Renewing American Civilization: Class Six

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Renewing American Civilization
Class Six
Pillar Five: Quality As Defined By Deming

>> The following is a special program produced by RCTV, Reinhardt College
>>Television, in Waleska, Georgia.  From Reinhardt college in Waleska,
>>Georgia, this is "Renewing American Civilization." In this, the sixth of
>>10 class presentations, Congressman Newt Gingrich, an adjunct professor
>>at Reinhardt college, will continue his course, which presents the
>>foundational principles necessary to the renewal of American
>>Civilization.  This week's lesson, Pillar Five, Quality, focuses on
>>quality, customer orientation, teamwork, continuous improvement, systems
>>analysis, and the spirit of Edwards Deming.

>> Let me say good morning.  I want to welcome the students of Mind
>>Extension University who are taking the course by television around the
I want to remind everyone that this is premised on the idea that there is an American Civilization, and that the five pillars of American Civilization are, first, the historic lessons of American Civilization. Second, personal strength. Third, entrepreneurial free enterprise. Fourth, the spirit of invention and discovery. And, fifth, today's topic, quality as defined by Edwards Deming, and that as we go through each of these pillars with two hours with a class devoted to them, we will then pick up starting next week with the four areas to which we will apply these pillars. First, the third wave and American Civilization. Second, creating American jobs in the world market. Third, replacing the culture of violence and poverty with a culture of productivity and safety. And, fourth, citizenship and community in 21st century America.

Now, today's topic is quality as defined by Dr. Edwards Deming. But before we get into talking about quality, I just want to take 30 seconds and ask you, based on having read Drucker's "the Effective Executive," which, as you remember, is one of the books I most emphasized buying and I'm frankly encouraging every American citizen to buy, because I think it's the key to being effective in the 21st century. How many of you have found yourself, from Drucker's work, keeping better track of your time? Okay. Those of you who are doing that, how many of you found that it's actually helped you? Okay, almost all of you. I raise this because everybody who's watching, as well as the students in this class, ought to consider if you haven't already read Drucker and you're not applying these ideas, you ought to. And if you have read Drucker and you've now been told by about 90% of the people who are actually using it that keeping track of your time and then thinking through how you use your time is actually effective may be the key then for a lot of people who say they're too busy to keep track of their time, is to keep track of their time so they can learn what they're too busy doing. And I think that's a very important part of this.

The -- let me say that today also, we are going to look at applying Quality and Profound Knowledge to education. This is something I want you all during the class today to make notes to yourself. I mean, the one thing about virtually every American is they spend a lot of time asa student. You've been in education. And Dr. Minnix was reminding me last night that we want you to literally, for the next two hours, just take notes. And then we're going to spend a little bit of time at the very end of the class saying, okay, based on what you've learned from Deming and based on the concepts of Quality and Profound Knowledge, how would you change the process of learning? But in addition, we're going to ask you by next week to tell us what three -- what are the three biggest changes you would make in the way people learn based on what you're learning today about knowledge? And all of you are experts, and all of you have been in school, all of you have spent the hours. You certainly have plenty of expertise at having studented and hopefully having learned, and so you ought to be in a position to say, based on my years of experience, here's what I think we ought to change based on what I've now heard about how Dr. Deming thought. Okay? So we're going to come back to that at the very end of the course.

For me, my introduction to Edwards Deming started with two people. One was Owen Roberts, who's a management consultant who actually -- a long-range planner who actually was the person who helped invent this course. And many years ago, Owen Roberts told me that I had to study Dr. Deming, that he was right. And he gave me Dr. Deming's book, which is very hard to read, and the truth is, I didn't pay as much attention. I tried two or three times, didn't get it, and I sort of backed off. Then Roger Milliken invited me to come to the Milliken company's annual leadership retreat. They take their top 270 people and they go off for three days and they hide and they talk about, where are we at today? Where are we going? There's no hierarchy.

Now, Roger Milliken owns the Milliken company. It's a family owned company. He's been president of it since 1948. He's physically a big man, taller than I am. And he dominates the company. And he has taken the company through a revolution beginning in 1979, 1980, and literally changed the entire structure of the company. And I found myself in meetings where 37-year-old sales managers would get up and say, "Mr.. Milliken, with all due respect, you're just plain wrong. "you do not understand what's happening in marketplace, and we're in the marketplace, and we're telling you that isn't right." And I watched Milliken get up at one point and he said, "I know I'm supposed to just be part of a team here, but can I say something, too?" And it was astonishing, because it was a sincere partnering between the guy who literally owned the company and people who were working. Now, this is the most successful textile company in the world.

And so I stopped and I said, what is it you guys are doing? And they did the red bead experiment, which we'll do, and every year as part of their retreat they stop and they talk about Deming and they do the red bead experiment to remind themselves to ground their behavior in Profound Knowledge, which is Deming's term. But what I found at the Milliken company was that they had shared vision, they all had the same vision. They had shared strategies. They had open discussion. Facts, not opinions, dominated. Everyone studied the basics. Everyone counted. And they had an explosion of productivity. When I say everyone counted and everybody understood the basics, I meant Mr.. Milliken had to be studying the same material he asked everybody else to study, and when I tell you everybody counted, he wore a name tag and everybody else wore a name tag, and he said, "you can't know 13,000 people. "but the newest janitor can wear a name tag and the head of the company can wear a name tag, and there is an immediate ability to read each other's name. "and you can create a dialogue that is more personal instantly."

And so they had a system where they had thought through how everybody could play a major role. Now, from that, I decided, look, this is such an amazing change, and I listened to his key people tell us how they had change d the company. And after I left there, I had dinner with several of his top people, and I talked to them about, what did you do? How did you do it? And it literally was a revolution. They took a system which had been top-down and they redesigned the entire system, and it was very, very nerve wracking, and the guy who was in charge of doing it went off and ran this experiment, decided it worked, came into see Mr.. Milliken, outlined for Mr.. Milliken and the top three deputies: this is the scale of the change we've got to go through, and the senior guy said, "that's not the Milliken way. "we don't do things like that." And he said Roger Milliken sat at the end of the couch for about five minutes, and there was nothing said. And he's thinking, okay, I can get a new job. It's not a bad deal. This has been a great experience. And at the end of it, Milliken said, "you know, he's right. "that's not the Milliken way, but it's going to be," and they just changed the whole system. Took them three years.

Now, in that framework, what I want to suggest to you is that part of what happens and part of what Milliken does a lot of is let people do things for which they are recognized. They liberate people to achieve excellence. They allow people to work beyond their job definition. They give them a level of responsibility and creativity which allows them then to be participants in the continuous improvement of the company and to make hundreds of little suggestions. Because one of the things you're going to discover out of this is that most of the time it's not the giant leap forward that matters. It's having specific little breakthroughs every day, but having so many of them that the cumulative effect is a giant leap. And this leads to recognition.

In Japan, the leading award for being a company of quality is called the Deming award after Edwards Deming. In the U.S. It's called the Baldrige award after the former secretary of commerce. Now I want you to understand, the reason -- one of the reasons we're focusing on Dr. Edwards Deming today is this is a man whose impact on Japan was so profound, that their top award for the highest quality Japanese company is the Deming award. In 1950 or '51, he was invited -- he'd been in Japan earlier as a statistician. He was invited back to talk to what he described as 80% of the capital investment in Japanese manufacturing. They had about 400 people in a room, and for three days he taught them. Now, he later developed that into a four-day, 10-hour-a-day course, and he taught it until he died at 93 years of age. We're going to give -- we're giving you a very brief two-hour overview of what is truly an extraordinary system. And he's left behind people who studied Dr. Deming and his work all over the world. But the reason for prizes, this is a very important first point. The prizes and awards and honors are signals to people of good behavior.

And this is very important, because it's very different from normal American behavior. The trick is not to say, I think I will now do something so I can win the prize. The trick is to behave in such a way that the prize is a signal to others to study how you behave. Let me draw a distinction. One of the great dangers with the Baldrige award is that people will try to get the Baldrige award so they can then run an ad saying, this is how good we are. That's a very misleading way, because it's an external motivation. It's a manipulative motivation. The trick is to say, I want to be the highest quality company in the United States because that's the best way to serve my customers. That's the way to stay in business. That's the way to create jobs. And, oh, by the way, they honored me by giving me the Baldrige award for being the best at what I do. As distinct from, now, what gimmicks do I -and all of you think about courses you've taken -- what gimmicks do I have to do so the Baldrige award committee will give me the award so I can then run the ad?

Do all of you see the difference? Huge difference in why you're doing these things. Recognition for internally driven achievement is good. Seeking recognition for external motivation is bad. Very big difference in what you're doing. Getting an "A" because you actually mastered physics is good. Getting an "A" because you conned the teacher into thinking you'd met the requirements is bad. And if you have an "A" driven system rather than a physics driven system, you have truly broken the back of learning. So just take that and think about what's gotten -- why we're having such huge problems with education in America today. Because people are extrinsically motivated.

What do I need to do to get enough credits to get out? I mean, how many of you have friends who take college courses in order to get the credits so they can get out? Seriously, raise your hand. How many of you know somebody who takes courses in order to get the credits to get out, as opposed to taking the course in order to learn the material? So you've got to rethink, why do you do things? Let me also suggest the reason that I focus on Deming and use up 10% of the course on this topic is that with a -- I believe with a culture of quality, Americans can out-compete anyone in the world. And I believe that for three reasons, so you understand. This is not just Pollyanna, oh, gee, we're wonderful. We can win. One, we're a continentwide nation. We're huge physically. I mean, only china and Russia are comparable to us, and Australia are comparable to us, and I guess brazil. Everyone else is just smaller. I mean, people talk about competing with Japan. Japan is the size of California, and about 80% of it is mountains. In the long run, Japan's not competitive in terms of just sheer resources. Second, we are the most ethnically diverse society on the planet. I mean, if we ever get our act together and are truly organized, you want to send a salesman to Nigeria who fits in? Fine. You want to send a salesman to china who fits in? Fine. I mean, we are an extraordinarily diverse society, so we bring more potential creativity from more backgrounds than any other civilization in the world. Third, because we are an individual society where you are endowed by your creator with individual liberty, we have a greater capacity to liberate energy, to liberate creativity. I mean, if you talk about the Deming model of everybody playing a role, everybody helping, continuous improvement, there is no other society on the planet that is as consistent about saying everybody can play.

