Three Sigma Systems

So what’s the big deal about 3-sigma? Is it just 6-Sigma for under-achievers? Is it only for statistical geeks? Why should anyone give a hoot?

As with all powerful ideas, 3-sigma is simple, yet difficult to get your head around. Although there is no short explanation, here’s the shortest answer I can provide.  It goes like this…

——–Sticky Post——–

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Obama wants to rework G. W. Bush’s “No Child Left Behind”, which was itself a monument to stupidity. According to the NYT, Obama says that he will,

“…replace the law’s pass-fail school grading system with one that would measure individual students’ academic growth and judge schools based not on test scores alone but also on indicators like pupil attendance, graduation rates and learning climate.”

Because, said Education Secretary Arne Duncan,

“We’ve got to get accountability right this time,. For the mass of schools, we want to get rid of prescriptive interventions. We’ll leave it up to them to figure out how to make progress.”

So Obama’s “new plan” is no plan at all. It is just another way to measure outcomes being produced by unknown processes run by an anarchic cadre of do-it-yourselfers. With stupidity incarnate, the best idea Obama can up with is to try and change educational outcomes, not by working on the system and processes that produce those outcomes, but by hitting students and teachers with bigger hammers.

As a lifelong educator who spent more than a few years running a small public high school in the basement of a church and buying teaching materials using a portion of my meager salary, it seems to me that even a simpleton should be able to understand that, rather than hammering students, teachers and yes, even administrators, to produce more desirable educational outcomes by doing whatever it takes, we must work on the system and processes that produce those outcomes!

For starters, here’s what Obama’s new standards should look like. Read more…

I finally got around to watching Michael Moore’s movie, “Capitalism: A Love Story“.

Moore builds his story around case studies that illustrate the abuses of power that occur when wealth becomes concentrated in the hands of groups who are absolved of responsibility to their community by the amoral dictates of increasing profits. His story is not so much a polemic about the theory of Capitalism as a call to conscience. How is it, he asks, that human beings can act in ways that do profound harm to others, and not be overwhelmed by paralyzing shame? Read more…

Dick, a member of the Deming DEN List forum, forwarded me an article by Barbara Tuchman written around 1980, entitled “The Decline of Quality“.  Tuchman is the author of “The Guns of August”,  which I regard as one of the greatest books of the 20th Century, so I read the article with great enthusiasm. In her opening she says that she planned to take a holiday in Patagoniato hide from the blowback that would inevitably occur upon publication. From my standpoint, Patagonia wouldn’t have been far enough!

At the root of the problem is her adoption of the idea that quality is an inherent characteristic. This is of course, Platonic nonsense. Quality is in the eye of the beholder in a given time and circumstance. She speaks from the position of an elite that scorns peasants and lesser beings as incapable of recognizing “inherent” quality.

She does touch on the idea of “intention” as a necessary precondition for realizing the creation of quality, but then she races off into the self-contained elitist world. She cites great books as more worthy of study than the television viewing assigned by the school teacher, yet Shakespeare was a producer of the soap operas of his day. A punster of unrivaled skill, he wrote immensely clever trash for his peasant audiences.

We should not be surprised if the cleverness of some television writers, producers, and performers, survives the ages as future classics. If the human race manages to survive the folly of its own making, the Internet will undoubtedly become the medium by which authors and artists, no longer beholding to moneyed gatekeepers and solicitous contemporaries, produce tomorrow’s “classics”.

I do agree with her that the ubiquity of poor quality has increased, but it does not come from our egalitarian tolerance of the mediocrity of those with lesser tastes, lazy dispositions, and peasant genes. The source of decline comes from the subordination of all intentions (aims) to our quasi-religious worship of the profit motive. When quality, by any measure, is systematically subordinated to profit, those characteristics we value in product and service, whatever they might be, must suffer, because the dictates of profit always take precedence.

All things being equal, consumers of all classes will opt for quality (what they value) as they define it, but when constrained by what is available, by economic circumstance, and by deceptive practices, they can only do what is possible. And if the evidence of their senses tells them that the quality of a person is measured solely by profit, in spite of all other measures of quality, they will subordinate their very being to actions that they believe will maximize profit — at the cost of qualities such a honor, loyalty, membership, responsibility, creativity, and diligent endeavor.

