezos was one that really made it very explicit. "If you're here for quarterly performance, you're not gonna get it." And so I always have said to CEOs, having seen analysts and fund managers, I've visited, taken fund managers more than 1,000 times to meet with CEOs, and CEOs ask me, "What's your advice from seeing all that?" And I said, "Don't listen to this too much." Take it on board, what the discussions are about, but you're the CEO. Your job is to optimize the value of this business. And that means, that doesn't mean making quarterly numbers, manipulating things to make quarterly numbers. So part of what I've said to people is, "Get a backbone. Don't come and complain to me, 'Oh, yeah, but the pressure of the market's quarterly.' Come on." You know and I know that the job of a CEO is to maximize the value of the business, not the quarterly result. So anyways, that's my little pet peeve. 0:07:13.6 Balaji Reddie: Yeah. Yeah, that's right. And if you look at even Jobs, Steve Jobs, when he came back as Apple CEO, he had the nerve and the spine, like you said, to tell the board, "Don't judge me on this. It's gonna take time. And believe me," he said, "someday you will see results." Now, unfortunately, he was not there to see what he's created, but I think anyone in Apple can safely say that they're growing because of the foundation that he laid so long back, right? And I think that was one of the major reasons why he did not make Jonathan Ive as the CEO, because he wanted him to focus on the product and the customer rather than the quarterly results. And I don't think Apple ever played it by quarterly results. 0:08:04.9 Andrew Stotz: Yeah. And here's a good book called Competition Demystified by Bruce Greenwald. And there's a passage in here that's interesting because he published the book back in 2005, so it was long before Steve Jobs really made the company profitable. And he had basically gone through and explained the situation at that time as a strategist looking at the company. And what he said, it says, he just said that “Jobs had managed to restore operating margins, but Apple survived, it had hardly prospered, its future does not look bright.” And I use this as an example in my strategy class to help people understand that when you're building strategy, you're thinking long term. And the ecosystem that Steve Jobs created, the value of that ecosystem didn't really truly appear until many years after he was working on it. So anyways. 0:09:06.6 Balaji Reddie: Yeah, so that's a classic case here. 0:09:11.1 Andrew Stotz: Let's keep going. You're on a roll. 0:09:14.5 Andrew Stotz: Oh, that's okay. So now better practice, he says, theory of management. Now see what he writes here. He says, "Adopt and publish the constancy of purpose." Now, that's one of the things that he also changed in his 14 points in the 1990 edition, which he never really published in a book but he gave as handouts in his seminars. Earlier on, it was "Create a constancy of purpose," but he says now, "Publish it." And it should be a proper statement, right? And he also said not just for the company, but for other organization. Now, he perhaps was envisioning or he already saw what is happening in the world today, that it's not one company against another, it's a family of companies against another family of companies, if I may say so. And these companies are globally dispersed, so there has to be something that binds them together, and that's the constancy of purpose. And purpose is why we exist, right? 0:10:13.4 Andrew Stotz: And I want to ask about this. 0:10:15.3 Balaji Reddie: Right. 0:10:16.2 Andrew Stotz: Professor, can I ask you about this? 0:10:18.4 Balaji Reddie: Sure. Right. 0:10:21.0 Andrew Stotz: Because if we go to Out of the Crisis, he has his section, and this for me is on page 24, but I don't know what edition I... Maybe I have an old edition, but it's the chapter "Principles for Transformation." He's gonna talk about the 14 Points, and I want to talk about the first point. And the first point is "Create constancy of purpose for improvement of product and service." 0:10:45.8 Balaji Reddie: Yeah. This is the old edition, 24. 0:10:48.6 Andrew Stotz: And the question that I have is that was he saying... Because now you've said in The New Economics he says constancy of purpose. He just states constancy of purpose. He doesn't say "for improvement of product and service." So my question to you is, is he saying that the constancy of purpose should be about improvement of product and service, or is he saying your constancy of purpose could be any purpose, but you just need a long-term purpose? 0:11:22.8 Balaji Reddie: Yeah. And he says that anything that help people to live better and have a market. That's on page 25. So whatever you do, your purpose should be to make life better, right? 0:11:40.2 Andrew Stotz: Right. 0:11:40.7 Balaji Reddie: And the product is just the manifestation of that. It's the outcome, correct? For example, if you talk about Walt Disney and his statement of purpose, he made a very telling statement, right? And how he came to write that down as a very fascinating tale. But he said, "I'll do anything to make a child smile. I'll do anything to make a child smile." So all that you see was aimed at the child, right? Whether it was the merchandise, whether it was the animated films, whether it was the actual non-animated films, if I may say so. And then, of course, coming out with Disneyland and then Disney World. So whatever he did was for the child. And then after he passed away, they lost that. I think they wanted to just sustain what they had attained, but there was nothing new coming out of Disney. And slowly people started encroaching on their turf, so to say. You had someone like a Steven Spielberg who made ET, and that really pulled the rug under their feet. And before they knew it, there was Goonies and Gremlins, and they were really crumbling. And they thought, "Let's join hands with the devil," and so they hired him to make a film. And that did very badly. 0:13:01.9 Balaji Reddie: We also know that Hook, which was supposed to be on Peter Pan, et cetera. And then they were in a crisis and said, "What do we do now?" And most of the top people were just washing their hands of everything. They were the employees who were left, many of them who had worked with Disney, and they said, Sony was very keen to buy them out. And they said, "We need to keep them out, and how do we do that? The only way we can do that is to make a comeback and let's make another film. And we've not been doing anything original, so let's go back to the drawing board." But they said, "We need something to guide us." And that's when they discovered what Walt Disney had written, "I'll do anything to make a child smile." And they said, "What a shame. We forgot the child. We hired the best, but we didn't do anything for the child." And they added one more sentence there. "Anything to make a child smile, and there's a child in every adult." That's how they created Honey, I Shrunk the Kids. Unique idea. 0:14:03.0 Andrew Stotz: Right. 0:14:03.9 Balaji Reddie: You can see it's a statement of purpose that brought them back. 0:14:07.6 Andrew Stotz: Okay. That helps me to understand that what he's talking about, according to what you're saying, is come up with your purpose. 0:14:14.4 Balaji Reddie: That's right. 0:14:15.3 Andrew Stotz: Okay. 0:14:15.6 Balaji Reddie: And he of course also added the word “aim” later on, which is that direction, because he says there, "Where do we wish to be? And then by what method?" So you should know whatever you do should go in the right direction. So that's the first faulty practice, and also giving us a theory of what we need to do. So go back and try to rediscover your purpose if you don't have it, or maybe just come out with something and see what really ignites you, what really drives you forward. And he's given some bullet points here. No number of successes in the short-term problems will ensure long-term. Short-term solutions have long-term effects. So that's that statement where he said cause and effect are not closely related in time and space. Of course, management must work on short-term problems as they turn up, but it's fatal to work exclusively on short-term problems. So he tells us that there has to be some place where you need to stop and start focusing on the big picture. So that's the very first faulty practice. Now the next one is a real, real bucket of water on your face. “Present practice, ranking people, salesmen, divisions. Reward at the top, punishment at the bottom. The so-called merit system.” At the top and bottom. It's an artificial creation because no matter what scale of measurement you use, there will be an average measure and there will be 50% above the average and 50% below the average. That's exactly what the word average means. So making these stupid claims that this is an above-average person or a below-average person does not really mean anything. 0:16:07.8 Andrew Stotz: Because what you're really doing is rewarding or punishing common cause variation? 0:16:14.9 Balaji Reddie: Well, that's one. But when you're artificially creating something which doesn't even exist, right? You're saying top half, bottom half. In fact, that funny statement where there's a headlines in England, this happened in England, which said studies have shown, and they spent half a million pounds on carrying out the study, that 50% of the children in England are below average nutrition level. You don't need to spend half a million pounds to figure that one out. That's the law of averages. And using that to judge people is crazy on some arbitrary scale that you've invented. And he goes on to... 0:17:06.7 Andrew Stotz: So the first question I asked was, is this just a frivolous or tampering with common cause variation? Or the other question that... Or is this part of psychology and the idea of demoralizing people through this type of behavior? Where does that fall in from the System of Profound Knowledge, let's say? Is it variation, psychology, or is it both? 0:17:34.5 Balaji Reddie: It's a bit of both. 0:17:36.4 Andrew Stotz: Yeah. 0:17:36.6 Balaji Reddie: Because if you talk about understanding psychology, what he meant, I think I used the word empathy, that we need to be empathetic. When you're talking about employees, what do you mean by empathy there? Well, we need to understand their learning processes. Each one of us has a learning process, but we have a different kind of a learning process. And then when you understand the learning process of a person and then put that person in the right job, you'll have to stop that person from working. That's joy in work. He says that when you... And that takes time. And the ranking system or the merit rating system is an excuse for not having understood or making an effort to understand your employee. You're becoming lazy. You put the onus on them when actually the onus is on you. You have to find out what makes that person tick, if I may use the word resonates. What resonates with that person, right? And then put that person in the right job. He's been saying this from the beginning. It's fascinating that he said this in Japan when he was teaching the control charting there. 0:18:42.3 Balaji Reddie: He said if you draw the control chart for performance of a worker and then it's all within limits for a long period of time, despite all the training and all the lessons that he or she has been given, then he said, "I think it's time to move that person out from that job and give them some other job." Because they've reached statistical control. Any amount of effort put in will not result in a better output. You're gonna get the same thing. And if you want something else, then you need to shift them or maybe give them some better job, whatever it is. So he always had this, that we need to use these in tandem. And in any case, it's a System of Profound Knowledge, so all the four sciences work together, right? And if you want to ask me, when a person understands their purpose, I'm extending the statement of purpose here to the person, when a person understands why they're doing something, they always do the job better. So that statement of purpose needs to come in here too. Instead of ranking them, sit down with them and have a heart-to-heart with each one of them. This is back again to the 17 principles we discussed last time, that you have to spend some time with them. 0:19:57.9 Andrew Stotz: Okay. 0:19:58.3 Balaji Reddie: And understand what makes them tick. So he says “the better practice is to abolish the merit system and manage the company as a system. The function of every component, every division under good management contributes towards optimization of the system. That is, it's not compromise, it's optimize.” We don't say either-or, it's and. And he says “differences there will always be, but the question is, what do the differences mean?” So that's where you can use control charting to figure that one out. And I told you how I did this in my company and I got the HR lady to finally say, "I think we need to remove performance appraisal." Performance management, yes, of course you need to have a system in place because I need to know where I am. Even when we later on come to the 14 Points, one of his most, according to me, most misunderstood points is...
/episode/index/show/deminginstitute/id/41680760
info_outline
A New Lens with Balaji Reddie (Part 2)
06/15/2026
A New Lens with Balaji Reddie (Part 2)
What does great leadership actually look like? Can you make a difference even if you're in the middle of the hierarchy? "If you think you're too small, you've not spent the night under a bedsheet with a mosquito." In this episode, educator and Deming practitioner Balaji Reddie explains why W. Edwards Deming was far more practical about leadership than many people realize. Drawing on both The New Economics and Out of the Crisis, Balaji shares stories and examples that bring Deming's 17 principles of leadership to life. From creating trust and joy in work to understanding variation, coaching people, and improving systems, this conversation challenges conventional management thinking and offers a clear path toward transformation. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Balaji Reddie, who is an educator and trainer in the teachings of Dr. Deming and quality management generally. And the topic for today is Principles of Leadership. Balaji, take it away. 0:00:27.9 Balaji Reddie: Good morning. Thank you so much, Andrew. We had left our last session with that, we'd be dealing with this. And of course, Dr. Deming gave us the outline of Profound Knowledge and he gave us 14 points. He also gave us the deadly diseases and the 16 Obstacles. So people often talk about the diseases, but very often they forget the obstacles. And there are 16 of them which he highlighted for us. And if you think that they're outdated, they're as relevant as they ever were. So you need to keep revisiting those. I think if you start working on removing the obstacles, it's like you're taking your foot off the brake rather than pressing on the accelerator. 0:01:11.3 Balaji Reddie: So you're removing the things that actually stop you before you actually take things forward. But nevertheless, we start with point number 14 where he says, take action to complete, to make the transformation. And he says that there should be a critical mass of people that you need to educate and train and get them on the same page as you are. I'm gonna quote Hazel Cannon here, who is current president of the British Deming Forum. And she talks about the time when she was very young and she attended the Deming four-day seminar, I think in Birmingham. And at the end of those four days, she was overwhelmed as you normally are when you hear how the man speak. And he spoke... He wanted you to make drastic changes. It's not just tinkering here and there. 0:02:08.2 Balaji Reddie: And so she went up to him and she said, "I'm really taken up by what you just said." And then she made a statement, "I'm too small to make these changes in my organization." I believe she worked as a lab assistant in a chemical manufacturing company. They used to make chemicals for cosmetics. So she said, "I'm too small." And Deming just interrupted her and said, "Never think you're too small. If you think you're too small, you've not spent the night under a bedsheet with a mosquito." So make a change where you are and take it from there. So I would like to now quote Dr. Deming from Out of the Crisis. This is Plan for Action: Take action to accomplish the transformation. So he writes there, there are three points and then I'll come to what he writes below that. 0:03:01.8 Balaji Reddie: So he says, "Management in authority will struggle over every one of the above 13 points, the deadly diseases, and the obstacles. They will agree on their meaning and on the direction to take. They will agree to carry out the new philosophy. Management in authority will take pride in their adoption of the new philosophy and in their new responsibilities. They will have courage to break with tradition, even to the point of exile among their peers." So he talks about courage. He talks about courage of conviction. And then he says, "Management in authority will explain by seminars and other means." So I think he leaves it to people of the ways and means. And now today there are a lot of means of doing that. DemingNEXT is one of them. And he says, "To the critical mass of people in the company why change is necessary and that the change will involve everybody." 0:04:00.9 Balaji Reddie: Now he writes something very interesting. He says, "This whole movement may be instituted and carried out by middle management speaking with one voice." So he gave instructions. Why are people saying that he did not tell us what to do? It is just that he expected maybe a lot. And now let's get to that middle management and what he expected. He says here... Let's see here. I'm coming to chapter four now in The New Economics where he says, "A System of Profound Knowledge. The aim of this chapter: the prevailing style of management must undergo transformation." So we just heard that, that what we need to do. And he says, "A system cannot understand itself. The transformation requires a view from the outside. The aim of this chapter is to provide an outside view, a lens that I call a System of Profound Knowledge. 0:04:59.7 Balaji Reddie: It provides a map of theory by which to understand the organizations that we work in." Then he says, "The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding the System of Profound Knowledge." Then he says that “the individual, once transformed, will set an example.” So setting an example, I believe, is doing the right thing under adverse circumstances, when you stick to your principles despite the fact that there is an easier way out. As they say, choosing a path between good and bad is easy, you choose good. But good and better, you need to make the right choice. And that needs profound knowledge. "So be a good listener," he says, "but will not compromise. Continually teach other people and help people pull away from their current practice and beliefs and move to the new philosophy without a feeling of guilt about the past." 0:06:02.7 Balaji Reddie: So he explains to us what was needed here, right? And he says this is what we actually need to do. Now I'd like to, I mean, I'll be referring to a document. I don't know how we're gonna get this to people, but for the Principles of Leadership. All right, I think I'll have to send this over to you later, but we will do that. So in the Principles of Leadership, just come to them. I am quoting again from both Out of the Crisis and The New Economics. So you will find this there when he speaks about what needs to be done. Modern Principles of Leadership. And he says, "The modern principles of leadership will replace the annual performance review. The first step in a company will be to provide education in leadership." So that would be introducing people to profound knowledge from what we just heard. Then he said, "The annual performance review may then be abolished." Of course, that will take time. "Leadership will take its place, and this is what Western management should have been doing all along." 0:07:12.6 Balaji Reddie: So he says, "The annual performance review sneaked in and became popular because it does not require anyone to face the problems of people. It is easier to rate them, focus on the outcome. What Western industry needs is methods that will improve the outcome." And he says, "Suggestions follow." So first, institute... The first principle. “Institute education in leadership: the obligations, the principles, and methods.” And so I think introduction to the System of Profound Knowledge will help. And then after profound knowledge has been sort of brought to the notice of... Of bringing to the notice of the people then you get into perhaps teaching them about 14 Points, et cetera. 0:07:57.8 Balaji Reddie: Comes the second principle. He says, "Ensure more careful selection of people in the first place." So choosing the people, he says again, now here's where it requires you to understand the purpose of what you're doing, purpose of your organization, purpose of the people you're looking out for and making this change. Because when you know your purpose, you know the aim, then you can choose people in the right way. And I believe he said this somewhere, it's a combination of education, training, skills, and experience. So we need to combine these four factors in choosing the right people. Then he says, after selection of the people, ensure better training and education. So we fine-tune all of their... He says a complete background. He said their aspirations, their goals. 0:08:54.2 Balaji Reddie: I kind of borrowed this idea from a company here in India where they had this thing called roles, responsibilities, and objectives. And they used to meet once in a month, but once in a year they used to decide. So the top management, the HR, would sit down with each and every employee and say that, "In this calendar year, this is what we intend to do and this is what we expect from you." And in turn, they used to ask the employee, "What do you expect from us? Because this is what we want from you." And then the employee had a chance of putting forth what he or she wanted, the management, what help they needed. And I think this is where we have to be... It's a give and take. And they didn't just meet once a year; every month they would meet and the question was, "How are we doing?" not "What have you done?" 0:09:51.1 Balaji Reddie: So I think it wasn't a traditional appraisal. If there was any appraisal, it was appraising what top management were doing or intended to do and not so much the employee. I thought that was a good move. So that's what we need to do here: better training and education. Principle number four states: “A manager understands and conveys to his people the meaning of a system. He explains the aims of the system. He teaches his people to understand how the work of the group supports these aims.” Now, here's where, you know, when you talk about, say, hiring people in the first place, when you bring in new employees, I believe that there should be a special session by people inside the company who have stayed the longest, who served the company the longest, especially during their bad days. Because the employees need to know what really happened and how the company survived and how we were resilient, we came back despite all the problems that we had. 0:11:00.7 Balaji Reddie: And the historical perspective, especially if there's someone who's in touch with the founding members, that would be a great boon. I know nowadays we talk about the older companies, obviously none of the founders are there, but if there is such a person, exchanging those ideas with the young employees would definitely make a difference. So they would then understand the purpose, the aims, and how your work supports these aims. I think it's the best way to do that. But what I see right now in companies and I'm being very specific about this, because today when new employees join the company, they have an orientation, they have onboarding, as they call it, but that's done by a rookie, someone who's just joined the company and is just making... 0:11:46.8 Andrew Stotz: [0:11:46.8] Following a checklist? 0:11:48.1 Balaji Reddie: Exactly. Like a PowerPoint presentation. They don't talk about the history of the company. And I think there has to be an emotional connect before there is a logical or an intellectual connect. That emotional connect, I think, then makes you feel that pride and you feel good about coming to work and you say, "Oh, I did not know." So I believe this fourth principle is important in that sense, in the way to do that. Now, he says that... Principle five says he helps... 0:12:19.7 Andrew Stotz: By the way, do you know what chapter are you in? 0:12:23.9 Balaji Reddie: Oh, I have combined. 0:12:27.9 Andrew Stotz: Okay. 0:12:29.4 Balaji Reddie: I took some of the text... Okay. If you want to see here, this is management of people, all right? In that chapter. So I've taken... There are 14 principles there, management of people. In the new edition of The New Economics. It appears... 0:12:48.2 Andrew Stotz: So chapter six. 0:12:50.2 Balaji Reddie: Chapter six, yeah. That's chapter six... 0:12:51.8 Andrew Stotz: Yep. 0:12:52.6 Balaji Reddie: All right. And he talks about pictorial effect of transformation, and then he talks about management of people, role of a manager of people. So there were 14 there, but in Out of the Crisis, the first three which were there, he did not include here. 0:13:10.0 Andrew Stotz: Okay. I just just asked... 0:13:11.0 Balaji Reddie: So I just included those. Yeah. No, so that when people read the book, they could read it clearly, right? So, yeah. So he says now principle number five, which in Economics is principle number two or three, right? He says “he helps his people to see themselves as components in a system, to work in cooperation with preceding stages and following stages toward optimization of the efforts of all stages towards achievement of the aim.” So we want optimization, not compromise. So you need to sit together. Just if I were to ask a simple question to you, Andrew, and without thinking, if I were to try to answer this question... Okay. I presume you know how to make a cup of tea. 0:13:58.7 Andrew Stotz: Yes. 0:14:00.1 Balaji Reddie: So what is the first step? 0:14:02.7 Andrew Stotz: For me, boil water. 0:14:04.6 Balaji Reddie: Boil water. And what if I say that's not the first step? 0:14:12.0 Andrew Stotz: Well, first of all, I think you probably have more experience with tea than I do, but I have more experience with espresso, probably. But anyways, go ahead and tell me. 0:14:20.9 Balaji Reddie: Okay. The first question is, whom am I making a cup of tea for? So what I just tried to convey is it's not natural to think about the customer. And so the first step is, for whom is the cup of tea? If it's the person... 0:14:30.8 Andrew Stotz: Grandma. 0:14:40.7 Balaji Reddie: That's right. If she's diabetic, then you would not need sugar. So you gather the ingredients accordingly. If he wants black tea, you don't take milk, right? And that's the point he's trying to say here. When you look at different stages, every every person has a customer. So the first question is, who is my customer? 0:15:07.1 Andrew Stotz: Right. 0:15:07.4 Balaji Reddie: And that part of profound knowledge, understanding psychology, I mentioned this last time, is empathy. The word empathy captures this. So you go to the next process as, "Whom am I doing this work for?" and sit down with that person and say, "What do you expect from me? How may I help you?" And that's what decides what you're gonna do. So this this fifth principle here, that he helps his people see themselves as components, I think this is important. The next process is your immediate customer, and the rest of them are customers in a very oblique sense. But what you do is critical to the next person in line, right? So you always spend extra time with that person and of course the other people down the line who your work is gonna be impacting over a period of time, right? But these are the... This is the first step you find out. So who's my customer? So that's principle five. 0:16:09.0 Balaji Reddie: Principle number six: now this comes under psychology again, that a manager of people understands that people are different from each other. He tries to create for everybody interest and challenge and joy in work. Now, if you look at the theory of knowledge, what exactly did he give us when he brought that component of profound knowledge into play? He says that theory is a statement that conveys knowledge by relating cause to effect. So I repeat, theory is a statement which conveys knowledge by relating some cause to some effect. It fits without fail all the observations of the past and helps us predict the future with the risk of being wrong. 0:17:04.7 Balaji Reddie: So I'm gonna repeat this whole statement again. Theory is a statement which conveys knowledge. How? By relating some cause to some effect. It fits without fail all the observations of the past and helps us predict the future with the risk of being wrong. So no amount of examples can establish a theory, and even one example can lead to either abandonment of the theory or modification of the theory. That's what he kept saying. Now, how does this work? So he says it's a system of learning, and all of us have this built in, right? Now, he came from the school of Clarence Irving Lewis, Mind and the World-Order. And if you read that book, Lewis says all knowledge is a priori, it's based on what you already know. 0:18:00.9 Balaji Reddie: For example, let me take this example here. Now, suppose I were to start describing the road to my house. Now, you've not been here, but if I start saying that the road bends towards the left and then there is a command you get to see, now you start constructing a picture in your head based on what you have already seen. It's not the same. That's your theory, right? And then when you actually visit, you say, "Oh, it's the difference between theory and what I actually saw," and then you change your theory. So theory is... It's natural. All of us think naturally like this. And that's why he says here that people are different from one another and we need to celebrate those differences. All of us are born with the system of learning, but not all of us learn the same way. 0:18:49.8 Balaji Reddie: There are some who learn by watching, there are some who learn by doing, there's some who learn by reading, there's some who learn by writing. For some people, one word is enough. You utter a word and they say, "I got it." And for some people, you have to repeat the statement maybe 10 times, 11 times, and then the 12th time you repeat it, they say, "Okay, I got it." Now, is that wrong? We're just different, right? And that's why he says here that we need to understand the learning process of people. And when you understand the learning process of a person and then put that person in the right job, you'll have to stop that person from working. That was his definition of joy in work. People enjoy their work when they realize it resonates with them. 0:19:40.4 Balaji Reddie: And how does that resonance come in? When you under... And because this is so difficult to do, we just throw the responsibility on them by saying, "Here's the target." So the target actually distracts them when actually you should be working on understanding their learning process. So it's a lot of hard work. And sometimes people are motivated enough to discover it themselves, which is great, but we need to create that atmosphere for them to enjoy their work. So interest, challenge, et cetera, he tries to optimize. Now, here's the key. This is beautiful. He tries to optimize family background, education, skills, hopes, and abilities of everyone. 0:20:21.7 Balaji Reddie: So this is not ranking people, very clear. It is instead recognition of differences between people and an attempt to put everybody in a position for development. I think this is one of the most important principles in getting things done. When I teach this to the HR students in my college, I keep saying that I don't think you should call this science as human resource management, because the definition of a resource is obtain it, shape it, use it, and throw it away. We don't wanna do that. I think we should change the title of that department to Department of Learning, because that's what exactly this is all about, and it's learning in both ways where you are trying to understand...
/episode/index/show/deminginstitute/id/41575560
info_outline
What Deming Knew That Your Dashboard Doesn't
06/08/2026
What Deming Knew That Your Dashboard Doesn't
Why do more pressure, more meetings, and more accountability so often produce the same outcomes? John Dues and Andrew Stotz explore Deming’s overlooked insight that results are created by systems — not effort alone. Learn why reacting to variation often makes performance worse, how leaders unintentionally create noise through “tampering,” and what it takes to build improvement that actually lasts. TRANSCRIPT 0:00:02.6 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. And the topic for today is why reacting to results won't improve your system. John, take it away. 0:00:25.6 John Dues: Hey, Andrew. It's good to be back. 0:00:28.6 Andrew Stotz: Yeah, it has been a while. 0:00:30.5 John Dues: It has been a while. We missed a couple months for scheduling stuff, so we're fitting it in on Memorial Day here. 0:00:38.1 Andrew Stotz: Hard working. Even on a holiday. 0:00:41.1 John Dues: Even on a holiday, yep. No doubt. I stumbled across this, I'd seen this a number of times, but I thought I'd start with this quote from Deming. He would often sort of pose this simple question at his seminars. He would, you know, kind of ask the crowd, “what will it take to take an organization to unprecedented levels of quality?” And he was, you know, truth be told, he was kind of setting the crowd up because he knew inevitably someone in the crowd would say, you know, by everyone doing their best. And he would immediately respond then, “they already are, and that's the problem,” right? So that's kind of the focus today. And, you know, that sort of exchange to me exposes a belief that still shapes in my world how many schools are led today, and I'm sure many businesses as well. And that is this idea that when results fall short, the instinct is to push harder, you know, respond faster, demand more from people. You know, it feels responsible, it looks decisive, but it rarely, very rarely produces better outcomes, especially on the long term. You know, in many schools, you know, leadership revolves around reviewing outcomes. 0:02:05.8 John Dues: You know, just like probably in your business, you know, we're examining test scores, attendance rates, discipline data, you know, lots of other types of indicators, and we're often comparing those results to what came before. And then we have all these meetings and we have charts and explanations and action steps. And, you know, despite all this attention, all these best efforts, results often remain unchanged. 0:02:30.3 Andrew Stotz: Yeah, it made me think about when, you know, let's just say that a tragedy happens and then everybody wants the government to tighten the laws. And then they're oftentimes responding to a short term, or let's say, normal common cause variation. And next thing you know, you have 10 laws coming down on society that nobody can untangle. 0:02:56.3 John Dues: Yeah. 0:02:56.8 Andrew Stotz: And if you were to actually stand up... And this is, I think, to me, some of the crux of what made Deming different and difficult, was that if you were to actually stand up and say, “my proposal is to do nothing.” 0:03:04.0 John Dues: Yeah. 0:03:16.3 Andrew Stotz: Everybody wants action. 0:03:17.3 John Dues: Yep, everybody wants action. It's, you know, the issue is certainly not a lack of effort. You know, I mean, I see it every day, you know, leaders, educators, they work hard. The vast majority, you know, work very, very hard, which is probably the case in most businesses. And you know, in most cases people are already doing their best. And that's kind of the point, right? The issue is that the results are those outputs of those systems. You know, they're produced by the system and they can't be improved directly, the results, that is. You know, but that's what we focus on. As leaders we focus typically on results and, you know, we end up reacting to what the system produces rather than changing, you know, how that system works. And I think that's probably, if not the, one of the key lessons that, you know, Dr. Deming taught in his four-day seminars. And it's just like what you said, you know, that reaction, it feels like action, but it doesn't change, you know, the performance of the system. So, you know, over the past several months, I've argued, you know, as I've been writing about this, that leaders often respond too quickly. 0:04:32.4 John Dues: Just like what you were, you know, talking about in your example there. When the numbers change, it's so often just that common cause, that routine variation, and they don't have any tools to distinguish signal from noise. That's sort of one characterization. So, you know, what happens is these common cause patterns just remain. And when results are not where we want them to be, we just respond to the data itself, right? Instead of actually working towards the system. And we, you know, in my world, it's lots of meetings, you know, we ask... As leaders, we ask for explanations. I definitely did this before I discovered this methodology. We adjust expectations. You know, we in education are sort of notorious for new initiatives piled on old initiatives, but none of these actions, none of these things, it feels productive, but none of them are actually changing that underlying system. And I think that's really where the problem lies in my mind. 0:05:39.5 Andrew Stotz: Yeah, the concept of tampering is such an interesting one, you know, that he talks about, about tampering with a system, you know, just does more damage. 0:05:49.2 John Dues: More damage. Yeah, that's exactly right. That's kind of the irony or the paradox that you often find in the Deming philosophy is that until people actually stop and think about it, you know, if they stop long enough to consider what he was saying, then they start to sort of come around to those ideas. But we often don't slow down enough to actually do that, right? And so, you know, it begs the questions, if reacting to results is ineffective, and we've said that, you know, here before, what is it leaders should do instead? And I, you know, I think a really useful, different starting point is a question to ask yourself. And you know, that first question is, is the process that produced this observation the same as the process that produced the others, right? Is this actually something different being produced in our system or, when we really stop and think about it, is it more of the same? You know, and the answer to that question is going to dictate your next steps. But the key thing is that that question shifts attention away from the most recent data point and toward the system that generated it. You know, it forces you to look back more than just, you know, last month or last year. 0:07:07.7 John Dues: Now you're looking at what's happened the last several months, what's happened in the last several years in this system. You know, I think then if the process has not changed or the system has not changed, I kind of use those interchangeably, then what you often discover is that the results are likely consistent with what the system has been producing all along. And so in that case, which is again so often the case in a common cause system, asking for explanations or making immediate adjustments doesn't address that underlying issue. And it, just like you were saying, it's what Deming called tampering. And it actually makes things worse. All this action, all this activity, it feels good in the moment, but you're actually making things worse in your organization by overreacting or reacting to the wrong things. Now, on the other hand, if the process has changed, then there might be something to investigate, but the goal is not to explain the result, it's to understand what is different in your system. So in either case, whether it's a change or something hasn't changed, I think the key thing is the focus moves from the data to that underlying process or that underlying system. 0:08:29.4 Andrew Stotz: It's... I've been working at my coffee factory with the accounting team using the accounts receivable days and the inventory days as a measure that we can track over time. And then I've, you know, developed a pretty simplified PDSA for the team, considering they've never heard any of this stuff. And so, and then, you know, first thing we saw when we looked at the data was that the inventory days really went down a lot in December. We're like... And that was because we wrote off a lot of inventory at the end of the year that was obsolete or whatever. So there was a... And that's where I could say there is an example of a special cause. There's no sense in changing the system because of that one write-off, although that can give us some indication like, we need to be better in some other areas. But to look at that one special cause as unique wouldn't make sense. 0:09:35.7 John Dues: Yeah. And in that case, is the data point from December being produced by the same system that the other data points came from. 0:09:45.6 Andrew Stotz: It's the same system except there's an extreme adjustment to the system. 0:09:53.1 John Dues: Right. 0:09:53.3 Andrew Stotz: Which is the write off. 0:09:55.5 John Dues: Does that happen every year? 0:09:58.3 Andrew Stotz: Yeah, it's gonna happen in every business that has a warehouse and production because, you know, there's gonna be waste, there's gonna be obsolescence, there's gonna be mistakes, and you... It's just very hard to get it perfect. My first job at Pepsi was counting the inventory, basically, and I ran a team of seven people that counted the inventory every single day. And you know, you just, you know, you can see the whole concept of, you know, that you're never gonna get it perfectly right. But the objective is to minimize and minimize and minimize that, you know, variation. We don't really want a large, the reason why a large hit happened at the end of the year was ultimately because of the management decisions that we made throughout the year to either avoid it, not take, you know, not write it off, or not try to sell it at a discounted price or something like that. So yeah, there's lots of different factors. 0:10:58.3 John Dues: Yeah, sounds like some seasonality in that case is probably the primary driver. Yeah, and I think that's a good segue into this idea that I think when we've talked about systems, you know, they all have sort of a certain level of performance they're capable of producing at any given time. And you know, the key thing is looking at that capability not just at a single point in time, but over, you know, an extended period of time. And then by seeing the patterns that sort of emerge over time, you sort of start to really grasp what the capability of your, you know, your system is. And then, you know, at the same time as an organization we have expectations for those processes or systems, what the results should be. And I think the starting point for improvement is where you start to compare those two things. You know, what is the system currently producing, what do we want it to produce? And then what's the gap between those two levels? And that's where we, you know, often that's where the goal setting and things like that, you know, where our expectation setting falls off track because we've set those goals without studying, without understanding that capability. 0:12:14.0 John Dues: You know, we've talked about this here, it's so often leaders are establishing targets based on aspiration or pressure or, you know, external demands without understanding what the current system can actually deliver. And so then when those results fall short, the response is often to push harder or react more quickly, you know, reactive. We got to do something. Don't just stand there. You know, these are all things that we've talked about multiple times. I think, however, you know, that gap between current and desired performance, it can't be closed by reacting to outcomes. That's the whole point. It can only be closed by changing that underlying system that produces those outcomes. And I think that's what Deming was talking about when he said “substitute leadership.” Right. Leadership is about understanding the system, understanding what the system is capable of. And you're a part of that system, you're a part of that understanding. And so you have to sort of lead that understanding, lead that capability understanding, and then start to help lead with the changing of that underlying system. It's not just the frontline workers, you know, in our case, the teachers, they can't be left to their own devices because they don't have control over so much of the system just like, you know, the production workers in your Pepsi example. 0:13:36.0 Andrew Stotz: Yeah, it's interesting because I've been working with this, my accounting and finance and inventory team, and you can definitely see, like, they cannot produce a different result than what they're producing right now. Like, I just can see that. And even thinking about how do we do that is a challenge. It needs some time. But I also don't want to come in and give solutions. I want to teach them how to use PDSA and how to think about, you know, the variation. And so, you know, but I did, like, I told them a story about, I went to visit a credit card collection company and they were very successful in Thailand and they were a Japanese company. And the way that they did it is they set up the collection date was the 15th, starting, or your credit card, basically you gotta pay on the 15th. And their goal was, of course, to be at 100% collection by the end of the month. So they made a whiteboard, and they just marked down each day from 15, 16, 17, all the way to 31. And then they had eight teams, and each team each day would post the percent collection. 0:14:52.8 Andrew Stotz: So one day they had 50%, you know, 50% of people just pay, and then 60 and 70. And so there's a natural, you know, increase as people are paying their bills. But then they start doing calls and other things, and then they can look at other teams and see how's each team doing. And I asked the Japanese manager of it, this was in Thailand many years ago, and I asked him, what do you do if one team's doing really well and the other one's collecting, you know, a lot less? He said, well, we have the better team help the weaker team. 0:15:23.6 John Dues: Hmm. Imagine that. 0:15:25.2 Andrew Stotz: And I was like, that would just never happen in America. 0:15:27.6 John Dues: Yeah. 0:15:31.9 Andrew Stotz: It's like, not my problem, dude. You're not doing it. 0:15:48.6 John Dues: Yeah. You know, when you're talking about, you know, a special cause, you know, a key point is that a special cause could be positive, you know, that positive deviance. And so what do you do? Exactly what you just said. You study it, and then you share it with, with, you know, with everybody else, right? And it's not in a gloating way. It's just like what you described, you know, they were helping another team because, you know, a few months from now, maybe it's this, you know, the team that needed help, they may then be, you know, helping others. And that's such a much better way to sort of operate, you know. 0:16:08.3 Andrew Stotz: Yeah, by giving some ideas like that. And this is why I love reading and I love podcasts, and I love that because, you know, you hear different ideas and you think, hmm, I wonder, you know, why don't we... We could do a PDSA on that and say, what could we track on a daily basis that would keep us all kind of seeing the progression? Would that help? Maybe not. 0:16:30.9 John Dues: Well, at least it puts it in front of you. So everybody sort of, you know, closes that feedback loop, it makes it visual. We're actually doing something like that right now with our student recruitment department, where we have a weekly meeting, we have a board where, you know, all of our sort of leading and lagging indicators are visualized, and we can see right away, like, where are the gaps. And then immediately with that team, we're problem solving. Okay, this campus wasn't able to make, you know, or spend as much time on recruitment, like what's getting in the way, and then they can immediately problem solve with some of their peers from other campuses that are doing the same work. It's been really powerful to sort of operate like that. 0:17:09.2 Andrew Stotz: Yeah. And some people may look at it as just a torture to say, why is this up? Why is this down? You know, as you're talking about reacting. That's not the purpose. The purpose is... And I think for the purposes in my own situation, the purpose is awareness. 0:17:23.1 John Dues: Yeah, yeah. And it's in our case, you know, this is not a gotcha. It's not an accountability measure where, oh, you didn't hit, you know, a certain target. It's not like that. It's more along the lines of what got in your way, what didn't allow you, you know, we, we kind of, especially with the process-oriented targets, we kind of came up with them based on the end goal. So how much work do we need to be doing now in different areas to hit the end goal before the new school year starts? And we know that that requires a certain amount of, you know, hours, a certain number of calls we have to make, a certain number of doors we have to knock on, and those types of things. And so, you know, if we wait weeks before we sort of attend to some of the gaps where we're seeing instead of, you know, doing it immediately, then we're just gonna fall farther and farther behind from our goal. And so that's, you know, again, part of the power of doing it like what you're describing. And I think it really just goes back to this idea that, you know, better results require a better system. 0:18:22.9 John Dues: And then that means that the improvement work has to focus on how the system is operating. And we're talking about ways to visualize what the system is producing and in a very quick way then attend to those areas where things aren't where we want them to be. You know, so there's all kinds of ways to do that. But, you know, the key is the leader is not walking in and saying, why aren't the results where I want them, that's the key here. There's so many other things that we can do, kind of like what you were just talking about. We can, you know, study how the current system functions. We can identify areas in the systems where the performance is being limited. We can test small changes through a PDSA to improve outcomes. You know, we can repeat those cycles of learning to, you know, build knowledge. So there's many other things that we can do besides just applying pressure and say, you know, I don't know how you're gonna do it. I don't care how you do it. Just figure it out and get it done. You know, that's sort of the opposite of what Deming was talking about. 0:19:26.3 Andrew Stotz: Yeah. And when you work with them on it, you create lasting change. 0:19:31.9 John Dues: Well, I think, yeah. And when you're working with people on it, you know, they're much more likely to be bought into it, and the change is much more likely to stick because they were part of producing that solution in the first place, right? We're not trying to force better results, but we're trying to design a better system that regularly is capable of producing those results. That's kind of how I think about it. 0:19:55.7 Andrew Stotz: So what would be...
