Tag Archives: quote

94% Belongs to the System

I should estimate that in my experience most troubles and most possibilities for improvement add up to the proportions something like this: 94% belongs to the system (responsibility of management), 6% special.

Page 315 of Out of the Crisis by Dr. W. Edwards Deming.

the system that people work in and the interaction with people may account for 90 or 95 percent of performance.

Dr. Deming’s quote from the introduction to the Team Handbook

I think, in looking at the total of Deming’s work, that the point he is trying to make is that looking to blame people is not a good strategy for improvement. The impact due solely to a person’s direct action (not including their interaction with the system and with others) is small in comparison to that of the system within which they work. So, Deming (and I) want people to focus on improving the system; which will achieve better results than searching for what people did wrong.

What did Deming want people to take from his statements?

Did he want us just to accept bad results? No. He was not saying it is the system there is nothing we can do just accept that this is how things are. He wanted us to focus on the most effective improvement strategies. He saw huge waste directed at blaming people for bad results. He wanted to focus the improvement on the area with the greatest possibility for results.

Did he want to say people are just cogs in the machine? No. Read or listen to most anything he said at any significant length (a full chapter of this book, a full article he wrote on management, an hour from one of his videos) and it is hard to maintain such a thought.

photo of forest trail

Pinetree Trail, Frasers Hill, Malaysia by John Hunter

Did he believe that people were not important? No. He was trying to direct the focus of improvement efforts to look not at the fault with one person but to look at the system. I believe strongly he was correct. If you blame a person as the root cause of a problem, my first, second and third reactions are why? why? why? It is possible the person is to blame and there is no benefit to exploring system improvement instead of settling for blaming the person. But that is rare.

I have written about the importance of developing people to build the capability of the organization. My father wrote about it previously, “American organizations could compete much better at home and abroad if they would learn to tap the potential information inherent in all processes and the creativity inherent in all employees.”

I wrote about the importance of the ideas behind Deming’s quotes here, back in 2006 – Find the Root Cause Instead of the Person to Blame

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The Art of Discovery

Quality and The Art of Discovery by Professor George Box (1990):

Quotes by George Box in the video:

“I think of statistical methods as the use of science to make sense of numbers”

“The scientific method is how we increase the rate at which we find things out.”

“I think the quality revolution is nothing more, or less, than the dramatic expansion of the of scientific problem solving using informed observation and directed experimentation to find out more about the process, the product and the customer.”

“It really amounts to this, if you know more about what it is you are doing then you can do it better and you can do it cheaper.”

“We are talking about involving the whole workforce in the use of the scientific method and retraining our engineers and scientists in a more efficient way to run experiments.”

“Tapping into resources:

  1. Every operating system generates information that can be used to improve it.
  2. Everyone has creativity.
  3. Designed experiments can greatly increase the efficiency of experimentation.

An informed observer and directed experimentation are necessary for the scientific method to be applied. He notes that the control chart is used to notify an informed observer to explain what is special about the conditions when a result falls outside the control limits. When the chart indicates a special cause is likely present (something not part of the normal system) an informed observer should think about what special cause could lead to the result that was measured. And it is important this is done quickly as the ability of the knowledgable observer to determine what is special is much greater the closer in time to the result was created.

The video was posted by Wiley (with the permission of George’s family), Wiley is the publisher of George’s recent autobiography, An Accidental Statistician: The Life and Memories of George E. P. Box, and many of his other books.

Related: Two resources, largely untapped in American organizations, are potential information and employee creativityStatistics for Experimenters (book on directed experimentation by Box, Hunter and Hunter)Highlights from 2009 George Box SpeechIntroductory Videos on Using Design of Experiments to Improve Results (with Stu Hunter)

George Box

I would most likely not exist if it were not for George Box. My father took a course from George while my father was a student at Princeton. George agreed to start the Statistics Department at the University of Wisconsin – Madison, and my father followed him to Madison, to be the first PhD student. Dad graduated, and the next year was a professor there, where he and George remained for the rest of their careers.

