Episode Transcript
[00:00:00] Speaker A: One of the worst things you could do is ask a group of employees to come together as a team, improve a process that then results in one or more jobs being eliminated and those people then being fired. Now, it's okay to eliminate jobs where you then retrain the people that are impacted and have them go do other things. That's okay. But the moment someone hits the streets because of an improvement idea, you're never going to have any more improvement ideas. People are not going to be part of a process that eliminates their friends or even potentially their own jobs.
Welcome to why they Fail, the podcast.
[00:00:45] Speaker B: That pulls back the curtain on why.
[00:00:47] Speaker A: Continuous improvement efforts fail.
[00:00:50] Speaker C: Buckle up, because we're not here for motivational fluff.
[00:00:54] Speaker A: We're dissecting the short sighted decisions and leadership agendas that sabotage CI success.
[00:01:01] Speaker C: But don't worry, we'll clue you in to the few simple keys to success.
[00:01:05] Speaker A: To avoid these pitfalls. If you're ready for the truth, let's do this.
[00:01:15] Speaker B: Welcome to the podcast. I'm your host, Kevin Clay, a master black belt and president of Six Sigma Development Solutions. I'm excited to dive into a topic that is critical for any organization striving for sustainable growth, continuous improvement. Joining me today is John Dyer, the author of the Facade of Excellence.
John has a wealth of experience, having spent years with General Electric and as the VP of Continuous Improvement at Ingersoll Rand.
He's a veteran in process improvement, having learned Six Sigma directly from the people who originated the course and even got to see Dr. Deming run the Red Bead experiment in person. Our focus today will be on Deming's point 11, eliminate management by objectives and answering the question John's plant manager asked him years ago. Who do we need to fire over this? John is here to share his journey from a process engineer witnessing a costly production shutdown to becoming a global expert who champions fixing the process, not blaming the people.
Get ready for an insightful discussion that will challenge how you think about leadership metrics and and achieving true excellence.
[00:02:25] Speaker C: We're here with John Dyer. He is the author of the Facade of Excellence. The first question I have for all of our guests that come on is what got you into this? What drove you to become a process improvement professional?
[00:02:42] Speaker A: All right, well, first of all, thank you for having me on your podcast. I love talking about these things. We could probably go on for hours. But as far as what got me into all this.
So this is way back early in my career with General Electric. I was working with major appliances at the time as a process Engineer on the shop floor. And this one particular evening, it was on second shift, we had a particular piece of equipment that broke down on the main assembly line. And, you know, we, we calculated that every day the production system was down, not making refrigerators, we would lose roughly a million dollars. So there's a huge amount of pressure to get the line back up and operational. And in this particular case, there was a series of events that happened with this piece of equipment that had broken down that basically had stopped the entire production system. You know, it was diagnosed that a motor had burned out. Well, we didn't have a spare motor, so we had to have one drop driven in by taxi from, you know, on the other side of the city. They hooked the motor up, the new motor up, incorrectly. So when they put power to it, it fried it instantly. So we had to get another motor driven out to us. And once they got that hooked up, it turns out it wasn't the motor at all. It was a gearbox that the motor was connected to that hadn't been filled with oil forever. And the gears had basically rubbed down to nubs. So it was nonfunctional. Of course, we didn't have a spare gearbox. We had to have one of those driven in from another place from across town and finally got the machine back up and running. And it took us about six hours total time to get it back up and operational. Well, we only had about four hours worth of inventory. So the whole system was shut down for two hours for lack of inventory. So the next day we had a big meeting to discuss what happened. And the plant manager came into the meeting and the first thing he said was, who do we need to fire over this? And of course, that put everybody's defenses up. And I remember I'm. I'm fairly new in my role, so I was more of just, you know, listening, you know, sitting against the wall, listening to all this. And, and basically the discussion went on and on.
Nobody wanted to really say much. Finally, the head of operations for the, for that particular part of the plant said, well, I think the root cause for all of this is the fact that we only had four hours worth of inventory. And we have diagnosed a six hour potential problem. So we need to add two more hours of inventory. And everybody was like, sounds good to me. That sounds great. And everybody got up and left the meeting.
