Innovation and Deming’s System of Profound Knowledge

Here’s a compilation of some of my tweets from this year’s Annual Deming Conference in Los Angeles, CA.

My top 5 take-aways from this terrific conference:

1. Paula Marshall, CEO at Bama Companies describing how Dr. Deming showed her the futility, stupidity and waste of performance evaluations and merit play.  Watch this short video clip: http://youtu.be/9PW1xVTAIEo

2.Dr. Ed Chaplin explaining the connection between Deming’s system of profound knowledge and neuroscience, including this bonus discussion on why we tend to blame the front-line worker related to the Ebola situation in Dallas.  Watch this short video clip: http://youtu.be/K335makju6c

3. JW Wilson explains how the prevailing education system affects the brain and causes long-term damage (including many addictions).  Watch this short video clip: http://youtu.be/BPBWMRP212U  Here is the original source of this video: https://vimeo.com/album/2212406/video/57032725  Here is another great video featuring JW Wilson explaining the meaning network and the disconnect with our dependence on extrinsic motivation: https://vimeo.com/album/2212406/video/57027887  A friend directed me to this TED talk video that provides some additional thought on the problems with the prevailing way we educate  and the consequences: http://www.ted.com/talks/ken_robinson_says_schools_kill_creativity?language=en#t-430463  No doubt about it, the education system is FUBAR, so is the healthcare system.

4. David Langford’s discussion on innovation in education, including the JW Wilson video, but also this great video of a better education system in Australia: http://youtu.be/yAL5O6GFsO8

5. We watched some video clips of Dr. Deming after our evening dinner.  See the individual links below.

Next year’s conference will be at Iowa State University.  I hope to see you there.

Here (below) are some of my other tweets and some comments from the conference.

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I realize that I need to get involved with the Deming Institute early on next year in order to help with their social media plan during the event.  I made a hashtag #Deming2014 during the event, but it would have been more effective if this had been built into the system before-hand.

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The only problem is that I assumed that the presentation files were on the stick, but they weren’t.  It’s a good idea though, just not implemented.  I could volunteer to help with this next year too.

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140 is not a bad number, but I always wish there were more.  I think this is a problem that needs to be addressed.  If the same “Demingites” are the ones who attend year after year, then the conference will die of old age.  What will it take to get the message and participation out to other industries?  To Education, Government and Healthcare?

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Kevin Cahill, oldest grandson of W.E. Deming starts the conference.  Why don’t we see more systemic innovation?  Where does innovation come from?  What prevents it?

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Here’s to the crazy ones.  I remember this short Apple commercial.  Apple was not one of the presenters at the conference.  I suppose they could be in the future.  is there anyone at Apple that could connect their work to the system of profound knowledge?

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I always enjoy hearing Kelly Allan present.  He provided an overview of Dr. Deming’s system of profound knowledge (Deming 101).  This was a very helpful presentation.

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Management by trickery, fear and theatre of magic.  Dr. Deming called it the “mythology of management”.

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System of profound knowledge (Deming’s philosophy) is scientifically elegant (everything you need & nothing more) & humane.  A great quote from Kelly Allan.

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How will your life change when you understand and start to apply this knowledge? 1 Better thinking, 2 extraordinary results, 3 everyone wins.

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If you want to make music from noise, then Dr. W. Edwards Deming is your guy.

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If a company’s aim is to make money, that is really not that much help.  Such an aim is not bigger than ourselves.  What is this need that exists that our company meets?  What do we contribute to society?  To our world?  Do we make things better or worse?

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The only people who think that command and control works are those who practice that archaic method.  Why does this method persist?  We are fooled into thinking that it works.  Our (current) success is just dumb luck.  We are saved (for now) by the fact that our competitors are mediocre and practice the “mythology of management” (including management by spreadsheet and other forms of trickery).  How long can we tolerate and afford this method of management?

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What do we mean by “boneless chicken”?  Is an egg a “boneless chicken”?  The importance of operational definitions.

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Another great speaker and thinker, David Langford, prefers the title of “Demolitions” not “Demingites”.  We’re going to be blowing things up.

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David shared a video clip of J.W. Wilson, explaining how the prevailing education system is toxic to the human brain and to humans.  It produces addictions (drugs, etc.).

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Example of a better education system from Melbourne, Australia.

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Who do we tell when we are satisfied?  No one.  That’s why satisfaction is over-rated.

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What would we see in a “me” organization and then in a “we” organization.  If most organizations are still “me” organizations, how do they stay in business?  They are kept in business thanks to lousy competitors.  Most other organizations are mediocre as well.

