Patrick Adams  00:00

Hello and welcome to this episode of the lean solutions podcast led by your hosts, Catherine McDonald from Ireland and myself. Patrick Adams, Catherine, how are you doing?

 

Catherine McDonald  00:42

I’m Great, Patrick, thanks for asking. How are you

 

Patrick Adams  00:44

I’m doing amazing. Excited for here in Michigan, at least the things are really hot right now, but we’re like on the end of summer, and then comes the fall, which is just a great time for weather. Here in Michigan, it’s beautiful. The leaves turn. The weather is great. So I’m like, like, excited about what’s to come in the fall here in Michigan. So

 

Catherine McDonald  01:10

I’m just happy kids are back in school. Yes, absolutely. Kids are back. Yeah,

 

Patrick Adams  01:15

yeah. Well, my wife works in the schools too, so we, you know, we get the there’s, it’s really popular here in the US, at least, to, I don’t know if you guys do the same thing, but we hold signs that say, like, first day of 10th grade, or whatever it is. And so I try to get a picture of my wife, you know, like first day of 10th year of education, or what she you wouldn’t go for it, though, but she’s excited to be back to school. And we have, our youngest daughter, is 16. She’s back in school too. So, yeah, it’s, it’s nice get that structure back in Nice. Well, today, Catherine, we have, we have a an exciting topic with a great guest, and we’re going to be exploring the intersection of Lean practices and Demings principles. So we’ll, we’ll delve into the essential lessons that lean practitioners can glean from Demings insights, the critical distinction between effectiveness and efficiency and the pivotal role that methods play over tools. So this is going to be a great conversation with our guest, Dennis Sargent. So why don’t you tell us just a little bit about Dennis, and then we’ll welcome him to

 

Catherine McDonald  02:30

the show. Yes, absolutely. So Dennis is a principal at Sargent results group. He’s a management coach, he’s a consultant, and he’s a facilitator of scientific improvements grounded endemic system of profound knowledge, which I’m sure he’s going to tell us all about with experience at at&t, where he was introduced to Dr Demings ideas. Dennis specializes in quality, productivity and transformation across various different sectors. He has published research, delivered numerous keynotes and lectured at several universities in collaboration with the W Edwards Deming Institute, and he has held leadership roles in several organizations. So he knows his stuff, and in the background, he enjoys music, hunting, fishing and time with his family. So Dennis, very warm. Welcome to the show. I’m looking forward to everything you’re going to talk to us about. Maybe we could just start with Dr Deming himself. So for listeners who are unfamiliar with Dr Deming, can you tell us a little bit about who he was and why he was and is still so influential.

 

