Deming Communities
Profound Knowledge

July 30,1998 at Yungho, Taipei, Taiwan.

Dear Peter,

Attached is one article I did for the Chinese edition of coming. The leader Handbook, I translate the main idea for communication. This is a service for our international friends. I wrote an introduction or a review for every book I translated. It means I am very serious about our choice. Now it is different since we have a website as a magazine and cyber-college, we plan to take some responsibilities as a member of global Deming Community, so in addition to last May's summary of my keynote speech named Fire Sermon and Deming Philosophy which was also inspired by first impression of your book, I decide to spent some effort to write my learning and reflection to share with our friends.

I write the Chinese draft first and then put the main points into English but actually they are different. Although my English is not very good, I hope it can help you and our friends get some understanding or feedback as the starting point of dialogue you mentioned in our new Chinese edition of your great book.

Sincerely Yours,Hanching Chung

Notes: During last 4 weeks, maybe many people in the world are dismayed by the Clinton formula: Mea minima culpa for his sexual fling doesn’t merit a real apology since it is a private matter. For our generation, we may remember the Nixon formula of leadership (he wrote a book ‘Leaders’ in 1982 with some insights): I am responsible; the others are to blame.

I didn’t put any ‘criticism’ in my following notes. The major reason is that in the field of leadership studies, “ All theory is gray, / but the tree of life/ is evergreen.” ( Goethe ). Dr. Deming’s theory of leadership is worth doing more studies and learning. The Leader’s Handbook is major for business organizations, all though the author quotes some words of N. Ginrich’s talk. So in certain ways, like in the public and social sectors, and in the eastern way of leadership, the dialogue is only starting now. This can explain that the author’s view or insights of Japanese leadership are major through Kano’s window and Deming Prize winners’ stories. The recent popular Matsushita Leadership can tell the gap between the two worlds. In the field of leadership studies, we need to speak many languages. But a book is like a garden, it is a system, not only thousand flowers in blossom. I think this book is Peter’s best work up to now although Peter didn’t give us very good explanations of the dynamic balancing between improvement and standardization, between PDSA learning and leadership habits. During last several weeks, AMP CEO Mr. Bill Hudson resigned due to hostile merge proposal from Allied Signal, Bill was the VP who hired me and let me know AMP culture and sound expertise in serving customers. The sad story tell how difficult to be a good leader. Yes, we are in a new leadership age. ( notes added on Aug. 29, 1998)

Note: the website is with very limited English material.




Notes on the Profound Leadership in the Age of Systems

-Thought on Peter Scholtes' The Leader’s Handbook


Why the best-in-class companies are not enough?

In 1986, I was the quality and reliability assurance manager of Motorola Automotive and Industrial Electronics Group (AIEG) new plants in Taiwan. Since our main customers like Ford and Chrysler are in the quality awareness that time and Motorola was preparing Motorola University, we learned a lot from Ford in Quality As Job No 1,trainings and education, SPC, Applied Diagnostic Tools and Design of Experiments, Benchmarking(BIC), prototype-QS 9000,Process FMEA, Six Sigma program, Cycle Time Management, Speak-out name it, our product and systems quality are one of the best. Our plants as the model plant claimed by our senior managers as one can Think-and-Act Globally, and within one year employees increased from 10 to about 800. I had a department with around 50 persons. So far, so good. But the plant with a very fantastic new building sold out 3 years later.

Last year on Dec. 20, we invited one senior manager of one worldwide famous IC manufacturing company to have a keynote speech for our Deming Memorial Conference. He is very honest and introduced the outlines of their performance appraisal systems. Although most participants are very keen on their compensations packages (average five times of other company’s at least).

But the speaker's personal delightful characteristics seemed more inspiring than his company’s practice explained. In deed, it also reminds us the difficulties of performance evaluation in any company. I think the semiconductor companies in Taiwan should think about new approach of performance management. Peter’s book provides good alternative systems for our reference.

Why Motorola and our friend’s company, both are world-class companies in quality and productivity are not good enough*? Maybe Peter Scholtes' The Leader Handbook can tell us why and show the new way of leadership.

Peter is an educator**, as Dr Ackoff's in his Foreword to his book put it. So are Dr Deming and Dr Ackoff. Educators need to teach Deming Philosophy or Profound Knowledge System. Peter is also an organization development professional, his main concerns are teams and leadership. After 10 years since his very successful The Team Handbook, a new book to bring the best of Peter’s expertise with heart, soul and head finally come true. In fact, this book can be called The Profound Leadership. This book not only illustrated that example is better than precept but tell us to know the true leadership and to know how to make things happen and get things done, as the sentence in the book cover tells.

Leadership is the heart of Deming Philosophy. Dr Deming insists that it is the responsibility of the leaders to lead organizations out of The Crisis and to take advantage of The New Economics (Deming intentionally or humorously to make his leadership philosophy into another 14 points in his great book The New Economics). This is the background of the new theory of leadership.

