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This file was generated by Descript 

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Welcome to Resilience Talk hosted by
Paul Spencer of Second Nature Solutions.

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Let's dive in.

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Paul Spencer: So I was talking with a
friend of mine, um, about the morality of

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business and really the conversation was
how often do we make financial decisions,

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um, p and l decisions, economic decisions
over the moral, um, side decision

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making or maybe even the humanity.

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Decision making.

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So, um, the example that he was describing
was more of letting people go, right?

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Making an economic decision versus,
uh, basically a humanity decision.

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And so I thought it was an
interesting conversation.

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Um, a lot of it resonates with me
when I think about Deming and in

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his 'cause he wrote out of crisis in
82, I believe, or 83, probably 83.

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And in there's got, he's got the seven
deadly sins, and one of those sins is

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the emphasis on short term profits.

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He talks about how, um, that if
we're, and really he's thinking

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of more of a corporate side, so
thinking about shareholders and,

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and dividends and bankers, and those
are the kinds of words that he uses.

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Um, but his, one of the deadly sins
that he talks about is the emphasis

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of short-term profits, right?

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Is um, is something that we.

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Really focus on a lot.

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And at the detriment of the long
term vision, the long what he calls

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the, the, um, the constancy of
purpose, that's what he calls it.

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So that's in his 14 points
is constancy of purpose.

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Um, and what that means essentially
is having a vision and knowing

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out in front of you years.

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And an aim, and where am I
going and why am I doing this?

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And that is what gets you
to a destination, right?

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And so when you have that constancy
constancy of purpose, that helps

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frame all your decision making.

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So anyway, one of the deadly sins, again,
as I already said, the emphasis of short

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term profits means that now we're starting
to look at, uh, what's the revenue

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projections for the end of the month.

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And, uh, here it is on the 27th, what
are we gonna do in the next three days

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in order to shore up our monthly numbers
and what is it that we're gonna be

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doing this quarter so that when we, um.

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Release our, uh, our earnings report
that we'll get a good, uh, shareholder

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announcement or what are we gonna
do for our dividends and right.

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And all of those things, if we
take the timeline goes shorter

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and shorter and shorter.

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And so now we're just looking
right in front of us, right in

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front of us, right in front of us.

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And his whole point is that,
um, if you get into that mode.

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Then you get blindsided about all
the things that are coming at you

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because you don't have constancy of
purpose, you don't have a vision, and

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you don't know where you're going.

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So anyway, I thought that was interesting.

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The, uh, thinking for me is that we
haven't really talked a lot about demming.

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Ha that's a joke.

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I know you guys, uh, you hear
me talk about dimming all the

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time and, um, I would say that.

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There's really maybe only one or
two of you that are really good

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students of Deming that you really
can go inside and out of, um, all

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the different philosophies of Deming.

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Why, why those things are in place,
what that means for you and how you

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actually wanna think and manage and
govern your, your, your organization.

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The rest of you tend to hear me say it.

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Um, I speak about it.

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I, uh, put it in terms, maybe you could
say layman's terms and terms that you

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can understand, but I guarantee you
haven't dug up any demming and you

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haven't looked into it any further than
maybe, maybe what Paul has told you.

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And, uh, you know, for me, um, I
started, uh, I was trying to think of

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when I started using Deming explicitly.

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It's probably.

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In 2014 ish, somewhere in there,
um, when I went to my first, uh,

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two day seminar, uh, for Deming
seminar up in Dayton at at Aileron.

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And, uh, we were just
still fairly new in PO yet.

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Um, and really even maybe it
kind of, maybe I'll give you a

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little bit of a life story here.

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So in.

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And with the Agile manifesto with
software development, that was

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all derived up, I think, I believe
they were up in Detroit, maybe.

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Um, and it was a, it was a set
of software developers who were

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working in, um, car manufacturing
and they had taken some of these.

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Lean manufacturing principles and
applied them to software development

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and that's called the Agile Manifesto.

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And that's really where a lot of
the agile development came from.

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And that was around 2000.

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Um, and that was early on in my career,
and I was blessed to be able to join

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a team in 2003 that really was really
invested in all these ways of thinking

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and really a philosophy and a mindset.

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Um, about how we could build
software in a different way.

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And really it was just, it was lean,
it was lean manufacturing and really

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the roots of it, which I didn't know
at the time, were all rooted in Deming.

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And so we had built, um, lots of
different enterprise businesses.

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Not businesses.

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Um, a lot of enterprise software
systems projects based on

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that philosophy with Agile.

