In this episode, I had a conversation with Mike Beck. We dive deep into W. Edwards Deming's seminal perspectives on quality and their application in the automotive and healthcare sectors. Mike, with his vast experience at General Motors and Toyota, shares compelling stories and insights on how Deming's principles transformed his approach to engineering and management.
Mike Beck's journey began as a mechanical engineer at General Motors in 1979, a time when the company held a dominant market share. His career took a significant turn after attending Deming’s seminar in 1984, which profoundly influenced his perspective on quality and management. This episode captures Mike's evolution from a reliability and test engineer to a leader in statistical methods and quality improvement at GM.
Key Discussion Points:
Show Notes:
Mike's Email: mikebeck001@gmail.com
In this episode, I had a conversation with Mike Beck. We dive deep into W. Edwards Deming's seminal perspectives on quality and their application in the automotive and healthcare sectors. Mike, with his vast experience at General Motors and Toyota, shares compelling stories and insights on how Deming's principles transformed his approach to engineering and management.
Mike Beck's journey began as a mechanical engineer at General Motors in 1979, a time when the company held a dominant market share. His career took a significant turn after attending Deming’s seminar in 1984, which profoundly influenced his perspective on quality and management. This episode captures Mike's evolution from a reliability and test engineer to a leader in statistical methods and quality improvement at GM.
Key Discussion Points:
Show Notes:
Mike's Email: mikebeck001@gmail.com
John Willis: [00:00:00] Hey, this is John Willis again, another profound podcast. I think I've mentioned a couple of times the wealth of people I met at that In2In Thinking sort of reunion conference by Bill Bellows, and just the hits keep coming. I got a great guest today that just had some amazing stories and and just an incredible background.
I think you're all going to enjoy this. Mike, Mike Beck, why don't you go ahead and introduce yourself?
Mike Beck: Thank you, John. Nice to be with you. It was great meeting you at the In2In reunion and I look forward to having some more conversations with you. My background, I'm an engineer. I started that as my career and that's kind of how I think of myself.
I actually still maintain my P. E. license after 40 some years just for the heck of it. I went to Michigan State University and I was a mechanical engineering person. I joined General Motors out of [00:01:00] school. When I joined GM in 1979, it was a member of the fortune one. It was the biggest corporation in the world at 52 percent market share.
Of the domestic car market, and I was there for 15 years, and during that time that changed a lot. So early in the career reliability and test engineer, I competed for and won a General Motors fellowship, which meant that they would put me through a master's program. So I went to Northwestern for an MBA, Master of Management, they call it, came back thinking I knew most everything and went to the summer after I got out, 1984, went to my first Deming four day seminar, and I was just blown away.
A bunch of things clicked for me that I hadn't, you know, put together before. And I was hooked and I really went for the statistical [00:02:00] side of things as well as the leadership and transformation parts of what he, what I remember learning at the time. And that started me off. I had been assigned a development program was lead the guy for the short block of the quad four engine.
It was General Motors first high performance engine, four valve per cylinder. And I was responsible for the short block, everything to do with it. And I, I figured out that I could use some statistical methods, went to some Taguchi methods seminars learned about fractional factorial design of experiments, did a lot of work like that.
1988 or so during this time, I got the opportunity to do another Deming seminar and we decided to hire, not me, we, the senior management of my division had spun off. I started at Oldsmobile, then it became GM Engine Division, then GM Power Training Division, doesn't [00:03:00] matter. But in any case we hired Dr.
Deming, to be the consultant for our division. And I raised my hand real high, Jim Fallow said, I want to do this. And I got a little bit of grace to let me do that. And I ended up changing my career from engineering to improvement and was really fortunate in that we had a consultant, a full time joined the staff of the senior team.
Dr. Gypsy Ranney and learned so much from her. We got into a high high speed. Let's get a group of people who know this stuff built up in this organization. We created the Powertrain Statistical Network, and I was one of the co leaders of that. We had through Deming the the idea that we needed more statistical methods in the organization.
