Transformed leadership starts with a transformed individual (and that means you!)

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Deming’s Individual Transformed, Part I

Several decades have passed since some of the management greats – Dr. W. Edwards Deming and Walter A. Shewhart – set about to transform the style of American management. But in the first of a 2-part series, Timothy J. Clark says that before transforming management, we need to first transform ourselves.

Author’s Disclaimer: The views expressed in his articles are those of the author and not necessarily those of the U.S. government.

One of the more neglected aspects of W. Edwards Deming’s philosophy may be the discussion on how the application of his System of Profound Knowledge (SoPK) leads to individual transformation or spiritual conversion.

The SoPK includes the theory of knowledge, understanding variation, appreciation of a system and understanding psychology (human behavior). As Deming reinforced, it is the transformed individual who must lead and/or support the changes that will result in needed improvements within organizations and nations.

In his book The New Economics for Industry, Government, Education, Deming stated that:

"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."

Deming further offered the definition of transformation as meaning a "change of form, shape or appearance." He thought the term metanoia may be more suitable and defined it as "penitence, repentance, reorientation of ones way of life, spiritual conversion."

Individual transformation is just as important as business transformation?

The term "spiritual" can be associated in either a religious or non-religious (secular) context. It generally refers to the values and behaviors that engender the positive contributions individuals can have within themselves and upon others when actions are aligned with a purpose. In his book The 8th Habit, Stephen R. Covey captured the concept of spirit in the 8th Habit, which is to find your voice and inspire others to find theirs. Covey states:

"Voice is unique personal significance—significance that is revealed as we face our greatest challenges and which makes us equal to them.…Voice lies at the nexus of talent (your natural gifts and strengths), passion (those things that naturally energize, excite, motivate and inspire you), need (including what the world needs enough to pay you for), and conscience (that still small voice within that assures you of what is right and that prompts you to actually do it)."

Craig Newmark, founder of Craigslist, reinforced a similar belief in his statement that "connecting people to fix the world over time is the deepest spiritual value you can have" (Susan Cain, Quiet: The Power of Introverts in a World That Can’t Stop Talking).

A spiritual conversion includes a raised awareness that comes from the realization that continually improving quality (doing the right things) is a moral imperative with the aim of serving others. In an organizational context, serving others is providing quality products and services that customers and stakeholders need, want and expect.

Robert K. Greenleaf, in his book The Servant as Leader, perhaps defined the best test for leaders as:

"Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants? And, what is the effect on the least privileged in society? Will they benefit or at least not be further deprived?"

The Best Ideas May Have a Missing Piece

Deming reinforced that you do not need to be an expert in any of the four elements of the SoPK. In fact, most, if not all, adults have successfully applied them on an intuitive or conceptual level. For example, when I walk people through the elements as they apply to the transportation system and their daily commuting process in relation to cost, convenience, time and safety, they have no problem relating to the principles. I get similar results when I relate the elements to an education example.

Although individuals may have a conceptual grasp of the SoPK, it is not unusual for them to take one or more years (assuming they choose to learn more) to understand the elements as they apply to the destructiveness of grades and individual rankings. Of the four elements, I believe the variation principle is the "What’s New" for most people and the most important for gaining insight on the scope of change and for shortening the transformation learning curve.


Deming remarked that if he had to reduce his message to just a few words, it all had to do with reducing variation. This statement stresses the importance of reducing variation and raises three basic questions. The questions and their answers are as follows:

  1. Reduce variation from what? From the ideal. An ideal is always doing the moral or right thing.
  2. By what method? By the application of the SoPK, which is guided by the Shewhart cycle for learning and development (also known as the plan-do-study-act, or PDSA, cycle).
  3. Who decides whether variation was reduced? The stakeholders who will have a significant impact on or will be significantly impacted by the actions taken in the near, mid and long term.

In reinforcing the aim on the importance of reducing variation, Deming also provided his assessment that a lack of knowledge of variation resulted in situations where 95% of change results in no improvement. He targeted this conclusion to management but it applies to almost everyone.

Deming did not expand on the concept of variation. I suspect the omission was likely due to two reasons. First, it would have detracted from his aim to transform the style of American management, which was introduced in his book Out of the Crisis. The second reason is based on the premise espoused by Matthew E. May, author of In Pursuit of Elegance: Why the Best Ideas Have Something Missing. May said that "the best ideas are those that are incomplete, that have stopped doing something, and that have a missing piece for the rest of us to fill in."

An expanded description of variation that I believe represents a missing piece includes the following:

In simple yet profound terms, variation represents the difference between an ideal (i.e., an optimal situation) and an actual situation.

An ideal represents a standard of perfection—the highest standard of excellence—that is uniquely defined by stakeholders, including direct customers, internal customers, suppliers, society and shareholders. Excellence is synonymous with quality, and excellent quality results from doing the right things, in the right way.

The fact that we can strive for an ideal but never achieve it means that stakeholders always experience some variation from the perfect situations they envision. This, however, also makes improvement and progress possible. Reducing the variation stakeholders experience is the key to quality and continuous improvement.

Doing the "right," good, moral, ethical or "spiritual" thing is positive action that benefits yourself and others. Not doing the right thing causes harm. So in effect, "reducing variation" requires positive action that benefits yourself and others or at least does not leave anyone any worse off.

Individual Transformation

I attended a four-day seminar conducted by Deming in 1988. I was working as an auditor at the time for the U.S. Navy. My transformation to the new perspective occurred when I understood and could successfully "prosecute" the case against individual performance rankings and grades in school. Further understanding was reinforced through the realization that the lessons from Deming’s red bead exercise were applicable to any organization. This knowledge provided clarity on the interdependence of Deming’s 14 Points for Management and the Seven Deadly Diseases with their respective relationship to the SoPK.

Metanoia or spiritual conversion is a more descriptive term than transformation. Covey’s description of the 8th Habit reinforces the individual’s need to find purpose and to live a fulfilling life that can only be achieved by reducing variation:

"It is the voice of the human spirit, full of hope and intelligence, resilient by nature, boundless in its potential to serve the common good. This voice also encompasses the soul of organizations that will survive, thrive, and profoundly impact the future of the world."

In June 1986, Deming updated his forward to Walter A. Shewhart’s book Statistical Method from the Viewpoint of Quality Control. In that forward, he noted:

"Another half-century may pass before the full spectrum of Dr. Shewhart’s contributions has been revealed in liberal education, science, and industry."

Given that Deming wrote this in 1986, June 2036 marks when the value of Shewhart’s and Deming’s contributions may be revealed or considered common knowledge. In support of this vision, application stories from individuals who have been transformed by the new perspective will be critical in supporting the needed transformation.

Since that seminar in 1988, I’ve led and supported applications of the new thinking in a wide range of industries and areas. In "Deming’s Individual Transformed, Part II", I share a variety of examples that range from examples taken from my personal and family life to examples related to the military and national security. The aim is to contribute to the inventory of "full spectrum" examples to help support the transformation to a culture where the application of Shewhart’s and Deming’s methods is considered common practice.

For further reading, download a free booklet explaining the four interdependent areas - appreciation for a system, understanding human psychology, knowledge about variation, and the theory of knowledge – of Dr. W. Edwards Deming's System of Profound Knowledge: Creating Winning Businesses: Deming’s System of Profound Knowledge