George died today, he was born in 1919. He recently completed An Accidental Statistician: The Life and Memories of George E. P. Box which is an excellent book that captures his great ability to tell stories. It is a wonderful read for anyone interested in statistics and management improvement or just great stories of an interesting life.

photo of George EP Box

George Box by Brent Nicastro.

George Box was a fantastic statistician. I am not the person to judge, but from what I have read one of the handful of most important applied statisticians of the last 100 years. His contributions are enormous. Several well know statistical methods are known by his name, including:

George was elected a member of the American Academy of Arts and Sciences in 1974 and a Fellow of the Royal Society in 1979. He also served as president of the American Statistics Association in 1978. George is also an honorary member of ASQ.

George was a very kind, caring and fun person. He was a gifted storyteller and writer. He had the ability to present ideas so they were easy to comprehend and appreciate. While his writing was great, seeing him in person added so much more. Growing up I was able to enjoy his stories often, at our house or his. The last time I was in Madison, my brother and I visited with him and again listened to his marvelous stories about Carl Pearson, Ronald Fisher and so much more. He was one those special people that made you very happy whenever you were near him.

George Box, Stuart Hunter and Bill Hunter (my father) wrote what has become a classic text for experimenters in scientific and business circles, Statistics for Experimenters. I am biased but I think this is acknowledged as one of (if not the) most important books on design of experiments.

George also wrote other classic books: Time series analysis: Forecasting and control (1979, with Gwilym Jenkins) and Bayesian inference in statistical analysis. (1973, with George C. Tiao).

George Box and Bill Hunter co-founded the Center for Quality and Productivity Improvement at the University of Wisconsin-Madison in 1984. The Center develops, advances and communicates quality improvement methods and ideas.

The Box Medal for Outstanding Contributions to Industrial Statistics recognizes development and the application of statistical methods in European business and industry in his honor.

All models are wrong but some are useful” is likely his most famous quote. More quotes By George Box

A few selected articles and reports by George Box

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Customer focus is critical to succeed with management improvement efforts. Few argue with that point, though my experience as a customer provides plenty of examples of poor systems performance on providing customer value (usability, managing the value stream well, etc.).

At times people get into discussion about what counts as a customer. Are customers only those who pay you money for a product or service? What about internal customers? What about users that don’t pay you, but use your product (bought from an intermediary)? What about users that use a service you provide for free (in order to make money in another way, perhaps advertising)? What about “internal customers” those inside your organization without any payment involved in the process?

I find it perfectly fine to think of all these as customers of slightly different flavors. What is important is providing what each needs. Calling those that actually use what you create users is fine, but I think it often just confuses people rather than adding clarity, but if it works in your organization fine.

To me the most important customer focus is on the end users: those that derive value from what your organization provides. If there is confusion between various customer groups it may be helpful to use terms like end user, but really using the term customer for a wide range or customers is fine (and modification such as internal customer to provide some clarity).

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Respect for Everyone

TL;DR – The two pillars of the Toyota Way are: respect for people and continuous improvement.

One of the big reasons my career followed the path it did (into management improvement) was due to the impact of respect for people. My father was a professor (in statistics, engineering and business) and consulted with organizations to help them achieve better results. To achieve results he took advantage of the gains possible when using statistical tools to manage with respect for people.

Managing Our Way to Economic Success: Two Untapped Resources, 1986: “American organizations could compete much better at home and abroad if they would learn to tap the potential information inherent in all processes and the creativity inherent in all employees.”

After he died, for years, people would talk to me about the difference he made in their lives (at conferences mainly). Other than those with PhD’s in statistics (of which there were many, but a very small number compared to all the others) the thing that made a difference was respect for people. Those who chose to talk to me are obviously a self selected group. But of those, the people that made the largest impact on me basically said he talked to me as though everything I said mattered. He didn’t talk down to me. He helped me see how I could help improve: the organization and my own skills and abilities.