Another big investment by the company [00:04:00] was they put together a statistical master's degree program with Oakland University for a select group of people. There are about 25 of us, and we did a master's degree over four years, one class at a time, during work time. It was a Tuesday and Thursday morning classes.
Eight till 10. And so it took four years to get through that, but it came up with a came out with a master's in statistics. During this time, lots of seminars participated in Ohio quality and productivity forum events In2In events had the wonderful pleasure and great fortune of working with so many great people.
I got to know Brian Joyner, Tom Nolan, Jesus, a whole list of people, Mike Tweety Peter Schultes. Don Wheeler, just amazing, the people I got to hang out with, but the best thing about it [00:05:00] my role as one of the co leads of the Archery and Statistical Network, when Dr. Deming would come to our division, somebody had to go pick him up at the airport and take him to all the meetings.
And I was in the rotating group of folks who got to do that. And I, I spent several days and some, sometimes overnight at offsite kind of situations with Dr. Deming. Pick him up at the airport. Small talk. How's he doing? Carry his bag. I was the I was the bag man. And it was really interesting. We would get into a conversation with senior management folks, and the language was English.
The two parties, the GM management and Deming talking to each other, they didn't understand a word each other were saying. The GM guys talk with acronyms, inside lingo program names that were meaningless. Dr. Deming talked about profound knowledge and [00:06:00] said things that they were just like, what? Did he really say that?
My, my role in that was often to be a translator. GM, you know, Dr. Deming would say something and the guys would be, look befuddled and I'd say, well, what Dr. Deming is trying to say is when, you know, when you're implementing this program, you might want to think about, you know, X, Y, Z, and in addition to, you know, top down stuff.
Ah, okay. And then they would say something back with all these acronyms and Dr. Deming, what they're trying to say,
John Willis: it was
Mike Beck: very interesting and I learned a lot. Through a lot of experience. That's interesting. Before we get started and previously I told you a couple stories and I'd like to share one of them that was really good.
So Dr. Deming would be often talking about history and he was a physics PhD at Yale and I know he knew a lot [00:07:00] about. History of physics and knew knew a lot of people and I was a physics major for two years before moving to mechanical engineering. So I had something that I thought I could share some something with him.
We were talking. We were debriefing about how one of these meetings went with the GM execs, wherein things were left kind of confused. We weren't sure what they were saying. And I thought this was a good comparison to the Heisenberg uncertainty principle. Sometimes they wanted to leave things like it could have been either answer.
It was and so I, I asked him, I knew he would know this, but I wanted to just confirm that we were on the same page with what the Heisenberg uncertainty principle was. So I could then use that as the analogy of what the way they were thinking. And he said, Oh, when I said, you know, Heisenberg uncertainty, I get that much out of it.
Out before he said, I don't know [00:08:00] the Heisenbergs. Oh, yes. I knew them well. His wife made excellent apple pie and I was just so blown away. It's like, wow, I thought I was going to use this as a reference here. The guy knew the man and had dinner at his house and knew the wife and had pie. So just amazing.
The, you know, where he was in his life and where he'd been and all the giants he, he got to hang out with. Yeah, that was just like thunderstruck by that.
John Willis: I love that story. You know, I never, of course, I never got a chance to meet him. By the time I started really sort of understanding why he was so interesting to me, you know, he had been long gone, you know, but but it seems like to me he was you know, like, I think it's easy to say he didn't suffer fools, but he was pretty serious.
But, but like, that seems like such a classic way, you know, not, not, you know, Not to brag, not to tell you that, but like going to the, and the more important things in life, which is good food, right? Like, so all combined of [00:09:00] like who he kind of was like, not a braggart, like you said, had been in like some incredible places in his career, understood things at a level most people didn't.
But, like, when you ask him that, cut to the chase, you know, family, people, food, yeah.
Mike Beck: Yeah, and not suffering fools gladly, he definitely had that trait, but if you were sincere, if you just didn't know,
and
Mike Beck: honestly was asking the question with the intent to learn, he was the most patient. And, you know, kind to people, he was kind to me when I asked a lot of dumb questions.