Today, this is what we teach in our schools — to profit in tests, in grades, in money, in life — by any means. The “idea” that human interaction is driven by the “profit motive” is not only false, it is doing irreparable harm. As Deming said, “economists have led us down the wrong path”.

In Tibetan, authentic presence is wangthang, which literally means, ‘field of power’… The cause or the virtue that brings about authentic presence is emptying out and letting go. You have to be without clinging.

Chogyam Trungpa

My wife is a Physical Therapist. She has explained to me that walking upright, which is a means of locomotion most fully expressed by human beings, is actually quite remarkable. The process is one of taking a stable system and intentionally driving it into a state of instability — falling — and then regaining stability, over and over again.

First we stand. Next we hurl ourselves forward into a fall. We then catch our fall and regain our stance. If you watch a human infant learning to walk, you will see this instinctual process unfolding quite clearly.

The process of knowing (of creating knowledge) is very similar to this. We construct a stable explanation of the world and stand on it. As the world changes beneath our minds, we fall. As we fall, we struggle to reconcile our explanation of the world in order to reassert a stable stance.

In ideology and dogma, we try to cling to a stable stance — a truth — from which we will no longer fall and from which we need no longer move forward. But the world does not comply with our attempts to avoid our fear of falling. The world changes beneath our clinging minds and, sooner or later, we must fall despite our best efforts.

Since the world is always changing beneath our minds,  the length of the fall we will take in knowing will be greater the longer we try to avoid falling. The danger of relying on ideology and dogma increases over time. History is filled with tales of fatal falls.

There is another option though. We can chose to master the art of knowing in much the same way we master the art of walking.

Like walking, the process of knowing — this falling forward —- goes unexamined in our everyday experience. To change this — to depart the habit and master the art —- we must be letting go in much the same way as the infant learns to walk by falling. To move forward, we must step off the brink of our belief, stepping into the fall, and trust that we will survive. In this way our knowing becomes more powerfully useful given our aims and intentions. Our journeying minds can then take us where we chose to go!

I call this process surfing the wave of knowledge creation.

I was strolling the sidewalks of downtown Santa Cruz one evening this weekend. To all appearances, life along Pacific Avenue, our “main street”, was as pleasant as ever. Then I noticed something interesting. As is the case in many American towns, quite a few commercial buildings are unoccupied, but rather than leave dark gaping holes behind the plate-glass storefronts, owners or some other business savvy people, had placed attractive objects to mask the depressing emptiness. As I peered behind these little white lies, a sense of foreboding welled up in me. As I thought about it, it was not the unoccupied buildings that disturbed me. It was the lies that were being used to deceive me into complacency.

I was reminded of Dr. Washington Dodge’s account of the Titanic’s sinking just a few short days after the tragedy:

“We had retired to our stateroom, and the noise of the collision was not at all alarming. We had just fallen asleep. My wife awakened me and said that something had happened to the ship. We went on deck and everything seemed quiet and orderly. The orchestra was playing a lively tune.

(The crew explained that) “[A]s a matter of extra precaution the women and children should be placed in the lifeboats.”

“They started to lower the lifeboats after a lapse of some minutes. There was little excitement. As the lifeboats were being launched, many of the first-cabin passengers expressed their preference of staying on the ship. The passengers were constantly being assured that there was no danger…” Read more…

The Huffington Post, March 3, 2010: Gun-and-latte aficionados can rest easy. Despite an outcry from advocacy groups, Starbucks says it will continue to allow customers to bring licensed firearms into their stores.

SHOWDOWN AT STARBUCKS or THE CUSTOMER’S ALWAYS RIGHT
A short play in one act
by
I.M. Intim A. Dated

SCENE
INT. STARBUCKS COFFERIA

Typical Starbucks. Subdued lighting. Muffled chatter of patrons who sit sipping 3 dollar lattes and cappuccinos. The counter queue is moderately long. CUSTOMER 1 takes his double expresso and walks to an alcove table for a few teaspoons of sweetener. As he reaches for the sugar, CUSTOMER 2 appears behind him holding a Cafe Amerciano. He reaches around, and grabs the little wooden bowl of brown organic sugar being held by CUSTOMER 1.