This didn’t happen 5 times or 10 times of 20 times, it happened many more times than that. Year after year of this helped push me to stick with management improvement. These served as a great incentive to perserve as I ran into the typical difficulties actually improving management systems.

The senior executives he talked to were not very impressed that he spoke to them with respect. So none mentioned that with awe, but a few did notice that he was able to connect with everyone – the senior executives, nurses, people on the factory floor, secretaries, salespeople, front line staff, engineers, janitors, middle managers, doctors, union leaders. The senior executives were more likely to be impressed by the success and his technical ability and knowledge as well as communication skill. Doctors, statisticians and engineers were more impressed with knowledge, technical skill, skill as a teacher and advice.

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Ackoff: Corporations Are Not Led By Those Seeking to Maximize Shareholder Value

If I had to limit myself to a handful of management experts, Russel Ackoff would definitely be in that group. Thankfully there is no such limit. Ackoff once again provides great insight with great wit in the above clip.

A corporation says that its principle value is maximizing shareholder value. That’s non-sense. If that were the case executives wouldn’t fly around on private jets and have Philippine mahogany lined offices and the rest of it. The principle function to those executives is to provide those executives with the quality of work life that they like. And profit is merely a means which guarantees their ability to do it.

If we are going to talk about values, we got to talk about what the values are in action, not in proclamation.

Related: Ackoff, Idealized Design and Bell LabsDr. Russell Ackoff Webcast on Systems ThinkingA Theory of a System for Educators and ManagersCEOs Plundering Corporate Coffers

Leading Improvement and Enjoying the Rewards

The better job you do of managing the easier your job becomes.

As a manager your primary responsibility is to improve the system: both the systems within your sphere of control and those outside of it. The more effectively you do so, the less firefighting you have to do. The less firefighting the less hectic and chaotic your days are. And the more time you have to focus on improving the system.

The better you are at leveraging your efforts, the greater your impact, and more quickly your job gets easier. Most effective leveraging involves improving the system. Improvement to the system continue to deliver benefits continuously.

A specific form improving the system is coaching people so they are able to be more effective at improving the system themselves. One valuable role you can play is to help avoid the existing traps that prevent improvements. Early in a transformation to a continual improvement culture there are significant barriers to improvements. Those not only prevent the system from improving rapidly they can easily derail the motivation people have to improve. It is hard to maintain a desire to improve if every effort to do so feels like a long slog through quicksand.

As you create a system where people have the knowledge, drive and freedom to improve you get to enjoy continual improvement without any direct action by you. As this happens you are able to spend more time thinking and learning and less time reacting. That time allows you to find key leverage points to continue the progress on improving the management system.

Related: Engage in Improving the Management SystemKeys to the Effective Use of the PDSA Improvement CycleGood Process Improvement Practices

Management Blog Posts From November 2006

I have selected a few great posts from the Curious Cat Management Blog back in November 2006.

  • What Could we do Better? – There are many important ideas to improve management. This is one of the most important tips to aid improvement that I know of: it is easy to do, brings huge benefits and most organizations fail to do it. Ask your customers: “What one thing could we do to improve?”
  • Ackoff’s F-laws: Common Sins of Management presents 13 common sins of management, such as: Managers who don’t know how to measure what they want settle for wanting what they can measure
  • Common Cause Variation – “Every system has variation. Common cause variation is the variation due to the current system. Dr. Deming increased his estimate of variation due to the system (common cause variation) to 97% (earlier in his life he cited figures as low as 80%). Special cause variation is that due to some special (not part of the system) cause.”
  • Sub-Optimize by Interrupting Knowledge Workers – “The general consensus is that the loss from interrupting [software] developers is much greater than for interrupting most other forms of work and therefor a great deal of effort is placed on improving the system to allow developers to focus.”
  • Amazon Innovation – “I believe Amazon uses technology very well. They have done many innovative things. They have been less successful at turning their technology into big profits. But I continue to believe they have a good shot at doing so going forward (and their core business is doing very well I think).” [Amazon announced great sales numbers today, continuing their long term tread. They are also continuing to be very slow to grow profits (CEO, Jeff Bezos remains willing to challenge common practices – such as his willingness to build business and sacrifice current profits)].

