A New Lens with Balaji Reddie (Part 6)

What happens when an organization gets so focused on results that it forgets why it exists? Andrew Stotz and Balaji Reddie dig into the first of Deming's 14 Points, constancy of purpose, using stories like Harvard's answer to Deming's challenge to define a business and Indian manufacturers who pivoted to build PPE during the pandemic. This conversation may change how you think about success, profit, and the real aim of a business.

TRANSCRIPT

0:00:02.4 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with Balaji Reddie, an educator and trainer in the teachings of Dr. Deming and quality management generally. I'm really excited for today's topic, which is the 14 Points. Take it away, Balaji.

0:00:27.5 Balaji Reddie: Thank you. Thank you, Andrew. So the last time we spoke, we had discussed all the four sciences that Dr. Deming put together. In a nutshell, we said his words, appreciation for a system. That means appreciating that there are no events, there are eventualities, and there is a huge myriad or a huge system of myriad components that create these outcomes. So we need to understand that. We need to appreciate the fact that these are all interconnected, interdependent, these components. Right. And we saw some other attributes that when they interact with each other, the cause and effect are not closely related in time or space. Seemingly disconnected events then turn out to be connected. There exist synergistic relationships. So you can't just straightaway say, "I know." You can say, "From what I understand or what knowledge I have right now about the system, I think."

0:01:34.7 Balaji Reddie: And you always dig deeper. Right. And that gave us the next thing, that the performance of any system, the outcomes are subject to Variation. You will never get the same outcome every single time. It keeps on fluctuating. And then we realize there is a difference between normal and abnormal fluctuations. The typical term that Walter Shewhart said was Variation, and Deming took that forward. He said, "Understand Variation." I would say learn how to think statistically. Right? And statistical thinking is about knowing when to act and when to leave a process alone. Okay. So we said understand the Variation, and you should know when to... There's that normal fluctuation, you would need to work on it continually. But abnormal fluctuation is a little easier to understand, isolate, and take immediate action. So the low-hanging fruit comes from the abnormal fluctuation, what he called as special causes or assignable causes, as Walter Shewhart said.

0:02:41.0 Balaji Reddie: And once you work on them, then your long-term work on the process continues. That never stops because it helps you understand the process much, much better. Right? But there you are faced with the dilemma sometimes. There's so many complications there, and you just need to understand them if you want to know completely what happens in a system. And that's why he said the complete knowledge is never... Is unknown and unknowable. But he said there's a way of doing that, and that's where the Theory of Knowledge came in. We needed to understand that we build upon what we have right now. We start asking questions, and you begin with theories. "I think, I believe." And once you start doing that, you start unraveling the mysteries of the system under study. And last bit here is all this, of course, he was speaking about man-made systems, organizational systems, which all this work is being done by people.

0:03:38.0 Balaji Reddie: And he said that's where the best part comes in. You can never do things all by yourself. You need to cooperate with others. Each one comes with their own theories, and each one has their own system of learning, their own way of thinking. So we need to understand that, whether you are employees inside a company, whether you are people outside the company contributing in the sense of suppliers, or people who are recipients of this in terms of consumers. So everyone, you need to understand people, that they're a part of this entire system. And that's where Psychology comes in. Of course, I used the word empathy. I said understanding them and on. And on a lighter note, I ended by saying that if you really want to sharpen your empathetic skills, you need to either understand your pet or a baby, because these are people who can't express what they want and you just have to have your own theories and then understand them better.

0:04:34.9 Balaji Reddie: But that's what we saw last time. Now we're gonna get to, funnily, what he espoused as his philosophy [chuckle] when he first presented it in the United States in a structured form, right? These were the 14 Points. Now, first of all, the 14 Points are not his philosophy, but they're 14 consequences of his philosophy. You can never really set out to say, "I'm gonna do these 14 Points." But when you start, how do I say, asking the right questions and want to gain Profound Knowledge of what's happening and start looking at things differently and start asking questions, the right kind of questions, just like I said, "What is the purpose of the system? What are the components? How are they connected? How do they work? What is happening right now? Does this normally happen? Is this abnormal?" And then, of course, what are better ways of explaining or expressing what I'm seeing right now?