So we should in the information age easily be the dominant competitor on the planet if we decide we have to have a civilization committed to Quality and to Profound Knowledge. I believe that quality can transform government, and that we need to really think through, how do we apply this -- these ideas across the system? This is much deeper than simply reinventing government, to use a current phrase. This is literally rethinking from the ground up. How would a customer-oriented system behave? How would you design it? And you'll see by the end of these two hours how different that is. I think quality can transform services. It's not just about manufacturing. It's about any systemic -- systematic human behavior, and so it's just as applicable to the newsroom or to an insurance company as it is to making cars. It's important to understand -- and this is one of the great problems in dealing with a lot of consultants on this topic -- that Quality and Profound Knowledge are not gimmicks or management techniques.

You know, quality is not, you know, putting up a sign on the wall or hiring somebody for a two-day course to teach you the five -the five habits of quality. Quality is very different. Quality and Profound Knowledge are essentially cultural, intellectual, personal. It is a way of seeing things, a way of doing things. It's a way of life.

Now, I spent about 60 hours with Dr. Deming over a three-year period. And it was like peeling -- unpeeling -- or peeling an onion. I mean, I started with his ideas as he would explain them, andthen I'd ask him a set of questions. Then I'd go off and think about it. Then I'd come back and ask him more questions. What I discovered was that Deming had a cultural world view that represented America between 1910 and 1930, and it started with levels of integrity and hard work and sincerity and decency that were integral to American Civilization. And that those were his assumptions. They were working assumptions on which he then built his philosophy. And so you had to really listen carefully, because he's talking -when he talked about quality, he was talking about a way of life. He was not talking about a gimmick. A way literally of getting up each morning and how you felt all day, how you thought about things all day. Think of it this way, we codify our beliefs and ways of doing things into processes, systems, and structures, whether it's business, education, or society. In other words, how do you answer the telephone? You know, are you friendly, are you orderly, are you organized? How do you deal with customers when they walk in? What are your habits? How do you take phone messages? Is it a habit, or is it random pieces over paper scattered all over the house?

I mean, it's a very simple example, but think about it. How do you decide to learn how to cook something new? Do you randomly experiment, or do you have a cookbook? And what you find is that the people who are really effective consistently codify things. They think through, what are my habits? What are my structures? And all a large system is is a series of structures and habits. So we have a habit of building a car at the ford motor plant. We have a habit of how we do an appendectomy operation. It is this set of processes. So it's very important. Do you all understand what I'm trying to say here in terms of the notion it's not magic? Every time you encounter a set of behaviors, you can say, what are the habits and systems and structures that that behavior is an example of?

How do TV people operate as compared to print people, for example? Print reporters type. TV people talk into a camera. Very different ways of presenting. They need different quantities of information. Print people, the entire evening news is less than a full page of a newspaper. So if I'm a TV reporter, I need to know the right 40 seconds. I mean, watch how short the time is for a TV reporter to speak, and then say to yourself, I'm going to spend all day, I'm going to be on the air one time, and I need 40 seconds. How much do you have to know to do 40 seconds? And then think about the reporter who writes a very long article. Look at the difference in density and the habits that implies. And so you go through and you ask yourself, what are the -- what are the beliefs and ways of doing things that we're codifying?

A good place to go look at a waffle house, which is a great little system. I mean, they hire people, they train people, you suddenly have a short -- have you ever tried to imagine doing what that short order cook does? Have you ever just sat there at the counter and listened for a while as the various waiters and waitresses yell the orders and it somehow all works? Can you imagine yourself being, you know -- what is waffle house? It is a very highly organized set of habits and behaviors and systems. And they train people very quickly into learning how to do that. And they do a very good job.

Now, in that framework, three men have created the modern awareness of quality, Dr. Deming, of course, and then Dr. Juran and Dr. Crosby. Very different people. Very different people. Deming and Juran -- Juran's still alive, but he's also now in his late 80s. Deming died a year ago, and Crosby is much younger. He's a generation younger. Crosby was the quality -- was the real popularizer. He wrote a book called "Quality is Free," which was a best seller and which basically argues that quality actually lowers your costs and improves -- and it was Crosby's book which led Milliken to Deming, because Deming -- Milliken said he read Crosby'sboo k and Crosby says something like 20 to 30% of what you're doing is waste, and if you can simply cut out the waste, you increase your profit by 20 to 30%, and since he owned the company, he stopped and said, wait a second. This is an enormous amount of money. Well, think about your own life. If you could literally combine Drucker and Deming and improve your daily effectiveness 20 to 30%, how much would that over a year impact?

>> don't the market forces naturally force quality issue?

>> no.  Not if everybody's equally mediocre.  It's true.  I mean, we're
>>going to get to this in a minute, but it's true.  You can have an entire
>>-- I mean, look at a third world country.  They have a market.  But the
>>market force is a bowl of rice, not McDonald's.  Because quality is not
>>forced.  Quality's created. Now, the market then can discern quality.
>>The market can invent quality.  We're going to get to that in just a
>>minute, but it's a very big difference.  What the market will do is at a
>>given level of quality, I will choose the better over the worse, but it
>>will not raise the level of quality.  It takes leadership to raise

>> doesn't that encourage quality in itself?

>> yes, it does encourage it over time if you know how to think systemic,
>>if you grow up in a civilization which teaches you to think
>>systematically, but it doesn't encourage it over time if you don't.  And
>>you'll see this in just a minute.  I mean, again, imagine there were no
>>cookbooks and you said you went to the place that most -- that most
>>frequently actually cooked the egg, but since there were no cookbooks, it
>>was random.  You hire a cook and you say, cook the egg.  They haven't got
>>a clue what you're talking about.  Okay?  The first step is, this is the
>>recipe.  This is the stove.  This is how we wash the dishes.  And then
>>you begin to improve, and then ultimately you get to ray Kroc's invention
>>of McDonald's, which is one of the great breakthroughs of consumer
>>culture.  Or coca-cola, the invention of coca-cola in the late 1880s,
>>early 1890s.  But it took somebody to invent it.  Once it's invented,
>>quality drives out non-quality, but until it's invented and begins to be
>>the new accepted standard for the market, you stay at whatever level you
>>were at before.
Now, the thing that's fascinating to me about Profound Knowledge in Deming's model is that it has deep American roots. It has the work ethic, basic honesty, basic decency, self-respect, and respect for others. It has teamwork. Think of a wagon train, pragmatism, trying to achieve the aim, and personal responsibility. The only way you'd get all these if you -- and this was very striking to me and when we first designed the course. I see the entire personal responsibility two hours as coming, in a sense, out of Deming's work, because Deming's assumption was you had to have personal responsibility. If you couldn't have personal responsibility, you couldn't even begin. So that's one of the reasons we emphasize it so much in the course. That in his vision of America, the first thing you'd say to every person on welfare is, what are you going to do about it? The first thing you'd say to every addict and alcoholic is, what are you going to do about it? Now, we'll help, but you tell us what you're going to do first. And so you start with this very deeply ingrained sense of personal responsibility.

And again, I mention the wagon train because in a lot of critiques of American Civilization, there's a tendency to overstate the lone cowboy, which, by the way, is nonsense. I mean, you almost never had lone cowboys. You had herds which were herded by cowboys who operated as a team. But if you think about this whole notion of the lone gunfighter in the middle of the street, that is an almost pathological vision of the 19th century. There were very few loners. There was tremendous individualism, but it was individualism within groups, it was individualism within the wagon train, individualism within the community, individualism within the group of people herding the cows. And you had very individualistic personalities, but you had people who were very used to working as a team.

And it's very important to understand that. It's individualism with a capacity to then deliberately surrender your individuality to be part of a team, knowing you can then leave the team and go back to being an individual and that you'll form a new team. But it's America as a sequence of teams not America as this hegemonic individual who is totally isolated. I mean, Jeremiah Johnson was a very rare person. And he's the mountain man. There's a movie by -- with Robert Redford. He's a real figure, but he's very rare in the 19th century. There are very few people who were that alone, and the real model was the cavalry patrol, the wagon train, the community, the small town.

Now, in this context, Deming, who was born in Indiana but raised in Cody, Wyoming, born in 1900, is, I think, in many ways in his own life the personification of those kind of core American values and core American behaviors. So what I'd like you to do for a minute is take a look at Dr. W. Edwards Deming and his life.

>> it's been said that James Watt, with his development of the steam
>>engine, set the industrial revolution in motion.  Henry Ford advanced the
>>revolution to its second phase with his assembly line method of
>>production.  And some say that W. Edwards Deming created the third phase
>>of the industrial revolution, with a simple philosophy based on customer
>>satisfaction, continuous quality improvement, and a focus on the people
>>who make it work.

>> Donald Petersen: the one stipulation that Dr. Deming had was that, in
>>fact, I would be the one that would meet him, not someone down in the
>>organization.  And he explained that when we did get together, he
>>explained that to me by explaining how disappointed he was in his
>>inability to get the leaders in America back in the '40s and early '50s
>>to understand the importance of putting quality as the number one
>>priority in your business.

>> W. Edwards Deming: a manager is a leader.  Should be.  He understands
>>how he, his work, and the work of his people fit into the system for
>>optimization of the system.  That's the first job of a leader, to try to
>>find -- recognize that all people are different.  Try to fit each one
>>into what he can do best.  That he takes joy in doing, and help him to
>>improve.  He's coach and counsel, not judge.  Judge people, you shut
>>them -- you shut them up.  They don't talk.

>> I asked Dr. Deming why he felt American workers had not been turning out
>>quality products.

>> how could they?  All they ask is a chance to do a good job, to take
>>pride in their job, and to be proud of the company.  That's all they ask

>> just hammering away as he does on the supreme importance of serving the
>>customer and then enriching the definition of what we mean by a customer.
>>It isn't just the ultimate customer, but everyone with whom we work.

>> customer doesn't know what he wants, he makes a choice.  He does not see
>>his future needs.  Customer's expectations are only what you and your
>>competitor have led him to expect.  He's a rapid learner, but he does not
>>foresee what he might need.  No customer asked for electric lights.  No
>>customer asked for photography.  No customer asked for a telephone or for

>> The best definition of what this concept is all about is the continually
>>and never-ending effort by the leadership and everyone else in an
>>organization to understand and meet and  exceed the needs of customers.

