(2023-03-16) Chin Operational Excellence Is The Pursuit Of Knowledge

Cedric Chin: Operational Excellence is the Pursuit of ‘Knowledge’. This is Part 3 of the Becoming Data Driven series. In How to Become Data Driven, I introduced process behaviour charts...

Donald Wheeler excerpt, where he says that introducing these charts to your company are how you “get to the kind of thinking that enables continuous improvement”.

the obvious next question you might ask is: what is the type of thinking that it leads to, that Wheeler and others talk so much about?

The process behaviour chart is unsurpassed for focusing data so that the user can formulate the interesting and important questions.

The traditional approach inevitably results in wasted effort and missed opportunities. The use of traditional approaches guarantees an excess of both kinds of mistakes people make when interpreting data.

process behaviour charts are the beginning of knowledge because they help you ask the right questions

It turns out that Wheeler is using a very specific definition of the word ‘knowledge’ when he makes these statements. One of the more annoying things about Understanding Variation is that it is not clear that he’s doing this if you’re just reading the book

The word ‘knowledge’ is related to two ideas in the broader SPC literature; both bits point us towards the type of thinking that Wheeler is talking about.

The first idea is something we’ve covered before: SPC practitioners believe that ‘management is prediction’.

if I’m being honest, my growth decisions around this very blog are more gut-driven than rigorously tested, which is a little embarrassing to say out loud.

In most cases, though, the things you do somehow work out, and perhaps the business is able to grow — but you’re never really sure if your actions or your predictions are as good or as causal as they can be.

Deming argues that if management is prediction, then what you need to seek as a business operator is not truth — for truth does not really exist in business — but instead what you should seek is knowledge, where knowledge is defined as “beliefs or theories that enable you to make better predictions”. (thinking in bets)

Putting these two ideas together gives us a better idea of what Wheeler means.

When Wheeler says that usage of process behaviour charts is the ‘beginning of knowledge’, what he means is that such charts should lead you — and your organisation! — to ask the kind of questions that will slowly build into a causal model of the business in your heads.

as with most things in SPC, simple axioms tend to lead to interesting practices. Let’s dive in.

The Process Control Worldview

The good news is that we’ve already looked at one such example of this worldview in action: this is, essentially, the goal of the Amazon Weekly Business Review (WBR).

Bezos learnt this style of operating from Jeff Wilke — who came from an operations background, and whom Bezos called his ‘tutor’. “Becoming a better operator” is just code for “getting better at predicting business outcomes”.

SPC is primarily used in production lines. But what I got from talking with Colin is that the process control mindset is really the more interesting, valuable thing that may be taken and applied to businesses outside of manufacturing.

I’ll give you another example of the mindset in action, from early-ish Amazon.

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