/episode/index/show/deminginstitute/id/41510860
info_outline
A New Lens with Balaji Reddie (Part 1)
05/25/2026
A New Lens with Balaji Reddie (Part 1)
What if the problem isn’t your strategy, your people, or your tools, but the lens you’re looking through? In this first conversation with Andrew Stotz, quality educator Balaji Reddie explains why so many organizations chase Deming’s 14 Points and prizes but miss the philosophy underneath. He also gets into what changes once you start seeing your organization as one connected system. There are a few surprises along the way, like why his employees actually celebrated the day he got rid of performance appraisals. 0:00:01.9 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm here with featured guest Balaji Reddie, who is an educator and trainer in teaching of Dr. Deming and quality management generally. Now the topic for today is a deeper perspective of the teachings of Dr. Deming. Balaji, how are you? 0:00:29.6 Balaji Reddie: I am fine. It's wonderful to see you this morning. I have been looking forward to this for quite some time now. 0:00:37.0 Andrew Stotz: Yeah. In fact, we've been talking back and forth in the past and then we had a meeting recently to get going on this because you've got so much to share. And one of the things I just said is a deeper perspective on the teachings of Dr. Deming. Maybe you could just give a little background of yourself for those people that have never heard of your journey. Maybe tell us a little bit about your journey, the Deming journey, as well as what you're doing now. 0:01:02.2 Balaji Reddie: All right. So I am an electrical engineer by profession and my first job which I got was in a lamp, a bulb manufacturing company which made automotive lamps. And that's where I chose to be in the quality department because I was being shunted around in all the different departments and the owner of the company asked me, "Where would you like to be?" and I said, "Quality." I don't know, when I look back why I chose. I think it appealed to me as an engineer and also the fact that I wanted to be a manager. It combined engineering and something to do with managing people. I don't want to sound dramatic, but I don't think I chose quality, I think quality chose me. But what I did after that was conscious. I did a postgraduate diploma in quality management, the first structured course in the country, and then went on to a Master of Science in quality management here in India. 0:02:00.2 Balaji Reddie: So that's been my journey here as far as working. I worked a lot. I used to teach part-time, but I made this switch 20 years ago to be an educator primarily and decided to put all my focus into creating the next gen of managers. At the same time, during the bit of a free time that I have, I do consult, but that's not the core profession of mine. So, yes, I'm an educator and a trainer. You can say that. I teach quality management, anything to do with operations, supply chain, et cetera, but there's always been a Deming slant to it. Along with that, I've also liked to... Because I went into the works of Dr. Juran, I got a good chance to meet with him and be in touch with him. It was only the last six years of his life, but I think he had very little time to give me, but he gave me time. So I have a good perspective of both these gentlemen. And if you know quality, they're the pioneers. 0:03:01.5 Andrew Stotz: Yeah. And I'm curious, when you first started out with the degrees and the, as you mentioned, getting a diploma and then a master's, was Deming front and center in there or was that a secondary thing? What was it like in the beginning? 0:03:19.6 Balaji Reddie: Oh, my entire focus was actually Deming. I needed to be qualified in that. I wanted to qualify myself in quality, that's what I meant here, because there was no... I was looking for a structured course on the subject. You had these training programs, certificate courses, but this one caught my attention when they said we have a diploma in quality. And part of the course was we had to, there was a project like a dissertation, and we had to show how we implemented this in our companies where we were working. And for those who were not working, they were provided companies where you go and actually implement these. So it was a win-win. So the company gained and you gained. That's how it was. That's what I liked about that course. Same with the masters. It was a complete two-year course. This was a year-and-a-half or three semesters. That was more elaborate, the masters. So, yeah. 0:04:18.0 Andrew Stotz: And what is the state of Deming and the teachings of Dr. Deming in India? We know that many companies in India have implemented the teachings of Deming over the years. But of course, there's a lot of people that just know nothing. I'm just curious, what is the state right now as far as the teachings of Dr. Deming? 0:04:40.3 Balaji Reddie: Oh, I'd like to... Just a slight correction there. We have the highest number of Deming Prize winners, but that does not necessarily mean that they're implementing the teachings of Dr. Deming. In fact, many of them after having got the prize... I worked in a company, we were suppliers to one of them. And when they came to do a vendor assessment to our factory, obviously there's a lot of buzz. Everyone in the company, they called me the Deming man. They used to call me that. And so when these guys came down and they were talking and when they gave their business card which had the Deming Prize logo, so they said, "Oh, we have... You know, Balaji is here and he's our Deming man." So who's he and what is this? And so they came and met me and they said that, "We got the Deming Prize." I said, "Excellent." But I said, "Just because you got the Deming Prize, I mean, have you worked on the Deming philosophy?" "Isn't this the same?" And I said, "No." And I, of course, joked with them, and they said, "So how do we learn?" And I said, "Pay me." [laughter] Anyway, yeah, then we got talking and they realized that there was such a big gap in what they were doing. For instance, when I spoke to them about performance appraisals and having quotas and things like that, they were like, "What?" 0:06:04.9 Andrew Stotz: Interesting. And when we talk about the Deming Prize, when I asked you that, we're talking about the Deming Prize which is offered by the Union of Japanese Scientists and Engineers through their Deming Prize Committee. This isn't something done through the Deming Institute. 0:06:12.3 Balaji Reddie: No. 0:06:19.7 Andrew Stotz: Yep. Okay. And do people study Deming there in India anymore or is it fading out or... 0:06:26.7 Balaji Reddie: Well, yeah, that's what I said, they do know. The good part is that because of the fact that the Deming Prize winners are there, at least they know about Dr. Deming. And then they're curious to know, "Oh, what did he teach?" Because again, they've been given that perspective that he taught, well, wrongly, PDCA, and he focused on the 14 points. And then when they read the 14 points and then they get... Because when you read it just without understanding, you can actually... It can put off certain people. You may get a little repulsed and say, "Oh, my God, what's he saying?" But then there are certain people who get intrigued and say, "Wait a minute. This is challenging. He's saying that we need not have quotas? Then how are you going to get work done?" And that's where the questioning begins. And there have been normally these trends where some companies where they called me over, I shall not name one of them, one of the students I was teaching in class and I was talking about the 14 points, and then she comes up to me and she says, "I've spoken about you to my father, and he's working in this company, and they're going for the Deming Prize. He wants to meet you." And then she brings him to the college the next morning and then we had a lovely discussion. And he said, "We've been discussing the 14 points." And I said, "You know what? You're putting the cart before the horse. You need to discuss profound knowledge first." So he said, "I'll put you in touch with my HR, the human resource." And then that lady got in touch with me, then we had a good chat and I explained to her and she understood very quickly. Incidentally, Andrew, that's something very amazing, when I speak about these things to the HR people, they take to it like a fish takes to water. They say, "You're right. What can we do about appraisals? Appraisals are wrong." But they also know they're shackled. They do not have the authority to break and come out of it. There have been some cases where they've been bold enough, but many of them... That's one of the things I've seen over these last 20 years that I've been teaching, that everybody principally agrees, but they also say that we're bound by it. 0:08:37.6 Andrew Stotz: That reminds me when I attended my first seminar when I was 24, and I was very intimidated by all the people in the room. I was just fresh out of university, working at Pepsi in Los Angeles. I flew into Washington, D.C., and so I sat right in the front row and I just decided I'm not gonna look at anybody behind me because they're all bigwig executives. But then when I heard Deming really show no mercy and really be tough to them, I was like, "Wow, wow, this is interesting." And he was getting to the... As a factory supervisor, which is what I was at Pepsi, I could just see he was getting to the heart of the matter. And so, yeah, a lot of things are very obvious to people in the factory, but then it's the leadership that is an issue. I'm curious when we think about... Let's imagine that someone listening to this has never heard of Dr. Deming and it's their first time, they stumbled upon this, they're hearing you speak. They're gonna ask the question, "Why does this matter? What benefit do I get from this?" How would you describe that to someone who knows nothing about Dr. Deming and his teachings? 0:09:59.3 Balaji Reddie: Oh, well, when you start getting aware of what this man had to say, let me tell you, when you start actually getting to it, you'll find that what you've been missing all this time in life. And then when you actually get to implement this, it'll be way, way better than where you are right now, sometimes totally in a very, very different direction. And you begin to realize that you had an illusion of knowledge, that you thought you were correct, and then suddenly a new perspective comes in. Just to make a point here, I don't want to be boastful about this, but I'm really proud to say this, that in all the companies that I worked, I removed performance appraisal. None of the companies I worked in had performance appraisal. And the day we removed it in one of the companies, there were actually celebrations. [laughter] 0:10:56.7 Andrew Stotz: Yeah. Which for many people listening that don't know anything about the teachings of Dr. Deming may think, "That's crazy, because I thought that we run business through performance appraisals, KPIs, and the like." One of the ways I was thinking when you were just speaking was it's a little bit like Deming's... You're a fish, and Dr. Deming is a guy that's gonna come up and tell you, "Oh, by the way, you're surrounded by water." And you're like, "Wait, what do you mean? What's water?" And then all of a sudden he brings this awareness like, "What am I swimming in? I am swimming in something, and it's called water." And it's like everything that's going on, the concept of how we learn, the concept of variation, the concept of psychology, it's like all of these are foundational things that we've been swimming in, but we really haven't been paying attention to. And I think he woke me up to a lot of that. So what should we talk about today? What do you got on your mind? 0:11:55.7 Balaji Reddie: Well, I presume that the audience would be someone who's read about Deming, or if they have not read, I can go it either way. 0:12:05.9 Andrew Stotz: Yeah, I mean, I would say just let's go into what your learnings are and what you want to teach us today and share with us, and then people can follow along. 0:12:17.4 Balaji Reddie: All right. So let's begin with what he meant by Profound Knowledge, because that was something he put together only towards the end of his life. I'm reminded of a few things that led to me thinking about these things. One of the very first books that was written on him was by Mary Walton, The Deming Management Method. And with due respect, she was an excellent journalist, and so she followed him around. Everyone was intrigued to know who this man is because he had just gained popularity. If Japan Can... Why Can't We? And so she wrote this book, I think as early as '84, if I'm not mistaken. And she followed him around for almost three years before she actually published the book. So she attended four-day seminars, and she's trying to understand what this man was. So the biography bit of it was very nice. But if you go there in the preface and in one of the chapters, there's a very interesting conversation where she says, "I asked Deming that why don't you set up a body, an organization? Why are you doing this all alone?" And he didn't say a word to her, and he just mentioned to her, "I'm good." So I believe he was still looking for the answers to offer something to the world. He had it all in uncoordinated stuff here and there, but that came much later, I think in 1989, when he finally put it all together and called it Profound Knowledge. Because that was when a year, a month or so before he passed away, he set up the Deming Institute. I think he thought he was ready now to leave behind a legacy that others could build upon, right? 0:14:08.0 Balaji Reddie: And so that he called it... Again, I'm looking for the missing link here—. Apparently, when he wrote it, as he called it deep knowledge, but it was someone who gave him the word profound, and that's how the name stuck. So I'm still trying to find out who did that. I saw this in one of the letters to Henry Neave, where he was writing to all of his colleagues, he called them, and taking feedback from them. And in that, he said that, "I profess this is deep, this is wide." And somebody said, "It's profound." I forget. I really want to find out who it is. I asked Bill Scherkenbach, and he said, no, it wasn't him. Henry, of course, no. I asked Bill Latzko, and he said, "No way. I never said that." So I really don't know who said it, but he christened it “profound.” And we all know now, it sounded very pompous to begin with when you hear profound, and then you say, "Wait a minute." When you start getting into it, you say, "He's right. There's no other word to describe this. It is profound." So what exactly is Profound Knowledge? Now, it's a different way of looking at things around you. And especially he designed this or created this for man-made systems, organizations that you and I work in, helping us to look at things differently, right? And that's why he said it's a different lens. And when you see things differently, you ask different questions, right? When you ask different questions, you get different answers. When you get different answers, you draw different conclusions. When you draw different conclusions, you take different decisions. And when you take different decisions, that's when you get different results. It's insanity to expect different results by asking the same questions every single time. All right. 0:15:53.8 Balaji Reddie: Now, what exactly is, again, what do you mean by this whole thing, the lens? He brought together four seemingly disconnected sciences, right? He never invented any single one of them, but he saw the interconnections. All right. And the four sciences, he felt that if you had good knowledge, working knowledge of these four sciences, you need not be an expert in them, just enough for you to understand what's going on around you. All right? And in no order of importance, he had his title for each of those sciences. One was he called it appreciation for a system, which I would like to say very simply is connectedness, right? Because when people say systems thinking, okay, then you have the systems thinking experts who jumped into the picture. And I think they were caught napping. To be quite honest, Andrew, I think the people from the world of management were suddenly caught napping, and the experts were completely caught napping because they realized they'd missed the bus. Here's this man who caught everything together and put it into place, right? And so when they were... When they said systems thinking, so the systems experts came in and started trying to find out, "Oh, but he missed out on this, and he's confusing this with that." That's where it is. Dr. Deming knew where to start. All right? He said, "Yes, of course, it's all about systems, appreciation for a system, the fact that nothing exists in isolation." So I would like to say connectedness. Everything's connected to everything. When you start having that systemic approach, you realize you're not dealing with events, you're dealing with eventualities, and that there are always a huge myriad of inputs that create the outputs that you see in front of your eyes, right? And there's so many other attributes that they're separated in time and space, et cetera. We can talk for this forever. But the short word here is connectedness. Second... 0:17:56.1 Andrew Stotz: And I would say that the systems experts retreated soon after because they're nowhere to be found when we look at it these days, because everything's divide and conquer. 0:18:07.6 Balaji Reddie: Yes. Yeah, because there were people like Russell Ackoff, Stafford Beer was mentioned many times, and then their books. Now, I went on to read their books and I found, yes, they were going deep, but Dr. Deming knew where to draw the line and said, "That's it. Please don't go beyond this,” and it depends on where you are, what you want to study. So draw your line around that and say that's it. And I think that thinking came from the next science which I'm talking about, which is understanding of variation, right? Now, although we say understanding of variation and people talk about the control chart, I think that's just the manifestation. If you look at the philosophy behind it, what Walter Shewhart actually was trying to do was to draw a line between when to act on the process and when to leave it alone, right? He came out with... He demarcated, and that's where it turned into the control chart with data. But broadly, Deming started applying this everywhere, right? He said that there are some things which are in my control and some things out of my control, and so he drew a line. And same with systems thinking, that how big and how deep should I go? And that's why he said every system must have an aim. Without an aim... So the aim and the purpose decide where you're gonna stop. You can't just keep on saying, "Oh, yeah, finally, okay, the whole world is a system." Fine, great, I get that. But I'm trying to study this, okay? My company, my organization, this process, these people. So you draw the line and say, "This is my purpose, so let me restrict." Again, I repeat, he knew where to stop. People tend to go overboard. And so he always said, "Begin with the aim, begin with the purpose." The purpose is the reason the system exists, and the aim is the direction in which you're headed. So you keep going there, keep revisiting that to let yourself remind yourself that I need to stop right here. Okay, and that's it. When I come to it later, because he said... Coming to the third part of Profound Knowledge, where he said you must have a theory of knowledge. 0:20:13.4 Balaji Reddie: Now, when...
/episode/index/show/deminginstitute/id/41400255
info_outline
Why Commissions Didn't Fix Our Sales Problem
04/28/2026
Why Commissions Didn't Fix Our Sales Problem
What if your sales problem isn’t your people — but the system they’re stuck in? Mike Carr spent years doing what everyone told him to do: commissions, quotas, performance plans. Every new hire came with the quiet assumption they’d be gone in a few months. He even optimized onboarding to make firing faster. Then he did the math: it was costing ~$75,000 every time. He called it “Burning the Porsche.” His friend Travis Timmons — who’d been applying Deming’s principles — kept nudging him to look at it differently. Mike’s first reaction? “This is crazy talk.” In this episode, they walk through what changed, what didn’t work at first, and why the biggest shift wasn’t the system — it was the psychology. If you’ve ever felt stuck trying to fix your salespeople, this will change how you think about it. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today we have an interesting discussion. I'm going to be continuing my discussion with Travis Timmons, who we've been talking about all kinds of things, including offsites, which I've found very, very valuable. I know the listeners have, too. But we're also joined by Michael Carr, who is a business owner who found the teachings of Dr. Deming about 10 years ago and has been trying to implement it ever since. Why don't we kick it off with you, Travis? Tell us a little bit about how you came across Michael and what your relationship's been like over these years. 0:00:43.5 Travis Timmons: Yeah, thanks, Andrew. Great to be here again. Yeah, Mike and I met, I'll say it's probably 14 years ago, something like that. 13, 14 years ago, a business organization he and I were both part of and sat around a table of other business owners working on problems together. And long story short, and part of the problem solving, got to know Mike a little better and had some individual conversations about how Dr. Deming and the Deming approach was having such a positive impact on my business. Might be of interest to some of the things he was working on in his. And encouraged him to attend the Deming two and a half day. But that's kind of how we met, working on business problems together, having some of the same frustrations that even though we're in different industries, the problems seem to look eerily similar across businesses. So, yeah, that's kind of how he and I met and encouraged him to maybe explore Deming and see if it'd have a positive impact on him like it did for us. 0:01:49.2 Andrew Stotz: We were talking before we turned on the microphone about the idea of how do we reach the young man or woman out there who's looking for answers. And we know Deming has a lot of those answers. So I'm really interested to learn more about you, Mike, about not only, of course, your Deming journey, but maybe tell us a little bit about your business and your experience so people can kind of put you in context, in particular where they are and thinking about where you are and where you were. 0:02:17.8 Mike Carr: Sure. Yeah. I came into business about 25 years ago and I did it kind of accidentally where while I was in grad school, I started a campus chapter of Habitat for Humanity and I had more volunteers than I could handle. So over a weekend, I wrote a small piece of software to let people kind of sign up online. This is before the days of SaaS and everything that we're used to today. And that actually took off so quickly that I was supporting it for free, I was giving it away for free to other organizations - nonprofits. And eventually my wife said, this is taking so much of your time, you either need to start charging for it or shut it down and spend some more time with the family. So I quit my full-time job at the time, put all my effort on what became the business, and quickly found myself running a business with no business background or training because my training was in electrical engineering. So I hired my first salesperson and not knowing sort of how traditional business works, I hired the person on salary, fixed salary, and sort of set up a system for her to sell within. 0:03:39.3 Mike Carr: And again, not knowing Deming, not having any business background. And so I kind of accidentally set up sales the way Deming would have recommended because that's just what I thought made sense. Then later on hired a director of sales who had a lot of success in sales, but traditional sales, and he seemed to know what he was talking about. So we completely switched our sales to more of a traditional sales approach based on his recommendation. And that's when problems really started. Because as we're aware on everyone on the call here, the commissions, quotas, and that kind of thing cause a lot of unintended consequences. So at the time that I met Travis in the peer group that we belong to, I was having a lot of issues with sales. I couldn't figure out how to get sales to work. We were hiring and firing people rapidly. And Travis mentioned Deming to me and the Deming two and a half day training which I attended. And I had become so steeped in traditional sales at that time that after the training I literally said, this is crazy talk, this Deming stuff. 0:04:55.4 Mike Carr: It doesn't align at all with traditional sales techniques. But I gave it a shot and over the next year or two we started implementing it. We started trying things. I kept learning about Deming and at some point I realized this is actually the way I was doing it in the beginning when things were actually kind of working back then. So it was funny how I had come full circle from where I had started. 0:05:23.0 Andrew Stotz: And plenty of people that are listening have commission-based salespeople, bonus incentives, all kinds of different things. And they're like, that's the way you do it and the problems that you face are just part of it. And they couldn't see any other way. And it's way too much risk in their mind to even experiment with another way. So what were the problems that you were facing when you talked about I was facing these problems from the way I was compensating my salespeople? I want to make sure that we connect with people who are like... I don't want someone to say, well, that's not me. I want someone to understand exactly the problems that you were facing and then so they can think, okay, yeah, I probably have that problem. 0:06:11.7 Mike Carr: Right. So it was a lot of... So I'll describe sort of the sequence that we would go through. We would hire someone who seemed really qualified. We would give them a day or two of training, we would give them a telephone and a computer, and we would say, "Okay, you've been trained, you have the equipment, go do some hunting and get some sales," and basically leave them alone to go and do that. Of course, they would sort of rapidly fail because they didn't have the support they needed. They didn't have a system to work within. And so we would start applying pressure, we would start messing with compensation and apply incentives, and then we eventually get to a PIP, a performance improvement plan, and then we would eventually let them go and then do all the offboarding and then start from square one. And we did that so many times that we actually started optimizing our process for rapid hiring and firing. At one point, I moved to these thin client PCs so that we didn't even have to send an entire PC to the person. 0:07:25.7 Mike Carr: We could just send the thin client and put their desktop up in the cloud so that when we had to fire them later, it was just a lot quicker to get all your equipment back. So we optimized for that rapid hiring and firing, and we were literally going into most hires with the assumption we're going to fire this person within a couple of months. And so obviously you can imagine the stress that creates for the person we hired, obviously, but also stress on the part of management because we're just constantly failing all the time. Not to mention the business isn't getting revenue and we're missing all the opportunity that we could be capturing. So one day I said to the management team, let's add up how much it costs us to go through this entire cycle beginning to end in terms of man-hours and salary and so forth and missed opportunity. And the number we arrived at was something like $75,000. 75,000 to $100,000 every time we go through the loop. And so to put this in context, I said to the team, this is as if we had gone and bought a Porsche and then just poured gasoline all over it and lit it on fire every time we go through the loop. So I started calling it Burning the Porsche. Let's just burn the Porsche again, guys. And so we got to call it Burning the Porsche. We were optimizing for rapid hire and fire, and obviously stress levels on all sides were just skyrocketing. So those were the problems that we were facing. 0:09:10.0 Andrew Stotz: And I can hear a skeptical person say, oh, you just didn't know about how to train. I know how to train my salespeople, and I put them through this intense training, then I apply all those incentives and it works. What do you say to that? 0:09:27.4 Mike Carr: So, yeah, we tried all of those things. So we gave them piles and piles of written materials, we made training videos, and of course we wanted to hold them accountable for those things. So we had quizzes at the end of each training section, and assuming they passed the quiz, which was five or 10 questions, written questions, we would check the box. And we would later, when they began to fail, we would point back at the checkboxes from the training and say, "Hey, you were trained on this. We checked the box. Why are you not doing the things that you were trained on and the box was checked?" So, yeah, we tried a lot of different varieties of training and different accountability techniques, and just nothing was sticking. And I think everyone was just getting more and more frustrated. On the part of the person that we were hiring and firing, let's not forget about them. I mean, they're going through this three to six month process that's very anxiety-producing in the system that we had, and it can't feel good for them. 0:10:37.1 Andrew Stotz: Yeah, it's interesting because when you're in that situation, as many people are, there's no way out. It's just tightens the screws tighter. Every book you read, everything you see, every person you talk to, it's just you've got to engineer your KPIs better. That's what it is. We need more granularity in KPIs and all of that. And did you feel at some point, before you met Travis and learned about Deming, did you feel at some point like there's no other choice, I just got to do it this way, or what was going in your head before you came upon Deming? 0:11:24.5 Mike Carr: Yeah, I mean, that's exactly how I felt, is that other people are getting this to work somehow. So it must be that I'm just not applying enough pressure or my compensation structure isn't correct. We need a different mix of base salary and commission, and we need different quotas because other companies seem to be making this work somehow, and I just don't know what magic they're using. So that made me even double down to say I just need to look around and look at more companies and how are they structuring their commissions, how are they holding their people accountable? I started reading a lot of business books on the topic, lots of sales management business books that reinforce that thinking. You just need to get your compensation structure right and everything works. But for me, nothing worked. 0:12:21.5 Andrew Stotz: It kind of reminds me of an AA meeting as I imagine Travis sitting down next to you and then hearing the struggles that you're going through. It's like, yeah, been there. And maybe Travis... Now that we understand the background of kind of where Mike was coming from, let's talk about maybe on that day that you first met or in your first conversations, what were the things that stood out? 0:12:48.3 Travis Timmons: It was probably several months in because we'd meet monthly at that business peer-to-peer. But yeah, to your point, it's like, hey, I struggled with similar things. Mike is pretty humble. He's a super smart guy, PhD in engineering, so he doesn't lack intelligence. So he can figure stuff out, but just like me, was not trained in business. And there's a lot of things out there that just seem to make sense when you read them, but they're not applicable. And nothing seemed to take the entire system into consideration or make an assumption that people were good. That was the other thing that jumped out at me and I had the assumption that would align with Mike's worldview because as he's already said there a few times, he knew he was putting these employees through the ringer as well and he didn't like that. So it just got to a point where I'm like, hey, I found something that is different. It takes a system view and for me, it took the stress off and gave me a construct with which I could work within. 0:14:04.5 Travis Timmons: And with his background in engineering, he obviously knows how to put stuff together, so I thought this would be a good fit for him to at least explore it and look at something different than what the traditional business approach was out there. And it just kind of went from there. He finally got tired of me bugging him about it, I think, and said, yeah, I'll go to this two-and-a-half-day so Travis stops bringing it up. But it's the same thing I was doing before finding Deming. The same problem kept coming up in my organization, and I'd read a book about it or I'd have somebody tell me, "Hey, have you tried this," "Have you tried that?" And it wasn't taking an entire system view to how to solve the system for the business. So that's where I introduced it to Mike and said, "Hey, go check this out. You're a smarter guy than I am. See what you think about it." 0:14:54.7 Andrew Stotz: It kind of reminds me of AI these days because we all use AI in different ways, but I get on the TV, on the internet, talking to friends, like, oh, I'm doing all of this and I'm doing all that and I've redesigned everything. I'm like, so how much more money is in your bank account? Are you really? And it's like there's this excitement that everybody's talking about, but I'm not able to get that. Am I missing something? I'm just not smart enough. But I'm like, "Wait a minute, I'm smarter than those guys. I know that." And that guy he doesn't.... And so maybe you can talk a little bit, Mike, about your journey, your discovery, the seminar, and kind of how it started for you and where did it go? 0:15:48.7 Mike Carr: Right. Well, so let me start at the end of the journey, and then that will illuminate the beginning. So what I realized today, and I volunteer a lot with scouting because of this, is we don't really have, we don't really train young people in leadership. Most schools don't have a class on leadership. They might have some introduction to some type of leadership, say, in sports, but we don't really train people to lead other people or to manage other people. And so what I think happens, my theory is most leaders in business, specifically, lead by copying what they see other people doing. It's a Xerox copy of other leaders, and probably in the same business, in the same company, even. And so I think what we have today is we have a lot of people who want to be good leaders, they want to be good managers, but all they have to go off of is copying from what they see other people doing. And unfortunately, that's a lot of these sort of accountability techniques and pressure techniques. And so going back to the beginning, when I got into business, my background was engineering. 0:17:14.6 Mike Carr: And I had no business background, no business training. I had been in Scouts, but Scouts doesn't teach you really how to manage, how to be a sales manager. And so I was just lacking any kind of a background. So that's where I went wrong at the time, and I looked around to copy other people. How are they doing sales? And for me, I think what I took away from the two-and-a-half-day was here is a framework not just for sales management, but here is a framework that finally gives me sort of the perspective that I could use to develop my own leadership skills in a way that makes personally a lot more sense to me. And I come from an engineering background, and Deming was also an electrical engineer. And so I think it just kind of resonated with me because the techniques and the concepts he was talking about felt very familiar from my engineering training. Let's think of this as a system. Let's look at root causes. And let's think about how changing the system, how is that going to change outcomes? 0:18:22.4 Mike Carr: All of that sort of aligns with a lot of electrical engineering. And so it kind of made sense. But then I said, what Deming's really proposing here is that we take these concepts that are applied to electrical engineering and we extrapolate them to business management. And I thought that's a really interesting idea because I hadn't really thought about that before. And once I made that connection, that leadership framework just kind of came together naturally because now I have a leadership framework that I can build off of and that I understand and that seems to make sense. 0:18:57.6 Andrew Stotz: And how would you summarize that for someone who doesn't know Deming? What are the top three things that you got from it that you really have incorporated into your leadership style? 0:19:11.8 Mike Carr: Well, the number one is the psychology piece. If you're copying off other people for sales management specifically, you're copying a lot of high stress, a lot of judgment approaches, rankings, measuring personal performance, measuring individual performance, not as a team. So you have all of these sort of tricks that people do in sales management. And so the number one thing for me was the psychology piece, which is, no, no, no, let's just start with the assumption that people want to do a good job. And in my case, we're selling software that helps nonprofits. So why are we using these high-pressure techniques? People naturally want to help nonprofits do better. Let's just find those people that have an intrinsic motivation to do that, of which there are many, and then let's give them a system within which they can do that. They can go out and help nonprofits solve problems. And so that was the number one thing is just moving away from the manipulation and persuasion techniques that you see in business books and copying from other business leaders and moving toward the intrinsic motivation piece. 0:20:28.3 Mike Carr: So that would be my number one for sure. And then the number two is thinking, which is Deming's number one thing, is just thinking of everything as a system and a collection of subsystems and understanding. One thing we did early on is previously we would send out a memo across the company whenever we made a sale and we would congratulate the salesperson who closed the sale. And I said, well, it's not... Once we implemented Deming, I said, it's not just the salesperson that made this sale. This sale was the result of everyone in the company working together to produce a good product and provide good support to our customers and do good marketing and all the stuff that's required. It's all of us working together. So we just said, "Let's stop congratulating the one person and let's celebrate the sale across the entire company and congratulate everyone." So it's these kinds of things that sort of just seem natural to me and that just...