And I saw that trait with him with many people. But I also saw him when somebody had a harsh thing to say in counter, counter a point he made with their view. He could cut the legs out from under somebody really, really quickly.
John Willis: I heard he was the same way with [00:10:00] management, too, if they were sort of fools, you know, that he was pretty brutal.
I love so, you know, one of the things I have my own sort of, yeah, I, as I've interviewed people, you know, over time, they talk about, you know, kind of call the greats, Doris Quinn called them the greats, right, Brian Joyner, Peter Schultes, you know, all these Gypsy Rainey I hear come up quite a bit.
And you know, I, I, when I first started sort of diving into to Deming, trying to understand what was going on here. I, I ran into some of the works by Peter Schultes and, and I did a little background and like, so I grew up a Catholic and I'd always be, you know, my parents would be dragging me, kicking me, screaming to church every Sunday.
And, and to me, I don't know, like I'm a good person, but like, like the, the only sort of bright spot of that day as a kid, having them, especially on a beautiful summer day, happened to be inside the church was, The one song I love which is [00:11:00] they'll know we are Christians by our love turns out he wrote that song I was like, oh my goodness.
So I I immediately tried to reach out to him, but unfortunately like most of the greats he was already gone. I'd like because I I'd watched a video from him. I'm like, oh this guy is just like that He's great. Then I googled and did a couple of things. I'm like, oh, that's the guy who wrote man I have to go ahead and contact him and It was too late.
So
Mike Beck: he was an amazing guy. He really was. And he was very big into change in psychology and how people change. And I, I, in one of the things I shared with you earlier one of the things I learned and I've always kept with me from him are the three conditions that allow change to happen.
When you're trying to make change in an organization, there's three conditions you have to have. The first one, he said, was, people need to feel good about themselves. And sometimes, you know, [00:12:00] it sounds like, well, what's that got to do with change? People's feelings, what difference does it make? It makes all the difference.
Because if they feel good about themselves, they're in a mental state where they feel confident, they can handle some change, they could do it. If you start by putting them down and make them belittling people and we got to change guys this you know, this isn't going to work the way you guys have been mucking it up.
That is setting the stage for disaster right off the bat. So start with that. Then the change has to involve the people's ideas. And after you've got that included, the change has to also involve their motivations. So those are some really interesting principles that I learned from him, and I've tried to follow that.
In my career, I've, I've made lots of changes after GM maybe we can get back and I can tell some, some more stories, but [00:13:00] whenever I've been in a situation and I'm, I'm, I'm, I'm, I'm. Applications of improvement guy. I'm not a theoretician. I'm not an academic. Whenever I've run into a situation where I was unable to achieve the change needed because my superiors were not on board, I would work on the situation for a period of time, and when I finally realized it wasn't going to change because they didn't get it, I was not afraid to change, and I would, I've made a number of career changes where it was the right thing to do because I was not being useful anymore in the organization.
John Willis: That was a, one of my good friends, early DevOps guy was, he had this great quote he'd always say, you know, if you can't change your job, change your job, you know. Yeah. So, I got a question. This might be a little meta, but you know, when, you know, some of the stuff I was researching during my book, right, you had sort of [00:14:00] Ford was, seemed to be at least in the automotive one of the earlier adopters of Deming's ideas.
You know, you had the documentary, you know the, you know, the sort of, the, How old stories of Peterson trying to contact Deming and bring him in and, and, and then, you know, sort of the, it seemed like General Motors was a little bit behind the curve on Deming stuff. And then there was probably some sort of publicity or like, you know, I guess I, again, I could have it this all wrong, but the Ford Taurus started being successful.
Ford started being sort of successful against GM, which really hadn't happened in like. You know, decades. Did you get a sense of that from, you know, some of the interviews I've had with other people that, that General Motors was sort of in this, like, You know, what's going on with the Deming thing?
What's for doing? Should we get them in here? I know you told a little bit about what you guys did. I
Mike Beck: think I think there was
John Willis: some of that.
