Marcia Daszko on Leadership Lessons from Dr. Deming; Pivot Disrupt Transform [Podcast]

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My guest for Episode #501 of the Lean Blog Interviews Podcast is Marcia Daszko, a speaker, workshop facilitator, and consultant.

For more than 25 years, she has passionately been speaking, consulting, and guiding executive teams in Fortune 500/private corporations, education, the U.S. Navy, and non-profits to achieve exponential success. 

Mentored by Dr. W. Edwards Deming, she is nominated for the International Deming Prize; and writes a leadership column for the Silicon Valley Business Journal. She has taught MBA classes at six universities.

Marcia's author of the book Pivot Disrupt Transform: How Leaders Beat the Odds and Survive. She was also co-author of Turning Ideas into Impact: Insights from 16 Silicon Valley Consultants.

Questions, Notes, and Highlights:

  • How did you get connected to W. Edwards Deming?
  • What was it like spending time with Dr. Deming? 
  • Not just statistics? Challenging ideas like performance appraisals
  • “Change management is another management fad”
  • Tell us more about the consulting work that you've done and do?
  • “Identify your problems accurately to problem-solve”??
  • Helping leaders with “Accelerate efficient, effective data-driven decision-making”??
  • Accountability and responsibility — big difference
  • Am I blaming executives unfairly???
  • 3 Fundamental Business Strategies?
  • “Hope is not a business strategy”
  • Continual vs. Continuous?

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Episode Summary

Marcia Daszko: A Beacon of Leadership and Transformation

The Legacy of Dr. W. Edwards Deming

Marcia Daszko's insight into the world of leadership and management has been profoundly influenced by her mentor, Dr. W. Edwards Deming. Deming, renowned for his principles on quality and organizational excellence, introduced concepts that were transformative for a wide array of sectors, including the US Navy, healthcare, education, and large corporations. Under his tutelage, Daszko was exposed to ideas such as systems thinking, understanding variation, and the significance of fostering an environment free from fear. Emphasizing the continual process of learning and adapting, Daszko has built upon these foundations to guide and educate leaders on embracing these profound business philosophies. The importance of grasping Deming's concepts is not only to benefit individual organizations but also to contribute to the broader landscape of industries seeking sustainable success and innovation.

Transitioning to Impactful Leadership

Deming's profound impact on leadership development is keenly felt in modern business practices. Leaders across various industries have had to contend with the challenge of moving away from traditional, counterproductive practices such as annual performance appraisals and instead substituting adaptive and forward-thinking leadership styles. Marcia Daszko's story perfectly encapsulates this journey with her evolving understanding of the necessity of change within management. After attending numerous seminars and being directly taught by Deming himself, Daszko harnessed that knowledge to propel leaders toward a culture of continuous improvement. Resonating with Deming's advocation for removing barriers to pride of workmanship, Daszko emphasizes the importance of ceasing ineffective practices and replacing them with methods that align with organizational aims, culture, and values.

Driving Change in Educational Assessments and Corporate Evaluations

Deming's philosophy of holistic education and business management has influenced debates concerning standardized testing and employee evaluations. Marcia Daszko makes a poignant observation about the flawed reliance on SAT scores for evaluating student potential, a dated system that may not equitably assess students' true abilities or predict success. This critique extends into the corporate world, challenging the utility and fairness of annual performance reviews. Highlighting the need for leadership that genuinely nurtures talent rather than fostering competition and insecurity, Daszko advocates for the elimination of ranking systems that could demoralize staff and inhibit cooperative culture. Through the example of forward-thinking universities and corporations that abandon performance appraisals in favor of more constructive feedback mechanisms, Daszko shows that there are meaningful alternatives that align better with an organization's objectives and personnel development.

Silicon Valley's Insights and Innovations

As a co-author of “Turning Ideas into Impact: Insights from 16 Silicon Valley Consultants,” Daszko brings a wealth of experience working within the epicenter of technological innovation and leadership thought. In Silicon Valley, where relentless innovation is the norm, the capacity for leaders to pivot, disrupt, and transform is not only valued but expected. Marcia Daszko's engagement with executives in the tech sector reflects an intimate understanding of the dynamism required to stay ahead in this fast-paced environment. Her work presents a blueprint for other leaders seeking to achieve similar breakthroughs in their fields by leveraging critical thinking, fostering inclusive and adaptable cultures, and continuing the legacy of mentorship started by thought leaders like Dr. Deming.

The Importance of Continuous Learning and Evolution

True to the teachings of her mentor, Marcia Daszko's career emphasizes the significant role continuous learning plays in both personal and professional development. By attending Dr. Deming's four-day seminars extensively, Daszko not only deepened her understanding of his philosophies, but she also identified new insights that emerged from the questions and interactions within those sessions. In a world that is persistently shifting, the ability to evolve, question, and refine one's approach to leadership is indispensable. Daszko serves as a testament to the lifelong learner's journey – consistently absorbing new information, contextualizing it within the complexities of various industries, and teaching others to do the same. She challenges current and upcoming leaders to embrace the nuances of their respective fields and promote an organizational culture that prioritizes continuous improvement and evolution.

Marcia Daszko's journey, guided by Dr. Deming's revolutionary views, underscores a legacy that continues through her consulting, teaching, and writing. Her experiences and the insights she shares are invaluable resources for leaders intent on navigating the rough seas of organizational change. As a speaker and author, Daszko continues to impart wisdom on how to thrive amid uncertainty – a vital message for individuals and organizations striving to make a lasting impact in today's competitive landscape.

Embracing Systems Thinking in Organizational Assessment

Marcia Daszko's approach to organizational transformation starts with a comprehensive assessment–a deep dive into identifying the hurdles that impede progress, the practices that detract from a healthy workplace culture, and the barriers to delivering exceptional customer experiences. For any organization, the realization that problems endured for years can be addressed with a fresh perspective is both enlightening and empowering. This process not only uncovers systemic issues but also sets the stage for leaders to transition their thinking from blaming individuals to understanding and addressing system-wide challenges.

