Deming’s Chain Reaction for the 21st Century? By Dave Kerr

  

Pulling my reflections from earlier parts of this series of articles together, this kind of picture begins to emerge, one which might represent a version of the Chain Reaction for modern times?

This is developing thinking – definitely not a finished work, and not detracting in any way from Deming’s original work.

I am hopeful that this, or some further development, will help to engage a wider audience – leading to a greater take up in practice – leading ultimately to a better quality of life for all.

What do you think?

Social Entrepreneurship and the Deming Chain Reaction - by Dave Kerr

Recently I have been both encouraged & excited to discover that, whether by design or accident, there appears to be an uncanny resemblance to a Universal Deming Chain Reaction/ Cycle in practice within what appears to be referred to as the world of ‘Social Entrepreunership’

In the foreword of Tania Ellis’s book “The New Pioneers ” (Wiley 2010 ISBN 978-0-470-74842-8), Professor Klaus Schwab, Founder & Executive Director of the World Economic Forum, states that:

 “The main idea is that leadership is meant to serve all stakeholders of a company – and, at a higher level, serve the global community. Leaders must act as the trustees for the long term prosperity of the community.”

The book contains many specific examples of this principle in play. One that particularly strikes me is the LifeStraw produced by a Swiss based Danish company, Vestergaard Frandsen, a textile business which used to produce work uniforms but now specialises in disease control textiles & other innovative life saving products & concepts. The LifeStraw is a 25cm long water filtration straw which – at a price of less than 6 dollars for governments or international relief organisations – can be used by a person for up to a whole year to turn most dirty water into safe drinking water!

Another interesting example comes from Blue Ventures, this year’s winner of the Buckminster Fuller Challenge  (Blue Ventures & Buckminster Fuller Challenge http://challenge.bfi.org/2011Finalist_BlueVentures). By connecting conservation with wealth creation (a good summary of the Chain Reaction?) Blue Ventures has found a way to help fishing communities in the developing world experience a counter-intuitive reality: that saving fish doesn’t mean starvation, it means surviving & prospering!

One further example for the time being comes from GlaxoSmithKline (GSK) as reported in the Independent on Monday 6^th June 2011 (http://ind.pn/mm6DJa).

Commenting on the move by GSK to offer its Rotarix vaccine (a vaccine which prevents diarrhoel disease – a deadly bug responsible for the deaths of more than half a million children annually) to poor nations for £1.50 a dose rather than £30, Andrew Witty, chief executive of GSK was reported as stating:

·         The drug  industry too often acts “as though it is detached from society.”

·         “To be successful in the long term, we have to operate in a way that is in step with society & its expectations.”

·         This move is  “not a gimmick or one off philanthropic gesture part of a concerted strategy to change our business model.”

·         “Specifically, we are aligning our commercial success with doing what we can to tackle the healthcare needs of people in all countries, including the poorest.”

In the final part 6 I will attempt to pull all this together.

A New Conversation for Quality Management | Quality Digest

A New Conversation for Quality Management | Quality Digest:

'via Blog this'

Part 4 Presentation of the Deming Chain Reaction

Whilst at a recent conference, where I made reference to the chain reaction, it occurred to me that a significant factor in the apparent low ‘take up’ in practice of the Deming Chain Reaction could be related to the way that it is still generally presented and described i.e. as a linear sequence in an almost explicit manufacturing context. I suspect that when it was first ‘developed’ this context & format were very appropriate/ relevant to the issues of the day e.g. post WW2 manufacturing & employment – but I wonder i this both potentially ‘undervalues’ & unintentionally limits its ‘take up’ in current practice? There appears to be a hint of this line of thinking in “Fourth Generation Management”. On page 23, describing the chain reaction, Brian Joiner writes:

“With his (Demings’) permission, we’ve added a final step to this chain: provide better return to investors.”

And potentially even more significantly goes on to say:

“And producing more with the same resources raises our standard of living”.