>> anyone that has started to spend time with Dr. Deming and the basic
>>ideas, the importance of people and treating of people, it's almost like
>>the golden rule and some of the other things cast in a business context.
>>Why, it just came through to me that the principles were something I
>>strongly believed in and could easily make as my main statement as far as
>>what I wanted to stand for at the Ford motor company.

>> Now, let me summarize all that into three pieces for a second. Petersen,
>>whose book, by the way, "a better idea," is a tremendous introduction and
>>very helpful.  He is now retired. But Petersen describes in "a better
>>idea" what he did at Ford and how he did it.  And I found it very helpful
>>in understanding the development of quality across the board.  So that's
>>one.  Two, but notice, Deming starts at the top.  The President of the
>>United States, the CEO of a corporation, the president of a university.
>>If you don't have leadership -- this is not about all of us being equal.
>>It's about an orderly process in which everybody's equal before the law,
>>but in your organization, you get somebody -- there is a wagonmaster in
>>the wagon train.  The wagonmaster makes decisions.  There's a captain of
>>the ship.  So Deming would go to the wagonmaster or to captain of the
>>ship and say, would you like a quality wagon train?  Would you like a
>>quality ship?  And then they've got to be involved.
Second, notice the role of invention. This is back to answering your question. In that sense, who did we see last week who was decisive in creating consumer awareness?

>> Edison.

>> Edison.  I mean, take the list of what Edison invented, most of which
>>was not requested until it arrived.  Think of the rise of the fax or the
>>microwave oven or the cellular telephone. Third, notice Petersen's
>>reference to the golden rule.  In many ways, what Deming tries to do is
>>codify healthy behavior and simply say to people, treat everybody else
>>the way you wish you were treated.  Get everybody involved in the system.
>>Okay?  Now, I was -- one of the reasons I got very excited about this
>>and I was very interested in doing this is for many years, I represented
>>Hapeville, which has a Ford plant which is widely considered one of the
>>best plants in the world, in many ways considered equal to any plant.  I
>>think it ties one Toyota plants as one of the two best plants in world.
>>I watched it go through the transformation from the system it had been,
>>which was the classic industrial system, to a participative system in
>>which if people on the assembly line had a new idea, they would be flown
>>to Detroit to meet directly with the engineers.  And they would help
>>redesign how the company built cars.  And it was just -- you could see
>>the explosion of energy and the level of investment people were making in
>>their own jobs as they got excited.  Let's take just a minute to look at
>>the Ford plant at Hapeville.

>> the need for a change became evident when, in 1979, Japanese car makers
>>claimed a fifth of the American auto market.  Ford was losing $96 every
>>time it sold a car or truck in north America. Chrysler, near bankruptcy,
>>was losing more than $600 a vehicle. Only General Motors was making
>>money, more than $300 a sale.  By 1988, Ford was earning $591 a vehicle.
>>Chrysler was recovering, earning $288 a sale, but General Motors'
>>earnings had dropped to just $47 per car and truck sold in North America.
>>A harbor & associates report ranked the Ford plant in Atlanta as the
>>most efficient in the country, beating even the Japanese.  It
>>manufactures the sable, named one of "car and driver" magazine's 10 best,
>>as well as the Taurus, which is the number one selling American car,
>>second only to the Honda accord.  The harbor report credits Ford with
>>cutting labor costs, retooling plants, and encouraging cooperation
>>between labor and management.

>> the Taurus-sable was designed for ease of assembly, and it became that
>>way because we were involved.  I'm talking about the hourly work force in
>>this assembly plant was involved upstream of the design of that product,
>>and we designed it so it would be easy to assemble.

>> The key here, in part, is that people get integrated into the totality
>>of what they're doing and are then liberated to improve their own
>>contribution to getting it done.  So there's this constant process of
>>improvement in which everybody's a participant.  Now, by definition, if I
>>said to you, who's going to be smarter, a system in which 85,000 people
>>all get up every morning saying, "how do I improve my job?" Or a system
>>in which 84,500 people get up and say, "I'll go do my job,"and 500 will go
>>around trying to invent something?  Which was the old system. The old
>>system was, you do your job, we'll hire a consultant. The consultant will
>>come in and listen to you.  Then the consultant will tell me what they
>>think they heard you say.  Then I'll decide, although I don't do your
>>job, how to improve your job.  I'll tell the consultant, who will then
>>teach you.  I mean, isn't that exactly how it used to work?  Okay.
What Deming is doing is liberating everybody to improve their own performance in a context of understanding the larger system that they're part of. Now, it's very important to understand, Deming is not teaching a technique. I cannot drive this home too hard. Deming is teaching a way of being. You have to discipline yourself. Again, it's like learning how to cook. Let's say you get up in the morning, you said, I want to boil eggs today, but I'm so sick and tired of putting water in the pot. Today I'm just going to put the egg in the pot. To heck with the water. I mean, that's literally what -- that's how people manage. I really ought to do what Drucker says about keeping my schedule, but it's so hard, I don't have time today to figure out how I'm spending my time, which when you think about it is about as dumb as not putting water in the pot. So learning new habits, learning new approaches, is a way of redisciplining yourself. But it's redisciplining yourself not into what I do on the job, but into a way of being.

I think there are six core principles. This is my abstraction of 40 hours of Deming. So the first is that -- and we're going to go back over these a couple times -- the consumer, not the bureaucracy, defines value. The producer invents value. To improve future results, you must improve the process. People have intrinsic motivation. They want to do a good job. Every person, process, and system is part of an interdependent larger system. And continual learning is the basis for continual improvement.

Now, we're going to come back to all six of these, but I want you to first of all understand the key part of this, which is thinking about the concept of what it is you're doing. And where we went wrong, I think, was in the early '20s with a guy who was the leading inventor of management techniques in the industrial era, Taylor. Taylorism was a term. Taylor studied what Ford did at General Motors -- I mean, at Ford motor company. And Ford suboptimized things. He broke it down so you put on the wheel, he put on the bolt, you put on the tire. And so Taylorism was, how do we break things down into very tiny bites? And the ultimate model was the pyramid.

Okay? Now, there's a problem with this. This is the person at the top. This person has power. This is the person on the assembly line. This person has no power. Who does this person report to? They report upward to a person who's their supervisor, who reports to the line manager, who reports to the plant manager, who reports to the regional vice-president, who reports to the vice-president of production, and so forth, right? This is the customer. Look how hard it is for the customer to say, "what they did yesterday to my car doesn't work very well," and notice this person doesn't care. If the customer's here saying to them, "boy, was that a dumb way to put the car on," they go, "yes, but that's what the person above me told me to do."

Now, who am I going to obey, the customer or -- the Deming model's much simpler. The customer is, in a sense, able to communicate with all these for the following reason. And I'll give you a couple of quick examples. And this is one Dr. Deming used directly. He said, you're going to wash off a table. This is your job, is to wash off a table. So I'd say to you, wash off the table. Okay? What do you do to wash off a table? Anyone?

>> you take the rag.

>> take a rag.

>> put it under the sink and get it wet

>> put it under the sink.

>> put soap on it.

>> put soap on it.

>> go over to the table and wipe several times, knocking the dirt off on the floor or into the hand, and then you go and rinse the rag out and wipe the table off.

>> okay.  Is the table now wiped off?

>> should be.

>> does everybody agree the table's now wiped off?

>> I'll bet it's not, though.

>> no, no, no, it is wiped off.  That's not -- don't be overly suspicious
>>here.  Table's wiped off.  How many of you agree the table's wiped off?
>>Okay.  First question, you're part of a larger system.  What's the first
>>question?  I say to you, wipe off the table.  What's the first question?

>> how do I do it?

>> no.

>> which table?

>> no, which table.  Why is that important?

>> got to know what you're doing.

>> so I'll tell you, it's a white table made of metal sitting in the middle
>>of a room.  It's the only table in the room.

>> which room?

>> operating table.

>> why should it be wiped off?

>> okay.

>> operating table.

>> Why should it be wiped off?  Now, if it's a -- if it's a process, see,
>>what I'm trying to draw for you here is the difference between a flow
>>chart and a pyramid.  In a pyramid, the person above you said, wipe off
>>the table.  You said, fine, I wiped off the table.  They forgot to tell
>>you it's an operating table, so the patient got sepsis and died.  It's
>>not your fault. It's not your fault.  You did exactly what the person
>>above you told you.  In a flow chart, no matter where you are in the
>>chart, what you need to know is: what is the end product?  Why are we
>>doing it?  Who is relying on me?  And who am I serving?  Because if you
>>don't have an integrated -- if you don't understand the system you're
>>part of, how can you know what your doing?  Which means, guess what?  You
>>have to hire people who are told, ask questions.
Notice how different this is. Here the answer is, take orders. Now, you come in and you say, well, we could wipe the table off with that stuff you're using, but, you know, I noticed recently that there's a brand new antiseptic that's dramatically more powerful. Whose job is it to know that? Anybody in the organization. Anybody in the organization is allowed to say, I read this article yesterday. I think we can improve this. Because they're all equal in the flow chart. They're all necessary. Give you a good example. If you fly on airplanes, you may think the pilot matters. And they do. It's good to have pilots. It's good to have pilots who take off and land safely. It's good to have pilots who know what airport they're going to. It's also good to have mechanics so that the engine doesn't fall off. Because even with a good pilot, if the engine falls off, it is bad, okay? But in a sense, it's funny. The first hearing I attended as a freshman in congress was on a DC-10 which crashed because the bolt broke and the engine fell off on takeoff, and it crashed and killed 400 -- 300 people. Chicago. Okay? And it turned out the way they were putting the bolt on was wrong and was causing stress and metal fatigue. They had to change the way they put on every engine in every DC-10 in the world.

Okay? So it's only when you start realizing that in a modern system, every person matters. If they don't matter, why are they there? It's a key test of how you downsize government. if your job isn't so important you have to do it brilliantly, why are we keeping you? And if it's so important that you have to do it brilliantly, how do we train you and empower you and strengthen you so that you can be brilliant? Every person has the potential to be brilliant if they're put in an environment of adequate support. But notice how different that is from this system. I am the important person. You are the unimportant person. So I am the chief pilot flying to London. I get paid lots of money. You are a lowly mechanic. Who failed to put enough gasoline in, or jet fuel. I am now near Iceland. We are running out of fuel. I am a less important pilot than I thought I was.

