Management Matters to a Curious Cat

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Implementing Lean Marketing Systems

Management Matters to a Curious Cat Dr. Deming’s 7 Deadly Diseases + 2

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John Hunter on Management Guest was John Hunter

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Management Matters to a Curious Cat

Dr. Deming’s 7 Deadly Diseases + 2

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John Hunter combines technology with management expertise to improve the performance of organizations. He has served as an information technology program manager for the American Society for Engineering Education, the Office of Secretary of

Defense Quality Management Office and the White House Military Office. He has authored the Curious Cat Management Improvement Blog for years. He is the author of new blog for the W. Edwards Deming Institute. John has facilitated seminars for the Deming

Institute, spoken at the annual Deming Institute conference and lectured at the Deming Scholars program at Fordham University, as well as presenting at conferences on

management improvement topics. John got early start learning about variation, quality and Deming's management ideas from his father: Bill Hunter. Bill's work with the City of Madison was included in Deming's book: Out of the Crisis, as the first known example of applying the ideas in government. Peter Scholtes was involved in that effort (as a city employee). Peter later went on to write the Team Handbook and Leader's Handbook and teaches with Deming at his 2 day seminars. John created and maintained (and still maintains) Peter's web site. John is the founder and CEO of curiouscat.com, managing over 30 web sites on management, software development, investing, engineering, travel and other topics.

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Transcription of Podcast

Joe: Welcome everyone. This is Joe Dager, the host of the Business 901 podcast. With me today is John Hunter. He combines technology with management expertise to improve the performance of organizations. He has served as an information technology program manager for the American Society for Engineering Education, the Office of Secretarial Defense Quality Office, and the Whitehouse Military Office. He's the author of the "Curious Cat Management Improvement" and the W. Edward Deming Institute blogs. John has facilitated seminars for the Deming Institute Blog, spoken at the annual Deming Institute conference and lectured at the Deming Scholars Program at Fordham University, as well as having presented at conferences on management improvement topics. John, I would like to welcome you back to the Business 901 podcast, as you

were the star of 2012. I'm honored that you came back to tell us about your new book, Management Matters.

John: Thank you. I'm excited to be back. Hopefully, it can go as well as last time. Joe: Well, you start your book out discussing system thinking. Can you put some

context to how you use that in your book?

John: The key when you're looking at this from a Deming perspective or my

perspective is it's in viewing the organization as a system and process thinking. There's the discipline of systems thinking and that comes from the appreciation for a system in my context. But it is that within the management system that is





the focus. It is about understanding interactions and constraints, leverage points, friction that is caused by the system, support that the system has to make processes work better, things like mistake proofing, those kinds of effects that the system can have on results. Understanding things like optimizing

subsystem is not automatically optimizing the overall system. Understanding, the importance of managing interactions within the system, not just the individual PROCESSES within the system and failing to understand all of those interactions and the byproducts of those interactions.

Joe: When you talk about system thinking, it's like stepping down and making a

change but then taking that step back and looking at the total picture when you make them small changes?

John: Like, formally you can do that with a PDSA cycle and you make the change; you

make a prediction about what will happen based upon your theory of how things are working. You assess the results then based on those results you either adjust and go through the cycle again or figure out that this is really good and try to adapt it on a wider scale.

One of the things that I believe more than most people I've talked to and read is the idea of taking things like the PDSA cycle and integrating that understanding in how you operate. So that you use that PDSA thinking even when you don't normally go through the PDSA cycle, but exactly what you said. You try things. You then assess the results, which is often never done. Based on that, you





decide to move forward. You decide this change didn't really work. We need to make a different change.

What you said is one part of it, testing to make sure things work. The other part

is that system thinking affects how you even decide what to try. So, and that’s a big part of it. The subtitle of the book is "Building Enterprise Capability" because over the last five or six years, I came to that as sort of my focus.

When I was trying to decide, well why am I choosing to do this? Why am I saying this is what we should do next? It was because it is about improving whatever we are trying to do today. But it's also about building the organization, so we are more capable next week and next month and next year to do these

things.

While I'm working on this project and using a control chart to understand that the system is within control, you're using special cause analysis isn't really going to help. You build that capability so that [people a month from now six months from now a year from now will have a better understanding of everything that they do. It's based on that sort of systems thinking, the idea that building enterprise capability makes sense. The idea that I understand the way this whole system works, it's very critical for people to have an understanding, to trust the leaders are going to respect all the employees if we find solutions that save five-man years of effort, they're not going to lay off five people. They're going to maybe free up those five people to do something else in the organization. But





they're not going to lay those people off, because if they do, why is anyone going to offer suggestions in the future? So, looking at that system to figure what I need to do next is the other, I think, big key.