Reflecting particularly on this latter point, and in the light of some of today’s’ key issues e.g. quality of life, climate issues, stewardship of natural resources etc, causes me to wonder if a different form of presentation & wording might ‘open the door’ to a significantly greater application of the Chain Reaction. For instance I am wondering about:

· Presentation as a closed loop cycle – rather than an open linear sequence.

· Wording which is more readily related to a universal context – rather than a limited manufacturing organisational context. Some thoughts that are beginning to form:

o Starting point ;

§ ‘Understanding the real value needs of your ‘community of interest’.

o Costs decreased because:

§ Less pollutants ‘generated’.

§ Less wasted labour.

§ Less wasted creativity.

§ Less waste/ destruction of limited natural resources.

o Productivity improves:

§ Human.

§ Material.

§ Financial.

§ Ecological

o Outcomes including:

§ Jobs & more jobs.

§ Better quality of life.

§ Reduction in carbon emissions.

§ Conservation of natural resources.

§ Increased financial profit.

§ Better return to investors.

§ Increased ‘wealth’.

In part 5 we will briefly ‘visit’ the world of Social Entrepreneurship, hopefully to gain further useful insight

Part 3 Reflections on the Role of the Customer

In the ‘Deming Dimension’ (SPC Press Inc 1990 ISBN 0-945320-08-6) Henry Neave introduces the chain reaction (page 33) with a reference to Quality Guideline 1 in an article by Joiner Associates “A Practical Approach to Quality”:

Quality Guideline 1: Quality Begins With Delighting the Customer.

“.... Your bosses may be ecstatic, the Board of Directors blissful and your company may be considered a legend on Wall Street. But if your customers are not delighted, you have not begun to achieve quality”.

Pretty direct wording – which I suggest is symptomatic of a strong belief that is an implicit fundamental of the chain reaction.

Whilst currently there are ‘shed loads’ of words and lots of activity around the importance of customers e.g. customer care initiatives, questionnaires, surveys etc, my experience as a customer is generally that reality comes nowhere near to me ‘being delighted’. I conclude from my experiences that in practice ‘delighting customers’ is not generally regarded as either the starting point for quality nor product/ service delivery. My personal experiences and observations, affirmed in conversations with others, strongly suggest that, in general:

· The actual prime focus in action is on ‘boss’ (I use this term in a VERY wide sense).

· ‘Quality’ is what we can ‘get away with’.

· Delighting the customer means we have gone too far – and given something away for nothing.

· The prime ‘aims in action’ are actually:

o Reduce cost.

o Sell more – of whatever you can manage to sell.

Regardless of the fact that I personally find the statements made by Tom Johnson & Brian Joiner (see part 1) both consistent & compelling, we are, however, still seemingly left with the reality that current practice does not, in general, appear to follow the Deming Chain Reaction. Maybe the way that the Deming Chain Reaction is presented may be a factor? This will be our focus in part 4

The Rule of 150 | Quality Digest

The Rule of 150 | Quality Digest

Part 2 Reflections on the Deming Chain Reaction

In his ‘seminal’ book ‘Out of the Crisis’ (Cambridge 1982 ISBN 0-521-30553-5), Dr W Edwards Deming introduces the chain reaction on page 3:

“Management in some companies in Japan observed in 1948 & 1949 that improvement of quality begets naturally & inevitably improvement of productivity."

“... The chain reaction was on the blackboard of every meeting with top management in Japan from July 1950 onward...”

“... The production worker in Japan, as anywhere else in the world, always knew about this chain reaction; also that defects and faults that get into the hands of the customer loose the market and cost him his job.”

‘Flip’ back to page 2 and you will find a summary of the essence of the heart of the chain reaction:

“Improvement of quality transfers waste of man-hours and of machine time into the manufacture of good product and better service. The result is a chain reaction ....

(Authors note – Italics above are mine for emphasis, largely because they excite my current curiosity!).