0:05:43.9 Balaji Reddie: And then finally, taking help from everybody else and bringing their thought processes. When you start asking these questions and start structuring and understanding the organization much better, you eventually see the 14 Points. So they are consequences of his philosophy. They are not his philosophy. You end up with the 14 Points, you don't start with them. Right? Having said that, does that mean we just go through this and be done with it? I said, "No." Now let's understand how he structured these and why he structured it the way he did. Now, they are in no order of preference. In fact, I remember speaking to Bill Bellows about this, and he said when he asked Deming, "Which of the 14 Points are the most important ones? Where do I start?" and he said, "All of them." He said, "Where do I start?" "Start anywhere," he said. You could start anywhere, eventually they're all connected.

0:06:40.7 Balaji Reddie: So the 14 Points are a system themselves. They are all connected to each other. You could start anywhere and you end up with the 14 Points in any case. But since we have to follow a kind of the sequence in which he wrote them, which he presented them, I'm following that sequence to begin with. Now, I'm gonna start with the 1986 edition of the 14 Points, which are there in his book, Out of the Crisis. But in 1990, he updated the wordings of the 14 Points. So I shall pull up my document right here so that I can read out the 1990 edition. Just give me a minute.

0:07:36.0 Andrew Stotz: Just for the audience, go out there and get yours in your hand. Get ready. I'm just going through and getting mine ready.

0:07:42.8 Balaji Reddie: Yes, so. Okay, so here it goes. Let's get to the 14 Points. So here we are. Right. And in what I normally say here, that he often said too, that when you apply Profound Knowledge, the 14 Points help you apply this in the most structured manner. So here we go. So the first is the 1986 edition, point number one, where he says, "Create constancy of purpose toward improvement of product and service with the aim to become competitive and to stay in business and to provide jobs." I think this is an amazing set of words which he's brought here, especially saying to provide jobs, where he said that quality is a ways and means of really contributing to society and not sucking the worst 10%, but adding something more to it to provide more jobs. Now in the 1990 edition, right, now the commentary for this, if you read Out of the Crisis, I've taken an excerpt from there, "Management must demonstrate unshakable commitment to quality, productivity and continual improvement.

0:09:09.8 Balaji Reddie: Your customers, your suppliers, your employees need your statement of constancy of purpose, your intention to stay in business by providing product and service that will help man to live better and which will have a market." So this was his definition of quality. A product or a service possesses quality if it helps someone live better in every way and enjoys a large and sustainable market. So for him, quality had two aspects. One, it must make someone's life better. Whatever you do, whether it's a product or a service, service being an activity. Right. So it should add value to the customer's life. It should make that person's life better. But it should be at a price the customer is willing to pay. Right? So that's the way he looked at it.

0:09:55.2 Balaji Reddie: Now, he changed this in 1990 to this, "Create and publish to all concerned a statement of the aims and purposes of the company or other organization. Management must demonstrate constantly their commitment to this statement." Now he says to publish the statement. And he says not just purpose, but aim. So aim, I think this came from his definition of a system, where he says that a system must have an aim. Without an aim, there is no system. So the aim provides a direction and purpose provides the reason why the system exists. So they go hand in hand. You can't separate these two. But now the commentary for this is, "A system must create something of value, in other words, results. The intended results, along with consideration of recipients and of cost, mold the aim of the system. It is thus management's task to determine those aims, to manage the whole organization towards accomplishment of those aims.

0:11:07.1 Balaji Reddie: It is important that an aim never be defined in terms of a specific activity or method. It must always relate to a better life for everyone. The aim precedes the organizational system and those that work in it." So...

0:11:23.4 Andrew Stotz: What was that part? "It's important that it's not" what?

0:11:27.2 Balaji Reddie: Yeah, that it's not an activity or a product. It should be something broader than that. It's about adding value to someone's life. Now, you can't go into the other extreme and come up with a motherhood statement like "I want to boil the ocean" or "I want to solve the world's poverty problems," alright? But it must translate into something doable, alright? And it should tell where the organization is heading. But the key word here is "publish it," right? And he says, "and other organization," that means "of the company or other organization." So I believe he started envisioning that in the future it's not gonna be one company, but a family of companies working together, which very simply today we use the term "supply chain" to express that. And I think, I think I mentioned this before in one of my earlier chats that I don't like that term because. It falls woefully short to explain what actually is happening there.

