Welcome to Resilience Talk hosted by Paul Spencer of Second Nature Solutions.
Let's dive in.
I got a lot of comments recently around the topic of Deming and his concept
of, um, reducing to one supplier and building a deep relationship and have
that long-term trust and loyalty.
And that kinda sparked something in a few of you.
So it's a lot of fun.
Uh, you know.
I've also learned that, uh, when, when there, uh, it's not necessarily
a controversy, but when you guys wanna kind of banter on some of the topics,
you do it to me personally, right?
So it's not on social media, it's not on LinkedIn, it's not on any of the posts.
Um, you send me a note, which is I love that.
I think it's perfect.
And I, and I reflect on that a little bit and I always wonder
about the, the folks who.
That we know, right?
Let's, let's use Trump and Elon.
Uh, when they, they had a falling out over Twitter or X, sorry, I should say X.
Um, and it's very interesting to me to to think about would I ever have those
types of words or that type of say, argument or discussion with somebody.
On a public forum so everybody can watch and then have it, have it
just go down into name calling.
And this is very interesting.
So anyway, I'm not saying that you guys, or I am, we're devolving into
our conversations in the name calling.
Um, but it is fun to hear from you.
So keep sending me notes, keep, uh, giving me, um, some insights
into how you're thinking.
Um.
I think all of your points are valid.
So, uh, a lot of you are, well, some of you are confirming, uh, some of
you are, have a little bit of yeah.
Buts.
And then there was one or two of you that were very adamant that tend to disagree
with the concept of a single supplier.
And, and you had lots of examples.
Um, and we've had, we have recent examples, right, with uh.
With the COVID, um, supply chain issues, uh, the recent, uh, turmoil
that we have now, um, is an output, an outcome of a lot of that happened
in 2020 with, uh, the supply chain issues that we had, mostly with China.
Um, and what does that mean to Reshore?
How do we reshore?
How do we get more supply chain locally?
How do we get more fault tolerance?
So I agree with all of that, and I think it's a fun point discussion to
say that everything that we talk about, there is a dichotomy to everything.
So our world is full of a dichotomy.
We could say at one hand, our principle is this.
But on the other hand, it's also this, right?
The yin and the yang.
And those two things could be true at the same time.
And uh, and going back to what we were talking about the last couple times
is just provocative thoughts, thinking contr, uh, contrarian thoughts, right?
All of those things are part of us.
Um.
Not just being robots in what we're taught, not taking our MBA,
not taking, uh, the status quo, the established ways of doing
things and just doing it that way.
Right?
This, what I'm after is for us to think a little differently for, we may come to a
similar or the same conclusion as what we would say the established traditional way.
Um, but the way we get there is different.
Our thinking is different.
That's, that's the whole point.
Um, so, uh, is Deming correct in saying that, uh, we should end
the practice of wording business on the basis of the price tag?
Well, you tell me.
You tell me.
You are in business, you have customers.
And if your customers say, Hmm, too expensive for me.
Could you cut that by 20%?
Could you cut it by 30%?
What are you going to say?
I think you'll say, geez, let's not just look at it at the price point.
Let's look at these other factors that we provide.
Let's look at the value we bring.
Right?
So Deming is correct in that.
And then the follow on to that is instead of.
On basis of price tag.
On price, let's maximize total cost, which is moving toward a
single supplier for any one item.
Right?
Build that relationship.
Build long term loyalty and trust.
So does that mean that we could have some risk?
Yeah, we talked about that last time.
We could, we could incur, incur some risk by doing that.
Um.
When we talk about the unknown unknowns and the unknowables and
the data with all of that, um, that still applies to all of this, right?
So anyway, I think that's very interesting.
The dichotomy's good.
Um, somebody mentioned to me the, uh, the, um, uh, a set of books.
Now, Brandon, who normally does the, the tag team with me,
you guys all know who he is.
He suggested to me and I, I have these books.