Overcoming Default Assumptions and Fostering Innovation

The hurdle of default assumptions in an organization cannot be understated. Too often, systems and practices are inherited rather than critically examined, leading to stagnation and resistance to new ideas. Daszko's strategy encourages leaders to question these assumptions and to shift away from seeking proofs for new methods, especially when existing methods were adopted without evidence of their effectiveness. This shift in thinking is crucial for paving a path towards streamlining processes, inspiring innovation, and driving organizational growth without an undue focus on change for the sake of change.

The Significance of Language in Leadership and Transformation

The language used by leaders in an organization significantly affects transformation efforts. Daszko emphasizes pivoting from vocabulary that induces fear, such as “change” and “change management,” to more constructive concepts like “improvement,” “innovation,” and “quality.” By replacing terms that can inadvertently instill resistance with language that promotes collective progress, leaders can effectively rally their teams around a shared vision of organizational excellence and customer satisfaction.

Education Through Experiential Learning

Marcia Daszko's ability to teach and instigate powerful shifts in perspective often involves hands-on, experiential learning. Instead of instructing leaders and teams on what to think, she designs exercises that allow individuals to experience and extract the concepts for themselves. This method ensures the learnings are ingrained and readily applicable to real-world challenges within the organization. This form of learning serves as a catalyst for personal growth and systemic reevaluation.

Assess, Learn, Apply: A Three-Phase Approach to Transformation

Daszko's tried-and-true method involves three phases: assess, learn, and apply. Firstly, an in-depth assessment establishes the current state of the organization. Following this, targeted, experiential learning sessions are crafted based on the assessment. Finally, through guided application, the organization learns how to integrate the newly acquired insights into their day-to-day operations. This structured approach not only yields profound improvements in organizational culture and financials but also ensures sustainability by equipping teams with the tools needed for ongoing evolution and adaptability.

Results That Speak: From Transformation to Tenfold Growth

The results of this approach to transformation are not only felt culturally within an organization but also quantifiably. Remarkably, organizations can experience exponential growth, as evidenced by one of Daszko's clients who achieved a tenfold increase in revenue. This growth was not fueled by arbitrary numerical targets but by a deeply rooted commitment to improvements that resonate with both employees and customers. These improvements stem from an organizational culture that values every member, promotes unity, and seeks to exceed customer expectations at every opportunity. Through personal transformation and a focus on customer satisfaction, organizations can reach heights never previously considered possible.

Addressing Organizational Silos for Systemic Harmony

Silos within organizations can create enormous challenges, severely hindering efficiency and progress. Leaders and teams operating in a vacuum fail to recognize the interdependencies that exist across the organization, leading to disjointed efforts and suboptimal outcomes. Effective system thinking can help an organization align its various components to function harmoniously toward a common goal. By promoting cross-departmental communication and collaboration, leaders can ensure that teams are aware of how their work impacts and is impacted by other areas, leading to more coherent and synchronized operations.

Diagnosing and Treating Organizational Health

Medical metaphors often reflect the state of organizations. Just as an internal medicine specialist considers the whole body rather than focusing on individual parts, leaders must adopt a holistic view of their organization. It's imperative to move beyond treating the symptoms of organizational issues–such as poor performance in one department–and address the root causes that affect the entire system. Leaders must diagnose the health of their organization by understanding its processes, relationships, and the beliefs that underpin its existence.

System Optimization: A Universal Strategy for All Sectors

The principles of system thinking and optimization are not limited to healthcare or any specific sector but are universally applicable across all industries. By understanding and optimizing the interconnected elements of the system, leaders can recover from stagnation and decline. Engaging in honest self-reflection about their systems allows leaders to initiate meaningful, impactful changes that can propel an organization forward.

Breaking Free from the Shackles of Outdated Beliefs

Adherence to outdated beliefs and assumptions is a common impediment to organizational growth. Leaders must challenge the status quo that ‘that's how it's always been done', paving the way for innovation and continuous improvement. Embracing new paradigms helps create a fertile ground for fresh ideas and prevents the organization from being left behind in an ever-evolving market landscape.

Accountability vs. Responsibility in System Change

A crucial distinction in system change is between accountability and responsibility. While employees are responsible for contributing ideas and enhancing processes, it is the leaders who are accountable for the system's design and subsequent changes. Real system transformation can only arise when leaders take full accountability for the system's performance and engage their teams in a culture of continuous improvement.

Redefining Business Strategies with Quality, Improvement, and Innovation

The intersection of quality, continual improvement, and innovation serves as a foundational triad for effective business strategies. By integrating these elements, organizations can move beyond incremental upgrades and usher in breakthrough innovations that redefine industries. When companies understand this interdependence–how improvement without innovation risks obsolescence or how innovation without quality and improvement might not endure–they position themselves for long-term success.

The Interplay between Survival, Management Philosophy, and Innovation

The quote “Survival is optional” captures the essence of strategic choice leaders face. Drifting towards short-term fads and buzzwords may lead to temporary gains, but it's a path that often ends in decline. Alternatively, aligning a company with a solid theoretical foundation of management, straying from destructive trends, and preparing for the challenges of continuous innovation can forge resilience. This path requires a bold rejection of destructive norms and a commitment to fostering cultures that prepare organizations to not just survive, but thrive in uncertainty.

The Path Forward: A Dedication to Systemic Excellence

In summary, the pressing need for systemic thinking and a dedication to holistic organizational health must not be understated. Leaders have the power and responsibility to pave the way for transformational change. With an unwavering focus on systemic harmony, continuous improvement, and innovation-driven strategies, organizations can transcend traditional barriers and achieve unprecedented growth and success.

Cultivating a Strategic Compass in Leadership

Developing a strategic compass is an essential aspect of nurturing systemic excellence within an organization. Leadership is not merely about guiding an organization through the well-trodden paths but rather shouldering the responsibility of steering it toward innovation and continual learning. Leaders should embody a sense of provocative thinking that stimulates constructive debates, injects creativity, and embraces a culture of continual learning. They need to pose challenging questions that stimulate reflection on organization vision, mission, and values–not just in theory but through demonstrated actions and behaviors.