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The prevailing style of management is in the lower-left quadrant (me orientated and reactive).  Better management needs to be on the right-hand side, we oriented and both proactive and reactive (it’s ok to decide when to react).

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A highlight among the highlights was the presentation by Paula Marshall, CEO of Bama Companies.

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CEO Paula Marshall describes how Dr. Deming taught her about the problem with performance evaluation and merit pay.

Here’s a bonus video that I found on Paula Marshall: https://www.youtube.com/watch?v=WzAFNFGgBHA

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The “iceberg” metaphor comes in handy again.  This time, explaining the systemic structures that underlie the behaviors that demonstrate trust and trustworthiness (on the surface).

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Increasing trust is like moving the fulcrum closer to the innovation (and improvement) that we need.

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The relationship between trust and the 4 components of the system of profound knowledge.

In 1993, Dr. Deming added the “zero stage” (generation of ideas) to his view of the organization as a system.

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But he did not describe a method by which to accomplish this.  Do not seek to follow in the footsteps of the old masters.  Seek instead what the old masters sought.  Ron Moen described a possible method.  Summarized in 3 video clips.

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After dinner we were treated to some video clips featuring Dr. W. Edwards Deming.

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Day 2 we learned about what is happening at the Deming Institute.

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We learned about the Deming Institute podcasts and how we can get involved.

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We learned about the 21st Annual Deming Research Seminar in Georgetown, Washington, D.C. and how we can submit abstracts.

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Dr. Ed Chaplin gave a terrific presentation on the connection between the System of Profound Knowledge and neuroscience, including a bonus discussion on “blaming the front-line worker” and Ebola virus management and reaction in Dallas, TX.  I did not get the entire presentation on video, but here are a few clips.

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It’s The System, But Not Just Any System … It Depends on the Principles

People want better results.  I hear it every day.  Costs are over-running revenues.  There are too many customer complaints.  There are too many patient injuries and even deaths.  Yes, people want better results.  And I’ve heard people say that is management’s job … to get results.

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But by what method?  There are lots of ways that you can get results.  I recall Dr. W. Edwards Deming saying on more than one occasion, “Anybody can make anything happen if they don’t count the costs!”  Managers can get better results (short term) by threats and punishment.  We can (and do) get better results every day through heroic efforts, fire-fighting and best efforts.

People hear about “lean” and they understand that you can get better results through this methodology.  So, they start their journey.

They read some books, engage with some consultants, organize some teams and learn some tools.

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This isn’t wrong.  It’s a common way that people learn the principles behind lean-thinking.  Getting a team together and improving the work using an event and introducing tools does work.  And the results often follow.

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There’s so much waste, inefficiency and variation in healthcare (and other industries) that it would be hard not to get some improvement.  The trend looks positive and people are encouraged by their work.

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But the improvement does not last.  Not by this method alone.  The improvement starts to slip.

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The typical response is to re-frame or re-name the effort (with some more tools), and sometimes we see some renewed improvement.  But it too does not last.

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The actual rate of improvement remains flat (or goes down in you factor in advances made by your competitors).

Lately, I’ve heard a lot of talk about “creating a lean system”, and I also see people trying to copy what others are doing (they’ve gone beyond copying the tools, but are now trying to copy the system).  It may be “directionally correct”, but will it result in sustained improvement?  Much of this appears to be resulting in a churn of activity, but not sustained improvement.  Time will tell, but I think there is missing puzzle piece.

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In 1980, Dr. Deming was interviewed for a program that aired on NBC “If Japan Can, Why Can’t We?”  In that interview he said, “people go to other companies in other countries and they want to copy what they are doing.  But they don’t know what to copy!”  He was talking about the thinking, which can’t be copied.  Completely different mental maps are required, new wiring in our brain.

Many organizations give up on this lean stuff at this point.  “This stuff doesn’t work in healthcare”, they say.  And it’s off to the next shiny object.

What’s missing?  The model for improvement is incomplete.  There’s an entire “undiscovered country” that is not often understood.  It’s not even under suspicion.

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There are principles that need to be understood, and not just any principles.  What do we mean by principles?  Imagine you wanted to build a house.  In order to do this, you would need to learn the principles of house-building.  This might include some principles of geology (the foundation for a house) and the principles of different building materials, and the principles of architecture.  If you went about trying to build a house without understanding these principles, you would have problems. There are consequences of not understanding principles.