Mike Beck: But I would say the 14th floor GM top brass, we're not really interested [00:15:00] in it interested in it. Directly, they would be appreciative to get some of the benefits of it,
but
Mike Beck: it was really this GM engine division, which became the GM power train.
That was a subsection within General Motors itself. And that organization took the lead and we're really pushing hard It turned into the springboard for a much broader application. During this timeframe General Motors bought EDS Ross Perot and his organization. And with that, they got the satellite downlink transmission of video capability.
And we put on probably, gosh, I don't remember the number in the twenties to thirties, four day seminars where. Dr. Deming would, you know, do his four day seminar live in a venue. It would be all of Deming's spoken narrative would be broadcast. There would be [00:16:00] significant breaks where there would be docents, people who were On site in other sites.
I was one of those folks. And we would then conduct the experiment, the analysis, talk about the method, et cetera. And then we go back. So I was a participant in in a supporting role with probably, I'm going to guess 15 Deming four day seminars.
Wow.
Mike Beck: Yeah. It's interesting. He told many of the same stories, but I was mesmerized by it.
I would learn something new every single time,
John Willis: right?
Mike Beck: And I had I had a very strong, clear penmanship. I took notes in, you know, 0. 5 millimeter Pentel pencil, and I have stacks of notebooks where I was taking down poems. Oh, wow.
Oh,
John Willis: wow.
Mike Beck: I need to go back and do something with those.
John Willis: Yeah, you really should.
Boy, that could be, that could be a treasure trove of [00:17:00] you know, especially if they're very particular notes, but I'm sure they are. That's pretty awesome.
Mike Beck: So anyway, I think we, we then, those, those seminars broadened the base. Of people who were knowledgeable and interested in we had multiple divisions doing things.
John Willis: Your insights on, on just you know, I guess this is a really broad question and I always fear when I ask it, I might get like, that was a stupid question, but the, you know, like you know, going back to the Ford you know, like some of the things I've had this conversation with Bill Bellows on, like you know, in my book, I, I tried to sort of point out what you had Ford who invented in, you know, sort of invested in Mazda and And then you had that whole transmission story where the, the customers would say, oh, I only want the cars with the transmissions from, from Japan.
And, you know, and, and the engineers would be like, yeah, that doesn't make any sense. It's all to spec anyway. Right. And, [00:18:00] and, but I think, you know, Yeah, yeah. No, I mean, but I think that the thing that like there was a lot of pushback and then they were like, Oh my goodness. Right. And, and so there was a big aha, which, you know, I, I, I would guess was like heavily influenced by Deming's teaching after Peterson brought him in, but were there, what was the kind of insights or ahas that, that you, you all found in powertrain or in the engine?
About like, what was so special about using analytical statistics or control charts or just really deeply understanding variation.
Mike Beck: It was for GM, Ford had Mazda and that experience. GM had NUMMI the NUMMI plant in Oakland California. Right. It was a joint venture new United motor manufacturing incorporated Toyota and GM co owned that.
And I was on numerous study missions, the NUMMI to see what the heck's going [00:19:00] on. And it was a combination of the Toyota production system approach to leadership. Which is in the one paper that I sent to you very much got to do with senior management being involved in the details and aligning people and ensuring that people are understand what the job is.
And if they've got a problem or an issue that they're supported to get it fixed right away. But the statistical approach, the idea has to do with you've got a specification limit. And the physical device, whatever it is, sometimes smaller, it was better. And you can only be so big, but sometimes hit in the middle is good.
And that's the case for transmissions and engines. Usually there's an ideal fit for something. If it's too loose, it rattles. It's too tight. It creates heat and friction. The the Japanese were not happy with [00:20:00] just getting it within the specification limits. They wanted to reduce variation. And not only that they wanted to reduce variation and get the middle in the right spot.
And so there's a lot of engineering knowledge to, well, what is that right spot? And then there's methods of manufacturing knowledge. How do you do that? And how do you measure in a way that yields information that's consistent? How do you take action? That's all the statistical process control kinds of work.