Fostering Learning Organizations through Investment and Creativity

Investing in people is paramount for creating learning organizations that resonate with success. Leaders who recognize the value of each individual's contribution can unlock vast reservoirs of creativity. The willingness to conduct town hall meetings and other inclusive forums where ideas can freely flow evidences a leadership style that is open and responsive. Such participatory environments encourage employees to present new concepts without fear of rebuke, knowing that their insights can lead to organizational breakthroughs.

Embracing the Learning Journey: The Role of Mistakes

Accepting mistakes as a natural part of the learning journey is critical in fostering an environment conducive to growth and innovation. It's this acceptance that allows organizations to take calculated risks, knowing that errors will yield valuable lessons. The key is not simply to make mistakes but to have an organizational mindset that prioritizes learning from them. The old adage, ‘fail fast, learn fast,' encapsulates this necessity for rapid iteration and adaptation to change.

The True Cost of Fear and Arrogance in Leadership

The road to transformational change is often blocked by the twin barriers of fear and arrogance. Fear paralyzes action and innovation, while arrogance blinds leaders to the need for change. To overcome these obstacles, leaders must exhibit qualities such as openness, commitment to learning, and the courage to apply new knowledge. Without these attributes shaping leadership, the potential for positive change within an organization dwindles.

Toward Effective Change Management: Rejecting Fads for Foundational Growth

Change management should move beyond being treated as a fleeting fad and instead should be recognized as a foundational element of long-term strategic planning. Effective change management means integrating new insights and methodologies into the core operational strategies–not discarding them once a new trend emerges. It requires a deep understanding of an organization's culture to implement change initiatives that are both transformative and sustainable.

Conclusion

In advancing an organization's mission, leaders are presented with the option to either hold onto outdated methods or courageously pursue innovative pathways. They must foster an organizational culture that prizes continuous learning and effectively manages change. By doing so, leaders not only facilitate their organization's survival amid shifting markets but also set the stage for it to flourish.


Automated Transcript (Not Guaranteed to be Defect Free)

Mark Graban:
Well, hi everybody. Welcome back to the podcast. I'm Mark Graban. Our guest today is Marcia Daszko. She's a speaker, a workshop facilitator, a consultant and an author.

Mark Graban:
For more than 25 years, she has been speaking, consulting, and guiding executive teams in Fortune 500 companies, private corporations, the education sector, the US Navy, and non-profit organizations to achieve exponential success. She was mentored by Dr. W. Edwards Deming and nominated for the International Deming Prize.

Mark Graban:
And Marcia writes a leadership column for the Silicon Valley Business Journal. She's taught MBA classes at six universities and I'm going to mention two books. She's author, most recently of the book. Those of you watching on YouTube can see the COVID and the image behind her. It's Pivot, Disrupt, Transform: how leaders beat the odds and survive.

Mark Graban:
Marcia was also the co-author of a book titled Turning Ideas into Impact: Insights from 16 Silicon Valley Consultants. So, Marcia, thank you for joining us here. How are you doing today?

Marcia Daszko:
I'm great. Thanks for having me today.

Mark Graban:
I'm happy we could connect and people who know me in this podcast, when they heard Dr. Deming's name at the beginning, they're not surprised that you and I are going to have a conversation. That's why you're here on the, you know, I like to ask people their origin story. I would love to hear your origin story of first taking interest in Dr. Deming's work and then getting connected to Dr. Deming.

Marcia Daszko:
Certainly that's an interesting journey, not one that I planned for. So many people have a plan and they live their plan. I didn't do that. I did a pivot. So my first career was corporate communications and marketing and some teaching.

Marcia Daszko:
And then I started working for a small consulting company owned by Dr. Perry Gluckman. And I was doing marketing. And then one day he said, I want you to do business development. I said, what am I selling?

Marcia Daszko:
And he sent me off to Dr. Deming's four day seminar and that was in the 1980s. So I went to that and then I came back to the office and said, perry, what was that about? Because there were words that Dr. Deming was using that I had never heard before like variation and systems thinking and the red beads and so forth.

Marcia Daszko:
And so he said, don't worry, I'll teach you. And Dr. Deming was at the time in his 80s teaching these four day seminars to as many as like 1500 managers and executives from all across any sector, from nonprofits to military to corporate, nonprofit, education, healthcare, we covered it all. And so that's when I had my first introduction, and then Perry was helping me learn. And so I was reading five to ten books a week that he approved of.

Marcia Daszko:
He said, yes, these are great. No, don't read that. That's junk about TQM quality and so forth. So I studied and studied, and Perry and I would have conversations of three, four, give hours talking about Dr. Deming's concepts and philosophy of management and how to apply it.

Marcia Daszko:
And Perry was working with companies like HP and T3com and so forth to help those executives learn and apply. So then I said to him, after a few months, I want to go hear Dr. Deming again. So off I went to another four day seminar, and then I was introduced to him by Dr. Nancy Mann, who was running the workshops or hosting.

Marcia Daszko:
And she said to Dr. Deming, Marcia works with Perry. Well, they were friends. And Dr. Deming looked at me and he said, oh, good, then I will teach you.

Marcia Daszko:
And I was extremely shy at the time and thought, oh, no, I don't want to be a then. But he said to me, come as often as you can to the four day to learn. And I ended up going to 20 of his four day seminars and then co founded the Bay Area Deming user group. And we met monthly for about 18 years to talk about. Every month we'd have a speaker, and then we would talk about Dr.

Marcia Daszko:
Deming's philosophy and how to apply it. And that was many, many people from Silicon Valley companies would attend, and sometimes we had 30 attendees, sometimes 100. It varied over time. So that was my introduction, and then I was working with Perry then to help other people learn and apply Dr. Deming's philosophy as I was learning, too.

Marcia Daszko:
So great.

Mark Graban:
So did you end up, I've interviewed people who say they assisted Dr. Deming during the workshops. Did you kind of graduate to a role where he had you helping him and not just sitting there in the audience each time?

Marcia Daszko:
It was interesting. Yes, I helped with registration and so forth initially. And on the side of the podium or the stage where Dr. Demings sat, there were usually four rows of helpers and facilitators. And so a couple of people in the first row would be like Dr.

Marcia Daszko:
Brian Joyner, Dr. Ed Baker, Dr. Bill Scherkenbach, Dr. Gypsy Rainey, some of those people, Dr. Joyce Orsini, who worked with him closely and who also taught at the university level usually.

