Dr. Edward Deming: Still making a difference in 2013

I had the pleasure interviewing Dr. Joyce Orsini, a professor of Fordham University and president of the W. Edwards Deming Institute and Kevin Cahill, the Executive Director of the Institute. Dr. Orsini has also recently authored the book, The Essential Deming: Leadership Principles from the Father of Quality and Kevin is the grandson of Dr. Deming.

In the interview I ask Kevin, How do you think Dr. Deming would want to be remembered in the future? What do you think would be important to him?

Kevin: I think it would be important for him to know that people still want to make a difference, people still want to come together and see through problems that we're facing in today's world, and I think he would like to be remembered as somebody who made some small contribution towards his own country. I mean, everyone always talks about the differences he made in Japan and I think that was incredibly important to him.

But I think he'd like to see that he could also have made a difference in the lives and communities and families and organizations of people in his own country and those around the world, because, when you think about it from a system standpoint, the U.S. is just one component of a larger system.

I am still surprised that stigma exists about Dr. Deming. I may not be on the cutting edge of every platform that exists today but through social media and this podcast, I am very fortunate to be acquainted with quite a few. Dr. Deming is not only recognized but revered by most. For example, I think the Lean Software community is more aligned with Deming than they are traditional Lean and Toyota. Even in my own work, I am finding that Dr. Deming, Peter Scholtes and Brian Joiner more applicable to the knowledge management and systems thinking areas that are required in the service and sales and marketing arena. Dr, Deming you are still very relevant, even in 2013. I hope you enjoy the podcast. I certainly did.

 

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About the Deming Institute: The W. Edwards Deming Institute® was founded by Dr. Deming in 1993 to provide educational services related to his theories and teachings. The aim of The W. Edwards Deming Institute is to foster understanding of The Deming System of Profound Knowledge® to advance commerce, prosperity and peace.

Kevin Edwards Cahill, Successor Founding Trustee is Dr. Deming's grandson. He currently volunteers full-time as Executive Director of The W. Edwards Deming Institute® where he oversees general operations and development. Previously, Kevin was the co-founder and CEO of ViewBridge, Inc. Prior to that, he was Vice President Sales Manager for media rep firm, Katz Communications. As a member and chairman of the system oversight committee, he helped guide the design and implementation of various sales, technology, and management systems.  Kevin holds a BA in history from UCLA.

Joyce Nilsson Orsini, Ph.D., Associate Trustee, is Associate Professor of Management Systems at Fordham University Graduate School of Business, where she directs the Deming Scholars MBA program.  She has been a practicing statistician and consultant to industrial management and government for more than 25 years.  Dr. Deming directed her doctoral dissertation research at New York University.  She assisted Dr. Deming with his teaching at N.Y.U., as well as with many public and private seminars.  The Metropolitan Section of the American Society for Quality awarded her the Deming Medal.

Outcome Based Mapping in Sales and Marketing

The following is an excerpt from Chapter 4 of The New Economics, second edition by W. Edwards Deming:

A system cannot understand itself. The transformation requires a view from outside. The aim of this chapter is to provide an outside view-a lens-that I call a system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in.

The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people.

Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will:

• Set an example
• Be a good listener, but will not compromise
• Continually teach other people
• Help people to pull away from their current practice and beliefs and move into the new philosophy without a feeling of guilt about the past

As I re-read this excerpt, I could not help thinking about my discussion, A New Approach to Lean – Robert Fritz, with Robert and my thoughts on how the typical organization chart and how we must change to more of a Venn diagram type of structure to meet the ever-changing world.  More of that in the blog post, The New Org Chart for Customer Engagement. Dr. Deming’s statement, “The transformation requires a view from outside and The first step is transformation of the individual.,” are so true. 

Taking this a step further, I think of how in sales and marketing that we must also understand the customer’s organization. The influencing of our customer requires a change for our customer’s organization. How many of us spent time identifying influencers and critics within the customer’s organization? It sounds like a very daunting task but most of us realize that it is becoming a collaborative decision process in most organizations. The day of the single decision maker is becoming rare. However, according to Dr. Deming, we have an advantage; “The transformation requires a view from outside.”

How do we leverage that advantage? Can we have control of the transformation? First, we must understand it is not the decision process that we must understand, rather the individuals involved. I have recently become quite intrigued by Outcome Mapping. Excerpt from the book, Systems Concepts in Action:

Outcome Mapping is a method from the evaluation field that explores the way in which interventions contribute to a result and in particular the way in which changes in behavior of certain stakeholders contribute to a result. It addresses the following questions:

• How does our intervention contribute to an ultimate goal?
• Whose behavior can we influence in terms of that contribution?
• What is a realistic strategy to achieve that behavior change?
• How do these behavior changes affect our role, and which changes do we have to make to be an effective partner?

This approach is very similar to Verna Allee, co-founder and CEO of Value Networks LLC approach to Value Network Mapping. You can read more about it in this blog post, Is Relationship Mapping the new Critical Path? and a Dr. Deming discussion, Sub-optimizing your Social Collaboration.