All the early stuff I learned on that it was interesting. I'm trying to remember who had the reference book, but somebody had a reference book. And it was from the 1960s. And it was all from Tokai Rika, which was one of the Koretsu companies. I've still got, I've probably got notes of that somewhere that described all this and we, we work in that at General Motors powertrain [00:21:00] there are things called process indices, CP, CPK, CPM.
They've got to do with the spread of the variation of the the dimension or fit of interest. And the specification limit and CP is just that ratio. What percentage of the total is a plus or minus three Sigma statistical limits giving you. And then CPM includes the Delta, the deviation from the target.
So we were doing CP, CPK, CPM. I was involved in getting that going within GM engine division, then GM powertrain. And it's interesting. If you want to learn and improve, you should sample take data in a manner that highlights these problems if they exist, and I was involved with the quad four engine on the design and then I went through all this [00:22:00] stuff.
And then I was I was involved with it on the production and after it was in production, and I was ensuring that we were measuring and subgrouping selecting subgroups That would highlight the variation over time because there was, there was a disconnect still with this idea of improvement versus MBO meet the target.
Some senior guy had said, well, look, we all have to be hitting the target like this. And if you choose to sample a certain way, and you're only looking at CP you can sound like you're doing great because, You sample with the sample was over time. So you miss the trending it, it throws it into the variation that becomes your upper and lower control limits, and then you're doing better.
There's, there's ways to treat the the numbers, but you can sample in a way that highlights the problem if you, if it exists. And if you are interested in finding a problem that [00:23:00] exists, that's the right way to do it. If you're interested in not being called by the senior guy, how come you're missing the, the number, you would, you would choose to sample a different way.
I made a big point of that and had partial success. So how do you,
John Willis: so this is a dangerous question, but how do you, it seems to me like, how do you, how do you know what to highlight? In the subgroup sampling when you're looking for the problem like if you don't
Mike Beck: know if you sample five in a row, right at the same time, and the machine to see the machines will wear right so you've got a trend will happen over time.
If you sample five in a row, you will get a very narrow range. Within that subgroup, and that will cause you to have a better apparent result if you are interested in. Well, we know that we got we're going on. So we're going to include in our sample the measurements [00:24:00] that include various points in time before the machine is reset.
That's a better understanding what's really happening over time. Got it. Got it. And it is. They're both correct. Here's a five subgroup sample taken over five minutes. Here's a five group sample taken over four hours. What are you trying to understand? You're trying to understand how they're all made or just How they're made first thing in the morning when they're, when everything's tuned up.
So it's, it's, you can, you can use numbers to lie any way you want. And if you know what you're doing, you can do it really well.
John Willis: So like you said, if you knew that it was time to go ahead and whatever you, what have you do at that point, refurbish or checking the last sort of samples near the end, give you a better indication of what it looks like.
Well, it gives you a
Mike Beck: more truthful understanding of the total variation you're dealing with. What's the customer getting?
John Willis: Yeah, right. Customers
Mike Beck: getting whatever they got. It was an 8 a. m. production, or it was a 10 a. m., or it [00:25:00] was a noon, or 2. 45 in the afternoon. So anyway, there's all kinds of interesting tricks you can play if you know what you're doing.
And if you know what you're doing and you have the right intent, you get better information. But what it tends to highlight is that you've got more problems than you realized, and therefore you have to address them. If you wish to hide problems, you can, you can sample a different way, and you have less work to do.
That's interesting.
All right. So I want to add one more little story just about early learnings and transfer of knowledge. So when I was working on the quad for engine development, I was the engine development engineer. I've been to the Taguchi methods course. I've learned about. Fractional factorial design of experiments, and we were facing a very important problem.
It's a technical problem with the design of the engine. It was a four cylinder engine, which means you have four bores with four pistons. The bores are [00:26:00] supposed to be round in the shape of the piston, and they are as they're machined. But there's a problem called bore distortion. Where does it come from?
Well, it comes from all the things that happen when you assemble the engine. If you bore it just round, and then you put a head gasket on and the cylinder head on, and then you take these bolts, which are called head bolts, and you squeeze it all together, and then you bolt the front accessories on and squeeze that you end up distorting the shape.