Marcia Daszko:
And then the other rows were people still learning and just helping facilitate, however we could or help at the four day. And then gradually, as you learn more and more, you've moved up in the rows, so it was fun.

Mark Graban:
And I've never sat through anybody's workshop anywhere near 20 times. I have a favorite movie of mine that I've watched 20 times. And you learn the lines, but the movie is the movie. I guess the question is, how consistent was the four-day workshop? And you really kind of get to know it by heart, or there's different insights that come out each time.

Marcia Daszko:
I think I definitely learned during each four-day workshop, and there were multiple reasons for that, and those are from workshop to workshop. Dr. Deming was learning and integrating new ideas and new thinking into his four-day workshop. That was one thing. Another thing was that the audience questions would stir and spur new thinking, new comments from him, insights, and so forth.

Marcia Daszko:
He would speak all day until 4:00. And then the facilitator would put us in working groups, and the working groups would go from, like, 4:00. They would ask questions, and we were supposed to then go into teams and work on those answers to the questions, write them on an index card, and turn them in. And Dr. Deming would.

Marcia Daszko:
Those teams would share the next morning. And so the focus was on our learning, but also Dr. Deming's learning. He was very interested in learning what questions we had about what he had taught the previous day and what ideas we had about those things. And so it was a lot of mutual sharing, and out of that was the continual learning.

Marcia Daszko:
And then on some evenings, Dr. Deming would invite in someone that he wanted to learn from. So, for example, he might have a panel of psychologists, and there would be a facilitator asking them questions, because Dr. Deming wanted to learn more about theory of psychology, for example. And so I remember one of those evenings, and Dr.

Marcia Daszko:
Susan Lettuce, who is a psychologist, she asked me to scribe all of the answers. So as people were, as the panelists were answering questions, then I would capture all of that on the flip charts. It was another opportunity for learning for me, because when you're actually writing all those things down, it's a different process in your brain.

Mark Graban:
Yeah. And that interactive, not just hearing what Dr. Deming was teaching, but the questions. And, yeah, I could see that deepening your understanding of then what people might ask you if you were teaching or coaching or consulting.

Marcia Daszko:
Yes, of course they would have questions that really challenged him, because if they, for example, had performance appraisals and they were used to ranking and rating and supposedly giving feedback to employees and so forth, but it was in terms of judging and blaming, then they would ask questions about that and he gave answers, but they weren't deep answers. Sometimes the audience struggled to understand his answers because you had to study. Had to really study and think about what he was teaching was not always direct or it made you think.

Mark Graban:
Yeah. And I mean, my recollection, having never met Dr. Deming, never had the opportunity to do the four day workshop, but mainly through books. And I think it seemed like the advice, if he would say, eliminate fear, eliminate annual performance reviews. And the short answer was substitute leadership.

Marcia Daszko:
Yes.

Mark Graban:
And maybe that wasn't a satisfying answer to.

Marcia Daszko:
Yes, exactly.

Mark Graban:
More leaders. Well, maybe not that.

Marcia Daszko:
Yes. As we hear today, some universities have gotten rid of the need for turning in SAT or ACT scores when students apply. And I recently heard of two universities who are going to reinstate using SAT scores for applications, and one was Dartmouth, and I can't remember the second, but it's back east as well.

Mark Graban:
Another Ivy League.

Marcia Daszko:
Exactly.

Mark Graban:
Yeah.

Marcia Daszko:
And I wrote a short letter or short note to one of the presidents and basically said, you need leadership, not SAT scores. So I'm probably not helpful either. But, you know, Dr. Deming saying, substitute leadership. And it's like, leaders think about what does really, a test score tell us.

Marcia Daszko:
They're hoping that the test score will tell them that certain applicants have a potential for success and that has nothing to do with it, because SAT scores is not about knowledge, but instead about how fast can you memorize certain things and then forget them in some cases.

Mark Graban:
How much help and coaching do you have about taking the standardized test?

Marcia Daszko:
Yes. And that right there, when people have the. Some students have the money to pay for classes or coaches to prime them for those SAT tests, that leaves out a good chunk of the population that can afford those support systems.

Mark Graban:
Right. So it's not as standardized. It might be a standardized test, but maybe not a standardized system around that test.

Marcia Daszko:
Right.

Mark Graban:
Think back to when you were maybe balking early on of, like, you didn't want to become a statistician. But Dr. Deming is, of course, I'm sure you figured out quickly, and he was much more than that. I hear him sometimes described as, oh, the statistician W. Edwards Deming.

Mark Graban:
I'm like, that's incomplete. There's lots of other labels we might use. But he did have a lot of really challenging ideas. And I've had an opportunity here in this podcast over time to interview Alfie Kohn, who has pretty radical ideas about getting rid of grades in school and not robbing people of intrinsic motivation for learning. And then a UCLA professor, Samuel Culbert, who actually was not directly influenced by Dr.

Mark Graban:
Deming. But he wrote a book about get rid of the performance review. Now, in the 2020s, we hear more about companies, or maybe even the last decade, more companies doing away with the rigid annual ranking. Annual performance review, like GE doesn't do the Jack Welch rank and yank version, which is probably even worse than just doing the annual performance. Some of your, what are your observations or thoughts even just on that point?

Mark Graban:
That's still pretty challenging to leaders today of substituting the annual performance review with something better, right?

Marcia Daszko:
And again, Dr. Deming would say substitute leadership. And there's a great book written about performance appraisals that I recommend to all my clients, too, if they're using them, and that is abolishing performance appraisals by Tom Cohen's and Mary Jenkins. And they spent four years researching the topic and then writing. And they have examples in there as well, about organizations that did abandon the performance appraisals.

Marcia Daszko:
But the issue is that there are many inaccurate assumptions about the value of performance appraisals that people don't think about, don't check out. It's almost like fake data. And it's like a company, once it has so many employees, they think, oh, we need these certain HR systems in place. And one of them is we need performance management and performance appraisals and so forth. They don't think about what's the aim?

Marcia Daszko:
By what method? Why would we use that? Does it match our culture? What are the values of a performance appraisal? All of those things.

