Can Organizations Make Positive Changes and Grow?

The Cell Training
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Dynamic Solutions Productivity Series
June, 2017
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Can Organizations Make Positive Changes and Grow?
Participant Notes © 2017 Dynamic Solutions. All Rights Reserved

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Vi l L L b S iVisual Learners – Learn by Seeing
Pay attention to the screen and the graphics
Auditory Learners – Learn by Hearing
Listen Carefully to what I say
Kinesthetic Learners – Learn by touch and do
Scribble on these notes, highlight points, earmark the pages
th t t i t tthat most interest you.
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1.CUSTOMERS: Unique to Type of Business
2.MARKETS: Unique to Type of Business
3.COMPETITION: Manageable by Business
4.SUPPLIERS: Manageable by Business
5.CULTURE: Can be Changed over Time
6.TECHNOLOGY: Unique to Type of Business, but Manageable
7.ECONOMY: Can be Changed over Time
8 GOVERNMENT Bi d t B t
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8.GOVERNMENT: Biased at Best

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Every automotive executive knows the work of John Paul McDuffy , University of  Pennsylvania . Every automotive
plant around the world was monitored for about 18 years.  He can show you with incredibly convincing detail that
plants that have adopted the Toyota Production System (TPS, or exhibit its characteristics) have lower cost and
higher quality. This is something that every automotive executive knows as noted by the then CEO of Ford Motor
company Don Peterson, when speaking to a group of university manufacturing students . He said “I wish we had the
best manufacturing system in the world, but we don’t, Toyota has”.  Why did he say that?
GM has a list of every manufacturing plant in the US by performance:
#1 Toyota Plant , # 2 Honda Plant, #3 BMW Plant, #4 NUMMI Plant (at the time the book was published)
What they have in common is they are all using the Toyota Production System (TPS).  Why isn’t GM using TPS
successfully? …… the “Know‐doing” gap9
S R f h d f hi d f f h i f iSee References at the end of this document for further information
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Here is your chance to “internalize” some of the concepts and
recommendations made by the speaker.
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The pages that follow are additional supporting notes and
references for the presentation made to the members
attending the ASQ Section 1405 Pre‐Dinner meeting in
Houston, TX on June 15, 2017
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There is a lot to meditate on related to this graphic. Much
effort and tenacity is required for a business to master these
concepts and implement them successfully. See Profound
Knowledge and Deming 14 Points for possible execution
methodologies.
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References:
1. Ackoff, Russell L. and Rovin, Sheldon, Beating the System: Using Creativity to Outsmart
Bureaucracies, Berrett‐Hoehler Publishing, San Francisco, c. 2005.
2. Bossidy, Larry & Charan, Ram, Execution: The Discipline of Getting Things Done, Random
House, Inc., NY, c. 2002.
3. Buzzell, Dr. Sid and Boa, Dr. Kenneth and Perkins, Bill, The Leadership Bible: Leadership
Principles from God’s Word, Zondervan Publishing House, Grand Rapids, MI, c. 1998
4. Christensen, Clayton M. and Raynor, Michael E., The Innovator’s Solution: Creating and
Sustaining Successful Growth, Harvard Business School Press, Boston, MA, c. 2003.
5. Covey, Stephen R., The 4 Disciplines of Execution, Franklin Covey, Salt Lake City, UT, c.
2004
6. De Bono, Edward, Six Thinking Hats, MICA Management Resources, Inc., NY, c. 1999.
7. Deming, W. Edwards, Out of the Crisis, MIT, Cambridge, MA, c. 1986.
8. Deming, W. Edwards, The New Economics For Industry, Government, Education – Second
Edition, MIT, Cambridge, MA, c. 1994.
9. Johnson, H. Thomas & Bröms, Anders, Profit Beyond Measure, Free Press, NY, c.2000.9. Johnson, H. Thomas & Bröms, Anders, Profit Beyond Measure, Free Press, NY, c.2000.
10. Pfeffer, Jeffrey and Sutton, Robert I., The Knowing‐Doing Gap: How Smart Companies
Turn Knowledge into Action, Harvard Business School Press, Boston, MA, c. 2000.
11. Senge, Peter M., The Fifth Discipline: The Art and Practice of the Learning Organization,
Currency Doubleday, NY, c. 1990.Currency Doubleday, NY, c. 1990.
12. Smith, M.K. (2001), Chris Argyris, Theories of Action, Double‐loop Learning and
Organizational Learning, The Encyclopedia of Informational Education,
www.infed.org/thinkers/argyris.htm, Last update: September 07, 2009.
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Deming’s 14 Points for ManagementDeming s 14 Points for Management
(Source: Deming, Out of Crisis, Chapter 2, Ref. 5, Pg. 50)
1 C t t f t d i t f d t d/1. Create constancy of purpose toward improvement of products and/or
services, with the aim to become competitive and to stay in business,
and to provide jobs.
2. Adopt a new philosophy. We are in a new economic age. Western
management must awaken to the challenge, must learn their