Dennis Sergent  03:39

Well, Dr Deming was a person of humble origins. He grew up in the northern prairies, lived in a sod house at one point of his lifetime, and he was lucky enough to have parents that guided his education towards Yale. And at some point, he not only got degrees in mathematics, but he proceeded to go get a PhD in statistical math and physics and Dr Deming, shall we say, joined the workforce at a really interesting time, as he was pursuing his PhD, he studied under Walter shoehart for a period of time, who was working at Bell Laboratories. Walter shoehart Not only was the inventor of the control chart, but he was also a proponent of what became known as the shoe heart cycle. Dr Deming later taught that to the Japanese industries after World War Two, and ultimately they called it PDCA, and they used it somewhat like he intended. It, but he insisted that at some point he needed to change the name of it to plan do study act instead of check act. Cultural differences being part of it. So Demings considered to be the creator of Plan Do Study Act, as well as a proponent of these methods that he learned from Shewhart and from his studies with other statisticians and scientists, he had the opportunity to work after he graduated with his PhD in the Department of Agriculture the Census Bureau, and during World War Two, he was one of the folks who helped the War Production Board convert civilian industries to military production. This method that he taught with respect to control charts and the plan do study act cycle, which he hadn’t called it that yet, but it was the shoehard cycle. Then was instrumental in raising his name to the supreme commander, who replaced the Emperor of Japan after the war, the Japanese country, the economy, everything was in shambles when Deming went to help them, first do a census and then to teach these statistical methods to the Japanese, because they couldn’t feed themselves. Okay? They didn’t know how many people they had. They didn’t know how to take a census. They didn’t know how to get communications because they didn’t have radios or a telephone network that was working, the Allies, did a tremendous job of destroying everything that would help them with a modern economy. Dr Deming arrived and taught a few people who were part of the Japanese union of scientists and engineers, and he said, if you would really like to recover faster, here’s the methods that will help you. It’s the methods that I taught the Allies during World War Two. Long story short, he said, I’ll teach you these methods if you get your top executives to show up. And reportedly, by several sources, 80% of the top industrialists in Japan showed up. What he taught them changed the way they thought about their corner of the world. He taught them not only about systems and statistics, but they taught him about the respect for people, that was a huge part of what makes lean work. It’s one of the two foundations that Toyota leans on, and continual improvement, which Deming was always about at that point. So they found a lot of success together, the Japanese industrialists, the Jap he loved, the Japanese people. And one of the things that was part of respect for people is he wanted to absorb their culture. You should think about this tall American guy from the prairie, educated, knowledgeable, going to another country and absorbing everything that he could. And he also had a habit of buying things at the PX, because the Japanese were not well fed. Even five years after the war, they were still suffering from hunger, not enough food, and so he arranged for meetings where he could give away some of the food that he got at the PX, and they came to really respect him as he respected them. And so the transformation that he said, if you use these methods, you’ll transform your economy in five years. And they did it within four years. That transformation has continued, like many Western companies, they practice some of the Japanese companies practice Western methods, and they have the same kind of problems we have in America. But Dr Deming was neglected in his own country until 1980 which was the first time I found out about it. NBC had a special the automotive industry was complaining about Japanese taking away their business, selling more cars in the United States than the American companies, the big four at that time, the NBC special told this story about there was an American who taught the Japanese how to do this, and in the last 15 or 20 minutes, it was all Dr Deming talking. He was the Japanese or the American that taught the Japanese what they were beating us at in auto manufacturing. So that’s essentially his story. Great. Wow.

 

Patrick Adams  10:02

That’s That’s amazing. What a what a great legacy that he’s left for all of us to be able to learn from and think about the hundreds of 1000s of people that he, you know, impacted in a positive way, both in Japan and, you know, other places in the world. You know, the three of us, other lean practitioners, you know, from all different industries around the world. It’s, it’s pretty amazing. Dennis, before I ask my question, I have to ask you, I know there’s people that are listening, that are not watching the video, but your background, I talked about Michigan being an amazing place to be in the fall, the state of Michigan. And I know you are in Michigan. Can you those that are watching the video? Can you tell us about your background?

 

10:49

Sure. Well, it’s a picture that the Michigan Department of Natural Resources shares on their website. You can go get this exact same picture and a variety of others, but this is the Pigeon River State Forest, and part of the pigeon rivers behind me. I happen to be in a hotel because we had a power outage and checked out of our house and into a hotel. So I thought rather than looking at my hotel room, you’d probably be better off looking at something pretty. So I

 

Patrick Adams  11:18

love it. Yeah, I wondered. I didn’t know if you were on a kayak or

 

11:24

no, I’d be pretty wet because I don’t have good balance.

 

Patrick Adams  11:31

So my question, Dennis, is specific to what you just talked about, but kind of tying in with some of our listeners. Many of our listeners are lean practitioners, whether they are, you know, supervisors, managers, team leaders, or even, you know, lean CI managers or CI leaders in an organization. They’re, they’re wondering, probably, or maybe they, they know Deming, but they’re, or they’re wondering, how does, how do the teachings from Doctor Deming affect us as lean practitioners? What can we learn from the principles that Deming put out there, from the work that he did in Japan? How does it affect us, and what can we what can we glean from that in order to become better at the the role that we have within our organization?