Marcia Daszko:
They don't ask those questions. They just say, oh, we're this size now, we need these things. More and more and more corporations or organizations are adding, quote unquote, best practices, trendy things, trendy shiny tools, management fads into their organizations without thinking about why or what they are doing or the impact that they will have. And if instead they created a culture that achieved their aim, they would not put in these things. In fact, the first one third of my pivot book is about the things you need to stop doing, because otherwise it's like adding fresh strawberry jam on moldy toast.

Marcia Daszko:
If they just want to add any good things onto the bad management fads they already have in place. So they've got to stop a lot of these things that are actually causing waste, complexity and dysfunctional cultures first. So they need to get rid of those things. And if they do that, they can almost automatically see and experience a surge in a healthy culture, a more efficient, effective system, and a healthier, happier culture. But they need to get rid of the bad things.

Marcia Daszko:
And oftentimes, they can't see those things. So that's why I love when an executive, a leader calls me and says, marcia, I need your help because I can go into an organization. Oftentimes it'll take me a week to assess the organization and give them a summary report and say, these are your major issues. These are your challenges. These are the barriers to your success or your progress, or your happy, healthy culture, or your wow experience to your customers.

Marcia Daszko:
These are the things that are getting in your way, and they can't see it because they're in the system and they've just adopted bad practices.

Mark Graban:
Yeah. And it's fascinating to me in different industries, and this isn't just on the performance review issue, but there are default assumptions of how an organization has to operate. People tend to accept or inherit those assumptions and those defaults, and then you propose something different, and then they'll say, well, prove to me. Prove to me that this other way is better. When that was never the threshold for adopting the old method, it was never proven.

Mark Graban:
It was somehow just adopted. And moving away from that default has, I don't know if it's like a matter of fear, discomfort of why that bar is so high. Prove to me that shifting from the status quo is going to be better. You probably realize the status quo is lacking in some way. What are your thoughts around that component of change?

Mark Graban:
Even with powerful executives, they're sometimes still afraid of doing things a different way. Is it more complicated than that?

Marcia Daszko:
Sometimes they're not even aware of their fears, or they're not aware that there's a better way. They're used to the way it is. And even though they have problems, I know one of my clients, a president, said to me one day, Marcia, I've been struggling with these same problems for ten years, and you come in and in a month or two are teaching us how to ask different questions, rethink what we've been doing. We see the processes that have been impacting these issues and why we keep having those same problems over and over again, and we never get to solutions. He said, you give us a different lens to see through, a different knowledge.

Marcia Daszko:
You're teaching us to ask different questions. And he said, we're not afraid of change, but you get us to focus on improving or innovating. And one of the things I say is take the word change out of the vocabulary, because if you talk about change, you instantly are going to drive in fear. People have a fear of change, fear of loss, fear of the unknown, fear of making mistakes. And so if that's what it's about, oh, we need to change.

Marcia Daszko:
We need to, instead of say, pivot that thinking, pivot that vocabulary. Because if you pivot the wording and you talk about how can we improve together as a team to give our customers an amazing experience and create new markets. So innovation, we're talking about quality as a business strategy, continual improvement as a business strategy, and innovation as a business strategy that takes away, if that's the focus, we take away the fear of change and the use of the word change and change management, it's another management fad. So I just want people to get rid of change management. Performance management, performance appraisals, arbitrary numerical goals because they don't add value.

Marcia Daszko:
And over time they will make an organization struggle and decline.

Mark Graban:
Yeah, you talk about the word change and there's this expression I hear a lot. You've probably heard too pointed at other people or people in the organization that they're resistant to change. I don't like that phrase because I think if someone is detecting, if that seems to be the symptom, there's a much deeper causes to that. But I've never once heard anyone say those people are resistant to improvement.

Marcia Daszko:
Exactly.

Mark Graban:
Because change is not always improvement. It's not just the framing of like, oh, if we chose a more positive word, there's more to it than that. But I think people have had a lot of changes forced on them that weren't improvements. And they remember that.

Marcia Daszko:
Right?

Mark Graban:
I think that's at least part of it.

Marcia Daszko:
And you know, Peter Scholtes, who wrote the Team Handbook and the Leaders Handbook, and he said, people don't resist change. They resist being changed. So that's why I think it's so powerful and important for us to think about the vocabulary that we use in our organizations. And that's a leadership.

Mark Graban:
Yeah. And thank you for citing Peter Scholtes on that. I've quoted and cited him many times in blog posts and articles and books. So thank you for the call out to the late Peter Scholtes. One other thing I think is really challenging that comes back to assumptions, is people often think an individual's performance, whether that's sales numbers or patient experience scores, or that these outcomes are clearly the result of this person's effort and skill and individual performance, as opposed to looking at performance being driven by the system.

Mark Graban:
And to get statistical for a, the idea that Deming people understand or people who've learned from Don Wheeler or others know most people's performance falls in the range of common cause variation. There might be an outlier, but it's certainly not like a bottom 10% that the old Jack Welch approach would judge and get rid of. But can you share thoughts and reflections on trying to help leaders understand that idea, that most performance is driven by systems, not individual effort and skill and dedication?

Marcia Daszko:
Yes, that is such a powerful concept. And if leaders don't get that, they're not going to be able to transform or lead. And so what I do is I don't tell people or even kind of teach people how to think differently about, you've got stop measuring the individual and shift to measuring the system. They're not able initially to wrap their minds around that. They just can't get away from that individual focus.

Marcia Daszko:
So what I do is in my leadership classes, developing leadership, understanding, learning about, and I don't always say Dr. Deming's philosophy. I teach that later where this new system of management comes from or this new management philosophy. So what I do is when I facilitate their learning to be better leaders and to be able to create more productive, happier, successful organizations, what I do is I put them into an exercise and then I ask them, what did you learn? What else?

Marcia Daszko:
What else, what else, what else? Until they pull the concepts out. And then I ask them, how does this apply to your work, your job, your organization? And then I do another exercise and do the same. So there's a process that I have of learning, facilitating their learning to put them through the educational concepts.