The same is true for business (and healthcare is a business).  There are certain principles for achieving excellence in all parts of your business.  There are principles of working with and enabling people, principles of improving the work, and principles of working on the right things (the things that provide value to your customer).  What are some of these principles?

Here’s a list:
Enabling principles -
Lead with humility.
Respect for every individual.
Learn continuously.

 

Improvement principles -
Seek perfection.
Provide quality at the source.
Flow and pull value.
Embrace scientific thinking.
Focus on process.
Understand and manage variation.

Alignment principles -
Think systemically.
Work toward constancy of purpose.
Provide value to the customer.

Are there more principles? Yes, probably.  But this is a good start.

The thing about these principles is that these are not the principles that most managers have learned and for which they have been rewarded and recognized.

The prevailing style of management does not reward “leading with humility”, but tends to recognize and reward managers who have all the answers, or solve the problems, heroic efforts and hard work.  We value superstars.

The prevailing style of management does not reward or recognize “respect for every individual”.  If it did, we would not see the focus on the individual when things go wrong (blame and shame).

The prevailing style of management does not reward continuous learning, not really.  The focus is on results.  Curiosity, asking questions, learning about and embracing the current state is not what management is paid to do.  The learning seems to have stopped once the degrees were conferred.

The prevailing style of management does not reward “seek perfection”, perhaps it rewards “demand perfection” or “achieve perfection”, but that is not the same thing.  Seeking perfection is never-ending, ongoing effort to provide value to the customer.  When management says “things are good enough” or shows a scorecard that is all “green”, there is something amiss.

The prevailing style of management does not reward or recognize providing quality at the source.  The prevailing style depends on and builds in inspection – checking, double-checking and triple-checking.  Passing defects along is a way of life.  We don’t even see the defects.

The prevailing style of management does not understand much less reward and recognize “flow and pull value”.  Information and problems are batched.  We save items for monthly or quartely committee meetings.  Waiting is built in to our processes.  We even have rooms just for waiting.

The prevailing style of management does not embrace scientific thinking.  Instead of Plan, Do, Study, Act (or Adjust), we tend to see Plan-Do, Plan-Do, or Do, Do, Do.  Scientific thinking means developing a hypothesis about what is going on, and a hypothesis about what might lead to improvement, and testing that hypothesis and studying the results, then adjusting accordingly.  Not once, but continuously – forever.  Most managers don’t see their job as running experiments.  The focus is on results.

The prevailing style of management does not focus on process.  The tendency is to focus on the individual when things go wrong (or even when they go right).

The prevailing style of management does not include an understanding of variation or how to react to variation.  The tendency is to react to every outcome as something that needs to be investigated and corrected.  Understanding the difference between random (common cause) variation and assignable (special cause) variation seems to have eluded management, and the schools that management attended.  For some reason “understanding variation” has been equated with statistics, or six sigma, or other mysterious areas of specialty.  The most important application of this principle applies when we don’t have data – it applies to the management of people.

The prevailing style of management does not reward and recognize an understanding of “systemic thinking”.  The current tendency is to chop the organization up into parts and try to manage the parts as if the organization were additive.  The prevailing style thinks in terms of linear, cause & effect.  If we see something, we think it is entirely logical and rational to find the one cause.

The prevailing style rewards and recognizes short-term thinking and results, not constancy of purpose, long-term.

The prevailing style of management does not reward and recognize providing value to the customer.  The tendency seems to be to focus on what the boss wants.

I could go on and on.  We have a lot to learn (and unlearn) around principles.  Myself included.  Creating new mental maps is hard work and is not easy.  It takes deliberate effort, new experiences, a willingness to experiment, and patience (with each other and ourselves).

When we do understand these principles, it affects the kinds of systems we design (or how we adjust our existing systems).  Now when we turn our attention to systems we will increase the likelihood of sustained improvement.

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What is a system?  Dr. Deming defined a system as “a network of interdependent components that work together towards  common aim”.

Systems are not new things.  They are all around us.  Our body works as a system – actually a group of systems (respiratory, cardiac, muscular-skelatal, etc.).  We deal with systems every day.  The transportation system is an example.  It is comprised of interdependent components (traffic signals, rules, police, education, training, highways, signs, gps) that work together toward a common aim (help people and things to get safety from one point to another).

Systems are comprised of tools (among other things).

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We have a lot to learn about systems.  One thing we need to understand is the affect that systems have on behavior.  Systems drive behavior.  That’s why we all drive on the right-hand side of the road (in this country).  That’s why we stop at a red light.

