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deming, improvement, leadership, lean, transformation

Deming’s Influence on Lean

There are numerous books and papers available today that, in one way or another, touch on the subject of lean. I am amazed, however, at the number of these publications that fail to make the connection between lean leadership and W. Edwards Deming’s theory of management.  Besides the fact that Deming had a huge impact on Toyota over the years, I don’t think it is possible to truly appreciate the impact of lean on the overall organization without a basic understanding of his philosophy on leadership and transformation.

I am not discounting the effect that people like Taiichi Ohno, Eiji Toyoda, Shigeo Shingo, and others have had on the development of lean thinking, but Deming’s influence, especially in the area of leadership, is so critical that I wonder how anyone can truly lead a transformation without developing an understanding of his System of Profound Knowledge (SoPK).

The System of Profound Knowledge

Deming developed his system of profound knowledge as a “framework of thought and action for any leader wishing to transform and create a thriving organization, with the aim for everybody to win.”  The SoPK has four elements that work together as a system to enable transformation toward what we now refer to as lean thinking.  If leaders ignore any of these elements, the chances of unlocking the “big gains” available to organizations or sustaining improvements over the long-term are extremely small.

The four areas within the SoPK are as follows:

  1. Appreciation for a System Leaders need to understand that the organization is a system comprised of a complex interaction of people, processes, and the environment that work together to achieve an aim.  Failing to identify and continually drive toward the aim will lead to behaviors and actions that are destructive to the organization.  Conflicting objectives, short-term thinking, and poor supplier relationships are some of the results of failing to understand and apply systems thinking.  Within lean thinking, helping people understand how the work they do aligns with the organization’s long-term objectives is a critical responsibility of leadership.  Without an understanding that the organization is a system, however, it is virtually impossible to do this on a continuing basis.
  2. Knowledge of Variation Assuring the right measures are collected and understanding what the measures are saying about performance is critical to assuring an organization continually improves.  When performance is not as expected, whether above or below expectations, we need to understand the reasons for the gap and the type of action to take.  Knowledge of variation will help leaders understand whether problems are built into the system requiring management action, or caused by something outside of the system and can be addressed locally.  Also, having an understanding of variation will drive the organization toward the creation and use of standardized work to help stabilize performance.
  3. Theory of Knowledge For a team to continually improve performance, it must be able to learn effectively, and learning effectively requires continual testing of opinions, ideas, and hypotheses, which is the basis of the Plan-Do-Study-Act (PDSA) cycle.  Although Deming was not the first to apply the cycle to process improvement, he is credited with identifying it as a critical element of leadership.  In organizations that have successfully adopted lean thinking, the PDSA cycle is applied at all levels, from the shop floor to the board room.  The cycle is the basis for changing the way people think and approach work.
  4. Psychology Organizations are made up of people and, without an understanding of what motivates people and how they learn, interact, and develop, the ability to develop an organization that continually performs at a high level will be severely hampered.  Too often, organizations promote people who are technically good at their jobs and leave their development to chance.  As a result, the organization suffers from varying leadership styles and confusion among team members.  On the other hand, when the organization standardizes its approach to developing leaders and teaches them how to

Although one of the objectives of lean is simplicity, the methodology can be very complex, requiring a level of understanding of organizational behavior that many people do not appreciate.  Success requires a continuing commitment to learn about the theories upon which lean was built in order to understand and deal with the specific situations, relationships, and interactions that make up an organization.  The more you understand the what and why of lean, the more effective you will be with the how during the deployment.

I would never refer to myself as an expert of Dr. Deming’s philosophy.  Like much of lean thinking, the more I apply the SoPK, the more I learn about it.  I believe a big part of what Deming was trying to teach, though, was the idea that transformation is a journey, and the only way to keep progressing along the journey is to continue to learn.