Marcia Daszko:
And I don't tell them, okay, now I'm going to teach you such and such. Or now look at these 20 PowerPoint slides and get this, because it's too difficult. They won't and they will resist then that, well, I've got my MBA from such and such, and I've studied this and that. I read this book that's full of management fads and there's plenty of those I can rip apart, but instead, I give them the experience and that experiential learning they will never forget. In fact, one of my clients from PBS, who is one of my first clients, many years ago, when people from PBS call me, they still say, hey, ms.

Marcia Daszko:
Hart, how are you doing? Because I had an exercise where I wore a hard hat and on the front it said, ms. Hart. And that's what they still call me because they never forgot that exercise. And I basically was teaching the PDSA model plan to study, act, and they can implement that improvement tool wherever in life, right.

Marcia Daszko:
Because they experienced it.

Mark Graban:
Yeah. And then I think another form or another example of experiential learning that can have a great impact. You mentioned earlier the Red bead game or the Red Bead experiment. But I think sometimes the key question, as you asked it, people learn. And, okay, they're building maybe some intuition or some new ways of thinking.

Mark Graban:
But then the question of, how does this apply to your work? And they might say, well, this applies in something simple and silly, like dipping a paddle into a bucket of beads. But we do real work.

Marcia Daszko:
Yes, well, we give a few examples, or we ask them for the examples, where do you do this at work? And they really quickly can draw the link from that exercise to where the red beads are in their work. And that's profound. And that's how, bit by bit, they are learning. And then that's where we help them with the consulting to help them apply those new concepts.

Marcia Daszko:
How does that apply to you? And the faster they learn and apply, they can experience huge transformations in their organization.

Mark Graban:
Yeah. And there was one time I enjoy facilitating the red bead game. And I remember one session, it was a chief medical officer of a health system who was very engaged. I don't think he had a hands on role, but he was sitting in the front. And I remember when we were talking afterwards about debrief questions and sharing thoughts, and he said, and meant quite seriously, he said, I'm paraphrasing, but it was very close to saying every single one of our patient safety or patient harm metrics is red beads, because they get so excited anytime the number is a little bit better.

Mark Graban:
They get so discouraged when the number is a little bit worse. They want to reward this team and not reward some other team. And that was an aha moment. Now, unfortunately, because I was just doing a workshop, I don't know what he and that organization then translated into action. And it sounds like you're helping people kind of through some of that consulting and coaching, turning this into action.

Marcia Daszko:
Yes, because when I work with leaders, executive teams, boards, whoever, I use a three phase approach to help them. So first I went to phase one, assess, where are they at today? So I don't do anything cookie cutter. I go in and I assess, where are you in your thinking, in your leadership, in your culture, and your communication and decision making and charting in your financials as a system. So phase one, where are they at?

Marcia Daszko:
And then based on that, I design a short, focused, hands on learning, experiential learning session so that we do exactly the exercises. And what did you learn and how does it apply? So when they walk out of the room. They understand their key business issues. They have a plan.

Marcia Daszko:
They know who's going to do what. They have teams focus. They are going to look at data in different ways. They're going to create process flows and so forth. And then phase three is helping them apply those new ideas that they've learned in a couple of days.

Marcia Daszko:
And I see personal transformation, new vocabulary, new communication, interaction. I had one executive team that came into the room for two days, and before we got started, they kept moving around, and I thought, what are they doing? And I realized, oh, they sat next to somebody and said, oh, I don't want to sit next to that person. Oh, I don't want to sit across from that person. They kept moving, and I thought, I have never seen this before.

Marcia Daszko:
What have I gotten myself into? We went through the two days when they had walked in. They judged, blamed, criticized, yelled at each other. They were not a management team. They were managers who did all these behaviors.

Marcia Daszko:
But when they walked out, they hugged each other and said, have a safe drive home.

Mark Graban:
Yeah.

Marcia Daszko:
It was an amazing transformation that began, and that company owner had called and said, marcia, I've got a financially healthy company at 30 million, but I want to take it to 35 or 40 million. And we've got all these problems. Can you help? And then that's when I took a look at the company. I brought them together for the learning.

Marcia Daszko:
Then I worked with them for a few years, and they went from 30 to 300 million.

Mark Graban:
Wow.

Marcia Daszko:
They had personal transformation. They came together so supportive of each other like never before. And then they were totally focused on wowing their customer, giving them the customer experience like never before. They were ecstatic when they had that 300, but it was never a goal. I never let them say, oh, we're going to go to 100 million or 200 million.

Marcia Daszko:
It was just like, I have no idea where you're going.

Mark Graban:
Right. Well, I mean, 10x growth is a huge difference than 10% growth. And I'm sure it required transformation to be able to make a leap like that. Your observation is one that I've seen even in healthcare, calling it a leadership team or a senior leadership team. It's a collection of executives, and they each embody the silo that they're responsible for.

Mark Graban:
And that seems to be a huge impediment to trying to really operate as a health system. Again, using that word doesn't necessarily make it true. It's a healthcare organization.

Marcia Daszko:
Yeah. I find it interesting that, especially with doctors, they have to look at the body as a system when there's a problem. And in order to cure a person, look at the system. But yet the way they run their healthcare, medical organizations is not systems thinking at all. It is silos.

Marcia Daszko:
They talk about change management, they talk about departments, and they don't understand what each other is doing. And until they understand system thinking and system optimization, healthcare is going to struggle. Medical organizations, medical device, whatever, in that sector or any sector, they will struggle.

Mark Graban:
Yeah. And a couple of the best healthcare ceos that I've met and talked to and learned from that are best at thinking about systems are internal medicine specialists, because they are thinking about the person as a system where there is a trap, even then, of siloed thinking when it comes to somebody who only works on certain body parts. I have a friend, it's a quick story, but her husband had a bad bicycle accident and had, I think, a broken pelvis and a broken shoulder. And the doctor that was treating and thinking about the recovery of the shoulder advised him to get up out of bed and start walking. His body system was not capable of that.

Marcia Daszko:
Right? Oh, my God.

Mark Graban:
It was a different doctor, apparently dealing with the aftermath of the broken pelvis.