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People say they want to create a culture of continuous improvement, that they want to change the culture in their organization. A company’s culture includes the collective behaviors in the organization.  The behaviors of top management, middle management and the front line.  If you want different behaviors, there are really 2 levers to pull: 1) what gets measured (especially if it is made transparent).  As soon as you start measuring something and making the results visible to everyone, the behaviors change.  But that is not sufficient.  2) Because systems drive behaviors, we need to think about what kinds of systems (and behaviors) we want and we need to learn how to design and adjust our systems.

It’s the system.  But it is also the principles behind the system.

It’s also important to be clear on the roles and responsibilities.  Top management needs to own the principles.  Their understanding of these principles, and the behaviors exhibited by this understanding, sets the climate for the organization and is the primary way they contribute to the results of the organization.  Middle management are the primary owners of the systems.  They design, redesign, measure, monitor and maintain the systems.  This is their primary contribution to the organization’s results.  The front-line workers are primarily involved with the daily use of tools and methods (parts of the systems).  They need to own, design and redesign these tools.  This is their primary contribution to the organization’s results.

When I ask questions about who owns what in this model, I often get these answers: Who owns the tools?  The typical answer is either “management” or, more likely, “the lean team”.  Who owns the systems?  The typical answer is, “what systems?” or more likely, “what is a system?”  Who owns the principles?  The typical answer is silence.  Some principles may have been discussed or embedded into some courses, events or workshops, but they are not usually made explicit.  They ware not typically reflected upon and the correct ownership (top management) is not well understood.

NOTE: I did not come up with these ideas.  I learned this from several sources including the Shingo Institute and the Institute For Enterprise Excellence., and the Lean Enterprise Institute.  I also learned a lot (and continue to learn a lot) from the work of W. Edwards Deming and the Deming Institute.

The Mythology Of Management Seems To Start in First Grade

I still remember some things from when I was in kindergarten.  My teacher was Mrs. Sears.  We took naps and I learned to skip.  One day we had a fire drill that was supposed to include a chance to see a real fire truck and get one of those plastic red fire hats.  The problem was that the kid who led us out of our room took a wrong turn and we were on the other side of a fence.  We could see the fire truck and the hats, but did not get to ride the truck or get a hat.  I also remember naps and drawing with crayons.  Mrs. Sears gave me a cut-out of a butterfly and I drew a farm.  I’ve been doing landscapes ever since.

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Kindergarten was great, but things changed in 1st grade.

It was that second word “grade” that did it.

Why do we think we need grades?  Why do we think that helps?  The answer is we don’t need them and they not only do not help, they harm.

Dr. Deming was clear and unrelenting on this point.  He summarized this in Figure 10 from his book “The New Economics“.

 

 

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Here’s a quote from the book.  “Figure 10 shows some of the forces of destruction that come from the present style of reward, and their effects. What they do is to squeeze out from an individual, over his lifetime, his innate intrinsic motivation, self-esteem, dignity. They build into him fear, self-defense, extrinsic motivation. We have been destroying our people, from toddlers on through the university, and on the job. We must preserve the power of intrinsic motivation, dignity, cooperation, curiosity, joy in learning, that people are born with.”

I heard him use the term “mythology of management” and “prevailing style of management” interchangebly.  He showed us that much of what we see in management today (not that different from when he was alive) was actually a modern invention, not something that was inevitable.  We are led to believe that the best way to manage an organization is to chop it up into parts, manage the parts, hold people responsible (accountable) for the numbers produced by the parts.  We then evaluate people on their performance (grading) and think that the organization is the sum of the parts.  It’s mythology, pure and simple.  The mythology of modern management.

Grading people (starting with kids) is a force of destruction.  It is not necessary, yet we do it?  Why?

Performance evaluation is also a force of destruction.  It started with grading.  Why do we do it?  It is not necessary and it is destructive.

Dr. Deming labeled this as part of the “Seven Deadly Diseases of Western Management” in his 1986 book “Out Of The Crisis“, number 3 in the quote below.

“Deadly diseases afflict most companies in the Western world.  An esteemed economist (Carolyn A. Emigh) remarked that cure of the deadly diseases will require total reconstruction of Western management.

Enumeration of the deadly diseases.

1. Lack of constancy of purpose to plan product and service that will have a market and keep the company in business, and provide jobs.

2. Emphasis on short-term profits: short-term thinking (just the opposite from constancy of purpose to stay in business), fed by fear of unfriendly takeover, and by push from bankers and owners for dividends.