0:12:29.2 Balaji Reddie: I like to use the word provider network. Right? It's a network. It's not just a chain. Chain is more linear. Network is more lateral, all over the place. And these are not just suppliers. These are providers. So, right, he talked about a supply chain in those days. And he also says publishing, that means it should exist in some hard form, right, so that people see it, read it. Okay. Now this kind of, I thought was quite amazing because if you know about, for those who are into ISO 9000, the standard, of course, the latest one which is coming out this year, I'm not well-versed with what they've written or what they've changed in it, but up until 2015, the ISO insisted that companies have a documented statement of their policies, right, a quality policy and objectives. It should be written down. So to say that they could have got this idea from here is not fair, but I guess that you can see the parallel in what he was saying.

0:13:44.8 Balaji Reddie: So publishing. Now, in 2007, this is what I wrote after talking to many, like I said, who attended or helped Dr. Deming in his seminars till the day he passed on, right? And they said, of course, because I was quite intrigued, initially his four-day seminar had a perfect structure and everyone knows who attended that on the second day after lunch you had the red beads experiment. So that never changed even after Profound Knowledge came in. So anyway, coming back to what I was just saying, so initially he spoke a lot about the 14 Points, but after he professed Profound Knowledge, the stress on the 14 Points came down, but it did not disappear altogether. And this I heard from many of those and I asked what he would speak of. So based on that, I just came up with these words. The words are all Dr. Deming's, I've just edited and put it together.

0:14:50.1 Balaji Reddie: So create a statement of the aim and purpose of the organizational system. It must bring out the long-term vision of the organization, preferably stating how it intends to stay in business by making life better for all those impacted in any way. So there could be a direct or an indirect impact. Stakeholders is the term we use right now, right? So purpose describes why you exist. And if you go deeper to find out why a company exists, it has to last beyond the founding father's vision, right? So the statement of purpose must be very clear. Like Walt Disney, we spoke about this, he said, "I'll do anything to make a child smile." That was his purpose, and that's how everything stemmed from that, right? So if you start looking deep, why are we here? Why do we exist?

0:15:46.3 Balaji Reddie: Then once the company starts growing, you don't forget why you set up the company in the first place. You go back to your roots and the statement of purpose is like a North Star. It reminds you of where you're supposed to be, where you started, what you had in mind, right? So it's not that companies don't have it, but we need to revisit it from time to time. And sometimes you need to, it may undergo a change because things don't remain the same, right? Systems keep changing and if everything keeps changing, then you have to revisit the purpose. You don't do it every day though, because it's something that you spoke about and you say that it took me time to come out with this statement of purpose. So I was trying to understand even Apple's statement of purpose where Steve Jobs said making technology accessible, making technology simple, making technology productive is what we are supposed to do here as a company. Right.

0:16:46.4 Balaji Reddie: So he always believed in simplicity. He believed in seeing that people are more productive with the work, the software, or the products that they offer. Right. And it should be something that at times goes beyond just what the customer expects so that that one part is always there. So that's point number one, the statement of purpose.

0:17:11.3 Andrew Stotz: Can I ask a couple questions about that?

0:17:14.2 Balaji Reddie: Yeah, sure, sure, sure.

0:17:15.3 Andrew Stotz: Before we go on, I'm assuming you're gonna go on to number two.

0:17:18.4 Balaji Reddie: Yes.

0:17:20.5 Andrew Stotz: So a couple of things. First thing is about aim. You know that statement, "the purpose of a system is what it does," meaning that ultimately every system, there's an aim. It just may not be the aim that you think it is or that you want it to be. So part of this idea is recognizing that we have to state the aim or else people just, they're gonna just do things the way they've done them. Am I correct in saying that?

0:17:51.2 Balaji Reddie: Yeah. And it brings clarity to whatever you are doing. You start realizing, okay, I thought that we were actually doing this when we should be doing something else. For example, in Out of the Crisis, he gives that example of that trucking company. And he said when that gentleman took Dr. Deming's four-day seminar and then went back to his company and asked his employees, "What business do you think we are in?" Because that's what he used to ask, "What business are you in?" He used to ask that question, right, to the audience. "Any CEOs here? What business are you in? What business do you need to be in? What are you gonna be doing five years from now, ten years from now?" Right. So these are questions which I think you need to look at. If you want a list of questions, then in Out of the Crisis, there is a chapter on just the questions. Right.