Marcia Daszko:
They were focused on parts that they specialized in versus the whole. I remember there's a fantastic story that Dr. Russ Aikoff shared, and he was working with a city back east, and there was the managers, and they were going around the table saying what the problem was for the city from their perspective. So it's an economic problem and it's an engineering problem, and it's a marketing problem, all these things. And he pulled them all back, basically, and said, it's a problem.

Marcia Daszko:
Take a look at it from the larger perspective and then think of, how do you ask questions and think about this as a whole system? The city has a problem for its residents, and then why is that? It's not a slice.

Mark Graban:
Well, a silo might want to claim the cause of the problem because that silo has a solution that their silo can deliver. Instead of thinking about the system, then looking at your website and some of the phrases and things that you talk about helping clients with, one of them in the list is identify your problems accurately to problem solve. It seems like you're kind of touching on that there, that if people are framing the problem in a non systems based way, if they're framing the problem as a card posted or not a posted note, but an index card scribbled some notes from a conversation with someone recently of, like, we might say the problem is low productivity, but they might be defining. So that's a siloed metric, and they might be blaming the workers for not being productive. So you have to help people reframe or accurately frame the problem as what it is without a blaming siloed view.

Mark Graban:
Right?

Marcia Daszko:
Exactly. So oftentimes people identify this is a problem, but they don't accurately identify a problem because for one thing, they're looking at the symptoms and they don't even go to the root causes of a problem. So until they even can talk about the root causes, the interdependencies of the causes, that's causing probably not one problem, but probably multiple problems, until they can have that discussion and think about what are the assumptions that we're making? What are the beliefs that we have. So they're getting, let's say, lower bad results or lower productivity or losses instead of profits and things like that.

Marcia Daszko:
But those are all the outcomes. And too much focus is usually on outcomes instead of going all the way back to understand what's the process, what are the causes, what are the even further back assumptions and beliefs that we have about this and what are we trying to accomplish? Because generally between the purpose and the result, there's a lot of complexity and waste that has been built in. And people are, you mentioned the term before, status quo. Oftentimes they say, well, that's the way it is.

Marcia Daszko:
They accept it because it's what they know. And they don't quote unquote, change it or improve it because they'll just say, well, we've always done it that way. People won't change because we've always done it that way, instead of thinking they have to. Leadership, it's up to leadership to say, we need to improve. We need to improve for better results, for customer expectations, for customer experiences, to have a healthy work environment for hundreds of reasons.

Marcia Daszko:
And people are only going to improve together if they believe leadership, if they trust leadership, if leadership communicates effectively and they see that leadership is also working to make improvements, because if leaders say one thing and do nothing, there won't be any improvements with the staff either.

Mark Graban:
Right? Want to ask one other question before I'll pivot to wrap up talking about the book pivot, disrupt, transform by Marcia Daszko. One of the other things in the list of concepts and things that you work with people on, I'll think back to the Red Bead game again. It says on your website, accelerate efficient, effective, data driven decision making. Now, like people have talked a lot the last couple decades, data driven decision making.

Mark Graban:
But thinking back to the Red bead game, when you fire the bottom three Red Bead producers. That is data driven, but I would say not effective in improving company performance. Right.

Marcia Daszko:
Right. So what is the system that's been created that is having that output? So if you want to change, I often ask a question, are you getting the results that you want? If not, look back, change the system.

Mark Graban:
Right.

Marcia Daszko:
It's not about changing the people, not about blaming the people, which is often what happens. But if you're not getting the results that you want, it's the system that's producing them, which then goes back another step, which means leadership thinking has to change because leaders create the system.

Mark Graban:
Right.

Marcia Daszko:
Leaders create the system, and only leaders can make that change to the system. Yes, employee, this is sometimes controversial in my book, or when I'm talking about it. People love to hold other people accountable. And I say there's a huge difference between accountability and responsibility. Leaders are accountable, and employees or teams are responsible for contributing ideas to improve processes and systems and so forth.

Marcia Daszko:
But they can't change the system. Only leaders can do that. So leaders are accountable.

Mark Graban:
Yeah. I mean, people might be able to continuously improve the bad system, but that's not really what's necessary.

Marcia Daszko:
Transform it.

Mark Graban:
No, I mean, being more efficient with the paddle is not going to, that's not a meaningful system change. And when people ask, like, okay, how do we filter out the red beads and remove them from the container instead of dumping them back in every time? That's an example of a system change. But when you say leaders create the system or senior leaders are most responsible for the system, I've had people push back and even criticize me for saying, well, okay, you say, don't blame the workers, but you're blaming management, and that's bad. Blaming is bad, but I'm like, well, I think management is in a different situation where they may be beholden to a system like quarterly Wall street financial expectations or other elements of really big picture.

Mark Graban:
Didn't mean, I don't know, should I be defended there a little bit, or is there a chance I'm blaming executives inappropriately or unfairly?

Marcia Daszko:
Dr. Deming blamed them.

Mark Graban:
Yeah.

Marcia Daszko:
It's up to leadership. Like he said, there's no substitute for leadership. And if people don't want to lead, don't want to be held accountable, then they shouldn't lead. In fact, if they don't want to be held accountable, they are not leaders. They're executives with titles and positions and lots of money.

Mark Graban:
Yeah, well, thank you for, okay. I feel a little more confident in my position around some of that maybe I don't articulate it well.

Marcia Daszko:
Just quote Dr. Deming and say, substitute leadership.

Mark Graban:
So, Marcia, the book pivot, disrupt, transform. One thing I was going to ask you, you touched on this earlier. Maybe I can ask you to elaborate here the three fundamental business strategies. You could tell us a little more about that. And do companies tend to choose?

Mark Graban:
Does that tend to evolve? Is there overlap in these three strategies?

Marcia Daszko:
I think many executives adopt Hope as a business strategy.

Mark Graban:
How's that working?

Marcia Daszko:
Sorry. Hope is not a business strategy, but it's the integration. It's the interconnectedness of quality, continual improvement and innovation as business strategies. They're interconnected and you don't do one without the other because, for example, you can improve and improve and improve and improve. The buggy whip.

Mark Graban:
Right. Rotary phone.

