Profound Knowledge & Sociology

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Sociology: noun \ˌsō-sē-ˈä-lə-jē, ˌsō-shē-\.  the science of society, social institutions, and social relationships; specifically : the systematic study of the development, structure, interaction, and collective behavior of organized groups of human beings. [Merriam-Webster.Com]

W. Edwards Deming’s Systems of Profound Knowledge has been a cornerstone to successful lean deployment for the last 20 years (longer, if you consider that it began with his 14 Points for Management).  As written in an earlier post, I am a strong believer that the level of success with lean is directly related to the level of understanding and application of Deming’s system of management.

The four components of Profound Knowledge as presented by Deming include Knowledge & Learning, Appreciation of a System, Variation, and Psychology.

Deming rightly presents the need for leaders to have an appreciation for psychology because of the fact that effectively leading requires knowing how to relate to people.  Although it should be obvious, I have run across many people in leadership positions over the years who were severely short of people skills.  There are differences in people and effective communication and motivating individuals requires understanding and working with these differences.

How About Sociology?

One aspect of leadership I always felt was missing from Deming’s system is sociology.  Organizations consist of a number of individuals and teams, and in addition to knowing how to relate to and motivate people individually, leaders need to be able to continually develop and improve teamwork.  This can not be done without an understanding of sociology.

There are natural and cultural forces within people that drive them to identity strongly to the teams to which they belong.  Although these forces can be beneficial to improving performance, they can also be destructive to the organization, as a whole.  It is all too common for people to put the needs of the immediate team ahead of those of the company.  Even if this is unintentional – which in most cases it is – it is still very toxic to the company’s culture.

Maintaining a Unified Focus

One of the basics of organizational sociology is tendency of a group to break apart when its members start developing conflicting interests and objectives.  Competition between factions develops and the ability to keep people focused on a common purpose becomes difficult, if not impossible.

Without strong leadership and an understanding of group behavior, internal competition (or apathy toward those outside of the immediate team) can grow to the point where correcting behavior can be extremely challenging.

Many leaders do not recognize the complexity involved in the individual and team goal-setting process.  In far too many instances, there is too much going on to take the time necessary to assure objectives are aligned and well understood by all involved.

Catchball, a process for communicating direction, expectations, and objectives between levels in the organization, is critical to assuring that consistency is maintained and people work toward the achievement of a common purpose.  Unfortunately, catchball takes time and, without a respect for organizational sociology, will not help prevent competition from developing and sub-optimizing performance.

Although sociology is apparent throughout Deming’s writings, I believe elevating it to the level of importance assigned to psychology, variation, knowledge, and systems thinking would help more leaders understand how critical it is to organizational success.

PDCA Explained One More Time

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Although it’s been around for decades, the PDCA (or Shewhart) Cycle continues to be one of the simplest – and most misunderstood – concepts in business. Introduced to the masses by W. Edwards Deming, many people don’t initially see the cycle as significantly different from the way they already work. After working with the cycle for many years, however, I have found that most organizations do not even come close to truly understanding or applying a PDCA mindset.

THE PDCA CYCLE

THE PDCA CYCLE

Americans generally follow a solutions thinking, rather than a PDCA approach that attempts to find the perfect solution and a “permanent" fix to a problem. The high level of complexity among interactions within processes and systems, however, along with the fact that the world is in constant change, makes it unrealistic to think that permanent solutions to problems can be developed. The best that one can expect when facing an issue is to address it under current conditions and, once addressed, continue to look for recurrence and further improvements.

Besides the time it takes to seek the perfect solution to a problem, solutions thinking can give a false sense of security that a situation is permanently resolved. As circumstances change, a "resolved" problem can reappear without warning and cause significant damage if the team has moved on and stopped looking for the condition to recur.

By contrast, the PDCA approach addresses problems as a potentially never-ending cycle. Instead of seeking the perfect solution, one or more countermeasures are developed and implemented quickly to stop the condition from continuing to cause damage. Since it is recognized that the countermeasure may not be a permanent fix or completely solve the problem, the team continues to monitor the process to determine the effectiveness of the change. Adjustments are often made to the countermeasures – and new ones developed – to assure the situation continues to improve.