/episode/index/show/deminginstitute/id/41041190
info_outline
Fitness Matters: A Deming Success Story (Part 4)
03/09/2026
Fitness Matters: A Deming Success Story (Part 4)
How do you run an offsite that actually changes performance — not just conversations? In this episode, Travis Timmons and Kelly Allan share with Andrew Stotz what happened during the Fitness Matters off-site. They discuss how a Deming-inspired approach helped their team tackle a critical business aim, align around system improvement, and turn employee engagement into measurable competitive advantage. TRANSCRIPT 0:00:02.5 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Travis Timmons, who is the founder and owner of Fitness Matters, an Ohio based practice specializing in the integration of physical therapy and personalized wellness. For 13 years, he's built his business on Dr. Deming's teaching. His hope is simple. The more companies that bring joy to work through Deming's principles, the more likely his kids will one day work at one of those companies. And we also have a special guest, Kelly Allan, who is a long term practitioner of the teachings of Dr. Deming. And he's also been instrumental in bringing the teachings of Dr. Deming to Travis and Fitness Matters, and particularly to this offsite. So the topic for today is how a Deming style offsite can strengthen your company's competitive advantage. Travis, take it away. 0:01:01.4 Travis Timmons: Hey Andrew, thanks again for having us and super excited to share with Kelly and your audience how our offsite went a couple of weeks ago. The short answer, kind of the upfront, is it was amazing. We had fun, number one, which is always important, but engagement from the team was through the roof. For four and a half hours straight. We worked on the work together and had Kelly there to make sure we were appropriately following Dr. Deming's teachings. Had Kelly there to facilitate and a couple of fun things we did. One was the red bead experiment, which I'm sure we'll talk about as we go through the conversation here. The short answer is I know in the last podcast we talked about the preparation that Kelly worked with myself and our leadership team on in preparing for a Deming focused and led offsite. We did that and it was just amazing. What were your thoughts, Kelly? 0:02:06.4 Andrew Stotz: I'm curious, Kelly, as an outsider helping them, observing, what are your observations of how it went? 0:02:14.2 Kelly Allan: I think there was just incredible energy and interest in figuring out some of the challenges ahead for the company. People came in well prepared and it showed. The interactions in the breakout groups, interactions in the full groups. Often when you're in a full group of 60, 70 people, folks are often, especially new folks, and the company's been growing and adding new people, new folks are often somewhat hesitant to speak up. But the culture of the people in that room, the culture of the organization is bring it on, let's have a conversation, let's hear what people have to say. Let's share theories, let's get down and debate and wrestle with some of these things that are not easy. There's no low hanging fruit here. It's complex stuff in a complex and highly competitive industry. 0:03:28.9 Travis Timmons: Some of the feedback we received, I think I shared last time, Andrew. As Kelly said, we've hired several new team members and they've all shared with me just a breath of fresh air from where they came from before. The power of this offsite with it being focused on some of the core teachings of Dr. Deming allowed them to see how is this different? They know they like it, they know the culture is different. They know they can provide care the way they want to. They know they can have a voice, have an impact on the system. But they didn't really know why they just liked it. Having a Deming focused offsite to explain a little bit, you can't fully explain Dr. Deming in four and a half hours, but we covered quite a bit. Make the system visible, operational definitions. What are a couple other ones with the red bead, Kelly? We did some tampering. 0:04:28.8 Kelly Allan: Making sure that we're not being confused by visible numbers alone. That what's important is how we work on the system so that we're not doing special efforts all the time to get great results. It's built into how we do things. 0:04:43.8 Travis Timmons: To Kelly's point, part of why our team, for four and a half hours we had over 50 people all in, sharing thoughts without hesitation because one of the things we talk about in the very beginning of the meeting, one of Dr. Deming's core philosophies, if that's the right way to put it, Kelly, correct me if I'm off base here, but 96% of issues within an organization are system issues, not people issues. When you put that out there, we're here to talk about the system and improve it and make it visible. We're talking about problems with systems and processes, not people. Then the gloves are off and let's dive in and we're gonna say whatever's on our mind and there's no drama, there's no feeling of any backstabbing or throwing under the bus. We just get to work on making the system work better for everybody. That's where it's fun and fast. 0:05:41.9 Andrew Stotz: What I'm hearing is that Dr. Deming, my favorite quote is "people are entitled to joy in work." And part of the key to joy in work is contributing. People want to contribute in life. I love that word because I think everybody wants to feel like they're contributing to a mission, to an aim, to a goal, to a team. And one of the biggest problems we have these days is siloing off people and getting them focused on this little area and missing the whole bigger picture. And so to some extent, you've proven through what you've done that people really do want to contribute. Throughout this discussion, what we're gonna be talking about is this concept of Deming style offsite. And I'm gonna push back at times to try to make sure that we're clear on what's a Deming style offsite. Because it's not to say that Dr. Deming said this is how you do an offsite. But what we're talking about is your interpretations of how do we apply this thinking to this particular meeting style and offsite and ensure that we're true to that. 0:06:56.6 Andrew Stotz: One of the first questions I would discuss is just the idea that maybe you just had a really open, caring environment. And so is that Deming or was that just that? Or maybe you did a lot of prep. You guys have done a tremendous amount of prep. That's what I was impressed about in our prior discussions. Maybe you prepped, maybe you focused on the one thing. Those types of things is what could go through people's minds. Why is it that you're calling this a Deming styled offsite? 0:07:34.9 Kelly Allan: Well, I think in part it starts with Deming's teachings and continued Deming's teachings. I think it might be useful to start with the aim, to have Travis talk about the time that he spent researching and thinking and what's going on in the industry. And even though we can talk later about their industry leading statistics and data and recognition etc, it's off the charts. It starts with the aim. And Dr. Deming said let's be focused on the aim. And so there are a couple, Travis, you wanna just talk about the content aim and then we can talk about even a more cultural Deming cultural aim. 0:08:21.1 Travis Timmons: That was one of my early learnings years ago, Andrew, was the difference of an aim versus a goal. And so from the perspective of this offsite through the Dr. Deming lens, our aim as an organization is to maintain one to one care because we believe that results in optimal outcomes. And it's very rare in our industry to have one to one care. Part of how we do that is we have to be industry leading in everything we do. And the thing that we are industry leading in, but I feel it was the one thing that we could improve upon was our arrival rate. Patients get better if they show up, team members are happy, they don't want holes on their schedules. Referring physicians are happy. Everybody wins. So that aim of a higher arrival rate was our aim of this offsite and conversation. 0:09:17.6 Andrew Stotz: Can you back up just for a second and define arrival rate for those that didn't listen to prior discussions on it? 0:09:23.9 Travis Timmons: Sure. Arrival rate is a visit we have on the calendar. Do they show up or do they cancel? And part of what we worked on and a little bit of an aside here is operational definition of what's a cancellation on our schedule to make sure we're measuring what we want to measure. A funny aside, competitors, we hired several new team members came from other organizations and they tout an arrival rate that is high, like 92% arrival rate. Right. 0:09:55.9 Travis Timmons: And I asked them in the meeting and Kelly will remember this, I said, I know your institutions claim a 90 plus percent arrival rate. Did you have a 92% arrival rate? And they said, absolutely not. But they had people on their team, for example, the front desk might have been bonused based on arrival rate. So how they would take visits off of the calendar would not negatively impact arrival rate. So we talked a lot about operational definition and our aim is to study what we want to study, not to tamper or. Kelly, you share your favorite saying. There's only three ways to get better numbers, and those are 0:10:39.6 Kelly Allan: Manipulate the numbers which you were referring to from another company. Manipulate the system that gives you the numbers. So that also kind of fits with, well, we're not gonna call that a late arrival or a late cancel or a non arrival. We're gonna call that something else so we can manipulate the numbers. And then the third way, which was Deming's way, which is how do we figure out how to improve the system so that late arrivals go down. So that they're a natural part of what we do when people show up, the patients show up when they need to. 0:11:14.6 Travis Timmons: Yeah. And I think that's one of the things to your point earlier, Andrew, is was it just a happy go lucky meeting because Travis and Kelly have great personalities. Well, we know that's not true. 0:11:26.9 Kelly Allan: Speak for yourself. 0:11:29.3 Travis Timmons: But no, I think anymore people know when they're working on something meaningful that's gonna have an impact on their lives or where you're just there to drink coffee and have snacks. People don't suffer fools, right? They want to be there. To have a team of 50 plus people leaning in for almost five hours doesn't happen just because it's a fun environment. To your point, it's the right question to ask. I appreciate you asking that. It comes down to they understand that we're a Deming organization. They understand that what we're talking about is gonna be implemented in a Deming way. We'll talk about that more as we go on, but that, to Kelly's point, was starting with the aim. Our aim is improving arrival rate. How do we do that? That's where the Deming offsite comes into play. Kelly and I and our leadership team worked on, okay, how do we best convey this problem and this aim to our entire team rather than just five or six leadership people working with Kelly and just coming up with our own ideas and then spitting it out to the team at a monthly meeting? 0:12:47.8 Travis Timmons: The power of them owning and seeing the problem and then working on system improvement is the power of that is unmeasurable, as Dr. Deming would say. 0:13:03.1 Kelly Allan: Yeah. I think we talked about the aim to be able to continue to do the one-on-one care with patients because most companies are doing two patients, one physical therapist, three patients. Locally here in Columbus, Ohio, where Travis and I are at, we sometimes hear about classes of five patients with one physical therapist. Physicians and insurance companies, these people are not getting better. Right? These people are... Or if they get discharged, 'cause that's a way to get a better number. "Oh, we got them out." But they come back because they're not really healed. They don't really know how to take care of themselves the way they do when they come out of Fitness Matters. One of those overarching aims has to do with building the culture even further so everybody understands the why behind the what. We could say the what is how do we increase those arrival rates, and then the meeting was about the how we're gonna figure that out, how to do that. But the overarching piece had to do with the why. Why does this matter? 0:14:16.9 Kelly Allan: How do we see...If we see the organization as a system and we use a fishbone chart as a way to visualize some of that, everybody can see handoffs. Everybody can see how different parts of the system, of that patient journey, that patient story, intersect and how what happens upstream affects downstream and how the feedback loop from the discharge point of a physical therapist discharging the patient, how that can wrap back into the understanding of the customer care coordinators and how they can work with that at the very beginning of that relationship with the patient. It's all a part of a system, all a part of continuous flow. We wanted to make sure that everybody, especially the new people, really had a visual, a view of the organization as a system and how they interact. Part of those weeks of planning, it wasn't every day all day long. You start with some ideas, you refine them, you get some research, you refine them, you refine further. Travis spent a lot of time on that. Part of that value is time for reflection, time to have the others on the leadership team weigh in, give their points of view so that we're really seeing this from a fishbone perspective as well. 0:15:44.5 Kelly Allan: So now we can go into that meeting with everybody, and their homework was in part the fishbone with some instructions on how to do that and some examples of how to do that. And that was pre-work. So people came into the meeting already successful. They had already figured some things out. This just gave launch, just gave liftoff to the energy. They'd done this work, to your point, Andrew, they're making a difference, and it just fed on itself. The output was stunning. 0:16:21.0 Andrew Stotz: Travis, I'm gonna write your company aim as I heard it from you, and that is, or from both of you, is maintain one-to-one care. It's best, it's rare, it works. And the off-site aim was different from the company aim. It was the number one thing that we can do to improve that company aim is improve our arrival rates. Correct? 0:16:51.4 Travis Timmons: 100% correct. And you talk, I think you used the term silos earlier, Andrew. Part of the aha moments and making the system visible and working on this and building culture and teamwork, when everybody sees the complexity within your organization and understands that, there's a lot more willingness to support, like, "Hey, we need to change this process at the front desk," even though it may not be optimal for the physical therapist, as long as it achieves our overarching aim and improves joy in work for the front or less friction for a client coming in. Now the team starts to see and understand, all right, that's a system win rather than silos or turf wars. The amount of energy that is spent on that in organizations is... I couldn't do it. 0:17:52.9 Andrew Stotz: Another thing I think that would be difficult for many people with an off-site is you just had one aim. If we were doing prep in the companies that I know and I own and others, we're gonna list out 17 things we want to talk about in that four-and-a-half-hour off-site. From your perspective, why is it so important to get this one focus, one aim? And then I want you also to tell us more about how it went. We've set it up now, so just one last thing on the setup is this idea of focusing on one thing when you've got 17 different problems in our company and we got everybody together and you're telling me just one thing. 0:18:40.5 Travis Timmons: Well, and Kelly can chime in here because he was instrumental in getting us from pre-work to meeting day. But part of it, that's why it's two-and-a-half, three months of work leading up to this. We had the aim of arrival rate. All right, what are we gonna do? A lot of different ways we could have tackled that. We landed on fishbone and making the entire system visible. And that turned out to be the right move. I think Kelly can correct me if I'm wrong. 0:19:15.0 Kelly Allan: I would agree. 0:19:16.0 Travis Timmons: So we started with the aim and it's like, okay, how do we get 50 people to work on this together? Dr. Deming says make the system visible. And so we chose to do that via a couple different breakouts of a fishbone. And to your point, Andrew, when we did that, now there's understanding of complexity and then where are the biggest opportunities? Because we have seven things we're working on to achieve that aim. There's gonna be three or four large PDSAs. We're doing a software upgrade, which in and of itself... And a funny aside, so our organization's been doing the Deming approach for 13 years. Right, Kelly? We announced that we're changing softwares at this meeting. Right. 0:20:13.7 Travis Timmons: Everybody was like, "Okay, let's do it." 0:20:17.4 Kelly Allan: Unheard of. I see a lot of companies, that's usually panic time. 0:20:23.5 Travis Timmons: And it was announced at the beginning of the meeting. Any questions? "Nope, sounds like the right move for our aim." 0:20:32.3 Kelly Allan: Well, Travis, you provided the why behind the what. The what was that we have to change the software. You provided the rationale from all points of view, including from internal people who deal with the software to making it even less friction for customers and for physicians and for insurance companies, etc. People understood the why behind that what, and now they're ready to work on the how. 0:21:06.4 Travis Timmons: And I would even argue, because I agree with that, and because we've done Dr. Deming and have had success and accomplished so many things that people don't believe we've been able to accomplish as an independent organization, having lenses to look through and "by what method?" That's one of my favorite Kelly Allan-isms. By what method? 0:21:33.5 Kelly Allan: That's a quote from Dr. Deming. 0:21:36.0 Travis Timmons: Oh, okay. We're good. 0:21:38.9 Andrew Stotz: We stand on the shoulders of giants. 0:21:41.6 Travis Timmons: Yeah. There's a high level of trust in our organization that we can implement change. I think that... 0:21:51.3 Kelly Allan: I agree. 0:21:51.8 Travis Timmons: I don't want to undersell that in terms of how powerful that is that I announce we're changing our entire operating software in a few months and the entire team was... And we told them why, to Kelly's point. But to make that announcement and then just have everybody say, "Okay. Cool." I think that's crazy to me. I believe it because of everything else I've seen happen over 13 years. But to have a way, by what method, using Dr. Deming's principles, PDSAs, operational definitions, system view, we're gonna diagram it. Everybody left there confident that, "All right, we can do this and we're gonna do it." Anyway, what would you add to that, Kelly? 0:22:40.9 Kelly Allan: Yeah. I would say that fulfilling the promises that have been made at previous offsites just builds the credibility that this leadership team gets it, understands it, and is interested in engaging people and making things happen and getting things done in a way that doesn't disenfranchise people, it doesn't beat up...
/episode/index/show/deminginstitute/id/40344400
info_outline
The Courage to Not React
03/02/2026
The Courage to Not React
What do you do when a new data point drops—and all eyes turn to you? In this episode, John Dues and Andrew Stotz explore the leadership discipline required when performance data changes. Instead of reacting to a single data point, they unpack how Deming thinking (understanding variation, avoiding tampering, and pausing to interpret patterns) can protect trust, stability, and improvement. A practical conversation for leaders who want wisdom—not speed—to guide their decisions. TRANSCRIPT 0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is when the numbers change and everyone looks at you. John, take it away. 0:00:28.4 John Dues: Yeah, it's good to be back, Andrew. I think this is sort of an interesting topic. Many of us that have been in leadership roles have been in this position where the numbers change, whatever they may be. For me, they're dips in attendance, they're assessment results changing, something like that, a subgroup's results changes from the previous year. Sometimes the changes are small, sometimes they're big. But I'm thinking about times when they're just large enough to draw attention in a meeting. And it's not even really so much the size of the change that's important, it's what happens next. 0:01:12.9 John Dues: So you can kind of put yourself in one of these meetings where you're looking at data and maybe you didn't even expect it, but people kind of notice. Then someone asks what went wrong? And then the next thing that comes is someone suggests some type of fix or solution, and then this pressure starts to build. Especially if they're all sort of looking at you, the silence can feel irresponsible. And so what do we do? We react in some way. We call another... For explanations, maybe from others. We adjust a plan that's already in place. We launch a new initiative or tighten expectations on people, whatever it may be. None of it's out of malice. It's done out of care, most typically, or at least in the settings I've observed this sort of phenomenon. 0:02:13.1 Andrew Stotz: Don't just stand there, do something. 0:02:15.2 John Dues: Don't just stand there, do something. But the thing is, very often it just makes things worse. Right? 0:02:21.0 Andrew Stotz: Don't just do something. Stand there. 0:02:23.8 John Dues: Right, right. The opposite. But even if you know that, it's very, very difficult in the moment to... 0:02:32.5 Andrew Stotz: The pressures. 0:02:33.6 John Dues: Yeah. 0:02:34.9 Andrew Stotz: Well, I have a little... Little thing happened last night when a friend of mine came to see my mom and me, and we went out for there's a restaurant nearby, so we got the walker and got mom going. And her natural inclination was to help mom in getting up and that type of thing. And I was explaining to her the difference between what I call a caregiver and a caretaker. And I was saying that most people are caretakers where they're just taking care and they want to just help. And she's like, "It's irresistible. I mean, in my bones, I want to help." And I said, "It's very hard to see that sometimes the best help is to let her struggle and use her legs to get up, not to help her on that." And that was like a revelation for her last night, it just made me think about that. 0:03:33.8 John Dues: No, that's actually a perfect analogy because her health is sort of a high stakes environment. Just like schools are high stakes environments or many of the businesses that people run that listen to this podcast have high stakes. In our cases, it's students and families matter, outcomes matter. There's a lot of different stakeholders that are interested in what's going on in schools. And when those numbers do change, it can feel like neglect if you don't do anything. We're expected to notice. We're expected to... Good leaders are supposed to respond. They're supposed to act decisively, right? 0:04:12.0 Andrew Stotz: Yeah, because there's another aspect to it too. Let's just say that you have a boss that understands it and you're like, "Yeah, it's just noise. It's not signal." But how many times can you say that? Right? 0:04:27.8 John Dues: Yeah, that's right. 0:04:28.5 Andrew Stotz: That's another kind of pressure in that situation. 0:04:31.6 John Dues: Yeah, that's like the second-in-command type person, right? So they have their own pressure. And what you can see happening, this like visible action is sort of like evidence of competence because you can see it. And so the reaction becomes the default. So just like in this example you're giving with your mom, that action to help is very hard to resist. Even though by doing so, like you were saying, she doesn't get the physical exercise and actually makes things worse in the long term for your mom's health. 0:05:10.4 Andrew Stotz: "Boss, why did Kevin get a promotion and not me?" "Well, Kevin's a man of action." 0:05:14.8 John Dues: Man of action, right. Exactly. Exactly. And there's all these risks for a leader that doesn't react right away. Are they disengaged? If they're asking questions instead of acting right away, are they just uncertain? They lack certainty? Are you ignoring the data if you are pausing or waiting? Again, under these conditions, which I think are prevalent just about everywhere that I've been, at least, reacting quickly feels like the safest move. But I think the conflation is speed and wisdom. But speed is not, definitely not the same thing as wisdom, right? 0:06:02.1 John Dues: In all of our organizations, the data fluctuates naturally over time. No different in schools, like we've talked about. Attendance rises and falls, assessment results bounce up and down, behavior incidents they spike and they dip. And it's not necessarily a sign that something's broken. It's often just how systems typically behave, the systems that we're paying attention to. I think the main mistake leaders typically make in that moment when they see that movement is that they think that automatically means something changed. And so you get these concerns if it's a bad move in the data. If it's a short-term increase, maybe we trigger some type of celebration. So this works both ways, actually. But the main point is that one data point becomes a story. It becomes the story of what's... We try to attach an explanation to this dip or this increase that's actually not grounded in any kind of reality. We would say they're just reacting to noise, kind of like what you just said. And the problem, though, is that there's a number of then very predictable things that happen. First, educators, and I felt this as a teacher. I taught in Atlanta Public Schools, a big district that was trying lots of new things in the early 2000s. You feel this whiplash. So priority shifts, guidance changes. Yesterday's focus is replaced by today's concern. 0:07:44.5 John Dues: And what happens in a setting like that, that I found, is that people start explaining instead of learning. Especially when there's a strong accountability system like there is in education systems, results are questioned immediately, often. And so the safest response at almost all levels of the organization is just to justify what's already happened, not to explore what might be improved. Very, very, very difficult. And that then leads to trust eroding. And over time, what I've seen is that educators learn that any fluctuation brings scrutiny. They become cautious, defensive, quiet. And obviously none of that improves outcomes. And again, just like in the example with your mom, it actually makes things harder to improve in the long term. So this overreacting to this routine variation then often increases variation, and so the system actually becomes noisier and not more capable. You get this vicious cycle. What's that? 0:09:00.5 Andrew Stotz: Tampering. 0:09:01.8 John Dues: Yeah, tampering. Exactly. That's what Deming would call it, tampering. When you intervene in a stable system. 0:09:07.3 Andrew Stotz: It's interesting. The one data point becomes a story is a great, great line. In the world of finance, everybody's trying to get the next wave. As a financial analyst, you're trying to think, okay. And all we do constantly is look at the next data point and say, "Does this confirm or not my view that gold's going to crash now, or gold's going to rise, or US stocks are going to X, or the dollar is going to... " And most of the time, we're just making one data point become a story, and then the next data point comes out and it's like, "Okay, so there's a different story here." And then... 0:09:51.3 John Dues: Yeah. That explanation there it's sort of... The key idea is reaction. It's literally seductive. It is seductive because it feels productive. 0:10:04.3 Andrew Stotz: In my finance work, when I help people with their money, what I do introduce what I've learned from Dr. Deming to say it really helps me separate the signal from the noise in the stock market, and therefore, I will never react. And I even set parameters where I rebalance my portfolio every three months. So when they go, "What are you going to do about such and such?" it's like, "Everything's set. I'm going to wait until the results are in, and I'm going to reevaluate on a framework, on a systematic way," which just helps me from getting whipsawed this way or whiplash this way or that way. And it's proven to be not only great for helping people feel like I have a deeper understanding and follow what I'm doing, but it also improves performance. 0:11:07.7 John Dues: Yeah. And you know, I'm definitely no financial expert by any means, but it makes me think of The Big Short, the movie, when I don't know how true to reality it is, but when the character played by Christian Bale, Michael Burry, is sticking to his guns with his shorting of the housing market and people are coming into his office and screaming at him. He's getting emails that are coming in one after another calling him an idiot, threatening him with lawsuits, and he holds. So that's like an extreme example of not reacting to noise. And you can see what it does to him in the movie, the intestinal fortitude, before sort of it comes to the conclusion. He got less and less certain even though he stuck to his guns, that he was doing the right thing. Right. 0:12:00.3 Andrew Stotz: I got to get that clip because I want to combine that with Mel Gibson in that movie, I can't remember, the Celtic battles in England where he's saying, "Hold the line! Hold the line!" What is it? 0:12:13.6 John Dues: Braveheart, probably. 0:12:16.3 Andrew Stotz: Braveheart. Yeah. 0:12:17.9 John Dues: Braveheart. Yeah. That's because when you're having a conversation like this and you talk about this leadership concept, just about everybody's going to nod along with you. But when you are actually in the moment, very few people hold the line, very few people hold the line. But at least if you have this grounding, at least you'll be more likely to hold the line because you have some techniques and some ways to sort of paint this picture that there's a firm logic. There's never certainty, but at least there's a firm logic for why you're holding the line in a particular situation. But it's very, very hard. Very hard. 0:12:58.2 Andrew Stotz: One question is, could there be such a thing like a mantra that the management team could have? Something like, "One point is not the full story," or something that they talk about in non-emotional times so that they've got it set. So when all of these numbers change and everyone looks at you, it's like, "Guys, remember, one point is not the story." 0:13:28.1 John Dues: Yeah, no, that's a really good idea. That would be a good sort of internal value or something marketing-wise that you could sort of, something sticky that would remind people of this, especially in those moments of anxiety or even panic, depending on the particular situation and the type of data that you're talking about. That's a good idea. I think the key thing is that activity is not the same as improvement. It feels good. It feels good to change something, introduce something new, new rules, new expectations, even though the system itself hasn't changed. And like you said, that's tampering. You make adjustments to a stable system based on something that's just routine ups and downs and it degrades performance. I think a lot of people are familiar with Deming's Red Bead Experiment. Less of them are familiar with the Funnel Experiment. He basically talks about when you are trying to hit a target through a funnel and you move it each time to sort of adjust for the variation from the mark. You actually, he called it going off into the Milky Way in terms of where you end up when you make these adjustments every single time. 0:14:46.1 Andrew Stotz: I thought that demonstration was so... I don't remember that he did it in the seminars that I attended. I remember the Red Bead Experiment. But that tampering is so powerful to understand the mess you can end up in. 0:15:05.7 John Dues: Yeah. And that was in The New Economics. I don't think he ever did it in a four-day seminar that I remember. But the interesting thing is generally the best choice is just to keep the funnel in the same place and keep going. But again, that's very hard. Especially let's say you're doing this as a group activity and group two, three, four, and five, you're looking over and they're making these adjustments every time, and you're just sitting there. And you're like, "Maybe they're onto something," or "Maybe I do need to move." But at the end of it, they're much farther away than you are. 0:15:43.4 Andrew Stotz: And I feel like the title you talked about, "When the Numbers Change and Everyone Looks at You," is evoking that emotion of, "Am I doing something wrong? Other people would do it a different way. Oh, they're making progress. I'm just sitting here." Those kind of emotions are the types of things that cause that tampering. 0:16:02.7 John Dues: Yeah. And then that shows up as initiative overload. You get these contradictory messages, constant course correction like in the Funnel Experiment. And the irony is you typically have a leader who cares deeply and they don't realize they're creating the very instability that makes improvement impossible. It's a tough realization. So what I would say is that when the data does change, the most important leadership move is not action, but it's interpretation. So instead of asking, "What should we do?" maybe a good first question is, "Is this shift within the range of what we should expect?" So just that question kind of slows the moment down. It shifts attention from reaction to understanding and it invites the group to look at data over time rather than point to point. It opens up this possibility that nothing is wrong even if the results aren't yet acceptable. 0:17:15.4 Andrew Stotz: Love that. Love that. 0:17:16.8 John Dues: Yeah, I think it's a really important... 0:17:17.5 Andrew Stotz: Is this shift within the range of what we would expect? 0:17:20.6 John Dues: Yeah. 0:17:21.1 Andrew Stotz: Answer's going to be "Yes, this is in the range." So next topic in a meeting. 0:17:28.5 John Dues: Right. And we've talked about this before. And it's possible when you've asked that question that the system itself looks stable, but it also may be producing outcomes we don't like. And so the key is even in those cases, reacting to an individual data point is not going to help. In that case, if you have stability but outcomes you don't like, you need thoughtful system redesign. But these sort of urgency-driven immediate fixes, overreaction, that's not going to help. That's not going to help. 0:18:06.9 John Dues: So the big thing is pausing before reacting. But that's often misunderstood. We talked about is he or she ignoring the data? Are they lowering expectations? Is that leader just indecisive? I don't think so. I think that's really what discipline is. And pausing, being that person that says, "Let's take a breath and pause here," it creates the space to study patterns rather than focusing on those individual data points. It allows leaders to separate stability from acceptability. It prevents unnecessary pressure then cascading through the system, which is what often happens. And so what I think is when you actually pause, what you're doing is protecting the people in your organization. When you do that, I think in an education system it protects teachers from being judged on noise they can't control. I think it protects leaders from... They are often then turning around and making promises that the system can't actually keep. It's sort of like a short-term thing, but you're hurting the long term. And then it protects students because they don't then undergo all these constant changes that disrupt their learning. 0:19:43.1 John Dues: So I think what a leader, a strong leader does that's different is they ask questions. What does this look like over time? Is this a meaningful signal from what we've seen before? What should we expect if nothing changes? Just some basic questions. I think resisting the urge to explain every up and down movement. And it's really at the end of the day what it comes down to is you're not trying to assign meaning to every data point, but what you're trying to do is understand the underlying system behavior. Now sometimes action is warranted, and in those cases, you're going to act in a deliberate way. When it's not, they're going to communicate that and communicate why we're going to wait in this particular scenario and why that's the responsible choice. So there's got to be this underlying logic whichever direction you're going to go. And I think if you've ever been around a leader like this, it feels calm. It just feels calm. It feels steady. And over time, the key thing is it creates this system that's trusting and then as a result, it's far more capable of improvement. It's far more likely that improvement's going to happen. 0:21:13.4 Andrew Stotz: That's amazing. And I was just taking lots of notes, but I wrote down pause, have discipline, protect employees, protect students. But I wrote down protect the aim. 0:21:27.0 John Dues: Yeah, protect the aim. That's good. 0:21:28.7 Andrew Stotz: Protect the aim of the system. Why are we here? And if we can't do that pause and look at it carefully, there's just no way we're going to achieve that. 0:21:43.3 John Dues: Yeah, no, I agree. And I think the thing is with these situations is that the most damaging decisions in schools are often made after the numbers change, but not because of the numbers themselves. Like even if they've declined, typically it's not to the point that it's catastrophic, but what's catastrophic is the series of decisions that are made as a result of the decline. And so in those situations again, this reaction feels responsible. But really what happens when you react without understanding is it creates more noise, more stress, more instability, and you still don't have the improvement at the end of all that consternation. 0:22:30.1 Andrew Stotz: Yeah, I would sum up my sum of this is the bad manager says, "That's a terrible result. Let's make it worse." 0:22:42.0 John Dues: And that's really what's happening. They're obviously not saying it, but that's exactly what's happening. Exactly. That's a really good...