The Customer is the Purpose of Our Work

photo of poster with Gandhi quote

Quote from Gandhi on customer focus at the Chakra restaurant

A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.

Mahatma Gandhi

A snapped this photo at the Chakra restaurant in Johor Bahru, Malaysia. Ironically the food is great but the service isn’t what I would like. But I will gladly go back many times. I’d like a bit more attentive service but I love the food and that is more important to me.

I think service at restaurants is one of the tricker things to do well: different customers have different desires. I basically want great food, my water to be filled up and my bill to be given to me before I finish so I don’t have to wait around to pay. But lots of people will find it annoying to get a bill early, feeling that they are being rushed out the door.

Still there is a certain standard I share with lots of people for things like not having to wait around for a long time to get the bill after I am done. Getting water filled up as needed, pleasant decor, etc..

In Johor Bahru there are a fair number of Japanese restaurants (the food is very good and the service is also good). Several of these restaurants have buzzers on your table to press when you want service. I love Indian food. I must say I like the Japanese service (it did take me a bit to warm up the buzzer idea – it is very practical). It do believe some of the things I would see as weaknesses in customer service are partially a cultural difference (it is interesting to see the different customer service experiences at the different restaurants here).

The quote from Gandhi is great. “He is the purpose of it” is something we would all benefit from taking to heart. To do so, I think we are wise look at how we can better meet customer desires every day.

Related: Delighting Customersquotes by Mahatma GandhiPaying New Employees to Quit

Keys to the Effective Use of the PDSA Improvement Cycle

The PDSA improvement cycle was created by Walter Shewhart where Dr. Deming learned about it. An improvement process is now part of many management improvement methods (A3 for lean manufacturing, DMAIC for six sigma and many other modifications). They are fairly similar in many ways. The PDSA cycle (Plan, Do, Study, Act) has a few key pieces that are either absent in most others processes of greatly de-emphasized which is why I prefer it (A3 is my second favorite).

The PDSA cycle is a learning cycle based on experiments. When using the PDSA cycle prediction of the results are important. This is important for several reasons but most notably due to an understanding of the theory of knowledge. We will learn much more if we write down our prediction. Otherwise we often just think (after the fact); yeah that is pretty much what I expected (even if it wasn’t). Also we often fail to think specifically enough at the start to even have a prediction. Forcing yourself to make a prediction gets you to think more carefully up front and can help you set better experiments.

An organization using PDSA well will turn the PDSA cycle several times on any topic and do so quickly. In a 3 month period turning it 5 times might be good. Often those organizations that struggle will only turn it once (if they are lucky and even reach the study stage). The biggest reason for effective PDSA cycles taking a bit longer is wanting more data than 2 weeks provides. Still it is better to turn it several times will less data – allowing yourself to learn and adjust than taking one long turn.

The plan stage may well take 80% (or even more) of the effort on the first turn of the PDSA cycle in a new series. The Do stage may well take 80% of of the time – it usually doesn’t take much effort (to just collect a bit of extra data) but it may take time for that data to be ready to collect. In the 2nd, 3rd… turns of the PDSA cycle the Plan stage often takes very little time. Basically you are just adjusting a bit from the first time and then moving forward to gather more data. Occasionally you may learn you missed some very important ideas up front; then the plan stage may again take some time (normally if you radically change your plans).

Remember to think of Do as doing-the-experiment. If you are “doing” a bunch of work (not running an experiment and collecting data) that probably isn’t “do” in the PDSA sense.

Study should not take much time. The plan should have already have laid out what data is important and an expectation of what results will be achieved and provide a good idea on next steps. Only if you are surprised (or in the not very common case that you really have no idea what should come next until you experiment) will the study phase take long.

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