0:18:57.0 Balaji Reddie: And that's, if I believe, let me just check. It comes after chapter seven. Is that where it comes in? No, I think... Yeah. Diseases and Obstacles. Okay. It's chapter five, "Questions to Help Managers." So you can find a host of questions there. These are rhetorical questions, most of them, telling you to focus on the job you have on hand. Right. And helps you define your purpose and your aim, both. And it gives clarity. Like I said, sometimes it gives clarity to yourself. What exactly am I doing here? All right. You always begin by saying that. I mean, if you ask people who set up businesses, they'll start by saying, "I did this because I was good at it," and the money came, but "I was good at doing this." And why did you do that? What do you mean by good? "Well, when I did this, I saw people feel happy." Right. And that's why I wanted to do this.

0:20:06.8 Balaji Reddie: And I thought this is the best way for me to earn my money, but the purpose was mainly to make them happy. Right. And then the money came. So that should be the focus. I think I mentioned this once when 1983 was when Harvard Business School was celebrating 75 years of existence. And everyone knew at that time, because Deming had just been rediscovered in America, and he was hot property. But everyone knew his ideas about Harvard. [chuckle] He was scathing. He said they prepared managers for the past and not for the future, and blah, blah, blah, blah, blah. He was very angry. But when they sent him a letter saying that we are making a souvenir of sorts, so can you pen a few words for us? So he was quite lavish in his comments and in his praise. He said, "It's not easy to run a business school and y'all have done it for 75 years. So all credit to you." But he said, "I have just one question for you.

0:21:18.7 Balaji Reddie: In these last two, three years that I have come back into American industry, I see with pain that many people do not understand the purpose of their business. And I see that Harvard has not defined the purpose of a business. Could you define the purpose of a business?" And Harvard came out with an answer which went, "The purpose of a business is to create value at a profit." So the sequence of the words is so beautiful. Create value at a profit. Right? And for a business, you need both. If you're only creating value and no profits, that's not a business. That's social service. And if you only want profits but no value, then that's not a business either. Then you might as well go loot a bank, get 100% profit and no value. And I remember Myron Tribus writing about this at the Kobe shipyard in Japan, right? And this was before Deming landed there, apparently, because there was someone sitting at Kobe who later on had taken Deming's lectures on statistical quality.

0:22:39.4 Balaji Reddie: And then of course, the leadership thing, right, where Deming spoke about the flow diagram. And he said that, he said the light bulb went on because they had a statement there at the Kobe shipyard, "We shall make good ships. At a profit if we can, at a loss if we must, but we shall make good ships." And later on, apparently some American gentlemen came to take over and they changed that and they said, "No, no, no, remove all that profit and loss and just say, 'We shall make good ships.' That's it." So there were times when things started going wrong, right? They went in the wrong direction because they were not looking at it in the clear manner. When they had problems, they said, "No, just make the ship. Just ship it out. It's good." And things went wrong. So they had to reassess and come back. So that was the kind of the idea that we're looking at, the aim and the purpose, and that could change. Right?

0:23:45.6 Andrew Stotz: And I want to add for the listeners out there, in the world of finance, profit is, we also call it cash flow. The cash flow is the numerator in the calculation of value. The denominator is risk. So when we think about what's the objective of a person running a business, it's to maximize value, which many people think means maximize profit, which it does not. It means maximize risk-adjusted profit. So, for instance, if you were breaking the law and doing bad things or mistreating your people ultimately you're raising the risk. Though your cash flow or your profit may be strong, you're raising the risk of that profit or cash flow. And so that's a distinction I like to help people understand, because there are people that just think that the objective of business is maximize profit. No, it's to maximize value. And mathematically we can prove that in the world of finance.

0:24:57.2 Balaji Reddie: Yeah. So I'd just like to paraphrase, when I said that what Harvard said is purpose of a business is to create value at a profit, I'd just like to add something more to that. Create value at a profit in the most ethical way, right? We have to be very ethical about it, because if you're doing wrong things to get your profits and add value, it won't last long. You won't last long as a company. It'll always catch up to you.