As the process stabilizes, the team looks for ways to further reduce the likelihood of the problem recurring (by addressing other potential causes) or tackles another problem plaguing the process. Each adjustment leads to another fairly quick trip around the PDCA cycle that results in a more robust process and additional learning.

SO WHAT'S THE DIFFERENCE?

The major differences between PDCA and traditional thinking include:

Scientific Approach: A conscious effort to apply a scientific approach to improvement involves developing a hypothesis, testing the premise, formally evaluating whether or not the hypothesis was correct, and acting on the results. Although the traditional approach relies on some level of hypothesis testing, the check step makes it a more conscious effort within PDCA thinking that, when applied over-and-over again, results in developing a scientific thinking mindset throughout the organization;

Countermeasures: Within PDCA thinking, there is clear understanding that, although an action is an improvement, it is not necessarily a permanent solution;

Speed: Since the effort is not directed toward the perfect solution, improvements are made much more often and at a much quicker pace. PDCA is oriented toward a just do it mindset, where ideas are tested and implemented fairly quickly, even if the resulting improvement may be fairly small.

The quickest way to determine a group’s collective mindset is to observe how it addresses problems. If discussions tend to bog down as the team searches for permanent solutions, it is a safe bet that PDCA is not the norm. Also, ideas regularly “tested” and rejected in conference rooms rather than real situations is another sign of a solutions thinking mindset.


PDCA vs Solutions Thinking

The exhibit shows another difference between PDCA and solutions thinking. Ideas and improvements occur much more quickly with PDCA than with solutions thinking. Although each improvement is generally much smaller in scope than with solutions thinking, the rapid pace of improvements when applying PDCA results in far greater improvement of the process over time.

PDCA vs Solutions Thinking

Since processes tend to naturally deteriorate between improvement efforts, the longer the improvement cycle, the more deterioration that occurs. Because of this, the fewer number of improvement cycles, the slower overall pace of improvement that will occur over time.

THE LEARNING ORGANIZATION

Another advantage of PDCA thinking is the amount of learning that takes place about the process during each cycle. Because solutions thinking deploys fewer improvement cycles and focuses attention specifically on the problem at hand, less learning takes place about the overall process. The increased learning resulting from deploying PDCA throughout the organization further adds to the overall pace of improvement cycles.

Those who fail to recognize the true significance of PDCA often require a good deal of coaching, reflection, and experience with the cycle to truly understand why it is different and how it can benefit the organization. Without a certain level of transformation toward PDCA, however, the implementation of improvement methods like lean thinking or 6-sigma will be difficult, if not possible.

The Missing Link in a Lean Deployment

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A common difficulty many companies face when embarking on a lean journey is getting people – at all levels – to buy into the philosophy and commit to a new approach to business.  Lean generally follows a different way of thinking, and success often requires transformation of leaders as well as a change in behaviors across the organization.  Without significant transformation, lean becomes nothing more than a short-lived effort to attack waste on a project-by-project basis.

It is not enough to say that leadership is the key to successful implementation of lean thinking.   Without understanding what this means, we cannot truly transform an organization and build a sustained improvement process.

I have come to the conclusion that a critical – and often missing – component of leadership necessary to transform an organization is a deep understanding and application of the Deming system of management.  Most lean deployments include training of the management team in basic lean methodology, the categories of waste, and improvement tools, but very few organizations include Deming’s system of profound knowledge as part of the roll-out.

Although there are many people over the years who contributed to the development of the Toyota Production System (TPS), W. Edwards Deming taught the managers at Toyota about leadership, which was critical to the development, success, and longevity of the system.  I have been lucky enough to visit Toyota on several occasions and, although I never heard Deming’s name mentioned, his influence on their culture and systems is still readily apparent.

The System of Profound Knowledge

In his final book, The New Economics, Deming presented his System of Profound Knowledge.  It basically defines the competencies required for effective leadership.  Since transformation of an organization begins with transformation of the individual, a company has no chance of deploying lean thinking unless its leaders completely believe in the need to change and clearly understand what it means to the organization.

According to Deming, there are four areas that anyone in a leadership position must possess and continue to develop in order for the organization to remain competitive and continually improve performance.  Being competent in – and actively practicing – these four areas is what separates leaders from bosses.