CUSTOMER 1
(Mildly irritated)

Hold your horses there friend, I’ll just be a second.

CUSTOMER 1 and CUSTOMER 2 both gripping the sugar bowl.

CUSTOMER 2
(Speaking with a groggy growl)

YOU look, “FRIEND”! I had a bad night and I’m late for a meeting. Just give a guy a break, huh?

CUSTOMER 1
(Turning to face CUSTOMER 2)

You’ve got your problems and I’ve got mine. What gives you the right?

CUSTOMER 2
(Stepping back a few paces, he rests his hand on a bulge beneath his jacket that vaguely resembles the shape of a licensed 357 Magnum. Speaking in a low, commanding voice.)

I suggest you show a little respect friend. A man’s gotta do what a man’s gotta do.

CUSTOMER 1
(Taking it all in. averts his eyes, releases the sugar bowl and replies haltingly)

Oh yes… err…I see now… You’re right. I’m REALLY, REALLY sorry. Please excuse me SIR.

CUSTOMER 1 steps aside, head bowed, puts the lid on his unsweetened coffee and heads for the door.

~ FIN ~

Adapted from a comment I submitted to a recent post by Simon Johnson on his Baseline Scenario blog.

Too often, we fall into the trap of the cyclical model asserted by the quasi-scientific, nee apologetic, of economic theory, that attempts to define social interaction as if transaction reflects some sort of discrete closed system that abides by external and “natural” mathematical principles and behavioral laws.

The only abiding principle of relevance is that human beings are inherently social and in their sociality, they seek to devise methods for organizing their behavior into predictable patterns of collaborative action. (The invention of money as a medium of value exchange is one example.) When the material interests of one group become irreconcilably divergent from another’s, there is war, fought using the means at hand. Read more…

“Shewhart recognized the fact that good management consists of making one mistake now and then, and the other one now and then. What was needed, he saw, is rules that can be put into practice by which to try and achieve minimum net economic loss from both mistakes. To this end, he contrived the 3-sgma control limits. They provide, under a wide range of unknowable circumstances, future and past, a rational and economic guide to minimum economic loss from both mistakes.”

W. E. Deming, “Out of the Crisis”, pages 318-319.

Shewhart’s and Deming’s meaning for concept of “economic” runs much deeper than the connotative value in popular usage, and that meaning is central to understanding Shewhart’s control chart theory and Deming’s extrapolation of that theory to the broader universe of action that can be called human enterprise. Read more…

The nature of knowing is the central problem of human existence. Some images came to mind as I thought about this. You might want to contemplate this, as I did— or not.

Our being in the world “out there” is probably something like this:

Read more…

The gadgets you own will soon be you.

NYT today – “Cellphones Let Shoppers Point, Click and Purchase“ “We see the smartphone being used more and more in the shopping experience,” said Dick Cantwell, Cisco’s vice president for retail at Cisco’s Internet business solutions group.

As the more daring retailers see it, the potential benefits outweigh the risks. More aggressive profiling of shoppers — along with a novel, entertaining shopping experience — could help increase sales. And the technology may help retailers save money by cutting workers, essentially substituting electronic guidance for store clerks.

The gadget revolution is ramping up! Technological innovators understand that people are fed up with having to be tied to their homes in order to insulate themselves from the stress of interacting with fleshy, sneezy, dirty, human beings. In the beginning, avoiding human contact on the run was limited to primitive devices like the Sony Walkman. Next came the sexy iPod. But it was the ubiquitous mobile phone that made it possible for the average Joe to turn-on, plug-in, and tune out, no matter how many living, breathing, people were polluting his physical space.

Today, iPhones and Smart Phones are transforming our on-the-go peoplescape into a bloodless and stress free cyborg community. The unpleasant ambiguities of human contact — the gestures and smells and shifty glances of others —- can be scrubbed into succinct twitters, 6 mega-pixel snapshots, and instant data scans. Hands sullied by shakes, pats, hugs, and counting money, will soon become a thing of the past. The possibilities are as limitless as the imagination of those who want your money but not the messy inconvenience of you.

