Theory of Knowledge

By John Hunter, author of Management Matters: Building Enterprise Capability.

The System Of Profound Knowledge® (SoPK) is the culmination of W. Edwards Deming’s work on management. The four areas of the system are: appreciation for a system, knowledge of variation, theory of knowledge and psychology. This post explores the theory of knowledge in the context of Dr. Deming’s management philosophy.

“The greatest obstacle to discovery is not ignorance – it is the illusion of knowledge.” – Daniel J. Boorstin

What do we know that isn’t so? How can we avoid the mistakes we are in danger of making in our thinking? How can we improve the learning process?
These are some of the questions that led Dr. Deming to include the “theory of knowledge” in the System Of Profound Knowledge.

While many of his ideas have found their way into other management theories (focus on the customer, variation, systems thinking, innovation, continual improvement, data based decision making, the importance of psychology…) you rarely hear about the importance of understanding how people think, and act, based on what they believe they know to be true. That is core to a theory of knowledge.

Confirmation bias

Confirmation bias is one such important concept; it means that we tend to latch onto evidence that supports our beliefs and ignore evidence that undermines our beliefs. In order to more effectively adjust our beliefs to reality we are well served to question whether we are falling for confirmation bias.

Experiments, Prediction and Learning

To the extent possible it is best to gather evidence based on experiments to support your theories. The model used within the Deming System for Managing to gain evidence and insight is the Plan-Do-Study-Act (PDSA) cycle. The PDSA cycle is a process to improve based on an understanding of the theory of knowledge.

People learn better when they predict. Making a prediction forces us to think ahead about the outcomes. Making a prediction also causes us to examine more deeply the system, question or theory we have in mind. Also we learn about our understanding of the management beliefs we hold as we examine the results of our predictions.

For example from your predictions (and from the PDSA experiments which test them) you might discover that:

  • You are often overly optimistic (or pessimistic).
  • You are extremely effective at predicting change related to information technology improvements but poor when predicting the results when psychology plays a big role in the change.
  • The impact is often as you predicted for the projects during testing (using PDSA) but attempts to actually standardize the improvements across the organization fail.

Learning about your ability to predict (and your organization’s ability to predict) is a key part of the theory of knowledge.


People believe there is much less variation in systems and processes than there is. This underestimation of variation causes people to believe normal variation is not normal, which in turn causes them to search for special causes for the variation. Doing so is a very low yield strategy for improvement. (See more on Deming’s view on tampering).

Again, the Deming System for Managing seeks to avoid this trap in how we think about variation by adopting sensible strategies. One of these strategies is to use control charts to show exactly what is reasonable variation for a process. Another sensible strategy is to examine the process and environment in which a person works first, rather than to blame the person (as a special cause), first.

Psychology and the theory of knowledge

As stated previously the four components of SoPK are interrelated. Here is an example of how psychology interacts with the theory of knowledge.

The way we evaluate an idea is not based on the cold logic we may like to believe it is. If we hear an idea from someone we don’t like and then two days later we hear the exact same idea from a friend we respect, we tend to react very differently.

As I started to understand the theory of knowledge and apply what I suggested above, I began to question why I believed certain things and how I responded to ideas that were presented. In examining my own reactions, I noticed that I far too heavily weighed the source of the idea in evaluating the idea, myself. By examining my thought process I could see I was being overly influenced by factors that shouldn’t be so important. And then I started to look at others and it amazed me how often I would hear someone criticize an idea from one person and then praise the same idea a week later from a friend.

This also shows one of the real weaknesses in performance appraisals. When a manager likes a person, the manager is much more likely to appreciate the person’s work, ideas, and contributions and thus give a higher rating to that person.

Operational Definition

There is no true value of any characteristic, state, or condition that is defined in terms of measurement or observation. – Dr. W. Edwards Deming

The “value” is in the context for a given operational definition. Understanding that a value must be interpreted via context, leads us to question any data that doesn’t provide the operational definition for how the data was created. And this leads to better understanding. Otherwise, without having the operational definition we are likely to draw incorrect conclusions from data. Let’s look at a simple example:

Misinterpretation and Misunderstanding

The height of senior executives is much greater than the average population. Are tall people inherently much better leaders in organizations? It may have made some sense historically to have the biggest people in the group lead the hunt but it sure doesn’t seem like there is a good reason to believe height is a great value for leaders in contemporary society. You could take from that data about tall senior executives that in fact height is a “value” of great value. Or you could take from it that we continue to make judgments based on unimportant factors because unconscious evaluation criteria (such as height is better) are baked into our psychology and those criteria shape what we believe.

Next Steps

Understanding the theory of knowledge within the context of the Deming’s System for Managing helps us more effectively and consistently learn and improve the processes and systems we work with.

Gaining an understanding of how the theory of knowledge is integrated into Deming’s system for managing is easy for some people, but not easy for others. As stated in previous posts these posts can get you started along the trail of discovery but they only scratch the surface of what four components of Deming’s management system offer.

Related: How Do We Know What We Know? – Deming’s SoPK by John Hunter

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