The advantage to the Outcome Based Mapping approach is that it uniquely identifies, what they term as boundary partners.  Boundary partners are described as "those individuals, groups, or organizations with whom the program interacts directly and with whom the program can anticipate opportunities for influence." This approach is very aligned with my efforts on how to discover and influence the participants in our customer’s networks and organization. Have you experienced Outcome Based Mapping?

You can look forward to more discussion on Outcome Based Mapping, Boundary Partners and of course, Dr. Deming.

The Scholtes Canvas for Lean Marketing

“You don’t have to be a customer to be important. But, from a systemic point of view, each is a supplier, not a customer. The systems do not exist to serve their needs. Their role is to help systems serve the needs of the customers. When suppliers start seeing themselves as customers, the needs of the true customers are likely to be displaced and subordinated.” - Peter Scholtes from The Leader’s Handbook: Making Things Happen, Getting Things Done,

As I mentioned in my blog post, Standardizing Sales by Peter Scholtes, you will find a great deal of guidance and understanding on how to include sales and marketing into continuous improvement. Lean is a model that was developed from manufacturing and uses the Toyota model or the Toyota Production System (TPS) as the basis for much of its theory and development. The world of process methodology; Better Faster, Cheaper as a way of creating demand is rapidly diminishing. This model is not broken but is limited in the sales and marketing arena.

From the ebook, Lean Marketing House: When you first hear the terms Lean and Value Stream most of our minds think about manufacturing processes and waste. Putting the words marketing behind both is hardly creative. Whether marketing meets Lean under this name or another it will be very close to the Lean methodologies develop in software primarily under the Agile connotation. This book is about bridging that gap. It may not bring all the pieces in place, but it is a starting point for creating true iterative marketing cycles based on not only Lean principles but more importantly Customer Value.

Excerpt from the Lean Marketing House

I believe that Lean Agile or Lean Software groups have a better understanding of customer value than the traditional Lean Thinkers who concentrate on waste. Seldom when you read, Dr. Edward Deming, Scholtes and Brian Joiner do they not have the customer at the forefront. The quote above from Scholtes, demonstrates how Lean and TPS may have drifted from the original teachings of Dr. Deming when we think about customers. Lean (Agile) Software groups have developed in what I would call a purer Lean approach, less influenced by Toyota but more so by Dr. Deming.

In recent years, Alex Osterwalder and Yves Pigneur developed the Business Model Generation Canvas. It identifies nine building blocks required for the business model. It is an iterative approach to see what underlying structure is required to institute and develop change for innovation.  A PDF download can be obtained here: Business Model Canvas.

In reviewing Scholtes work, I found a similar outline that could be developed into an A3 or a canvas. These are tools that we have been using in the Lean world. However, we have stopped short applying them from a Customer – In perspective as described by Scholtes. This canvas is developed in language that is understood by both Lean Practitioners and Sales & Marketing. The Scholtes Canvas can serve as the natural bridge that is needed between Lean and Sales & Marketing.

Scholtes Canvas for Lean Sales and Marketing from Business901

An overview of the the Scholtes Canvas:

1. What is the Purpose of the Organization? Instead of teaching the way to do things, we need to step back and determine the key points that are required, as Simon Sinek says the “Why” while leaving the how alone (Start with Why: How Great Leaders Inspire Everyone to Take Action). I think you will be surprised how closely the description in The Leader’s Handbook resembles Simon Sinek’s work.
2. What capabilities do your customers acquire (or improve) as a result of interacting with you? We have a tendency to jump to what we do. It is easy to explain. However, what is important is what it allows our customers to do.
3. Who are your Competitors? Understanding your competitor's is important but not only who they are but the different ways/methods that the customer needs may be satisfied.
4. Customers: List existing and one that should be and other that you may not want to be.
5. Identify the major products and service that benefit your customers and serve your purpose: I like to think of these as different value streams but do not limit yourself from just thinking from a product/service standpoint. It may be better to organize around customer groups. 
6. Choose a Specific product or service: Scholtes has you choose from item #5, which value stream (group) to use for the remainder of this exercise. I created a separate canvas if someone would like to complete the entire exercise to include items 1 through 5 for a particular value stream.
7. Examine the chain of customers for that product or service: List the different ways you to market. Who receives it from you? You may have a wholesaler that has numerous intermediate customers, etc. Reread the opening paragraph of this blog post.
8. Applying the Kano Model: Most of us are familiar with the Kano Model. You may choose another method to display your feedback. The important thing is to display it. Reread the opening paragraph of this blog post.
9. Identify Customer Feedback Loops: Describe the process you use and/or intend to use. Reactive is service request, complaints, etc. and Proactive is surveys, social media, etc. 
10. Gemba - Mapping the Process: First create a simple SIPOC (Suppliers – Input – Process
    - Output – Customers before proceeding with any other mapping tools such as a Customer Journey Map or even a Value Stream Map. Make sure you know what initiates and ends the journey. I enjoy Scholtes description where the customer is shown at both ends.   
11. Trace a Basic Key Quality Characteristic through Process: This often goes without saying, but I find it interesting and revealing that Scholtes emphasizes taking key characteristics, often times called Critical to Quality (CTQ) issues and highlighting them in a separate mapping process. You can interpret it several ways, but I think he wanted to highlight what was important to the customer, maybe even thinking all the way back to step 2; What have we enabled the customer to do that they were not doing before? Map the key issues, the deciding factors of the process and a few moments of truth where the customers received the value they expected and understanding on how to deliver that key characteristic. Also, note the failure points or weak points along the journey.