ibiliti d t k l d hi f hresponsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the
need for inspection on a mass basis by building quality into
products/services in the first place.
4. End the practice of awarding business on the basis of price tag.
Instead, minimize total cost. Move toward a single supplier for any
one item, on a long‐term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service,
to improve quality and productivity, and thus constantly decrease
costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people
and machines and gadgets to do a better job. Supervision of
management is in need of overhaul, as well as supervision of
production workersproduction workers.
8. Drive out fear, so that everyone may work effectively for the
organization.
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Deming’s 14 Points for Management (Cont )Deming s 14 Points for Management (Cont.)
9. Break down barriers between departments. People in research, design,
sales, and production must work as a team, to foresee problems of
production and in use that may be encountered with products and/or
servicesservices.
10. Eliminate slogans, exhortations, and targets for the work force asking
for zero defects and new levels of productivity. Such exhortations only
create adversarial relationships, as the bulk of the causes of low quality
and low productivity belong to the system and thus lie beyond the
power of the work forcepower of the work force.
11. ELIMINATE!
a. Work standards (quotas) on the factory floor. Substitute
leadership.
b. Management by objectives, by numbers, numerical goals. g y j , y , g
Substitute leadership.
12. REMOVE BARRIERS!
a. That rob the hourly worker of his/her right to pride of
workmanship. The responsibility of supervisors must be changed
from sheer numbers to qualityfrom sheer numbers to quality.
b. That rob people in management and in engineering of their right
to pride of workmanship. This means, inter alia, abolishment of
the annual or merit rating and of management by objectives.
13. Institute a vigorous program of education and self‐improvement.
14. Put everybody in the company to work to accomplish the
transformation. The transformation is everybody’s job.
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P f d K l dProfound Knowledge
(Source: Deming, The New Economics, Chapter 4, Ref. 6, pg. 50)
Appreciation for a System means taking a holistic view of the organization, seeking
to optimize Business Processes from end‐to‐end. How does the wider system fit
together in terms of its customers, suppliers, employees, managers, shareholders,
and the world around it? Action for improvement should strive to optimize the
benefit for all players, and not to advantage any one part of the system to the
detriment of others.
Knowledge of Variation requires a view of numbers and performance data that is
not well appreciated by managers. Does improvement require fundamental review
of the very design of the system or process you are examining? Are there occasions y g y p y g
when immediate and local action is required to address performance outside the
expected range? The concept of Special and Common Causes of Variation, and its
implications for improvement are vital here.
Theory of Knowledge seeks to show managers that their focus should be on theTheory of Knowledge seeks to show managers that their focus should be on the
future of the system – improvement of existing product and existing process;
innovation for new products and services to meet the future needs of customers;
innovation for new processes to deliver products and services. Thus the job of
management is that of prediction; managers should be constantly andmanagement is that of prediction; managers should be constantly and
systematically learning about what is necessary for future success.
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Profound Knowledge (Continued)
In the Psychology component an understanding of motivation is needed; in
i l h diff b i i d i i i i i A iparticular, the difference between extrinsic and intrinsic motivation. A certain
mount of extrinsic motivation, such as pay, is required for people to gain a level of
self‐esteem. However, assuming that people are only motivated extrinsically is both
incorrect and damaging.
People are born with high levels of intrinsic motivation. Children have a high degree
of curiosity about the world and a desire to explore. Deming is adamant that to
optimize a system means this natural motivation needs to be encouraged and
enabled in life at work. People who have “Joy in Work” are people most likely to join
in the development and improvement of the whole organization.
Interactions between the components The four components of Profound
Knowledge are not independent; in fact the interactions between them are
probably more important that each of them individually. For example, the
performance of anyone is largely governed by the system they work in, which is the
responsibility of management. Yet people’s desire to “do well” will generally cause
them to try to “do well”, if necessary by finding ways around the system, when
really it is the system itself that is in need of reform.
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