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Menlo Park Associates, LLC © Menlo Park Associates, LLC 1 PDSA Into The Unknown Moving ahead in the face of uncertainty Mensa Regional Gathering SEMMantics XXIX May 5, 2007 Troy, Michigan

PDSA into the Unknown

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Electric cars have more to do with global warming than you think. They are both involved with solving extremely large problems in the face of uncertainty. We are tempted to do research, look for silver bullets, or wait for issues to be clarified. But, the future will never wait. It will unfold in ways we cannot always anticipate. Dr. Henry M. Pollack, author of "Uncertain Science, Uncertain World" has given us some useful characteristics of our future and strategies for dealing with this great unknown. Dr. W. Edwards Deming has bequeathed us much, including Plan-Do-Study-Act. These are two great sets of thoughts. They are rich veins of wisdom that can be combined. This presentation shows how they can be applied, and should be applied, to issues of great complexity and uncertainty. How we can, and must, move forward in the face of uncertainty. Move forward into the Unknown.

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Page 1: PDSA into the Unknown

Menlo Park Associates, LLC

© Menlo Park Associates, LLC 1

PDSA Into The UnknownMoving ahead in the face of

uncertainty

Mensa Regional GatheringSEMMantics XXIX

May 5, 2007 Troy, Michigan

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PDSA into the Unknown

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© Menlo Park Associates, LLC 2

Moving Ahead

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PDSA into the Unknown

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Moving Ahead

The University of Michigan team won the 1990 GM Sunrayce.They had very good students, sponsors & technology.They were able to simulate the performance of their vehicle under many different scenarios of future weather conditions.This was because they were the only entry to have a complete Weather Team.

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The University of Michigan team won the 1990 GM Sunrayce.They had very good students, sponsors & technology.They were able to simulate the performance of their vehicle under many different scenarios of future weather conditions.This was because they were the only entry to have a Weather Team.

Moving Ahead

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Complexity & Uncertainty

Every large organization should have a Weather Team.Governments, companies: public and private, profit and non-profit.

Organizations need to articulate future needs.And implement a methodology that takes them into the future.

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Global warmingEconomics

MathematicsChemistry

Complex

TrafficStock market

ShoppingSimple

UncertainCertain

Types of Problems

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During WWII

US Armed Forces used Pacific Islands as bases:

Impacted local economyPopulation became accustomed to supplies delivered by planes

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At the end of the WarIslands were abandonedLeft behind a big problem:

How to recover:Go back to the original island economy and way of life?Bring back the planes?

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Their Solution

Do what they saw the Americans doing that caused the planes to land bringing supplies.

Bamboo hutsBamboo desksBamboo microphonesSaying things into them they heard said by the Americans

i.e. creating a “cargo cult”

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Operating Without A Theory

In management consulting terminology this is what is called a “Best Practice”.

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How Not to Solve Problems

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Saturday Morning Physics

Uncertain Science, Uncertain World

by Henry N. PollackUniversity of Michigan

www.amazon.com

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Characteristics of the Future

More research does not mean less uncertainty.Research hardly ever finds a silver bullet or the one right answer.Some issues cannot wait for clarification.

long development time scalesuncertain tipping points

Causes and consequences of problems are non-linear.

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What Scenario Are We In?

www.worldclimatereport.com/index.php

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Scenarios (1)

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Characteristics of Solution

The benefit/cost ratio of remediation is greatest when a problem is first recognized.Uncertainty will never be eliminated.Surprises are the rule, not the exception.Uncertainty must not lead to analysis paralysis.‘Optimal’ strategies may not be.

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A Really Great Slide

www.jpl.nasa.gov/images/earth/coastalerosion-chart-browse.jpg

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Principals to Follow

Reduce uncertainty through action, not research.Take incremental steps.Explore a wide range of future scenarios.Seek robust strategies that do well across many scenarios.Monitor the future as it unfolds.Make mid-course corrections, as needed.

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Dr. Pollack’s Philosophy

“…develop a long-term vision and make plans to move ahead—but to be prepared for many course corrections along the way, as the future unfolds quite differently than you anticipated.”

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Dr. W. Edwards Deming

www.deming.org

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Deming’s System of Profound Knowledge

Appreciation for a SystemA system is a network of interdependent components that work together to try to accomplish the aim of the system.

Theory of knowledgeManagement is prediction. Knowledge is built on theory.

Understanding of psychologyKnowledge about variation

Life is variation. Special vs. common causes of variation.

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Appreciation for a System

Systems must have a clear AIM.System components are interdependent.Sub-optimization must be eliminated. The obligation of a component is to contribute its best to the system, not to maximize its own production, sales, or profits.Optimization for everyone concerned should be the basis for all negotiation within the system and between any of the components.

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Theory of Knowledge

Management is prediction: modeling a process and projecting its performance into the future. Knowledge is built on theory. Knowledge is not the same as information. Knowledge also implies prediction. When prediction fails, then a new theory is needed.Organizations need such knowledge to understand how they operate and do continual improvement.