When, as a manager in British Rail, I was first introduced to the chain reaction, like “the production worker in Japan, as anywhere else in the world,” it did indeed make intuitive sense – and still does. However, it did not, & in my experience generally still does not, appear to be common practice:

· Modern management thinking and practice does not generally appear to embody the belief that improvement of quality begets naturally & inevitably improvement of productivity.

· The chain reaction does not appear to be on the blackboard (aka powerpoint etc) of many if any top management meetings today.

If it really does make such intuitive sense to ‘production workers’ why does it not appear to make much/ any sense to modern management? Whilst there are undoubtedly very many contributory factors, my current reflections are ‘focussed’ around two particular issues:

1. What I regard & regularly experience as general ‘lip service’ paid to the role of customers.

2. The format, wording & context (manufacturing organisation) of the chain reaction as it is generally presented.

In part 3 we will explore some aspects of the role of the customer.

Reflections on Cost, Productivity, Value, Waste & Quality;Part 1 Value - the Prime Focus for Improvement

There would appear to be general agreement that much of the current interest in waste and ‘lean’ is traceable back, in one way or another, to the Toyota Production System (TPS). In “The Toyota Way” (McGraw Hill ISBN 0-07-139231-9), on page 7 author Jeffrey Liker, introducing the TPS, quotes Taichi Ohno (the person credited as the originator of the TPS) as follows:

“All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value-added wastes.”

In his November 2009 Quality World article ‘The Unnatural Environment”, Tom Johnson offers some profound insight into the focus of the TPS:

“So, if Toyota’s operations yield low costs and little waste, it is not because Toyota relentlessly strives to subtract parts. Instead, it is because the company’s constant focus on improving relationships among parts produces features such as direct, short connections & simple, unambiguous pathways without workarounds.”

In other words, the focus, or starting point if you like, of Toyota’s efforts is VALUE

not waste (aka cost). Waste (cost) reduction is a CONSEQUENCE of this focus on VALUE. This is congruent with Deming’s Chain Reaction (where ‘Improve Quality of Product and Service’ is synonymous with ‘Improve the added value for the customer’) – not a surprising fact given that Toyota ascribe much of their practice & success to the teachings of Dr Deming.

This highlights a subtle but very profound issue – there is a world of difference between a focus on ‘cost reduction’ (were most current efforts generally appear to start) & a focus on ‘adding value’.

In his book “Fourth Generation Management” (Mc-Graw-Hill Inc ISBN 0-07-03715-7) Brian Joiner shines further light on this issue. On page 23 he writes:

“What if we try to enter the Deming Chain Reaction at “Decrease Costs”? Or at “Return on investment?” Many companies have taken this route ... but it is doomed to failure. By starting at “Decrease Costs” instead of “Improve Quality”, they don’t eliminate the causes of the cost. One cost cutting drive therefore leads to further problems, which leads to another cost cutting drive. The situation spirals downwards.”

By looking at our own processes & systems with a focus on VALUE (as defined by the end customer) we are in effect ‘stepping into their shoes’ – a very good place to be since it is they who use (or not) our product & service!

In part 2 we will reflect a little more on the Deming Chain Reaction

How to Sustain Front Line Process Improvement Activities - Brad Power - Harvard Business Review

How to Sustain Front Line Process Improvement Activities - Brad Power - Harvard Business Review

“Do nothing” – a sensible management strategy.

I enjoyed a short article “Waiting as a change strategy” http://t.co/L0N7CUX by @markwfoden and it made me think about a phrase that often trips off my tongue: “Do nothing, at least in the first instance” is very often the right response for managers to events occurring in their companies.

I’m referring in particular to the way people typically react to performance data, though it also applies more generally in a conceptual sense. You can imagine the person compiling this month’s figures coming into your office saying ”You’re not going to like this, boss. We’re worse 9% on last month”. Then, in today’s high-pressure world, you feel yourself instinctively reacting with “well don’t just stand there, DO SOMETHING ABOUT IT!”