 

Dennis Sergent  12:21

That’s a great question, Patrick, let me share that there’s four aspects of Demings work that really are what I consider to be the thing that’s a big difference for everybody that wants to amplify their success at whatever they do. And Dr Deming described many methods to think about principles, to think about implementing in organizations. You and some of the other lean practitioners might have heard of Demings 14 points for management. The 14 points are a good start. But what he recognized after he published that in his works, in like 1986 is that the 14 points was not a checklist. It was basically you have to do all of this if you really want to transform your organization. And so he began to build what he called the system of profound knowledge that encompassed those 14 points. And the system of profound knowledge has this huge advantage for Lean practitioners, for managers and executives at any level, and that is that it helps you see things much differently than you would otherwise. The four parts of the system of profound knowledge are interlocking areas of knowledge, first of all, knowledge itself. How do we know anything? We have perceptions. We have suspicions or superstitions or myths that we pull out of our back pocket. We have this idea that something is true, and the only way that we really know in a pragmatic sense, is to be able to test it. That means to test it, measure it, and see what is it that we’ve done has a cause and effect relationship. This definition of knowledge is one of the four areas, and it intersects with systems. If we think about the world that we live in, we live in a world of systems. We’re in a solar system. We’re part of a universe. We’re part of a corner of the universe. We’re part of a planet. And whether you think about the rock in your yard, the large building that you’re next to, it’s a system, and it’s part of an overarching system. And when we understand our systems are not just parts, not just divisions, an interesting name. Uh, to come from a Deming person, but whatever the sub part of the organization is is not operating in isolation. It’s interacting with all the other parts in the system. And one of the things that helps to distinguish systems thinking is this notion about the system isn’t the same without it, and it doesn’t exist without the system interactions. For example, a motor in a car isn’t going anywhere unless it’s connected to the rest of the car. It’s a human made system with respect to the natural system. Let’s say it’s Dennis, and Catherine’s a really good surgeon, and she can cut the top of my skull open and take my brain out and set it on the table. The brain will soon cease to exist as well. Dennis the system is dependent upon all the components interacting, so that’s the second component of the system of profound knowledge. The third is an understanding of variation. If we understand the variation that goes on in our system, whatever the processes are that make up that system, we can manage them if we cannot understand the variation. We can manage it. They can be very predictable. And this variation component is where the control chart has a very special place in connection with that plan do study act cycle that comes from the field of knowledge. The understanding of variation that’s only possible with control charts, or some people call them process behavior charts. It’s perhaps a better name. You can then understand that the variation that happens within a system is either common cause coming from the system itself, or it’s something special that’s acting outside the system that we need to understand better so that we can treat it differently. Also, we might find in a control chart that the patterns of performance are stable, but they don’t meet the customer’s need, and that means we have to change the system, not just go tell somebody that they need to work harder or work smarter. The fourth component is respect for people personified. Deming, called it the area of psychology and an understanding of the variation in people, the human beings are part of the system. They have variation too. No person is a substitute for anybody else. And the understanding of how people react to change, to communications, to the way they’re treated, they have intrinsic motivations. And these four areas of the system of profound knowledge are a way for us with everything that we try to improve, everything we have an opportunity to think about the interaction of those four parts. Deming called it the profound system of profound knowledge, not because he thought he was profound, but because it’s such a deep way to look at the way the world works. So lean, practitioners have told me that once they had all of their green belts black belts. Had somebody very recently. I think you might know him, but he’ll remain nameless to protect his reputation, it told me that he got his black belt at a degree at a notable Engineering University. And he said in 13 weeks of learning about the system of profound knowledge, 48 hours of time, not a master’s degree, not a black belt, but in 48 hours, that he learned more from studying Deming than he did in that entire program, and for a lot less money. So it’s charges the performance of people, whether they are operational excellence, lean practitioners, Lean Six Sigma. Six Sigma, it’s been useful in my work and my life.