/episode/index/show/deminginstitute/id/40284075
info_outline
Fitness Matters: A Deming Success Story (Part 3)
02/02/2026
Fitness Matters: A Deming Success Story (Part 3)
How do you design a team off-site that actually improves your organization? In this episode, Travis Timmons breaks down the mechanics of a Deming-styled off-site team meeting—from starting months early and setting a clear aim to using pre-work, fishbone diagrams, and PDSAs to drive real change. If you want a real-world example of how Deming leaders create focus, collaboration, and joy in work, this conversation is a practical place to start. TRANSCRIPT 0:00:02.3 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussions with Travis Timmons, who is the founder and owner of Fitness Matters, an Ohio-based practice specializing in the integration of physical therapy and personalized wellness. For 13 years, he's built his business on Dr. Deming's teachings. His hope is simple; the more companies that bring joy to work through Deming's principles, the more likely his kids will one day work at one of those darn companies. Travis, how are you doing? 0:00:35.2 Travis Timmons: Hey, Andrew. Doing well, how are you? 0:00:37.1 Andrew Stotz: I'm really excited. We were just talking about the structure of today's discussion, and the topic for today is the mechanics of a Deming-styled offsite, which I... In today's session, we're going to be talking about the importance of starting early, setting an aim, figuring out and developing an agenda. Also homework, huh? 0:01:05.1 Travis Timmons: Right. 0:01:05.4 Andrew Stotz: Pre-work for attendees. I thought that's interesting as we were going through it. And then you talk about your activities, your outcomes and all of that. So why don't you get into it and walk us through the mechanics of a Deming-styled offsite. And by the way, one last thing. When we say Deming-styled, well, you're certainly getting a lot of support from a true Deming advocate, Kelly Allen, and your understanding of the teachings of Dr. Deming. And so you're doing your best to apply those things in this. Is it a perfect Deming offsite? Well, that's why we say Deming-styled offsite. Maybe the listener or the viewer would add in or subtract some things, but at least we've got the general structures. So why don't you take it away, Travis? 0:01:47.3 Travis Timmons: Yeah, no, happy to, Andrew. So yeah, we have our team offsite. It'll actually be 10 days from now. So from a big picture standpoint, one of the things I've learned is systems, process, organization, and none of that happens quickly. So every time we do an annual team offsite, it's about a three-month work-ahead process for myself and the leadership team. So we start a good three months before the meeting date just to start percolating on what do we need to talk about at this meeting? What's the aim? What do we want the outcome to be? And that doesn't happen with a week of preparation. So we've had to spend some time looking at our KPIs, where do we have an opportunity to have a positive impact on our system? So we have to study our current system, see where there might be opportunities for improvement, understand how do we want the team to engage with that. And for this year's offsite, our big aim... We have two aims for the offsite. One is to make the system visible. Everybody on the team. I've had some learnings through some newer leaders on our team that have been through the DemingNEXT and they've been on our team for a few years. 0:03:04.1 Travis Timmons: But they until going through the DemingNEXT, they didn't fully understand what system view meant. And that kind of hit me over the head like a ton of bricks. It's like, well, maybe that would be a good thing to spend part of our offsite making sure the entire team can visualize and see our organization as a system. And then the second aim from a mechanics, from a KPI standpoint, if you will, is we want to improve arrival rate for our visits. So basically, how many scheduled appointments show up is what we call arrival rate. To have a better impact on patient outcomes, joy in work for our team members, joy in the referral sources that send to us. So yeah, it was about a three-month process. 0:03:49.3 Andrew Stotz: And if I... Just curious, sometimes when I've done offsites or I've attended offsites, it's more general. Here you have a very specific thing, improve arrival rates. Why is it so specific and how do you come to that decision that this isn't going to be just an open discussion about things in our company? 0:04:14.4 Travis Timmons: Yeah. That's a great question. Some years they are a little more general. Like last year we spent quite a bit of time setting a new round of BHAGs, Big Hairy Audacious Goals. This year, looking at KPIs, looking at where the opportunities were to improve, where there were the most breakdowns and frustrations happening in our system that we were hearing consistently across our team. It's like, what's the one thing we can have an impact on that will, if we improve that, everything else will get better. And that was arrival rate. So then we started looking at, all right, how do we dissect that? How do we make it visible to the team so the entire team can work on it together? So that's how we came to that. And it's like, all right, this is a consistent issue. So if you do the control chart, it's like I can almost set my watch to what's arrival rate going to be every week. And until we change something in our system, that's going to be what's going to continue to happen and we need to have an impact on that this year. So that's how we came down to it. It's the one thing we can do that'll have the most impact positively across the entire organization. 0:05:23.1 Andrew Stotz: I often talk about a big company in Thailand that was a Deming-focused company for many, many years, and then a new CEO came in and he made it a different focus company. And the company struggled for years. Whether it's from that or not is a secondary item. But two weeks ago I was giving a lecture and a guy from that company, who is an older guy, was at the lecture. And afterwards we were talking and I said, "What's the difference between the prior guy and the new guy?" He said, "The prior guy set the direction and we all knew it. The new guy kind of has us set it or we go in a lot of different directions. It's not as clear." And so what I was thinking when you were talking about improve arrival rates, I was thinking, yeah, that's leadership. You've identified what you believe is the most critical element at this stage of the business right now, and there's a lot of knock-on effects of fixing that. Whereas if you went into that room and you say, "What's the biggest problem we have right now?" 0:06:35.6 Travis Timmons: Right. 0:06:36.3 Andrew Stotz: Yeah, you're going to get a long list, but as a leader you have to set the direction. 0:06:41.1 Travis Timmons: Yeah. Yeah, and with the leadership team as well. And yeah, where do we... The KPIs and the system, if you study it and look at the outputs through the Deming lenses, it becomes... It's not easy. You got to spend the work and have the tools in place and the discipline to track it all consistently so that you know what your true arrival rate is. I can get in... It's a whole probably different conversation, but tampering and all that kind of stuff. So we know what our data is because of how we've made very clear definitions on our arrival rate and how we don't tamper to get better numbers. But yeah, it's exciting. The team, as crazy as this might sound, we've done these for many years now, over a decade, and the team looks forward to them. And part of that is because we spend the time. I take this very seriously. If I'm going to ask people to come to a meeting for five hours, it better be good. And we better bring... We better have something we can work on as a team to come out of it. And if we don't, that's nobody's fault but mine. So that ownership of the system I take very seriously. 0:07:58.1 Andrew Stotz: A great song, by the way, by Led Zeppelin, Nobody's Fault But Mine. But I would also say that's why I think it's fascinating to continue to go through the structure that you've got, because I think it can guide all of us. So we've learned about starting three months early. I was also thinking about my Crock-Pot. I like to cook slow-cooking food and I put all these different tastes of an onion and a piece of meat, which doesn't really have taste in some ways. And I put them all in a pot and it's eight hours. And if I interrupt it at one hour, there's just, there's not much value there. It needs time to extract the tastes and also bring those tastes into each other until you end up at the end of eight hours. Like, whoa, that's amazing. So... 0:08:51.4 Travis Timmons: Right. Right. Yeah, as you're pointing to, that's kind of how the agenda evolves. So we have an aim of system visibility and arrival rate. Well, how do we put an agenda around that together? So myself, the leadership team, Kelly, we've been working back and forth quite a bit, several iterations of that. So that's part of why you need that three months. You work on it. That sounds great in your head. You put it on some PowerPoint slides and then you share it with folks and they're like, "I don't know really what you're trying to say there, Travis." So there's... 0:09:25.0 Andrew Stotz: It seems like an onion and a carrot. 0:09:27.0 Travis Timmons: Right. Right. 0:09:27.3 Andrew Stotz: But I don't get the taste of it. 0:09:29.6 Travis Timmons: Yeah, so it's just working through those iterations. So miniature, little PDSAs, if you will, of the agenda. But yeah, once we get it to a point where we feel like, okay, we know what we want to work on, then the next big thing becomes how do we get the team involved ahead of the meeting? Because if you... I found very clearly over the years, if the team's not understanding what they're going to be working on coming into the meeting, that you've lost so much opportunity to learn from the entire organization. Because that's where the real learning happens when we do these is stuff that's happening that I don't have visibility of or little workarounds or somebody has a great idea, but maybe didn't feel like it was the right place to bring it up. So just have another opportunity for people to feel very comfortable sharing what breakdowns are happening. But we have homework, right? So that's one of the other big pieces of, if we're going to work on the system, we better know what we're working on that day. And if I don't tell anybody what we're working on until the day of the meeting, we could spend two hours just defining a fishbone chart, which we can talk about later perhaps. 0:11:15.7 Travis Timmons: But the point of the homework is we spend a lot of time, hours preparing the homework booklet that we give to the team about two-and-a-half weeks before the meeting. And it informs them, here's where we're going to be diving deep. We need you to come with the ideas and questions and thoughts already in your head so that we can all just dive in aggressively. Because it's so powerful when they're just bringing the ideas, referencing their homework. You can get so much more done in five hours than if we weren't doing that. So that homework becomes critical and has to match the agenda. If it's disjointed, then you've already lost some trust with your team because they're like, "You had me do all that homework and then we just didn't talk about any of it at the offsite. Like, what are we doing here." So it all has to tie together from a system view, as Dr. Deming would want, hopefully. 0:11:43.5 Andrew Stotz: Yeah. And I don't know, for the listeners and the viewers out there, you probably feel the same way I do, which is kind of like, "Oh, gosh, I should have done more preparing for that last offsite." And also feeling that excitement like, "Oh my gosh, I can unleash a lot from my leadership team, from the company employees through this pre-work and all of a sudden all the mess I have sometimes in offsites of, I don't understand what you're saying by this and what do you mean by that? It could be this." And all of that's gone. And so it makes me... I'm literally thinking about my next offsite and thinking, okay, how am I going to incorporate what you're teaching? So keep going. [laughter] 0:12:26.5 Travis Timmons: Yeah. Yeah, no, it's... And I've learned from some of the best over the years, so it's... I've been very fortunate to learn some of these tools. But yeah, from the homework perspective, it'll accomplish one of our other aims, which is always an aim, but more pointed in this meeting is they start to see the entire system and the complexity that's within it and just start appreciating. "All right, here's everything that has to happen." And, man, we're doing a lot of things really well. And they understand at a deeper level, every piece on our team is critical. There's no silos, no one piece of the equation is more important than the other. If any piece of the equation doesn't happen well, then we're not successful. So that's what with the homework, it just starts making sure from a cultural standpoint and an understanding from the Deming lens, we're all on this together. We have to work on the work together. And the system visibility helps with that, with the homework. And the engagement is so high. 0:13:32.3 Andrew Stotz: Yeah, I'm sure. And that's part of what makes it exciting when I was listening you talk. And I think we're going to need to do a little pre-work on the concept of fishbone, because there are some people that are listening or viewing that may have never even heard of fishbone and fishbone analysis and all that. So maybe as we move into this next part, make sure that you do that pre-work so that we all can figure out exactly what it means, fishbone. And I think you may even have some diagram of that you can share. 0:14:03.4 Travis Timmons: Yeah, I could pull up. If you'd like, I could pull one up to share here. So did that come through for you there? 0:14:12.9 Andrew Stotz: We see it now. 0:14:14.8 Travis Timmons: So this will be... This is part of the homework booklet that we created. So we filled in what we call the main bones. And this is just the patient journey from first contact with Fitness Matters all the way through to a successful discharge. So we have the main bones, I'll call it. If you envision this being, there'd be a fish head at the far right, and then the tail would be at the left. But we just want people to start working on, okay, how does somebody first hear about us at initial contact? Well, they'll write in underneath initial contact, could be website, Google search, could be physician referral, could be my neighbor. So we start penciling in what's all of the ways people first come in contact with Fitness Matters? So we have an understanding of what that looks like. And is it a good first impression? Do we knock that out of the park? And then it just goes through all the major... We look at it as five major bones from first contact to discharge. Second is that initial contact with us to them, scheduling the evaluation. So how many times have they had to call us and leave a voicemail, or can they schedule online, or can they stop in the clinic and schedule, or how did the script come to us, do we capture their insurance data correctly? It just goes how quickly a lot of researching... 0:15:37.0 Andrew Stotz: So many ways to drop the ball? 0:15:39.6 Travis Timmons: Yeah, a lot of research to show if you don't schedule that patient within the first 48 hours of initial contact, the likelihood of them scheduling just plummets. 0:15:49.3 Andrew Stotz: Yeah. 0:15:50.0 Travis Timmons: So a lot of things we have to consider in technology and systems, process, tracking. We have a whole system of how we track how many times we've reached out. We have templates created on how we text message versus voicemail, because some people don't listen to voicemails anymore. Anyway, I could spend an hour just on this fishbone. And then it goes to evaluation day. So when they show up in the clinic, do we have their benefits ready to explain to them? Is the therapist ready for them? Have they looked at their medical history? Do they understand how much they're going to pay? How do they pay? Is it easy to pay? And then the next bone is the plan of care. So all the visits they do, how good are we at scheduling them? How good is the therapist at predicting how many visits they'll need? Is it clear? Do they understand what they owe every visit? So there's not a great experience and then they get this big surprise bill at the end and just ruins everything, right? So we work very hard to be transparent. And then a successful discharge into home exercise and our wellness services. 0:16:52.5 Travis Timmons: So that's what we want everybody to spend some time on with homework. And then at the offsite, this isn't easy to make a patient happy and have a successful outcome. And I think a lot of times in organizations, people don't fully appreciate or see the entire system and understand why this part up here. So if we don't fill out their insurance demographic correctly at the front desk and we rush them back to the evaluation because the therapist is in a hurry, well, now all of those claims aren't going to get paid. 0:17:27.9 Andrew Stotz: Yeah. 0:17:29.1 Travis Timmons: And now we've had a bad outcome for the company. So anyway, that's the fishbone chart. It really helps you diagram at a big level. And then you can dive deep on each one of these bones and turn each of the bone into its own miniature fish, we'll call it, and really dive deeper and deeper, which we'll be doing at our offsite. 0:17:46.8 Andrew Stotz: Yeah. And for the listener out there, think of your own business, what's the chronology of from first contact to delivering this successful experience? Delivering that experience that you're trying to deliver in your business or your school, wherever you are. And this breaks it down into kind of the stages or the phases of that on kind of a chronological order. And that helps you to visualize. And that's part of what you've talked about is the idea of trying to, one of the big goals is visualizing. So that's a great visual of it. Maybe, I think you can probably stop sharing that now. And then also that's, I believe, activity, what I would call activity part one is working on that. Maybe talk a little bit about the mechanics of, now that we understand the fishbone and all of that, what are you asking them to do and then how are they using that? 0:18:51.2 Travis Timmons: Yeah, so the first breakout, we're going to have six tables where they'll use their homework to start filling that in. It's conversation, it's collaboration. It's like, "Oh, this person over here had that on their homework. I didn't even think about that." So that's the goal is that 10,000-foot view, here's the entire system. 0:19:09.6 Andrew Stotz: And are they doing that on a wall together or something like that? Or how is it happening? 0:19:13.4 Travis Timmons: Yeah, we're going to have big newsprint, so it'll be up and big newsprint so everybody can see what's going on. And at the end of the day, we have a very large fish that we're going to have posted and we're going to fill it in with the final product, if you will. That's the entire fishbone. So that's the aim of the first one, is the big picture. Some collaboration, some understanding of the entire system of Fitness Matters and what the complexity looks like. It also allows, one of the things we try to do with this offsite and really in culture in general, Dr....
/episode/index/show/deminginstitute/id/39911655
info_outline
Where is Quality Really Made? An Insider's View of Deming's World
01/26/2026
Where is Quality Really Made? An Insider's View of Deming's World
In this episode, Bill Scherkenbach, one of W. Edwards Deming’s closest protégés, and host Andrew Stotz discuss why leadership decisions shape outcomes far more than frontline effort. Bill draws on decades of firsthand experience with Deming and with businesses across industries. Through vivid stories and practical insights, the conversation challenges leaders and learners alike to rethink responsibility, decision-making, and what it truly takes to build lasting quality. . TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussions with Bill Scherkenbach, a dedicated protégé of Dr. Deming since 1972. Bill met with Dr. Deming more than a thousand times and later led statistical methods and process improvement at Ford and GM at Dr. Deming's recommendation. He authored the Deming Route to Quality and Productivity at Deming's behest and at 79, still champions his mentor's message: Learn, have fun, and make a difference. The discussion for today is, I think we're going to get an answer to this question. And the question is: Where is quality made? Bill, take it away. 0:00:44.9 Bill Scherkenbach: Where is quality made? I can hear the mellifluous doctor saying that. And the answer is: In the boardroom, not on the factory floor. And over and over again, he would say that it's the quality of the decisions that the management make that can far outweigh anything that happens on the shop floor. And when he would speak about that, he would first of all, because he was talking to the auto industry, he would talk about who's making carburetors anymore. "Nobody's making carburetors because it's all fuel injectors," he would say. And anyone who has been following this, another classic one is: Do you ever hear of a bank that failed? Do you think that failed because of mistakes in tellers' windows or calculations of interest? Heck no. But there are a whole bunch of other examples that are even more current, if you will. I mean, although this isn't that current, but Blockbuster had fantastic movies, a whole array of them, the highest quality resolutions, and they completely missed the transition to streaming. And Netflix and others took it completely away from them because of mistakes made in the boardroom. You got more recently Bed Bath & Beyond having a great product, a great inventory. 0:02:51.4 Bill Scherkenbach: But management took their eyes off of it and looked at, they were concerned about stock buybacks and completely lost the picture of what was happening. It was perfect. It was a great product, but it was a management decision. WeWork, another company supplying office places. It was great in COVID and in other areas, but through financial mismanagement, they also ended up going bust. And so there are, I mean, these are examples of failures, but as Dr. Deming also said, don't confuse success with success. If you think you're making good decisions, you got to ask yourself how much better could it have been if you tried something else. So, quality is made in the boardroom, not on the factory floor. 0:04:07.9 Andrew Stotz: I had an interesting encounter this week and I was teaching a class, and there was a guy that came up and talked to me about his company. His company was a Deming Prize from Japan winner. And that was maybe 20, 25 years ago. They won their first Deming Prize, and then subsidiaries within the company won it. So the actual overall company had won something like nine or 10 Deming Prizes over a couple decades. And the president became... 0:04:43.5 Bill Scherkenbach: What business are they in? 0:04:45.5 Andrew Stotz: Well, they're in... 0:04:47.0 Bill Scherkenbach: Of winning prizes? 0:04:48.7 Andrew Stotz: Yeah, I mean, they definitely, the CEO got the distinguished individual prize because he was so dedicated to the teachings of Dr. Deming. And he really, really expanded the business well, the business did well. A new CEO took over 15 years ago, 10 years ago, and took it in another direction. And right now the company is suffering losses and many other problems that they're facing. And I asked the guy without talking about Deming, I just asked him what was the difference between the prior CEO and the current one or the current regimes that have come in. And he said that the prior CEO, it was so clear what the direction was. Like, he set the direction and we all knew what we were doing. And I just thought now as you talk about, the quality is made at the boardroom, it just made me really think back to that conversation and that was what he noticed more than anything. Yeah well, we were really serious about keeping the factory clean or we used statistics or run charts, that was just what he said, I thought that was pretty interesting. 0:06:06.7 Bill Scherkenbach: Absolutely. And that reminds me of another comment that Dr. Deming was vehement about, and that was was the management turnover. Turnovers in boardrooms every 18 months or so, except maybe in family businesses. But that's based on the quality of decisions made in the boardroom. How fast do you want to turn over the CEOs and that C-suite? So it's going to go back to the quality is made in the boardroom. 0:06:50.0 Andrew Stotz: Yeah, and I think maybe it's a good chance for me to share the slide that you have. And let's maybe look at that graphic. Does that makes sense now? 0:07:00.9 Bill Scherkenbach: Sure, for sure. 0:07:02.2 Andrew Stotz: Let's do that. Let's do that. Hold on. All right. 0:07:15.8 Bill Scherkenbach: Okay, okay, okay. You can see on the top left, we'll start the story. I've got to give you a background. This was generated based on my series of inputs and prompts, but this was generated by Notebook LM and based on the information I put in, this is what they came up with. 0:07:48.6 Andrew Stotz: Interesting. 0:07:50.1 Bill Scherkenbach: Based on various information, which I think did a fairly decent job. In any event, we're going to talk about all of these areas, except maybe the one where it says principles for active leadership, because that was the subject of a couple of our vlogs a while ago, and that is the three foundational obligations. And so the thing is that quality, even though Dr. Deming said it was made in the boardroom, one of the problems is that management did not know what questions to ask, and they would go, and Dr. Deming railed against MBWA, management by walking around, primarily because management hadn't made the transition to really take on board what Dr. Deming was talking about in profound knowledge. And that is, as you've mentioned, setting that vision, continually improving around it, and pretty much absolutely essential was to reduce fear within the organization. 0:09:25.9 Bill Scherkenbach: And so management by walking around without profound knowledge, which we've covered in previous talks, only gets you dog and pony shows. And with the fear in the organization, you're going to be carefully guided throughout a wonderful story. I mentioned I was in Disney with some of my granddaughters over the holidays, and they tell a wonderful story, but you don't ever see what's behind the scenery. And management never gets the chance because they really haven't had the opportunity to attain profound knowledge. So that's one of the things. I want to back up a little bit because Dr. Deming would... When Dr. Deming said quality is made at the top, he only agreed to help companies where the top management invited him, he wasn't out there marketing. If they invited him to come in, he would first meet with them and they had to convince him they were serious about participating, if not leading their improvement. And given that, that litmus test, he then agreed to work with them. Very few companies did he agree to on that. And again as we said, the quality of the decisions and questions and passion that determine the successfulness of the company. And so. 0:11:40.0 Andrew Stotz: It made me think about that letter you shared that he was saying about that there was, I think it was within the government and government department that just wasn't ready for change and so he wasn't going to work with it. I'm just curious, like what do you think was his... How did he make that judgment? 0:12:00.0 Bill Scherkenbach: Well, it wasn't high enough. And again, I don't know how high you'd have to go in there. But quite honestly, what we spoke about privately was in politics and in the federal government, at least in the US, things change every four years. And so you have management turnover. And so what one manager, as you described, one CEO is in there and another one comes in and wants to do it their way, they're singing Frank Sinatra's My Way. But that's life…. 0:12:49.3 Andrew Stotz: Another great song. 0:12:50.7 Bill Scherkenbach: Another, yes. 0:12:52.1 Andrew Stotz: And it's not like he was an amateur with the government. 0:12:57.5 Bill Scherkenbach: No. 0:13:00.3 Andrew Stotz: He had a lot of experience from a young age, really working closely with the government. Do you think that he saw there was some areas that were worth working or did he just kind of say it's just not worth the effort there or what was his conclusions as he got older? 0:13:16.9 Bill Scherkenbach: Well, as he got older, it might, it was the turnover in management. When he worked for Agriculture, although agriculture is political, and he worked for Census Bureau back when he worked there, it wasn't that political, it's very political now. But there was more a chance for constancy and more of a, their aim was to do the best survey or census that they could do. And so the focus was on setting up systems that would deliver that. But that's what his work with the government was prior to when things really broke loose when he started with Ford and GM and got all the people wanting him in. 0:14:27.0 Andrew Stotz: I've always had questions about this at the top concept and the concept of constancy of purpose. And I'm just pulling out your Deming Route to Quality and Productivity, which, it's a lot of dog ears, but let's just go to chapter one just to remind ourselves. And that you started out with point number one, which was create constancy of purpose towards improvement of product and service with the aim to become competitive, stay in business and provide jobs. One of my questions I always kind of thought about that one was that at first I just thought he was saying just have a constancy of purpose. But the constancy of purpose is improvement of product and service. 0:15:13.6 Bill Scherkenbach: Well, yes and no. I mean, that's what he said. I believe I was quoting what his point number one was. And as it developed, it was very important to add, I believe, point number five on continual improvement. But constancy of purpose is setting the stage, setting the vision if you will, of where you want to take the company. And in Western management, and this is an area where there really is and was a dichotomy between Western and Eastern management. But in Western management, our concept of time was short-term. Boom, boom, boom, boom. And he had a definite problem with that. And that's how you could come up with, well, we're going to go with this fad and that fad or this CEO and that CEO. There was no thinking through the longer term of, as some folks ask, "what is your aim? Who do you think your customer base is now?" don't get suckered into thinking that carburetors are always going to be marketable to that market base. And so that's where he was going with that constancy of purpose. And in the beginning, I think that was my first book you're quoting, but also, in some of his earlier works, he also spoke of consistency of purpose, that is reducing the variation around that aim, that long-term vision, that aim. 0:17:19.2 Bill Scherkenbach: Now, in my second book, I got at least my learning said that you've got to go beyond the logical understanding and your constancy of purpose needs to be a mission, a values and questions. And those people who have who have listened to the the previous vlogs that we've had, those are the physiological and emotional. And I had mentioned, I think, that when when I went to GM, one of the things I did was looked up all the policy letters and the ones that Alfred Sloan wrote had pretty much consistency of three main points. One, make no mistake about it, this is what we're going to do. Two, this is why we're going to do it, logical folks who need to understand that. And to give a little bit of insight on on how he was feeling about it. Sometimes it was value, but those weren't spoken about too much back then. But it gave you an insider view, if you will. And so I looked at that, maybe I was overlooking. But I saw a physiological and emotional in his policy letters. 0:19:00.7 Bill Scherkenbach: And so that's got to be key when you are establishing your vision, but that's only the beginning of it. You have to operationalize it, and this is where management has to get out of the boardroom to see what's going on. Now, that's going to be the predictable, and some of your clients, and certainly the ones over in Asia, are speaking about Lean and Toyota Production System and going to the Gemba and all of those terms. But I see a need to do a reverse Gemba and we'll talk about that. 0:19:49.6 Andrew Stotz: So, I just want to dig deeper into this a little bit just for my own selfish understanding, which I think will help the audience also. Let's go back in time and say that the, Toyota, let's take Toyota as an example because we can say maybe in the 60s or so, they started to really understand that the improvement of product quality, products and service quality and all that was a key thing that was important to them. But they also had a goal of expanding worldwide. And their first step with that maybe was, let's just say, the big step was expanding to the US. Now, in order to expand to the US successfully, it's going to take 10, maybe 20 years. In the beginning, the cars aren't going to fit the market, you're going to have to adapt and all that. So I can understand first, let's imagine that somebody says our constancy of purpose is to continuously improve or let's say, not continuously, but let's just go back to that statement just to keep it clear. Let's say, create constancy of purpose towards improvement of product and service with the aim to become competitive, stay in business and provide jobs. 0:21:07.2 Andrew Stotz: So the core constancy in that statement to me sounds like the improvement. And then if we say, okay, also our vision of where we want to be with this company is we want to capture, let's say, 5% of the US market share within the next 15 years or five or 10 years. So you've got to have constancy of that vision, repeating it, not backing down from it, knowing that you're going to have to modify it. But what's the difference between a management or a leadership team in the boardroom setting a commitment to improvement versus a commitment to a goal of let's say, expanding the market into the US. How do we think about those two. 0:21:53.6 Bill Scherkenbach: Well as you reread what I wrote there, which is Dr. Deming's words and they led into the, I forget what he called it, but he led into the progression of as you improve quality, you improve productivity, you reduce costs. 0:22:33.6 Andrew Stotz: Chain reaction. 0:22:34.5 Bill Scherkenbach: Yeah, the chain reaction. That's a mini version of the chain reaction there. And at the time, that's what people should be signing up for. Now the thing is that doesn't, or at least the interpretations haven't really gone to the improvement of the board's decision-making process. I mean, where he was going for was you want to be able to do your market research because his sampling and doing the market research was able to close the loop to make that production view a system, a closed-loop system. And so you wanted to make sure that you're looking far enough out to be able to have a viable product or service and not get caught up in short-term thinking. Now, but again, short-term is relative. In the US, you had mentioned 10 or 20 years, Toyota, I would imagine they still are looking 100 years out. They didn't get suckered into the over-committing anyway to the electric vehicles. Plug-in hybrids, yes, hybrids yes, very efficient gas motors, yes. But their constancy of purpose is a longer time frame than the Western time frame. 0:24:27.1 Andrew Stotz: Yeah, that was a real attack on the structure that they had built to say when they were being told by the market and by everybody, investors, you've got to shift now, you've got to make a commitment to 100% EVs. I remember watching one of the boardroom, sorry, one of the shareholder meetings, and it's just exhausting, the pressure that they were under. 0:24:55.2 Bill Scherkenbach: Yep, yep. But there... Yeah. 0:25:00.0 Andrew Stotz: If we take a kid, a young kid growing up and we just say, look, your main objective, and my main objective with you is to every day improve. Whatever that is, let's say we're learning science. 0:25:17.3 Bill Scherkenbach: You're improving around your aim. What is your vision? What are you trying to accomplish? And that obviously, if you're you're saying a kid that could change otherwise there'd be an oversupply of firemen. 0:25:38.5 Andrew Stotz: So let's say that the aim was related to science. Let's say that the kid shows a really great interest in science and you're kind of coaching them along and they're like, "Help me, I want to learn everything I can in science." The aim may be a bit vague for the kid, but let's say that we narrow down that aim to say, we want to get through the main topics of science from physics to chemistry and set a foundation of science, which we think's going to take us a year to do that, let's just say. Or whatever. Whatever time frame we come up with, then every day the idea is, how do we number one improve around that aim? Are we teaching the right topics? Also, is there better ways of teaching? Like, this kid maybe learns better in the afternoon and in the morning, whereas another kid I may work with works better in another... And this kid likes five-minute modules and then some practical discussion, this kid likes, an hour of going deep into something and then having an experiment is when we're talking about improvement, is the idea that we're just always trying to improve around that aim until we reach a really optimized system? Is that what we're talking about when we're talking about constancy of purpose when it comes to improving product and service? 0:27:14.4 Bill Scherkenbach: Well there's a whole process that I take my clients through in coming up with their constancy of purpose statement. And the board should be looking at what the community is doing in the next five years, 10 years, where the market is going, where politics is going, all sorts of things. And some of it. I mean, specifically in the science area, it's fairly well recognized that the time of going generation to generation to generation has gone from years to maybe weeks where you have different iterations of technology. And so that's going to complicate stuff quite honestly, because what was good today can be, as Dr. Deming said, the world could change. And that's what you've got to deal with or you're out of business. Or you're out of relevance in what you're studying. And so you have to... If you if you have certain interests, and the interests are driven... It's all going to be internal. Some interests are driven because that's where...