Okay? Now, the trick here is to understand that key words explain Deming, but that you have to then say to yourself, why is each word key and how -- because it has to permeate your life. So that you -- each of these habits, each of these patterns, becomes part of you. For example, a process is a repetitive series of actions or causes that create some output. I dial the telephone or I type on my computer. Or I write out checks once a month. A repetitive series of actions or causes that create some output. A system is a network of processes. I do habit "a," then I do habit "b," then I do habit "c," and they all connect with each other. Your car, in a sense, is a system. Its wheels, its hydraulics, its steering mechanisms, its engine, its gas tank, and all these various things fit together into a system. Common causes of variation are present all the time and affect every time you -- "trial" may confuse you. But if you're trying things out, every time you do something, it is affected by a common cause.

If you try to drive into Atlanta between 8:00 and 9:00 every morning during the week, you will have a similar experience. It's called a traffic jam. Okay? Very important just as an example of common cause, okay? If you arrive at the 24-hour grocery store early enough each morning, you will get there before the newspapers are delivered and be frustrated. There's a common cause here. The correct answer is not to arrive at 5:00 and wait patiently till the papers get there at 6:00. The answer is to figure out, what time does the paper get there? You see -- it's very important. The reason it's important is special causes are not present all the time and will only affect some subset of trials. For example, when we have an ice storm, the papers arrive later. Now, when you have a flat tire, even though you're driving into Atlanta on a Sunday and there is no traffic jam, you will be stopped on the way in. That's a special cause. The reason this is important, and this to me was the moment -- this was for me what Roger Milliken's 25% savings was to him. Because I saw this at the Milliken presentation, and they made the following point, which is devastating.

And I want you to think through carefully. 94% of all improvement is from focus on common causes. 6% of all improvement is from focus on special causes. Guess which one managers focus on? Because they take for granted common causes. Common causes are so common, how could you think about changing them? Yet it is the change in the common cause which is the explosive improvement. It's a very important, key part of this whole thing, is to understand you have to say to yourself, you know -- I'll give you an example. I work at losing weight. Except when I eat ice cream. So I can tell you by measuring calories that I do a terrific job of losing weight most days. Now, I have an occasional day when there's a little blip. That day occurs as often as once or twice a week. Can you identify with these kind of examples?

Now, I have discovered -- my older daughter found a fabulous diet which absolutely works. And I'm now on it, and I've lost one notch in my belt, and it's a great diet. And you eat fruit up until lunch, you eat vegetables for lunch, and you can eat vegetables and one other thing in the evening. Like, you can have vegetables and meat, or vegetables and bread, or vegetables and potatoes, but -- so I got on this thing because it absolutely worked for her amazingly, and she eats all she wants. It turns out, you can eat an amazing quantity of fruit before lunch and it doesn't matter, because all the fruit you could eat all day is less than one good bowl of ice cream. Now, eventually I figured out -- it took me about a week to figure out, well, I'm happy doing this. And we all think it's funny in my family. What I'm doing is just applied common sense, and I've eliminated the common cause problem of ice cream and beer.

Okay? Now, I'm trying to bring you back to notice, what people tend to do is they take for granted all of the normal things they do, and then they look for the one special gimmick. Okay? Common cause improvements come from changing the system or process. So you have to think through, what is our system? What are we trying to get done? What do we do routinely which if I could get a 10% improvement, because it would be 10% improvement routinely, it would be big? When you focus too much on special causes, you actually disrupt the system and make things worse. Now, because people will say, oh, let's really focus on that flat tire. Boy, we'll really make sure we don't ever have a flat tire again.

That's not what's causing you a problem. What's causing you a problem is you insist on trying to get into Atlanta at 8:00 o'clock in the morning. If you went into Atlanta at 7:00 o'clock in the morning or 9:00 o'clock in the morning, you could get in very quickly. You can't get in at 8:00 o'clock in the morning even if your tires don't go flat. Now, to identify a common cause, however, you must have a theory, a prediction, a standard, and a goal. This is absolutely critical.

Deming is actually, in a weird kind of way, very intellectual and then very psychological and personal simultaneously. First of all, you have to have a theory. A theory is our understanding or hypothesis of how things work. Remember the egg? If you have a theory that says water, pot, heat, egg, that's a hypothesis. "I believe I can cook an egg if I put it in water and put the water on heat." Now you can test the theory out. Don't put the heat on. Put the egg on and put the heat on without the water. It's very important. If you take every job in the world, it gets to be as simple as that if you think it through. What's your theory of the job? Second, theories let us predict what will happen. Why do you think that's going to turn into a boiled egg? Because you have a theory. "it's my theory that this is how we boil eggs." Well, tell me about the job you're now doing. What's your theory of how you'll do this job? A standard conveys the level of acceptable behavior. I want all of my eggs to be soft-boiled. Therefore, I should not cook them 12 minutes. That sounds obvious. It is not obvious. You'd be astonished how many people have no theory of the job they're doing and no standard for the job they're doing. They do what's acceptable. Yet every job being done in America today is susceptible to a theory and a standard. The goal is the desired outcome.

Why are you doing this? Remember I asked you about wiping the table. First question should have been, why am I wiping it? What is the desired outcome? And if I said, it is so we can eat off of it, that's one level. What if I'd said it was, frankly, to be able to make clay pots? Think of the difference between cleaning a table off to make a clay pot from cleaning a table off to eat on it to cleaning a table off to do surgery. The term "wipe off the table," unless you know why you're doing it, doesn't make sense. And by the way, look at the theoretical model behind killing germs, which lays at the base of why you use antiseptic to clean off the surgery table.

There's a whole set of theories in your head that you don't make clear to yourself that you just accept as common knowledge. Now, if you have the desired outcome, you know the standard you want to work at, you have a theory of how it's going to work, we just described management. Management is prediction, and prediction is based on theory, an understanding of how things work. I believe we will make 85,000 cars at Hapeville this year. We will do it in the following manner using the following processes. That's a projection. That's a theory. And great managers spend every day immersed in the theory of how things will work and then studying why the theory and reality didn't match. To summarize for a second. Now, this is very -it's surprised, both very common sense and very intellectual. There is no learning without prediction. You must compare results to prediction to then revise and extend the theory to have a reason to change the process and behavior.

So every time you start to do something, what is your goal? What is the standard forthat goal? What is the system you're involved in to achieve that goal? What's your theory of how you will achieve that goal? What common processes will you use and what common things will be involved? And then you begin to put it together so that it becomes a habit, a routine way of doing things. And then you internalize that into yourself much like Drucker. Just as Drucker says, you know, to keep track of your time, ask of every problem, what is it a symptom of, so you're solving the deeper problem. Learn how to manage strengths, focus on the customer. Always focus outside your organization. Be driven by the need to have results outside your organization.

Similarly, Deming is saying, when you get up in the morning, what's your goal? What is your theory of that goal? What standard is necessary to meet that goal? What are the common causes that affect that -- getting to that goal? And if you get every person in your organization doing that simultaneously, the level of human talent you bring to bear -- I mean, people -- you know, why did we run the House of Representatives amazingly well the opening month? Because we had 230 members and about 500 staff, and we gave all of them responsibility. So everybody could play. Again, think about it this way.

And this is the essence of the American model, by the way. It's the reason Sloan ultimately beat Ford. Henry Ford was a genius. Sloan was not a genius. Sloan was a very smart organizer of people. But Sloan figured out, if I get enough smart people, we will collectively outthink one person, even if that person's a genius. This is also the American way of war. No one of us can necessarily beat the best professional military in the world. On the other hand, we can bring so many people to bear with so much common sense that the collective team is so amazing, so that we delegate down to lieutenants decisions some countries would keep at generals. We tell our sergeants to make inventions some countries would allow colonels to make. So the total intelligence we bring to bear, the total number of people able to think about a problem, is enormous.

And every time we do this as a country, every time we find a way to engage everybody, we drown problems and talent. And every time we go back to this model, which is the bureaucratic welfare state, it's the old manufacturing model, it's the old military model, you look at "Desert Storm." "Desert Storm" is this. Very enormous delegation. Look at the old model. Not very much delegation. This was -- this was what we tried to do in Vietnam. We did not do this in world war ii. World war ii was like this. Very decentralized. Okay? Any quick questions? We have time probably for one question, two questions.

>> is that the same as Hill's mastermind theory?

>> I don't know.  In the sense -- no.  I think hill's closer to this.  Now,
>>in terms of breakthroughs for inventors, you want this.  I mean, the
>>geniuses do this, but in a smart system, you start with the genius and
>>you immediately give the information to everybody.  In a bad system, you
>>have no geniuses, or you have a genius, but they get to keep the magic.
>>It's not how it works in a good -- in -- so Edison invents the
>>phonograph, everybody gets it.  Okay?  We will take a brief break and
>>then we'll pick up with the red bead experiment.


>> Now, what we're going to do now is, in some ways, the most famous thing
>>that Dr. Deming did, and that is the red bead experiment.  In order to do
>>it correctly, we're going to need several willing workers.  We've already
>>got Justin, who's agreed to be our computer person.  He is going to run
>>averages.  The way this experiment works is this is a factory.  This
>>factory produces materials for people for our customers.  Our customers
>>want only white beads.  This is our machine, this plus a person. This
>>machine goes in, you bring it out at a 45-degree angle, and your job is
>>to produce only white beads.  Every red bead is a defect, okay?  Now,
>>we're going to run this factory on a traditional Taylor-oriented, top-down,
>>"boss tells employee what to do" model, but with all the modern gimmicks.
>>So we're going to have motivational process inside the pyramid, okay?
>>What we need now is we need five volunteers.  We need one volunteer who
>>will be our recorder.  Their job is to track whether or not the workers
>>are doing their job or whether they should be fired and replaced with
>>other workers.  Then we need four workers who are willing to come up and
>>perform to the top standards necessary to stay in business in a
>>competitive world market.
Okay? So who would like to be the willing workers? One, two, three, four. You four come up. Now, who would like to be the recorder? You're now the recorder. You can come over here. Okay, the recorder's job is to use this -- can you write clearly?

>> sure.