3. Evaluation of performance, merit rating, or annual review.

4. Mobility of management; job hopping.

5. Management by use only of visible figures, with little or no consideration of figures that are unknown or unknowable.

Peculiar to industry in the U.S., and beyond the scope of this book.

6. Excessive medical costs. As William E. Hoglund, manager of the Pontiac Motor Division, put it to me one day, “Blue Cross is our second largest supplier.” The direct cost of medical care is $400 per automobile (“Sick call,” Forbes, 24 October 1983, p. 116). Six months later he told me that Blue Cross had overtaken steel. This is not all. Additional medical costs are embedded in the steel that goes into an automobile. There are also direct costs of health and care, as from beneficial days (payment of wages and salaries to people under treatment for injury on the job); also for counseling of people depressed from low rating on annual performance, plus counsel and treatment of employees whose performance is impaired by alcohol or drugs.

7. Excessive costs of liability, swelled by lawyers that work on contingency fees.”

Here’s an elaboration of #3:

“Evaluation of performance, merit rating, or annual review.  Many companies in America have systems by which everyone in management or in research receives from his superiors a rating every year.  Some government agencies have a similar system. Management by objective leads to the same evil.  Management by the numbers likewise.  Management by fear would be a better name, someone in Germany suggested.  The effect is devastating:   It nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry and politics.   It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior.  It is unfair, as it ascribes to the people in a group differences that may be caused totally by the system that they work in.  Basically, what is wrong is that the performance appraisal or merit rating focuses on the end product, at the end of the stream, not on leadership to help people.  This is a way to avoid the problems of people.  A manager becomes, in effect, manager of defects.  The idea of a merit rating is alluring.  The sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate people to do their best, for their own good. The effect is exactly the opposite of what the words promise.  Everyone propels himself forward, or tries to, for his own good, on his own life preserver.  The organization is the loser.  Merit rating rewards people that do well in the system.  It does not reward attempts to improve the system.  Don’t rock the boat.  If anyone in top management asks a plant manager what he hopes to accomplish next year, the answer will be an echo of the policy (numerical goal) of the company. (James K. Bakken, Ford Motor Company.)  Moreover, a merit rating is meaningless as a predictor of performance, except for someone that falls outside the limits of differences attributable to the system that the people work in (cf. later pages).  Traditional appraisal systems increase the variability of performance of people.  The trouble lies in the implied preciseness of rating schemes.  What happens is this.  Somebody is rated below average, takes a look at people that are rated above average; naturally wonders why the difference exists.  He tries to emulate people above average.  result is impairment of performance.

“One of the main effects of evaluation of performance is nourishment of short-term thinking and short-time performance.  A man must have something to show.  His superior is forced into numerics.  It is easy to count.  Counts relieve management of the necessity to contrive a measure with meaning.  Unfortunately, people that are measured by counting are deprived of pride of workmanship.  Number of designs that an engineer turns out in a period of time would be an example of an index that provides no chance for pride of workmanship.  He dare not take time to study and amend the design just completed.  To do so would decrease his output.  Likewise, people in research and development are rated on the number of new products that they develop.  They tell me that they dare not stay with a project long enough to see a product into manufacturing; that their rating would suffer if they did.  Even if his superior appreciates effort and ability to make lasting contributions to the methods and structure of the organization, he must defend with tangible evidence (viz., counts) his recommendations for promotions.

“Evaluation of performance explains, I believe, why it is difficult for staff areas to work together for the good of the company. They work instead as prima donnas, to the defeat of the company.  Good performance on a team helps the company but leads to less tangible results to count for the individual.  The problem on a team is: who did what?  How could the people in the purchasing department, under the present system of evaluation, take an interest in improvement of quality of materials for production, service, tools, and other materials for nonproductive purposes?  This would require cooperation with manufacturing.  It would impede productivity in the purchasing department, which is often measured by the number of contracts negotiated per man-year, without regard to performance of materials or services purchased.  If there be an accomplishment to boast about the people in manufacturing might get the credit, not the people in purchasing.  Or, it could be the other way around.  Thus, teamwork, so highly desirable, can not thrive under the annual rating. Fear grips everyone. Be careful; don’t take a risk; go along.”

I’ve blogged about this before, and will do it again.  Repetition got us into this mess and only relentless repetition will get us out.

The perspective from Peter Scholtes.

The perspective from Alfie Kohn.

And Dr. Deming’s Perspective.