/episode/index/show/deminginstitute/id/39852685
info_outline
Fitness Matters: A Deming Success Story (Part 2)
01/19/2026
Fitness Matters: A Deming Success Story (Part 2)
What happens when an entire company learns to see its work as a system? In this episode, Travis Timmons reveals how his team uses Deming-inspired pre-work, collaboration, and the Red Bead Experiment to make their offsite energizing and impactful. It’s a practical, engaging look at how clarity and shared purpose can transform improvement efforts and build a happy workplace. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Travis Timmons, who is the founder and owner of Fitness Matters, an Ohio-based practice specializing in the integration of physical therapy and personalized wellness. For 13 years he's built his business on Dr. Deming's teachings. His hope is simple. The more companies that bring joy to work through Deming's principles, the more likely his kids will one day work at one. The topic for today is bringing systems thinking to your next team off-site. Travis, take it away. 0:00:41.5 Travis Timmons: Hey Andrew, great to be with you again. And, yeah, looking forward to sharing a little bit about how we're preparing for our next annual team meeting. And focus for this meeting is going to be, well, a little back story, we had three of our newer leadership members attend some Deming learning, some Deming education. And the biggest comeback, the biggest aha moment they had was they now better understood what I meant by the system view and systems thinking, which got me thinking, boy, it would be great if more of our team fully understood what the system meant, how to visualize it, and then how that further dives into the Deming System of Profound Knowledge. So that's what we've been working on. Our offsite is January 30th, so about a month away. We're about six weeks into preparation for that, kind of going back and forth on what needs to be in there. And the biggest thing, the first exercise, they're going to have homework to do coming into the meeting. We're going to have them kind of diagram what they think the system is. What is the Fitness Matters system? And we're going to prime them a little bit. 0:01:51.7 Travis Timmons: We're going to be doing it via a fishbone chart is the method we've decided to do that with. So, yeah, very excited about that. And it's a great way to get the team working on the work together and making sure they have an appreciation, as Dr. Deming would say, an appreciation for the system. And if you don't know what the system means, it's hard to appreciate it. So, trying to make more team members understand that. 0:02:14.7 Andrew Stotz: And what you're describing, I think is like pre-work that you're asking them to do? 0:02:21.1 Travis Timmons: Yes, yeah. So we'll have we've been spending the last few weeks on making sure we get the right questions in there because we want them to come in prepared but not feel like it's overwhelming or not feel like it's too heavy, if you will. But we want them to do the work so that they can come in and we can dive deeper once we get into some of the teachings and making the visible system of what everything looks like for them. So, that's kind of what we're working on. 0:02:49.1 Andrew Stotz: Did you guide them on, "Here's a fishbone chart, here's how to use it," and then, "Here's the system"? Or do you want them to just understand the fishbone chart and how to use it, and then, "Okay, don't talk to anybody else, you come up with what your vision of the system is"? 0:03:05.0 Travis Timmons: Yeah, so we have a total of seven locations. So what we are going to put in the homework is a one-page definition on what a fishbone is, how to use it and maybe pre-fill in a few of the primary bones, if you will. 0:03:20.3 Andrew Stotz: Yep. 0:03:20.8 Travis Timmons: Just to give them a primer. But we do hope they work together around the lunch tables and the break rooms, and the local leadership will be there to kind of guide them. Because that's where a lot of the collaboration and culture starts to happen and continues to build. So yeah, there'll be some learning about what is a fishbone, how to use it, because several have probably not used one before. And then we'll prime it a little bit, but then we want them to work on it, kind of kind of work, struggle a little bit to see, like, "All right, what's been invisible to me that happens behind the scenes, and it just happens." And make sure that then we can kind of dive deeper into when we say somebody has a good visit at Fitness Matters, how does that happen? And it's everything from first contact to insurance, to in the clinics, to how they pay their bill. So, just making sure that somebody understands what piece of the puzzle they play and then how it all works together. So we don't have silos, is one of the things we try to avoid, having silos within the organization. 0:04:25.8 Andrew Stotz: So, just so that the listener and viewer can implement what they're learning from you just to be clear. So, you're giving them the fishbone chart, teaching them about it, maybe filling in some of the main bones, as you said. And then just to be clear, you talked about them discussing things. Are you saying when you're working on your fishbone, talk to others about it and try to figure that out together? 0:04:51.7 Travis Timmons: Yeah. 0:04:52.5 Andrew Stotz: Okay. 0:04:52.6 Travis Timmons: Yeah, we want them collaborating and there's going to be people who wear different hats in our company. Some are physical therapists, some are Pilates instructors, some are client care coordinators, some are billing managers. So it'll be interesting to see what they bring to the table. And part of it is we don't want them to struggle. We want to kind of prime the pump, but we also want them to see the big picture. So that's why we're doing the fishbone methodology is so we can see it when we get to the actual team meeting. And then we're going to work with them on, then you can do fishbones of individual processes or individual pieces of the system. 0:05:33.1 Andrew Stotz: And, I mean, the reason why I'm asking this is because something like a system, for some people, they understand it, but for other people, they'll just get lost. And then what they bring to the meeting is not really some deep thinking on the topic, but, "Here's my best idea of what you meant." 0:05:50.1 Travis Timmons: Right. Right. Yeah, and we assume like some people may not have the opportunity based on how their schedule works to do much interaction and collaboration, others will have more. It'll be interesting to see what each location comes up with. Our hope is it's similar because we do spend time with the onboarding process talking about Dr. Deming, but we don't currently have a full fishbone diagram in our onboarding manual, for example. And that might change after this offsite. We might add that. You might find that that's a very good idea. 0:06:23.8 Andrew Stotz: Okay, so you got them working on their pre-work, which is the systems thinking, lay out your system in a fishbone chart. What's next? 0:06:35.0 Travis Timmons: So they'll have about two and a half weeks to work on that, heading up to the team offsite. And then we have a four and a half hour agenda for the team offsite. And first part of the phase is we're going to have them break out into groups, six groups. We have a total of 50 people there. So, six tables, and we're going to have each of them with posty notes. We're going to have the fishbone, like the bones there, and they're going to use posty notes to kind of fill in the system. That'll kind of be activity one. We're going to talk about what their learnings were from the homework, what were their aha moments or things they hadn't considered or complexities they didn't realize existed. Talk about that for about a half hour, 45 minutes. And then we're going to take a little break and come back and Kelly Allen's going to be there. He's going to walk our entire team through the red bead experiment, which is one of my favorite in-person Deming exercises. So we're going to go through the Red Bead experiment. And if people don't, that's probably too long of a conversation to explain what that is on this conversation, but opportunity there then to show where there are kind of defects in the system, if you will. So the big thing we're working on for this team offsite beyond system view is how do we improve arrival rate? So what arrival rate is in our industry is how many of our scheduled visits, whether it be for personal training, Pilates, physical therapy, how many of the scheduled visits show up? So a lot that goes into why do they show up? Are they scheduled appropriately? Do they understand their billing? Do they have a good experience? Is it easy to do the scheduling? So that's what's going to be our example of a red bead in the Red Bead experiment. So yeah, going to spend about an hour on the Red Bead experiment. And then myself and our director of operations are then going to, at the end of the red bead, when Kelly debriefs what we just saw happen and people feel the angst of people that, you know, put the paddle in and keep pulling out red beads, even though they were offered bonuses and they just can't quite do it. Talk about how that correlates to our system. 0:08:55.9 Travis Timmons: What are our red beads and what can we impact within the system to have a positive impact on less red beads in the system? 0:09:05.5 Andrew Stotz: And just to go back to one thing, you mentioned a total of 50 people. Is this a total, this is a total company offsite or a leadership team offsite? 0:09:13.5 Travis Timmons: It's going to be the entire company. So what we've found is, I think there's just so much value in everybody on the team understanding what's happening. They don't have to be an expert in all of it, but they need to, using Dr. Deming's term appreciate the system. 0:09:30.9 Andrew Stotz: Yep. 0:09:31.4 Travis Timmons: And appreciate the complexities and appreciate their role in it and everybody else's role. And it also allows some opportunities for sure. There's going to be team members that could be brand new to us six months in. When we make everything visible, they're going to have some fresh eyes and point something out to us that we've always done it that way. So we're going to, let's keep doing it that way and they're going to point it out to us and say that's not a good idea. 0:10:02.7 Andrew Stotz: And you've chosen four and a half hours. Sometimes you could look at that and think, that's a long time. And other times you look at and think, that is such a short amount of time. How did you come upon the time? 0:10:15.2 Travis Timmons: So, a lot of feedback from the team, to be honest with you. So there were, early on there were years where we would do an all day. And I got feedback that, hey Travis, we know you love all this stuff. We don't love working on systems quite as much as you do. So how about a half a day? So a half a day seemed to be about right as long as we did the pre-work. So what we found is if we didn't do the pre-work, then there's just so much wasted time getting everybody kind of up to speed on what we want to work on that day. So the team is all kind of, we come to a mutual agreement of like, hey, if you guys will spend extra time on putting the pre-work together, you'll agree to do it. And then we'll agree to have a four and a half hour all-in meeting, gas pedal down and then we're going to, you'll have a celebration dinner at the end of the meeting. So that's what we do. 0:11:08.6 Andrew Stotz: Sounds like you're still getting eight hours out of them. I mean, when you think about it, it's hard to go into something without putting some time aside. And what I'm hearing here is that this is also a very narrowly focused event and that I could imagine the mistake that many people make is, oh, we want to talk about that and we want to talk about that. And don't forget about that. We got everybody together, we might as well talk about that. 0:11:37.0 Travis Timmons: Yeah. Yeah, it's hard to narrow it down to, okay, what are the two or three things that we need to make sure we accomplish in this meeting? So one of the things we have in our meeting, I learned this from Kelly and Ray Kroc, another mentor of mine. We have a big whiteboard that we call the parking lot. And if somebody brings up an idea that's a good one, but we don't have the time to tackle that day, we just go right on the parking lot and tackle it later in the year. But yeah, that's part of leadership's responsibility and feedback from the team is, all right, we got four and a half hours. What are the top one or two things we need to work on as a team? And then that pre-work from a culture standpoint, people tuning in if they're listening to this, one of the things I'm sure everybody hears, you have to have a culture where people have a voice. That's probably one of the things people get most frustrated about when we hire from other organizations. They don't have a voice. They just got to show up and whatever happens, happens. 0:12:42.5 Travis Timmons: And that can suck the life out of you pretty quick. So I've never had anybody do anything other than be excited about the homework. You'll see them in the break room talking about it. It just brings a lot of energy. And folks that have never done an offsite with us before, I always get the question, what are we going to talk about for four and a half hours? What could we possibly talk about for four and a half hours? And then at the end of that they're like, that was amazing. We didn't have enough time. So, kind of a delicate balance there, but we've landed on four and a half for our current size and what we try to accomplish. 0:13:20.9 Andrew Stotz: And the next question is I've sat through a lot of offsites over the years and you end it by going, that was awesome, now let's get back to work. 0:13:32.4 Travis Timmons: Yes. So we always do a wrap up on what are the deliverables. We let them know up front kind of the expectation of we may, we'll probably not have everything fully decided at the end of the day. The purpose of the day is to get feedback from the entire team. And then my goal, and we'll tell them this up front, or I should say aim, not goal. We'll get in trouble with Dr. Deming there, but is to have two to three PDSAs to walk away with. So we wrap it up, kind of report back on what we've all been working on for the day. And then we let them know we're going to report back in the coming one to two weeks on big picture items and then kind of continue to give the team feedback on here's what we did, here's what we worked on, here's what we're now going to implement. Because you're right, you go to a lot of these meetings, a lot of good ideas are tossed around and then absolutely nothing happens. And then when team members see that happen a few times in a row, then they just stop working on the work. So, yeah. 0:14:41.0 Andrew Stotz: I have a client of mine that he does offsites. I think it's every six months. And he does it only with his management team that's to be clear. And that's about roughly 15 people for his business. And he picks a pretty unique location each time. So it's... And it's usually a couple of days, which I would say with a management team, you maybe make more sense than with the whole company. But he has something interesting that kind of ties in with your work. He has me come occasionally and give a presentation and talk about either Deming or some other principles. But in the mornings at 7:00 A.M. they all meet at the gym. And he has trainers and then they go outside usually, if they're at the beach, they go to the beach. And then they have activities that they do together where they sweat and exercise all of them together. And I just felt like that was so unique. And I felt like, I don't know, if I was an employee, I would be like, oh, I don't want to, why do I have to? 0:16:03.4 Andrew Stotz: I could imagine that feeling, but I just felt like he really left the whole event every time as people really connected. And I just thought that was an interesting activity, it just made me think about. 0:16:17.8 Travis Timmons: Yeah. Yeah, no, I think one of the things I've learned over the years is the less I'm up speaking to the team and the more the team is working on breakout. So I plan on out of the four and a half hours, I hope to not be speaking to the team for more than 20 minutes. And just let the work happen because if I'm up there talking for three hours and they're just listening that's another great way to probably kill morale if they're not working on the work together. 0:16:49.6 Andrew Stotz: And so just to rehash what you're talking about, about a four and a half hour meeting, you got pre-work. It's focused on one thing, which is understanding the system. Then you're going to have people talk to each other with this pre-work and then come to it with their own ideas. You're going to put them in groups and do post-it note types of things to try to figure it out, you're going to do it in groups, I'm assuming, for the post-it notes? Is that what you said or is it everybody? 0:17:18.3 Travis Timmons: Yeah, we're going to have them stay with the same group of six because as we work through the process of the larger fishbone, then there's six key elements or six key pieces that I want to make sure we identify. And then I want to have, later in the day, we're going to do a fishbone specifically of each part of that and see if we can identify two to three PDSAs out of those six that we really can have a big impact on whether it's through technology optimization, better training opportunities, better defining operational definitions. Those are the three key areas that I'm assuming based on where I'm seeing things from my seat. That's, I hope, the direction I think we're going to go. But we'll see what the team comes up with. 0:18:09.3 Andrew Stotz: And one of the things that inevitably comes up with the concept of systems thinking is what's a system? You know, come on, for me, it's this and that and for another, it could be the whole world and we could, you know, how do you help them understand system, but also how do you guide what is the system? 0:18:33.9 Travis Timmons: Yeah, I mean, it's tough, right? Because there are things that are fully under our control within our system, like the software we use, the people on our team. So we talk about things in and out of our control. Things out of our control are health insurance companies. Right? But they're part of our, they are part of our system. We interact with them every day, but we have zero real control over decisions they make. Referral sources are another example of... So we talk about the inputs that are coming into our system but not part of Fitness Matters. So it's internal and external conversations, we get into that quite a bit. And then individual... 0:19:13.5 Andrew Stotz: What about people that are trying to narrow it to say, my system is a much smaller thing. How do I think about system? 0:19:24.0 Travis Timmons: Yeah, yeah, we get into that a little bit because you get a lot of that, right? People just want to optimize what they do and everything else will be fine. That's one of the hopes of making the system visible. We get into tampering, system capability and tampering is one of the ways we address that. 0:19:42.7 Andrew Stotz: Right. 0:19:42.8 Travis Timmons: So if somebody says, hey, I just want my little world to work this way and if the front desk could put patients on my schedule this way and I could...
/episode/index/show/deminginstitute/id/39702660
info_outline
Fitness Matters: A Deming Success Story (Part 1)
01/12/2026
Fitness Matters: A Deming Success Story (Part 1)
Travis Timmons shares with host Andrew Stotz how a decade of frustration running his physical therapy practice turned into joy once he discovered Deming’s philosophy and embraced systems thinking. Through PDSA cycles, clearer processes, and genuine team involvement, he transformed Fitness Matters from chaotic growth to a scalable organization getting stellar outcomes. His story shows how small businesses can create stability, joy in work, and remarkable results by improving the system rather than pushing harder. TRANSCRIPT 0:00:02.1 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm here with featured guest Travis Timmons. Travis, are you ready to tell us about your Deming journey? 0:00:19.7 Travis Timmons: Hey Andrew, thanks for having me. And yeah, very excited to share our journey and how impactful it's been on both our company, but also me personally and my family. So, super excited to kind of share where we started before Deming and where we're at today. So I'll just dive right in if that sounds like a good... 0:00:39.9 Andrew Stotz: Yeah. And I think just for the audience here, I'll just mention that Travis is physical therapist, founder and president of Fitness Matters in Columbus, Ohio, going on his 27th year of business. And you know, you and I have had some discussions. You've had a lot of great things that you've written and we've gone through and I think it's really an exciting story, particularly for a small mid sized business owner who's just frustrated as hell that things aren't going the way that they want. And I think your frustration a long time ago was a driving force. So I'm excited for you to share your story. So yeah, take it away. 0:01:22.6 Travis Timmons: Yeah, very excited. Yeah, 2000 is when we started, January 2000. So coming up on 27 years, as you mentioned, do physical therapy and wellness. And the first 10 years I was in business, pretty good at being a physical therapist. Started my own business and had no idea how to run a business. I knew a lot about physical therapy, but just kind of shooting from the hip in regard to business. Spent about a decade struggling, frustrated. We were growing, but growing slowly, growing chaotically. No process, it was just a, it was a heavy burden, to be honest with you. We were growing, but it was kind of Herculean effort on my part. 0:02:10.1 Andrew Stotz: I'm just curious how you were feeling at that time. Like there's gotta be a better way or this is the way business is and I just gotta muscle through this or how were you feeling at the time? 0:02:21.0 Travis Timmons: I was feeling frustrated and isolated. Didn't quite know where to turn. Yeah, I guess that's how, and just a burden. Didn't want to let the team down, I did not want the business to fail. I knew we had something different to offer. Just really had no idea how to scale that in a professional way. And along the journey was very fortunate to have a client who had a very successful business, took me under his wing. Ray Crook is his name. Started mentoring me and as luck would have it, he was familiar with Dr. Deming and a very long story short, after several meetings with him over time, some mentoring, I'd read the book along the way, the E-Myth Revisited and had some learnings from that book that really jumped out at me and came to the conclusion, both with reading that book and some feedback from Ray of basically, hey, it's time to grow up and turn this into a real business. If you're going to do this, let's do it right. And at that, around that time he introduced me to Kelly Allen with the Deming Institute. And you know, so we were 10 years into some chaos, had really no process, just would try stuff, see if it stuck or didn't. 0:03:43.5 Travis Timmons: If that didn't work, didn't really have any way to measure if stuff was working well. So really just a lot of chaos. And became introduced to Deming through Kelly Allen about 10 to 11 years into our journey and man, was that a breath of fresh air in terms of like having a direction to go in. After a few meetings with Kelly, him getting a better understanding of what was important to me, I think him just really understanding that I was serious about wanting to turn our organization into a large, professionally run and well run organization that would have a positive impact on people's lives, both team members and clients. I think he kind of, I think that we were so bad off he took pity on me to begin with, just to be honest with you, and he was like, man, this guy needs a lot of help. He could do some good in the world with what the services they have to offer. But if he doesn't figure out how to run a business professionally, they're never going to scale. 0:04:44.0 Andrew Stotz: And it's interesting that you reached out. I mean, there's a lot of people that are stuck in that situation and they really don't, either they don't reach out or they're afraid to reach out or you know, maybe they think there's no solution or nobody's going to help me. And you know, certainly when you're small, you also don't have huge budgets to hire people to come in and fix your business. You know, I'm just curious, like what drove you to even reach out? 0:05:09.8 Travis Timmons: I think I was fortunate enough to, A, have the mentor with Ray. And then secondly, have always been a believer in you got to check your ego at the door and know that you don't know everything. I think I've seen Business owners that are afraid to admit they don't know everything and so they keep things insulated and that just doesn't get you anywhere. 0:05:35.7 Andrew Stotz: Yeah. 0:05:36.3 Travis Timmons: So I just was fortunate kind of how I was raised as arrogance isn't a good thing, so check your ego at the door and learn from, learn from people smarter than you. And so I kind of took that fully at heart and like, all right, I have no idea how to run a business. I need to learn how to do that from really smart people. Read a lot of business books over the years, but the Deming philosophy, when I was introduced to that at the two and a half day seminar, went to that. I got to the Deming two and a half day in, I think that was 2013. So I was 13 years into the entire journey by the time I had met with Kelly, done some learning. And then at a time where the Deming two and a half day was offered in Ohio to where I could get to it, to your point earlier, budget plays into things for small businesses. So I was able to drive to that one and that two and a half day seminar just opened my eyes up to things that I knew in my heart but had no idea how to make that happen. 0:06:46.2 Travis Timmons: And what I mean by that, Andrew, is one of the key things I took away from that first two and a half day is Deming's belief that roughly 96% of issues within an organization are not people issues, but they're process and system issues. And that aligned with my worldview of if you hire good people, which we did, they show up every day wanting to do a good job as long as they have a good system and process to work within something that's professionally put together. So that was takeaway number one that really resonated with me. And the person responsible for said system is me. There's no passing the buck as the owner. And that resonated with me. It's a big responsibility to own a business in terms of the people and clients you're responsible for. And there's no passing the buck. You're responsible for the system at the end of the day. 0:07:42.3 Andrew Stotz: Yeah. I remember when I was 24 attending Deming seminar, when I was working for Pepsi, and it was a little bit different situation than yours. I could see, though, the same thing resonated with me. I could see that people were hemmed in by the system. And even though many people in the factory had really good intentions and they wanted to do a better job, they literally couldn't because they didn't have the tools or the budget or the this or the that. And a lot of times it's easy for senior management, particularly in a big company, to say figure it out, your job is to figure it out. But that only goes so far and there's eventually a point of exasperation for people working in a company that, like, I just, there's a limit here and I'm not going to kill myself trying to do something that I can't change. And so it just, I was coming from a very different perspective as an employee in a huge company versus you at a perspective of, this is my company, I set the rules. 0:08:46.5 Travis Timmons: Yeah, can do whatever we want. And you mentioned something there. It reminds me of a quote from that first two and a half day, and it still sticks with me a decade and a half later. Almost a lot of businesses complain about the term. We have a lot of dead wood in terms of employees. And the quote, I remember Kelly sharing this, it's like, well, did you hire dead wood? Because if you did, that's on you. Or did you hire live wood and kill it and that's on you from your standpoint of, from a system. And I'm like, man, 100% true. And I hired, I had good people on our team, but we didn't have good processes to keep from killing that live wood I would say. So, yeah. And to your point on budget, yeah, I had and still do have quite a bit different budget than Pepsi. Right. So one of the other things that jumped out at me early on that made Deming very approachable and something I could engage with very easily as a small business owner was the concept of PDSAs, the Plan-Do-Study-Act. 0:09:58.5 Travis Timmons: That was a game changer for us because I was like, all right, I don't have to hire a big business consultant. We don't have to hire or pay for a bunch of software. There's very simple things we can do via the Plan, Do Study Act PDSA method that we can create systems or improve upon systems and those little experimental ways and not have to bet the farm. You know, you see a lot of businesses that try to go through these huge transformative activities, bring in a new software to fix all their problems. Things that are very expensive with no real way of understanding what their aim is, what their theory is, or even if it'll work. So, yeah, your comment on budget there, I think, is what makes Deming so approachable for any size organization, but the budget's really not a limit from the PDSA standpoint. So those were some of my key takeaways very early on on my first two and a half day Deming, it was an eye opener and just really resonated with how, how I saw the world in terms of from a human level. Just had zero idea as a physical therapist with no business training on how to implement and run a professional organization. 0:11:13.8 Travis Timmons: So as things evolved, kind of went from the kind of the term chaos to process. So after that two and a half day, I went back to our team, which was small at the time. I think we had, we were a very small company at the time. I think we had 10 employees, nine or 10 team members at the time and just presented to them like, hey, this is going to be how we run our organization. There's this thing I heard about this guy called Dr. Deming. Some of it's going to seem a little odd, but this is how we're going to do things. And just started out early on, like just with PDSA, educated them on what that meant and we're all going to work on things together. So immediately it started enforcing a culture of improvement and collaboration and voice. Rather than Travis just coming up with random ideas, we worked on them together, made the system visible and then put some experiments in place. I talked to them about operational definition. That was a new term to me and gave them some examples. We wanted every client to have a good visit with us. 0:12:29.2 Travis Timmons: What in the heck does a good visit mean? Right. We didn't have an operational definition of that, so we created an operational definition of this is a good visit at Fitness Matters. So those were some fun things early on. 0:12:42.3 Andrew Stotz: I'm curious. There's two things, the first one is for someone that really doesn't know anything about PDSA, the Plan, Do, Study, Act process or cycle. Could you give an example either of one that you did early on or one that you think is the best illustration of the application of PDSA so people can understand what you're saying, because I know it's a big part of what one of the, let's say, tools that you've used in your process. 0:13:10.1 Travis Timmons: Yeah, one of the early on ones we did that was fun to do with the team because it changed our pricing model for our private pay team. Quick example, like we do personal training and Pilates muscle activation technique. Traditionally in that world, people buy those visits one at a time or you'll buy a package of 10 or 20 at a time at a discounted rate, volume, volume pricing, right. So we had that, we had 10 pack and 20 pack of personal training. We had a 10 pack and 20 pack of Pilates, same for muscle activation technique. And we had clients that would do sometimes all three of those services, but for them to be able to optimize their discount, they had to buy a 20 pack of Pilates, a 20 pack of personal training, and then the same with muscle activation technique. So after learning some things with Dr. Deming at the two and a half day that Kelly presented at, it's like we got to be easier to do business with. Be easy to do business with and how can we do that? So our PDSA was how can we change our pricing model on the private pay services to be easier to do business with and optimize how clients can move in our system freely. 0:14:25.9 Travis Timmons: So part of the concept of PDSA is you trial it, you put your whole theory together of what you think will be true. How are you going to study it? How long are you going to try it? So we had four clients that we knew well, that we told them, we're trying this new pricing model. Would you be willing to experiment on this with us? So we didn't roll it out company wide. We just tried it with a small segment, and we called it Fitness Matters Dollars and the do the Fitness Matters Dollars package. Then the client could use that discounted bundle of money for any of our services. So the discount applied to any of the services they did rather than having to buy a bunch of different packages. So the beauty of it is you can try it small. Had we gotten it wrong, we could have thrown it out and only five clients would have experienced the error. And they knew they were part of an experiment and they were happy to help us improve. It was a big win. That was 12 years ago. That's still how we do our pricing today. 0:15:29.1 Travis Timmons: It makes it very easy for clients to optimize their health within our system and not have to spend a bunch of money with us and have a lot of monetary resistance moving about our system. So that's one example that comes to mind. 0:15:41.4 Andrew Stotz: That's a good one. And I think if you think about, let's say an accountant may say, well, but wait a minute, the cost of three different services is different and that's the idea of how do we simplify this for the client, and that's interesting. Now, did you write it down, did you go to a Whiteboard. How did you actually go through that process? 0:16:02.9 Travis Timmons: Oh, that's 13 years ago. You're testing my... 0:16:06.5 Andrew Stotz: Oh, well, you can think about a current one, too. 0:16:09.6 Travis Timmons: 12 years ago. Yeah. When we're doing a current one, we'll get together as a team. Like, we're having our annual team off-site the end of January. And we'll come up, we try to come away with three, maybe four PDSAs as a team, and we'll write it up on the whiteboard. What's the problem we're trying to solve? Another key quote I've learned from Kelly Allen over the years is "the problem named, is the problem solved." So we want to make sure we're naming the right problem first. What really is the problem? So we talk about that through our entire company so that I'm getting feedback from all pieces of the system and then we'll map it out. Sometimes we'll do fishbone charts to look where in the process are we trying to do an experiment? And then there's the PDSA kind of chart that we'll use for bigger ones so we can study it. What's our aim? What's our theory? What do we think is going to happen with this experiment? How long are we going to study it, and what's our expected outcome? So part of the PDSA magic, as you know, is what are you trying to accomplish by what method, in what time frame, and what do you think is going to happen so you can go back and test your theory after you've studied it? So, yeah, sometimes we, if it's something bigger system-wide, we put it down on paper. We have a PDF that's fillable for each new PDSA. 0:17:35.5 Andrew Stotz: And for some people listening, they may think, well, I mean, isn't that what business does? I mean like owner comes up with an idea and says, yeah, I think we could try this and see what happens. Right. And ultimately everybody's kind of poking in the dark in business. We're not given a manual nobody really knows what we're doing. What's the difference between the way that you are poking in the dark, trying to hey, let's try this, let's try that compared to the PDSA. 0:18:08.5 Travis Timmons: I don't think I learned that till my second Deming two and a half day. So the second time I went, I took some senior team members with me so we could get more eyes around what in the world is this Deming person, who is Dr. Deming? What's this System of Profound Knowledge? To answer your question, I think the realization I had that I didn't have before, kind of going down the Deming journey is I didn't view our business as an entire system. I lacked that awareness of system view versus pieces and parts view. Pre-Deming, there's a problem over here and you go chase that fire and then another problem pop up over here, and to your point like there's lots of books out there on how to solve problems or you know, you hear like there's books out there on ownership thinking. And you know, it's like, well, do you have a culture and a system and by what method do you give people the ability to have that ownership thinking? Yeah, I think that's was the big aha of looking at the entire system. Whereas previously I was looking at it in silos and only trying to solve problems when a fire arose rather than system operationally efficient, trying to get efficient and optimizing the entire system. So that was probably one of the big aha's for me. Didn't happen day one. But as I got to understand Deming more, the system view of how it all has to be working together for optimization just changes your lens totally. 0:19:51.5 Andrew Stotz: So you've talked about PDSA, you've talked about operational definitions, you've talked about systems thinking, three core principles. One last thing on PDSA is like, I wonder what percent of the total value of doing PDSA comes from doing PDSA. In other words, the actual part of forcing yourself to get people in a room to discuss what's the problem, the Fishbone diagram, think about what's our aim, what's our theory, what's our hypothesis? Let's write that down. How are we going to study that? How we know if our hypothesis was true and you know, that type of thing. And sometimes I, after listening to you, I was thinking it, I suspect that a large amount of the final benefit you get from a PDSA is really front end loaded in all the work that you do to set it up. 0:20:48.3 Travis Timmons: Yeah, yeah. Going back to your comment earlier Andrew, on when you were at Pepsi, if I heard you correctly, you didn't...
/episode/index/show/deminginstitute/id/39650100
info_outline
When is Change an Improvement?
12/29/2025
When is Change an Improvement?
How do we really know when improvement has happened inside a school or organization? In this episode, John Dues and Andrew Stotz unpack a clear, three-part definition of improvement and show why evidence, method, and sustained results matter far more than year-to-year comparisons. Their discussion offers a practical lens for leaders who want to distinguish true progress from noise and build changes that last. TRANSCRIPT 0:00:02.4 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is, How To Define Improvement. John, take it away. 0:00:23.3 John Dues: Hey, Andrew. It's good to be back. Yeah, I think this is really interesting. Apologies on the front end. I'm a little bit under the weather, so I may sound a little raspy today. But you know, one of the things that's really interesting is there's lots of claims of improvement. In my world, there's lots of claims of school im- improvement. I would even go as far as to say that those claims are like a dime a dozen, something like that. And the reason I say that is not to be mean or anything, but you know, I think that a lot of these claims, they're not grounded any kind of reasonable evidence. And I think sort of even beyond that, that claims are often made without a logical definition of improvement. So I thought in this episode we could talk about a three-part definition that makes it really easy to tell when improvement has occurred and just as importantly, when it hasn't. 0:01:21.9 Andrew Stotz: Exciting. 0:01:23.2 John Dues: Yeah. When I talk about this, I always like to start with a challenge. So, you know, if I'm in a workshop, I'll say, you know, get out a piece of paper and a pen so the listeners could do this as well and think about, you know, the successful improvement efforts that you've led throughout your career. So in my world, maybe it's increase in state test scores or maybe you improved student enrollment in your school. Maybe you did a better job at retaining the teachers in your school. It could be any number of things. Maybe it's decreasing student office referrals or decreasing chronic absenteeism rates in your school or your school system, which are two things on everybody's mind coming out of the pandemic especially. And I tell people, just create a list of those instances. And I give them a few minutes usually. And typically, people come up with eight, nine, 10 or so instances of improvement, whether that's teacher in their own classroom or principal in their school, or a superintendent thinking about the whole system. Then I say to them, now what I want you to do is pause and think, what does it mean to improve? 0:02:46.7 John Dues: What do you mean by that? And that really brings us to this important question. What is improvement? You know, and this was... Full disclosure, when I started thinking about this, I stumbled across the definition in a book I'll show you here in a second. But when I stumbled across this, you know, there was some conviction. And I think that probably a lot of educational leaders or just, you know, leaders in general would say, actually, I never really thought about that. I don't have an answer for this seemingly simple question. And like I said, I didn't have an answer to that question when I really thought about it, when I stumbled across the definition, probably for the majority of my career, maybe the first 20 years or so, if I'm at year 25. So, yeah, the first two decades, I would not have had a clear answer for that simple question. Now, I turn to this seminal work in the field of improvement science called The Improvement Guide. I'm sure a lot of people are familiar with this. And I'll share my screen so people can see the book and kind of share an interesting story about the book. And, you know, when you're... Can you see my screen all right now? 0:04:06.9 Andrew Stotz: Yep. 0:04:08.1 John Dues: So you can see, if you're just listening, you can see the covers of two books. So on the left, a lot of people will recognize The Improvement Guide. But there's an arrow up there. It says, second edition. And a lot of people will recognize that book. Probably less people. Maybe some people that have been doing improvement work for maybe three decades will know this other book, the first edition of The Improvement Guide. It's this purple book on the right, if you're watching. But there's this interesting anecdote that I actually think I might have heard maybe on your podcast when some of the authors were on. And almost as soon as they wrote this first edition, this purple edition, they got this note from this professor in Brazil, and it said, I know you guys are really big into improvement, and you're really big on operational definitions, but you've written this whole book on improvement, and nowhere in the book have you defined what you mean by improvement. So, you know, talk about a swing and a miss. 0:05:15.0 Andrew Stotz: Yeah. And just for listeners out there, you can go to the podcast.deming.org and you can search for quality as an organizational strategy with Cliff Norman and Dave Williams. We didn't talk about The Improvement Guide specifically, but definitely it's worth listening to those two. 0:05:33.3 John Dues: Yeah, and I think... So any of us that feel bad when we come to realize, like, how obvious that question is when we've made claims of improvement and don't have a definition. So even these guys that were writing a whole guide about how to do improvement missed as well. You know, and it's pretty obvious when you think about it that The Improvement Guide, that a book like that should have a clear definition for the central concept. That's right in the title. But it should be just as obvious to leaders that they also need a definition of improvement. And that definition should really precede any improvement claims then. So I thought it'd be interesting to take a look at the definition that the authors came up with in their improved second edition. 0:06:20.9 Andrew Stotz: Improvement in their improvement. 0:06:24.4 John Dues: Improvement in their improvement guide. Right. And the definition is really easy to follow. It's got three parts, and now I've adopted it into my own improvement work. But what they've said is improvement is "a change that alters how work is done or the makeup of a tool that produces visible positive differences relative to historical norms and relevant measures and it's sustained into the future." So we can kind of break that three parts of the definition down now. So in part one of the definition, what you have to be able to do is point to a change that was made that led to better results. You know, that could be a new tool you're using, a new approach, a new framework, maybe it's a new staff role, but something has to change, a new method, something has to change in what you're doing. So that's sort of part one of the definition. Part two is performance improved after the change compared to past results. So that also should be fairly obvious. So you did something different. You noted when you started this new thing, and at some point in relative proximity to when you tried that new thing, the data improved. 0:07:54.2 John Dues: You know, it went up. If that's the direction of good or, you know, if it's like chronic absenteeism or office referrals, you want it to go down. But you see that in the data after you've made this change, that's part two. And then part three is that improvement after the change was sustained into the future. So it wasn't just a temporary thing because you were paying a lot of attention to it, but you made the change. The data improved over time after you did this new thing, and then it kept going into the future. 0:08:27.9 Andrew Stotz: Which is the hardest part, by the way. 0:08:30.1 John Dues: The hardest part, I'd say too. Assuming you could bring about improvement, then sustaining it into the future, especially as you maybe take your eye off it a little bit, and then work on something else, that's very, very difficult. 0:08:43.1 Andrew Stotz: Yeah, the initial seizure that you get into of making change can be really powerful compared to the energy, you know, devoted to sustaining it. 0:08:55.9 John Dues: Yeah. 0:08:56.3 Andrew Stotz: And you could also argue, if something's not easily sustained, was it really an improvement? 0:09:02.8 John Dues: Right. I think that's just right. And, you know, what I do in the workshop then is then after I go over the definition, I ask people, now, think back to your list of successful improvement projects. You know, and for the listeners, if you pause, then you created your own list and then you heard that definition. Then I just asked the participants, would you revise your answer after reading this definition of improvement? And ask people, okay, now how many things, how many items are on that list? And a lot of people, if they're being honest, are left with none, actually. You know, because this definition sets a really high bar. But I think it is the right bar if you're actually interested in improving outcomes in your school, in my case, or in your organization. And I think what you often run up against is, this is kind of a simplified version of most improvement claims. But in my world, you hear claims, something like, you know, our state test scores improved. Right. The translation is, this school's or this year scores are higher than last year's scores. 0:10:25.8 John Dues: But that claim falls really short of that definition. Well, okay, the scores are better than last year. Well, what did you do to make them better? Also, a single data point is probably not enough to back that claim up. Let's instead turn to an example that meets the definition, and it'll help you understand how powerful this can be in practice. So, you know, let's suppose that you've been working to increase some student outcome measure. Let's say we gather it on a monthly basis, whatever this thing is. So now I'm going to show you a visual that has some data plotted over time. And the three parts of the definition of improvement have been labeled right on that chart. And having this visual is very, very powerful. This is when this definition really clicked. So I'll go ahead and share my screen again with you. All right. Can you see that chart? 0:11:35.9 Andrew Stotz: Yep. 0:11:36.9 John Dues: Okay, great. So first off, if you're watching that, you can just see very quickly that the claim of improvement has been substantiated with evidence. So for the people that are just listening, we have some data plotted over time for the first 15 months and it's kind of traveling along around an 80% average. And then all of a sudden that data shifts up substantially to now it's humming along at about a 91, 92% average. And it's much harder to sort of internalize this without being able to see it. But I'll do my best to explain it. So the first thing was, part one. There's a clear point in time where a change was introduced. So that's labeled as part one. Right in between month 15 and 16, there's an arrow there on the chart where some change was made. If this is a teacher's data, maybe they made some type of change to how they were instructing the class. 0:12:55.3 Andrew Stotz: In research, sometimes we'll call that time zero. 0:13:00.6 John Dues: Time zero, absolutely. And then second again, there's this clear difference in results after the change was introduced as compared to historical results. So that's part two. So there's this positive, visible difference relative to historical norms. Now, you know, this is an example for illustration purposes and I wanted to make it very clear, like this delineation, this definition. But in reality, you know, if you're a teacher trying this new method, for example, it might be that even if the method is successful, you're not maybe going to see the results immediately. Right. But this illustrates, what you're hoping to see. And it makes it very clear. And then part three on here, that improvement was sustained in the future. So you see the bump in scores in this, whatever this outcome is in this hypothetical in month 16. But it wasn't just months 16 and 17, it carried forth for another 15 months at this much higher level. So you can very quickly start to see there's this profound difference between most improvement claims and one supported by this three part definition. It makes it very simple. When do we introduce something new? And then what does the data look like over time after an initial baseline period? 0:14:36.9 Andrew Stotz: It reminds me of something I often say to people, which is, do you ever make the same mistake twice in your business? And of course, everybody says yes. And I ask them, imagine if you never made the same mistake twice, how would that change the outcome of your business? And then we have a discussion about that. But the point is that most people just live in a world where they never are able to really sustain improved performance. They just fall back to the same things. And this chart is a good way of understanding, have we truly sustained improved performance? 0:15:24.4 John Dues: Yeah, yeah. And you have to have a method. You know, that's why Deming would frequently say, you can't just have a goal. You have to be able to answer the question by what method? So that's why part one of this definition was calling out whatever change was introduced. Because in this system, in that baseline period from month one through 15, while there are some ups and downs in that data, it's really just bouncing around that 80% average. And if you don't change something in that system, then you're very likely just to keep getting those same results over time. Some fundamental change has to be introduced so you have a stable system, but it's not satisfactory. So you got to change something. And then you're going to keep gathering the data to see if that change had an impact. So again, it's not rocket science. And it was pretty intuitive to see that definition in that improvement guide. And then actually this sort of chart I'm showing you with a three part definition combined with a control chart or a process behavior chart, I saw this in their latest book called Quality as an Organizational Strategy. 0:16:42.0 John Dues: And when I saw the visualization of the improvement definition, which was only in like text form in The Improvement Guide, then it all just clicked. Oh, this is so obvious what this definition actually means and how you could tell if something has improved or not. So I think anybody that's doing improvement work, you know, whether you're in schools or some other type of organization, and whether you're the superintendent of the entire system, the principal of the building or the teacher in a classroom, all of you can use this. A student could use this, an athlete could use this. This definition, it doesn't really matter. It's sector agnostic and can be applied, you know, pretty widely against different contexts. But it makes it very clear how to tell when things are getting better, how to tell if, you know, maybe things are going the other direction or if they're just staying the same. Makes it very, very clear. 0:17:36.8 Andrew Stotz: Yeah, I mean, it's a great thought exercise that you started with that, you know, got me thinking and I'm sure for the listeners and the viewers got them thinking, like, what changed? Where have we really improved? And one of the hard things in business, and I'm sure it's the same in teaching, is that ultimately personalities and ultimately it's about the people, whether that's business or teaching. And one of the things that you can say about people that's commonly said, whether it's true or not, I'll leave you to think about that. And that is people don't change. 0:18:19.8 John Dues: People don't like to change. 0:18:21.1 Andrew Stotz: They don't like to change. And I would argue that they rarely change. 0:18:25.9 John Dues: Yeah, yeah, no, I would agree with that. 0:18:28.5 Andrew Stotz: I mean, the whole mission of life is to get to a point where you don't have to change. That is the human body, the human mind is just like trying to get to that point. 0:18:42.6 John Dues: Yeah. Unfortunately, it doesn't work. 0:18:45.6 Andrew Stotz: Yeah. And then you die. 0:18:50.1 John Dues: Yeah. 0:18:51.3 Andrew Stotz: But it just gets me thinking too, about... And for everybody, here we are at the... We're discussing this on the 9th of December. So we're getting near the end of the year, thinking about what we're trying to do next year and all that. And in my coffee business, as an example, we've had our shares of ups and downs, but we've tried to right the ship as far as making sure that we've got the right balance of profitability, the right number of staff, cash flow and a buildup of cash so that we have the resources to go after markets. And the question is, that I always have in my mind is, how do we prevent ourselves from slipping back into some old habits of maybe spending on marketing and sales and then not getting the delivery of that, and therefore the costs go up, but the revenues don't follow? How do we ensure that the improvements that we're making right now aren't just lost six months from now? And this starts to give me some ideas that I'm thinking about. 0:20:00.5 John Dues: Yeah. I mean, and once you get that improvement, like, how do you sustain it? How do you have the discipline to do that? 0:20:09.1 Andrew Stotz: Well, I think the first thing that this raises is, are we clearly measuring, first, whether the improvement happened? 0:20:19.3 John Dues: Yeah. 0:20:19.7 Andrew Stotz: And second, whether it was sustained? 0:20:22.8 John Dues: Yeah. And even before that, you know, just having a baseline. Most people have the data somewhere, but they haven't plotted it like this so it's clear what the typical performance is currently, a lot of people don't even take that step. You know, it's just last year, this year. Last month. This month. 0:20:39.8 Andrew Stotz: Yeah, that's good point. That's a good point. That's something you pointed out to me a long time ago about looking at, you know, my enrollments in Valuation Masterclass Boot Camp and saying, well, you need to understand, you know, what's the system you're operating in, and therefore, you've got to understand what that system can produce before you start thinking about, you know, what's your next steps. 0:21:01.6 John Dues: Yeah, yeah. And like I said in the middle of this episode, you know, this is a very high bar. This is not easy to accomplish. It takes discipline. It takes continual improvement. Dr. Deming talked about he liked using continual versus continuous because a lot of this would be discontinuous. You know, you have a focus, you may be improving an area, then you have to change your focus. But you can't keep your eye totally off this other thing. Like you were just saying, you have to kind of keep your eye on multiple things to keep an organization going. And that's part of the challenge of running an organization for sure. Be it a coffee business or a school. 0:21:39.9 Andrew Stotz: Yeah. It's interesting that we're talking about the definition of improvement long after we talked about the method of improvement, like PDSA. 0:21:50.5 John Dues: Yeah, yeah. And that's probably the best method I've come across. So, you...
