Tag Archives: Deming

Annual Performance Evaluations are a Poor Management Practice

Sports provides visible examples of the futility of accurate performance appraisal. We have athletes who thousands of people devote a huge amount of time to dissecting their strengths and weaknesses and those evaluations are constantly shown to be wrong. Teams are constantly paying free agents tens of millions that completely flop. Others hire someone no-one else wanted for the league minimum and they become a big contributor.

Yes, it isn’t hard to figure out Stephen Curry is a far better basketball player than some bench warmer. But trying to value some non-world-class-superstar is extremely difficult. Yet we have many people that think they can provide a great assessment of exactly what rating their people deserve. If someone is really able to judge people that well they should move into the front office of a sports team because they would pay a huge amount for such talent.

photo of mural of kids and animals

Mural at the Smith Samlanh Education Center in Phnon Phen, Cambodia

When you understand the challenges with evaluating a complex system it isn’t hard to know that evaluating individuals is not easy. Much of the evidence of individual “performance” is so dependent on impacts within the system that are totally out of even the individual’s influence. Yet it is easy to find numbers within a complex system that can be used to argue for or against an individual’s performance.

The contributions any individual brings to an organization is largely dependent on the system in place (see: 94% Belongs to the System).

Related: Expand Your Circle of InfluenceRighter Performance AppraisalPerformance without Appraisal

Profound Podcast with John Hunter, Part Two

John Willis interviewed me for his Profound podcast series, this posts is about part two of the interview (listen to part two of the podcast, John Hunter – Curious Cat). See my post on part one of the interview.

photo of John Hunter in front of graphic for Plan Do Study Act cycle

John Hunter presenting at Deming Institute management seminar in Hong Kong

This post provides links to more information on what we discussed in the podcast. Hopefully these links allow you to explore ideas that were mentioned in the podcast that you would like to learn more about.

Find more interviews of John Hunter.

Profound Podcast: John Hunter – Curious Cat

John Willis interviewed me for his Profound podcast series (listen to part one of the podcast, John Hunter – Curious Cat)

This post provides links to more information on what we discussed in the podcast. Hopefully these links allow you to explore ideas that were mentioned in the podcast and that you would like to learn more about.

We also talked about six sigma a bit on the podcast. While I believe six sigma falls far short of what I think a good management system should encompass I am less negative about six sigma than most Deming folks. I discussed my thoughts in: Deming and Six Sigma. In my opinion the biggest problems people complain about with six sigma efforts are about how poorly it is implemented, which is true for every management system I have seen. I have discussed the idea of poor implementation of management practices previously also: Why Use Lean (or Deming or…) if So Many Fail To Do So Effectively.

I will add another blog post for part two of the interview when I get a chance.

Listen to more interviews with me.

Don’t Expect Short Quotes to Tell the Whole Story

When people try to use a short quote as an accurate encapsulation of a management concept they will often be disappointed.

It is obvious that Dr. Deming believed that organizations failed to use data effectively to improve needed to change and use data effectively in order to thrive over the long term. He believed that greatly increasing the use of data in decision making would be useful. He also believe there were specific problems with how data was used, when it is was used. Failing to understand variation leads to misinterpreting what conclusions can appropriately be drawn from data.

Using data is extremely useful in improving performance. But as Deming quoted Lloyd Nelson as saying “the most important figures that one needs for management are unknown or unknowable.”

I believe Dr. Deming would have said something like “In God we trust, all others bring data” (I haven’t been able to find a source verifying he did say it). Others don’t believe he would referencing the Lloyd Nelson quote and all Deming’s other work showing that Dr. Deming’s opinion that data isn’t all that matters. I believe they are correct that Dr. Deming wouldn’t mean for the quote to be taken literally as a summation of everything he ever said. That doesn’t mean he wouldn’t use a funny line that emphasized an important message – we need to stop relying so much on unsubstantiated opinion and instead back up opinion with data (including experiments).

Quotes can help crystallize a concept and drive home a point. They are very rarely a decent way to pass on the whole of what the author meant, this is why context is so important. But, most often quotes are shared without context and that of course, leads to misunderstandings.

image of quote - It is wrong to suppose that if you can't measure it, you can't manage it - a costly myth.

A funny example of this is the Deming quote that you often see: “if you can’t measure it, you can’t manage it.” Deming did actually say that. But without the context you get 100% the wrong understanding of what he said. Deming’s full statement is “It is wrong to suppose that if you can’t measure it, you can’t manage it – a costly myth.” Now normally much more context is required to truly understand the author’s point. But this is a funny example of how a quote can be even be accurate when passed on to you and yet completely misleading because it is taken out of context.

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Lead by Building Organizational Capability

The result of a recent interview with me has been posted: How to Lead From Any Level In the Organization

2. Help people solve their problems.

Similar to helping other people grow their careers is the idea of helping other people to solve their problems. Again, this starts with a clear understanding of your sphere of influence. “It determines what strategies you can pursue, and building your sphere of influence should be part of your decision making process.”