 

 

 

So, You Want To Be A Healthcare Value Network Member? Oregon Tour

As part of my work to support the Healthcare Value Network, I had the good fortune to visit two great organizations in Oregon last week.  Here’s a brief summary.

I asked to learn about the current lean work that was going on at Oregon Health & Science University in Portland, OR.  I was invited to see a series of daily huddles with the first one beginning in the OR at 7:00 am.

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Here’s a picture of some of the OR staff with something they invented – a “huddle board on wheels”.  This board helps to support the daily huddles in the OR.  There are key items for tracking and communicating on each of the 4 sides.  Each side is a white board, which can be updated quickly on the spot in real time. The huddles take 15 mins.   The staff certainly have a sense of humor.  One of the huddle boards (Neurosurgery) had this written on the top “Actually, it IS brain surgery!”

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I saw a series of huddles that work together as a system to facilitate communication and coordinate activity up and down (and across) the organization.  This diagram shows the current main huddle types and what is discussed.

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Here’s another example of a visual management board used at one of the daily huddles. They are tracking and improving “readiness for surgeries”.  This board shows where there are problems and accountability for studying and improving future readiness.

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“Knowing how we’re doing” on key measures of importance to the organization and the OR’s performance on these measures. A combination of computer-supported and hand drawn graphs and charts. This board is also used in daily huddles.

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A close-up example of how the graph helps tell the improvement story “getting information to the family”.

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Another example is “improving surgery turnover time”. The sharp drops occurred after improvement “kaizen” events. The graph shows if the improvement has been maintained and if the standard work that was developed is being followed.

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Another graph that shows how the staff is doing with “process audits”. This is a way to see how the standard work is being followed once it has been agreed to by the people who do the work.

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An example of a team’s “kanban board”. There are lots of areas for improvement and ideas for improvement, but it is not possible to work on them all at once. Which one’s to start with? How many can we handle per week?  This makes the process visible.

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I saw an example of improvement being made in the oncology infusion unit. This list shows the 47 standing orders that had to be managed by a staff person for one patient. After the improvement work, the list was reduced to 9.

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The latest data point shows what looks like substantial improvement in patient experience. What are the likely causes? The staff believe a lot of it has to do with a new system for matching and scheduling staff based on patient acuity. The next step is “level loading”.

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Not all huddles are in person. This manager is leading a “virtual huddle” with remote departments. He’ll take the information that needs to be escalated to the next-level huddle.

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This is what the daily administrative huddle looks like. It’s a “standing meeting” (no-one sits) and it takes about 15 minutes to understand the current state of the organization. This is not a meeting for problem-solving. That occurs during the remainder of the day, with updates at subsequent daily huddles.

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By 9:00 am the information from various huddles will be discussed at the daily administrative huddle. This occurs in a “visual room” where current performance is posted. It was helpful to see this wall with performance on key measures (compared to other academic medical centers). Some things to note: data were plotted on control charts to tell if the performance was stable or not, and how the performance was against the goal. Those that are not yet at goal are coded “red”, those that are meeting goal are “green”. The colors help to determine where efforts need to be focused and what changes need to be made to study and adjust.

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Another wall shows the major areas of improvement area by department and by month. There is no shortage of improvement needed, but it’s not possible to tackle everything right away. This helps to prioritize and plan.

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Part 2 of my visit took me to Salem, Oregon.

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Salem Health hosted a meeting of the “Oregon Healthcare Lean Community of Practice”. This is a grass roots, volunteer effort to help spread the understanding and application of lean thinking to healthcare organizations in Oregon.

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The session was kicked off by CEO, Norm Gruber who offered a welcome message and history of the Salem Health lean effort. He described how they “did their homework” to really understand what a lean transformation is all about. “It won’t work unless top management understands this and is actively leading the work. This is not a set of tools.”

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The visit featured short tours of various areas. This is a wall in the information services department. Salem health is not only a member of the Healthcare Value Network, but also the Clinical Business Intelligence Network. I blogged about this before. Here’s a link to that blog post, including a youtube video describing the connection between lean and information.

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All departments have a board that links that department’s work with the key goals for the organization. Some of the boards are electronic, like this one in Environmental Services.

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Here’s a close-up of the board. The EVS department has identified processes (and process measures) that connect to the key outcomes (outcomes measures) that connect to the related items at the organization level.

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Once improvement has been made in a measure, it is not forgotten about. The measure is monitored for 30, 60 and 90 day updates to see that the improvement in that measure has been sustained.