And the source of this panic-type reaction is that we are not generally taught about how numbers behave in the world of key performance indicators and understanding process capability. Most often the ups and downs of performance life are due to the natural variability of the process or system in question. Trouble is, by reacting in the manner described, the likelihood is that somebody will be found to blame for the downturn, or some immediate remedy is sought to ensure that the numbers will turn in the better direction next time. If the ups and downs are due to natural variation, then blame seeking and silver-bullet remedies will merely add to the waste already in the system. Indeed, it will make real improvement even more difficult as people seek to distort the numbers so that the witch-hunt is avoided next time.

On the other hand, with an understanding of natural variation and how to interpret the numbers using process behaviour charts, the instinctive managerial reaction changes dramatically. “Don’t just do something – STAND THERE!” And then in a rather softer tone – “Think about it. This month’s figure is within the range of variation we expect from this system. If it’s not as good we would like it to be, what do we have to do to work together to change the system of work and achieve the improvement we desire on a sustained and ongoing basis?”

This is an enormous change in management style, emanating from a much better understanding of statistics. “Do nothing” is a bit of a misnomer, I admit. Perhaps “Do nothing before engaging brain” would be more accurate. In fact, you’ll have already done something way before the monthly figures are out. You would have been using your process behaviour chart for months beforehand, and therefore have a powerful predictor of what the monthly (weekly/daily/hourly) figure is going to be so it’s unlikely to be a surprise.

And on the odd occasion when the number is outside the expected range of variation, you’ll be on-hand in real time to know for sure “Something has truly happened differently. Let’s go and find out what’s going on whilst the conditions that created the difference are likely to be still around.

You do not achieve cultural change by trying to change the culture

I was inspired today by @flowchainsensei’s tweet "You do not achieve cultural change by trying to change the culture." Which strangely enough is attributed to Francis Maude MP.

I think there is great truth in this statement. In my experience any attempt at culture change without simultaneous changes in the system of work will simply result in further demotivating staff, increasing stress and increasing waste. It is starting at completely the wrong end of cause and effect.

If you begin by examining the system of work, together with eliminating the overlay of traditional management predilections such as quotas, arbitrary targets, service agreements, and “just get on with it” – once people believe you are for real their levels of engagement and excitement go through the roof and culture change comes for free.

I was reminded of a story told by Peter Scholtes on p45 of “The Leader’s Handbook” (pscholtes.com/handbook) where he asked a client “What are your biggest problems?” “Morale” was their immediate and universal response. “I didn’t want to work on morale problems because they are symptoms of something else and working on them usually involves a lot of useless complaining. I got them to agree to defer working on this”.

Instead, Scholtes got the staff working on improving processes that impacted on customers. For example, they studied the core process with the aim of reducing downtime, and set up a series of subprojects to develop real solutions – for example looking at reducing the time spent waiting for parts.

“After six or eight weeks of involvement in such activities, I suggested at a meeting “Now let’s talk about the morale problem.” “What morale problem” they responded.

So the message is clear: change the wasteful and sometimes daft ways of working you currently have, involve the people who actually do the work, and you will gain an energized and more committed workforce into the bargain. If you like, a corollary of “you can’t motivate people, you can only stop demotivating them”.

Scott Adams has useful insight also. Famous mostly in his deriding of management, Adams offers something more positive in Chapter 26 of “The Dilbert Principle” with his “New Company Model:OA5”. His grand insight about company fundamentals is ““Companies with effective employees and good products usually do well”.

The prime aim of his new company model is “to make the employees as effective as possible, and so to get the best out of employees and make sure they leave work at five o’clock (hence OA5)”. He goes on “Most people are creative by nature and happy by default. It doesn’t seem that way because modern management is designed to squash those impulses. An OA5 company is designed to stay out of the way and let the good things happen”.

Overall he is saying “Put in place the culture for transformation – keep your people fresh, happy, and efficient, set a direction – and then stay out of the way”.

Whenever I hear an organisation say “We need culture change around here” I give a sigh and roll my eyes. Instead, let’s just get on with improving the system of work, eliminating wasteful management practices, and allow people their right to joy in work.