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About Gregg Stocker

Gregg Stocker is a lean advisor for Hess Corporation. He possesses over 20 years experience in a variety of disciplines including operations, manufacturing, human resources, quality, and strategic planning, and has worked in manufacturing, service, and oil & gas industries. He has extensive international experience, including successfully leading an $65 million business in The Netherlands. He authored the book, “Avoiding the Corporate Death Spiral: Recognizing & Eliminating the Signs of Decline,” (Quality Press, 2006) and was a contributing author to "The Lean Handbook," (Quality Press, 2012). Gregg is a frequent speaker and recognized expert in business and performance improvement having been interviewed on television, radio, and in a number of newspaper and magazine articles including The New York Times, Washington Post, BusinessWeek, and InformationWeek. Gregg has implemented change in organizations ranging in size from $10 million to more than $100 billion. He is a team-oriented leader who achieves results by improving teamwork, focus, and communication throughout the organization.

Discussion

8 thoughts on “Deming’s Influence on Lean

  1. I utterly agree with you

    Posted by Dr. Donna Samuel | April 2, 2015, 5:48 am
    • I also agree 100%

      Posted by Bob Barbour | April 5, 2015, 7:10 pm
    • And I agree. It was John Bicheno who brought to my attention the connection between Deming and Lean, particulalry the SoPK. I have a question for you on this. John Bicheno has invited key speakers such as Spear and Rother over to the UK (Wales) who have presented their work with very strong linkages to the Plan (and predict), Do, Study, Act. I also enjoyed the Liker book, The Toyota Way, but I did not capture the SoPK message coming through amongst the 14 points. Did I miss it, or have different authors picked up on different aspects of Toyota’s acitivity to attriibute to their success? This reminds me of Rozensweig’s fine work on the ‘The Halo Effect: . . . and the Eight Other Business Delusions That Deceive Managers’. I see Rother and Liker have subsequently co authored, suggesting there isn’t a rift.

      Posted by Philip Catherwood | April 7, 2015, 7:08 am
      • Philip – Thank you for your comments. I have found that, like much of TPS, SoPK is simple but not easy. People are only able to learn what they’re able to at any given point in time. Initially, the connection between SoPK and the 14 Points is not absolutely clear, but the more I’ve applied SoPK and learned about the system, the more I see that they are actually one in the same. There are a lot of differing opinions on this, but I think that the 14 Points are more prescriptive and the way to get transformation started. As the transformation begins to happen, though, leaders need a framework to sustain and continue the process beyond the prescriptive statements – and the framework is SoPK.

        Lean thinking is a complex undertaking and requires more than deploying kaizen, and although Rother does a very good job of describing a process for changing the way people identify and address problems, true transformation requires much more. It takes leadership focused on developing others, a clear vision, effective annual plans, and much more.

        Transforming an organization requires the never-ending pursuit of learning. And learning requires a vision and an clear and honest reflection on what is preventing the process from happening. Reading Deming, Juran, Liker, etc. will help with the effort but without actually applying what they’re teaching to real-world situations, true learning will not happen.

        Of course, I’m still learning and will probably look back on this at some point in the future and want to seriously change my response.

        Thanks again for taking the time to comment.

        Posted by Gregg Stocker | April 7, 2015, 6:22 pm
  2. Lean Leadership! Wow! Is there such a thing? I get the impression that most people interested in Lean want to raid the Toyota toolbox, focussing on “how”, rarely “why”.

    My apologies Gregg, but articles like these are preaching to the choir. Assuming there is a body of knowledge you (and I) call Lean Leadership, why is it not taught as the absolute foundation of any leadership education? It is difficult to get a good estimate from Google, but the last time I tried there there were between 8-9 thousand business schools around the world. How many of these base their MBAs on Lean? How many give their students a visceral knowledge of Lean, rather than lumping it is as something optional in Operations? Apart from a very minuscule minority of academia who introduced Lean to us in the 90s, the rest have successfully ignored its existence, and so million (perhaps millions) new MBAs are minted every year without this core knowledge.

    The way people are educated in Lean is not very Lean (break-fix model), but very lucrative for the many Lean consultants. Does it make sense to try and sell Lean to someone surrounded by the trappings of his success when that person is in his 40s or 50s? Is he going to listen as he admires his BMW in his own parking space? How many consultants have the cojones to tell that leader bluntly that the problem is not his workers but the way he thinks and behaves? Konosuke Matsushita tried telling his elders over 30 years ago but they did not listen, they did not no how, and they are not listening now (apologies to Don McLean).

