Top-Down Knowledge Myth: Boosting Lean with Deming (Part 4)

In this episode, Jacob Stoller and Andrew Stotz discuss the myth that managers need to know everything in order to manage. What happens when you ask non-managers for feedback?

TRANSCRIPT

0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W Edwards Deming. Today I'm continuing my discussion with Jacob Stoller, a Shingo-Prize-winning author of The Lean CEO and also Productivity Reimagined, which explores how to apply the Lean and Deming management style at the enterprise level. The topic for today is Myth Three: The Top-down Knowledge Myth. Jacob, take it away.

0:00:31.2 Jacob Stoller: Okay. Great to be here again, Andrew. And, yeah, the myth we're gonna talk about is this notion that managers can make their workers and their people more productive by telling them exactly what to do. And that's surprisingly prevalent in the workplace. But I wanna start out by just saying how this relates to the other myths that we were talking about, 'cause we started with this, what Dr. Deming calls the "pyramid," the org-structure type or...

0:01:08.9 AS: Organizational chart.

0:01:09.9 JS: Paradigm idea, yeah, the organizational structure that says that everything is a independent component, right? You got your different departments, they all work independently, we optimize each, and we optimize the whole, right? So, from that, it naturally follows. And we did Myth Number Two that we can follow financial logic, 'cause financial logic fits nicely into that structure. And of course, we saw last time that all the shortcomings and problems you get when you follow that kind of thinking. So, the third myth is we get to top-down knowledge. And again, that follows from the pyramid structure. If it were true that interdependent components weren't interdependent, that everything could act independently, it would certainly follow that you could have knowledge about those components taught in school and that it would all make sense. I think it's the interdependence that really shoots that whole thing down of top-down knowledge. So... Sorry. Yeah.

0:02:16.3 AS: Go ahead.

0:02:18.8 JS: I wanted to start with a bit of a story just to illustrate how prevalent this is. I was doing a workshop with a small excavation company, and we were looking at ways to make them more effective and serve more customers, grow more effectively, and stuff like that. I did an exercise with them, and we looked at where maybe the waste was taking place the most. And they were driving trucks around a lot. This was a rural area, so there was a lot of mileage that was perhaps being wasted. So, we did an exercise with tracking value and non-value mileage. If you're going to a customer, that's adding value. But if you take a detour to have lunch or something, well, that doesn't add value to the customer, right?

0:03:08.8 JS: So, we were exploring those things, and that exercise worked out really well. They made some big changes, and it actually really helped the company grow. They started posting little notes in the trucks talking about, "Remember, value versus non-value." They were tracking it. And it was really interesting. But the success was largely due to one participant. And I'm sure you've seen this, Andrew, in workshops where somebody really seems to get it. And he had all these ideas, a very, very thoughtful guy, and we were just writing down his suggestions. He had a lot to do with that. But after the workshop, I sat down with him when we were chatting, and he told me that he'd been in the construction business for 15 years, and nobody had ever asked him for his opinion about how work was done. Never.

0:04:04.7 AS: Incredible.

0:04:07.1 JS: I was just stunned by that. This guy was so good. [laughter] When you think about that, it's pretty typical. And I think it's really, people are, managers are taught that it's their job to tell people what to do. And often that puts them in a tough spot. Often they have to be in a role where maybe that they're not that comfortable, because maybe they know deep down inside that there's a lot of knowledge out there that they're not aware of.

0:04:41.3 AS: Yeah, it's interesting. It reminds me when I was a first time supervisor at Pepsi, and I worked in the Torrance factory in Los Angeles, in Torrance, California, and then I worked in the Buena Park factory. And at Buena Park, I was given control of the warehouse. In both cases, I was a warehouse supervisor.

0:05:02.9 JS: Right.