What it comes down to is proving yourself in this way—and doing so consistently. “It isn’t some secret sauce. Prove yourself to be valuable and you will gain influence. Help people solve their problems. They will be inclined to listen to your ideas.” And helping people to solve their problems doesn’t mean you are giving them the answer. It may mean you asking empowering questions.

John says if you focus on building the capability in the organization to understand variation and to appreciate how to use data—then you are on the right path, and can increase your influence in addition.

“You need to build into the organization things like a focus on pleasing the customer instead of pleasing your boss.” When combining all of these methods, that is when your leadership is going to be most effective.

Hopefully you will find the entire post worthwhile.

More links related to interviews with me about improving management: Leadership While Viewing the Organization as a System, Business 901 Podcast Deming’s Management Ideas Today, Meet-up: Management Improvement Leader John Hunter.

Software Testing and the Impact on Quality

My response to a question on Reddit.

“Software quality does not come from testing”
Does anybody have any thoughts on the validity of the above statement?

That statement is similar to the idea you can’t inspect in quality. Basically “Inspection is too late. The quality, good or bad, is already in the product.” W. Edwards Deming

I agree with those ideas. Software testing is a bit different (at least some of it is) from the inspection mentioned above. You are testing while the product is being developed and adjustments are being made before the product is released to customers. Also with internet based software you have the ability to update the software and now all users have that update. Where for physical devices they already have the product and the only option is a recall which is very expensive and often ignored.

Software testing however should pay attention to those points in the 2 links above (defects should be understood as evidence of a process that needs to be improved so defects are not built in the first place). What you want is not just to fix the bugs software testers catch but figure out the reasons those bugs were created and improve you process so you create fewer bugs in the future.

No matter what the software quality is based on the code that is written. At the best software testing can tell people about the bugs but unless the code is fixed the software quality didn’t change. But to say that software testing doesn’t have a big influence of software quality when testing is well done and the software development process is good (listens to feedback and improves) is not very accurate.

Related: Improving Software Development with Automated TestsCombinatorial Testing for SoftwareBuilding a Great Software Development TeamDeming and Software DevelopmentThe Defect Black Market

Decades Later The USA Health Care System is Still a Deadly Disease for Our Economy

Decades ago W. Edwards Deming named 7 deadly diseases of western management. One of those was excessive health care costs. Sadly that deadly disease has become much worse in the last several decades.

Americans pay 300% more for this prostate cancer drug than much of the rest of the world

Xtandi, a prostate cancer drug co-licenced by Japan’s Astellas Pharma and Medivation Inc. was developed at a U.S. university with grants funded by taxpayer dollars. That gives the federal government the right to revoke the patent if the terms are unreasonable, said the letter, dated Monday.

“We do not think that charging U.S. residents more than anyone else in the world meets the obligation to make the invention available to U.S. residents on reasonable terms,” said the letter, which had Sen. and presidential candidate Bernie Sanders, Sen. Elizabeth Warren and Rep. Elijah Cummings among its signatories.

This specific example also highlights what I classified as a new deadly disease in 2007 – the broken patent and trademark system.

Both of these deadly diseases greatly damage the USA economy and the economic condition of USA citizens. It is disgraceful that the Democratic and Repulbican parties have allowed these deadly diseases to ravage the USA economy for decades.

The drug price situation in the USA is greatly exsaserbated by the corrupt political process. Drug companies give large amounts of cash to those we elect and then those we elect create system that damage the USA economy and provide drug companies huge extra profits inside the USA (those profits then allow the companies to charge other countries even less and still make a great return on their investment). I wrote about this in 2005: Excessive Drug Prices in the USA (and several times since then, Drug Price Crisis [2008] – it is a long term, huge economic problem for the USA).

Health care is extremely expensive everywhere. But in the USA the health care system is twice as costly as other rich countries. This is an enormous burden on the USA economy. Nothing else comes close to being as costly in terms of direct spending. And there a a great deal of other damage done that can’t be seen in just the 100% more the USA spends on health care than other rich countries spend. And the health outcomes are no better for the extra hundres of billions of dollars spent every year for health care in the USA.

The costs of decades of failure are extrodinary. We shouldn’t allow the political parties to continue to fail to sensibly address these problems. Even if we can just get to the point of costing 50% more than other rich countries our economy will be greatly enhanced, but we have not even been able to reduce the health care tax the USA health care system puts on us to just 50% more than other countries. That is a pretty sad state of affairs especially when you consider that other countries are not doing a great job – so we are twice as costly, not as some extremely wonderful amazing system but twice as costly as mediocre comparisons.

Extremely inflatted drug prices in the USA are a significant part of the problem but still only a portion of a system that has been costly the USA economy and citizens hundreds of billions of dollars a year (and untold soffuering in many other ways) for decades. We have to do better.