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Understanding of Psychology

Psychology helps us to understand people and interaction between

people and circumstances, customer and supplier, teacher and pupilmanager and people managed

How are people different?How are people motivated?

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Knowledge About Variation

Special and common causes of variationAvoid mistaking one for the other.

A process is stable when its variation is predictable.Eliminate special causes of variation.

Only a stable process can be improved.Reduce variation or change some process aspect by under-standing common causes of variation and using a cycle of continual improvement.

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Stabilize Process Performance

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Continual Improvement

Uspec = 19

Lspec = 7

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The Deming/Shewhart Cycle

Plan a change or a test, aimed at improvement.Do – carry out the change or the test (preferably on a small scale).Study the results. What did we learn? What went wrong?Act – adopt the change, or abandon it, or run through the cycle again.

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Applying PDSA towards the Unknown

1. Plan: define scenarios, strategies, goals, and incremental actions to attempt.

2. Do: pilot the plan or experiment to verify its assumptions.

3. Study the results of the pilot or experiment.4. Act to implement the incremental action or decide

on refinements

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Plan for the Unknown

1. Explore a wide range of starting assumptions and conditions and future scenarios.

2. Define goals against which potential future outcomes will be evaluated.

3. Define questions that will reveal progress towards the goals.

more...

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Plan for the Unknown

4. Define measures that will answer the questions, (including procedures and tests that will provide operational definitions).

5. Plan incremental actions to make progress towards the goals.

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Do towards the Unknown

1. Pilot the incremental action to learn something about its consequences on a larger scale, or

2. Perform an experiment to test assumptions or otherwise verify the plan.

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Study what was Unknown

1. Check the experiment to see if the plan needs refinement, or

2. Check the measures to see if the pilot incremental action verifies the plan and/or indicates refinement needed in the plan.

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Act in the Unknown

1. Decide whether to go back to the planning step, or2. Implement the incremental action on a larger scale,

or3. Decide if the incremental action needs refinement

and define why and how.

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PDSA into the Unknown

Repeat as needed.

1. Plan: refine scenarios, goals, and incremental actions.

2. Do: pilot or experiment to verify the plan.

3. Study the results of the pilot or experiment.

4. Act to implement the incremental action or decide on refinements

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Level 1 Analysis

Prob

abilit

ySt

rate

gy 1

Stra

tegy

2St

rate

gy (j

)St

rate

gy 4

Stra

tegy

5

Scenario 1Scenario 2Scenario (i) p(i) v(i,j)Scenario 4Scenario 5

100% S(j)

Keeping Track

Probability of Scenario (i) being the TRUE situation

VALUE ofStrategy (j)

under Scenario (i)

Expected SUCCESS of Strategy (j) = SUM(v(i,j)*p(i))

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Failures

We also call these learning opportunitiesSome failures (like the Tacoma Narrows Bridge) occur in belief we are not in the Unknown.Electric cars (GM, Ford, and others)

Single scenario, non-robust, solution

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Successes

Manhattan ProjectThere were actually two atomic bomb projects.One used Uranium and a linear trigger system.A second used Plutonium and a spherical trigger system.They both worked.

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Partial Successes

Toyota Prius electric hybrid carUses gasoline engine to charge batteries and drive electric motors.Cannot be charged up overnight (battery is too small and no electric connection available.)For $10-$12,000 you can upgrade the batteries in a Prius and add a plug you can use to charge them overnight.A robust strategy even Toyota missed, but likely to be corrected now that there is demand for it.

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Perception is distorted by the lens of complexity.Too many parameters with non-linear relationships

Natural inclination is to predict future by extending the past.Radio people did not invent television.RCA did not invent the transistor.CBS did not invent CNN.Lexis/Nexus did not invent Google.IBM did not invent the personal computer.Keds did not invent Nike.

It is hard to hit the bulls-eye when you cannot see the target.

Why It Is Difficult

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Why the Method Helps

Uncertainty is reduced through action, not research.Real lessons and understanding are learned early.

Incremental steps reduce LARGE errors.Real scenario is likely in a wide range of scenarios.Effective strategies are more likely to be found.Feedback permits mid-course corrections.

Before major investment is lost Before tipping point is reached

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Applications

Global policiesGlobal warming

Global economicsOutsourcing, developing countries

National policiesCorporate planning

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Thank you

www.thehenryford.org

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References/Reading

www.thehenryford.org

1. Deming, W. Edwards. 1993. The New Economics. Cambridge: Massachusetts Institute of Technology.

2. Pollack, Henry. 2003. Uncertain Science, Uncertain World. New York: Cambridge University Press.

3. Pollack, Henry. 2006. Scientific Uncertainty and Public Policy: Moving on Without All the Answers. Presentation for Saturday Morning Physics, University of Michigan, March 18, in Ann Arbor, Michigan.

4. Lempert R., Popper, S., Bankes, S. 2003. Shaping the Next 100 Years. Santa Monica: RAND.

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Contact Information

Richard L. Bollinger

Menlo Park Associates, LLC

618 Fifth Street

Ann Arbor, Michigan 48103

+1.734.662.7752

[email protected]

www.menloparkassociates.comwww.thehenryford.org