PDSA into the Unknown

Menlo Park Associates, LLC

PDSA Into The Unknown
Moving ahead in the face of
uncertainty

Mensa Regional Gathering
SEMMantics XXIX
May 5, 2007 Troy, Michigan

© Menlo Park Associates, LLC 1

PDSA into the Unknown

Moving Ahead



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.


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
Weather Team.


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.


Types of Problems

Certain Uncertain

Traffic
Simple Shopping
Stock market

Mathematics Global warming
Complex
Chemistry Economics



During WWII
US Armed Forces used
Pacific Islands as bases:
Impacted local economy
Population became
accustomed to supplies
delivered by planes



At the end of the War
Islands were abandoned
Left behind a big problem:
How to recover:
Go back to the original island
economy and way of life?
Bring back the planes?



Their Solution
Do what they saw the
Americans doing that caused
the planes to land bringing
supplies.
Bamboo huts
Bamboo desks
Bamboo microphones
Saying things into them they
heard said by the Americans
i.e. creating a “cargo cult”


Operating Without A Theory

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



How Not to Solve Problems



Saturday Morning Physics
Uncertain Science, Uncertain
World
by Henry N. Pollack
University of Michigan

© Menlo Park Associates, LLC www.amazon.com 12


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 scales
uncertain tipping points
Causes and consequences of problems are non-linear.



What Scenario Are We In?

© Menlo Park Associates, LLC www.worldclimatereport.com/index.php 14


Scenarios (1)



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.



A Really Great Slide

© Menlo Park Associates, LLC www.jpl.nasa.gov/images/earth/coastalerosion-chart-browse.jpg 20


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.



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.”



Dr. W. Edwards Deming

© Menlo Park Associates, LLC www.deming.org 23


Deming’s System of Profound Knowledge

Appreciation for a System
A system is a network of interdependent components that
work together to try to accomplish the aim of the system.
Theory of knowledge
Management is prediction. Knowledge is built on theory.
Understanding of psychology
Knowledge about variation
Life is variation. Special vs. common causes of variation.


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.


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.


Understanding of Psychology

Psychology helps us to understand people and
interaction between
people and circumstances,
customer and supplier,
teacher and pupil
manager and people managed
How are people different?
How are people motivated?


Knowledge About Variation

Special and common causes of variation
Avoid 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.



Stabilize Process Performance



Continual Improvement

Uspec = 19

Lspec = 7



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.


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



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...



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.



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.



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.



Act in the Unknown

1. Decide whether to go back to the planning step, or
2. Implement the incremental action on a larger scale,
or
3. Decide if the incremental action needs refinement
and define why and how.



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


Keeping Track

(j)
ty

1

2

4

5
Level 1 of
Probability

bili

gy

gy

gy

gy
gy
VALUE of
Scenario (i) being

ate

ate

ate

ate
ba

ate
Analysis Strategy (j)
the TRUE situation …
Pro
under Scenario (i)
Str

Str

Str

Str
Str
Scenario 1
Scenario 2
Scenario (i) p(i) v(i,j)
Expected SUCCESS
Scenario 4 of Strategy (j) =
Scenario 5 SUM(v(i,j)*p(i))
…

100% S(j)


Failures

We also call these learning opportunities
Some 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



Successes

Manhattan Project
There 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.



Partial Successes

Toyota Prius electric hybrid car
Uses 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.


Why It Is Difficult
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 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



Applications

Global policies
Global warming
Global economics
Outsourcing, developing countries
National policies
Corporate planning



References/Reading

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.


Contact Information
Richard L. Bollinger


618 Fifth Street

Ann Arbor, Michigan 48103

+1.734.662.7752

rick@menloparkassociates.com

www.menloparkassociates.com

PDSA into the Unknown

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