So after the meeting was over, I went to my boss and I was just like, you know, help me understand something here. You know, why didn't we talk about why we didn't have A spare motor. Why didn't we talk about why it was wired up incorrectly? Why didn't we talk about why there had not been any preventive maintenance done to the gearbox to let it drain of oil? We didn't talk about any of the process related things. We talked about first of all who was at fault and, and then how do we add more inventory which is just adding additional cost. And his response was basically, you know, John, you don't know how things work around here. Keep your head down, don't make any waves and you won't get fired. You know, that kind of a thing. So that's really what got me started on this journey, focusing on, you know, how do we fix the process versus trying to blame the people. And pretty soon after that an opportunity became available which was one of those kind of dream jobs where they asked me to go into a role for two years going around the country collecting best practices. And like you said, this is back when TQM was hot, pretty hot topic. Lean and Six Sigma really hadn't gotten off the ground yet. But I had the opportunity to go spend time with, you know, some of the greats like Dr. Deming, Stephen Covey. I got to go to all the different divisions within GE and learn what they were doing. I got to go to Motorola University and learn Six Sigma from the people who originated the, the course and the different teaching methods for teaching Six Sigma. I'm proud to say that I don't own a Six Sigma belt because I went through it before belts were given six. So I'm one of the few that have been teaching Six Sigma for 30 years and don't have a belt. So yeah, so that's, that's what got me interested in all this. And I learned a ton during those two years. I brought the information back to the executives at ge, taught them what I had learned and then they asked me to go start applying it within some of the plants within major appliances.
[00:07:43] Speaker C: That's an amazing story. I love listening to that, especially your story with how you first got it started in process improvement by asking, asking that boss, why aren't we talking about the real problems? And one thing that I saw in a Lean conference that I saw you in was used Deming's red beat, which I love. I love that, that simulation, it's, it's so resounding and it makes people, it's funny in the simulation they think they can get, they can get right amount of red beads.
[00:08:16] Speaker A: I got to see Dr. Deming do that twice in person. And the Second time, I wrote down every word he said. This was before cell phones and video and all that. Right. Because I knew that I was going to incorporate that into my training.
And, yeah, it's a great activity.
And. And I try to use as many of the words Dr. Deming actually used when he ran it. And, you know, you think of him, people who have, you know, seen him or seen videos of him, you can kind of think that, well, he's kind of a stiff, kind of a statistics kind of a guy. He actually had a great sense of humor, and that really plays out in the way he ran the Red Beat experiment.
[00:08:59] Speaker C: I want to ask you a question. I've studied Deming's 14 points. Which of those points do you find is the most commonly resisted by leadership today? What is a practical daily impact on a company actively trying to implement that specific point points?
[00:09:16] Speaker A: Yeah, that's a great question.
You know, it's funny, when I first went back to General Electric and shared with some of the top executives these 14 points back in. This would have been in the mid-1990s. They could only agree on one of 14 points as being relevant. So that gives you an idea of how far away from these teachings we were at that time. But even today, several of the points are still somewhat controversial. The one that Dr. Deming talked about the most was point number eight, drive out fear. He felt that was the foundation really of. Of everything else.
[00:09:56] Speaker C: The.
[00:09:57] Speaker A: But the one that's the most controversial, which is what your question was all about, let me make sure I get the point right here. Point number 11. Point number 11 is eliminate management by objectives.
Eliminate management by numbers. Numerical goals. Substitute leadership. You know, I talk about this point in my book, and one of my proofreaders, who was a general manager and eventually worked his way up to a CEO, a good friend of mine said that when he got to that part of my book, he had to put the book down and walk around the building several times to clear his head because it was so foreign to what he. He had learned all of his life. You know, what, the way he managed people his entire life. So, yeah, management by objectives. Dr. Deming talked quite a bit about this. Now, again, let's start with the fact that he did not mean to not measure things. He was all about the need for having data and that sort of thing. One of his famous quotes is that if you don't come with data, then you're just sharing an opinion. Measuring things was Critically important to Dr. Deming. His philosophy on this, though, and it actually has some things to do with the red bead experiment is that if we give people, the workers, a poorly designed process with bad material coming in and bad methods to find and poor training and pieces of equipment that break down on a regular basis and then ask them to hit a numerical goal, what are we basically telling that operator? That it's all their fault that they're not hitting the numerical goal? Because whenever we have management by objectives, there is a sense of fear associated with that. Right. We're giving you this objective and if you don't hit it, then something bad is going to happen to you.