0:25:27.4 Andrew Stotz: And I use the word sustainably. That's a kind of a nonsense word these days because everybody talks about sustainability and all.

0:25:34.5 Balaji Reddie: Yeah, they talk in terms about, in a very different context.

0:25:37.8 Andrew Stotz: But the point is, is that are we generating profit in a sustainable fashion? Now the other, I had one more question on this one, and that is if we go back to the words, he talked about the create constancy of purpose for improvement of product and services. And my question to you is, when he talks about aim, sometimes people can get confused, including myself sometimes. And for instance, Clifford Norman and David Williams have been on the show talking about their book Quality as an Organizational Strategy. And so as I've looked at his teachings over time, I've had a question in my mind of is what he's saying that the aim is to improve the business through this focus on quality? In other words, quality is the aim? Or is the aim whatever a company says, "We want to do this, our aim is that"? I'm just curious how you understand those things.

0:26:52.8 Balaji Reddie: I would say quality, but his definition of quality, right? Help someone live better and there must be a market, right? And it must be sold at the right price. So he's been practical, if you look at it. He says that if what you're doing is not making anybody's lives better, then why do it at all? Right? So you need to... You need to look at it from his viewpoint of quality, if I may put it that way. Not that narrow focus on quality of product in terms of free from deficiencies, [chuckle]

0:27:28.9 Andrew Stotz: Yeah.

0:27:30.1 Balaji Reddie: But in a very broad sense what he thought quality is. And also, I found something on the internet, so I'd like to again add that in, that the entire thing is his whole thing is to have happier people. Happy customers... And he doesn't say satisfied, he says happy. So happy customers, happy employees, happy suppliers, society being happy, and the owners. Okay. So what the Japanese interpreted this as, which they call as total quality, is owners, employees, customers, suppliers, and society. When all five are simultaneously satisfied, we call it as total quality. Whereas if you look at it from Deming's point of view, when all five are happy simultaneously, then you attained constancy of purpose. And the longer you can do it, the better it is. So that's his constancy. So the aim and the purpose should be about that. It should be about happier people at work, happier people in the market, consumers, customers, the suppliers, because they should feel a sense of pride...

0:28:56.9 Balaji Reddie: That they're learning something from this company, that growth is happening. Society should feel that this company not only serves their targeted audience, but does not cause harm or is also adding some kind of oblique value to all of us here. We all feel happy interacting with these people in some form or the other. Not necessarily being philanthropic or something, but in a very different sense. We're not getting harmed by these guys. So that, I think, in the broadest sense is what Deming was trying to say to run a company based on constancy of purpose.

0:29:35.4 Andrew Stotz: And the reason why I'm asking is because one of the lessons I've learned just in life in general, certainly from the teachings of Dr. Deming, but just in general, is that if you pick a particular thing or area and you decide that I'm gonna improve this and I'm gonna keep working on improving this, you're gonna end up with something incredible that nobody else has as long as you stick with it. And so that's where this idea of, and if you know what quality means, which is the five groups and things being happy, more jobs, create opportunity, all of that, once you understand that, then quality is driving toward that better outcome. I guess what I'm also thinking about is could a person who's never heard of Dr. Deming just say, "That's my aim right there. I'm gonna take it straight out of what he said, constancy of purpose in relation to improving the product and service with the understanding [chuckle] that that improvement means that." That's it. It's not the aim of "We want to provide transportation vehicles" or something like that. That's more of kind of a corporate communication or. That's where I really want to hear your thoughts on that.

0:30:53.3 Balaji Reddie: Yeah. So when you say that "I want to do this through this product that I am giving," and right now my understanding is that this is the best way to do it, but as the world evolves, obviously there could be many different other ways of doing it and I need to keep revisiting this. As long as my purpose is perfect, I know I'll be able to adapt and adopt very quickly. Right. Otherwise you'll be left behind. What exactly am I here for? Many of the people set up businesses, ancillary units here in my hometown, Pune. They set up, they were basically employees in the parent company and then they saw an opportunity. They saw they were good at this. "I can make this better." So they set up the company to serve the parent company, not realizing that suddenly there could be somebody else coming in. Right. And they were preferred because they understood what the parent company wanted.