It's basically the, um, uh, the great mental models by Shane Parrish.
And, um, so there's four books in there.
And so somebody even mentioned that, um, Shane Parrish mentions,
um, what did he call it?
They call it interdependence in one of the books.
Um, and so I thought I went through it.
And you know what?
I've had these books forever and I've never read 'em.
I'm a little bit like my dad.
I just buy a bunch of things and then I keep 'em in a box
and then I never read 'em.
No, that's a shout out to dad.
So anyway, this one's called, this one's, uh, the fourth Volume, and
it's around the economics section.
And so there's a part in here about interdependence, which somebody
mentioned that said, Hey, some of the things that you're talking
about are some of the things that Shane Perish was talking about.
So open it up and was taking a look at it.
Um, very interesting because, um, it's probably that chapter, it's very
concise writing, very, very cool.
If you haven't picked it up, um, it's a good, it's a good little, um, set of books
instead of principles that are fun to read, especially for, um, maybe for some
of us might be, these might be like, duh.
We've read these and we know these, but there's some cool things in here around,
um, um, physics and chemistry, biology.
Um, it is just, it's just fun.
Anyway, uh, the interdependence is probably five, six pages.
It's not very long, but when you read through it, when I read
through it, um, it states everything that Deming's talking about.
So, um, not gonna name names, but the person that sent me that I think was.
Using it as a counter to Deming and I'll, I'll need to follow up with you and,
and make sure that I'm right in that.
Um, but, and there are, there is, he does state the dichotomy in there for sure.
Um, but by the time you get to the end, it's the same.
He's saying the same thing as Deming.
Um, so I want to talk through that a little bit.
Um, and then there's an also cool, there's another cool thing
in here called I Pencil, which is an essay that was written in 58.
Uh.
Which I'd never heard of before, and it's a, it's really cool.
So anyway, I wanted to read some of the things that are in here, um, and.
Really what, what he's getting at.
And he's just summarizing known principles.
He's not reinventing anything.
It's not an invention of things.
It's a great, it's got great, uh, references, bibliography.
Um, so anyway, he's, this is just the introduction.
It says specialization leads to interdependence, which is
exactly what we just talked about.
Um, a supplier for each item for one item, right?
That's specialization.
And if we get a deep.
Um, specialization.
Um, then in order to, um, survive, you have to have multiple businesses, multiple
specializations within your ecosystem, right, because you can't do it all.
Um, and, uh, so I'm gonna read this, the more specialized an individual
company, company, nation, or other, or any other group, is the
more reliant it must be on other specialists in order to meet its needs.
Right?
We can't do everything on our own.
Yeah, exactly.
And I think that it speaks exactly into Deming's.
Uh, SOPK, which is the awareness of the system, is that we're all
intertwined, interconnected, which is what this whole chapter is
called, it's called interdependence.
So because we're specialized, we are therefore interdependent.
And so, um, again, just kinda repeat myself.
When we have, when we have an awareness of the system and we understand
the interdependence between us and our competitors and our suppliers
and the world economy, the world supply chain, the government, right?
All those things that are around us, um, we have better insight
into how to make decisions and why.
Things are happening and how to make different processes to be
able to handle those different, what we would call imposed inputs.
Those are things we can't control, right?
The imposed inputs, they're, they're forced on us.
Um, and we have to deal with them, but we build our processes
around those constraints.
Like just like when we talk about with the theory of constraints,
which is also awesome theory.
So, um, then he mentions the eye pencil, which I had never heard of, um, essay.
Um, and then.
Uh, I'm gonna read this too.
So, even such a simple device involves numerous specialists.
So, um, there's loggers to harvest the wood workers in a sawmill to cut it.
Designers of machines used to work on the wood, so on and
so on, and so on and so on.
Um, and it's a very, uh, very fun topic.
I think it's a fun topic.
Uh, so I pulled up, um.