0:05:03.1 AS: And I remember I worked with the union workers who were all moving the product all day long. And I just constantly focused on improvement and that type of thing, and talking to them, and trying to figure out how can we do this better, faster, cheaper and with less injury and all of that. And when I left, it was two years, it was maybe a year and a half that I was at that facility. And one of the guys that had been there, he said... He came up to me, he said, "25 years I've been here, and nobody really listened to us the way you did."

0:05:41.0 JS: Oh, wow. Well, that's a hint.

0:05:41.8 AS: And it just made me realize, "How can it be?" Now, I know Pepsi was taking first-time graduates out of school and putting them in this job, and... I don't know. But I just was... I was baffled by that. So, at first blush you would think you'd never hear that. People are always talking, but people aren't always talking. That's not that common.

0:06:03.1 JS: Yeah, for sure. And it's so really deeply entrenched in the system that it's very, very hard to break. One of them, I talked to a couple of companies that actually went through transformations, and this was with Lean, where they transformed their managers as a lot of Lean companies do. And I know Deming companies do this as well, where they changed their role from being someone that tells people what to do, to somebody who actually is a coach and an enabler, and draws people out and uses their knowledge and encourages them to solve their own problems, whether it's PDSA or whatever methods they support. And both of these companies lost half their management team through that transition. But both of the leaders admitted, they were honest enough to admit, that the reason why they lost the managed, they blamed themselves. They said, "It's 'cause we as the top leaders didn't prepare those people for the change." So, that was interesting as well.

0:07:17.6 AS: I want to go back and just revisit... Myth Number One was the myth of segmented success. The idea that, "Hey, we can get the most out of this if we segment everybody and have everybody do the best they can in each of those areas." Dr. Deming often said that we're destroyed by best efforts. And part of that's one of the things he was saying was that it doesn't work. Segmented success doesn't maximize or optimize the output for a system. The second one was the myth of the bottom line, and that was the idea that just measuring financial numbers doesn't tell you about productivity, and just measuring financial numbers doesn't give you success. And then the third one was, that we're talking about now, is the Myth Number Three, is top-down knowledge myth. And so, I'm curious. Tell us a little bit more about what you mean by "top-down knowledge myth."

0:08:17.7 JS: Essentially it's knowledge from outside the workplace being... How do I wanna say it?

0:08:26.0 AS: Pushed down. [laughter]

0:08:28.0 JS: Pushed down, imported, or imported into the workplace, imposed into the workplace. It's really that idea that something from outside can be valid. And it certainly can, to a degree. You can have instructions on how to operate a machine. You can have all kinds of instructions that are determined from outside, but there's a limit to that kind of knowledge. And when you really wanna improve quality, it really does take a lot more input. But I think there are many... This is one of the myths I think that there are very many different sides to. And one of the sides is that what I call the... It's related to variation, but it's really what I call the "granularity problem." And it's the fact that problems are not these nice, big omnibus types of items that a manager can solve. They tend to be hundreds of problems, or thousands.

0:09:37.0 JS: And so, when you've seen transformations, for example, in hospitals, I think that's an environment we can all understand, again, it's because of many, many different improvements that they become better. One example that I was given is, let's suppose you have a medication error problem. That's really, really common in hospitals now, right? But medication error is, it's not one thing. It could be because of the label, labeling on the bottles. It could be the lighting when people are reading the medications. It could be the way they're arranged on trays. It could be the way they're stored. It could be in the supply chains. The really successful healthcare transformations have been by getting thousands of improvements. And I mean literally thousands of improvements from employees who live with those processes every day. Managers can never [chuckle] know all these hundreds and thousands of things, especially, they can't be everywhere. So, really, the answer is that you do need an army of problem solvers to really get the kind of excellence that we want.

0:10:56.0 AS: Dr. Deming had a quote that he said which was, "A system cannot understand itself." And he's talking about, you got to understand... Sometimes it takes someone from outside looking at the system. And that's different from what you're talking about, which is the idea of someone at the top of the organization saying, "I know how to do this, here's what you guys got to do, and here's how you solve it," without really working with the workers and helping understand w