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Did a lot of coaching.

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I did a lot of executive coaching,
building different development

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teams for, I don't know, probably
about 10 years, about doing that.

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And then we founded Pom yet around
this whole concept of, um, teams

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as a service, which in about 2012
or 13 in there was still, um.

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Pretty novel idea in that, um,
at that time it was very rare

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to allow a consulting group or a
consultant who's a develop on your

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development team to not be on site.

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So even if you provided two or
three developers, uh, to help you

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with, uh, some kind of software,
uh, initiative that you have.

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They would be on site, typically.

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And so what we did is we created a teams
as a service and we formed our own teams.

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They lived in our office.

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We had our own philosophy, which is where
the harmonics way concepts come from.

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Um, we had our own way of managing our,
our people, our, our software systems,

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how we integrated, how we built software,
craftsmanship, all those things.

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All came out of all of that.

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Um.

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A lot of the thinking around
it was from agile development.

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Now we were, I would say at that time,
very well versed in Agile and the way it

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works and sometimes the way it didn't, we
knew the fault, uh, the failure modes, the

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fault lines that were involved with that.

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And so we had kinda morphed
into, um, our own ideal.

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Way of, of managing and doing it.

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So it wasn't, uh, scrum and it
wasn't purely, uh, agile framework.

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Uh, there was scale and all
these different crazy things

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that have come out of all that.

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Um, but we just did it in a way that
just held more to the Agile manifesto

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and to be able to iterate and get
feedback loops and have high quality.

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So anyway, uh, that's kind of
my roundabout way is, um, Stacy.

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Who was our president at the time
suggested that I go to a Deming seminar.

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Um, and that was around
that 2014 15 timeframe.

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And, um, when I went.

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Um, in my head I was thinking, how can
I learn more about lean manufacturing?

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And at that point I had studied
a lot of lean manufacturing.

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I love going outside of, uh, at
that time the software industry.

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Going into more physical things, which
is what manufacturing is, and really

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taking a lot of those principles and
bringing 'em back into what we were doing.

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I, I, to me, that's really fun.

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Um, and I love learning as,
as you guys know, and reading.

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And so that's really what
I was thinking about.

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The Deming seminar is, oh, another
deep dive in the lean manufacturing

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and how could we, how could I think
about other aspects of further

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improving our development processes?

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Um, what I didn't know is by the time I
went through that two and a half days,

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so really three days is I had notes and
notes and notes and notes, all kinds of

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ideas and pages on how to actually run PO
yet, so not as just the development team

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and how we're gonna deliver software,
but how we're gonna run the company.

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Using Deming.

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Um, and I had never really
even considered that before.

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I'd never even thought of, oh, you, we
could do the whole sales side, we could

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do the accounting side, we could do the
HR side, um, using the Deming philosophy.

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And so, uh, that led to me
coming back and obviously.

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I enjoy learning and
thinking about these things.

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So I'm presenting to the, to our
company about all the ideas that

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I have and what I learned and what
we're gonna do differently and letting

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them explore some of those things.

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Um, and so what ended up
happening is we built ette.

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Uh, through the Deming philosophy,
and we were really good at it.

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And, uh, we were really different
and unique, uh, than the other,

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uh, software, um, consultancies.

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Uh, we had a different approach to it
and we had really awesome people because,

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uh, again, I think it was our nature.

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It was our nature to, to build that out.

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But I think with the framework
of what Deming gave us.

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We had some things to hang him onto.

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And really, if, looking back on it, the,
the harmonic's way, um, which wasn't Carl

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Harmonic's way at the time, it was just,
uh, ideas and principles that Rob had came

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up with, um, for us to build our culture.

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They're very Deming focused.

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We didn't know they were Deming focused.

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They weren't derived
from Deming in any way.

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Um, but they are tied in very, very
closely to what the, the values

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and principles that Deming had.

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So we had a natural fit for all of it.

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Um, and so it just seemed to,
to just easily mesh with us.

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Um, so, and the reason why I'm telling
you this is because, uh, the whole

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idea of what Deming is all about.

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Um, if you can really understand
what he's getting at, it's

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a very powerful framework.

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Very concise, but it fits
in so many different ways.

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And really, he started putting
these things, these things

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together back in the fifties.

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So it's an old framework.

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He wrote the book in the
early eighties, right?

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This thing has been around forever.

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Um, but very few of you are aware of it or
know of it, or you may have the bias that

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it's a manufacturing thing and it is not.

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It obviously lives in
manufacturing, but uh, it is not

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solely a manufacturing thing.

