Do We Know How to Learn?

Tweet

“The theory of knowledge that management in any form is prediction.”  W. Edwards Deming

When I first read the above quote many years ago, I didn't fully comprehend what Deming was trying to say.  After a lot of thought, reflection, and experience with a variety of organizations and management systems, I came to realize the significance of this statement as the basis of organizational - and personal - learning.

Whether through arrogance, lack of understanding, or just having too much to do, many organizations have failed to adopt of the Plan-Do-Study-Act (PDSA) cycle within their operations.  Others have implemented the cycle within their problem-solving process but failed to recognized it as a mental model for leadership and decision-making.

The Learning Organization

The power of PDSA thinking lies in the realization that every decision is, in effect, a prediction that a specific outcome will occur.   If one consciously adopts this mindset and practices it to the point where it becomes natural, significant learning can occur.

Taking action and expecting a specific outcome is not profound or revolutionary. But too often, the connection between action and outcome can be so basic that it becomes unconscious. And when the connection is not consciously recognized, little or no follow-up takes place to assure that the outcome is as expected and more importantly, why or why not a particular outcome occurred.  It is this lack of follow-up that prevents learning from taking place.

Too often, I have seen organizations continue to operate in the same manner, even when it does not appear to work.  They try harder or their leaders emphasize performance more strongly but any improvement in results that does occur is short-lived.  Organizations like this don't seem to understand that their performance is not the due to chance, but the result of a set of predictions that are failing to come true.  Improvement requires careful observation and study to determine why their hypotheses are false.

When decisions and actions are seen as hypotheses that specific results will occur, there is more of a tendency to watch for the connection.  “The why” becomes just as important as “the what” when reviewing results.  When results do not meet expectations, team-level reflection takes place to understand the reasons and the hypotheses are adjusted accordingly.  It is this process that enables organizational learning to occur.

When looked at in this way, it becomes clearer that becoming a learning organization does not mean spending more time in the classroom.  It means teaching people to consciously recognize that decisions are predictions, and honing the ability to study and understand whether (and why) results match the predictions.

Developing a PDSA mindset throughout an organization takes a lot of effort, practice, and patience.  People have to be coached and questioned regularly to understand that actions – even seemingly small ones – are predictions of specific outcomes.  The more developed this level of reflection becomes, the more the process will become a habit, and the more organizational learning will occur.

The Missing Link in a Lean Deployment

Tweet

NOTE:  This blog is moving!  Please read future posts at http://leadingtransformation.wordpress.com

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.