 

Catherine McDonald  20:03

the 14 points that were created by Deming all these years ago, the system of profound knowledge was really set up because, I suppose, in in the acknowledgement that these 14 points are actually very difficult to as you say, it’s not a check checklist. It’s very difficult to go through these 14 points, all the do’s and the don’ts within there. Maybe you can tell us a little bit more about those actually, in a second. But it’s actually not easy for organizations, and we know this because we hear it every day in the organizations we work in. It’s very, very difficult to do things like think systemically, break down, silos, transform together. We hear these words, we hear the advice, but so few organizations can do it, so I guess that’s what I’m hearing, that the system of prior knowledge has been set up to make that transformation more effective and efficient because it takes less time. Yeah, is that right? Well,

 

20:59

it makes it more effective, and certainly it’s not easy work. Dr Deming, I hope not to mangle the quote said it’s not for the weak and fainthearted, because it requires that we set aside our previous notions that what we learned is the truth, that what we learned is really based in science. Sadly, much of what we teach in business schools, I’ll say it again, much of what we teach in business schools is not scientific management. We teach Taylor’s methods, his his management science has been debunked, and it really the the truths of Taylor’s work applied to physical labor is some of his research was falsified, some of it was just wrong and could not be tested like real science can. And there’s evidence that his some of his writings, show a disrespect for people, this notion that makes people replaceable. Well, if you’re doing physical labor, some of what he said is true, but this notion that people won’t work unless a manager looks over them and makes them work, is part of what makes this so difficult, because it’s so ingrained in our culture to think of I’m a manager. I’m better than the person who does the work, part of what Taylor communicated and management schools have taught for decades is that management is the brains and the people are the arms and legs to go do the will of management. Well, that arms and legs thing is kind of good because it talks about an organism, but there’s human beings in this we are not interchangeable cogs. We’re in the process. We’re in the system. But we’re not just pieces that can be substituted. And Frederick Taylor’s find the best man at something an interesting phrase. If you took a control chart and looked at the best man. You’d find, as the folks at the Hawthorne works did at Western Electric and Bell Laboratories, you’d find that there’s variation every day among the best people. They created this test example, a relay test room where they use control charts to see what affected what else, and what they discovered is the lights didn’t make a difference. At some point, when it got totally dark or too bright to see that affected productivity, they changed colors, and they found that didn’t have an effect. They tried to analyze the psychology of the workers in the room. They found out about their family life. They fed them, they gave them breaks at different times. And they had all of these theories that they tested using control charts, the plan do study act cycle by its older name. And what they discovered is that, yeah, there was variation every day for every person in that quote, unquote, best performing team. And finally, they settled on one thing that they could prove, and that was that the people who were the most productive had the exact same answer about what they thought made the greatest difference to their productivity, I could have guessed a lot of things until the day that I found in the Bell System archives. It was the instigation to teach managers how to listen to their employees. Because. As the people working in the relay test room universally said, the reason they thought they were most productive was because their supervisor listened to them and the entire Bell System 23 separate companies in the US. Guess what they did? They started teaching their management people how to listen to the people that they report that reported to them. So some of this has been discovered before Deming. Some of it was discovered someplace other than in Japan, but the stuff from Taylor was proved in the 1920s to have more and more and more doubt, but it’s still very much taught in western educational institutions. That’s a long story I didn’t need to tell you about how to build a watch.

 

25:54

Oh, no, that’s okay. It’s it’s good to know. It’s good to know, Patrick,

 

Catherine McDonald  25:57

what are your thoughts? Because I know you’re the same as me. You’re working with, you know, organizations, different organizations, day to day, we see the struggles that organizations have in terms of trying to change and improve, bring and engage people, uh, break down silos, get people communicating and collaborating effectively. Do you see the work of Deming has been lost a little bit? Or have you hoped you do you see organizations that are still using Demings advice and methods, where, where, where do we stand at the moment? Do you think with Dr Deming and his influence real in the real world?