/episode/index/show/deminginstitute/id/39555315
info_outline
Optimizing Student Learning: Crazy Simple Education (Part 2)
12/08/2025
Optimizing Student Learning: Crazy Simple Education (Part 2)
What if more quizzes created more joy—not stress? Lee Jenkins shows host Andrew Stotz how Deming-inspired practices like random-concept quizzes, student-led charts, and “all-time best” celebrations turn classrooms into true learning systems that build confidence, motivation, and real understanding. A simple shift in method—massive shift in joy. (.) TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm talking with Lee Jenkins, who is a career educator in public schools, completing his full-time work as a school district superintendent. During that work, he was introduced to the teachings of Dr. Deming and has been applying those teachings to his life and work since. In his business, Crazy Simple Education, he helps people apply Dr. Deming's principles in their schools to bring joy back to learning, to help kids learn more. The topic for today is how educators have applied Dr. Deming's ideas to learning. Lee, take it away. 0:00:42.8 Lee Jenkins: Thank you so much, Andrew. It's amazing what Dr. Deming taught in five minutes. I've been able to teach that for over 20 years. It's just amazing. And then you see in the next slide, it was Lou Rhodes. And this is just a short little review of what we did on the first podcast. But he's the one that said, I think you're going to enjoy this. Little did he know how much I was going to enjoy that in 1990 when he said that. And then in 1992, heard Dr. Deming in person as the statistician. And he described in five minutes just a little touch of what was different about a classroom as opposed to all the other systems that he was teaching. And so over time, you're going to see how it's been implemented with great joy with so many people. He taught that education should have a learning system instead of an inspection system. And that's what we have, is an inspection system. The state departments of education inspect the schools and the teachers inspect the kids. We don't have a learning system. So if you think about that distinction, it's truly a learning system. And you're going to see that as we go through this today. 0:01:51.2 Andrew Stotz: Lee, I was just... After listening to you in the last episode and listening to some of our other great guests on the show, I talked to my students about this. And one of my students, after I went through it and talked about the random sampling as an example of questions to understand the level of knowledge that students as a group are getting, one of my students at this prestigious university I teach at in Thailand said, "So why are you grading us? " 0:02:26.1 Lee Jenkins: Yes. Yes. That's it. 0:02:27.4 Andrew Stotz: And I said... Lee, I need help. I gave my best answer and that is, "I decided that right now, the fight with the university to change the way it's done is not a fight I'm prepared to take. But what I'm going to do is try to deliver the best experience I can in the room." Now, that was a bit of a cop out, but that's part of... People who are listening and viewing this are also caught in a system, in a trap, an inspection system. So it's just great to hear you talk about this and it can help us think about how we can handle it. 0:03:09.9 Lee Jenkins: People say that education hasn't been improved for 50 years. Then think about it. We've had an inspection system for 50 years. Maybe that's the problem, right? So here's what Dr. Deming taught. Tell them what you want them to know first week of school. Here it is. You're going to give them a weekly quiz. The quiz is going to be the square root of the total number of concepts you want them to learn. So a teacher teaching a second language, 400 vocabulary words, they had 20 words a week at random out of the 400. It's simple, but it's crazy that you don't... People say, "How can you assess them on something you haven't taught yet? " You can, if you have a learning system. And then he said to build a scatter diagram and a class run chart. And let's look at those two just to review. The scatter diagram, and if you can't see this, it's just across the x-axis on the bottom. It says 1 to 14, which is for half a year. The y-axis goes from 0 to 10 because there are 10 questions every week in this classroom. And we have a dot by how many kids got 0 right, how many kids got 1 right, how many kids got 2 right. And if you look at over a semester, you can see all the dots moving from the lower left corner up to the upper right corner. So that's the scatter diagram. 0:04:29.7 Andrew Stotz: That's all the students in the class. That's not one individual student. 0:04:33.0 Lee Jenkins: That's not one student. It's the whole class because you're the manager of the learning of a classroom. He taught that. And then he said graph the total correct for the whole classroom. 0:04:46.6 Andrew Stotz: So you just did what he said. 0:04:49.8 Lee Jenkins: Yeah, add it up. It is simple and it is crazy. I mean, all the coaches who are listening to this know when you go to a game, you add up the total for every athlete. You add it up to get a total for the team. Then that same coach is in the classroom on Monday and they never think about that this is a team of learners. It's the same thing. Add it up. And they love it. And they help each other and they contribute and they celebrate when a struggling student helps the class out as much as a student that's advanced. 0:05:24.2 Andrew Stotz: Yeah. I mean we're social creatures, right? We want to be part of a group. We want to contribute. It's just such a clear principle. 0:05:35.0 Lee Jenkins: Yeah, it's simple. So then here's the expansion. Here's different things that happened over time with the process, and we'll share those with you. One was people said, well, ya know, my problem is not... It's partly they don't remember what I'm teaching well enough, but they clearly don't remember the prior courses. So this is a high school math teacher teaching geometry, and so she has half of her questions are coming from geometry because they're teaching geometry. But the other half of the questions come from the four courses they had in math prior because she knows they don't remember it. And then there's a secondary science department. The same thing. They said half of our questions for every quiz have to be from the prior courses, not just the current one. Because students think... 0:06:29.6 Andrew Stotz: Wow! That's fascinating. And before you go for that, so let's look at geometry. You've got these buckets. Before geometry is algebra two, and before that is algebra one, and before that's pre-algebra, and before that is math seven. I remember my pre-algebra class at school with Dr...Mr. Tyler. He was the football coach, and that guy was a slave driver. Even if you got the question wrong, if you structured your answering process right, you would get half points. 0:06:58.9 Lee Jenkins: Oh, okay. Yes. 0:06:59.6 Andrew Stotz: He helped me learn the structure and the order of solving algebra problems, but if I didn't do that well or I didn't have him as a teacher, I could end up in geometry not actually knowing that. But what the heck is this geometry teacher supposed to do if they find out that the class doesn't really understand some of the prior core principles? 0:07:21.7 Lee Jenkins: Well, they, obviously, they need to teach it, and so part of it they do. The other part of it is the kids don't want to forget the prior courses. If you just throw all these into a bucket and they don't say where it's from, they don't... Well, okay, I missed a question. But when you say, you're in 11th grade in geometry, and you missed the 7th grade question, they don't like that. So it builds, it's a visual. It's right in front of the room every day. They can see, I need to know all of this. And the science teacher is the same thing. The kids say, I'm in chemistry now. I don't need biology. Why do I need that? Until you see it right there in front of you every day, and you think, oh, I'm supposed to learn this. 0:08:12.9 Andrew Stotz: Gosh, it just brings me back to when I was in high school, and I really got frustrated because the pace was really fast, and I felt like I didn't fully understand the prior material, and now I'm on to the next. And that was, and I felt like I was building on a shaky foundation, and this is a part of addressing that. 0:08:33.7 Lee Jenkins: It is, absolutely. So that's one of the changes that was made. Teachers took and expanded that to the whole curriculum as opposed to only the course they're teaching. 0:08:43.0 Andrew Stotz: And just to think about that, is that in order to truly do that, you really want to have the math, the pre-algebra, the algebra, the algebra 2, and the geometry teachers all working on the same playbook. 0:08:56.2 Lee Jenkins: Yes, yes. And when we do make those lists for each class, there's no duplicates. 0:09:02.7 Andrew Stotz: Right. 0:09:04.3 Lee Jenkins: I mean, like with the science, I remember the biology teacher saying to the chemistry teacher, "You teach that? I teach that also." And they'd been teaching next door to each other for 10 years and didn't know it. So they have to say, who owns that one? So it's all a system that's tightly designed. 0:09:25.1 Andrew Stotz: And in the academic world of universities where I've taught, there's this thing that they want to give you independence to teach what you want in the way you want. I don't know about what's happening in schools these days, but is the curriculum pretty much set and therefore the teacher can't veer from that and therefore this would not be a problem? Or is it that, hey, every teacher's doing something different and it doesn't all work together? 0:09:53.6 Lee Jenkins: Right. What's the "what." The essential "what", needs to be agreed upon no matter who's teaching it. Now, on these lists, we don't put trivia. And trivia should be in the classroom. It's fun. It's interesting, but they're not accountable for it. 0:10:11.3 Andrew Stotz: Right. 0:10:11.7 Lee Jenkins: So it's what's essential for the kids to know. And the teachers, when they have time, the principal sets aside a day and said, okay, science department, get together, get this listed, what you want. They like that discussion and the agreement of what's expected. 0:10:30.1 Andrew Stotz: Yep. 0:10:31.8 Lee Jenkins: The next thing that was added, Dr. Deming did not talk about students graphing their individual progress. So this is a student run chart, not a class run chart. So you can see... 0:10:46.3 Andrew Stotz: Yeah, that's interesting. Before you even go into that, it makes me think about the factory. It was kind of accepted that the statistics guys would kind of run the run charts and management would look at it. It would be public, it wasn't hidden. But the idea of really bringing the accountability to the people on the production line is what this reminds me of. 0:11:10.0 Lee Jenkins: It's exactly the same, and the kids like making the graphs. When you see, this is a younger child, but it's done by a high school child, not all of them, but some of them, but who like to doodle, they become very, it's kind of pieces of art, but they own it. They own that learning. They can see how they're doing, and they're so happy when it goes up, but it goes down at times. Why does it go down? They went down because bad luck, because it's random. Sometimes you choose the hard ones, but overall, you see a progress of going up and up and up, and so that's why it's not an inspection chart. It's a learning chart. It's showing a picture of my learning. 0:11:58.8 Andrew Stotz: And just to be clear, the first two charts we saw were looking at the overall classroom, but now the chart you're showing is one student mapping their progress throughout the quizzes. 0:12:11.7 Lee Jenkins: Yes, every student does their own, and if the teacher is scoring the papers to give them back to them, the results, they have to change, a slight change, instead of putting how many, they put a plus at how many correct, because you're graphing the number correct. 0:12:30.6 Andrew Stotz: Yep. 0:12:32.8 Lee Jenkins: And then another thing is kind of a celebration, a thank you, when students do better than ever before. So if a student had two right and then three right, and then they finally had five right, they never had five right all year long, they do something for the kid quickly to just say, yay, this child went and hit the gong. Just means I did more than, got more right than ever before. So what's the power of that? Dr. Deming wants every student to win. And I've been in classrooms six weeks after school started, maybe four or five in that time, and say, "Is there anybody in here who hasn't had a personal best? " I've never had a hand go up. They all have by then. Now, so you can be a struggling student, you can be an advanced student, but they all have a record of doing better than ever before, and we have ways of celebrating that. 0:13:32.4 Andrew Stotz: And that also is the idea of the objective really here is to improve ourselves relative to our prior selves. 0:13:43.7 Lee Jenkins: Yes, you're in competition with your prior self, that's it, yes. And I would say it's even 1% of the time that I saw somebody twist that and make it into a bribe. It's not a bribe, it's a thank you. I'm so proud of you, it's a thank you. It's a completely different mindset. They want to do that. And if we look at the next one... 0:14:09.8 Andrew Stotz: And just to understand this one last thing is that, are you saying that in a classroom when a student hits an all-time high, they go up and bang the gong or the teacher bangs it or what? 0:14:19.3 Lee Jenkins: No, the kid does it, the kid does it. Or whatever's done. One, you know that in sports where they make a tunnel and the athletes run through that tunnel of other athletes. There was a classroom that did that. The kids made a tunnel and the ones who had an all-time best that week ran through the tunnel. Okay? And there's... 0:14:41.0 Andrew Stotz: Yeah. And you could do simple things. You could also just say, if you did an all-time best, stand up. 0:14:46.6 Lee Jenkins: Yeah, it could be... But we try to make it something fun. 0:14:51.3 Andrew Stotz: Yep, yep. 0:14:52.3 Lee Jenkins: Something that's enjoyable for them. And it depends on the age. Here's one, another classroom, they wrote their name on a shape when they had a personal best. If you go to the next slide. 0:15:05.4 Andrew Stotz: Okay. 0:15:05.8 Lee Jenkins: You will see there's a collection of probably 200 shapes. With individual kids, they wrote their name on it when they had a personal best. And see, it's everybody. And it's a graphic in the hallway that lets all the other classrooms see, look how much we're learning. 0:15:29.9 Andrew Stotz: Right. 0:15:30.3 Lee Jenkins: Because every time you have a personal best, you put your name. This happens to be a star instead of a feather, but they put it up there. 0:15:36.7 Andrew Stotz: Yep. 0:15:39.1 Lee Jenkins: And then here's a middle school. When they have a personal best, they write their name on the whiteboard. And the kids have made kind of a Scrabble out of it, a crossword puzzle, where they can use the letters from somebody else's name to make their name. They love it. And they particularly like it because their friends who happen to be in that classroom but a different period, when they come in, they see their friends' names. Again, it's everybody. It's simple. Write your name on the whiteboard when you have a personal best. And then this is a high school. They had the game Kerplunk. And if anybody's not seen that, it's a cylinder. And it has holes. About halfway up it has a bunch of holes. And you put straws through the holes. And then you put marbles on top. When a kid has a personal best, they pull a straw out. When you pull enough straws out that all the marbles on top come crashing down, that's why they call it Kerplunk. And then the class does something for a couple minutes of fun. But it's everybody. 0:16:49.0 Andrew Stotz: Right. 0:16:49.8 Lee Jenkins: Then here is, they added the word all-time best. That was an addition. 0:16:57.7 Andrew Stotz: Right. 0:16:58.1 Lee Jenkins: And this is a class run chart, like I showed you last time, where you add up the total for the whole class. But when the class has more correct than ever before, it's an all-time best. We use that word for kids also, and you'll see in school that the initials ATB are very common in the schools. 0:17:22.1 Andrew Stotz: Right. 0:17:23.3 Lee Jenkins: It's one of the most common things. And you can't see it, but I'm looking at this when they had 28 quizzes in the year, and there are one, two, three, four, five, six, seven, eight times during the year out of 28 that the class had an all-time best. Also, if you look at the x-axis, it's 28. Dr. Deming said every week, and it was changed to 28 instead of every week. 0:18:03.6 Andrew Stotz: Right. 0:18:03.9 Lee Jenkins: That was a huge deal for me because I knew that every week was too much. There's snow days. There's things that happen, and you just... In the schools, it's too much going on for it to be every week. But I also knew that every other week's not enough. Not for kids to really prove that they're learning. Plus, they like them. They want... 0:18:29.6 Andrew Stotz: So, what does the 28 mean? Why 28? 0:18:33.5 Lee Jenkins: It's seven times a quarter instead of nine times a quarter. That's why. 0:18:37.1 Andrew Stotz: Okay. 0:18:38.3 Lee Jenkins: So, out of a quarter, two times they didn't. And actually, the complaint the kids had was, why aren't we doing one this week? And so, in a sub-sense, it's only for the teacher to just kind of a sense of... It just eases up a little bit. For the teacher, not for the kids. 0:18:55.8 Andrew Stotz: So, in other words, rather than strictly tying it to a week, you tie it to the number of quizzes that you're going to do, and then you manage that. 0:19:08.6 Lee Jenkins: Yeah, and I've never heard anybody say they couldn't get the 28 in. It's reasonable. 0:19:12.5 Andrew Stotz: Right. 0:19:13.1 Lee Jenkins: Yeah. It's a reasonable... 0:19:16.3 Andrew Stotz: Just for people that don't recall, like myself, I can't even remember what numbers of days in the classroom and numbers of weeks in a class and stuff like that, can you just remind me what that is? 0:19:29.6 Lee Jenkins: Okay, in a year, the school is divided into quarters, and there's 36 weeks in the year. So, there's nine weeks per quarter, and we're quizzing seven of those nine weeks. 0:19:42.8 Andrew Stotz: Perfect, okay, got it. Okay. 0:19:46.5 Lee Jenkins: Now, here is something else that has been added, and it is the goal. And so, Dr. Deming talks against numerical goals, and we agree with that. That goal is not an artificial number. It's the best from the prior year. So, it's a real number. So, the students are trying to outperform the prior years. 0:20:18.6 Andrew Stotz: So, this is the best that the system could produce in the past period? 0:20:23.8 Lee Jenkins: Yeah, are we smarter than the kids that you had the last several years? Are we smarter... 0:20:29.5 Andrew Stotz: Am I teaching better? Are you learning better? 0:20:33.5 Lee Jenkins: No, it's a challenge. It's a challenge, and they are so excited when they do better than the prior years. So, how did they get so high...
/episode/index/show/deminginstitute/id/39296310
info_outline
What is "Profound Knowledge"? An Insider's View of Deming's World (Part 4)
11/17/2025
What is "Profound Knowledge"? An Insider's View of Deming's World (Part 4)
Ever wondered what Dr. Deming really meant by “profound knowledge” — and how it can still transform your work today? In this conversation, Bill Scherkenbach shares with host Andrew Stotz lessons from Dr. W. Edwards Deming on profound knowledge, systems thinking, and why “knowledge without action is useless, and action without knowledge is dangerous.” Tune in for wisdom, humor, and practical insights on learning, leadership, and finding joy in work. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Scherkenbach, a dedicated protege of Dr. Deming since 1972. Bill met with Dr. Deming more than a thousand times and later led statistical methods and process improvement at Ford and GM at Deming's recommendation. He authored the Deming Route to Quality and Productivity at Deming's behest, and at 79, still champions his mentor's message, learn, have fun, and make a difference. Bill, how are you doing? 0:00:36.3 Bill Scherkenbach: Doing great, Andrew. How about you? 0:00:38.6 Andrew Stotz: I'm good. It's been a while since we talked. I took a little holiday to Italy, which was. I was out for a bit, but I'm happy to be back in the saddle. 0:00:48.9 Bill Scherkenbach: Dove in Italia? 0:00:51.3 Andrew Stotz: Yes. 0:00:52.5 Bill Scherkenbach: Where in Italy? 0:00:53.6 Andrew Stotz: Well, I went to Milan for a trade show in the coffee industry, and then I went to Lake Como and relaxed and oh, what a paradise. 0:01:03.2 Bill Scherkenbach: Beautiful. Beautiful. Yep. 0:01:05.0 Andrew Stotz: And, of course, always great food. 0:01:09.4 Bill Scherkenbach: Yep, yep, yep. Well, you have a chance to use the PDSA on improving your mood there. 0:01:16.6 Andrew Stotz: Yeah, it was just... The resort I stayed at was a tiny little place on the side of a hill, and the food at this tiny little place was fantastic. We just didn't want to leave. Every single meal was great. So I love that. Who doesn't love that? 0:01:34.4 Bill Scherkenbach: They didn't have a food cart in the background. 0:01:38.0 Andrew Stotz: Yeah. In fact, they didn't really open for lunch. 0:01:39.8 Bill Scherkenbach: Like what they do over here. 0:01:41.3 Andrew Stotz: Yeah, they didn't open for lunch. They only served sandwiches at 2pm so we had to hold out. But we still, the sandwich was so good. We just thought yeah, just wait. 0:01:51.3 Bill Scherkenbach: Early lunch. Yep. 0:01:53.3 Andrew Stotz: Well, you've got some interesting stuff to talk about today, and I'm gonna share the screen, and then I think we can kick it off from there. So let me see if I can get that up straight here. One second in. All right, so hopefully, you see a white screen that says profound knowledge. You see that, Bill? 0:02:16.0 Bill Scherkenbach: Yes, I do. 0:02:17.2 Andrew Stotz: All right, well, let's... Yeah, let's. Let's get into it. 0:02:23.2 Bill Scherkenbach: Oh, okay. I'll go from the bullets that I've got, and we'll hear from Dr. Deming and how he couched it in a little bit, in a few minutes, but he recognized that leaders would say they had the knowledge. Oh, yeah, we do SPC. We follow Deming's philosophy, we do that. But they really only knew the buzzwords. And to an extent, and I don't know how he came up with the word profound, but I do know in speaking with him that he intended it to be a degree of expertise that was beyond the buzzwords. Now, he said you didn't have to be an expert in it, but you had to know enough to be able to understand it and in fact, use it, as we'll talk about in a little bit. And knowledge obviously includes, as he said, an appreciation for a system and variation and knowledge and psychology. And as we'll hear in the audio, he also didn't really limited to that when he said there was there... His point, main point was that there are a whole bunch of interrelated subject matters that are very, very useful in managing your business or managing any organization. 0:04:17.1 Andrew Stotz: You know, I was thinking about that word profound. It's oftentimes wondering exactly what is meant by that. This is helpful to help us understand. It's, number one, about expertise. And I think the thing that I've always also felt is like, when you understand appreciation for a system, knowledge about variation, theory of knowledge and psychology, it, like things click, like it comes together, it's a whole. And that's the way I've thought about it. But that's interesting about the expertise aspect. 0:04:51.8 Bill Scherkenbach: Yeah. And that's something Don Peterson at Ford spoke about. He gave a very good talk to our leaders with Dr. Deming in attendance. And he said that a lot of you have said, "Oh, yeah, we already do this at Ford, " but you have to come to grips with a lot of you have been promoted for perhaps the wrong reason throughout your career, and you're gonna have to change. The change starts with us. So that was very impactful for Dr. Deming to listen to that. 0:05:32.7 Andrew Stotz: Yeah. And I just thought about the idea of profound action. Like, once you get this knowledge, does that mean that you're going to also, you know, the way that you do things is going to change substantially. 0:05:47.3 Bill Scherkenbach: Yeah. I mean, that's been a philosophical question. In one of the slides, I quote Confucius. About 2500 years ago, essentially saying knowledge without action is useless and the action without knowledge is pretty dangerous. But that's been consistent with Eastern and Western. Aristotle did the same thing, and Mid Eastern folks did it as well. Philosophers dealing with, yeah, we've got knowledge, but everyone agrees, at least in the good thinker role, that, that you've got to take action, otherwise it's useless. Okay, so we've got, and the subject matters, as I said, are not new. And he coalesced on four, but the general thought was that. And you've got to remember Dr. Deming was a classically trained physicist in the 1920s. And because of that a lot of, although it had been a few years, but they were very aware that everything started in the both, the eastern philosophies and western philosophies. Everything started with philosophy. Science wasn't a separate subject matter. And so everything was connected on how people should live, on how the stars move, a whole bunch of stuff. It all was philosophy. And these various subject matters evolved over the years. 0:07:50.6 Bill Scherkenbach: So even though he stopped it for his general intent was that a whole bunch of things are interconnected. If you go study these various subject matters. 0:08:05.1 Andrew Stotz: It's interesting because I attended the seminars in 1990, 1992 and then I went to Thailand and then I did other things and I didn't really keep up with it because I was in the financial world and doing my thing. And then I got The New Economics years later and there was this discussion about System of Profound Knowledge. And then I think about also going back to your previous discussions of what it was like being in a classroom with Dr. Deming when you first met him and studied with him. You know, that these things were going on. Obviously he had a deep understanding of variation. He definitely understood about the theory of knowledge from his scientific background. But I'm just curious, as you... It's interesting what you said, these things are not new. It's the way he brought them together. I just find that, that fascinating. How do you see that journey for him going from when you first met him to a very full formed concept or theory of profound knowledge at his later years? 0:09:15.3 Bill Scherkenbach: Yeah, I think things just solidified or codified. I mean, when I first met him in '72 at New York University Graduate School of Business, he didn't have 14 Points. He didn't have the Deadly Diseases. So none of the stuff that were codified as he progressed. I mean the one thing that I've mentioned it a number of times, the most important thing I learned from him is that you never stop learning. And he epitomized that sense of continual learning in improving oneself. So he tried to learn from everyone. But, but yes, for instance, as I mentioned, he was a degreed physicist and ended up doing a whole bunch of. And that transitioned into statistics which was a relatively. Well, I'm going to say everything is relative. But new in operationalizing the use of statistics besides counting people and the experiments at Rothamstead for agriculture. I mean, that really was some of the... But the earlier stuff, yeah. Was helping their patrons gamble better. 0:11:02.0 Andrew Stotz: And so I often take comfort in your descriptions in the first episodes about how he hadn't put all of these things in place at the age of 72. And I think there's still hope for me, Bill, to figure it out and put together my grand thinking. 0:11:22.7 Bill Scherkenbach: Yeah. Oh, no, I understand. I mean, I'll be 80 in less than six months. But he really, he started out getting his foot in the water here anyway when he was 79 also. So there's a chance. There's a chance. 0:11:46.4 Andrew Stotz: There's a chance. All right, well, the next slide, you're talking about the connections. 0:11:51.6 Bill Scherkenbach: Yeah. Again, all the subject matters are, again, evolve from philosophy and they all are interconnected in many, many ways. So, yeah, if you could play what Dr. Deming's introducing, that might set the stage. 0:12:14.0 Andrew Stotz: Okay, let me play this audio. Hopefully it comes across. Okay. [video playback] Dr. Deming: Let us begin our study of Profound Knowledge. Profound Knowledge. Provides a roadmap to transformation, not just change, but a roadmap to transformation. Nothing else will satisfy our needs. Not just change, a roadmap to transformation into a new state. The System of Profound Knowledge, appears here in four parts, all related to each other: first, Appreciation for a System. Which we shall study, we shall study a system, and soon, I won't keep you waiting. And Theory of variation and theory of knowledge and knowledge of psychology and add anything you please, sociology, anthropology, whatever you please. I present these four parts to Profound Knowledge. They are interdependent, they cannot be separated. One need not be imminent in any part of Profound Knowledge in order to make it, in order to understand it and apply it. 0:13:30.9 Andrew Stotz: That's quite a mouthful. 0:13:33.1 Bill Scherkenbach: Yes, it is. Yes, it is. What I've got to do is go back to the tapes and get the lead in and follow on to that. But yeah, that's how he introduced profound knowledge in his later seminars. 0:13:56.2 Andrew Stotz: So what would this have been? What, 1990, 1991, 1992? 0:14:03.8 Bill Scherkenbach: Well, probably, I would say, yeah, maybe '89. 0:14:10.6 Andrew Stotz: Okay. 0:14:11.9 Bill Scherkenbach: In there. Yeah. 0:14:13.8 Andrew Stotz: So I took out a little transcript of that and I want to just go through a couple quick points, if you don't mind. He starts off by talking about it's a roadmap to transformation, not just change. Why would he say transformation rather than just change? 0:14:38.6 Bill Scherkenbach: Well, he changed really, transformation. And he thought a metamorphosis would be better. There's a butterfly in there somewhere, but it needs change. And it's not just, I know he mentioned the western style of management, but in my travels, Eastern style of management is just as bad. And again, knowledge is, is literally encompasses space and time. Looking at the past, projecting or predicting the future, little space, great space. And when you look at Western philosophies or western style management, we have emphasized the individual. So restricted space and short term. And the eastern philosophy of management took a longer term viewpoint of things. And they said it's not the individual, it's the team, the family. In my opinion, you have to, everyone, no matter where you live in the world has to balance those two, being able to take joy in your work as an individual. To be able to take joy in your work as a member of the team. And, I mean, I've been asked years ago, how long would it take? And I would say, "Well, Deming says it'll take 30 years." So over here in the US it's going to take a long time, but it's not going to take a long time in Asia, it's only going to take them 30 years. So time is relative, so is space. 0:16:53.2 Andrew Stotz: And there's something else he said in here that if you could try to help me understand and help the listener understand it. He talks about, you know, he gives a summary, theory of variation, theory of knowledge, knowledge of psychology. And then he adds in this line, "add anything you please, sociology, anthropology, whatever you please." What does he mean by that? 0:17:16.6 Bill Scherkenbach: That's what I said before he came from the the school that everything started with philosophy and things broke off science and all of these various disciplines. What he's saying is he's gone to, his theory of profound knowledge is included these four. But the general message is any discipline is interconnected with each other. So you don't have to be restricted to these four. And you're going back to how knowledge was developed in the first place. And perhaps it could be full circle, although I'm not going to get bogged down with the potential of AI contributions. But you need to, you need to recognize that many, many subject matter are interrelated because they were spawned from the original Eastern philosophy and Western philosophy. 0:18:37.5 Andrew Stotz: And one last thing on this, he wraps it up with this statement that also, you know, particularly given his depth of knowledge of the subject, he said, "One need not be imminent in any part of profound knowledge in order to make it, nor to understand it and to apply it." Why do you think he had this need to explain that you don't really have to know this in super deep detail? 0:19:02.7 Bill Scherkenbach: Well, I think he was being off a little bit. The word profound scares a lot of people. And so there's again a balance. You need to go far beyond the buzzwords, but you don't need to be an expert in any of those fields in order to grasp and be able to in some cases, I think, contribute to them. So he's saying that he's trying to better explain or define the word profound. 0:19:48.8 Andrew Stotz: Yep. Okay, now the next slide is incredible. A lot of different things on here that you're showing. Maybe you can explain what you're getting across in this one. 0:19:57.9 Bill Scherkenbach: Yeah, this is a MEGO chart. My Eyes Glaze Over. What I tried and I'm. I'm continually updating it. The different colors are from the fields of statistics, the fields of epistemology, psychology and systems thinking. And I'm linking a whole bunch of them together to show that there are similar thoughts in all four of these fields that contribute to a better understanding and use of all of them. Now the next slide, hopefully is more visible. It should be. I'm focusing on a stable process, which is statistical concept. Stable process means you've got by definition of Shewhart. There's a... Deming would call them common causes. When common causes are... When a process is stable, you're able to do design of experiments. Some of the enumerative methods work very, very well or with some degree of belief with a stable process. The red bead experiment was stable. Rule one and two of The Funnel. Stable process. Common causes in theory of knowledge. There's comment, well, I've seen that before or no, jeepers, I've never seen that that hooks up to some other special causes and statistics. There's a concept in theory of knowledge where you're talking about general providence or specific providence that the storm just, it hit everyone and pick out anyone in systems thinking you can only have a stable process if you have negative feedback loops and negative feedback. 0:22:40.0 Bill Scherkenbach: Again, I think I had mentioned in a previous discussion with you, negative doesn't mean it's bad. It just means it closes the loop and it seeks a stasis so, and that's the only way you're going to get. I'll simplify just about the only way you're going to get a stable process. There's a negative feedback loop in there somewhere. Stable process leads to long term thinking versus short term thinking, the theory of knowledge, empirical knowledge is never complete. Knowledge is theory applied over time. Stable process over and over and over again. The theory matches the data or what you predict, you then have knowledge. So the point is that, that there are a number of specific learnings. Well, for instance, let me see here, what's on. I have to adjust this. Okay. From psychology you've got what the psychologists call a fundamental attribution error. And that is mistaking who, as Dr. Deming says, who, who did it, who did it, did the people do it? Or did the system do it? Did the process do it? And in psychology, although it's in a different place, you've got following Rule 3 of The Funnel is a psychological term called complementary schismogenesis. 0:24:42.3 Bill Scherkenbach: And that's easy for me to say, going back to the Greek schism of split in genesis of a birth of a split. What that means is in psychology it's two people trying to one-up another. I've got this example. Well, I can do it. I mean, who, yeah, and the move or the musical Annie Oakley. Anything you can do, I can do better. So, psychology has observations and subject matters that they didn't have a clue. That was rule 3 of The Funnel. So my point in looking at all of these is that as you dig into things, they are interrelated. Now I haven't dug through anthropology or started. I've just restricted it to the four things Dr. Deming spoke about. But that would be a challenge to our listeners. If you really know some of these sciences, some of these bodies of knowledge, how are they connected? Okay. The aim of profound knowledge, he says, has to have an aim. Confucius in the East, Aristotle in the West, and in the Mid east, someone essentially said knowledge without action is useless and action without knowledge is dangerous. 0:26:51.0 Bill Scherkenbach: And Deming said the aim of a system, of his System of Profound Knowledge is action. And as we discussed previously, it's a transformation of Western, I think it's a transformation of Eastern and Western style of management. And he, the way he pronounced it was metamorphosis. And I will have to check the OED, Oxford English Dictionary. I haven't done that yet. But he has been 100% right in his pronunciation and usage of the English language. So as I said, there's got to be a butterfly in there somewhere. But he's talking about a major, major shift, major rebirth if you will, management. Systems theory. A lot of this is obvious and these are what he mentioned in his, not Out of the Crisis, but The New Economics. A network of interdependent components that work together to try and accomplish its aim. And, and he, and this I had mentioned earlier, I think that in his work. Well, I've got... Going back to some things, this is a 1954 speech he gave in Rome and this is a 1940 speech he gave. And because he was a Renaissance scholar, they were talking about a Systems View before it was popular. 0:29:06.5 Bill Scherkenbach: Everyone knows that he introduced the improvement on the old: design it or spec it, make it, try to sell it. And he introduced his expertise, sampling theory to...