Joe: we're mentioned before the podcast, I just got done rereading the Fifth discipline by Senge, one of the things that struck me, there is that Dr. Deming is always closely related to system thinking and then lean involved, of course from Toyota. And Senge kind of took over that system thinking baton, but there's a distinct difference between the two. Could you define that for me?

John: What I see is Senge and Deming knew each other and liked each other and

thought each other's ideas were great, but I think Senge was a little more

focused on, and is, a little more focused on formal systems thinking. He, I believe, totally understands where Deming was coming from, totally sees how what he's doing relates to what Deming is doing. When Senge says systems thinking, I think it's a lot more on the formal systems thinking. So, drawing these systems loops and reinforcing loops.

Joe: A cool analogy between the two is PDSA in one direction, and the other direction

is a systems archetype. John: One thing that I think is powerful is you use both. Deming was more focused on

the PDSA stuff. But for me when I'm thinking about the systems in an organization, understanding where Senge and people like him comes from and





their diagrams is helpful. I'm not an expert in that level of systems thinking, but having a decent idea about what they're talking about is very useful. But when all this stuff was going on with Deming, people talked about for systems thinking were Senge and Ackhoff. So the Deming people, that's who they looked at.

Joe: You believe that we need to learn from great leaders. You mention that in your

book. You mention of course Dr. Deming, also Ackhoff and Ohno and Scholtes, did all these views complement each other or did they differ in some way?

John: I think basically they all complement each other. Some of this can be based on

the perspective of that person making that judgment, like me. And my mentality is in general to look for useful ideas where I can find them and use them. That

was sort of Deming's idea. If you look through Deming's talk and books, you'll see he's constantly referring to where he got this idea from, where he got that idea from. The number of people that he brings in as influences and brings ideas from that he specifically mentions has to be over 100 in his books and the videos.

For me, looking at people, I'm looking for things that will help and be useful. So, like you had Joyce Orsini and Kevin Cahill on recently talk about Deming and Drucker and Deming and Drucker talking to each other and having ideas. One of the things a lot of Deming followers know is that Deming didn't like MBO and had problems with it. When I look at Drucker's work and even when he's talking about MBO, when you read what Drucker said about MBA, most of that, almost





all of that, I think is really good. The problem had Deming criticized as I see it was mainly the application of MBO. Now there were a bit of disagreements about the structure of MBO having some problems given the nature of organizations and the fact that if you try to do this in an organization, there's likely to be these

problems. So Deming had that view. Drucker's view was more there are problems, do it this way and it will be good. I think Deming's opinion was trying to do it that way sounds good on paper but won't really work. But when I look at what Drucker said about MBO, I can take lots of good ideas from what he was trying to do. But I do agree with Deming that trying to use these goals when we understand how systems work; we understand how psychology works for people trying to get

these goals and what they're going to do especially when the systems have bonuses attached to meeting to goals and there are promotions attached to meeting goals, it's going to end up distorting the system and causing problems. Some people can look at that disagreement and say there's huge conflict between these two. I look at it and say there's some conflict, but overall I find both useful. That's one of the biggest differences I see when I look at those other people, I really see almost no differences at all between Scholtes and Ohno and Ackhoff and Deming.

Joe: What leaders are out there currently, that you admire and follow and have some

of these principles that we talk about that are good leaders for us to watch to see what their organizations are doing?





John: Well, the first thing I would say is, I still learn more from Deming and Scholtes

and Ohno and Ackhoff and Joyner and George Bach and people like that than from anyone else. So I still think going back to those people today makes a huge

amount of sense and continuing to reread them. I even mention that in the book right at the beginning. What I find is most of the stuff that comes out now is either bad but throw that out, which is a lot. Then you have some stuff that's really good and the stuff that's really good I think mainly does a really good job of providing useful new implementation ideas on how to do a general concept that already Deming and Ackhoff and others have sort of talked about in a big way. That stuff's great.