[00:11:53] Speaker C: Can I, can I jump in? I've got a story. I've done a number of companies that this happened, but in particular was engaged with the company for about three years. And I saw this one position where somebody would come in and it was on the floor. It was a direct labor position. And they'd make mistakes and they would seem to perform poorly, although they were a great person and they got fired. I saw it, I saw it coming from a management meeting where, you know, the plant manager said, we're not performing well here. Right. And then somebody else got hired into that same position and what do you think happened? And then that person got fired and the third person came in and we had the same problem. And they finally, the third iteration, understood that maybe it's not the person, it's the process. I tell my students that in, in improvements, training doesn't really come improvement because you're focusing on the person.
[00:12:51] Speaker A: Right.
[00:12:52] Speaker C: If you have a process that anybody can exist in and produce the same thing, then then you've got a good process. But we tend to say, we'll bring somebody in, we'll train them. And training is usually a 20 year person talking to somebody who's been there for a week and onboarding them. And then that 20 year person leaves to go to the next job or next hierarchy in the ladder and they look at that other person, they go, are you good? And he, he goes, yeah, because he wants a job. Right. And then all of a sudden they're left to basically develop their own faith.
[00:13:31] Speaker A: Yeah. No, no. And it happens all the time. Absolutely. You know, one of my favorite quotes from Dr. Deming is that a, a bad system will be a good person every time. And I truly do believe that.
[00:13:44] Speaker C: I think that that's a great quote. Great quote.
[00:13:47] Speaker A: Most people want to do a good job. They want to be part of a winning team, they want to satisfy the needs of their customers, they want job security. And they come in. And a lot of times I'll even express, you know, the fact that this needs to be fixed or this needs to be improved, and it falls on deaf ears, and then they get blamed for the issues.
The other side of management by objectives that Dr. Deming also spoke quite a bit about was the fact that you can set the objective too high or too low. You know, if you're at, say, 90% good quality and your objective is by the end of the year to get to 90.1% that, you know, that's not very motivational and it's not very inspirational. You know, you can say, well, all right, we'll just do, you know, rounding error. We'll get to that.
But if you set it to 99% and you're at 90 and you have no ability to make any changes or invest anything, then all of a sudden you're like, well, we'll never get to that point, so why even bother trying?
[00:14:56] Speaker C: I've been in a couple of companies that I've seen Taktime boards, and these taktime boards, say 30% efficiency, and you ask somebody is, you know, are we using this to gauge our performance?
They're like, well, they're up there. We can see them, but it's 30% is, you know, what's going on? Oh, I don't know. You know, we can't really affect that board. So we're given these. These tools to gauge our performance, but we're not given the tools to actually enhance our performance. Right. So we're given these. These goals that we can't meet because we aren't given the tools to then progress to meet those, right?
[00:15:35] Speaker A: No, absolutely. I remember going on a plant tour, and this particular plant was actually lifted up as a good lean facility. And they had, you know, the scoreboards all throughout the plant, and they were making a certain number of widgets every day.
And.
And they said that their objective was to increase that number every month, the number of. Of widgets every day. And I said, okay, great. That sounds like a honorable objective. So what are you doing to change the process to allow that to happen? And they were like, well, we really don't do that. And I'm like, well, how do you get more out every month? And they said, well, we just change the objective. That's it. You know, so if you're making a thousand a month, next month we're going to set the objective to 1100 using the exact same process, the same tools, the same materials, everything. And we just expect everybody to work harder and make more and more and achieve 1100. And we're going to keep doing that every month until something breaks. And it's just like that is so ridiculous in the way to think about this over the years. What instead of management by objectives, what I like to think is, is that we as a whole organization should have celebration points, right? So let's say that you are at 90% quality. You say, hey, you know, the objective is really 100%. It always should be a hundred percent.
And anything less than that, we're admitting that, you know, we're, we're okay with failure, but we're not going to get to 100% right away. So let's set a celebration point at 92. And when we get to 92%, let's have a big party, you know, let's have a big lunch. Let's recognize the people who helped with that. Let's have a really great celebration. And at the end of that celebration, let's set the next celebration target. You know, hey, we'll have another one of these big celebrations at 94% and then at 96%.
And just keep using that as a way for people to see progress being made, but also to feel like they're part of a winning team, that they're actually moving towards, you know, the right goal.