>> Now, your job is to be over there and to mark that.  You four come over
>>and stand right behind me here.  For television purposes, we want to keep
>>that clear.  And Dr. Barbara Lawton, who, as I said, is my coach, is
>>going to pretend she's a student, because she's going to do a part we
>>couldn't figure out how to teach anybody in a short time.  Come on over.
>>She's going to record and tell us what our predictions should be, okay?
>>And if I get it too far wrong, she will promptly break in and tell me.
>>Now, your job -- because you're all willing workers, right?  You applied
>>for the job.  You want the job.  And you understand that your career and
>>your future is a function of doing this.

>> what's it pay?

>> pays a lot.  Pays more than you were earning sitting in this class a
>>minute ago.

>> okay.

>> okay.  And it's the only job in town, so it's a big deal. Okay, now,
>>your job is to reach in here and to pull out the scoop, filling up every
>>one of the things, and having only white beads.  What we're going to do
>>is allow each of you to do it once, and she will record, okay, so you're
>>one, two, three, and four.  Okay, what's your first name?

>> Winston.

>> Winston is going to be number -- no, no, put it over there on the line --

>> right here.

>> that's right, yes.

>> Winston.

>> good, Winston.  And your name is?

>> Bob.

>> okay, now --

>> Bob?

>> Stephanie.

>> Stephanie.  So we've now identified them, so this will be a test of
>>their competence.  And on national television, they will now --

>> Mai.

>> Mai?

>> We will now learn whether or not they are not just willing workers, but
>>they're our model of good quality-oriented workers, right?

>> absolutely.

>> okay, Winston, go for it.  This is your job.  Okay, all right, whoa.
>>Now, first of all --

>> got an empty slot.

>> First of all, Winston has an empty slot, so we know that he's not very
>>competent.  Second, he has one, two, three, four, five, six, seven,
>>eight, nine, 10, 11, 12 -- 15 red beads.  This is not good, okay?

>> what can I say?  I'm in food service.  What can I say?

>> Bob will now hopefully do a decent job.  Oh, Bob just cheated. Bob just
>>cheated.  Bob has one, two, three, four, five, six, seven, eight, nine
>>red beads, but we also have to mark -- mark after it, just put a little
>>"c" after the "9" so we can remember that he cheated.  Okay.  Stephanie
>>will now hopefully -- this is a chance now for Stephanie to prove --

>> all right.

>> three, six, she got nine, too.  Now, she and bob are clearly superior to

>> thanks.

>> go, Mai.

>> all right, now, Mai  has -- she has the largest number of vacancies, two
>>vacant.  Then she has two, four, six, eight, 10, 12 -- do we count the
>>vacancies as red beads?

>> why not.

>> okay, so they count to 14.  She has 14.  If you don't get one, that
>>counts the same as getting a red bead, which actually means Winston's at

>> yeah.

>> and plus he should be penalized for cheating.

>> I didn't cheat.

>> no, he didn't cheat.  Bob cheated.  He was sincere, but incompetent.

>> my heritage, that's what counts.

>> all right, now, this means -- by the way, what's the total? Where's the
>>computer?  Justin, what's the total of those five -four?

>> 48.

>> 48.  You've got to do the computer faster.  What's the average, then,
>>since there are four of them?  Anybody want to do that without a
>>computer?  12, right.  So total 48, 12 average. Okay, now --

>> if I get fired from my job, I'm going to really leave.

>> okay, Dr. Lawton, do you want to tell us anything about where we're at
>>now for predictive purposes?

>> let's keep on going.

>> okay.  All right, now we're going to go to day two, but let's recognize
>>here, first of all, that we had nobody who was actually very good.

>> wait a minute.

>> I feel real bad.

>> we had two people who at least seemed to be trying, bob who cheated and
>>Stephanie, so I would say Stephanie's clearly the best worker, because
>>she tied bob but she didn't cheat.  Okay. Winston is close to pathetic,
>>but we don't want to make him feel too bad.

>> but there's no --

>> but -- what?

>> there's no way for them to do it right --

>> You're not allowed to talk.  You're supposed to -- see, each person --
>>in a pyramid, each person has their job.  Your job is not to be part of
>>this except to write.  Now, the problem we've got, in a good modern
>>management hierarchy with a pyramid, having brought in our consultant, we
>>would say,  let's put Winston on probation.  Recognize that Stephanie
>>seems to be doing pretty good.  But we also have to recognize that we're
>>in the world market, competition is tough.  We need to do better.  Now,
>>we're going to start by creating zero defect day.  We're going to say, we
>>should do better.  We want everybody to do better.  We want to raise
>>morale.  Do I put these up now?  You can help do this.

>> okay.

>> put one of these up.  "quality is our name."

>> where do you want it?

>> on the wall.  And, Mai, you can help.  "zero defects now." And in
>>addition, in order to build morale and let people understand that we are
>>committed to quality, right, we're going to give each of them -- here you

>> thank you.

>> they're very -- and I put yours on you because I wasn't sure you could
>>find it, okay?  You are, after all, on probation at this stage.  And
>>here, you may have one too for helping.  Okay, now we have -- this is the
>>big motivational moment.  We've had quality rally, we've had quality day.
>>We have our quality signs. And everyone is committed.  "I'm a quality
>>worker," right?

>> yes.

>> all right.

>> absolutely.

>> Winston, since you're a quality worker and on probation, go for it.

>> Winston said he wanted a break.

>> can I put the beads on there?

>> no, no.  Scoop.

>> you're not allowed to do that.

>> okay.  Two, four, six, eight, 10, 12, 14, 16.

>> Ooh!!

>> Winston has tied his all-time record for incompetence.  You have to at
>>this point wonder if this guy's just not going to get it, right?  All
>>right, bob.  Bob.  Well, bob, now that we're monitoring so he doesn't
>>cheat, two, four, six, eight.

>> one just fell out.

>> nine, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 -- 22, setting a -- making
>>Winston look good.  Now, Stephanie's at 10. Continuing, although she's
>>decaying, she's nonetheless not doing as badly as bob.  Okay.

>> she's learning from my mistakes.

>> all right, Mai, go for it.  This is your moment.

>> I don't really feel so bad anymore.

>> 19.  Now, this is bad.  What's the total?  Huh?

>> 67.

>> and what's the average?  16.75.

>> now, we have to really look at this for a second.

>> we're getting tired.

>> we're motivating the workers, we've talked about quality, we've brought
>>in a quality consultant, we've had a quality rally. It's worse, right?
>>Okay.  This is -- let me be straight about this, now.  This is the last
>>day for two of you.

>> all right!

>> and you have to say right now, theory and prediction, that bob and
>>Winston, although actually Mai's now worse than Winston by one.

>> that's right.

>> only Stephanie seems to have learned how to do the job.  And if we were
>>a normal company, wewould now be honoring Stephanie, because she seems to
>>have done the best job so far.  Okay, now, go for it.  This is your

>> all right, Winston.

>> all right, all right, all right.

>> no, no.

>> I'm just mixing them up.

>> Ahhh, look at that!

>>	11.  Which for bob is a miracle.

>> mix them, mix them.  The key is to mix.

>> for Winston.  Bob.  Dramatic improvement over his two previous days of
>>failure.  He's almost up to being average.

>> Ooh!

>>	11.  Tied.

>> no, wait a minute.  Gosh, okay.

>> counting is good.  Okay.  But Stephanie's up to now always been better.
>>So let's see if Stephanie's now going to have the big improvement.

>> Ooh!

>> six?

>> no, seven because she missed one, seven.  Notice Stephanie continues to
>>improve.  This is Mai's moment, and Mai has lots of pressure now.

>> two, four, six -- 17.  Now, if you add across, okay -- so the team has
>>done better, but remember, the two weakest people now have to go and be
>>fired.  So if you add across --

>> this day or overall?

>> of the three days, total.

>> no, no, no, don't write that in there.  That's the fourth day. Just
>>write it up here.

>> 43, 22, 32, 41 --

>> no, 33.  It's 42.

>> well, you just asked me to write.  You didn't ask me to --

>>	46.

>> check her.

>> stop it.

>> 50, 50.  Well, so Mai is gone.  Does everybody agree?  Mai failed.  Okay.

>> she was admirable.

>> and bob is gone.  Right?

>> and bob's gone.

>> bob's gone.  The big 22 killed you.  It's gone.

>> I want a hearing.

>> no, you're gone.  You can try to file an EEOC complaint later, but not
>>during the class.  Okay?  Now, okay.  Now, each of you -they go twice?
>>Okay.  So, Winston, you get to go and we'll add you up under Winston and
>>bob.  You get to go twice.  You're very destructive.  Okay.

>> Ooh!

>> Uh-oh, two blanks.

>>	12.  Do it again.  Go again.

>> Uh-oh.  Shut up.

>>	21.

>> notice, by the way, how the scorekeeper, who's not performing -- not
>>participating, gets a certain thrill out of his failure? Just think about
>>this again in terms of hierarchies.

>> is this sick or what?

>> nine.

>> nine.  Now, clearly, clearly Stephanie is the person who has best
>>understood this.

>> watch them be all empty.

>>	10.

>>	10.  Okay.  So he did 33, she did 19.  But look how bad the day was.
>>Okay.  So as our consultant, what do you want to teach us now?  Do you
>>want them to stay up here so they can learn  that --

>> if you look at this, this would be essentially a stable process, and
>>here is where Newt laid off the two worst people.

>> all right, you need to.

>> come over and stand -- does she need the hand mic or what?

>> this is innovation.  I think you guys didn't think through this part of
>>the process.  Go for it.

>> this is called --

>> is that picking it up?

>> There's only common cause variation inside the system.  So the system is
>>stable, and therefore predictable.  And so what we have is that with all
>>of these people, you can say if this process doesn't change, then you
>>would expect the same thing to happen in the future as has happened in
>>the past.  Because this is a stable system, there's only common causes
>>present, you have predictable performance, and the only way to change the
>>performance is to change the underlying process.  When we got rid of the
>>two worst workers, nothing really changed.  The system continued to work
>>exactly the way it was before.  It's a process problem.  It requires
>>process improvement, and it had nothing to do with the motivational
>>techniques or actually laying off the two worst workers.

>> get rid of all those reds.

>> eliminate the red beads coming in.

>> Ah, yes, okay.  Why don't y'all go ahead and sit down.  You may keep
>>those as a memento of this moment of excitement.  Notice here a couple
>>things.  First of all, how did -- how did you all feel as you went
>>through this?