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The daily process measures that will go into the electronic board are gathered on this white board.

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Some departments (like this nursing area) have a similar board that is paper on a magnetic board. The same approach is applied here.

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The organization has created a giant fish-bone diagram that shows the current performance on the key measures that ultimately affect unintended outcomes for patients (mortality, infections, etc.)

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Here’s a close-up of the hypothesis of how this fish-bone diagram works.

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The lean support team has a nifty way of keeping track of the monetary savings from their lean efforts

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The session closed with an overview of the Oregon Healthcare Lean Community of Practice and a “call for volunteers” to host the next meeting. Having been involved with multiple similar volunteer efforts in my career, I can personally attest to how difficult it is to sustain such an effort. It’s important work that requires a tremendous amount of tenacity and patience.

Lean Thinking and Information (Technology) – Converting Data Into Wisdom

I recently had to upgrade to a new computer.  When I say “had to” I don’t mean that I was coerced, or that my old computer died.  But it became apparent that my 5 year-old computer was not keeping up with the information or processes I was handling.

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Fortunately, I have access to top-notch computer advice (my son, Dan)  It was actually Dan who pointed out the need and the opportunity for improvement.  “Dad, you need a new computer”.  This leads me to two observations:

1) As Dr. Deming often said, “A system cannot understand itself.  An outside view is required.”  Dan provided the outside view, otherwise I would probably still be writing this blog (and trying to do many other things) on my old computer.

2) Perhaps you have heard the term “digital natives” and “digital immigrants”?  I heard about this approximately one year ago from a physician who was describing the variation among his colleagues (of different ages) regarding interest in and capability to work with computers.  Digital natives are people (like my kids) who grew up with this technology and for them, it is intuitive – their first language.  The rest of us are “digital immigrants”, which means we can learn the language and some can become proficient, but we will always have an accent.

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I think that my first introduction to the connection between lean thinking and information technology was through reading a book co-authored by friend and colleague, Mike Orzen.  This is a useful book that I recommend.

A second milestone on my understanding was through discussions with friend and colleague, Julie Bartels who leads up the Clinical Business Intelligence Network at the ThedaCare Center For Healthcare Value.  Julie agreed to an impromptu youtube video describing the connection between lean thinking and clinical information.

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Yesterday I listened to a very helpful web interview featuring friend and colleague, Mark Graban who was interviewed by Healthcare Tech Talk.

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This interview contains some very helpful insights, including the key role for top management to really understand what this (lean) is all about.  I highly recommend that you listen to the interview.

Dr. Deming often pointed out that information is not the same as knowledge.  For instance, knowing the capitals of all of the 50 states is information, but it is not knowledge.  Knowing why St. Paul became the capital of Minnesota is knowledge.  It helps us to predict the future (the attributes of a state capital).   He also pointed out that having the latest information will not lead to improvement (or survival) for individuals or for businesses.  Here are some excerpts from his 1993 book, “The New Economics“:

“Information is not knowledge. We are today in possession of instant communication with any part of the world. Unfortunately, speed does not help anyone to understand the future and the obligations of management. Many of us deceive ourselves into the supposition that we need constant updating to cope with the rapidly changing future. But you can not, by watching every moment of television, or by reading every newspaper, acquire a glimpse of what the future holds. To put it another way, information, no matter how complete and speedy, is not knowledge. Knowledge has temporal spread.

“Knowledge comes from theory. Without theory, there is no way to use the information that comes to us on the instant. A dictionary contains information, but not knowledge. A dictionary is useful. I use a dictionary frequently when at my desk, but the dictionary will not prepare a paragraph nor criticize it.”

I also like the advice and wisdom from Dr. Russell Ackoff.  Here are some excerpts from his book, “Systems Thinking For Curious Managers“.

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“An ounce of information is worth a pound of data.  Data are symbols that represent the properties of objects and events. They are to information what iron ore is to iron: nothing can be done with data until they are processed into information.

“Information also consists of symbols that represent the properties of objects and events, but these are symbols that have been processed into a potentially useful message.  Information is contained in descriptions; answers to questions that begin with such words as who, where, when, what, and how many.  Most relevant information can be condensed significantly without loss of content.  Irrelevant information can be condensed to zero without loss of content.  Therefore, filtration and condensation are the two most important processes that can be applied to information.  These, however, are considered to be irrelevant by those who provide managers with information.  For them value and volume are synonymous.