One of the very few things that I see as totally new thinking and it’s actually getting sort of old now is Clayton Christianson. He's someone who I have continually recommended if managers haven't read his stuff, you have to read at least one of his books. His stuff is on disruptive innovation, essentially. It's great stuff. It's not something I see automatically springing from the work before it but it can fit in completely with understanding the organization as a system, long-term thinking, and customer focus. All of his stuff is wonderful. When I look at other people nowadays that I really like; there are tons of them. They're people like David Lankford, Womack, Jeff Liker, Gypsy Ranning; she's another Deming person. Roger Hurl and Rod Sneed are two of the people that I really like for Six Sigma. I think Six Sigma has some really good stuff in it. When you read and listen like to people like those two, you'll see people who don't have a Six Sigma





concept that can't be used by people that an understanding of Deming and lean thinking and everything else. I think that Six Sigma has more problematic applications in leaders than others. Another person is, like, Jeff Bezos at Amazon. He occasionally has interviews that are great stuff, but also seeing

what's actually happening at Amazon and then reading some of his articles, some of his interviews provide some really great insight. Alphie Cone is another person I really like. Ken Sandrine is a person I really like. And Boson, he's probably the least well known, but he has some great stuff. He worked with Ackhoff a fair amount. There's a bunch of people related to agile software development and lean software. I think I might see newer stuff from that group of people than anywhere else. But again, I see most of it as really

good new ideas on how to use concepts in a new arena. So, something like minimal viable product is a thing in agile software development of figuring out the least features you can have in a software release, releasing that, seeing how users react to it and then adjusting, instead of taking a year to build your product and push it out. Well, that is really PDSA. That is really piloting on a small-scale and adjusting and iterating over and over and over; and then making change that way. But it's a little different and it's a new idea and the Internet especially makes that a very powerful way, especially for software to go. You can use it for other things. You can use it for hardware things. So there's a lot of stuff there. And one of the great things today is all the blogs. There's just tons of blogs that are really good.





You have John Miller; I really like. Kevin Myer. Mark Graban. All sorts of people with really great stuff, it does point to one of the things that I find funny and I think it does relate to one of the issues with Six Sigma. You will

find almost nothing on the internet on Six Sigma that's any good. There's just almost nothing there. If you search for jobs in Six Sigma and Lean manufacturing, there are probably more jobs open in Six Sigma stuff. If you look for a good Six Sigma blog or good Six Sigma content online, there's very little in my opinion, and I've searched around a lot for it. The absolute best Six Sigma stuff is really stuff by Lean Six Sigma people that have way more Lean stuff they're talking about than Six Sigma.

Joe: How do we influence others? Let's say we want to take an idea and influence others, is there a way in your book you describe how to do that?

John: It isn't so much force, that plan or anything, but when you understand a lot of

these impacts on the system, you understand psychology; you understand that when I'm going to influence this one person, there might be some psychology that's either going to help or hurt me, when I understand the culture of evidence based decision making in the organization, that might help or hurt me. So if I know that our organization essentially doesn't' have evidence based decision making. Essentially it comes down to whoever has the most authority in the meeting will decide based upon whatever whim they have. Well, if you know that, then the way that you have to go after influence is much different than if





it's an evidence-based culture. But you understand that going in. In that situation, if I thought, I could convince that person offline, I'd try to convince that person offline. If in the meeting, I thought I could convince that person I might do that. Often it might be; they have these three big allies and for

technology stuff, they really rely on Mary, so I'm going to go talk to Mary, explain why this is a good thing and get her to tell a decision maker that this is a good idea. How you try to influence will be dependent on the system you're within, where you have the ability to influence and you're going to figure out which levers need to be changed to make that happen. Now one of the things I talk about a little bit in the book, but I think is a powerful idea to get across that I haven't really seen elsewhere, is the idea that

circle of influence is defined today, not it's defined, there are limits upon it today. But that definition varies over time. This is one of the ideas that came when I was coming up with the idea of building enterprise capability, is over time I grow my circle of influence. And I build that enterprise capability. I build my capability to influence. So I happen to believe that evidence-based management is very useful and very good. I also happen to believe when I'm trying to make my case it's best if I can make that case based on evidence instead of trying to figure out internal political games to play in order to push something forward. I have a vested interest in building my circle of influence by building the capacity in the organization to understand data, build the way that we understand variation in making our decision so in a year from now I might be able to make a





presentation and say, "Look, we are arguing about a supposed trend that is not a trend. It is statistical noise. So let's not waste our time coming up with counter measures to something we all see that it's graphed out is statistical noise."