    It is a good article but there are many more like it not reaching the ears, hearts and minds of those that should listen. You would have my admiration if I learnt that you were trying to head-butt some sense into 25 Deans of business schools every day.

    Posted by Owen Berkeley-Hill | April 4, 2015, 5:01 am
    • Owen – Thanks for your comments.

      I agree with the premise of your comments, but I can’t stop writing and promoting a new way of thinking – even if it doesn’t always reach the right people. While I don’t have access to the Deans of business schools, I do work with leaders within industry everyday who are open to change the way they think and will do what I can to help them – and me – learn. I don’t always get through the first time, or the second, but I apply PDSA thinking to my own approach and continue to adjust until I find a way to get through to the people I’m trying to reach. I find that I need to adjust my approach with every new person with whom I work.

      I don’t know if it’s cajones as much as it’s the ability to coach and communicate to get through. I asked Deming about this once and he told me that, if I understand and others are not listening, then the problem is with me . . . I’ve got to change my approach (i.e., PDSA).

      Thanks again for your thought-provoking comments. You’ve definitely given me some ideas for subjects of future blogs.

      Posted by Gregg Stocker | April 7, 2015, 6:00 pm
  3. Nice reminder. Back in the 1950s Deming and Juran did not get along because Deming was a statistical quant jock and Juran emphasized that management of a total process was critical to quality performance. Fascinating now is that Deming’s SoPK is enduring better than Juran’s work. Deming really did learn every day over a lifetime, setting a great personal example of a key attribute of transformative leadership, no matter what label is given to the transformation.

    To illustrate why after WWII quality flourished in Japan, but not in North America, my first quality text was also used as a text in advanced statistics courses. Of course, executives choked on the stuff.

    Over their lifetimes, C. West Churchman and Russell Ackoff were two more figures who made their early mark in management science; then became recovering quant jocks. Their later writings are also worth examining. All three became proponents of systems thinking in the broadest sense, recognizing that a total system is very big and very diverse. An industrial system is physical, social, economic, biological, ecological, and maybe more than all that. And some of the variables are simply outside management control, and always will be. The lesson is that neither narrow modeling nor adopting techniques changes a total system.

    Leadership for transformation is primarily about changing people and intervening in a total system, recognizing that changes in one part cannot hold if the rest of the system does not transform to accept the change.

    As is often lamented, many “lean implementations” are overly mechanical. Operational flows change, but too little else does. For example, reward systems throughout a company remain inconsistent with lean. And leaders still want to direct people in detail — give orders — instead of creating a learning, adaptive system that nearly runs itself for all routine things.

    Today we are pursuing “leadership for lean.” That’s too narrow a thought. From a general management view, perhaps it is better vision is to envision the total culture and system one wants to nurture; then introduce lean techniques (along with others) as needed in order to change what people do, thereby gradually migrating toward that new system. Of course, it will never progress according to some project plan, but the transformation will be better. A better phrase than continuous improvement might be continuous transformation. Nothing is ever “done.”

    Posted by Doc Hall | April 4, 2015, 3:12 pm
    • Doc – Thanks for the comments. I agree that there are many who influenced the development of TPS/lean thinking. I like to use SoPK to teach leaders because it puts a lot of lean elements into one unified theory. Like lean, though, SoPK appears simple on the surface but is very complex to apply . . . one has to start small and continue to learn and adjust along the journey. I also find that the most successful organizations in establishing a lean mindset have done so as a system. I disagree with an approach to transformation that, for example, attempts to apply and “perfect” kaizen without focusing on other elements like annual planning, dashboards, leadership development, etc.

      I also agree with your point about “lean leadership” being too narrow. I really don’t even like to use the term “lean” – I’d much rather make transformation about the improving the organization than following the path written in best-selling business books.

      The best description I’ve heard of lean is that it’s about continual learning – with the idea, of course, that learning implies action.

      By the way, I’ve read your books before and truly appreciate your insight and approach, and always welcome your comments.

      Posted by Gregg Stocker | April 7, 2015, 5:48 pm

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