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Deming’s Journey to Profound Knowledge - How Deming Helped Win a War, Altered the Face of Industry, and Holds the Key to Our Future - Preface

I pulled on a thread and found a fascinating tapestry.

My professional career started in 1980, just as New York was coming out of one of the worst financial times since the Great Depression. The joke was you couldn’t get a job with IBM, J.P. Morgan, or Grumman without inheriting it. So, at just nineteen years old, I headed to Texas to get in on the oil boom. I had only a duffle bag and my incredibly efficient and reliable 1975 Toyota Corolla. During my first week in Texas, I found a job with Exxon Corporation as a computer programmer in exploration and research. The eighties were a fascinating time to work at Exxon, which had a rich culture of leadership and best practices. Although I couldn’t have known it at the time, Exxon’s leadership was my first introduction to Dr. Deming’s principles. Working with some of the world’s top geophysicists, I was indoctrinated in the principles of systems thinking and the scientific method. These principles would shape not only the successes of my life but those of some of the greatest organizations in the world. A decade later, I went to work at GE. As I earned my Six Sigma* Green Belt, I had no idea that what I was doing came directly from Dr. Deming’s teachings. GE had its own analytical statistics department. It seemed like my entire job revolved around control charts, a Deming hallmark. The core lessons I learned around cooperation, experimentation, and systems thinking—all rooted in

Deming’s teachings—deeply resonated with me as I continued my career path. While I had unknowingly learned much of his teachings, my knowledge of Dr. W. Edwards Deming didn’t begin until the 2000s. I had started working with best-selling author and award-winning CTO Gene Kim in 2009 on The DevOps Handbook, along with coauthors Jez Humble and Patrick Debois. Before joining the project, Gene had asked me to read The Goal by supply chain management guru Eliyahu Goldratt. After absorbing it, I quickly read his other books: The Theory of Constraints, Critical Chain, It’s Not Luck, and Necessary but Not Sufficient. Let’s just say that after reading his books I was all in on Goldratt.

At a DevOps Days conference in 2011, my friend and mentor Ben Rock-

wood, a pioneer in internet engineering, was running an open discussion on Goldratt. During the discussion, Ben intimated that Goldratt was heavily

influenced by someone called William Edwards Deming. I didn’t know who the

guy was, and I wasn’t looking forward to learning about someone who might

shake my faith in Goldratt. But true to his nature, Ben challenged me to at least read Deming’s 14 Points for Management. When I did, I was floored. I realized that almost everything Deming was saying was the foundation for the three major software movements I’d experienced in my life: Lean software development, Agile development, and DevOps.

What amazed me even more was the fact that Deming had written his 14 Points in the 1980s, years before these software movements occurred. Over the next few years, I came to be heavily influenced by the “Prophet of Quality,” as he’s often known. The more I learned about him, the more I wanted to know. It seemed like every little thread I pulled revealed more and more of just how fascinatingly complex the man’s life and thinking were. During the course of coauthoring Beyond The Phoenix Project with Gene Kim in 2017, I stepped up my research on Deming. I wanted to truly understand how he’d come to the epiphanies that seemed to predict organizational success or failure in nearly any organization or system. What events littered along his life’s path helped him discover the universal System of Profound Knowledge? I felt that to understand Deming’s philosophy, it was critical to understand the roots and catalysts of his ideas. I’ve spent over a decade learning about Deming’s life and teachings, and I’ve become something of an expert in the process. To this day, I still find myself peeling back the layers of Deming’s onion as I learn more about those who influenced him, such as the scientists and philosophers C. I. Lewis, Percy Williams Bridgman, and Bertrand Russell.

Unfortunately, of the more than two dozen books about Deming I have read, none chronicle how specific events and inspirations in his life directly connect with the four elements of Profound Knowledge. They were either biographies or explanations about how to apply his principles. None told the journey of how his ideas were developed. I decided that was the book I needed to write, a book that connected the unique moments in Deming’s life that culminated in his grand unifying theory of management that is the predictor of success or failure in every organization today: the System of Profound Knowledge.

During the COVID-19 pandemic, I finally found the opportunity to sit down and write. Before the pandemic, I typically traveled about two hundred thousand miles a year. But with lockdown, I suddenly had an extra fifty hours a month of prime productivity time.