It’s not often that I agree with Charles Krauthammer, but in his recent opinion piece, “Toyota and the price of modernity“, he is on the right track when he says,

The question is: How do you distinguish the idiosyncratic failure from the systemic — for example, the single lemon that came off the auto assembly line versus an intrinsic problem inherent in that model’s engineering? How do you separate one patient’s physiology producing a drug side effect versus an intrinsic problem with a drug that makes it unacceptably dangerous?

Perfection is not an option. The question that any manufacturer must ask is if the causes of a problem observed are “assignable” or “common”. If something assignable is going on, for example, a bad batch of gas pedals, they can “fix” the problem and move on. But if the problem is systematic — if for example, the design process discounts safety issues in favor of volume production — the system must be changed as a whole or similar problems will keep reoccurring in various ways.

One method that can help determine if a problem cause is “assignable” or “common” is to chart the events over time and look to see if they fall outside of 3-sigma limits (assignable) or inside those limits (common). This will not provide a certain answer, but it can provide a good indication of the nature of the problem’s cause and how to best address it.

In the case of Toyota, the incidence of sudden acceleration is almost certainly outside 3-sigma. In other words, it is very rare. Toyota has attempted to assign the source of the problem and fix it — dangerous floor mats and bad batches of accelerator assemblies. But in his testimony before the U.S. congress, the leader of Toyota, Aiko Toyoda, takes the position that the problem is common (i.e. systemic) in his company. He says his company became focused on volume at the expense of safety and quality. This is a very interesting twist for a Japanese company that is expert in the use of SPC (Statistical Process Control.)

It is almost certain that Toyoda has internal company data that indicate systematic problems to which we are not privy. Perfection is never an option. But I suspect that the recent problems that have garnered so much attention, are most likely not systemic in nature. The reason Toyoda addresses them as systemic is because  American audiences, who have no understanding of the nature of variability, have seized upon a very rare but dramatic event, and erroneously extrapolated from that rare event the conclusion that Toyota products are unsafe and that Toyota is a negligent company. Aiko Toyoda cannot hope nor dare to teach American audiences about the nature of variation. His only option in the face of American hysteria, is to take full responsibility and hopefully move forward.

Are systemic changes needed at Toyota? Toyota is one of the few companies that has the knowledge and methodology necessary to answer that question. But if systemic changes are not indicated, making such changes will likely do more harm than good. In other words, shaking up the whole company as a response to assignable causes may hurt the company, its members, and the consumer in unpredictable ways.

Krauthammer does a pretty good job of pointing out how American audiences consistently confuse common and assignable cause and, one way or another, make decisions that do more harm than good.

Americans habitually confuse common cause with assignable causes, and as a consequence they are constantly looking for, and finding, someone to blame (assign) for their troubles. In America, finding bad guys is pretty easy because we have a system the reliably and predictably produces bad guys — crooks, cons, greedy actors, corrupt politicians, Republicans, Democrats, preachers, atheists, Socialists, Capitalists, and my next door neighbor, Fred.

Once you begin to understand the nature of variation, the cause of the problems that plague us the most, become pretty obvious. Generally speaking, they are COMMON. This tells us that we need to stop looking for bad guys and start working to improve or maybe even transform, our system.

It is no secret that by any measure, the quality, safety, and reliability of Toyota’s products have out-shined American automotive products for many years. Nevertheless, for reasons that are not too difficult to understand, the cracks in the armor of Toyota’s phenomenal quality have been pried open in a manner that has brought Toyota’s imperfections into the spotlight. Rather than comparing the quality and safety of Toyota products with those of US automakers, or seeking to minimize Toyota’s failures in any way, head-man Toyoda of Toyota takes absolute and unequivocal responsibility for the flaws in his products and the terrible consequences of those flaws.

Watch Toyoda’s apology before the United States Congress. Then watch the leaders of the U. S. automakers testify before that same body. Compare Toyoda’s words and demeanor with those of U.S. leaders, who utter not one word of personal regret or contrition for having driven their companies into collapse, wrecking havoc on the lives of countless workers and customers. Then decide for yourself who demonstrates greater strength in purpose, responsibility, and honor. Who would you trust?

