Putting Deming's principles into action to transform individuals, communities and organizations

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Deming’s Individual Transformed, Part II

Dr. W. Edwards Deming estimated that without knowledge of variability, 95% of changes made by management results in no improvement, writes contributor Timothy J. Clark. Here's how Deming's System of Profound Knowledge and Foundation Principles for Leaders can provide the common language, theory and methodology that can transform individuals, who in turn can apply the principles to help transform their communities, organizations and nations.

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

In my previous article, Transformed leadership starts with a transformed individual, I introduced W. Edwards Deming’s reference to transformation or spiritual conversion and how this transformation can occur through application of the System of Profound Knowledge (SoPK).

A premise for individual transformation is the theory that individuals have a unique purpose and a desire to live a fulfilling life consistent with this purpose. This aim can only be achieved with the support of others and by working together to reduce variation.

I believe the most critical component in the SoPK is understanding variation, particularly insight on common and special causes of variation. Common cause variation includes results from policies, systems, processes and "habits" that can be expected or considered normal. Results from processes consisting of just common cause variation are more stable or predictable.

Special cause variation represents outcomes that are unusual, unexpected or an outlier. The special cause could be temporary and non-recurring or could signal that something has changed. Processes consisting of both common and special causes are unstable or less predictable.

Two of the Most Common Mistakes

Walter A. Shewhart developed the control chart in 1924 (over 89 years ago for those doing the math) to help individuals understand and manage variability. The control chart identifies the two types of variation. The chart is more than a statistical or analytic tool. The concept represents a way of thinking that lies at the core of decision making and personal transformation. It leads to decisions that help mitigate the effects from two types of mistakes:

Mistake #1: Taking action on a stable process when nothing out of the ordinary has occurred and there is no desire or commitment to change.

Mistake #2: Not taking action when something out of the ordinary has or may have occurred.

Do you understand the difference between special and common cause variation?

The financial crisis in 2008 provides an example of mistake 2. It symbolizes the cost of ignoring the effects of policy and regulatory changes in the housing, banking and investment industries, which made things worse for everyone. See my article "Managing Variability in Thrift Savings Plans" for more insight on common and special cause variation related to the crisis and personal investments. Investor herding, referenced in the article in respect to the C- fund, illustrates an example of mistake 1.


Deming remarked that avoiding mistake 1 or 2 is impossible. The aim is to regulate the frequency of the two mistakes to minimize adverse effects, including economic loss.

Foundation Principles for Leaders (FPL)

Deming’s SoPK is sometimes referred to as the Foundation of Quality, but I like to refer to it as the Foundation Principles for Leaders (FPL). Deming’s guidance for the "individual transformed" includes:

  • Be a good listener, but will not compromise.
  • 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.
  • Continually teach other people.
  • Set an example.

Regarding being a good listener, I tend to solicit information, restate the issue(s) in terms of variation using common language and terms, and then bridge to the FPL if appropriate. Invariably, people want to know how the new methods can be immediately applied to resolve their particular issue.

To help people pull away from current practices in organizations, leaders need to develop a deliberate change and communication plan that is aligned with their organizational strategy and tailored to their unique culture. Sharing success stories of what the organization does well and how it has successfully made evolutionary and revolutionary changes in the past and then aligning those stories with the FPL is one of the better ways of supporting the transition.

Sharing application experiences is among the best strategies for teaching other people and setting an example. It also helps raise awareness that inspires people to learn more and test out the principles. Toward this end, I will share a variety of examples that range from my military and national security experiences and examples taken from my personal and family life.