Related: USA Health Care Spending 2013: $2.9 trillion $9,255 per person and 17.4% of GDPThe Growing Market for International Travel for Medical CareCEOs Want Health-Care Reform (2009)Can We Expect the Health Care System in the USA to Become Less Damaging to the Economy? (2011)

Transforming a Management System – A Case Study From the Madison Wisconsin Police Department

This post in an excerpt from The Quality Leadership Workbook for Police by Chief David Couper and Captain Sabine Lobitz (buy via Amazon).

cover image of the New Quality Leadership Workbook for Police

The New Quality Leadership Workbook for Police

Transformational Steps
A Case Study Madison, Wisconsin (1981-1993)

Step 1: Educate and inform everyone in the organization about the vision, the goals, and Quality Leadership. This step must be passionately led by the top leader.

  • Begin discussion with top management team and train them.
  • Discuss and ask employees; get feedback from them.
  • Share feedback with the chief and his management team.
  • Get buy-in from top department managers.
  • Survey external customers—citizens; those who live and work in the community.
  • Create an employee’s advisory council; ask, listen, inform, and keep them up to date on what’s going on.
  • The chief keeps on message; tells, sells, and persuades, newsletters, meetings and all available media.

Step 2: Prepare for the transformation. Before police services to the community can be improved, it is essential to prepare the inside first — to cast a bold vision and to have leaders that would “walk the talk.”

  • Appoint a top-level, full-time coordinator to train, coach, and assist in the transformation.
  • Form another employee council to work through problems and barriers encountered during implementation of the transformation and Quality Leadership.
  • Require anyone who seeks to be a leader to have the knowledge and ability to practice Quality Leadership.

Step 3: Teach Quality Leadership. This begins at the top with the chief and the chief’s management team.

  • Train all organizational leaders in Quality Leadership.
  • Train all employees as to what Quality Leadership is, why the transformation is necessary, and what it means for them.

Step 4: Start practicing Quality Leadership. If top managers within the organization are not authentically practicing Quality Leadership neither will anyone else.

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A Strong Management System Handles the Transition of Leaders With Ease

Part three (of three) of an interview of me with Bill Fox has been published.

Leadership While Viewing the Organization as a System

…So if I see the weak management system as the problem, the solution is not nearly as easy as coming up with a new CIO. I don’t really think the problem is so much the CIO not being a good manager – because the system shouldn’t allow a new manager to come in and ruin a good management system. The management system is the problem. So we need to fix that and that’s a very long, hard thing to do well, but it’s the kind of thing that a company like Toyota does.

So, you have to try to build that strong organizational structure; one that isn’t so fragile that when one or two senior leaders change, things fall apart. But it’s very difficult and many organizations have weak management systems. It’s a lot easier to accomplish in smaller organizations, because individuals can have a bigger say. If you’re in an organization of a hundred people, and there’s been some real success with lean or Deming’s ideas, and some new person comes in and tries to get rid of it, people stand up and say “No”.

In big, huge organizations, it often can be very difficult because there’s all sorts of big internal politics and issues that get involved

It is a fragile management system that allows the change of one or two leaders, whether they are leaders as in a CFO sense or whether they are this great software developer that had the whole team doing lean software and as soon as they leave, it just falls apart because they were the personality that made the whole thing work. When the changes relied on that person, there wasn’t really a system improvement: as soon as they left, the apparent system improvements collapse.

Read the full interview with more on how to build a strong management system based on the understanding of the organization as a system.

Related: If a a company is dependent on one (or a few) people to perform then it is in dangerExecutive LeadershipA Good Management System is Robust and Continually Improving

Remembering Peter Scholtes

Guest Post by Fazel Hayati

Fall always reminds me of my friend Peter Scholtes. It was during 2008 annual Deming Institute fall conference in Madison, Wisconsin when Peter said farewell to his friends and colleagues. He gave a keynote titled Deming 101 (that full speech can be watched online). Although inactive for many years and managing numerous health challenges, he was sharp, witty and very happy to be talking about Dr. Deming, systems thinking, problems with performance appraisal, talking to his old friends and reminiscing. Anticipating this event had really energized him. He told me numerous times he was very grateful for the opportunity. He passed away in July 11, 2009.

Peter Scholtes, 2008

Peter Scholtes at Deming Conference in Madison, Wisconsin, 2008

Peter wrote two seminal books, both remain relevant years after their publication. The Team Handbook remains one of the best in developing teams and it has helped many organizations to improve quality and productivity through team building. The Leader’s Handbook is one of the best elaborations on Dr. Deming’s System of Profound Knowledge.

Peter articulated Dr. Deming’s teaching and incorporated his own experience in six competencies for leaders:

  1. The ability to think in terms of systems and knowing how to lead systems,
  2. the ability to understand the variability of work in planning and problem solving,
  3. understanding how we learn, develop, and improve; leading true learning and improvement,
  4. understanding people and why they behave as they do,
  5. understanding the interaction and interdependence between systems, variability, learning, and human behavior; knowing how each affects others (Figure 2-16, Page 44, Leader’s Handbook),
  6. giving vision, meaning, direction, and focus to the organization.

No one has done a better job of operationalizing Dr. Deming’s teachings.

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