About: Peter Scholtes was an internationally known author, lecturer and consultant and the recipient of numerous awards such as the Deming Medal and the Ishikawa AwardFrom 1987 to 1993 Mr. Scholtes shared the platform with W. Edwards Deming, helping to educate corporations about the new philosophy of the Quality movement. He was one of the first to synthesize the principles of the organizational development field with the teachings of Dr. Deming.

Lean Sales and Marketing BlogShop

Next week, the Business901 Blog will host an abridged version of our Leans Sales and Marketing online workshop. Each day, the blog post will include a brief introduction, short video, workbook page and recommended reading. On Monday, February 11^th, the program will start and follow this outline for the week:

1. Monday: Why Lean makes sense for Sales and Marketing
2. Tuesday: Understanding Structure to deliver Value
3. Wednesday: Value Stream Mapping differs in Lean Marketing
4. Thursday: Lean Marketing methods for Flow and Pull
5. Friday: Seeking perfection in Lean Sales and Marketing
6. Saturday: Lean Marketing Overview in 30 minutes

Blogshop Description: Lean Sales and Marketing is about using PDCA (Plan-Do-Check-Act) through-out the marketing cycle with constant feedback from customers that can only occur if they are part of the process. It is about creating value in your marketing that a customer needs to enable him to make a better decision. It is a moving target and the principles of Lean and PDCA facilitates the journey to Customer Value. Improving your marketing process does not have to constitute wholesale changes nor increased spending. Improving what you do and increasing the speed that you do it can result in an increase in sales and decrease in expenses.

In Lean Marketing concept value streams differ from the more traditional approaches found in other mapping process. Its primary focus is not the discovery of waste but of process improvement with a very specific strategic intent, delivery of superior value for the execution of an organization’s value proposition. This means that the focus of the analysis must be on those segments and processes within those value streams that have the most substantial impact on the most important value drivers.

Do remember, this is an abridged version of the 60-day program that is offered as part of the Lean Sales and Marketing Training at no additional charge when you purchase the Marketing with Lean Book Series.

Old vs New Lean = SOAR vs SWOT

Traditional Lean practitioners equate Lean to waste reduction and problem solving. New practitioners of Lean emphasize knowledge and strength building. More information: A New Approach to Lean – Robert Fritz. and Strength–Based Lean and Six Sigma.

I equate this to the fundamental difference between SOAR and SWOT. SWOT is the age-old concept of defining our Strength, Weaknesses, Opportunities and Threats. SOAR is a strength-based approach. SOAR allows you to lead with the positive side of the issues and many times you will often discover more. The SOAR framework is outlined by Strengths, Opportunities, Aspirations, Results. There may not seem like a huge game-changer but what I recommend is that you try it and see the difference it makes in your session. More information: Overcoming Sales Resistance with SOAR.

Recommended Book: The Thin Book of SOAR; Building Strengths-Based Strategy

I have found recent books providing a nice bridge between Lean and Sales & Marketing. 

A few of them that I have read: 

Predictable Revenue by Aaron Ross and Marylou Tyler of SalesForce

Revenue Disruption by Phil Fernandez of Marketo

Social Marketology by Ric Dragon of Dragon Search  

The Connected Company by Dave Gray

All of these emphasize the iterative process of continuous improvement. They are very Lean like in their descriptions of the marketing processes promoting knowledge building and pull as a way of creating flow. They also highlight the interconnectedness of people and the collaborative aspect that exist in business today. 

This new approach moves us away from a company assuming it has more knowledge than a customer. That expert status type thinking – “We know more.”  It moves us away from the problem-solution type approach to one of joint discovery and learning. Trying to force your solution through a sales pipeline does not work in a collaborative type decision-making process. (More info:Lean Sales and Marketing: Outcome Based Mapping)

The question becomes if we are not solving problems for customer and providing solutions, what is our purpose? 

Do Compromises hinder Advancement?

Are compromises something that you should do? Not with yourself and maybe not within your organization. Watch this video that is part of the collection at http://www.PhilosophersNotes.com.

Do you struggle between dreaming big dreams and then doubting whether or not you can attain them?

Then I think you'll enjoy this Philosopher Notes episode where we check out some Big Ideas from Robert Fritz’s, The Path of Least Resistance for Managers (In the new edition, Robert has added a chapter on Lean in the update) and talk about the structural conflict that can create a negative oscillating pattern and how we can bust out of it and rock it.

Hope you enjoy!