Personal Application Experiences

The following application success stories identify the results from strategies that were derived from application of the FPL. The FPL and a few associated questions include the following:

  • Customers/Stakeholders - Who are they and what are their needs, wants and expectations?
  • Systems/Processes - What is being done and what products and services are being provided to meet expectations?
  • Variation - What metrics (outputs and outcomes) are being used to provide feedback on the performance of the systems and processes?
  • Knowledge - Are the systems and processes producing the required results? What needs to be sustained and what needs to be changed? What is the priority for improvement and what type of action is needed?
  • Planned Change - Is there a strategic plan, and if so, does it identify what success looks like in the near, mid and long term? Is the plan producing the expected results?
  • People - How are people being led and what is their motivation to support the needed change? What are the barriers to change? Are individuals being supported to find their voice and to help others find theirs (8th Habit)?

Military/National Security - As an Army Reservist, I was mobilized after the September 2001 attack on the World Trade Center for two years starting in November 2001. My military intelligence detachment specialized in chemical warfare related assessments. We were initially mobilized to support military action in Afghanistan and later supported the war in Iraq.

To support the war in Iraq, I worked with a team that produced accurate intelligence assessments on the quality of information related to Iraq’s weapons of mass destruction. Our customers were the military forces that used the information to assess the risks associated with taking action to counter the possible threats to coalition forces.

I had the opportunity to extend my service an additional year to contribute to the development of improved systems for producing intelligence. The aim for the changes was to improve communication of adversarial capabilities and threats among stakeholders. I developed the first application that validated proof of concept. The improved approaches included better documentation and communication of facts, assumptions, constraints, processes, projections and probabilities. Assessments from the improved systems support decisions that may help prevent conflict or, when prevention fails, help resolve the conflict quickly, decisively and economically.

Education - A teacher who attended one of my seminars had a student who was having problems. The student’s mother believed that the problems were common to all kids and not just her son (mistake 2). My demonstration of common and special cause variation inspired this teacher to develop a new approach that successfully addressed the child’s special needs and finally won the mother’s support for the recommended solutions. Positive change in a child’s life impacts not only the child but also the parents and families for generations to come.

Sports - My son’s soccer team was about to face the best team in the league—a team that had beaten them by 12 to 0 the last time they played. As I observed the results during that game, I noticed a trend. The better team had four excellent soccer players who scored all the goals. My son’s team had good athletes but they were not as skilled as soccer players. So, I recommended a new strategy to the coach: Have the better athletes on my son’s team prevent the rival team’s best players from touching the ball. My son’s team beat the best team in the league by a score of 1 to 0.

Another sports example was applying FPL to improve my son’s basketball free throw shooting, which you can read about in my article "Continuous Improvement on the Free-Throw Line".

U.S. Government - When I attended a four-day seminar conducted by Deming in 1988, he asked the question, "What percent of your performance is determined by the system within which you work?" I wrote down 98%. I later came to the realization that improving the system of government and the civil service system would take "a little while" and require that more citizens understand how Deming’s SoPK/FPL can be applied at a national level with positive impact worldwide.

My current strategy for supporting improvements in government is taking advantage of an opportunity to be a contributing author at FedSmith.com. The aim for my articles is to introduce and raise awareness of Deming’s contributions, provide application examples and offer strategies or a "Way Ahead" for improving the system of government.

In summary, for the skeptics who might wonder if they or I could have gotten similar results without an explicit knowledge of FPL, the simple answer is maybe they could have but I would not have gotten similar results. Deming estimated that without knowledge of variability, 95% of changes made by management results in no improvement. In my case, I would have certainly recognized the problems, but I would not have had the insight or knowledge of the risks and better methods and strategies that could be immediately applied to address the challenges.

A Way Ahead

The application of the SoPK/FPL has a better chance of getting results that lead to improvement or at least do not make things any worse off. The SoPK/FPL provides the common language, theory and methodology that can transform individuals, who in turn can apply the principles to help transform their communities, organizations and nations.

If you are new to Deming’s work, I encourage you to learn more and start applying what you learn. If you are an individual who has been transformed by the new perspective, I encourage you to share your application experiences and/or stories of how the SoPK/FPL transformed your life. Your experiences and stories may inspire more people to learn and apply it, which will bring us a step closer to a world in which the application of the SoPK/FPL is 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