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So, fast forward, um,
several years probably in.

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Somewhere in 17, 18 or
19, somewhere in there.

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Um, I went back to, to my friend
Kelly Allen, who was, um, at the

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time, he was leading those seminars
for the, for the Deming Institute.

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And I asked him if I could join,
um, being a facilitator, um,

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because I told him at the time that.

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Um, I've taken everything that
I think I know about Demming and

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applied it to running Pom yet.

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Um, and that's as far as I can go with
it, but I don't know if I did it right.

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I don't know what I don't know.

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And the one thing I do
know is that if I teach.

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Then I will learn more, right?

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Just by the ne necessity of
having to explain it to somebody

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and them asking good questions.

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And then now I have to explain why that
is the way that is or why the philosophy

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is that way, or maybe not, I don't know.

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Um, so, uh, and Kelly's a good friend of
mine and, uh, now many years later, and

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at the time we had stayed in touch through
the first seminar that I had gone to.

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Um, and it, and it's
such a beautiful thing.

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He said, he didn't
really ask any questions.

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He said, why don't you
come to the next seminar?

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Um, and then we'll see what we can do.

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So I, I joined as a, a participant.

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That was the second time I,
I've been to the seminar.

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Um, again, learned more
things just by doing that.

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Um, and then I got to go on a nice roller
coaster ride with Kelly and we traveled.

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Um.

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Uh, did some private seminars,
um, did lots of projects together.

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Um, still good friends.

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Um, and I think that that's the reason why
I'm telling you all this is because, um,

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Deming is just not a buzzword for me, and
I don't think, uh, you're giving yourself

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a bit of a disservice to think it's just
a Paul thing or it's just a buzzword that

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you don't really need to think about.

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Um, you'll just let Paul kind of.

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Uh, guide you along, which is obviously
why I'm here and why I work with you.

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Um, but the more you can jump into some
of the Deming aspects, the better off

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you'll be because you'll be able to
see the world, the whole world around

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you, um, in a completely different way.

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Um, so anyway, kind of just
go back to the beginning.

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So when my, uh, when
we're, when I'm having this

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conversation with my buddy, um.

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And he's talking about the, that
moral compass and those things.

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And uh, I think it just naturally
goes back to Deming for me is like,

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well, Deming talked about that.

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With the emphasis on short term profits.

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He talked about that in his, uh,
system of profound knowledge around

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psychology, which is, uh, yes, we
have processes and systems and,

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and, um, understanding variation
within, uh, the outputs that we have.

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But we have humans in the system, and we
have to understand our humanity, right?

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The psychology of how people operate.

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How they think, what their behaviors are,
what their biases might be in or, because

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that's another input into the system.

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And I think it's just so cool that
he's put all that together because

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when you start to put, um, uh, frame
of reference through psychology.

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Appreciation of a system and
you say, what's the moral side?

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What's the economic side
versus the Hu humanity side?

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Deming gives you a framework
to run through that.

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Now that doesn't make mean, and it's
black and white and oh, the answers

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are right there, but it gives you a
way to kinda run through, um, some

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of the decisions that you may have.

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Um, one other thing too that I
think is very interesting is.

00:16:15.923 --> 00:16:21.113
Um, Deming has these 14 points and
then he is got the seven deadly

00:16:21.113 --> 00:16:25.763
sins and then he is got SOPK, which
is system of profound knowledge.

00:16:26.243 --> 00:16:27.683
Um, and I'm gonna repeat these.

00:16:27.953 --> 00:16:31.553
The system of profound knowledge
is appreciation for a system, which

00:16:31.553 --> 00:16:36.383
we all know 'cause we've talked
about it a million times, is how our

00:16:36.383 --> 00:16:41.033
processes are visible and transparent
and how they connect, right?

00:16:41.243 --> 00:16:43.373
And then knowledge of variation.

00:16:43.778 --> 00:16:47.888
There's only four aspects to the,
to the SOPK appreciation for a

00:16:47.888 --> 00:16:50.048
system knowledge of variation.

00:16:50.048 --> 00:16:56.588
We have to know that you can't
get 25, 25, 25, 25, 25 every time.

00:16:56.798 --> 00:17:00.848
You'll get 23, you'll get
50, you'll get 18, right?

00:17:00.908 --> 00:17:02.918
And you have a natural variation.

00:17:02.918 --> 00:17:04.088
It'll go up and down.

00:17:04.298 --> 00:17:07.538
It's super important to have
an understanding of that theory

00:17:07.538 --> 00:17:10.897
of knowledge is, uh, like what
we talk about all the time.