The essay and you can just search for it.
It's called I comma pencil, meaning my name is pencil.
And it just, it's, it reads as, he writes it as my family tree.
Right.
Uh, kind of a play on words and everything, but, and it's his genealogy
of how he exists and everything.
And I highlighted this as, um, 'cause we've talked about this before, is
I have a profound lesson to teach because I am seemingly so simple.
And then it says, simple, simple.
Yet not a single person on the face of this earth knows how to make me.
This sounds fantastic, doesn't it?
Especially when it is realized that there are about one and one and a half billion
of my kind produced in the US every year.
And this was written in in 1958, right?
So, um, this is another thing that we have.
Uh, around simplicity and things that we were just talking about before,
which is the quality that we have when something is, is, and I'll go into the
software world when we build something, um, from a software perspective.
Of course there's the code, um, there's the tech debt, there's the
data, there's all the thing, there's the architecture underneath all of
those things, those are all hidden.
You don't know what those are.
You don't understand the quality of that, but you understand
the quality of the interaction.
And so when you interact with a piece of software, um, you have
an understanding of its quality.
Right.
Um, and at this point in time in, in our world of software development and product
development is we don't tolerate errors.
So maybe 20 years ago, or maybe even 15 years ago, if something failed,
meaning you got an error or it didn't quite load right, or, um, maybe
it did something you didn't quite expect, and you're a little confused.
Uh, we tended to tolerate those things a little, a little more.
'cause that's just what, what the environment was Today, we're in a
much more mature and commoditized software environment that if
anything failed in that way, it, it, nobody's going to tolerate that.
And, uh, and you'll lose customers.
Right.
So that whole interaction design is super important in today's world.
If you're building software products, um, because the customer has low
tolerance, it's a, it's a commodity.
They expect it to work.
If you grabbed a pencil, right, I still use pencils.
Look at that.
Um, if, if I grabbed this pencil and it broke in my hand or wouldn't
sharpen, or, uh, it wouldn't write, um.
And, uh, and it was not useful to me immediately.
Like as soon as I went to ride, use it, uh, I would throw it away.
I have no tolerance for it, right?
Because I expect this to work.
It's a commodity.
And 30 years ago, 50 years ago, it was still a commodity, right?
We expected it to work.
Um, so anyway, with when we have the interaction design, um, we're, we're.
We have such a high threshold of Toler, a low threshold of tolerance
that, uh, quality is expected, right?
So anyway, it's something interesting to be thinking about and uh, when
we talk about the simple solution.
'cause in the eye pencil, right?
He's talking about it's being simple.
I am simple, but seemingly I'm not.
That is when you have high quality.
That's, that's kind of the litmus test.
So going back to the software piece is, uh, when we use Google, and
you've heard me use this example many times, but when you go into Google.
Now we don't really go to Google anymore.
We just type into the browser and type what we're looking for, right?
Our search.
But at one point, Google had, you went to the google.com,
right?
And there was one input box, and then you would type in there, whatever you're
looking for, and then you hit enter.
That is simple, right?
Seemingly simple what's underneath there.
And uh, kind of from the pencil's perspective, all the things it took.
To be able for you to just type, uh, what were the, what was the Bengal
score from last weekend for it to go find all that information, pull all
that data, do all the algorithms, put it all up, and then bring you,
uh, five pages of HTML, um, documents that you could go look it up, right?
Websites that you could go look at that information.
Super, super complex, super complex.
But it's simple.
And that means high quality.
That is high quality.
So when we're building.
Anything physical, manufacturing, uh, hardware or, uh, fasteners,
screws, anything like that.
Quality is based on the simplicity.
The customer just assumes it works.
The customer just assumes that, oh yeah, that's easy to make.
Like how hard could it be to make a screw, right?
And all of those things.
That's, that's what we're looking for.
That is, uh, that's what the whole pencil thing is all about.
So anyway, I would encourage you to go read it.
