Volume 97, April 2009: Process Behavior

Keyzine: An E-zine for Leaders about the People Side of Business

This is a monthly electronic magazine for anyone who wants to be a better leader, coach, facilitator, or simply, to tune up their people skills. It is a complimentary publication, devoted to the next evolution of Quality Thinking.

Publisher: © Key Associates, LLC, 2009 ISSN # 1545-8873

“In God we trust. All others bring data.” — W. Edwards Deming, American statistician

“If you can’t describe what you’re doing as a process, then you don’t know what you’re doing.” — W. Edwards Deming

“When the system is stable, telling the worker about mistakes is only tampering.” — W. Edwards Deming

“Confusing common causes with special causes will only make things worse.” — W. Edwards Deming

“Managers who do not understand a process will manage by the numbers alone.” — W. Edwards Deming

IN THIS ISSUE:

  • What’s Hot in Leadership
  • Maintaining Yourself as a Leader
  • Frequently Asked Questions from Leaders
  • Educational Opportunities
  • Useful Websites & Newsletters
  • Articles/Publications

What’s Hot in Leadership

  • Understanding that variation exists in a process and what that means for management decisions.
  • Monitoring processes over time.
  • Not reacting to single data points in decision-making.
  • Studying the effect of changes on a process, as applied science.
  • Always asking: What could we change? How could we more accurately predict?

Maintaining Yourself as a Leader

For Dr. W. Edwards Deming, everything was an N of 1. For leaders, this means that understanding comes from observation and appreciation of differences. Every process will vary over time. Every person is unique, and will also change over time.

Management depends on prediction. Yet as leaders, we are prone to make decisions on one data point – one error, one quarterly result, one infraction. True prediction cannot occur without watching data over time. (Perfect prediction would be a straight line, which will never exist). Process behavior is variation. Therefore, a leader must observe, value, and work with the uniqueness of every process and person.

Frequently Asked Questions

“How can you understand variation?”
Not through a static display, such as a table or average and standard deviation: these are descriptive, but they do not lend themselves to prediction. A dynamic display occurs when data is plotted on a graph over time (using run or control charts). Think of it as a snapshot vs. a video.
A further appreciation of what you observe comes from teasing out special cause (SC) variation from common cause (CC). CC is the natural, random variation inherent in that particular process; SC is due to unusual or unnatural causes that do not belong to the process, sometimes called “noise.” SC’s should be identified and eliminated (or incorporated), in order to improve prediction. A process with only CC variation is considered stable. (See starred* References below)
Attempting to improve processes that contain SC’s will only increase variation and waste resources. An example might be introducing a bereavement policy for all employees to control a small number of people who abuse the privilege.
“I am unfamiliar with this statistical thing as a management theory. What’s the connection?”
When leaders do not understand process behavior and variation, they make several errors:
  • They see trends where there are none and act wrongly.
  • They give blame and credit for things over which they have no control.
  • Because they never fully understand the past performance, they make predictions that are untenable, therefore improvements don’t work.
  • The atmosphere of unfair blame/credit and poor understanding of the work process creates a culture of fear and decreased morale (Carey & Lloyd, 2001).
“We make management decisions based on our quarterly reports – which give current quarter compared to last year same quarter and year-to-date. Isn’t this sufficient?”
Unless you view data over time using Statistical Process Control (SPC: Run/Control Chart) methods, it’s hard to determine if a process is producing acceptable or unacceptable results. Furthermore, quarterly comparisons have aggregated 3 months and 90 days worth of business into a single number. Customers do not care about the average order time or average cycle time for the quarter. They care about what is happening right now! SPC methods are designed to provide such an understanding.
To learn more, please see Quality Healthcare: A Guide to Developing and Using Indicators by Robert Lloyd (2004).
“I learned ANOVA, t-tests and chi-square in school. Isn’t this sufficient to understand variation?”
Most professionals receive some training in enumerative statistics, such as descriptive statistics, tests of significance and regression analysis. SPC is a distinct branch of statistics (initially developed by Dr. Walter Shewhart in the 1920’s). According to Dr. Bob Lloyd, the key distinction is that enumerative examines aggregate data at fixed points in time, to determine if one group of data is statistically different from another. Whereas analytic statistics seeks to understand the variation that occurs with the data over time – through the use of run and control charts. The question becomes whether the data reflect common or special causes of variation and is prediction possible, not whether two data points are different. This is applied science, not controlled research or experimentation.

Exercises And Action Items:

  • Decide on the best measure (signal) for your most critical processes. Plot 20-25 points on a chart, by hand, with a pencil, and see what you observe, without runs tests.
  • Learn:
    • What is a run?
    • Find the tests for special cause (Carey, 2002; Carey & Lloyd, 2001).
    • Analyze your chart. Are there SC’s and where are they coming from?
    • What can you do to stabilize your process?

Education

Articles and newsletters on every type of chart-SPC for Excel: Articles & Newsletters.

Plotting data over time and other CQI instruction: Understand Variation in Data .

Key Associates offers introductory courses in Continuous Improvement and Innovation and Statistical Thinking. Contact us for more information.

Useful Websites & Newsletters

Web-based SPC Workout for basics on Control Charts: SPC Workout Basic SPC Training.

Free trial of ChartRunner by PQ Systems: CHARTrunner Lean.

Statistical software for Windows, MINITAB: Minitab16.

QI Analyst – an SPC product with more industrial and real-time applications: Getting Started with QI Analyst.

Charts, graphs, and diagrams as add-ons to EXCEL: QI Macros SPC Software.

Keyzines on related topics: Whither Quality, The Strategic Plan, Measurement, Picture of a Process, Balanced Scorecard, Accountability, and Bad Systems, Good People.

Articles/Publications


 

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