They say if you really want to know a subject, write a book about it. That’s certainly been true for me. I only thought I knew about Deming before. But pulling on the multiple threads of his life has given me profound respect for his thinking, accomplishments, and influence. He is like a cross between Albert Einstein and Forrest Gump: seemingly always in the right place at the right time but brilliant enough to take what he sees and experiences and use it to change the world around him. What’s more, the stories about the lives of those surrounding him were wonderfully entertaining and insightful. I wanted to write a book that captured the full picture of his life and his influence, a systems-thinking portrait instead of a book hyper focused on a singular piece of the whole. After all, systems thinking is one of the four elements of Profound Knowledge (as you’ll learn about later). One of my favorite authors is Michael Lewis. When reading Moneyball, for example, you think you’re reading a book about baseball statistics, but by the time you finish, you find that you’ve read a biography of Billy Beane. Similarly, while this book may look like a biography of Deming, it’s the story behind the story of his masterwork, which he shared with the world when he was ninety-three years old. Imagine publishing your magnum opus at that age, just before your death. That gives you a clue as to the kind of man you’re dealing with.

In Bill Bryson’s A Walk in the Woods, you read not only the chronicles of his hike through the Appalachian Trail but also stories of history, scandals, federal agencies, and the tire warehouse that’s been burning for decades. Similarly, this book tells the untold stories of those in Deming’s life, from a survivor of Japanese oppression who was the catalyst for Deming’s coming to Japan to Doris Quinn heading quality education at MD Anderson Cancer Center and helping Deming with his theory of psychology. These untold stories provide additional insight into Deming’s discovery of Profound Knowledge. While Deming’s influence is far and wide, it is most directly visible in four major nationwide efforts: the Aberdeen Proving Grounds (trying to out-manufacture the Axis powers during World War II), the Japanese Economic Miracle (their economic recovery after World War II), the American quality revolution of the 1980s, and, most recently, in the race to develop and distribute vaccines for COVID-19. As we look to what’s next, you will find we need Deming’s System of Profound Knowledge to face one of the biggest threats to the world today: cyberterrorism. The last four chapters of this book deal with understanding the severity of the cyber crisis and how Deming can save us yet again.

I’ve enjoyed the journey of bringing this book to you, and I hope you enjoy

this labor of love.

Deming’s Journey to Profound Knowledge - How Deming Helped Win a War, Altered the Face of Industry, and Holds the Key to Our Future - Introduction: What Ed Said

The black-and-white clip playing across the tiny screen shows the aftermath of a bitter conflict. A literal war zone. A city of millions reduced to rubble and ashes. Half its population lost. The caption reads: “TOKYO, 1945.”

In the summer of 1980, when that clip aired on TV, Kevin Cahill was a twenty-year-old boy living with his grandparents in Washington, DC. He’d come back to DC to work before he began his sophomore year at UCLA. Kevin had been perplexed by a phone call from his mother weeks earlier.

She could barely contain her excitement as she proudly told him that his grand- father was to appear in a prime-time NBC News special. Kevin’s grandfather had always shunned the spotlight, so she extracted a promise from Kevin that he would make his grandfather watch it. But why? Why would millions of people be interested in my quiet, gentle, hard-working grandfather? he wondered.

When he asked his grandfather directly, all Kevin got were polite deflections and a quick change of subject. The man was generally quiet and reserved but not downright secretive.

The special episode’s name didn’t help explain his grandfather’s involvement: “If Japan Can . . . Why Can’t We?” On the other hand, anyone who heard the episode’s name knew exactly what it was about: the Japanese takeover of American industry.

The Tarnish of the Golden Age

Whereas the rest of the industrialized nations of the world lay in ruins after World War II, the US was left virtually untouched. As the only game in town, US industry reigned supreme. Factories couldn’t churn out cars, radios, and other manufactured goods fast enough. Quality wasn’t a concern. The only real challenge was keeping up with global demand. America entered what is commonly referred to as the “Golden Age of Capitalism.” From 1948 to about 1970, the nation ruled supreme. Its economy, manufacturing sectors, military, and ability to shape history and world politics were second to none. It was a heady time to call yourself an American.