Are we losing interest in the Theory of Variation?

Two very big organisations that I’m close to have made big changes in their approach to business improvement recently. Neither have said this in so many words, but their body language is proclaiming very loudly “Six Sigma is dead – long live lean”.

And is it my imagination, or has “Six Sigma” dropped out of common business language, whereas “Lean” is booming in management speak currently?

In the two organisations I refer to, Six Sigma is regarded as far too slow in achieving business change, and people spend far too long in the classroom away from the business. Lean is presented in a fast paced and exciting style over half the time, with focus absolutely on waste reduction.

One of the victims of this change is that managers are no longer taught about statistical variation and the use of Shewhart Control Charts. And, in my experience, this simply extends a condition that is widespread in UK management circles – that nobody knows about what to do with system or process performance data. People say they’ve never heard about Variation, or they’ve heard about it in college and never used it.

The typical management world is inhabited by Key Performance Indicators (KPIs), Service Level Agreements (SLAs), Targets to achieve (judged on a weekly or monthly basis), and Red Amber Green (RAG) status tables to highlight the miscreants. Unbeknown to people attempting to manage like this, they are almost certainly making things worse and adding waste, together with fear and stress to their staff.

People aren’t taught that the fact that this month is better than last month, or worse than the same month last year, might simply be down to the effects of Natural Variation in the system under study. In fact, the ups and downs of performance can only be understood by careful use of control charts (more usefully known as process behaviour charts) which determine statistically the capability of your system to deliver. They broadcast the message loud and clear that, almost always, it is only rational action on the system that brings about improvement.

This is a big breakthrough in changing management style. Instead of setting people against one another, trying to pass blame or take action to distort the system to give the illusion of achieving targets – understanding variation unites people in working together to improve process capability, engages their innate interest in their work, and liberates them from the shackles of the RAG.

I’m all for reducing waste in organisations – but I think by not teaching the Theory of Variation we are perpetuating the biggest waste of all, the prevailing style of management.

Organizational Sabotage - The Malpractice of Management By Objective by Ken Craddock & Kelly Allan

Organizational Sabotage - The Malpractice of Management By Objective by Ken Craddock & Kelly Allan

Making What's Counted Count

Making What's Counted Count by Ian Graham.

Knowing what data to collect is one thing; knowing how to interpret it is another. What is missing from many managers’ competence (and this includes managers at all levels up to the top) is knowledge of the Theory of Variation. Without this knowledge many managers can and do interpret data incorrectly – often and unknowingly using it as the basis for incorrect action. In addition, they do not have access to the powerful new levels of interpretation which knowledge of this theory brings. This paper sets out to explain in simple terms what this theory is and how it contrasts with the implicit theory we use today.

Managing Performance Improvement on the Railways

Managing Performance Improvement on the Railways by Nigel Clements

Originally written in 2000 and last reviewed in 2005. Are things really still like this in the railway industry? Let us know!

The Perfect Target | inspguilfoyle

The Perfect Target | inspguilfoyle

A View of Deming's Thinking in the Modern World

A View of Deming's Thinking in the Modern World by Nigel Clements

Comparing the two Great Quality Gurus, Deming and Juran

Comparing Deming and Juran by Nigel Clements

John Thackara's 2011 Buckminster Fuller Challenge keynote address.: Change Observer: Design Observer

John Thackara's 2011 Buckminster Fuller Challenge keynote address.: Change Observer: Design Observer

Be Careful When Going to the Gemba — Lean Blog

Be Careful When Going to the Gemba — Lean Blog

Deming, Scholtes and the "Inspirational Petunia" Strategy of Leadership by Emma Langman

Deming, Scholtes and the "Inspirational Petunia" Strategy of Leadership by Emma Langman

Why "Conforming to Spec" Isn't Enough by Nigel Clements

Why "Conforming to Spec" Isn't Enough by Nigel Clements