[00:17:53] Speaker C: That's, that's a great point. In my book, we talk about KPIs, which you're calling celebration points, right? So these are the key, key performance indicators that I mentor a lot of projects where they come with a goal in their charter to be a hundred percent of something. And I say you're never going to get there. And so you've got, you've got to set the bar to some. Something that you can jump over, right? Because if you can jump way over the bar, you're the hero. If you just jump under the bar, you're not the hero. So, you know, set, set those goals as smart goals, attainable, relevant, time bound. They're celebration points. Because once you can comfortably reach that goal, then you set that goal higher. And I think that all plays into this concept of kaizen. Yeah, continuous improvement, you know, circling back in your process.
Once you've, once you've improved every other process and you've gotten them to their goal, and then you circle back around and say, okay, where's the one process that you know is the next priority?
[00:18:58] Speaker A: You know, I talk about this in the, in the book that, you know, my favorite day in manufacturing in this one particular plant we had been doing all these Things, you know, we basically had implemented all 14 of Deming's points. We had, we had done all the lean, the Six Sigma, everyone in the plant had been trained and how to do lean and Six Sigma, how to problem solve, how to work as teams. We really just focused very hard on doing it the right way to achieve excellence. And in this particular day, we had these scoreboards all throughout the plant that showed five key metrics. One on safety, one on quality, and then a couple on throughput and one other. So we had five, five metrics. Well, we were getting towards the end of the shift and a group of employees came into my office and they were like, John, you got to come out to the plant, you got to see this, you know, super excited. I had no idea what they were talking about. So we go out into the factory and of course the first thing everybody did when they went out into the factory was look at these floorboards to see how we were doing. And on this particular day, for the first time in the history of this plant, we were five minutes to the end of the shift, all the metrics were at 100%.
And when we, when the bell went off that the shift was over, the entire factory erupted in applause and cheers. You know, the employees were super pumped that they were able to achieve 100% in all the key metrics. Again, it didn't happen overnight. It took us three years to get to that point. But, but it is possible, it is possible to get to 100%.
[00:20:39] Speaker C: So let recover what you said. So we're talking about management by objective. But what I think that really means is don't manage just to numbers, right? Give your people the tools to delegate their own fate, to be able to hit those numbers. Because if you just manage by the, the end goal, you're going to whip your people into meeting that goal, and they're probably never going to meet that goal.
[00:21:05] Speaker A: You notice how it's says it ends with substitute leadership, right?
So that's the key is, hey, instead of using the metrics to drive behavior, use leadership and coaching and mentoring to change the behavior and to, and to change the process and to work as a team. I call that in my book, enthusiastic productivity. When people feel valued, when they feel like they're part of a winning strategy, they're part of a team. They feel like the leaders are there to support them, to coach them, versus there to berate them or drive in fear. Once you get to that point where everybody is pulling in the same direction and enthusiastically doing it, I mean, your employees will knock walls down for you.
They'll do whatever is necessary in order to make sure the customer is satisfied. And I've worked in several places that have achieved that. It's a great place to work.
[00:22:06] Speaker C: In your book, the facade of excellence contrasts two types of organizations. What is the single most common operational metric that a, quote, facade organization tracks, that an empowerment organization either ignores or measures in a completely different way? And why is this distinction so crucial?
[00:22:25] Speaker A: See, yeah, actually, I think the metric where the facade organizations play the most games with is quality yield. You know, there, there's a particular part in the book where the quality manager for the facade company is told that they have to improve the quality yield by 10 percentage points within a week or they're going to be fired. Well, you know, of course, it's like, well, how are we going to do that? You know? And he, he mulls it over and mulls it over and thinks of different ideas. And finally he comes up with what he thinks is a brilliant idea. They just change the criteria on what they decide is a defective part or what they include in the report. So they cut out all these various defects that don't really necessarily harm the customer, but it causes sales to decline significantly, and they stop reporting on those, and all of a sudden the quality yield jumps up by 10% and he's a hero and he gets a big bonus and a big raise. And I've seen that happen many, many times. Whereas those organizations that really understand how to achieve excellence knows that the only way to tackle hard problems is to admit that they exist and to be more on the other side, to be more focused on the. All the issues that are occurring, especially those that impact both the internal customer and the external customer, and to be as forthright as possible, even if that means the metric looks worse. And again, I've. I've seen that happen many, many times. In fact, when I was at Ingersoll Rand, I went, last four years I worked there, I was the VP of continuous improvement. And I went to the CEO and I said, look, this is a big issue for our, our various plants and divisions is that for years they've reported up to corporate numbers that don't, don't make any sense as it relates to quality. They might say that their first Pass yield is 99%, yet their customer returns are, you know, 20% of the product that they've produced. It's like those, those don't match up. So I said, what you need to do is, is allow all the plants to have a day of Amnesty, where they report real data, real numbers as it relates to quality, even though that might drop their numbers that they've been reporting forever by 10, 15, 20%. But that means that it's closer to reality, which is the first step towards making improvement happen, admitting that you need to improve. So I've seen so many games played with quality, quality yield, quality measurements throughout the years. It's a very easy metric to manipulate.