 

Patrick Adams  26:34

Yeah. I mean, I agree with Dennis completely, and I think that what, in my experience, many organizations are, maybe they’re dabbling with parts and pieces of, you know, Demings 14 points, but it’s very fragmented. And they might be, you know, maybe very focused in on, you know, working on creating a fearless atmosphere, you know, and but they’re missing the point of involving everybody in in transformation. And, you know, so they’re, they’re working with their leadership to create the right type of leadership that’s going to support a Lean culture. But they’re still like, Well, we, we can’t just pull people off the line. We need to get parts out the door. You know, well, well, you know, to your point, Dennis, earlier, you can’t just take one or two of the points and think that you’re going to be able to develop a true culture of continuous improvement. You will not have the same results as a company that’s fully committed to every one of the points. And so I guess I want to go back to you, Dennis, on your your your point of involving everybody. What’s been your experience in companies that do just take a few of the points, and maybe they’re not involving everyone, but they’re, but they’re, you know, they’re doing a good job at the other stuff. Is that okay? Is it are they going to still realize results? Is it a problem? What are your thoughts on that? Well,

 

28:08

you have a system that is used to working one way, and if you want to transform it, you can blow it up. You can have Havoc or revolution, but it’s better to have an evolution, because people are involved. You don’t want people to get hurt. And it’s important for the leadership. It’s not going to happen if the leadership doesn’t have constant purpose and doesn’t commit to it. It’s something they cannot delegate. They need to teach that they’re making the transformation with these methods, and starting with the points that you think are easy wins is a good way to start to approach it. Katherine, you asked a question about companies that do or don’t, and let’s just talk for a minute about the companies that don’t use Demings methods. The number of companies that were on the New York Stock Exchange 100 years ago have continued to drop off at a more rapid rate over time, as they’ve used more of the methods that don’t work. However, the companies that have come in and done very well, as well as a number of private companies, some would say the stock market, the investor drive for quarterly results, counteracts everything you can do with the 14 points, they destroy constant purpose, which Dr Deming, I don’t believe, said that there was a reason why he made that number one, but I think it’s number one for a reason. If you don’t stay true to what your purpose is, whatever your aim is. For your organization for the long term, you’re not going to have a long term close to the end of his life. He was interviewed in one of his last interviews. What is the number of companies in the US that do exactly what you say? And his answer was honest. He said, None. And the interviewer asked, how many do you think will be around in 100 years? And he said, all that survive. That’s in the third edition of his book, The New Economics in chapter 11. And I think it’s kind of interesting that you think about all the companies that are failing, and the reasons that they fail are some of those 14 points, the lack of constant purpose, a focus on not reducing fear, this idea that competition between the divisions when they should be cooperating, another idea that a lot of people criticize Deming for is, is he liked monopolies. I grew up in a monopoly, so I kind of like them too. But this idea of the Japanese that Dr Deming taught them is their economy was part of a system that included the industries, the people and the government, and that’s one of the reasons that their government was so instrumental in helping to rebuild their economy, not to mention all the American experts that were brought in to help them in one field or another. But the Japanese had lots of statisticians. They had lots of management thinkers. They tried lots of different approaches. They were big on Frederick Taylor and others, but what they integrated with Dr Demings help was this notion of our system is our country, and we’re all a part of the success. Let’s figure out how we can cooperate so the engagement of an executive can delegate it, but they can teach it to their subordinates, and they can start to practice this notion of going to GEMBA is not just walking through a factory or a facility or going for rides with people every quarter. It’s a matter of talking to people every day at every level, so you understand what’s going on, and they understand that you care part of the psychology element. And I’ll refer you to Paula Marshall. She’s the CEO of the Bama companies. If you haven’t heard of Paula Marshall, I can get you a video in the Deming next program we’ve we feature it in several of our learning programs that I offer. Paula tells the story about how McDonald’s was their number one customer because they made pies. They made those little handheld pies that were very instrumental in breaking into the hamburger market at a very fundamental stage. And she took over the company from her father, who took over from her grandmother, and her father made a deal with McDonald’s. It was a handshake agreement that stands till this day, and one day they were having a problem with a particular pie, and the person at McDonald’s in charge of quality and supplier management said, You need to go to this conference with me, or you’re going to lose our business. And so she went and she discovered Dr Deming, and she tells the story in several vignettes about how Dr Deming asked for a show of hands in a room full of 400 people, who’s a CEO, and she was the only one. He said, I want to talk to you later. And she said it was very intimidating, but she talked to him, and she said she could work on all the 14 points, but she had to rate and rank her employees. He said, If you want to succeed, you should just stop doing that. You don’t need to improve it. You don’t need to keep doing she said, I spent millions of dollars to put this process in. He said, you’ll be more successful if you stop. And ultimately, she figured out that he knew what he was talking about, and she stopped. But today, her business is not just one factory in Tulsa, Oklahoma, but factories around the US, factories in the British Isles in Poland and in China. They not only make pies for McDonald’s, they make the buns, the biscuits, the pancakes. They make pizza crusts for a number of pizza chains. They make buns for a variety of hamburger chains. So they. They expanded their business quite a bit by using Demings methods, and Paula is absolutely a wonderful example of using those methods. We’ve got videos of Don Peterson from Ford, and he’s since passed as Deming did, but he was CEO of Ford, and he told his story of how it changed the way Ford survived now, sadly, though, Ford’s still known for making a quality product. I drive one. My wife drives one. Ford replaced Ford’s Board of Directors replaced Don Peterson when he left with Taylorism practitioner who came in and said, Yeah, we’re going to stop all that. So you need to have constant purpose. And the companies that stay with it, that start with what they can do in the 14 points will ultimately succeed, and I’ve yet to find a company that used Demings teaching stayed with it that has failed.