The four areas that must be part of an organization’s leadership DNA include:

• Systems Thinking:  A clear understanding of the organization’s overall system – i.e., the entire process for transforming materials and information into products and services for customers – and how each area (including suppliers) affects its ability to serve customers;
• Knowledge of Variation:  Understanding how to use metrics and data to gain insight into the causes of variation in quality and performance.  Requires training in basic statistical theory and, among other things, how to separate trends and true changes in performance from normal variation;
• Theory of Knowledge:  Continually developing and testing assumptions to gain knowledge is a critical part of management.  Applying the Plan-Do-Check-Act (PDCA) cycle improves leadership by enabling learning about the business and clarifying relationships between causes and effects – which is vital to successful planning;
• Psychology:  Organizations are made up of people and those in leadership positions need to understand how to hire effectively and motivate people and help them continually develop and improve.

Without a clear understanding of the company’s leadership DNA and faithfully using it to select and develop leaders, a company can end up with such a wide variation in leadership styles that attempting transformation  - or pretty much anything else – will be futile.  Deming’s System of Profound Knowledge gives us a foundation from which to build a company’s management system and begin the transformation toward lean thinking.

Gaining Involvement in Improvement Activities

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One of the most common frustrations expressed by those involved in a 6-sigma journey is the inability to get others to participate in improvement activities.  In some cases, energy levels may be high during initial projects only to have a production focus return fairly quickly.  Often there is less accountability for process improvement than meeting production targets, and it becomes a battle to get managers to commit time and resources to improvement projects.

The Wrong Focus

A common reason for a lack of managerial engagement in improvement activities stems from the lack of a natural alignment between improvement objectives and a manager’s normal  work – i.e., meeting production targets (production referring to any type of output for which a team is responsible).  As long as improvement objectives are considered separate from production objectives, there will always be tension between the two; and when this happens, production will virtually always win.

Production is how a company makes its money, and managers are typically measured on their ability to produce.  No matter how logical it may seem so some that focusing on improvement will make meeting production targets easier, others will see it as a distraction and interference to meeting production objectives.

By design, a 6-sigma process is project focused, where people identify improvement opportunities, develop objectives, and form teams to address the issues.  This approach can make the job of creating and sustaining alignment between improvement and production a challenge.

Although some companies have been successful implementing and sustaining project-focused improvement, many have not.  In my experience, the life of a typical 6-sigma deployment is 6 months to one year.  Beyond the initial success, a lot of time and energy is required to keep the process going against the inertia of a production focus.

A Better Approach

A much better way to create a strong and natural alignment between improvement and production is to focus the effort on lean rather than 6-sigma.  Companies that ignore lean and attempt to implement an isolated 6-sigma process are missing out on a perfect opportunity to connect and closely align production control and the improvement process.  With lean, it is takt time that makes the need for continual improvement clear and logical.

Takt time, which can be calculated for virtually any process in any industry, defines the pace at which a process needs to operate in order to meet objectives.  Once the output objectives and resource constraints are understood, the takt time of the process can be calculated with little effort.

Understanding the takt time for a process makes it clear that, in order to meet production targets effectively, improvement efforts must occur.  This approach places the responsibility for initiating improvement projects with the supervisor of a process since he or she is the one accountable for consistently meeting production - or takt time - targets.  In effect, takt time creates pull from those directly involved in the operation.

The PDCA diagram below identifies a basic approach for implementing and sustaining improvement-based on lean thinking.  Once business objectives are understood and processes are standardized, process leaders become responsible for meeting production objectives on a continual basis.  Unless the person responsible for leading a particular process drives improvement within his or her area of responsibility, the odds of meeting takt time consistently become severely hampered.  Continually comparing throughput to takt time naturally drives the identification of improvement projects that enables objectives to be met.

The Improvement Process

To be successful in a lean thinking environment, very little pressure is placed on people for the current performance of the process(es) they lead.  There is significant pressure, however, on leaders to demonstrate how they are reacting to current performance, and the steps they are taking to drive improvement.

Every leader must be held accountable for assuring that the overall system (i.e., production line, location, business unit, etc.) meets its takt time.  Otherwise, improvement efforts may consist of pushing work or inventory to a downstream process, and when this occurs, there is little chance for the organization to meet its objectives.