/episode/index/show/deminginstitute/id/39062335
info_outline
A Smarter Way to Set Goals
11/10/2025
A Smarter Way to Set Goals
Are you looking for smarter, more sustainable improvements? In this episode, John Dues joins Andrew Stotz to challenge the way schools - and businesses - set goals. Instead of chasing stretch targets that often frustrate teachers and students alike, John shows how to use data and systems thinking to create real improvement. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is how to set educational goals. Take it away, John. 0:00:25.6 John Dues: Hey, Andrew. It's good to be back. Yeah. So the thing that I see just over and over again is that goal setting in schools is just really ineffective. And not only that, but it's often counterproductive. So I thought it'd be good to talk about a different approach to how to set educational goals. I think most typically what I see, and this is probably not just true in schools, but in other places too, you get some result, and then you set a goal to increase by 10 or 15 or 20%. But I think that what often is missed is that without certain conditions in place, these stretch goals end up disconnected from reality. And so what I wanted to do in this session is to teach three conditions that I believe will lead to much more effective goal setting. 0:01:20.8 Andrew Stotz: It's interesting because goal setting seems really simple, like, just set a goal and go get it. 0:01:29.1 John Dues: Yeah. 0:01:29.5 Andrew Stotz: And yet when you're... You say that it's simple as an individual that I'm going to go walking every morning. That's my goal. It seems simple as an individual, but when it gets to a company level, it can get really complex, or a school level. And also there's this... What did you call it? Like aspirational... Or what was the word? Stretch, stretch goal. It's so common, particularly when business is not going great. Like, I want this from this team, and it's just so common to say, to lay down demands. I want 20% revenue growth. I want students passing this by 70% or whatever. And yet it just doesn't work that way. And so I'm looking forward to hearing from you about your three conditions. So let's go. 0:02:23.1 John Dues: Yeah, sounds good. So let's start by looking at why I don't think stretch goals are helpful. And since I'm working in schools, I like using data that people are familiar with. So I'll use this third grade reading state test score data. It's very common. It's really important. There's often some guarantee around third grade reading scores or there's often high stakes attached to third grade reading. So I'll use that. And so let's say in year one, and this is actually real data, 54.9% of third graders scored proficient or higher on that test. And then in the next year, they score 63.8% of the third graders scored proficient or higher. So in most places, leaders and teachers would celebrate because that represents an 8.9% increase in proficiency rates. And so then they do something like set a stretch goal of, well, next year we're going to grow by 20%. So you think, well, we grew by nearly 9%, so we can surely hit 20%. But then what often happens in a situation like this is that the next year's data comes out and actually goes down. 0:03:41.4 John Dues: And that's exactly what happened in year three of this data. Now, in this third year, only 61.2% of the students scored proficient or higher. And so then you think to yourself, well, what stretch goal would I set next? Would you change that 20% goal because of the decreased rates in the most recent year? So it actually is an interesting exercise. If you're listening to this, actually get a number in your head. You're the school leader, you're the superintendent, you're the principal or whatever, think about what goal then would you set for this group. So they grew by almost 9% and they went down by a couple percent. Between year one and two, they set the goal of 20%. Now what are you going to do? What's the goal? What are you going to say? 0:04:36.2 Andrew Stotz: And I'm thinking about the tampering concept that Dr. Deming talks about, constantly adjusting based upon where you're at. And it's interesting because in that case, you may say, you know, a disappointing year, but we've got to stick to our 20%. We got to stick to our strong, we can't give up. Remember that celebration we had? 0:05:01.0 John Dues: Yeah, this is a one year blip. We had increased by nearly 10. I know we can do it if we just double down. Let's keep that 20% goal in place. Yeah, that's definitely what a lot of people would do. So let me show you the results for those three years and then what happened for the next several years after that. So I'll share my screen for those that are watching so they can see this actual data in chart form. 0:05:27.7 Andrew Stotz: Great. Yep, we can see that. 0:05:29.8 John Dues: You can see it. All right. So now we have nine years of test data, and we can see that setting that early stretch goal had no effect whatsoever on outcomes. And so in year one, we had that 54.9% of those third graders were proficient. Then we went up to 63.8 like we said. Then we dipped back down in year three to 61.2, and then in the subsequent years that we're looking at now, it jumped up to 60.7, and then it fell to 51.9, and then it jumped up to 59.8, and then it rose again to 62.3, and then it rose again to 64.5, and then it fell again to 61.3. So again, between year one and two is when we set that stretch goal of 20%, and we can see again that it had no effect on outcome. So really, in all likelihood, the goal was not only ineffective back there between year one and two, but it was likely counterproductive. Because if you're thinking about, if you're a teacher in this school, you're teaching third grade or you're the principal of the school, year after year, this team didn't come close to approaching that 20% stretch goal that had been set. 0:06:52.8 John Dues: Year one, year two, year three, all the way through year nine. Some years the scores go up, some years the scores go down. It's pretty demoralizing if you think about it. I think the good news is, and the reason we're having this conversation is I think there's a better method for understanding your data and then using that data to set school goals in a smarter way. So I'll introduce these three conditions. I think about them as three conditions of healthy goal setting. So the first thing that you want to do is gather baseline data in the area that you're interested in improving. So this could be historical results if you have data, or it might be new data that you need to collect if this is a new focus area. But either way, you need some type of baseline as a starting point, and then you can work to understand these three conditions. 0:07:55.9 John Dues: So the first condition, condition one is what I call the capability of the system under study. And by system under study, in this case, I just mean the third grade reading test data. So how capable is it? Condition two is the variation of that system under study. And then condition three is the stability of that system under study. So those are the three conditions that I'm interested in taking a look at. And this focus could be on any data that occurs across time. It could be like state test scores, like we're looking at here. Could be attendance rates, could be oral reading fluency rates for those elementary teachers. It could be the number of office referrals that are coming into the principal's office or assistant principal's office on a daily or weekly basis. For this example, I'll just keep using the third grade state testing data. 0:08:52.8 Andrew Stotz: And let's just go through that just to review. So you talked about gathering baseline data. So you got to figure out what's happening here. The second thing, the first thing then you talked about, step one is capability of the system under study. And what does the word capability mean? 0:09:10.5 John Dues: Yeah, we'll get into each of them and then define each one. 0:09:12.0 Andrew Stotz: And then the second one is the variation of that system. Okay. Now what I noticed in all of these as you're talking about system, third one is stability of the system. So I guess a big part of this is basically saying if you're not looking at it as a system, you're not going to have the success that you want to have. So that's certainly a reinforced point there. Okay, keep going. 0:09:38.1 John Dues: Yeah. And by system, I just mean there's all these inputs into the third grade reading test, and then there's things that we do in schools, and then there's an outcome, there's an output that happens. So that's why I'm calling this third grade reading state testing data system, basically. So the first thing that I've done is taken that data that we've been looking at in a table and I put it into what I call a process behavior chart. Other people call a control chart or Shewhart chart. We've talked about those charts here, and I've done that so that we can better analyze those three conditions. So this charting method allows us to do that. So can you see the chart now? 0:10:22.6 Andrew Stotz: Yep. And for the audience, we have a chart up on the screen, third grade English language arts test, state testing proficiency rates. And maybe you want to describe what you got in the chart. 0:10:36.1 John Dues: Yeah, so it's the same data that was in the table, but now I've just taken it and plotted it. And that's what the blue dots are. So for each year, which is running along the bottom of the chart of the x-axis, there's a year, year one through nine. Those all represent school years. And on the y-axis I just have proficiency rates running from 0 to 100%. And then I've plotted that data that we had just looked at for each of those years. So it's the same exact data. So the thing that should... Before you even get into the chart in detail, the thing that should jump off the page is how much more intuitive the analysis is just by looking at the chart as compared to looking at that same data in the table. 0:11:23.8 Andrew Stotz: Yeah, in some ways it just looks like a boring chart that looks pretty normal, a little ups and downs. 0:11:30.7 John Dues: It does, but it's super powerful. And it allows us also to start looking at those three conditions that we just talked about by putting it in this format, taking that data from the table and putting it in the process behavior chart format. So you had asked about capability. So what I would say is that the capability of this third grade ELA or reading system is actually defined by the chart. So some of the most important components of this are that green line running through the middle for those watching the video is the average of the nine data points that we have. So the average of those nine tests is 60.7%. That's the green central line. And then those red lines, there's the bottom line and the top line. Those are called process limits. And they're set by plugging nine years of data into a formula. 0:12:28.8 John Dues: So the most important thing is I don't get to choose where those limits are placed. They sort of appear on either side of the nine data points. So that lower limit is a little bit lower than the lowest point. So it's set at 44.9%. And the upper limit is a little bit higher than the highest data point, and it's set at 76.5%. This data, or this really tells us that the data is really just likely to bounce around this 60.7% average, but could plausibly range between those two limits. 0:13:09.8 Andrew Stotz: So is that when we say capability of the system is that this system, as is could just by randomness, could end up between 45, is highly likely to end up between 45 and 75 without it necessarily being attributed to anything but random variation. 0:13:31.9 John Dues: That's right, yeah. 0:13:33.0 Andrew Stotz: Yep. 0:13:33.6 John Dues: So another way to think about it is given what we're seeing in this nine years, if we call this our baseline, the data is likely to bounce around that average of 60.7%, but it could plausibly range between those limits. 0:13:51.9 Andrew Stotz: And one of the fun things I was just thinking about is if you made the average and the blue line of the data like invisible, then you'd have a really good picture of the system, right? 0:14:05.6 John Dues: Yeah, that's right. 0:14:06.3 Andrew Stotz: The capability is between these two fixed lines. There it is. There's your capability. Okay. 0:14:13.3 John Dues: That's the capability. And the thing that we can tell for sure, well, that's fairly certain, with a high degree of probability, we can tell that this third grade reading system as it's currently set up is incapable of hitting that 20% stretch goal. And the reason that I know this is if I add 20 to that average of 60.7%, the answer is beyond the upper limit of 76.5%. So is it possible that you could hit that stretch goal? I would say it's not impossible. It's highly, highly unlikely. And nowhere in that time period did we get anywhere close to hitting that 20% target. And so when you start to look at data this way, it becomes self-evident that the 20% stretch goal in this case is... 0:15:16.5 Andrew Stotz: So then a crafty manager would say, okay, John, that's great, so I'll set the stretch goal at 75%. We should be at the upper limit and therefore just below the upper limit. It's within the capability of the system. Let's go. 0:15:33.5 John Dues: Yeah. So that target setting is beyond the content of this podcast, but to me it would depend on what's the nature of that target. Is it an accountability target that a manager has set for subordinates and that people are going to be held accountable in some way? Demotions, lose their job, affects pay, that type of thing. That's completely the wrong way to go about target setting. But if the target setting is, hey, look, it's a fact of life that more kids need to be able to read proficiently. We need to, as a team, figure out how we're going to bump this up every year until we get to 80, 90, 95, 99, 100%, that type of thing. That's a completely different sort of mindset. That's an improvement mindset, and I would be all for it even if the target is outside of the capability. I'd be all for it if there's an improvement orientation and team orientation to that target setting. So that's the first condition, that's the capability of the system. So the second condition that we'll look at here is that we want to understand the variation in the system. And so the data now in this process behavior chart format can help us understand the variation in this system. 0:16:55.6 John Dues: So the first thing to notice when it comes to variation, you want to look at the blue data points and how they orient themselves around that green central line. And so you'll notice if you're able to see it, that those blue data points are really just regularly bouncing above and below the green line. There's nine of them. And if you look closely, three of the points are below the line, one point is just about right on the line, and five points are just above that average line. So if you're doing year to year, the results increase and then decrease, then increase, then decrease, then increase slightly for three points in a row before decreasing in that most recent year. 0:17:50.2 John Dues: So again, given the data we have so far, it's clear that this system is not going to increase from that average of 60% or so to 80% proficiency rates in any given year. It's just not going to happen based on what we're seeing in this baseline data. So again, the table, it's much harder to see. I mean, you can see it if you're really looking, but it's much less intuitive when you don't have the plots or the dots plotted and then connect them by line so you can see the ups and downs. And the other problem is, so often with something like state test data, but with lots of data, we only have two or three of those points in a table. And we're just looking at did we increase or decrease from last year. 0:18:41.3 John Dues: And so we completely miss all of these patterns that are happening in a relatively recent time period. So by charting, we get that analysis that jumps off the page when you look at data in this way. 0:18:55.7 Andrew Stotz: Yeah you feel like when you get a table of two data points, you get an understanding of data, but when you look at it like this, you get an understanding of the system. 0:19:09.0 John Dues: Right. And if someone's hearing this for the first time and you hear, okay, system capability, system variation, and the third condition, we're about to get into system stability, it sounds technical and engineering-like and things like that. You got to have some mathematical ability. You really need none of that to understand this. I mean, it actually makes data far more intuitive and far easier to understand, even for those that aren't mathematically or statistically inclined, which I would count myself as being among those people. 0:19:41.0 Andrew Stotz: Yeah, it's interesting that point, when I think about what's fantastic about Dr. Deming and his teachings, was that he understood statistics to an extremely deep level. But then he brought it back to us in such a simple way of understanding common cause, special cause, and understanding that just chasing around data points is what most people are doing. And I just think that that's impressive because I studied statistics for a long time before I really thought about that type of stuff deeply. And I didn't understand that most of what we're doing is rewarding and punishing random variation. 0:20:23.3 John Dues: Yeah, that turns out to be the case. That turns out to be the case. So that third condition is understanding stability. So the thing to understand there is that systems can be stable or they can be unstable. And then from there we want to understand that by a stable system we mean it's predictable. We can within reason predict about how that system is going to perform over time. In an unstable system, we don't have that power of prediction. Unstable systems are unpredictable. The other thing to know is that if the system is producing predictable results, it's performing as consistently as it's capable. And so this third grade ELA or reading state testing system, it's a stable, predictable system. So there's no patterns in this data to suggest otherwise. 0:21:20.0 Andrew Stotz: Yeah. And I feel like, congratulations, you have a stable system. 0:21:25.9 John Dues: I mean, there is something to take from that. And it is that if you do have a stable system, it does tell you that what you do need to do is improve the system as a whole. There's no special thing to go look at. It's just that random variation that you were just talking about. 0:21:44.7 Andrew Stotz: And in this case, if we could just imagine on this chart that we take all of these lines and we shift them up without changing any data or anything except that the underlying data just is moved up so that the upper limit is 95 and the lower limit is 65 or whatever that would be, you would still have a stable system. 0:22:11.4 John Dues: Still have a stable system. Yep. 0:22:13.1 Andrew Stotz: But it would be operating at a different level. 0:22:16.6 John Dues: Yeah, you might not be as worried about it if it was performing at a much higher level. You might not have the same concern...
/episode/index/show/deminginstitute/id/38980100
info_outline
Dr. Deming's Advice to Educators: Crazy Simple Education (Part 1)
10/13/2025
Dr. Deming's Advice to Educators: Crazy Simple Education (Part 1)
What if learning could feel like a team sport instead of a pressure test? Lyle "Lee" Jenkins, PhD., a longtime educator, shares how a chance encounter led him to a Deming conference specifically for educators in 1992, which transformed his thinking. Deming emphasized defining learning outcomes, rejecting numerical goals, and avoiding ranking. Lee explains how Deming methods prevent “cram and forget”, celebrate small wins, and rekindle students’ natural love of learning. (Lee shared a powerpoint during the episode, which .) TRANSCRIPT 0:00:02.3 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm talking with Lee Jenkins, who is a career educator in public school, ending his career as a school district superintendent. It was as a superintendent that he was introduced to the teachings of Dr. Deming, and he has been applying it to his life and work since then. In his business, Crazy Simple Education, he publishes books and schedules speaking engagements. Lee, how you doing? 0:00:38.4 Lee Jenkins: I am doing just great, Andrew. Yeah, this has been fun to put together. And just to highlight, I haven't done this before, just to highlight just simply what Deming taught. We've obviously, over the years added other things, but today we're just talking about what did he teach, just the pure form of it and our implementation of that. 0:01:01.6 Andrew Stotz: Yeah. And I think you and I have already met once and gone through this. It's pretty interesting, you know, I think what I enjoyed about our discussion, truthfully, what I liked, was your energy and the energy about the teachings of Deming and how we can apply that. And so I'm looking forward to seeing you bring that to the audience. Now, for those that are listening, we're going to have... Lee's got a PowerPoint and a presentation he's going to share, but we'll walk you through it. It's not like it's full of very complicated things. So, Lee, why don't you take us through a little bit about what you've prepared here? 0:01:38.3 Lee Jenkins: Okay, I can do that, Andrew. I was like anybody else as a school superintendent. I went to a meeting of the Association of School Administrators. I can't even tell you what city or state it was in, but I was there. And while I was in the hallway between sessions, Lew Rhodes, who worked for AASA, he came up and he said, "Lee, I think you'll enjoy this next session." And that's why I've called this, One-Minute Invite That Changed My Life. So I went in and no idea, I just liked Lew. I trusted him. And it was David Langford's an administrator. And that's how I was introduced to Deming and spent a lot of time after that, reading everything I could get my hands on and absorbed it. And I knew that he was correct in how organizations are operating. And so that intrigued me a great deal. But it was the same information that he shared with all organizations. I just took them and applied them to education. But then two years later, in 1992, American Association of School Administrators, under... With Lew Rhodes' leadership, sponsored a Deming conference. So I went to Washington, DC in January that year to hear him speak. 0:03:20.2 Lee Jenkins: We were there four days. He was assisted and was a part of it for two days. And for two days it was him on stage, the red beads, you know, all the things that listeners know about with Dr. Deming. And I would say that the first part of it was the things you would normally expect to hear. Now, understand, the audience here was educators. And I know there were educators sprinkled in his audiences in his whole speaking career. I know that. I wasn't one of them, but I know that. This was one that was specifically for educators. And nobody's told me any other time when he spoke to educators as the audience. So, but just things he'd say that we've all heard. 0:04:13.7 Lee Jenkins: Best efforts are not enough, you have to have knowledge, you have to have theory. He said too, you can't delegate quality. And I had school superintendents doing that all the time. You ask them about, anything about teaching or learning, they say, oh, no, I'm not involved in teaching and learning. I have an assistant superintendent for instruction. In other words, they've delegated quality. Deming talked about wasting time and wasting money in all organizations, and certainly schools are good at that. I'm going to talk at the end of this, how I took it onto one other point which is similar to what he's talked about also. The losses of the current system. He said in one place that, for 50 years... Now, he said this in the '90s, but for 50 years, America has been asking for better education without a definition of what better education is. And... 0:05:10.5 Andrew Stotz: That reminds me of talking to Bill Scherkenbach, who showed a picture of him, Dr. Deming, in the old days at an event of national teachers, and he said they really couldn't come up with a conclusion about what was the aim. [laughter] 0:05:25.9 Lee Jenkins: Yes, right. It's... Yeah, okay. And then he described fear, brings about wrong figures. So what did our government do? No Child Left Behind, which says, you increase your reading scores or your math scores or we're going to fire you. Well, then you get wrong numbers. That's what he predicted, that numerical goals are a failure. I had a discussion with a pastor several years ago and he said, "Our goal is to have 2,000 people in attendance on Easter Sunday." I said, "Okay, what's the best we've had so far?" "It was around 1800." "Okay, what happens if we have 1900 on Easter Sunday, the best ever? What do we do?" Well, it kind of caused him to think, which is my purpose. It wasn't to be critical, it was to get him to think. You could do your best ever but call yourself a failure because you didn't meet this artificial number. And I can hear Deming talking about just pulling the number out of the air. And that ranking is a failure. We rank and rank and rank in schools. I've got a granddaughter in first grade. School has just started. She's student of the month in her class, which means there's 19 failures of the month. I mean, Deming, it's just sad to see that it's still going on. But then Dr. Deming, I don't think it was in... It wasn't in his PowerPoint. Not even a PowerPoint. We had transparencies. 0:07:12.0 Andrew Stotz: Acetates. 0:07:12.6 Lee Jenkins: It wasn't in his transparencies. It wasn't in the handouts. But it's like he went on this little tangent and that's what has captivated my career, his tangent. And it was Dr. Deming, the statistician, talking about the classroom. So I'm going to go through what he said, just as he said, point by point. He said, number one, tell the students what they will learn this year. Now, when I share this with people, they say, oh, yeah, our college professors had syllabuses. I said, no, no, a syllabus is what the professor is going to teach. Dr. Deming talked about, what are they going to learn? They're two different things. What are you going to learn? And you give it to them. And we've done this pre-K, kindergarten all the way to grade 12 and a little bit of work at universities. 0:08:14.6 Andrew Stotz: And how detailed do you go on that? I see you're showing concept one to concept 19. Is it, you know, this is everything you're going to learn, or this is generally what you're going to learn? 0:08:26.5 Lee Jenkins: Well, this is a partial list. So it's the essential. 0:08:31.6 Andrew Stotz: Yep. 0:08:32.6 Lee Jenkins: I tell people, put down what's essential. Do not put trivia on the list. Now, of course you teach trivia. It's interesting, it's fun, but they're not accountable for it. And so it's what students have been asking for for years. What am I supposed to learn this year? I don't know how to study for the exam. I don't know what's important. I was at a... Doing a seminar for teachers in Missouri. And I said, "I wasn't a good test taker in college. Were some of you?" And a lady raised her hand and said, "Oh yeah, I was really good at it." I said, "How did it work?" She said, "Well, I was in a study committee and by design, half of our time was sharing our insights as we psyched out the professor. And then once we agreed on what was important and the personality of that professor, then we studied that." That's nonsense. Here's Dr. Deming saying, just tell them what you want them to learn, it's so simple. 0:09:47.0 Andrew Stotz: In the world of teaching, we often talk about learning outcome statements at the beginning of a lecture. 0:09:55.6 Lee Jenkins: Yeah. 0:09:56.5 Andrew Stotz: And I know, for instance, with CFA for Chartered Financial Analysts, they have very clear learning outcome statements and then they have a whole section that they teach and it's self study. And then you take an exam. Is that... Is learning outcome statement the same thing or is this something different? 0:10:13.0 Lee Jenkins: I would say it's the same. It's very, very close. It's same in general terms. Exactly. We're not talking about how it's going to be taught, only that it's going to be learned. Okay, the next thing Dr. Deming said to do... And by the way, before we leave, make sure this is a partial list. If I put the whole year's list on there, it's so small nobody could read it on the screen. Okay, next he said, give the students an exam every week on a random sample from the whole course. Said if, for example, you had a 100 concepts on your list, they would take a quiz on 10 of them each week, randomly selected. 0:11:02.6 Andrew Stotz: This is so mind blowing. Go ahead, keep going. 0:11:07.7 Lee Jenkins: Yes, because... So what do we do now in schools? We do cram, get a grade, forget. That's the most common thing in American education. Cram, get a grade, forget. Have a friend in college. He said, "Lee, I've looked at your website. I have a little bit of an idea of what you do. You don't know this about me, but I never studied the night before an exam in college, ever." "Oh, really? What'd you do, Larry?" He said, "Well, I set the alarm for 4 o'clock in the morning. I studied the morning before the exam." I said, "Why is that?" "I couldn't remember it overnight. So I did well in college. I got the grades on the exam and by noon it was gone. But I got through. That was my system." I was at my annual dermatology exam and the medical doctor said, "What do you do?" 0:12:20.7 Lee Jenkins: I said, "Well, actually I get on airplanes and I give speeches." "Ah, who do you give them to?" "Well, teachers and administrators." "But what do you tell them?" "I tell them how to set up a system where it's impossible to cram and forget, you just have to learn." She said, "Oh, that's interesting. That's what I did all the way through medical school." And I'm thinking, here I am with somebody who crammed and forgot all the way through. So I checked with an MD on my next plane flight who I happened to be sitting next to one. I told him the story. He said, "Yeah, that's how it works." I said, "Well, when do you learn?" "Residency." So Dr. Deming didn't talk about cram, forget. But the side effect was, when the students don't know what's coming on the Friday exam, they'll say to me, I just have to learn. There's no other choice. You just have to learn. 0:13:25.8 Andrew Stotz: Right. And then you talk about the... You're talking about the random sample size is roughly the square root of total concept list. I'm thinking about a 15 hour course that I teach and there's 25 concepts that I'm teaching. So a random sample would be 5 of those 25, give them that test. And then the idea here is that we're testing their understanding of that material. And in the beginning, let's just say that random, in the beginning, I haven't taught anything. So they have five questions and on average, let's say they get one right in the beginning because... 0:14:05.2 Lee Jenkins: You'd be lucky if you got an average of one. Yes. 0:14:07.8 Andrew Stotz: So we have evidence that they don't know the topic. 0:14:10.9 Lee Jenkins: Right. 0:14:11.6 Andrew Stotz: And then as we... Let's say we have five weeks and each week we go through, then in theory, if we've taught right and they've learned right, that they would be able to answer all five of those randomly selected questions on the fifth week? 0:14:29.3 Lee Jenkins: That's what you're after. You want them to not have to study, but whatever five is pulled out, they would get it. And if you're teaching a five week course, you might give 10 quizzes during the time, one at the beginning and one at the end of each class. So that because the random, you want them to have questions come up more than once, you want them to have the same question come up. Because that's part of the joy. Oh, we've had that, it's been taught or I've seen that before and it's not 25 questions, it's 25 concepts. Because you can ask it a multitude of different ways to see if they have the concept. 0:15:09.3 Andrew Stotz: And for teachers nowadays, or administrators, they're going to say, what's the point of giving quizzes for topics you haven't taught? 0:15:22.7 Lee Jenkins: That is the most common thing I've been told. Okay. And teachers who have done this for a number of years, sometimes 10, they will say that is the most powerful part of the whole process. Think of it as the synonym for what Dr. Deming taught as review preview. People are used to previews of movies and TV shows and all kinds of previews. And that's what it is. It's a preview. It's not graded. You know, the quizzes aren't graded. That is not fair. 0:16:00.9 Andrew Stotz: You mean they just don't count... They don't count as a grade for the students? 0:16:05.4 Lee Jenkins: Don't count as a... They're scored. 0:16:07.0 Andrew Stotz: Yeah. 0:16:07.3 Lee Jenkins: They're scored... 0:16:08.6 Andrew Stotz: They're scored. 0:16:08.7 Lee Jenkins: But they're not ABCDF on it. Yeah. 0:16:10.3 Andrew Stotz: Yep. 0:16:11.1 Lee Jenkins: It's just a number, correct. Yes. And so like a geography teacher, excuse me, science teacher, said, "You can't believe what happened to me last Friday. I said to the students, on Monday, we're going to start a unit on rocks. And these are middle school students. And they all applauded." He said, "I've never had students applaud about rocks before." Why? Because it keeps coming up on the quizzes and they want to know. It does that. And then when the students get things right that the teacher hasn't taught yet, then they get, oh, they're really happy. I outfoxed the teacher. I know that. 0:16:57.8 Andrew Stotz: Yeah. You can also imagine it would be interesting if you gave a test and the score was, you know, a four on average out of five, let's say, right at the beginning of the class, you think, wait a minute, they already know this stuff. How did they learn that? Where did they learn that? What am I doing in this class? 0:17:15.1 Lee Jenkins: And see, and one of the things we have to get our heads around is, it doesn't matter how they learn it. The question is, did they learn it? I mean, with AI out, okay, they can... They could do AI... They could find out on their own. They can ask their parents. I mean, there's books, there's the Internet. It doesn't matter. Did they learn it? 0:17:40.4 Andrew Stotz: Yep. Okay, this is great. [overlapping conversation] 0:17:42.5 Lee Jenkins: So then Dr. Deming said, if you've got 100 concepts, then you'd have 10... It's what he said. You'd be 10 questions a week. So that was in January and in November, I wrote him a letter and we had teachers in the school district already doing this. "Thank you for your kind letter and for the 100 sided die." I had just seen that and they're on Amazon. You can buy a die that's 100 sides. It's like the size of a golf ball. He said "it's exciting. Thank you also for the charts, which I've looked at with interest. I wish for you all good things and remain with blessed greetings. Sincerely yours, W. Edwards Deming." 0:18:29.3 Andrew Stotz: That's cool. And that 100 sided die, that was just saying, if you had 100 concepts, just roll the die and pick whatever ones that land... The 10 that lands on it. 0:18:43.1 Lee Jenkins: Right. Now, I've discouraged over times people landing on 100 because you want essential. So to get to 100, you either have to add trivia to get to 100 or you have to take away essential to get down to 100. So I want people to put down what is it that's essential for their kids to know and when they see them 10 years from now, they still know it. 0:19:10.0 Andrew Stotz: Yep. Okay. So, let's not... We're not going to fixate on 100 is what you're saying. 0:19:14.6 Lee Jenkins: Don't fixate on the 100. But I'm telling what Dr. Deming said as an example. Yeah. And what we did. Okay. Then he said create a scatter diagram. This is not a scatter plot, it's a scatter diagram. So if you look at the bottom left, you can see that... And let me find here, if I can just pointer options. Let's get this. Okay, if you look right here, this is Quiz 1, Quiz 2, Quiz 3. Over time... 0:19:49.4 Andrew Stotz: Okay. So the... Just for the listeners, we're seeing a document that's up here with a 14 quizzes across the bottom. Yep. And then on the Y-axis... 0:20:03.1 Lee Jenkins: And the Y-axis is from 0 to 10. 0:20:06.5 Andrew Stotz: And that's the quiz questions. 0:20:09.8 Lee Jenkins: No, it's... They were asked 10 questions. Yes. 0:20:12.0 Andrew Stotz: Okay. So in this case we can see... [overlapping conversation] 0:20:12.7 Lee Jenkins: The question number... 0:20:12.7 Andrew Stotz: And then those questions were randomly selected. And then they were put into a quiz format of 10 quizzes, quiz questions. And here we can see, for instance, question number two, four people, I'm assuming, got it right. 0:20:29.8 Lee Jenkins: On quest... This is... On quiz two... 0:20:31.0 Andrew Stotz: Quiz number one, let's say quiz number one, question number two. 0:20:35.7 Lee Jenkins: Quiz one, nobody... One person got zero right. One person got one right. Four people got two right. 0:20:41.7 Andrew Stotz: Okay. Okay. I see. 0:20:42.8 Lee Jenkins: One person got three. Okay? 0:20:44.8 Andrew Stotz: Yep. 0:20:45.8 Lee Jenkins: These are people for quiz one. 0:20:49.1 Andrew Stotz: Okay. 0:20:50.3 Lee Jenkins: Then this is quiz two. And then this is quiz three. Generally one each week. We've landed on seven times a quarter, because think snow days come up, things happen. 0:21:09.0 Andrew Stotz: Yep. 0:21:09.5 Lee Jenkins: But so seven out of the nine weeks works. So this is the quiz for a semester. 0:21:16.8 Andrew Stotz: Okay. 0:21:17.6 Lee Jenkins: And the end, at the 14th week, a 14th quiz, I mean, you've got one, two, three, four, five, six. We've got all 10 right. You got four of them with nine, et cetera. That's your Scatter diagram. 0:21:32.2 Andrew Stotz: Okay. 0:21:33.4 Lee Jenkins: Okay. Then he said, do that. Then he said, which I've heard nobody else ever say, add up the total for the whole class. That is unbelievable. Think about it. When an athletic team wins, the players and the coaches celebrate together. In schools, when the final's over, the students celebrate and they do not invite the teacher. Here, every time they are tracking their work, this is quiz one, quiz two, quiz three, four, five, six, seven. It's an interesting one. Somebody put this chart up on a bulletin board, put push pins up and...