0:31:53.5 Balaji Reddie: But if they had just set up by saying, "No, why am I setting up this business? Because I see an opportunity. I can do this well." Okay, then can I do anything else well? What else can I? Why just this product? Why not any other product? Right? I think during the pandemic, many of the manufacturing companies realized that. They said, "We are very good at assembly, so why don't we start assembling PPE kits?" here in India, because PPE kits used to be imported. And I know this firsthand. My student was working in one such logistical company and he said we were importing. 300,000 PPE kits per annum. That was the requirement.

0:32:38.8 Andrew Stotz: What's PPE?

0:32:40.2 Balaji Reddie: Personal protection equipment, which you have to wear, the doctors, et cetera, the health workers during the pandemic. They had to wear that and serve, because we didn't know what was happening. So instead of just masks, just protect themselves completely. In labs, doctors, nurses, they all wore that. Right. So this personal protection equipment, we were importing 300,000 such kits per annum from, I think somewhere in Belgium. And because that was the requirement, but during the pandemic, the requirement went up. And so many of the companies, automotive manufacturing companies, decided that, let's get into this because we know how to do these things, right? We know how to assemble. And within a matter of 45 to 50 days, they built capacity. And imagine this, we were consuming, I am not joking, at the rate of 200,000 kits per day.

0:33:39.4 Andrew Stotz: Yeah. Then you can become a global supplier.

0:33:46.5 Balaji Reddie: And so they had to. But now, see, they did it for that much time because they said, our core business is something else, but we understood our purpose, so let's contribute in a very different way. The other one which they did was many of the manufacturing companies started assembling ventilators. And some of them which were running without electricity, they ran on a mechanical device so that the need for power, et cetera, et cetera, be superfluous. So when you know your purpose, then you can always adapt and adopt very quickly. And I think the pandemic gave us that opportunity to see how many of the companies responded in a very positive sense. In one way to look at it is, "Oh my God, this is it, this is my fate, and we're gonna shut down, we have nothing to do." But the other way is, "No, wait, why are we here? And let's use our expertise in a very different sense. So let's get to action."

0:34:41.3 Andrew Stotz: Interesting. I feel like we can spend a whole episode talking just about one of the 14 Points.

0:34:46.9 Balaji Reddie: That's why I said two episodes for the 14 Points. [laughter] If you don't mind, three also. Because many of the points have been either not discussed in detail or misinterpreted. And there have been changes. Deming himself brought a change in the wordings. That's why I wanted to keep this section, this session separate.

0:35:07.9 Andrew Stotz: Okay.

0:35:12.5 Balaji Reddie: Now you can see why, because I was just setting the scene for the 14 Points. If you want to ask me, it's all profound, very, very profound. [chuckle]

0:35:16.9 Andrew Stotz: Yeah, and I have a lot of questions, so that's good. I've got some clarity now for point one. I think the listeners and the viewers will also get some of that clarity, so that's great.

0:35:26.4 Balaji Reddie: Thank you. And I have been, I still, I just scratch my head about many of the things that he said. Because if people are reading Out of the Crisis, oh my God, you gotta read the text for point one. It's brilliant. I mean, I can't just, you can't just read it out right now. [chuckle] It'll take three episodes just to. But just, many people just say he did give us a method. I think I told you this two episodes ago. He was very clear. We didn't see it. We didn't see it. And he's so clear about what he wanted in innovation. That, of course, I thought that there was a slight difference, I think we spoke about this, invention and innovation. So invention is something new and innovate is to use something differently. Right. So that innovation, I think he confused the two terms, if I may say so. Too brave to make a statement like that. But anyway, he says here that you have to keep improving, innovating, and this obligation never ceases.

0:36:36.6 Balaji Reddie: It's that very clear. And if you see here, there's one, there's a paragraph here, he says, "It's a mistake to suppose that efficient production of product and service can, with certainty, keep an organization solvent and ahead of its competition. It is possible and, in fact, fairly easy for an organization to go downhill and out of business making the wrong product or offering the wrong type of service, even though everyone in the organization performs with devotion, employing statistical methods and every other aid that can boost efficiency." So I think he was highlighting the limitation of the statistical methods, that 97% versus 3% thing, that we are only trying to improve this, but the whole thing comes from the top, that are you providing the right product? I mean, you can't set up a company today making the best typewriters in the world. [chuckle]

0:37:35.4 Andrew Stotz: That's true.