>> we had no control over it, really, I mean, so --

>> all right.  In fact, what is -- what is really to be attributed to your performance?

>> I filled up the holes.

>> and what else?

>> sheer luck.

>> luck, right, pure luck.  Very important.  Because how much of what we
>>think we are managing in a normal system is, in fact, not theoretical,
>>not systematic, it's just pure luck?  Okay. Secondly, how did the rest of
>>you feel?  I mean, those of you who were working, what was your reaction?
>>Bob what was your reaction?

>> I thought I had a career, and, I mean, it really wasn't that easy to do,
>>but she had good leadership.

>> bob, what was -- Winston, what was your reaction to not making it?

>> well, it was sheer luck, absolute sheer luck.

>> it's frustrating when you know what the problem is, but you don't know
>>how to change it.

>> now, why did you get -- why did you think it was funny that they were --

>> well, because you made me shut up, but right from the get-go, I knew
>>that as long as you've got red beads in there, they're going to be
>>pulling out red beads and somebody's going to lose.

>> right, so guess what?  On a traditional assembly line, what does the
>>traditional average worker know?

>> that there's going to be defects and there's nothing they can do about it.

>> right.  That they are, in fact, going to be part of a system over which
>>they have no control, and, in fact, if the vice-president for purchasing
>>takes the cheapest contract from the worst supplier, their performance is
>>going to go down. Right?

>> right.

>> Which leads them then to react exactly as you were reacting, which was
>>to be cynical, and instead of building a team, to say, well, that
>>person's gone.  Which both leads you to be frightened and therefore more
>>withdrawn and therefore more cynical, which is, guess what?  The typical
>>reaction of the classic 1930 blue collar industry.  Which defines a lot
>>of modern labor relations. Because the boss who didn't have to do this,
>>the guy who made his bonus this year by buying the cheap parts because he
>>lowered the cost of parts so he looks great, but he's ruined our career
>>because he wasn't measured as part of a system.  He was suboptimized, so
>>he measured purchasing, but if purchasing got you lousy parts, you know
>>-- if he had bought only white beads, he would have paid 8% more, and
>>this would have been a piece of cake.  So he's saved 8% and made our job
Secondly, the guy who's in charge of production was -- went to work 40 years ago when this was the only device available, so he loves this device. It makes him feel secure. There's a new device which will only select out white beads, but it's different. And so he he's no longer on the line, so he doesn't feel the pain of your failure, so he doesn't buy the new device because he doesn't get it. Do you begin to see how this fits together into a pattern? You're part of a system. This, this, the quality of the beads, the instructions. I mean, we could have said, reach in here, use your hand, get up only white beads, and fill this. Which would be a process change. But do you see the pattern? So there's lots of way to solve it, but to solve it, you have to recognize you're part of a process, and you have to understand how you fit together so that in the original Deming model, this being -- remember, this is the organizational structure. You're down here under manufacturing right here. Over here is purchasing. Here's advertising, and here's direct sales.

So advertising is saying, we're going to offer only white beads. You keep telling them, no, no, offer 90% white beads. They're saying, we can't offer 90% white beads, because you can't compete in the world market with only 90%. Purchasing's going, we've got to keep our costs low. Let's buy the cheapest possible supplier. You're then forced to manufacture with an obsolete process you are not allowed to improve. Then the sales force goes out and offers 90% white beads, which is what you told them is the most you could do in the current system. But the customer sees the ad for 100%, looks at the lot they just got, which is 90%, and goes to the head of the corporation and wants to know of these four guys, why are you failing? Now, the Deming model is radically different.

>> on that model, on the previous model on the classic hierarchy, shouldn't
>>the guy at the top be responsible for looking at all this?

>> The guy at the top should be responsible for setting the vision and
>>general strategies and defining a culture of the system which allows
>>every person to participate in going in the direction of the common
>>vision.  But can't possibly, in fact, know these things.  It's too big a
>>system.  Okay?  No surgeon can clean an operating room as well as the
>>best person they hire who's done it for 20 years and really cares about
>>their job.  And if the surgeon starts trying to micromanage the janitor
>>who's cleaning the room, you're going to kill people.  Okay?  So you want
>>every person to do brilliantly their job and to redesign and own their
>>job within the general vision set by the person in charge.  This person's
>>job is to, first of all, focus on the customer, focus on the inventions
>>of the future.
They just invented the phonograph or the movie or whatever it was Edison was doing. How does this change our world? How does it change our product? Our customers are changing. Alfred Sloan went out once a quarter and spent one week as a salesman on a lot. Head of the largest industrial corporation in the world sold cars one week every quarter. Why? Because he wanted to know what questions the customers were asking because he wanted to have a real finger -- "spitzen gefuhl" is the German phrase -fingertips, he wanted to know what was happening in the marketplace at a better level than his pollsters could tell him. Okay? Remember Drucker's point. You're always looking for the change in the pattern. You want to know, what are they doing that's different? What's happening out there that's unusual?

Now, Deming's point is that you first have to have an aim, and you've got to develop really thinking through that aim, you do consumer research, you design and redesign, you receive and test materials coming in. How many red beads are there in our raw material? You then talk to the suppliers, because you ideally want to get a supplier who's going through the same process you are, and you say to the supplier, we want you to be our supplier. How can we work together so you won't produce any red beads? Which means you suddenly, instead of just looking for the cheapest supplier, you begin to build a relationship where they've got to know what you're doing. So you call the office -you call the supply company and say, no, no, we're not doing restaurants. We're doing operating rooms. We need to buy from you appropriate things for an operating room, not appropriate things for a table in a restaurant. Then you produce, assemble, and inspect, and you test all these things constantly, and then it gets to the consumer and it comes back around, but it's a constant process, and you need to be thinking all the time about the totality of the process.

Okay? Now -- and this is something you can do anywhere -- I mean, you all can do this. This is not a hard experiment to set up, and it's very useful, because it's only when you get people into doing it for a while. And again, Deming took 40 hours, 10 hours a day for four days, to immerse people in what I'm giving you a hint of. You're only getting a hint today. Because you really have to be able to feel this and get the rhythm of this. And think about how isolated you feel. And then ask yourself about a typical government worker or a typical schoolteacher or a typical anybody in a classic system where you're told, do your job and keep your mouth shut. And what they want to do is say, wait a second, what is our aim? What are we trying to accomplish? I mean, apply this thinking to learning. Yes, sir?

>> I think you could envision the union's response to the scenario we just
>>experienced, but what about this Deming model? What's the union response
>>to it?

>> Well, the unions are confused by it and increasingly willing to work
>>with it because they see the pressure of the world market.  But remember,
>>the union response was a response to Taylorism.  It was a response to the
>>idea that, we're going to suboptimize your job and we're going to
>>brutalize you into a dehumanizing job with no power, no control.  You
>>know, do the white beads or else.  That's why you got all the union work
>>rules, was a response to Taylorism.  And now you're saying to people, we
>>want you to be a complete person.  We want you to completely understand
>>where we're going, and we want you to have complete authority for you to
>>help be creative and in redesigning your part of the process.  Very
>>different model, and places like Ford are unionized.  I mean, they go
>>through lots of dialogue trying to find a way to break through, trying to
>>talk with each other, trying to figure -- it's very -- the cultural
>>change is enormous.  It's not just a management change.  It's a cultural
Now, what you've got here is -- let's go back and start at the beginning. Principle number one, the consumer, not the bureaucracy, defines value. This is very important for this reason. You've got to define the consumer. Okay? If I can go back to the notion of flow charts -- where did the eraser go? Oh, there it is. Okay. What I want to show you is normally, in most large systems, who's defining value? At the welfare office, who defines value?

>> the bureaucracy.

>> right, the head of the welfare office, right?  So it's downward.  Okay.
>>In a normal hierarchy -- I'll just do a simple one -- you're down here
>>working, right?  Here is your customer. In a normal hierarchy, this
>>person's defining value for you, right?  I don't care what you, the
>>customer, want.  I care what my boss wants.  But in a flow chart, here's
>>the customer.  You should be feeding back into the system, this is what
>>I'm hearing, this is what we need to change, this is how we can improve

>> this Deming model, if we make this -- if our civilization makes this
>>move towards this Deming model and we pass out responsibility to the
>>workers, will it render the unions as we know them today obsolete or

>> no, the unions as they are today are obsolete.  Unions today have to
>>reinvent themselves.

>> well, is there any place for the union in this model?

>> Sure.  Sure, in a very big system where it is more efficient for you to
>>organize yourselves if you have one person who studies the whole system
>>than it is for you to try to do it yourself.  I mean, if you're all the
>>baseball players, you probably want to have a spokesman who somehow is
>>working.  But the aim of the spokesman would be different than the aim in
>>a traditional union.

>> Well, wasn't the whole need for the unions with the Taylor model because
>>the people at the lowest level --

>> No, it actually goes back to the middle of the 19th century. I mean,
>>it's an effort for people to aggregate themselves into groups that can
>>talk about their life.  If you have lots and lots of people doing this,
>>they may well want some kind of association to discuss doing it.  But the
>>goal of discussing in a Deming world is totally different from the goal
>>of discussing in the Taylor pyramidal world.  Here it's a fight.  I mean,
>>this person is above me.  They don't understand my life.  They're going
>>to try to force me to do things I can't do.  They'll fire me if I can't
>>do this, even though it's not my fault I can't do it.  In this world,
>>you're all on the same team.

>> so would it be safe to say that the Taylor organizational structure is
>>more adversarial and it's much more therapeutic --

>> Much more.  This is an inherently adversarial power structure. This
>>should be an inherently team collegial power structure. Okay?  Very big
>>difference.  I can only remain speaker of the house as long as I convince
>>a majority of 230 of the republicans that I am listening to them well
>>enough that they should re-hire me.  They are my consumers.  And the
>>minute I forget that -- I have two sets of consumers.  600,000 Georgians
>>and 230 house republicans, and the minute I forget that, either set of
>>consumers can fire me.  It's a wonderfully market-oriented system in that
>>sense.  Very -- it's a hard system, but it's market-oriented.  But the
>>first goal here -- and it's something to think about education.  Who is
>>the consumer?

>> students.