The seventies knocked the US off its pedestal. The USSR dominated the 1972 Munich Olympics, whereas the US went home nearly empty-handed. Despite Nixon proclaiming Vietnam a success, the prolonged war and withdrawal demoralized the military and America itself. A few months later, the 1973 oil crisis, engineered by a handful of developing countries, brought the most powerful nation on earth to a halt. And finally, the Iranian hostage crisis embarrassed the US on a global stage. Nationalistic feelings of pride, superiority, and modern manifest destiny had given way to uncertainty, anger, and fear. And Japan . . .

Outside observers called it the Japanese economic miracle, and for good reason. Upon its surrender to the Allied Forces in 1945, Japan was a ghost of its former self, its people on the brink of starvation. A significant portion of its industrial capacity had been wiped out. Not only had the entire country been bombed to nearly nothing, but it didn’t have the means to rebuild. What meager production it could muster was of such low quality that “Made in Japan” became a joke the world over.

After the war, the US stayed in Japan to oversee the dismantling of the Japanese military. From 1945 to 1952 the US’s mission in Japan was simply to help it survive. It wasn’t until US policy shifted in 1947 (known as the Reverse Course) that Japan began to rebuild itself. The US brought in several experts to advise the new Japanese government and what little remained of its industry. By 1968, just twenty-three years after the country had been decimated, no one laughed when the island nation surpassed West Germany to become the largest economy in the world after the US, a position it would hold for over forty years.

By the seventies, the phrase “Made in Japan” conjured images of advanced technologies, the best electronics, the most reliable appliances, and the highest-quality cars. The oil crisis spurred many Americans to buy foreign cars over domestic. With better gas mileage, greater dependability, and superior engineering and craftsmanship, a Toyota topped a Ford, GM, or Chrysler in every way. The land of Henry Ford and John D. Rockefeller was no longer the manufacturing capital of the world.

Americans could tolerate losing the battle for electronics and just about everything else, but Americans have a special relationship with cars. You can almost hear the average Joe muttering, “Well, at least we still have our cars.”

Losing dominance in the manufacturing of cars, it seems, was the final straw (or the wake-up call, depending on how you looked at it). That’s when the everyday, red-blooded American realized the country was in trouble.

How had this happened? How had “Made in Japan” gone from joke to juggernaut? How had the once vanquished country come to usurp its conqueror?

It was astonishing. It was impossible. It was nothing short of a miracle. From business leaders to politicians to factory floor hands, everyone shared the same bewilderment. They began to ask the question: If Japan can do it, why can’t the US? And for Kevin, the question was, What did my grandfather have to do with

any of this?

The Miracle Maker

On the day “If Japan Can . . . Why Can’t We?” was to air, Kevin dutifully went to the cramped basement of his grandparents’ little brownstone. There sat his grandfather, almost eighty years old, at his desk working with the vigor and determination of someone a fraction of his age. Being the voracious reader and lifelong learner he was, it’s possible Kevin’s grandfather had that day’s edition of The Washington Post with the op-ed that read: Have you looked at the economic news lately and wondered who really did win World War II? Somebody at NBC News evidently did, and came up with “If Japan Can . . .Why Can’t We?”—an “NBC White Paper” on Japan’s burgeoning productivity and our lagging one—to be aired tonight at 9:30 on Channel 4.

It is a thoughtful, often depressing and sometimes fascinating examination of what makes and maintains a work ethic, and why we may end up freezing to death in the dark but the Japanese won’t. Kevin and his grandfather climbed the narrow, rickety staircase to join his grandmother and great-aunt around the tiny TV. The program began with the aforementioned black-and-white clip of the ruins of Tokyo in 1945, followed by another black-and-white clip from the formal surrender of Japan. Next, the screen showed an industrial smelter pouring liquid metal with the caption “TOKYO, 1980.” Then the images on the screen flipped in rapid succession, showing scenes of busy factories and electronics labs, automated robots and cars rolling off assembly lines—the very images that might spring to mind whenever anyone mentioned Japan in the 1980s. Then the overlay of the episode’s title: “IF JAPAN CAN . . .Why Can’t We?”

Suddenly, Kevin’s grandfather, Dr. William Edwards Deming, appeared on the screen. In his quiet, measured tone, he asked, “What can we do to work smarter—not harder?”