Today it's very likely that might not work at all. But if I can build through time the capacity of the organization to understand statistics and understand data more effectively, then a year from now I can use that to have a greater influence. I can also build trust with people. When you start to work at an organization, you figure out what people really care about, what things are very important for them to see improve, you see what's going to make a difference to the bottom line, what's going to cause a change to the people who are going to decide, and you try to come up with projects to work on today that will solve real

problems today, will give value to customers today but also will build the influence in the organization of people who are trying to build organization capacity and build the skills in those people over time. But also let them see that if I have some issues that I want to see improve, the project that I worked on with John a year ago had a good result, the one I worked on nine months ago had a good result, the one I worked on six months had good results. Now it might be now it might be on all three of those I had to convince the person and drag them along and convince the supervisor to let this project go. Eventually, what happens is people that have these problems, they're sick of getting yelled at by the customer because a year after people have installed this software it just sort of becomes an issue over time, and they're tired of dealing





with it. They bring the problem to me and we talk about how we can attack this problem. How can we come up with a way of fixing it? My influence has grown even beyond me having to go and extend the olive branch and try to convince things to be done. But ideas are coming to me for where we can go. Now I

understand, too, when I say that coming to me would maybe cause people some problem. People should be able to go off and do this on their own. That's true and that's good and that's wonderful. But I'm talking about if you have people who are doing things locally. Hopefully, after a year, they are able to take on projects themselves and fix things. But even if that's the case, they'll run into stuff where okay I tried to deal with this issue and we did a PDSA and it didn't work; we did another one and it didn't work. Can you help figure out how to make this better?

Joe: It's a lot of understanding people. It's a lot of psychology. Which Dr. Deming

included is one of his components, but you don't learn in a psychology course, do you? That's not the answer. How can I take this and prove it in a more practical application in management?

John: I think you're right and it's sort of like what we were talking about earlier with

systems thinking. This psychology within the Deming context is dealing with people in an organization and how those people will respond understanding some of this stuff comes from essentially a psychologist would understand it and know it. So you have things like confirmation bias, which is the belief that when I have a certain belief, I will see evidence come by me. When that evidence supports





my belief, I will remember it and say, "Yeah, good. My belief is right. Here's some more confirmation of this wonderful belief I have." And when the evidence seems to disprove or question my belief, I will tend to ignore that evidence. This is a well-known psychological state. It's how we basically are. Now one of the

things that I have done is I understand that, I know, that is how I will react and how other people will react.

I question myself to understand whether I am doing that. I still won't be perfect, but I can improve a bit and reduce the amount of confirmation bias that I have, so I will be more willing to accept evidence that draws into question my beliefs. I will try to integrate that to understand to figure out and adjust my belief so now my belief is better because I have adjusted this evidence that shows in this way,

it's a little weak. I can use that when I'm dealing with other people too because I understand what they're going to do and I understand; it's one of the confirmation bias is one of the things that helps me understand why change can take a while. At first, when I would do this stuff and I would show people understanding variation is just obvious statistics. This is what it means. Those numbers are meaningless. You see a trend and there's no statistical trend there. You now know so you shouldn't have this false notion anymore. But that doesn't happen. People hold on to their old ideas.

There are lots of pieces of information that you can drive. Our brains are hardwired for pattern matching. We're very good at matching patterns to what we see in the world. We want to take pride in what we do. When you're





managing people, it's important to know and understand and believe these things. We'll have good days and we'll have bad days. It's not very useful in trying to design the most effective organization to expect everyone to be on their best behavior every day and not have a bad day. If your system is designed in

such a way that if someone has a bad day and is sort of upset, bad things happen to the customer, you can yell at the employee and tell the employee they should always be happy and never be upset. But that isn't very effective. It's better to design systems that will tolerate employees having good and bad days.

There are many of these things. Our understanding of variation is very poor. We think there is much less variation in the world than there really is. When you tie

that to our pattern matching, what happens is there're a lot of variations in the world. We think there's very little. When we see a variation, we then have our pattern-matching ability find patterns to that variation and we then assign causes to that because that's the way our mind generally works. But what's happening is we're assigning causes to patterns, which are essentially random noise but our brains are very good at making patterns out of it. So, it results in problems.

As a manager, it's both knowing these things for yourself and knowing these for others so you need to be coaching people to understand that. We all learn in different ways so when you're trying to help a number of employees learn about better ways to manage the organization; they will learn in different ways. Some,





you can just show them the math and explain that yes, you use a control chart here. Boom, it shows you. And that will tell you if there's any special cause. And they get that right away. They might not know how to calculate it, but who cares? It's simple, but it doesn't really matter. If you can just see the control

chart and see there's a special cause you can, then take the appropriate action based upon what the chart is telling you without knowing how to calculate it. Some people will see that, accept it, and go on. Many people won't. You'll need to explain it to them in many ways. You'll need to do different things.