>> If the students -- actually, there are three consumers, the society, the
>>parent, and the student.  Because, remember, the student's not paying
>>directly.  The student is being paid for by the parent and society to
>>achieve three sets of goals.  But now go back and ask yourself about the
>>typical learning situation we currently create.  If those three are
>>defining it, who defines it today?  The politicians, the bureaucrats, and
>>the professionals. Second principle, the producer invents value.  Nobody
>>knew they wanted to go to McDonald's till ray Kroc copied the McDonald
>>brothers plan.  Ray Kroc, remember -- this is one of the great stories of
>>how history unfolds, because it's not linear.  It's not from here to here
>>to here.  Ray Kroc was what?  Anyone remember?

>> milkshake --

>> milkshake machine salesman.  He wanted to sell milkshake machines.  He
>>was the best milkshake machine salesman in the country, and the McDonald
>>brothers had a great product based largely on their French fries, and
>>lots of people came to McDonald's, and he went to them and said, you guys
>>ought to franchise.  If you would franchise.  Now, why does he want them
>>to franchise?

>> sell more milkshakes.

>> Sell more milkshake machines, and they said to him, we won't do it.  He
>>said, if you'll just expand, I could do it.  They said, we don't want to
>>expand.  We're happy being the McDonald brothers.  So he finally, after
>>two years, talked them into letting him expand, at which point he gave up
>>being a milkshake machine salesman, but it was all a historic accident.
>>The minute he opened McDonald's in Chicago, people flocked to it, and he
>>suddenly said, this is really a winner.  By the way, do you know why they
>>use Coca-Cola?  The regional Coke salesman loaned him the equipment.  He
>>was an -- he was a small businessman he was getting off the ground, and
>>they said, we'll help you.  We like your idea.  We want you to succeed.
>>Someday you'll be a good customer.
Notice how Deming-like this is. Okay? Let us help you be successful? Well, guess what the largest single customer in the world is for Coca-Cola? McDonald's. Out of one local guy being positive. Now, in this model, of course, or in this model back here, finance would have said, you did what? Okay? Principle number three, to improve future results, you must improve the process, which means if you're serious -- this is why Deming and Drucker blend together so brilliantly -- if you're serious, you have to map the process you're engaged in. You have to always be thinking process. What am I learning about the process? So you can't focus on the event. The event is, oh, I did this number. It's part of a process. Show me the map of the process. What does the chart look like? Okay, so you're constantly improving the process, because it is the process improvements. Silly example. You have a phone which is too far from your desk and the cord is too short, so 12 times a day you have to stand up and walk over to the phone. What is the obvious answer?

>> get a longer cord.

>> get a longer cord or --

>> move the desk.

>> move the desk.  It may seem obvious.  Great managers do it
>>instinctively.  Bad managers get up 12 times a day for their whole life.
>>Okay?  Fourth, people have intrinsic motivation. They want to do a good
>>job.  Very important part of this.  The average human being wants to do a
>>good job.

>> what do you think's behind it?

>> it's an assumption about human nature.  Doesn't mean that they're good
>>-- they're necessarily good people.  Every one of us has some potential
>>for evil.  Every one of us has to go through a process all of our lives
>>of sorting out how we live out our potential, but most of the time most
>>people inherently would prefer to achieve rather than to not achieve.  And
>>you can acculturate to increase that tendency.  It's the basic tenet of
>>America.  I mean, if we're endowed by our creator with certain
>>unalienable rights, among which are life, liberty, and the pursuit of
>>happiness, you're assuming people will pursue.

>> I would argue that if people wanted to do a good job, we wouldn't see
>>the social problems that we see today.

>> Unless you have a system which is telling them not to do a good job.
>>Remember, the person down here who's not doing a good job may be -- is
>>being sent signals all day to keep their mouth shut.  A person on welfare
>>is being sent signals all day,  don't try.  Why would you want to get off
>>Medicaid?  Why would you want to leave public housing?  You don't have
>>any personal friends who work.  Why would you want to work?  Why would
>>you get good grades?  Talk to black kids who get good grades in an inner
>>city school and the peer pressure they're under to not succeed.  I mean,
>>humans will -- humans, I think, have a desire to be good, they have a
>>desire to be liked, they have a desire to achieve. But they can be broken
>>of those desires by a system which repetitively pounds in them to teach
>>them bad behaviors.  Why wouldn't you get pregnant?  All your friends
>>are.  I mean, just think about it as -- if you apply Deming, if you read
>>Leon dash's book "When Children Want Children" and think of it in a
>>Deming model of a system and a culture and a process, you have a totally
>>different view of what happens.  And we'll get into this when we get to
>>the section on the culture.
But our presumption here, it's at a core part of Deming, it's why Deming is so American, is that people basically want to pursue happiness. Now, if you don't believe that, you need a dictatorship, you need a police state. But if you believe that, then you ought to design a system that starts with the idea probably you want to do well. Now, if you're one of the tiny, tiny percentage that don't want to do well, we can deal with that, but for most people most of the time, it is safer to assume they want to learn, they want to grow, they want to do well, and we are the facilitators of their behaving in a positive way. Principle number four

>> excuse me, does that mean that baseball players can roll into some kind
>>of a --

>> well, jack Kemp has a very simple -- we'll keep this Chyron up.  Jack
>>Kemp has a very simple theory on the baseball strike. His theory is that
>>when the marginal tax rate finally broke 50%, by the time you count in
>>state taxes, that if you're a normal player who knows you've only got a
>>six- to 10-year playing career, that the marginal tax rate makes you much
>>more desperate than you were when it was 28.  And that the tax increases
>>have a direct impact on why the players are so concerned.  Because
>>they're actually making much -- by the time you take out the agents' fees
>>and you take out the tax rate at the state and federal level, they're
>>actually taking home much less than people think they are.  And these
>>guys know that they're probably not going to play more than 10 or 12
>>years, so they've got to build up in that length of time the entire nest
>>egg to sustain the rest of their life.

I mean, they're huge salaries, and I don't feel any sympathy for a guy who makes $7 million a year in field sport, but that if you really evaluate as a system in a Deming model and said, now, what happens to your salary? Tell me how much your agent gets. Tell me how much the union gets. Tell me how much the tax collector gets. How much is left? And you're 26 years old and you're a pitcher and you may not have 10 more years, how worried are you? And they're in an adversarial environment. I mean, they and the managers have -- they and the owners have had a lousy relationship culturally.

>> arrogant, bad decision-making by people like Steinbrenner.

>> On both sides, on both sides.  You've got owners who have made bad
>>decisions.  You've got a player's union that's made bad decisions, and
>>instead of in a Deming-like model stopping and -I mean, what they -- I
>>think what they ought to do, frankly, is go off on a retreat and not come
>>out until -- you know, if you took every owner and every player and you
>>said, we're now all going to go to Yellowstone and we can't leave until
>>we have a solution, they'd get one.  They'd talk to each other.  But
>>until you can unlock that, as long as you keep it adversarial, back to
>>this.  Well, these are just the players.  I am the owner.  Who do you
>>think you are?  Okay?

>> that's like saying that the worker at Ford is laid off.  And they've
>>worked for Ford for 20 years.  Three weeks before Christmas, they get
>>laid off.  They can't make their boat payment, their house payment, that
>>and that and that.  Well, you know, what a rotten president, what a
>>rotten congress, you know, we can't make our house payment.

>> I didn't say the Congress should do anything.

>> well, I'm just saying --

>> I said -- but a healthy leader would tell everybody eight months
>>earlier, we have a big problem in the world market.  We're not competing
>>very well.  We may end up having to close the factory if we're not
>>careful.  We'd better think about this together.

>> that's what I'm saying, is that they've got to take responsibility.  If
>>they know their career is only 10 years --

>> then they've got to slow down.

>> -- they've got to save it up.

>> and what they're saying to you is as long as we raise the marginal tax
>>rate, the amount they have to play with is going down, so the pressure on
>>them to get higher salaries is greater than people think it is, because
>>the net they're making has gone down, not gone up.

>> but it's free.

>> I'm just saying if you're the owner and you treat that with arrogance
>>and you're an owner who has a private corporate jet and you own a big
>>corporation and you have a stadium given to you by the city on a really
>>nice deal and they now get into a fight, if you decide just to fight each
>>other, which is Taylorism, why would you think the strike would end?
>>Whereas, if you'd come over here and say wait a second.  We're part of a
>>lot bigger system that has customers out here.  We are actually the
>>fiduciaries of a great national pastime called baseball.  We have a moral
>>responsibility to find a solution, this tone, this conversation is
>>totally different from Taylorism.  It's a different model.  But notice,
>>this is also broken up, because when you go to Taylorism and they hire a
>>union agent, now these guys have an agent who's paid to fight, and these
>>guys have an agent who's paid to fight, and they go off into a room and
>>they couldn't care less about the customers.

>> absolutely.  But what they're doing is the same thing we do with the
>>beads.  They're pulling them out and they don't have any control over the
>>red beads coming in.

>> right.

>> which is this guy  over --

>> right, which is why what they really ought to do is every single one of
>>the players and every single one of the owners ought to go off as a
>>group, kick out their agents on both sides, and sit down without the
>>lawyers and talk as human beings about the national pastime.

>> without the president and congress, also.

>> they ought to do it because as people who want to serve their fans and
>>the sport that they are the fiduciary responsible of, it's the right
>>thing to do.  And just say, we don't want -- now, when you get done with
>>all the talk and you have reached an agreement, you bring in the lawyers
>>to legally codify the agreement.  But the minute you get the two sides
>>lawyers, you leave this and you go back over here.  And what you've done
>>is you've now blocked right here.  And these guys don't talk to these
>>guys because they each have a hired hatchet, a hired gun. And the hired
>>gun's just sitting there shooting at each other.

>> and they can't make any decisions anyway --

>> right.

>> -- to solve the baseball strike.