/episode/index/show/deminginstitute/id/38546560
info_outline
A Leadership Playbook: An Insider's View of Deming's World (Part 3)
09/22/2025
A Leadership Playbook: An Insider's View of Deming's World (Part 3)
Great leaders know there’s no one-size-fits-all formula. In this episode, Bill Scherkenbach and Andrew Stotz discuss practical lessons on how to connect with people on physical, logical, and emotional levels to truly get things done. Discover why balancing “me” and “we” is the secret to lasting results—and why empathy might be your most powerful leadership tool. Tune in now and start rewriting your own leadership playbook. (.) TRANSCRIPT 0:00:02.1 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with Bill Scherkenbach, a dedicated protégé of Dr. Deming since 1972. Bill met with Dr. Deming more than a thousand times and later led statistical methods and process improvements at Ford and GM at Deming's recommendation. He authored The Deming Route to Quality and Productivity at Deming's behest, and at 79, still champions his mentor's message, "learn, have fun, and make a difference." And the episode today is Getting Things Done. Bill, take it away. 0:00:41.5 Bill Scherkenbach: Okay, Andrew. We will get 'er done today. The reason I put that on there is that in many of his seminars, Deming said that, "I am not a businessman and not trying to be one." But you need to think about these things. And his approach really was to improving organizations was to put people who he thought were masters of his teachings into organizations, and they would be there full time to facilitate the transformation when he wasn't there, such as Ford and GM and a few other companies. There were a few of us who he trusted to be able to be there to get things done. And I'm reminded of the philosopher, the Asian, Chinese philosopher, Mencius, and I'll read it there. It says, "Don't suspect that the king lacks wisdom. Even in the cases of things that grow most easily in the world, they would never grow up if they were exposed to sunshine for one day and then to cold for 10 days. And it's seldom that I have an audience with the king. And when I leave others who exposed him to cold arrive, even if what I say to him is taking root, what good does it do?" 0:02:35.7 Bill Scherkenbach: And quite honestly, that's the lament of every consultant trying to get stuff done in today's world, in Western style management. And so one of the things in this slide, the framework for getting things done, for having fun learning and making a difference, is one of the two, I think, major contributions I do say that I've made to the profession of quality. And that is using this Venn diagram to be able to show that even though other people have used other terms for physical, logical, and emotional, that there usually have been holy wars being fought by people who say, "Well, emotional is better. That's how you get stuff done." And other people saying logic and other people saying physical. And in fact, I think in the last time we spoke, the three major gurus of quality were those ships sailing in the night. Dr. Deming was the epitome of logical thinking, whereas Phil Crosby was looking for the wine and cheese parties and the emotional sell part of it. And Joe Duran was looking at physical, how are you going to organize to get stuff done? Now, they all had their followers who were pretty much on those frequencies, and they reached people in other frequencies. I came up with this idea for the Venn diagram to show no hierarchy, I guess back in 1987, something like that. 0:04:49.3 Andrew Stotz: And for the listeners out there, we're looking at a diagram that shows one circle that says physical, that's interlocked with another one that says logical, and then there's a third, a Venn diagram, that third is emotional. And so those are the three pillars that Bill's talking about. All right, keep going, because you got stuff in the middle too, which is interesting. 0:05:16.1 Bill Scherkenbach: And the thing is that I based it primarily at the time in the mid-60s, there was a theory of brain structure called the triune brain. Now, and it was the limbic system, the neocortex, and the R-complex. And pretty much followed the logical, emotional, physical words that I'm using. Now, our understanding of the brain in the decades up through now, it's a little bit more complicated than that. But physical, logical, and emotional is in all of us. In our body, I mean, the latest looks at neural connections extend to your gut. And nerves are just about everywhere and connected, and that the way the brain works is still not even fully, not begun to be fully understood. Having said that, in order to get stuff done, this Venn diagram shows very, very simply that the intersection of physical and logical, I put as science. It's the logical explanation of physical phenomenon. And the intersection of logical and emotional is psychology, logic of the soul. And the intersection of emotional and physical is art. All art is is the emotional interpretation of sensory input, whether it's a great meal, whether it's a Mona Lisa picture. 0:07:27.9 Bill Scherkenbach: But what will make one person absolutely swoon will make another person barf. So it's all personal, but it's physical, logical, and emotional is in all of us. And in the center, we're looking at what Eastern philosophies call harmony, where all of these are working together. And Western philosophies would call them peak experiences. And it's where the whole can be a lot greater than the sum of its parts, but with some slight changes can be a whole lot less than the sum of its parts. 0:08:14.3 Andrew Stotz: Great. I like the harmony in the middle. That's the challenge, really. Now, just out of curiosity, is harmony the goal? Is that what you're thinking with that being at the center? Or what is the meaning of harmony being in the middle? 0:08:28.0 Bill Scherkenbach: Yeah. When I apply this to the individual, harmony would be the goal. When I'm applying it to an organization, the larger an organization grows, the more you really need to use this overarching approach. And the reason I say that is, and it doesn't happen all the time, but most of the time when we're starting up a company, you want to surround yourself with fine people just like yourself. And so if you have a particular way of getting stuff done, you're going to hire people or surround yourself with people that are just like that, and everything is fine. But the more you grow the company, the more you're going to get people that are absolutely vital to your organization that aren't on those frequencies. And certainly, if you're in international business, you're trying to sell things to the world that in the larger the group of people, the more you have to be broadcasting on the physical, logical, and emotional frequencies. I mean, one of the first things that I did at GM when I joined was looked at the policy letters that Alfred Sloan wrote. And Sloan, it was very interesting because in any policy, Sloan had a paragraph that said, "make no mistake about it, this is what we're going to do." 0:10:31.8 Bill Scherkenbach: That's a physical frequency. In the Navy, it's shut up and fly wing. And so make no mistake about it, this is our policy. The second paragraph had, well, this is a little bit why we're doing it. And to be able to get the, and I don't know whether he was thinking that, but to my mind, it was brilliant. He was explained things. And the third paragraph or so in the policy letter was something that would instill the GM spirit, that there's something to do with the values. Hugely, hugely prescient in my viewpoint, but he's Sloan, I'm me, so he knew what he was doing. 0:11:29.9 Andrew Stotz: For people that don't know Alfred Sloan, he took over and was running General Motors at the time when Ford had, I don't know, 50% of the market share by producing one vehicle. And part of the brilliance of Sloan was the idea of building a lineup of different brands that went from the low all the way up to the high of Cadillac. And within a short period of time, he managed to flip things and grab the majority of the market share from Ford at the time, as I recall. Now, I don't recall it from being there, but I recall from reading about it. 0:12:12.3 Bill Scherkenbach: There you go. There you go. Yeah, having saying that, he offered those by buying the various little auto companies, littler auto companies to put that conglomerate together. But as people who have read my works, specifically my second book, The Deming's Road to Continual Improvement, this change philosophy is in there. And as I said, that's one of, I think, my major contributions to the field of quality. The other one being in a process model back in '86, we also were learning about Taguchi, Genichi Taguchi's approach to customers and the loss function, and he used the title or the terminology voice of the customer. And it occurred to me in our process definition, there was something called the voice of the process to go along. And so the voice, I introduced the voice of the process, and the job of anyone is to reduce the gap between the voice of the customer and the voice of the process. And I mentioned that because this matrix that we're showing now has physical, logical, and emotional, and the various process states that you could be in, there's a dependent state where you're completely dependent upon your customers or suppliers. 0:14:00.9 Bill Scherkenbach: There's an independent state where it's just you and an interdependent state. And I have that cross-reference with physical, logical, and emotional. In dependent state, it's essentially feed me, teach me, love me, do it for me, teach me, and love me. Now, in the independent, it's, I do it, I understand what I do, and I take great joy in doing what I do. And in the interdependent is, we do it. I understand how what I do helps optimize our process, and I take great joy in belonging to this team. And joy is the ultimate goal of what Dr. Deming had said for years, the ability to take joy in one's work. Now, I mean, every one of us starts out in life as dependent. It's feed me, teach me, love me, newborns, parents have to do everything. When you're a new employee, you might have some skills and understanding and emotion or pride, but this is how we do it in this company. And so you're dependent upon how you are introduced to that organization. But everyone tries to get out of that. Now, having said that, a pathology is there are givers and takers in this world, and some of the takers would just be very happy for other people to feed me, teach me, love me. 0:16:18.8 Bill Scherkenbach: My point or my philosophy is you've got to get out of the dependency and you have to balance that sense of independence and interdependence that is in each of us. Whether you're doing it or whether you're doing it in your family, as part of a family or a company or a motorcycle gang, whatever your group is, you're looking to blend being a part of that. Every human being looks to balance that sense of me and we. And in the thing we're finding in Western cultures, obviously, especially in North America or the US, we celebrate the me. It's the individual. And the team, we talk a good game about team, but mostly we're celebrating the me. In Eastern philosophies, they're celebrating the we. It's the team. It's not necessarily the, well, not the individual. The point is that in the Western philosophies, if you can't feel a part of a family or express that part, what we see in the US, there's a whole wave of people volunteering to belonging to organizations, whether it's sports teams, whether it's volunteer teams, whether the family balance. If you can't be a part of a family at work, you're going to go offline and do it. 0:18:24.9 Bill Scherkenbach: And the problem is your life suffers because you can't fulfill yourself as a person. In the Asian cultures, if you can't feel important as an individual, you go offline. Golf is huge in Japan and elsewhere, and it ain't a team sport. Calligraphy isn't a team sport. Karaoke isn't a choir event. There are ways to be able to express yourself offline if you can't feel important as an individual in your group. And so my philosophy is every human being needs to find that balance for each individual to be able to lead a fulfilled life. 0:19:28.7 Andrew Stotz: I'm reminded of a book by Dr. William Glasser called Reality Therapy, brought out in late '60s, I believe. And his philosophy was that part of the root cause of mental illness was that people didn't have one person they could trust. And that all of a sudden sets up all kinds of defense mechanisms that if prolonged end up leading to mental illness. That was a very interesting book, but the thing I took from it is that people want to connect. They want to belong. They want to be a part of it. They may act like they don't sometimes and all that, but we want to be in this interdependent position. And I'm looking at the bottom right corner of the matrix where it says, "I take joy in belonging to a team or this team." And that to me is, you know, that book helped me understand that it's not just the idea of, "Hey, we should all get along and work together." There is true value for a human being to be able to feel good about being part of a family or part of a business or part of a team. Something that just reminded me of. 0:20:53.7 Bill Scherkenbach: Yeah. Where I'm coming from is that everyone needs to balance that pride that you take as an individual and as you take as a member of a team or a family. That the independence is not, the interdependence is not the preferred state. Everyone, even people who are celebrating team need some time out to be alone, to do whatever they need to do to hone their skills, improve their knowledge, get excited about things that they also do as individuals. So it's a balance that I'm pushing for. 0:21:51.4 Andrew Stotz: Okay, got it. 0:21:53.3 Bill Scherkenbach: Okay. So with that as a framework, I think there are a couple of mistakes, well, there are many mistakes that leaders make, but the two big ones are, is don't think that what works for you must work for everyone. Okay. And don't even think that the sequence that works for you has got to work for everyone. Change is not a predictable hierarchy. And I'll explain that further. Let's see here. Yeah, I can do it on this next one here. I've got the matrix again, and of physical, logical, emotional, and physical, logical and emotional. And if a physical person is talking to another physical person, they're communicating on a similar frequency. And so a physical person is going to say, "Okay, this is the policy." The mother will say, "Because I said so." However, that physical person is communicating, the physical person receiving that communication is going to say, "Aye, aye, roger that, consider it done." 0:23:43.6 Andrew Stotz: Loud and clear. 0:23:45.3 Bill Scherkenbach: Okay. If a physical person is telling a logical person, using those same things, these are the policy, you could be a dean at a college and you're telling your professors, "This is what we're going to do," a logical person would say, "They're ignorant suit." 0:24:11.3 Andrew Stotz: Suit, what do you mean when you say suit? You mean an ignorant executive? What does it mean suit? 0:24:16.4 Bill Scherkenbach: Yeah, executive. Over here, they're called suits. 0:24:19.5 Andrew Stotz: Okay. 0:24:22.3 Bill Scherkenbach: So, no, but I'd be interested, you're logical, what would a logical person respond to a physical person who said, "Do this"? 0:24:34.5 Andrew Stotz: Yeah, I think without any logical backing, it's rejection maybe is what I would say is that ignorant, this guy doesn't know what he's talking about, he thinks just do it. 0:24:51.0 Bill Scherkenbach: Yeah. Yep, yep, yep. Okay. So, and again, if that same physical leader is saying, "Well, get this done," to an emotional person, that person might say, "You Neanderthal, you don't, you don't feel what the value system is." Okay. So, I'm trying to come up with sayings or whatever that these particular people would be saying. So if the logical person tells the physical person, "We've got to do this," it could be, well, the physical person is going to say, "That's too academic, spray some paint on it so I can see it." So, and that's the diss. Logical person talking to another logical person, "Yep, I got it, I understand it, it'll be done." A logical person talking to the emotional person, "You're heartless," or, "Quit mansplaining," as they say over here. So, and again, an emotional person trying to talk to a physical person to get stuff done, the physical person's going to say, "There's no crying in baseball." And so, and the logical person will say, "That's too touchy feely," and the emotional person reacting to the emotional signal, "Oh, they really like me." So, I'm trying to use movie quotes there to express the feelings and the understanding and the, what to really get done. 0:27:04.4 Andrew Stotz: So, people really come from different places, and if we don't take that into consideration, we may, it's one of the things I teach, Bill, when I teach a course on presenting, and I say, "Are you more of a logical person or are you more of an emotional?" And half the audience will say logical, half the audience will say emotional, let's say. And I said, "If I look at your presentations that you create, they're going to be based around what you are, logical or emotional. The problem with that is that you're only going to connect with half the audience. So, you need to build the logical and emotional aspect into your presentation to capture the whole audience." 0:27:50.8 Bill Scherkenbach: Well, I would argue that you're missing a third of it because you didn't check for the physical folks. I mean, in the story I tell about what we were doing at Ford, our vice president of supply purchasing was listening to Dr. Deming and said, "Well, we need longer term contracts." And so he had his people talk to the buyers down through the ranks and we need longer term contracts. And at Ford, a longer term contract was a contract that was more than one year. And so, yep, there were classes. It's important to get it done. Everyone's enthused. We look at it six months later, no change. A year later, no change. And so we looked at, because some people react to physical stimuli. And so we looked at the policy. And in order to get a long term contract, then you had to go through three levels of supervisory approval. No person in their right mind is going to go through that hassle. So we changed one word in the policy and it changed overnight. So now if you need a contract that's less than a year, you need to go through three levels of supervisory approval. 0:29:48.5 Bill Scherkenbach: And the long term contracts were magically appearing. So there are physical people. That is not a pejorative. I know that the educators are saying, "Well, the logical and emotional, but physical is a very viable way of getting stuff done." That should not be a pejorative. 0:30:14.1 Andrew Stotz: So I think now when I'm looking at my teaching in presentation, when I think about physical and presentation, there's people that really like props. They like having physical things to bring up on the stage. They like people, "Hey, stand up and raise your hands," or "Turn and talk to the person next to you," or something like that. So maybe that's what I need to do is bring that physical into my thinking and teaching. 0:30:44.0 Bill Scherkenbach: Yeah, I would recommend that. Find a way. There are many dimensions of physical. But you've got my second book. There are a bunch of ideas. 0:30:58.9...
/episode/index/show/deminginstitute/id/38269620
info_outline
Making Data Work for You
09/15/2025
Making Data Work for You
What is your data trying to tell you? In this episode, John Dues talks to Andrew Stotz about why most leaders misread data, overreact to single results, and miss the real story. Discover how Deming thinking exposes when change is truly happening and how to use a process behavior chart to listen to the real story. Plus, find out why nine years of ‘stable’ results may still demand transformation. Tune in and rethink data-driven leadership! 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. The topic for today is understanding variation is the key to data analysis. John, take it away. 0:00:27.8 John Dues: Andrew, it's good to be back. Yeah. So, we've just started the school year in Ohio, so I thought doing a session on goal setting would be a good place to kick off the year. And I was thinking a lot of leaders, school leaders and leaders in general, are setting goals around this time period. And I was really thinking about having this Deming lens. I was thinking, how did I set goals before I sort of started understanding this approach? And it's, you know, this is one of those things where if you really stop and think about it, goal setting is a lot harder than it seems at first glance. Things like, how do you set a reasonable goal? And then once you've gotten to that place, how do you know if things are improving? How do you know if things are getting worse? And I was thinking how powerful this understanding variation method is for folks that may be struggling with those questions. 0:01:32.9 Andrew Stotz: Yeah. In fact, that's a great question for the listener and the viewer. Like, how do you set goals? How did you set goals in the past? How have you improved that? And I was thinking when you were speaking, I didn't set goals. I gave proclamations. You know, 20% of I want to see this and that. And they were just stretch targets without any means or methods. So yeah, interesting. 0:01:55.2 John Dues: Yeah. How do you set the target? Was it arbitrary? Is it based on some standard that you heard somewhere? A lot of times you have no idea sort of what's behind that target or you've sort of associated it to something that's familiar. Like in my case, we often sort of set goals that sort of mimic the grade scale. So, you know, 80% is a common goal for something like test scores, you know. 0:02:23.7 Andrew Stotz: But they don't even call them goals anymore. They call them, let me remember, I think it's called KPIs. 0:02:30.0 John Dues: KPIs, targets, you know, lots of different things for sure. And I think what I've seen is that a lot of the reason that goal setting is so hard is because you, well, one, you misinterpret your data in the first place. And a lot of that misinterpretation, at least in the education sector, is because leaders don't have the knowledge. They don't know about natural variation. They're typically making comparisons between some current performance level, some previous value. But those two things, those two data points don't show you, don't convey the behavior of that data across time. So, what we do and what I did before I sort of discovered this method is you overreact to a single data point. Probably less frequently, you underreact to the data because you don't have this understanding of, you know, how much is the data moving up and down sort of naturally almost no matter what you're doing. Now, that's not always the case, but that's the case that I've found in a lot of situations. And so until you start to take that into account, those natural ups and downs, then you just misinterpret the data over and over again, usually by overreacting is what I've seen. 0:03:54.9 Andrew Stotz: Yeah. 0:03:56.0 John Dues: So there's, you know, I think as a starting point, people in the Deming community will be familiar with, a lot of people. But others listening to this probably have never heard of this idea of dividing variation into, I've heard it described as like two flavors. There's the routine variation, what I call natural variation, things vary naturally no matter what you're doing. And then there's exceptional variation where things are so different that there is reason to pay attention to this. And what I found through studying this is, the key is knowing how to tell the difference between those two types of variation. And don't do that, lots of confusion, lots of wasted effort. And so that's really where the power of this methodology comes into play. And for anybody that's studied this, you sort of realize that you have to have a tool to make that differentiation. It's not arbitrary. And so that's where what I call the process behavior chart, some people call the control chart, where that comes into play because that tool allows us to tell what type of variation is present. And it also allows us to tell if the system is predictable or unpredictable. And once we have that understanding, then we can chart an improvement sort of roadmap that makes sense. 0:05:21.8 Andrew Stotz: Yeah. In fact, I've applied two of the things, you know, one of the things to my pass rates and admission rates, I applied the process chart, the control chart, based upon your recommendation a long time ago. And it did help me to kind of think if, you know, in my case, I wanted to break out of that standard outcome that I was getting. And so I realized, something has to change substantially in the system in order to get a different result than this variation that I was getting. That was the first thing. And then the second one, a couple of nights ago, I was giving a lecture and I was using your work that you and I have talked about, as well as Mike Rother's stuff on goal setting and having the target. And then there's that obstacle. And what I realized when I gave a little talk on it and I used the diagram and I showed the obstacle, it became kind of apparent to everybody like, oh, yeah, there's an obstacle there that we don't know how to solve. 0:06:27.6 John Dues: Yeah. 0:06:28.3 Andrew Stotz: And that's where PDSA came in. And we started talking about that, as you have taught previously. So, yeah, I'm excited to hear what you have to say today. 0:06:38.2 John Dues: Yeah. And the Mike Rother model, I mean, he does have this target that's this long term target that's pretty hard to hit. And you don't really know what you're going to do. But the difference there then in the situation I'm describing is that that in Mike's model, that target is knowingly outside of the current sort of capability of the system. And they're coming together as a team and saying, how do we get to that target six months from now or a year from now? And we're working towards that rather than someone has just arbitrarily set some target, without a realization that the system isn't capable of hitting that currently. Those are two completely different scenarios. Yeah. So, I think I'll share my screen. Well, actually, before I do that, I would just say, too, because I know sometimes when I introduce these things, a lot of times people get scared away because they think the math is hard. And what I would say there is that there's the creation of a process behavior chart probably takes about fourth grade level math skills. You really only need to do addition, subtraction, multiplication, and division. 0:07:49.3 John Dues: That's it. But the thinking, I think, actually can be taught all the way down to the kindergarten level. And I've actually seen kindergartners explain the data on a process behavior chart. So, if anybody gets scared away at this part, the math is simple and the thinking is also pretty simple and powerful once you sort of have the basics. So, I'll go ahead and share my screen so the folks that are watching have a visual to follow along on. And for those that don't, I'll do my best to describe it. When we're talking about a process behavior chart, and this one's sort of an annotated version so that things are clear. But basically a process behavior chart is just a time sequence chart. It has upper and lower natural process limits, and we plot data for some measure that we're interested in. And the chart typically has a central line so that we can detect a trend of those plotted values toward perhaps either limit. So, this particular chart, the data is the percent of students who scored proficient or higher on the Ohio third grade reading state tests from spring 2004 through 2015. 0:09:06.8 John Dues: So, I've labeled sort of some of those key parts of the chart. So, just kind of call those out. Again, the red lines are the lower and upper natural process limits, sort of bound where you'd expect the data to be in a stable system. 0:09:21.1 Andrew Stotz: And those are 1, 2, 3 standard deviations or what? 0:09:28.1 John Dues: Well, this particular chart, it's what I call a process behavior chart. So it's actually, it's not standard deviation. It's based on a measure of dispersion called the moving range. And then there's a formula that smarter people than me figured out sort of how to use that moving range to set the red lines. But the important thing to know about the limits is that they're set empirically. And that just means that they're based on the data. And so they are where they are, not where I want them to be necessarily. I don't get to choose where they are, how wide they are, where they're placed numerically is based on the data itself. And then that green center line for this particular chart is the average of all the blue dots. And then the blue dots is each year of, again, testing data. 0:10:19.4 Andrew Stotz: 2004 to 2015 as the x-axis, yep. 0:10:27.0 John Dues: Yeah. So, you have a decade and a half or so, or sorry, a decade plus of data here. So, a good amount of data. So, you can kind of see how things are performing over time on this third grade reading test. And so the purpose of the chart, like we talked about, is to separate those two flavors of variation, the routine and the exceptional. And this chart is a really great example of just natural or routine variation. So, I'm looking for patterns in the data, like a single data point that would be outside the end of those red process limits. And you don't see that. The results for these years instead are just bouncing around an average of about 78.5%. Now there's some years where it's a little higher than that and some years where it's a little lower. But the point is none of those increases and decreases are meaningful. There's only that natural variation present. But the problem is, in the typical data analysis method, what I call the old way, the simple sort of limited comparison, is that a leader will rely on comparisons between the current figure and some previous value. 0:11:48.9 John Dues: And probably the most common and why I chose this data, at least in my world, is a leader will compare last year's test scores and this year's test scores. That's very, very common. But the problem is, again, that what I'm calling a limited comparison, the comparison between two years of data, it doesn't take natural variation into account. So, what happens is we try to ascribe meaning to those increases or decreases between data points when in reality there's often no difference to be found. And I have a really great example of this. Let me switch my screen here. So, there's a lot of information here, but it's pretty simple to understand. So, this is a snapshot from 2017/2018 state test results. And so this is a document that was published by our Department of Education here in Ohio back during those school years. And the thing is, it may be eight or so years old, but it's as relevant today as when it was published eight years ago. We're still making the same sort of mistakes. So, we're basically, when we look at the data in this chart, we're basically being led to believe that there's been this meaningful decline in performance in third grade ELA. 0:13:16.4 John Dues: That's what's signified by that red arrow in the first row of the table. So, you have the ELA data says that in '16/'17, 63.8% of our third graders were proficient. And in the following year, 61.2% were proficient. And there's this red down arrow to say, oh, things got worse this school year, at least when it was published. But then if you look at the blue box, the text for those that have video, in the text it says we're not supposed to worry because, "third grade saw decreases this year, but has maintained higher proficiency than two years ago." So. Then you start to think, well, which is it? Should I be worried about my third grade ELA state test scores because of the most recent decrease, you know, as of when this was published? Or should I not worry because the scores are better than they were two years prior to that? 0:14:21.7 Andrew Stotz: And that depends what side of the argument you're on. 0:14:24.4 John Dues: Depends what side of the argument you're on. What story do you want to tell with this data, right? 0:14:30.3 Andrew Stotz: So, it's bad enough to be potentially misled by this probably common variation, but then to have both sides of an argument be misled at the same time. 0:14:41.0 John Dues: Right, yeah. Ultimately it seems like what they're trying to do is show improvement because you have this big headline up here that says, Ohio students continue to show improved achievement in academic content area. 0:14:55.2 Andrew Stotz: Yay! 0:14:58.5 John Dues: But there's a way to actually answer these questions definitively using this method, right? And so what I did was I took the data from the three years of the state testing for third grade ELA from this state education department publication, and I just plotted it on a process behavior chart. And then I continued plotting it for the more recent data that's happened since this, because three data points isn't a lot, so I kept plotting it. And so now we have, going all the way back to the first year of data in this state testing document, we have 2015/2016 data, and of course now we have data all the way up through the end of the last school year, 2024/2025. So, we have nine data points. So I plotted it, right? It looks like this. So, here's those same data as the first three data points, spring 2016, spring 2017, spring 2018. 0:15:58.3 John Dues: That's from the table from the previous slide. And then I've continued plotting things for, you know, spring of 2018, '19, '21, '22, '23, '24, and '25. So, now we have nine years of data. And what we can see is, just like what I would have predicted, even if I had only had those three years to work with that were from the state testing document and not the more recent data, but there's no evidence of improvement. It's definitive. And so you see these nine data points. They're just simply bouncing around this average of 61%. That's what the green line shows. It's almost perfectly balanced, in fact. So, three of the points are actually below the average. One point is almost right on the line, the average line. And then there's five points above. And if you follow it from point to point, it increases, then decreases, then increases, then decreases, then increases very slightly for a couple or three or four years in a row. Right? But there's no signals or patterns in this data to indicate any changes of significance. Right? So claims like, you know, yeah, we've declined in this most recent year from that testing document or, oh, we shouldn't worry too much because it's better than two years ago. All of that is nonsense. 0:17:24.6 Andrew Stotz: So, the title should have been nine years of no improvement. 0:17:29.7 John Dues: Nine years of no improvement. Nine years of stable data. And the thing is, a lot of data looks just like the state testing data over time. Not only in education, but in other things. And how I've heard this described by people that use this methodology is that, claims of improvement are often nothing more than writing fiction. And I think that's a very good description for what we see here. And the thing is, is like, I'm not trying to throw the person that wrote that document under the bus. All I'm saying is that there's a better way to be looking at data like this, a way that makes more sense. 0:18:24.9 Andrew Stotz: It made me think of the Mark Twain quote, rumors of my demise are greatly exaggerated. 0:18:39.9 John Dues: Give me one second here. My screen switched on me. There we go. Okay. So, when I think about this data, there's no real decline in performance, there's no real increase in performance. It's just stable performance. I think the key for leaders, systems leaders especially, is that this system, the way we would describe it is it's producing predictable results, and it's performing as consistently as it is capable. And so it's a waste of time to explain the natural variation in a stable system. Because what people would say is that there's no simple single root cause for this noise. 0:19:24.5 Andrew Stotz: And I think it's even better way of saying it. It's not a waste of time, it's a waste of your career. 0:19:32.6 John Dues: That'd be a very apt way of describing this. 0:19:36.0 Andrew Stotz: It kind of goes back to the point that Dr. Deming said, which was that, a manager could spend his life putting out fires and never improve the system. And every little thing above and below was a little, little mini emergency or a response was made every year because of the under or over, you'd just spend, you know, it would just be whack-a-mole. 0:20:01.9 John Dues: Yeah. But I think the thing for people to understand is I'm saying this system is performing as capable as it is, or as the performances is what this particular system is capable of. But that doesn't mean just because it's stable and predictable, like this one is, you know, it's up above 61% one year, and then it's down below it a little bit or right on the line. That doesn't mean that stable means acceptable. It doesn't mean stable is satisfactory. 0:20:37.1 Andrew Stotz: I'm thinking that this is neutral, you know, it's an observation rather than a judgment. 0:20:42.5 John Dues: Yeah. It's just what is. It's the process is producing what you would expect it to produce because it's stable and predictable. 0:20:49.8 Andrew Stotz: I want to just mention that my mind's wandering because I know that you help people with these types of charts. And when I was working with a hospital here in Thailand, they had a great room that they set up that was all blacked out and it was full of these great computer screens and guys in their technicians, like 10 of them in this room. But the room was dead silent, blacked out 100%. And they were radiologists and all the x-rays, MRIs, and everything that were being done on the machines outside were coming into them and then they were making their judgments on it. And then they would submit that and then the doctors would very quickly get a read on that. And I was just thinking, imagine being a person that just all day long looking at these types of charts. Like just any system can be described by the... And then what's your judgment on this? Yep, common cause. That's it. 0:21:50.9 John Dues: Yeah. And I think it obviously doesn't mean that there isn't work to be done. Like in this case, even though it's stable and predictable, so if I was putting a bet down on what the results are for spring 2026, at the end of this school year, I'd put...
/episode/index/show/deminginstitute/id/38108685