PS – For those who have studied W. E. Deming, note Toyoda’s reference to workers and continuous improvement.

The Con

Con artists have a word for the inability of their victims to accept that they’ve been scammed. They call it the “True Believer Syndrome.” That’s sort of where we are, in a state of nagging disbelief about the real problem on Wall Street —The real problem is that it doesn’t matter what regulations are in place if the people running the economy are rip-off artists.

The system assumes a certain minimum level of ethical behavior and civic instinct over and above what is spelled out by the regulations. If those ethics are absent — well, this thing isn’t going to work, no matter what we do. Sure, mugging old ladies is against the law, but it’s also easy. To prevent it, we depend, for the most part, not on cops but on people making the conscious decision not to do it.

Matt Taibbi, “Wall Street’s Bailout Hustle”, Rolling Stone Magazine, Feb 17, 2010

For the past few years I have been writing blog entries about the “free market” con-game. Almost every article in this blog is relevant. My argument is that those who con us into being “True Believers” in a “natural system” based on individual self-interest, are con-artists who are setting us up to be “ripped off”. Sadly, the ideological nonsense of Free Market “theory”, has been bought into by Americans — hook, line and sinker — so we keep getting “Reloaded” (Taibbi’s Con 7).

Taibbi’s terrific article walks us through the cons perpetrated by the Wall Street financial con artists point-by-point, but anybody who is really listening will realize that it isn’t just Wall Street that needs to be unmasked. From Wall Street to Main Street, the whole edifice of free marketism that eschews what Taibbi calls, “ethical behavior and civic interest”, in favor of profits realized through deception and gaming the “system”, needs to be torn down.

We cannot extricate ourselves from the bloody talons of the predators among us until we recognize that when we accept their ideology of “predator and prey” we condemn ourselves to being preyed upon. We must substitute a values-based vision of our society, in which we as people do not aim to make a profit, but aim to create value that makes a better world for everyone. — in which case, everybody profits.

As old as the hills, here’s Taibbi’s list of con-games being run on us:

CON #1 THE SWOOP AND SQUAT

CON #2 THE DOLLAR STORE

CON #3 THE PIG IN THE POKE

CON #4 THE RUMANIAN BOX

CON #5 THE BIG MITT

CON #6 THE WIRE

CON #7 THE RELOAD

Read ‘em and weep.

For a more sober assessment of the grand con, read “The Doomsday Cycle” by Simon Johnson and Peter Boone, in CentrePiece Winter 2009/10,

A sound of cornered-animal fear and hate and surrender and defiance . . . like the last sound the treed and shot and falling animal makes as the dogs get him, when he finally doesn’t care about anything but himself and his dying.

Ken Kesey (1935 – ) One Flew Over the Cuckoo’s Nest, 1962

Poor Joe Stack, may he rest in peace, is already becoming a folk hero among the addled populist right wing, including the incredibly confused “Tea Party” crowd, who enshrine an ideology in which they  imagine that each person should be “free” from “big government” to pursue his or her self interest. Yet their model of a society unfettered by “big government” can only create a predator-prey feeding chain in which a few big animals feed on the many smaller animals. This is exactly what we should expect to get when we cleave to the idea of free markets unfettered by government.

Yesterday Joe, who was neither insane nor crazy, only dazed, confused, thrashing and biting from his corner, got eaten.

In an unfettered free market, the relationship between predator and prey — hunter and hunted — is really not that difficult to understand. Read more…

Think about it! The current Toyota story tells us much more about U.S. manufacturers and their market mindset than about Toyota Motors!

Toyota manufacturers automobiles for a profit. In part at least, they adopted many of the ideas put forth by Deming, and in combination with their cultural legacy and the blatant stupidity of their competitors, they have managed to do much better than the “Big Three” in the U.S. Now if U.S. manufacturers had more brains than guile, they would be grateful to Toyota for being a great competitor, and would take advantage of that to make their products even better, but that is not what is going on. Read more…