00:17:11.677 --> 00:17:12.968
How do we experiment with that?

00:17:13.988 --> 00:17:18.698
In in Deming's world, he would say,
what's A-P-D-S-A plan, do study act.

00:17:19.358 --> 00:17:23.978
What's the PDSA that we can run
to learn to improve the system?

00:17:24.637 --> 00:17:28.088
And in my terminology, I say,
let's experiment with that

00:17:28.088 --> 00:17:29.228
and how can we experiment?

00:17:29.648 --> 00:17:32.768
The last one is the psychology,
which I just explained.

00:17:32.948 --> 00:17:34.838
So those four basic tenants.

00:17:35.378 --> 00:17:39.428
Um, you can hang every decision
that you make across, uh, within

00:17:39.428 --> 00:17:41.828
your, within your, um, organization.

00:17:42.187 --> 00:17:47.588
Um, but you can also get a richness
around, um, the confidence that you

00:17:47.588 --> 00:17:51.937
have around being okay with being wrong.

00:17:52.808 --> 00:17:55.058
Why, why, why is it okay to be wrong?

00:17:55.298 --> 00:17:58.178
Because we have a theory of
knowledge and the theory of

00:17:58.178 --> 00:18:00.908
knowledge states that you don't know.

00:18:01.838 --> 00:18:06.248
It's just a theory now, you may
be able to say, oh, um, I'll be

00:18:06.248 --> 00:18:09.698
able to get a million dollars this
year, uh, more than last year.

00:18:09.968 --> 00:18:11.738
Okay, well, what's the percentage of that?

00:18:11.768 --> 00:18:14.048
Well, that's a 50%
increase from last year.

00:18:14.078 --> 00:18:14.468
Okay.

00:18:14.798 --> 00:18:16.658
What's your theory that that'll work?

00:18:17.018 --> 00:18:17.288
Right.

00:18:17.468 --> 00:18:21.608
It's just a theory until you go prove
it tomorrow and the next day and next

00:18:21.608 --> 00:18:25.298
week and the next week, uh, it's still
just a theory and you have to be able

00:18:25.298 --> 00:18:29.978
to adjust and run those experiments in
order to achieve your aim in that case.

00:18:30.893 --> 00:18:34.193
Um, so anyway, I thought that
was an interesting topic.

00:18:34.583 --> 00:18:40.853
Um, there's so many different
levels with Deming, um,

00:18:42.863 --> 00:18:48.263
that I wanna encourage you to
go out and, uh, maybe explore

00:18:48.263 --> 00:18:49.733
some of the Deming website.

00:18:50.333 --> 00:18:54.383
Um, grab a Deming book and read it.

00:18:55.253 --> 00:18:57.113
Actually read it, you might enjoy it.

00:18:58.763 --> 00:19:02.723
Um, and you know, there's another
thing in here too, which is, um,

00:19:02.753 --> 00:19:06.983
because I work closely with the
Deming Institute, um, they have an

00:19:06.983 --> 00:19:09.023
awesome portal called Deming Next.

00:19:09.443 --> 00:19:13.673
And there's so many different
training modules, different, um,

00:19:13.673 --> 00:19:18.473
it's a, it's an LMS system that, um,
there's so many cool little things

00:19:18.473 --> 00:19:19.883
in there that you can do continuous.

00:19:20.198 --> 00:19:25.598
Training, um, with your staff
and your executive teams.

00:19:25.928 --> 00:19:29.648
And if you're looking for something
to have access to that, then just

00:19:29.648 --> 00:19:33.458
send me a note and, um, and we can
get those things set up for you.

00:19:33.938 --> 00:19:38.378
Um, but anyway, uh, these
things exist out there.

00:19:39.113 --> 00:19:42.803
Meaning Deming has answers to a
lot of the questions you may have

00:19:42.923 --> 00:19:46.763
specifically around this one, which
was what's the moral decision?

00:19:47.243 --> 00:19:51.293
And, uh, there's never gonna be,
well, this is the moral decision.

00:19:51.293 --> 00:19:54.983
There's a, there's a huge
variation around that, right?

00:19:55.463 --> 00:20:00.083
Um, but if you have a framework in place,
it helps you to have more confidence in

00:20:00.083 --> 00:20:01.373
the types of things that you're up to.

00:20:01.673 --> 00:20:03.353
And plus, why wouldn't you do it?

00:20:03.353 --> 00:20:04.043
It's a lot of fun.