Very interesting.
Um, and really in the end, the whole, the whole, um, premise, the whole,
um, moral to the story is just about, um, how free markets work, right?
Open markets and the need to have specialized interdependence in a
market in order to build and innovate and seemingly create simple things.
So lots of fun.
Um, there's a couple of things else I wanted to.
Talk about is there's a quote inside, um, uh, Shane's book here.
And so I wrote these down.
Uh, when everything works, interdependence works well.
When things don't go as planned, however, interdependence starts to shut everything
down, which is, we saw that, right?
Um, and he wrote these books in 24, so he already had the experience of the
2020 stuff, but it's very common, right?
I mean, it, it makes logical sense.
So, um, does that mean that we can't be interdependent
and we shouldn't specialize?
Well, there's risk.
There's risk with everything.
Um, and that's the dichotomy.
That's the dichotomy.
Um, one other thing that, uh, that I thought was interesting, and I'm gonna
read this too 'cause this kind of lays out the unknown unknowables that
we had talked about, um, previously.
Um.
Actually, there's one other thing too in here I'm gonna read too.
Uh, so he's talking about how oil prices went down in the thirties because
there was a, there was a gluttony of oil wells and uh, the oil was gushing.
And then, so this kind of shows the interdependency of all the things
that we were just talking about and.
When we read it out loud, we, it's a big duh.
Of course.
Yeah, yeah.
That happens.
Um, but when we're in our businesses and we're trying to consider what's
going on and why are we getting weird results and, uh, how do we, how do
we move here or how do we innovate or how do we get more efficient and those
kinds of things, you really do have to start to look out and look at the big
picture and see how things are connected.
And that will give you more foresight, more insight, more
foresight, more insight, right?
You get to iterate on all of that, and then you come to,
hopefully to a better solution.
Um, which again is just a theory, and then you get to take those
theories and see what you can do.
So anyway, so first, oil prices went down all over.
And because none of us collected and refine our own oil, there was
widespread reaction to the windfall.
That our dependency created homes started to heat with oil instead of coal.
Great.
Because it's cheaper, right?
But then employment and coal mines fell and the price of steel.
Went up as because, because coal became more expensive, right?
'cause coal was going down.
We drove our cars more railway usage declined highways grew.
Towns caught in the wrong location.
Or dependent on the wrong resources, stagnated or died out while other
towns boomed new oil product, new oil produced effects that cascaded
far outside the oil industry.
This is exactly what Demming was talking about when, um, when we were
talking about the the seven deadly sins.
And when manages management focuses only on visible figures, he says
it in a slightly different way.
He says, uh, he says, management, uh, by use only of visible figures alone.
Something like that.
He kind of turns all the words around, right?
And then he goes on to say, with little or no consideration of the
figures, meaning the numbers, the data that is known, unknown or unknowable.
Is exactly, this is a great example of that, right?
Is uh, we look at the oil, we look at oil production, but the
cascading effects around that.
And we're not, we're not worried about the economics of things in our business.
Those things will go on our own, but there are consequences of having more
production in outside our own business to do this and what effects that's
going to have either for our own suppliers or for our own businesses.
Um.
Uh, yeah, so anyway, that, that's, that's what I wanted to talk about.
There's one last part in here, um, that is also very interesting here.
Um, so interdependence isn't just a macro concept, it's deeply personal.
We're all independent with our families, our friends, our communities.
We rely on one another for support, for love, for meaning.
And interdependence is the fabric of our social lives.
Um, he also says, interdependence can be both a vulnerability and a strength.
So the dichotomy of the world for us to be thinking and to be aware
of these things, we understand that there's lots of variables.
How do we reduce our variables?
How do we create theories?
How do we go and learn and be aware that there are unknowables.
Unknown data, unknowables things we'll never know, right?
That are very hard to, to understand the cascading effects, um, rather
than just relying as Deming says, on visible figures alone.