[00:25:18] Speaker C: I also see that efficiency is a misstated metric everywhere I go.
I was in a company that's, they make bricks, right? So I'm not going to call the company out, but they make bricks and we were called to come in to help them to increase, increase their efficiency. So we, we did a couple of days of seeing the culture and seeing, you know, their process and we found that they were, they were, were constantly day, on a daily basis beating their numbers that they made the previous week, all right, Making more and more bricks. I mean these guys were phenomenal when it comes to making bricks. And then they asked us, why are you here? You know, we're, we're beating our numbers every day. So I, I, I don't understand what's going on. What, what they, what they were disconnected from was that then their brickyard, these bricks were stacking up, piling up, right? But they didn't see that. They just put it on a truck and sent it off. And so, you know, their efficiency numbers were through the roof. But again, that, that doesn't tell the whole story, right? And so I see this in a lot of places where we game this efficiency number so that we look good. But if you look at the whole system efficiency, if you look at something like rolled throughput yield, where you take the, the yield of each process and I go to places where their yields like 98% but their, their CFO CFOs like there's no way that can be. And it's because there's so much rework that happens within the process that never gets captured. So I'm, I'm tigged from this that we tend to use metrics. This kind of goes back to management. My objective, right? So we've got to have the right objectives to measure to and then we actually have to measure it correctly. And so I think we've been pushed so hard to meet objectives, the these fake numbers that the way that we're meeting them is by gaming the system so that we can meet those when really what we should be doing is giving our people the tools to get to that number through leadership, right? And measuring what actually is happening, even though it hurts to see it. That is our true baseline and that helps us to understand where do we need to focus, where do we get better? So if we have the tools to get better and we know where we're bad, then we actually start to improve the company. So I can see where, where you got the word facade, because I can see a lot of that in this discussion of what we are talking. I. I've got a. I've got another question.
So Based on your 30 years of consulting, what is the least obvious non technical barrier that could cause continuous improvement initiative to ultimately stall or fail after the initial success?
[00:28:12] Speaker A: So in one of the titles of one of my chapters in the book is, you know, don't do stupid Things and we all. I think most people agree, especially when it comes to Lean implementations, that one of the worst things you could do is ask a group of employees to come together as a team, improve a process that then results in one or more jobs being eliminated and those people then being fired. Now it's okay to eliminate jobs where you then retrain the people that are impacted and have them go do other things. That's okay. But the moment someone hits the streets because of an improvement idea, you're never going to have any more improvement ideas. You know, people are not going to be part of a process that eliminates their friends or even potentially their own jobs. So I think most people understand that.
Where I think we really miss the boat though is we need to think about that as it relates to middle management as well. Middle management tends to be the biggest inhibitors of improvement initiative. Now at first they'll be very excited, they'll be on board. You know, they'll, they'll be part of the launch party. They'll free up people to go to training. They may not go to the training themselves because they're really busy, especially with all the fires that are going on. And in a lot of times, people measure their worth based on how many meetings they have to go to, how many emails they get, how many fires they have to put out every day. But, but again, they'll, they'll be excited to launch the Lean initiative. And after, you know, the, the teams come together, they might have a few Kaizen events where a few minor things get fixed or repaired and, and the middle managers will be like, oh, that's great. Boy, this is really going well. But over time, especially after a year or two, things are starting to get a lot better, right? And there aren't as many fires to put out. And the teams are really gelling, and they're really knocking it out of the park. And. And they're starting to get a lot of credit for that, a lot of kudos, especially from the CEO and from the top executives.
