The Myth of Segmented Success: Boosting Lean with Deming (Part 2)

Is the whole simply a sum of its parts? In this episode, Jacob Stoller and Andrew Stotz discuss what happens when you divide a company into pieces and manage them separately - and what to do instead.

TRANSCRIPT

0:00:02.5 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my conversation with Jacob Stoller, Shingo Prize winning author of The Lean CEO and Productivity Reimagined, which explores Lean and Deming management principles at the enterprise level. The topic for today is myth number one, the myth of segmented success. Jacob, take it away.

0:00:30.4 Jacob Stoller: Great to be here with you, Andrew. And yeah, before I dive into that myth, I'd like to just start with a quote by Albert Einstein. "There is no failure in learning, but there can be in refusing to unlearn." Now that's something that's gonna occur over and over when we talk about the different myths. And the fact is, as many people have observed, unlearning can be a lot tougher than learning. So I think we always have to keep that in mind. So I want to tell a little story which kind of illustrates just how deep this unlearning can go. And this was told to me by Rich Sheridan, who has a company called Menlo Innovations, they're a software development company. And very interestingly, the theme of his work has been about joy in work. Sounds familiar?

0:01:28.3 AS: I love it.

0:01:28.5 JS: Well, he didn't really discover Dr. Deming until he had already written two of his books. So it just shows to me that there's some very underlying truths behind what Dr. Deming was teaching. But anyway, the story Rich tells is that he had his family in for a wedding. And they had a new office they'd moved into, so everyone wanted to see it. So he brought his granddaughter in, an eight-year-old. And he said, well, where do you sit, pop-pop? And he said, right here. Here's my desk. Here's my computer. And the granddaughter looked at his desk and was puzzled. You know, she said, well, where's your name? You got to have your name somewhere. And so, I mean, Sheridan was amazed. He says, I thought, wow, she already has it in her head that as CEO, I should have a corner office with a placard that showed how important I am. And you know, I felt a little embarrassed. She was somehow implying that I can't be much of a CEO if I didn't have a placard with my name on it.

0:02:35.5 JS: And she's only eight. So no, here's a CEO that's just really, really, you know, ahead of a lot of people. You know, he understands a lot of the Deming principles. And he sees just how deeply people hold these myths. She believed that there's this pyramid structure and there's got to be a CEO at the top and there have to be all these departments and people reporting to various people, et cetera, et cetera. So this really, this belief she had is really, it's sort of the pyramid that Dr. Deming described. And Dr. Deming actually wrote, he said, in The New Economics, you know, his last book, he wrote, this book is for people who are living under the tyranny of the prevailing style of management. And he talks about the pyramid. And I think that kind of encapsulates everything we're dealing with in terms of beliefs. And I'm just going to read it because he was so concise about saying it. "The pyramid only shows responsibilities for reporting who reports to whom. It shows the chain of command and accountability."

0:03:55.3 JS: "The pyramid does not describe the system of production. It does not tell anybody how his work fits into the work of other people in the company. If a pyramid conveys any message at all, it is that anybody should first and foremost, try to satisfy his boss and get a good rating. The customer is not in the pyramid. A pyramid as an organization chart, thus destroys the system, if ever one was intended." So I've never seen a more pointed description of the prev