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January 23, 2024

Deming’s System of Profound Knowledge

By John Willis

This post is adapted from the book Deming’s Journey to Profound Knowledge by John Willis.


Over his lifetime, W. Edwards Deming eventually codified his system of systems and named it the System of Profound Knowledge. In Deming’s masterwork, The New Economics, published in 1993, the Master simplified his 14 Points for Management into the four elements of the System of Profound Knowledge:

  • The Theory of Knowledge: a theory for knowing how you know something
  • The Theory of Variation: a theory of how to measure what you know
  • The Theory of Psychology: a theory of how to understand human behavior
  • Appreciation of Systems and Systems Thinking: an understanding of interconnectedness 

Upon learning he named it “profound,” many people (myself included) initially think, Whoa, that’s a bit cocky! But the more you learn about Ed, the more you realize how humble, how soft spoken he was and how he readily gave credit where credit was due. In his books, it seems like there’s a footnote on nearly every page where he thanks someone for an idea, an insight, or just the inspiration for the topic. His correspondence with people from all over the world, from economists to politicians to philosophers, now housed in the Library of Congress, show his insatiable appetite as a willing student looking to learn from others. Only in studying him more carefully to write this book did I come to understand what he really meant by “profound.”

To profoundly change a system, whether that be how you manufacture a product or how we educate students, requires know-how outside of that system. If the system had that knowledge, then it would change itself on its own. That’s why managers often bring in high-priced consultants: they know their business has a problem, but they’re too close to the problem to see it. It requires someone from the outside to step in.

But the beauty of Ed’s System of Profound Knowledge is that it doesn’t require someone from the outside. It provides a way for the owners of a system to bring about their own profound change, no third parties required. But why did Ed use the metaphor of a lens to describe the System of Profound Knowledge?

When trying to transform people, organizations, and even governments, the System of Profound Knowledge is very much the same: you have to expertly balance multiple elements in order to see a perfect picture through the lens. In the case of Deming’s system, there are four. Without all four, the route to profound change or transformation isn’t clear.

The Theory of Knowledge

The first element, the theory of knowledge, essentially asks, “How do you know what you know?” Whereas people often react to problems with knee-jerk reactions and helter-skelter decisions, Deming saw that every action should be grounded in tangible evidence, i.e., the philosophy of pragmatism. Life itself is too complex for any one person to understand. Therefore, a person can’t rely only on what they think—they have to test it before they can truly know something. Think back to the cost savings of a nine. 99.99% uptime sounds great  .  .  .  but is it practical? Is there an economic limit to the improvement? Deming gave us an evolved version of the Shewhart cycle, the PDSA loop, as a way to apply the scientific method to acquire knowledge on any topic.

The Theory of Variation

Deming saw the second element, variation, as a force of nature, a natural law that couldn’t be avoided, such as the variation of the punch card operators inputting data for the Census: Perfection was impossible. The goal, then, should be to understand variation and, more importantly, to differentiate between the two types of variation. One kind is predictable and can be planned for. The other kind can’t be predicted. Sometimes it can be addressed, but some events are “black swans,” freak occurrences that may never happen again. The key is understanding the difference between the two so that managers don’t waste time trying to correct the wrong things. Remember, misunderstanding variation is the root of all evil.

The Theory of Psychology

Third, Deming was a student of human behavior and psychology. In fact, Doris Quinn told me that in the four-day seminars she assisted him with, perhaps only 20% was devoted to variation and statistical process control. He spent most of his time talking about managing people and leadership.

As I noted in the book, I believe that Deming saw Doris’s story about dengue fever as a prime example of how to work with human psychology instead of against it. But ever since Hawthorne, he’d been mulling over the differences in management styles: Taylorism, which assumed workers would put forth the minimum effort possible, versus the kind of intrinsic motivation he lived, believed in, and saw in full force in Japanese companies.

At Hawthorne, he recognized that improving a system was determined by the efforts of the people within that system—that human beings were an integral part of the process, not a gear to be swapped out at the change of each working shift. More than that, he came to recognize that those workers could be a wealth of ideas and insights on how to improve the system. He came to have a profound respect for the contributions of individuals working in a process. Instead of dismissing or minimizing the human element, as Fordism and Taylorism did, his approach elevated it, putting it front and center.

Appreciation of Systems and Systems Thinking

The fourth element is the knowledge of systems thinking. Few people intuitively think in terms of a system; Deming was one of them. Deming would refer to this as an appreciation of a system. To him, seeing the world as a network of interconnected systems was as natural as gravity: regardless of your perspective or understanding, it was a fact of life. The world working in systems wasn’t a theory for him; it simply was.

Most people can see only the problem in front of them. The Master, on the other hand, could “see” the factors, elements, and variables that contributed to it. He saw how everything worked together, how the factors of a problem came into existence several steps ago. For Deming, the method was more important than the outcome, like how Sakichi Toyoda prioritized improving his machines over simply building as many as possible, or how Paul O’Neill prioritized safety, which naturally resulted in higher-quality operations. Get the process right and you’ll naturally get the right results. Put another way: don’t optimize the components of a process—optimize the process itself.

Before you can make something better, you have to understand it. Deming said you can’t understand something completely unless you’re looking through the lens of all four elements. I think of it like the story about the blind men who encountered an elephant but could identify it only by feel. One man felt the tail and declared the unknown entity was a rope. Another man felt the elephant’s ear and confidently said it was a frond fan. The third blind man felt its leg and asserted the thing was a tree. The last man felt the trunk and quickly drew his hand back, fearful of the big snake he’d laid his hands on. Without someone there with a broader perspective, the four men were each convinced they alone had the answer and that the other three were mistaken. Without all four elements of the System of Profound Knowledge, there is no profound knowledge; there’s only what each person is able to see.

In our next post, we’ll use these four elements of Profound Knowledge to understand a profound problem. One costing ten million dollars a minute.

- About The Authors
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John Willis

John Willis has worked in the IT management industry for more than 35 years and is a prolific author, including "Deming's Journey to Profound Knowledge" and "The DevOps Handbook." He is researching DevOps, DevSecOps, IT risk, modern governance, and audit compliance. Previously he was an Evangelist at Docker Inc., VP of Solutions for Socketplane (sold to Docker) and Enstratius (sold to Dell), and VP of Training & Services at Opscode where he formalized the training, evangelism, and professional services functions at the firm. Willis also founded Gulf Breeze Software, an award winning IBM business partner, which specializes in deploying Tivoli technology for the enterprise. Willis has authored six IBM Redbooks for IBM on enterprise systems management and was the founder and chief architect at Chain Bridge Systems.

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