“And ounce of knowledge is worth a pound of information.  Knowledge is contained in instructions, answers to how to questions.  To know that a car won’t run is information; to know how to make it work when it doesn’t is knowledge.  But knowledge presupposes information just as information presupposes data.  Without the information that a car needs fixing, relevant knowledge would not be applied to it.  The function of knowledge is to enable one to make efficient choices between alternatives revealed by information.  Knowledge also provides criteria for determining the relevance of information; it identifies the information required to use what is known.  So information and knowledge, like Punch and Judy, presuppose each other, have no practical value when separated from each other except on quiz shows and examinations given in schools.  What an individual knows becomes organizational knowledge only when it is accessible to anybody else in the organisation who has a need for it, even if the source of that knowledge is no longer part of the organisation.

“An ounce of understanding is worth a pound of knowledge.  Understanding is contained in explanations, answers to why questions.  To know how a car works is knowledge; to know why it was designed to work the way it does is understanding.  Knowledge of how a thing works requires knowing its structure, how its parts interact.  Understanding the nature of a thing means knowing its functions in the larger systems it is part of.  For example, a car’s function could be: to enable people to go from one place to another on land under their control and in privacy.  It is part of a transportation system.  The function of the accelerator is to serve the function of the car, hence the purpose of the driver.  Knowledge lets us make things work; understanding lets us make things work the way we want them to.  The function of a corporation is to create and distribute wealth in the society it operates in and to promote the development of its stakeholders and that society.  Productive employment is the only way known to man of simultaneously producing and distributing wealth. All other ways of distributing wealth consume it.

“An ounce of wisdom is worth a pound of knowledge. This makes an ounce of wisdom worth 65,536 ounces of data, using the previous three f-Laws.  Wisdom is contained in value statements, e.g. aphorisms and proverbs.  It lets us perceive and evaluate the long-term as well as short-term consequences of what we do.  It induces us to want to pursue things of lasting value. It enables us to make short-run sacrifices for long-run gains.  It prevents our sacrificing the future for the present.  Knowledge enables us to make things work; understanding enables us to make things work the way we want; wisdom enables us to want the ‘right’ things, things that increase our ability to obtain what we and others need and want.  Information, knowledge and understanding enable us to do things right, to be efficient, but wisdom enables us to do the right things, to be effective.  Science pursues data, information, knowledge and understanding: what is truth; but the humanities pursue wisdom: what is right.”

 

 

 

 

 

Blood Industry Shrinks as Transfusions Decline – Survival Is Not Compulsory

I read this article in The New York Times about the current state of the blood banking and transfusion industry.  Changes in medicine have eliminated the need for millions of blood transfusions, which is good news for patients getting procedures like coronary bypasses and other procedures that once required a lot of blood.  But the trend is wreaking havoc in the blood bank business, forcing a wave of mergers and job cutbacks unlike anything the industry has seen.

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This isn’t a new phenomenon.  I can recall similar forces back when I was in the clinical laboratory and blood bank industry.  What is new, I think, is the scale of the changes – it’s gone beyond “regional”.
 
As Dr. Deming said:
“survival is not compulsory.  Improvement is not compulsory, but improvement is necessary for survival.”
 
There are no laws that say companies must survive, this is true for blood centers, hospitals, clinics, doctors.  There are no laws that say companies need to improve.  Companies can keep doing the same thing and hope that the good old days will return.  But some companies are changing, and not just through incremental improvement but through innovation.  They are asking fundamental questions, “what business are we in?”  “what business should we be in?”  I think companies like The BloodCenter of Wisconsin (a member of the Healthcare Value Network) have a chance.  At least they are trying to improve.  I blogged about them about a year ago.
 
 

Healthcare Value Network Members Learning About Principle-Based Lean Transformation

I had the good fortune to visit one of our Healthcare Value Network (HVN) member organizations that hosted a 2-day course that we offer on HVN Assessment model and process.  The host was MemorialCare Health System based near Los Angeles.  Other HVN member organizations that participated include: Stanford Health Care, Tucson Medical Center, and Mayo Clinic Health System – Franciscan Healthcare in La Crosse.

Understanding the relationship between guiding principles, systems and tools is a new paradigm.  Another one is the realization that there are two primary drivers of behaviors: 1) what get’s measured, and 2) our systems.  Organizations that are interested in transforming their culture to one of continuous improvement need to realize that an organization’s culture is the sum of the collective behaviors from top management, through middle management and the front-line workers.

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I’ve blogged about this topic several times before:  10 Lessons, and “one example of the HVN assessment process“.