Sunday, March 29, 2015

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, though, 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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