Peter is a very good educator so that through this wonderful book of moving stories in sidebars and theory-methods in the text, the readers can learn and enjoy a lot. Peter may agree that we are all leaders in certain subsystems, so, this book can help us make things happen and get thing done, if we can master the theories and the methods presented and be transformed with new leadership habits and mindset within a healing and learning organization.

For Peter, systems or organizations can learn by PDSA (plan-do-study-act) or by encoding inferences of studies (history) with theories into routines (standards) that guide the behavior, and the leaders and his people or teams players.

Overall, I think this is a good book. The content is very practical and useful, more importantly, it is a book with a sound theory of leadership and many useful operational tools. In fact, this is a book of treasures for so many wonderful cases, stories, humors, figures and cartoons that make it a very enjoyable reading. I also think that through the dialogue with the author, including enjoy the sidebars with world-wide favors and sound, we actually enjoy a Deming Philosophy In Action banquet. But this is only the Peter's persona practica. This book is also with strong autobiographical wisdom if we can say that this is the summary of his 45 years as the leadership observer (may be a passionate observer, not a bystander) and 25 years as a educator and an OD consultant. If we understand some of his activities and his career path together with his writings, we can appreciate his stories coverage is global and with proud local actions and cases and his continual learning and improvements. The book is very successful in terms of his persona poetica which I mean that the readers know a living educator is sharing his wisdom and love with us, and with such a masterly story-telling style (the “Poetry in the Gemba” of an educator may be in seminar rooms and in his or her books?).

This is a book of Peter's personal leadership or fellowship or servant-leadership journey. Reading it carefully will help us to know and understand the leadership first time. It bring life to leadership studies and make Peter's or Deming’s spirit and legacy forever (to use F. Rabelar’s friend word in Gargantua et Dantagruel).

This book is the pearl of Peter's more than 10 years endeavor, I think. We may borrow John Ruskin's word to praise it: When Love and Skill Work Together, Expect a Masterpiece. Let's talk about Love first. One of the themes of this book is that the leader should create a Healing and Learning Organization so that people can enjoy his work and be proud of the workmanship or leadership. Since most motivational and all performance appraisal schemes are based on wrong assumptions, hence they are wrong practices, so we should explore better leadership and methods. Peter also thinks the downsizing trend and fad may be immoral in essence, we’ll talk about this issue later.

The a leadership new competencies are based upon profound knowledge system. The leaders must create meaning and values for the organization, and he or she need to take responsibility in creating a healing and learning organization with purpose and aims. To take the leadership obligations is to love and trust the team and the people.

To appreciate this book, we need to go to Peter's skills in his writing tactics and style of treating leadership with sidebars and stories. It is impossible to go through many inspiring stories and cases otherwise we can extend and dialogue with them forever. Let's just try a very small samples of it.( In fact, may be Peter need to consider to write a book called Scholtes' Fables with Illustrations. It may be another hit.) We’ll make a survey of owners of his book in Taiwan later to see which stories are most impressive later.

Now let me ask my memory speak. We start with the cases from history which Peter favors. First, to use Prof. Tufte example of Losses to Napoleon's Army During the 1812-1813 Russian Campaign is very good choice since it is not only very moving but it is a good example of Loss Function, although the printing quality is not good and the author doesn’t call it this way (p. 255, the redefinition of this to make it a loss function also suggest the wisdom of people in wars and peace ). The second example is Wellington's response to bureaucracy which is very excellent since he is not only a truer winner who can pass Deming's criteria of winning continual 7 battles at least, but also that many people know Wellington is the few general famous for his logistics management ,and even he complained about the impossibility of meeting strict measurements( inventory, the true value). The Western vs. Eastern management history or fable contrast in the first chapter may be controversial. I am not very familiar with American's history but to use Ishikawa family as the representative of Japanese industries and so many contributing people is somehow misleading (more acknowledges need for the corporations and leaders attended Dr. Deming seminars and winning the Deming prizes. To mention few samples such as Toyota, Matsushita, NEC…etc ). But this is not the major issue***.

I personally like Pete Gillespie's Barber Chair (p.118) and the story of The Data-Gathers' Hall of Fame: The Intrepid Craighead Brothers are very good. So are many other stories like “ Another Tune on the...Triangle!” and the interesting policies of Malaysian Minister ( beware the guy charges you racist). We should talk about Peter's selections of Japanese cases. Most are very good( say, Aisin Seiki and the Ozashiki, p.109 and the stories of Konica Camera innovations),particularly impressive is the Joban Hawaiian Center of What Kind of Food do Customers Prefer? The reason is very interesting if we compare one Taiwanese professor wrote about the same case of Deming Prize winning Journey. The Prof. I mentioned us it as the Motivation guide for our National Quality Award, that is, he said, look how Japanese work so hard and so committed to winning the Deming Prize... Peter is much smarter to use this as one innovative case of understanding the voice of customers.