While the other people watching nearly burst with pride, Kevin’s grandfather seemed embarrassed. He made as if to go back to his basement office to keep working, but his family cajoled him into watching the rest. Nearly halfway through the program, there had been no further mention of Deming. It was “an uncomfortable thirty minutes,” as Kevin would later note. Then came a Japanese manager giving a speech . . .

Productivity gains were taught to us by Americans. We are very fortunate to have America as a good teacher and we always try to be a very good student, and that’s what made it possible for us to be somewhat competitive in an international market with US industries. At the words “somewhat competitive,” the audience began to laugh. The speaker—Joji Arai, manager of the Japan Productivity Center—was being modest and humble. At this time, Japanese manufacturers outclassed their US counterparts to the point it was laughable. Literally.

The next cutaway changed everything.

One second, laughter at Mr. Arai’s understatement of the century. The next, a slow, solitary voice that everyone around the TV knew well: “The first time that I went there to teach industry, I taught four hundred-and-fifty engineers in several cities. Tokyo, Nagoya, and Fukuoka . . .”

As the screen showed clips of the family’s beloved, gentle giant smiling and shaking hands with Japanese executives, the voiceover of narrator-reporter Lloyd Dobyns explained:

W. Edwards Deming first went to Japan in 1950 to teach industrial productivity through statistical analysis. He was so successful that Japan’s annual award for productivity is called “the Deming Prize.” It is one of the most coveted awards in Japan and the medal that goes with the award is a profile of Dr. Deming—an American.

. . . We have said several times that much of what the Japanese are

doing is what we taught them to do. And the man who did most of the

teaching is W. Edwards Deming. Some say this NBC special was the beginning of the quality revolution in America. At the very least, it brought the topic from the fringes to the mainstream. In just seventy-five minutes, it upended how the US and the world saw business and industry, sparking a wholesale adoption of Japanese methods and management. It dispelled many of the myths and misunderstandings surrounding the Japanese economic miracle and revealed one of its miracle makers.

No sooner had the documentary concluded than the telephone began to ring. For Kevin’s grandfather, life was never quite the same after that.

History Repeats Itself

For the next thirteen years, Ed (as he was called by those close to him) traveled from coast to coast, delivering lectures on productivity and management. Ford, GM, Xerox, Procter & Gamble, AT&T, The New York Times—it seemed everyone wanted a seat at the feet of “the master.” But history has a funny way of repeating itself. The lectures he gave were almost the same ones he’d delivered thirty years prior in Japan in the 1950s . . . and in the US back in the 1940s.

Yes, Ed had been down this road forty years ago, right after the US joined the fight against the Axis Powers in World War II. At that time, the country had to ramp up its industrial production of everything. From battleships and bombers to boots and bandages, the Allied Powers needed as much as possible as fast as possible, and there could be no compromise on quality. A defective washing machine meant drying the clothes on the line; a jammed gun might mean death.

The Allies didn’t win because of D-day or the atomic bomb. The Axis powers didn’t lose because of a misstep or overreaching. Victory came because the US outproduced the rest of the world. They achieved this despite the absence of millions of skilled American workers and experienced managers, who were on the front lines. It’s no stretch to say that the Allies won because of the quality produced by Rosie the Riveter. Rosie out-manufactured her male predecessors. And she did this using something called statistical process control (SPC).

Starting at Stanford University during the war, Deming trained over two thousand people in statistical process control methods. They, in turn, taught thirty thousand additional trainers. These thousands upon thousands of statistical process control evangelists went forth and spread the gospel, as it were, to Rosie’s supervisors and Rosie herself. The Allies won because of Rosie, and Rosie’s stunning success had Deming’s fingerprints all over it. Then GI Joe came home and once again donned his business suit or factory coveralls. He took one look at how the war was won and said, “Forget all that—we’re going back to the way we’ve always done it.” It took over thirty years to realize the mistake in throwing out Deming’s teachings.

In the NBC special, Lloyd Dobyns said of Deming, “In his own country he

is not widely recognized.”

After the war, Deming had been shunned by his own countrymen. He looked elsewhere for eager students . . . and there was no one more eager than the Japanese.

The Story of Profound Knowledge

So what exactly had Deming done in Japan? How did he bring about the economic miracle that had the US on its knees? He shared a collection of fundamental truths that show how any system or process can be transformed into something greater, what he would later call the System of Profound Knowledge.