And now, all of a sudden, the middle managers just don't have as much to do anymore. They don't have as many fires to put out. They don't have as many meetings, you know, emergency meetings to go to. They don't have as many emails to. To. To deal with. And all it takes is for one of the peers of that middle manager to say something like, wow, your department is running so well and your employees are really doing a great job as a team making all these improvements. Why do we need you anymore? And then the whole thing gets shut down. And I've seen that happen time after time after time because of fear. Fear of no longer being valuable to the company, no longer being the hero that's putting out the fires throughout this whole transformation. We need to do a better job of training, retraining our middle managers to be coaches. We go from managers to leaders. I think we need to progress all the way to coaches. Now think about a coach, right? Think about, like, Andy Reid, the coach of the Kansas City Chiefs. He gets paid a lot of money, right? Not to go out on the field and run the plays, not to catch the ball or jump on a fumble. Now, he's there to make sure that the teams are equipped to win the game, right? So he has to make sure the right players are being hired, that the right training is being done, that the right plays are being drawn up, that the morale of the team is as high as it can be, that all the different pieces are working together. And he gets paid a lot of money to do that. We need to start having the leaders of an organization think in those same terms, that, hey, we want to hire coaches, really good coaches, people who are good at mentoring others, who are good at hiring others, who are good at developing teams, setting up teamwork.
Now, that all goes then to, you know, how do we promote people within an organization? How do we hire people within an organization?
Because it's one thing to say we want coaches, but if the only people who continue to get promoted are those who are putting out fires and are heroes, well, then no one wants to be a coach. Or the only people that we hire are people with good resumes. And guess what tends to be good on resumes is how many projects I completed by myself or how many fires I put out by myself. So we have to really rework. You know, the subtitle of my book is the Facade of Excellence. And then it's defining a new normal of leadership. We need to really take a hard look at how we define a good leader and in this case, even a good coach.
And that means possibly rewriting all of our promotional criteria and actually living to that, redefining the type of people we want to hire into the organization, people who are more focused on others than themselves, as an example, and then redefine all the metrics like we've just been talking about metrics that focus more on the success of the team, the success of the organization, versus the success of the individual. And that's a huge transformation that most organizations aren't willing to tackle.
[00:33:53] Speaker C: I think most organizations are still stuck in that. Again, the management by objectives, your statement is, it's, that's a great statement that we should really promote not managers or supervisors, but coaches and mentors once we get to a certain point in, in our, in our continuous improvement journey and are moving those people from being fire firefighters to, to being proactive. And again, coaching for the last part of this, I saw you go through the red bead and you were. Are awesome in teaching the class. Can you take us through maybe a red beat scenario that you're, you know, at a company and, and some of the things that happen.
[00:34:35] Speaker A: Right. Yeah, I, I've had the opportunity to do the red beat experiment for over 30 years now. And all around the world, I've had the pleasure of performing that at many, many companies and organizations and conferences and so forth. And for those that aren't familiar with it, it's basically the way Dr. Deming set it up is, is he had six willing workers, six volunteers, and, and then a couple of people to count the defects. The defects were red beads. So you can just imagine this bowl full of white and red beads. The red beads represent about 25% of the total bead population, roughly. And then the workers would put a paddle in to the beads, and this paddle would have 50 indentions in it. So it would basically pull a sampling of 50 beads out of the bowl randomly. And you can just imagine with 25% of them being red, the chance of getting some red is very high. And those represented defects. So as the leader, the, you know, the supervisor or the manager, I would berate the employees for making defects and I'd even set a goal. You know, we talked about management by objectives. There's a lot of, a lot of demings 14 points that are basically revealed in this activity. This is one of them, is that, you know, I set an objective of two. You, you know, I'll allow you to. Red beads. Well, the average, when you look at the statistics behind this, is right around 10 with a range of plus or minus 7. So basically it ranges from 3 to 17. That's how many beads you can expect out of a sample size of 50. Well, guess what? 2 is not within that sample range.
You know, very rarely does anybody get two or less.
But all my actions in the. And like I said, I use a lot of Dr. Original words in this point to the fact that it's the employee's fault for not hitting the goal. You know, even though, like I said, it statistically is very, very low probability, that's not how I behave. In fact, at one point I even put up some quality posters and Dr. Deming did this as well up on the screen that say things like, you know, try a little harder and quality will improve or do it right the first time.
You know, those kind of slogans that we're all familiar with, and that's actually one of Dr. Deming's points, is to abolish these slogans because basically what they're implying is that it's the workers fault. It's not the process, it's. It's not the red beads. It's the employees themselves that are purposely making these defects.
[00:37:20] Speaker C: John, I saw when you did that in the Lean Summit, and then the next person came up and he actually pulled a lot less red beads. And then you were telling him, wow, this is really cool, you know, and then the next person came up and pulled a whole bunch of red beads and you then switched gears. So it was fortuitous that it happened then.