 

Patrick Adams  36:12

Yeah, yeah, that’s, that’s amazing. Dennis. I love, love that story too. And obviously there’s, there’s so many more stories of leaders at organizations that have adopted Demings methods and have found success in that. So if anyone’s interested to learn more about Deming, I believe that you offer some some different e learning courses and things that people can learn about, and you you have some upcoming stuff available, right?

 

36:41

Yes. A couple of years ago, the Deming Institute launched their e learning platform that Deming next is the name of it, and anyone can register for it at the deming.org website, and it is designed by somebody who understands adult learning and understands the interactivity that’s necessary for learning, making the visuals very important for the retention and repetition. And the fun part about it is, when you sign up for it. You have 24 by seven access, and you can go back and use it all you wish. I found it so useful as I helped develop it, and this award winning developer put it together. I mean, Leslie Peters is her name, just a marvelous way of learning. I decided to convert all of my programs about lean all my programs about continual quality improvement, and I found it very easy to integrate my work with that, or integrate that with my work. And instead of me standing in front of a room talking to people for 48 hours facilitating exercises, they get to practice themselves at their own schedule. And once a week, we get together for a webinar to make sure that we don’t have any challenges or questions that are unanswered by independent study.

 

Patrick Adams  38:22

Very nice, and all of that is available on your website, which will drop that into the show notes, as well as your LinkedIn profile, if people want to reach out and if they have questions or anything like that. I know that we only scratch the surface here. Catherine, with Dennis. So it would be nice maybe we could have you back on Dennis, and we can dive a little bit deeper and maybe even hit on the some of the points, some of the Deming points, on our next episode, and talk through why each one of them is so important to an organization’s success. Yeah. All right. Well, thank you again for being on Dennis. We really appreciate you being part of the show, and we’ll catch you in the next episode.