I think the most valuable cases are the true stories of American companies, such as many good stories from Peter’s community, the people learning to dance in Ford, the very arrogant VP of one high tech company proud of their creative confrontation style, the Deming methods applied in Marshall Industries, Parkview Healthcare, and companies try to kick of transformation at tailgates parties and the hospital need to do everyday PDSA improvement... the reason I think they are the best is they are true although some are not so successful. They are true people and "leaders of every day life". The prescriptions of Peter's book may be very helpful to them if the organizations really can learn. Peter joined the doubt of so-called turnaround and/or downsizing art--indeed, we can rearrange one sentence of Pickwick Papers: the father cut his little boy's head off, to cure him o'squintin' in order to look compact and comfortable (Chap.28).

See the Alert Dunlap story and other studies in the book. Maybe the reader like to compare it with the story of Showa company in the Lean Thinking (chap. 10). One is lean and mean and Japanese one is lean with better and more purposeful leadership.

This is a working encyclopedia of Deming Leadership Philosophy and with Many other practical methods such as Kepner-Tregoe's problem-solving method and QC story, etc. The scope and the scale of the book is somehow difficult to master at first reading and first time practice. The story of the misplaced foreword from Dr Deming for The Team Handbook and the rearrangement is good. Finally this book worth it and is able to meet the expectation and challenge of late Deming (p. 296). There are 47 habits need to be established for any serious profound leaders. I hope we are not too old to learn them and indeed this is the personal transformation needed to get organizations transformed.

Congratulations for Peter Scholtes' fine work and I hope we all learn from it. Now it brings us to the issue of Praxis. Few books on leadership offer good exercise and activities as The Leader Handbook (and The Team Handbook). But the challenge of practicing like the skills in listening exercise offered in this book( chapter 8) takes time and intimate team’s efforts. This also brings us to an important issue,that is the individual and organizational learning. To speak out the troubles of performance evaluation is very easy, like Andy Grove mentioned in his High Output Management that many managers were frustrated by it. But Andy is a very practical guy so he thought about how to improve on it. But this book and Deming Philosophy ask us to be more radical. I stayed with some good global companies for more than 15 years so that I can appreciate new thinking. But in real life, it is nearly impossible to take revolutionary measure Hence either the top management or somehow incremental and evolutionary approach may be better as long as we have constant purpose (alas! This is a dilemma and much needed to be studied.) Mind you that the forced distribution scheme was discarded in Harvard Business School as well as in our high school system. But if we watch British educational " new ways" recently, you may agree with Peter's comment in his foreword to the Chinese edition.

This book will certainly enrich the literature of Leadership Studies with some unique contributions**. We also need to start dialoguing with Western friends and learning from each other. Dr Deming and his friends like Peter learned from Japanese and create a community devoting with Profound Knowledge System which will be the foundation of next century leadership. We hope most Chinese Leaders like this book and make the methods as one of our tacit practice. For this book, may be Dr Deming will urge us to improve on it, use it often, so that a new synthesis will be born.



* If at that time Ford had an auditing systems based upon Deming 14 points and other BIC criteria, we'll prepared a very impressive manual to demonstrate we are more serious than Ford. Motorola culture is obsessed with quality and a very admired company. So is our friend's company with growth rate more than 30% continually last 6 years and gross margin better than Intel. I talked and played as devil's advocate that based on my industrial experiences (I was with AMP which was with growth rate more than 15% for more than 30 years and DuPont, one of very seasoned good company and sound knowledge in Deming Philosophy). At the Peak Time, people think in linear way and forget variations, world-as-a-system, the constraints of capability of individual and organizational learning and unlearning, the psychological stress and limits...I hope my friends understand Deming Philosophy better this year.



**Peter is an educator so that he recommends one time-proved leader effectiveness training originated from the training of teachers' effectiveness. As Dr Deming said, whatever Peter said, listen and think about it. As many people like Socratic way of leadership, so many treasure of leadership/management knowledge in the classics. For a simplified list of Leadership Studies, you may be referred to Chapter 14 of Synchronicity by Joseph Jaworski (1996) for the contributors/Directors and their works. We may like to add Max Depree, Howard Gardner and James O'Toole’s work on leadership. It is interesting to notice in Peter Senge's introduction to Synchronicity and Dr O'Toole Leading Change's one Chapter, they all mentioned about Dr. Deming as a leader. In fact, the EDN, The Deming Institute, BDA and other communities witness the power of Profound Leadership Legacy. Peter in his interview in Quality Digest mentioned the future leaders of quality professionals will come from these communities. I hope this translation will contribute it too.


***This is not a book in pursuit a theory of history. A brief record of Japanese transformations can be read in Dr Deming's Out of the Crisis appendix. In this field we need it’s A. D. Chandler and Thomas Johnson for at least two series of epic or trilogy, say Systems and Variations; Unknowable Hands; Quality and Quantity and Profound Knowledge System Forgotten/ Relearned/Understood and step change. Or we need something like The Quality Control Revolution like James Beniger's work. The study of history is concerned with recording, interpreting, and understanding those changes--transformations of systems, organizations and groups. In this sense, this book is a study of one type of transformations through Peter's eyeglass.

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