You'll need to reinforce it with real examples. One of the things I really try to focus on is with my focus on building enterprise capability over the long term. When I know I'm trying to do something like build an understanding of variation,

when we have a project that we've used that concept to make and improve, if I know the organization still needs to grow that understanding, I make sure that we draw that out of the project. We mention that this is why this was good. If we use flow charts very effectively, the organization still isn't using them enough, I'll emphasize that. I'll show how this flow chart was so helpful. So while you're getting results on a project, the same time you're assessing a result, you're also building learning; because a lot of people are going to be much more focused on when we got this improvement, why we got it? And if it's just you telling them flow charts are great, you can find [inaudible 30:04] and eliminate them, they don't care. But if you show them two projects in a row that this process that used to drive them crazy is now much better and the reason





why it's much better are you used flow charts to figure this out and find problems in the process and then improve the process, then when they're on their third project and they get stumped. A lot of times it's hard to do this on your own, so they're stumped. You can say, "Why don't we try to draw a flow

chart of this process?" That is where they'll accept the learning of flow charts than in some classroom all by itself. I think it is a lot of those kinds of things. Some principles that are important knowing about things like people want to care about the work they do, they want to feel like the work, they're doing is valuable and you need to build that into the organization. It's often hard. Often our organizations have created people that they want to feel that what they're doing is valuable. They've been here for five years and they don't have that feeling at all. So, they've blocked themselves off from even that desire because if

they maintained that desire of feeling what they're doing is valuable, they'd be disappointed day after day after day after day.

So, they try to block it out. It's one of the things, again, that makes change difficult. I believe truly that people have a wish and it's important for them to feel that what they're spending their lives on is valuable, is useful, and is providing value to the world. But they aren't going to turn on a dime after they've had to convince themselves that they have to isolate that desire because otherwise, they'll be disappointed day after day. Just because we start to let that process seep through, they're not going to change overnight. It's going to take time, but I've seen it repeatedly. After a year, two years, three years, these people have an entirely different outlook on work. It's not that coming in to work





every single day is wonderful. Some days are not that wonderful. But they feel pride in what they do. And that is completely different than the way many people are every single day they go into work. Those kinds of things are very important but hard to appreciate; I think, for most people.

Joe: What you've explained through this whole podcast is it really comes down to

continuous improvement, PDSA and the tools of PDSA. And even managing by that philosophy. Can I make it that basic?

John: You can try. I think there is some sense in that. But when you do that, there's a

lot of hidden importance that is still there that isn't as visible. What I've come down to for myself in thinking about it was the building enterprise capability

which is very similar to continuous improvement. It's a little; I would to me, there's a little hint of some different focus. But, even with that, it is, obviously, because such a short little thing, a big over simplification, with continuous improvement, I think you can build it that way. But for someone like me, for continuous improvement, you need to decide that the organization has an amazing ability to deal with and understand day to day, which is rare, but there are some organizations where that's true. Or to continuously improve, I need to build up that ability to understand data. So, it's not just that I need to make whatever improvements today based on the capability our organization has, I need to build some stronger and new capabilities. Now, to my way of thinking that's continuous improvement.





You can't improve over the long term without being able to assess the effects of these improvements and whether they actually are improvements and document them and put them down. You need to document processes so that you have standard, repeatable results. You need to respect people and maintain long term

understanding in the organization. So as all these things that would come along with my understanding of continual improvement. But I think if someone else had the idea "Oh, what I need to do is focus on continual improvement" they could be like "well; I don't need to understand variation. That's not continued improvement. I don't need to understand respect for people; that's not..." For me; it would be you're limiting your potential ability to continually improve greatly by not doing this list of 15 other things, which support it.

Joe: Where can I get the book? And how could someone contact you directly? John: Through Lean Pub which is a very nice publisher, which uses lean thinking. So

it's leanpub.com/managementmatters all one word but basically, you could search for me or go on my blog.

The best way through my blog, that's what I would like is to generate some

more talk and discussion on the blog. If not that, either through Google +, which you can do a search for me, or through johnhunter.com.





Joseph T. Dager

Business901

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Joe Dager is president of Business901, a firm specializing in bringing the continuous improvement process

to the sales and marketing arena. He takes his process thinking of over thirty years in marketing within a wide variety of industries and applies it through Lean Marketing and Lean Service Design.

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Management Matters to a Curious Cat

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Transcript of Management Matters to a Curious Cat