[00:37:41] Speaker A: Yeah, I mean, again, because it's just pure random, right? It's like, it's like rolling two dice. You know, you're going to get something between 2 and 12, and if I get a, you know, 10, the chance of me getting something lower the next time is. Is pretty high. So, yeah, so someone who had a lot of red beads the first time after reading the posters, wow, guess what? It came down. So I was like, well, see, the posters work. And then the person who got a really low number the first time gets something higher. Well, again, the chances of that, probability of that is very high. And then I would be saying, I would say things like, well, clearly you. You didn't read the posters or maybe you can't even read at all. So clearly you don't care about your job. And that. That led into the final day. And again, do Deming did this as well, is basically, you know, I took the person who got the lowest number of red beads and really thanked them and made them the employee of the month, and, you know, said we were gonna have a big celebration and have cake for everyone, but again, it'd be like rolling a three on two dice. You know, it just got lucky. And then I would pick the highest number and say, okay, you know, clearly you don't care about your job, so, you know, you're now on probation. And if you don't get a lower number the next day time, then you're gonna be fired. Well, guess what? If you roll an 11, chances are you're gonna roll something less than that the next time. And that's what happens. So then. So the person who gets rewarded gets worse the next day, and then the person who did poorly gets better the next day. So then I'm like, well, okay, what does that teach me as your boss? It teaches me that rewarding people and recognizing and thanking them doesn't work. And threatening people with their jobs does work, which is the fear, right? So then the final day, and I always find this fascinating. On the final round, I tell people, okay, if you don't hit the goal of two, you're fired. Well, the first couple of people get up there, and of course, they don't get to two. That's not statistically probable. And they're fired. And they. They're told to sit down. Then I say, okay, well, clearly this isn't going, you know, that well. So I need to ratchet the fear up. And I tell everybody that if you don't get the goal, the next person, the next worker doesn't get the goal. Everyone is fired. Including the people who are counting the defects, including the person who's writing the data on the flip charts, everyone's fired. And it's very interesting. About 80% of the time that I do this, they start fudging the data and putting in ones and twos, even though the number is far higher than that.
And so what that teaches you is that fear will actually drive people to do almost immoral kinds of things like fudging the numbers or hiding the defects. Now, again, I tell people, don't feel bad. One time, I did the red bead experiment with a group of pastors, and they did the exact same thing. When I threatened to fire all of them, they started fudging the data. And I'm like, your pastors you know, if anyone was going to be truthful about what was going on, it would be you. And they're like, well, you know, the fear was too high. And it was like we didn't want to. We didn't care if we got fired. We didn't want other people to get fired. So that team camaraderie overruled the morality of sticking with the actual data.
[00:41:11] Speaker B: That brings us to the end of a truly insightful case conversation with John Dyer. What powerful lessons we've covered today. We learned from John's story that focusing on fixing the process is the key to sustained improvement, not blaming the people.
John shared his belief that a bad system will beat a good person every time. He highlighted that Deming's point 11, which advocates for eliminating management by objectives and substituting leadership so is one of the most resisted points today, often resulting in fear and gaming the system to hit goals. Instead, we should be setting celebration points and giving people the tools and leadership to improve.
We also discussed the common trap of facade organizations manipulating metrics like quality yield, emphasizing that honesty with your data is the first step toward improvement. Most crucially, John pointed out that the greatest non technical barrier to continuous improvement is the middle manager's fear of becoming irrelevant when the number of fires decreases. This is why we must transform managers into coaches and redefine what a good leader is. If you are looking to build a successful and sustainable continuous improvement culture, don't miss out on my book why they Fail and the Simple Key to Success.
It's packed with the seven critical steps to build that strong foundation.
You can grab a free PDF copy of the book. The link is in the show notes below. Thank you for tuning in. Next time we'll be diving into the absolute, most important and simple key to success for any continuous improvement effort. Key Performance Indicators we'll show you how to stop shooting in the dark and start aiming for the right targets before you go. If you found this conversation valuable, there are a few simple ways you can support the show.
Please subscribe to our YouTube channel. It's a completely free way to support what we do. Make sure you're following the podcast on both Spotify and Apple so you get every new episode instantly. And if you have a moment, leave us a five star review. It helps other leaders and continuous improvement professionals find our content. We appreciate you being a part of our audience and we'll see you on the next episode.