>> But they can blur the communications.  So this team only hears from
>>their hired gun and this team only hears from their hired gun, so the
>>owners get one-sided views and the players get one-sided views, and over
>>here is the customer and the national pastime, both of which are being
>>served badly by both the owners and the players.  And that's why the
>>Deming model is so much more powerful at providing service and providing
>>goods than is the Taylor model.  Now, we've got to get through some more
>>stuff. But notice what the next Chyron is.  Principle five, every person,
>>process, and job is part of an interdependent larger system.  So if you
>>start with, gee, here is the pastime of baseball, here are the 130
>>million fans, here are the people who earn a living selling, you know,
>>cokes and beer and popcorn and tickets, here is the players and the
>>owners, now you see yourself in a much bigger system, and your ego gets
>>much smaller.  You're a tiny part of that system, okay?
And unless you see yourself as your -- you and your process and your job are part of a larger system, how can you figure out what your contribution is? That's why I said earlier when I said wipe off the table, the first question is, why? Because you've got to figure out what system you're part of. Principle number six, and this is very hard to get across to people, continual learning is the basis for continual improvement. I can't overstate this. You have to learn every day of your life. We have got to rethink education from the ground up, so from prior to birth, from conception to death, there are things we can do to maximize your chance of learning. If we are the best learning society on the planet, we will dominate the planet in terms of our productivity, and that means rethinking everything from the ground up. And if you're not continually learning every day, you don't get it.

Okay? Principle -- now, so take those six principles and let me go back and show them to you in this way, value is defined by the customer, value is invented by the producer, production is a system of processes, everyone contributes, and continuous improvement by everyone is the most powerful model. Now, let's look at a non-manufacturing example of this, one of the great systems of this country, the Ritz-Carlton.

>> thank you for calling the Ritz-Carlton --

>> for Ritz-Carlton hotels, it's a matter of constantly improving services
>>to its guests, for in a real sense, its product is service.  And they
>>also understand that with total quality management, the old way ways no
>>longer work.

>> Horst H. Schutze:  if it was true that quality, that it could reach the
>>peak of quality, if it was not a moving target, if it wasn't a continuous
>>voyage, then we would still be driving model-t Fords.  You see, there is
>>always a new dimension and new frontier to be captured.  It's very
>>interesting that most people think that statistical process control does
>>not exist in the service industry.  And it certainly does.  We have key
>>demands by customers, key expectations identified, of course, through
>>careful service, and for all those key expectations, we have processes,
>>and those processes are measured.

>> in fact, they measure 720 work areas throughout the company, and on a
>>daily basis.  Then those measurements are combined with comments from
>>guest surveys to form a data base which is used for continuous

>> okay?  Is that helpful?  Now, seen from that context, I mean, you can
>>apply it to, how does the reservation clerk answer the phone?  How does
>>the bellman greet you at the door?  How do they take care of your towels?
>>How do they take care of room service? How do they take care of the
>>restaurant?  I mean, every aspect. It's not just manufacturing.  Every
>>aspect of life.  What if we had a quality-driven legal system?  What if
>>we had a quality-driven bureaucracy?  And you can be.  I mean, you know,
>>"bureaucrat" doesn't have to be a negative word.  Because originally, it
>>simply meant somebody who was systematic in doing things.
Now, remember the three big concepts of entrepreneurial free enterprise. First, the entrepreneur as a creative -- is a creative inventor. Second, the customer or the market or the goal defines success. And, third, getting the job done is the focus. So you invent, the market judges whether or not your invention is useful, and getting the job done as you've defined it is how you define whether or not you're succeeding. If you apply quality to education in that context, you have a totally different rhythm and pattern of how we try to learn. It be much more dynamic, much more open. And the focus would be on, how much do you learn, not how long do you sit?

And this is why we really do want you by next week, every one of you to have written down what three major changes would you make in the process of learning in America based on Deming and Drucker and, in particular, on today's session. The vision here that we're trying to communicate with this particular two hours is an America committed to Quality and Profound Knowledge so that every American, the poorest American, the richest American, the least powerful, the most powerful, somebody with a sixth grade education, somebody with a Ph.D.., every American starts out each day and says, what process am I involved? What system am I part of? What is my goal? What customers am I trying to satisfy? How am I doing this? Okay? In that framework, it seems to me that our strategies, learning, speaking, teaching, recognizing, living, okay, how you have to learn, then you have to speak. You have to explain what you're doing. You have to teach it. When somebody does do it right, you want to recognize them. And all this gets summarized into literally, how do you live every day?

And it may sound at first kind of hokey, but just think about it. What we're trying to do here is suggest to you that Deming took the best of the American Civilization, he codified it into a way of empowering every person to have control over their contribution, so that every person can literally live this out. You ought to be living it out in your marriage or your relationship to other people. You ought to be living it out in your community. You ought to be living it out in your own life. Think of your own life as a system, as a process. All that should fit together in a way that makes sense.

Now, if that's true, one of the questions I'd ask you to think about, which I don't have an answer to, is, what are the projects and what are the tactics that ought to grow out of this? What would make your community more quality-oriented, more like a Deming Profound Knowledge system? Or your family, or your job, or your volunteer activity? If you would, imagine applying Quality and Profound Knowledge to health, safety, government, the welfare system, and learning. Notice, by the way, health, safety, and learning do not imply health care. They don't imply police. They don't imply education in the traditional sense.

They simply say, okay, how do you maximize learning? How do you maximize health in America? What if we didn't need any open-heart surgery because everybody had habits of diet and habits of exercise so that they didn't need it? How much would that save? Very different way of thinking than if you start -- you know, what if every neighborhood had its own patrol and every neighborhood did -- had its own people who systematically became deputized and you didn't have any crime? Which is different than, can we hire enough police and enough prosecutors and build enough prisons so that after the crime is committed, we can lock up the bad people. Very different models. And I'm trying to get you to break down the internal barriers to creativity where you start with blinders on, and instead, get you to think about all of it, the totality of opportunity that's available.

Remember that we talk in terms of vision, strategies, projects, and tactics. And what I want you to think about is applying it to quality in education. And, frankly, if I were redoing this particular Chyron, I'd probably say quality in "learning." I wouldn't say "education." I have almost no interest in education. I have every interest in learning. Now, you may learn in a setting which is an educational setting or you may learn some other way. But what I want to know is, how much are you learning? What is your process of acquiring knowledge? What's your process of changing your life? And you find more and more learning goes on outside of structured, bureaucratic environments.

More and more people who buy tapes or they go to a particular three-day seminar or they do something on their own or they pick up books or they use expert systems in computer. Or they find a consultant who comes in for a day. You know, I mean, think about it as an adult, if you had to go learn skiing, would you take a five-hour credit course on skiing, or would you go and spend three intense days at a resort with a ski instructor? Which technique -- they're both kinds of learning. Or would you read a book on how to ski, practice it a little bit, and go down the slope and see what happens? Different people do different things.

My point's just that's a -- if you focus on learning, it's a dramatically more open-ended question than if you focus on education, which is a predefined professional status in a bureaucratic setting occupied with credentialing. Very different systems. Remember, also, that after you think you know what you're doing, we've got to go back to applying listen, learn, help, and lead. That is, you think you have your vision, you think you have your strategies, you think you have your projects, you're ready with your tactics, fine. Now go listen to the person next to you. What do they think? What are their concerns? Why do they do it? Because if all you do is focus on your version of visions, strategies, projects, and tactics, you still have not listened to everybody else who's part of your game. So there's an enormous amount of listening involved in this kind of leading.

Okay? So how does -- how would this lead you to change learning in America based on what you've learned today? What might you do? Just brainstorm. No rights and wrongs. Just be creative.

>> let the students choose who they want their teachers to be for which
>>subjects they want to take.

>> put the students in a teaching capacity.  The best way to learn
>>something is to teach it.

>> teach it, sure.

>> get the parents more involved in volunteering in the schools.

>> what else?

>> like, learn through experience.

>> okay.  Should that count?

>> sure.

>> I mean, if we say to you, we want you to become something, what if you
>>just go and do it as an apprentice and actually learn it, but you didn't
>>sit through the five-hour course?  Does that count?  Does that count?

>> bureaucracy has to be defined.

>> yes, ma'am?

>> I think you ought to make computers check-outable at libraries just like
>>you do books, because they can learn things faster on a computer.

>> that's interesting.  What if you could check out a PC and the software
>>package literally and maybe put -- give a credit card or something as a
>>device, but what if public libraries became centers where people could
>>literally go in and check out computers?  Yes, sir.  Go ahead.

>> I think field trips should be part of, like, for history and stuff.  I
>>know when we were, like, in fourth grade, we toured the cyclorama and
>>berry college, and in high school it was so much more paperwork, we
>>couldn't go anywhere.

>> I was going to say, did you learn on field trips?

>> yeah.

>> what are the new rules in Georgia on field trips?

>> there's so much paperwork, you can't --

>> anybody know?  You do fewer field trips today.

>> too much litigation.

>> too much litigation.  Too much time out of the classroom.  The rules in
>>Georgia today are actually worse for field trips than they were 30 years

>> even the bureaucracy of the tests.  They have a test now that says you
>>can't graduate from high school in Georgia, and teachers are going to
>>have to teach, this is what's going to be on the test.  That ends -- you
>>know, my English teacher couldn't teach Maya Angelou's poetry because she
>>knew that this wasgoing to be on the test, because you have to pass the
>>test to get out of high school.

>> See, they teach to the test.  Remember the Deming point?  The purpose of
>>recognition is for what you've already internalized, and if we set up a
>>standard for recognition that you  then -- you then gain the system,
>>right?  And say, I've got it.  What I've got to learn to do is to stand
>>on one leg.  Okay, I can now stand on one leg, so I'll get an "a."  Who
>>cares?  Now, if the other answer is, the reason you're standing on one
>>leg -- and I'm not going to do this -- the reason you're standing on one
>>leg is you're a ballerina and you're doing a pirouette, see the
Okay, and we're now going to honor the best ballerina. That's a very different reason for learning to stand on one leg. And what we do in a bureaucratic credentialed environment, you systematically reduce the creativity of people, and you systematically reduce the holistic manner in which they learn, and you reduce them so that they become passive, narrow, and shallow, and then we say, gee, why do our schools not work? Because the entire core structure is wrong.

Now, next week we're going to pick up the Third Wave in American Civilization. Next week's readings are Alvin and Heidi Toffler's "Creating a New Civilization, the Politics of the Third Wave." Alexis de Tocqueville's "Democracy in America," volume II, books 2, chapter 18, and volume II, book 4, chapter 1. And Don Eberly's "Building a Community of Citizens," chapter 5. And we'll take up, what does the third wave mean and how will it change our lives? Okay?

Last Updated 3/15/95 [HTML revised 2004-03-28 by Terrence Berres]

Renewing American Civilization Table of Contents