Guest post by John Hunter.
This webcast shows Bob Browne’s presentation, Profound Knowledge of the Real Thing, at the 2012 Annual Deming Conference. Bob is the former CEO of the Great Plains Coca Cola Bottling Company.
Among other things, this presentation is a good option for those seeking an example that provides historical business results of an organization practicing Deming management methods. Bob provides an overview of inventory (they use Just in Time inventory methods to create efficient processes and systems) and typical financial metrics to examine how their business has done using Deming’s ideas (along with theory of constraints).
If you are an established organization and something new comes along, you are more than likely going to want to use it to do what you did in the past as apposed to use it to disrupt.
If we had better technology would we know what to do with it? Would we sustain, or would we disrupt.
As with many management ideas this concept isn’t difficult to understand but it is still very difficult for people, and organizations, to think clearly about the future without being greatly constrained by their past. That past has a strong impact on how new opportunities are viewed (and often how they are ignored).
The difficulty in changing is often mostly about our psychology (not the technical difficulty of operating under changed systems and processes after making adjustments to adapt to take advantage of new opportunities). Bob quotes:
It ain’t what you don’t know that hurts, it’s what you know that ain’t so.
by Will Rogers, or somebody else. Whoever said it, it is certainly true.
Reality is in the process, it isn’t in the results.
This is something that is very difficult for many people to understand. Variation, risk and chance within a system mean that individual results are a poor measuring stick. Results matter but within a context of the process. If I double profits by wagering all the cash we can borrow on the roulette wheel that result isn’t a sign that we are doing much better. Using data wisely requires understanding what the data tells you and what it does not tell you.
At the end (1 hour 1 min in) Bob has some good thoughts on how difficult it is for large organizations to keep the management improvements from organizations like Great Plains when they merge them into the larger organization. Those larger organizations don’t understand that the practices that work are part of the whole management system and when you remove those management practices and reinstate old practices (incentives, “holding people accountable” – for random variation, annual performance reviews, sales targets, inspections for conformance to “corporate expectations”, command and control management style…) the conditions that supported those successful practices change. The larger organization often doesn’t directly oppose innovations in processes that are in place; but by reinstating old management practices the organization undermines the system that allowed those processes to be successful.
It is very difficult to copy when you start undoing the cultural things.
Related: Bob Browne Discusses His Experience Applying Deming’s Ideas as a CEO – Six Keys to Building New Markets by Unleashing Disruptive Innovation – Deming Conference Webcast: Paula Marshall, CEO, The Bama Companies – Communicating Change