Marcia Daszko:
Yes. It doesn't get you to the horseless carriage, the car, the electric car, the flying car. It takes innovation as a business strategy. So improvement alone is not a business.

Mark Graban:
Yeah.

Marcia Daszko:
Quality alone. We might have great quality today with something, but it doesn't mean it's going to be sustainable unless we're doing continual improvement.

Mark Graban:
And you think of Silicon Valley companies? I'm a huge fan of Apple products. They tend to delight me and serve me well most of the time. I think quality, continual improvement and innovation. I'm not rushing out to buy this new headset, innovation, but for my think, you know, there are companies even, I'm thinking California.

Mark Graban:
Again, I don't know if you eat in and out burger. Yes, it's popular.

Marcia Daszko:
It always has a long line.

Mark Graban:
There's quality and continual improvement. I don't know how much innovation, but I think innovation around process and how well they manage those drive through lines compared to what other. There's some innovative practices, even if it's not an innovative product. Right?

Marcia Daszko:
Yes. And over time, maybe they're stable. I don't know about their business intimately enough to speak to it, but maybe they have stability right now and they have a mindset of continual improvement. And then at some point they may have to think about innovation. I think McDonald's has had to go through that somewhat.

Mark Graban:
McDonald's seems, yeah. To make attempts at innovation and new product development. Some fast food chains are always introducing something new. And then in and out, I think is kind of locked in on like, hey, this is what we do and we do it well. I think their fries are a little bland.

Mark Graban:
There's opportunity for continual improvement. I was going to ask you, Deming, people tend to use the phrase continual improvement. Do you nitpick about the phrase continuous improvement. Is that nails on the chalkboard to you or you're like, as long as.

Marcia Daszko:
You'Re improving, I'm used to it. It's better than nothing. But it's interesting because I was at the reunion for the intuitive Thinking network's get together Saturday in Southern California. I was thinking today, what year did we co found that nonprofit? And it was over 15 years ago.

Marcia Daszko:
And based on Dr. Deming's philosophy of management, Dr. Russ Aikoff, Dr. Tagucci and the loss function, several people foundational to new management thinking a better management philosophy. We started that.

Marcia Daszko:
Five of us co founded that organization, and then we decided to get together. About 50 people had a reunion on Saturday and I facilitated an open space session so that people could talk about, have conversations, pretty deep conversations about any topic they wanted to. And I remember that topic came out about what is the difference between continual and continuous? And don't ask me to repeat that answer, but it had something to do with discontinuous and continuous concepts in physics. And I recall that my friend Mike Beck explained know to someone else and I was listening to him like, well, I didn't study physics, but I understood.

Marcia Daszko:
I just, I understood enough to be able to say, yeah, I'm good with continual. I remember Dr. Deming saying that use continual, not continuous. So I've been good with that.

Mark Graban:
Well, Marcia, I want to ask one other question, looking at some of the talks that you give. One of those talks is titled using part of, I think a pretty famous deming quote, survival is optional. Maybe as a final question here, kind of tell us about that phrase and that idea and what it means to you and the companies that you're helping. Survival is optional.

Marcia Daszko:
And this is based on the theme of my book, too. And that is there's a fork in the road and executives can take one fork, which is full of management fads and trends and the next shiny thing and quote unquote best practices. And they can be followers of what everybody has done before. And, oh, I have a company. So now we're adding performance management and holding individuals accountable and arbitrary numerical goals and all these things.

Marcia Daszko:
We're going to follow that path. That is a path to destruction over time, sometimes slow, sometimes fast. We've got 90% of startup companies fail, right? And we've seen over 70% of Fortune 500 companies fail. Why is that?

Marcia Daszko:
Because they took that path. A good part of it. Other people, leaders who want to lead people and manage systems with a new philosophy of management based on a theoretical foundation of management thinking that Dr. Deming taught, if they take that path, they will also have challenges asking questions about beliefs and assumptions and customers and how do we create better experiences, and how do we work together better as a team? What's our constancy of purpose?

Marcia Daszko:
By what method? What do we stand for in actions and behaviors, not just words. So a whole strategic compass that I developed that helps leaders continually improve and innovate and create new markets and create new healthy organizations and hopefully contribute to a healthier society. So that's where survival is optional. They have a choice.

Marcia Daszko:
Do you want to be lazy and grab on to the old ways of doing things, or do you seriously want to lead people? And it means being a provocative thinker and continually learning. And the executives who tend to have more success will create learning organizations. They will invest in their people. They will look for creativity.

Marcia Daszko:
They're not afraid to have town hall meetings, for example, and listen to their people who are full of ideas and then try new things like you talked about with your latest book about the mistakes that make us. Making mistakes is a step in the learning journey, and we all have to be part of learning journeys and let go of those. We take the lessons forward and we let mistakes go to the past because that's how we get to experience new futures.

Mark Graban:
Yeah, that's very well said. And thank you for mentioning the book. And you made me think of a phrase. Timothy Clark, who did a blurb for the book, says here, making mistakes is not a choice, learning from them is. So you'd like to think learning wouldn't be optional.

Mark Graban:
Back to your point and Dr. Deming's point. It is optional. Survival is optional. Progress and innovation are optional.

Mark Graban:
But hopefully that's the option people choose.

Marcia Daszko:
Exactly. Yes. If fear doesn't get in their way or arrogance, I find that I look to work with people who are open to learning and committed to that and have the courage to apply new learning. If they don't have those qualities, I can't really help them.

Mark Graban:
Yeah, Marcia, I think we'll end it. On that note, we've been joined again here today by Marcia Daszko. This has been provocative and thought-provoking, and it's been fun. Thank you for your stories and your insights. I feel like we could probably do another whole long discussion on why change management is a fad and why you don't like that.

Mark Graban:
But maybe a topic for another day. But I will put links to Marcia's website in the show notes. The book, her most recent book, again, is pivot, disrupt, transform, how leaders beat the odds and survive. Marcia, I'm really glad we could do this. Thank you for being my guest here.

Marcia Daszko:
Thank you for having me. Just really enjoyed this conversation. I love when we can have a robust conversation and kind of really dig into the concepts. Fun. Thank you.

Mark Graban:
It was. Thank you for that.


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Mark Graban
Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.

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