0:37:41.5 Balaji Reddie: So he keeps saying this again and again, that you should publish a resolution that no one will lose his job for contribution to quality and productivity. So I think what we're coming to the end of this session today, we just discussed point one. [laughter] That's the best part. I heard from Henry Neave once that they all formed a kind of a team. Henry had come down to America and they started, they decided to meet Myron Tribus and just about everyone, Nida Backaitis, Barbara Lawton, the gang, and they were so happy to, the stars, right? Gipsie Ranney, I forget the other names, but they were all together and then they decided, let's discuss the 14 Points. And then point one, and it went on beyond lunchtime. They started in the morning. [laughter]

0:38:36.6 Andrew Stotz: That's great.

0:38:46.1 Balaji Reddie: It seems Dr. Deming was so happy. He was just sitting back and just listening and listening and listening. Then they met again the following day and the next day, and then they only came to point number four. And then finally, Brian Joiner, I think, said, "I think we're wasting too much time here. Let's just stop this." And it seems Deming was so upset because he said that Brian Joiner said, "Let's give ourselves 45 minutes for this point and that's it." [laughter]Deming said, "Don't set a target." [laughter]

0:39:22.9 Andrew Stotz: That reminds me of Bill Scherkenbach showing a picture of Deming at the, I don't know, National Education Committee meeting. And he said that they met all day or for two days and they still couldn't come up with the aim of what education, the aim of education in America was at the time. So, yeah.

0:39:42.9 Balaji Reddie: Yeah, I had this problem. It happened at a seminar here in Pune. It was Education for the Future or something like that, Engineering Education: The Next Five Years, blah, blah, blah, I don't know what it was. And there was this one gentleman making a presentation from a school in a city called Bangalore in India. And his topic was Six Sigma in education. And when he came to present, he started by saying, "Six Sigma is 3.4 errors in a million." And I said, "Oh, no." Anyway, then he went on to say, "Okay, so we decided our 10th, grade 10 is a public exam in India. It's a very big deal for a child to sit for that exam, right?" And he said that, "We want to have flawless results. And we've had flawless results for the last eight years. We have so many students, so many, so many students every year, blah, blah, blah, blah, blah." And so if you multiply and all that, and then, "So how do we get this?" Now here came the best part. He said, "In grade nine, all..."

0:40:48.9 Balaji Reddie: All those who had failed or had not reached a certain grade, we threw them out. And so we had flawless results. And I could see people squirming in their chairs because they were all sitting in the audience were teachers. They were squirming in their chairs and then one guy could take it no more. He put his hand up. And I was chairing that session, by the way. You can imagine what was happening to me. Anyway, this gentleman put his hands up and he says, "How can you say that? How can you say that?" He was very agitated. And I could realize, I just stood up and I said, "Okay, Professor so-and-so, please sit down. I get your, I get your sentiment, but we need to do this differently." So I turned to this... And he was a principal, this gentleman... I said, "What is the aim and the purpose of an educational institution?" And this man said, "Results."

0:41:42.4 Andrew Stotz: Yeah.

0:41:45.8 Balaji Reddie: Then I said, "Let's throw this question open to everyone." And I said, "Let's stop." I asked the people organizing the seminar that could we take a small detour here? Let's just stop. Let's not stick to your timetable because I know you're here on a leash. So they said, with permission from the chair and the host college... They were sitting there, the main people... They said, "No, we want this question answered now. What is the purpose of an educational institution?" And there was a lot of goading. I was bringing in Profound Knowledge and I was throwing up questions. And finally we came to the conclusion that the aim of any educational institution is to create a well-rounded individual that contributes positively to society.

0:43:33.9 Andrew Stotz: All right, so on behalf of everyone listening, I want to thank you again for the discussion. And for listeners, remember to go to deming.org and jump into DemingNext to continue your journey. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, and that is, "People are entitled to joy in work." As we're talking about how do we build that for the future.