And so the question was how to do a better job of getting things around when it's all fully assembled. One approach you can take is do a deck plate. You actually pre squeeze it, run the boring machine through, get around, unsqueeze it, now it's not round, but when you re squeeze it. It is basically round, but that is expensive and not very reliable.
So there's many different things that can be adjusted. [00:27:00] The length of the bolts, the bolt lug, the thickness of the wall between the, the cylinder bores. I had been informed of This design of experiment approach, and we were doing something very unique. We were using Katia one, the very first version of a 3d CAD modeling system.
And we had the ability to do distortion estimation using the 3d CAD model. And so I designed an experiment with all these different. Options. The different things that we might be able to do when we were presented with this 3d CAD, everybody thought, wow, you'll just be able to design it perfectly the first time.
Cause you can not model it and make adjustments. Yeah, but there's so many, what are the adjustments to make? So I did a design experiment where the changes we made were in the model. And we got some very interesting, unique results. Never would have thought of that. [00:28:00] Put those in and then ran the real experiment and the real engine, and it really worked.
So it was just using design of experiment approach in a 3D model that everybody thought because you had it in 3D, you could just make adjustments and fix it by looking at the results you're getting. Just eyeball it. What are you going to do? So it was the nature of all the interactions is what we discovered were critical to get the result right.
John Willis: Yeah, I think that's you know, like you know, I, I would say lost art and somehow it got, it didn't make it into transition from lean to sort of like, you know, new cloud native, the, the, all the new sort of development of technologies, you don't really hear that brought up as much you know, certain things that did make the transition from lean to sort of agile to development environments or modern development where, you know, So, yeah, I think, you know, as, as you've gone through your career, I think that it'd be [00:29:00] really interesting to be able to figure out a way to get you into you know, cause you're an engineer, right?
So like the, the, what we do is going to be sort of minor. Like the, you know, I was explaining to you about chaos engineering and, and, and how some, some of these work very effectively and understanding the you know, the overall actually performance of an organization, you know, the technology in an organization, all the software, the code, the infrastructure, I have a feeling that if, you know, if you got briefed, you know, on how these things looked at a level, You've probably seen so many sort of opportunities for quality improvement that, that quote unquote, the lost art of translation into you know, modern it is not the people with your background and skill.
So you you know, and then, so you know, just you know, skipping through, I don't know if we skip anything, but you spend a fair amount of time in GM, have incredible experience with [00:30:00] Deming, and, you know, sort of a lot of interesting stuff that's going on in general, including EDS.
Mike Beck: Let me talk about the transition. So the transition for me, Dr. Deming died our head of GM powertrain, Richard Donnelly left to go become president of GM of Europe senior management changed the nature of the attention to improvement and Deming's ideas changed. And I can figure out this wasn't going to be the right place for me anymore.
And I had been participating in OQPF. I'd gotten to know so many people there. One of whom was a guy named Paul Battaldon who was a medical doctor, researcher, m member of the faculty of the medical school at Dartmouth Hitchcock. And a really smart guy, big into Deming. He had heard some of my talks at OQPF, I'd gotten to know him and then I shared with him, I think it [00:31:00] was at, maybe it was at OQPF.
I shared with him, eh, I'm not sure this is going to work out. And he said, you know, you might be interested in working with us. And I said, what are you talking about? He was working on improving quality in healthcare early before IHI stuff. And so I thought that sounded kind of interesting, and I just took the big leap out of a 15 year career at General Motors.
He had Paul had chair positions at a couple different institutions. One of them was Henry Ford Health System, and he was the chair of the health care quality department it was called, let me think, health care quality education and research department. And so I was brought in to do improvement work and it was kind of new.
And I got to spend time with him and a guy named Don Berwick. And those, those two guys were kind of the main leaders [00:32:00] of Institute for Healthcare Improvement. And I got to go to Babson College about four times, participate in all the early discussions of that. I got to do some improvement events.
I remember I was, I was way out of my league. I was helping a brain surgery team with how to improve the turnover of rooms. And it was very interesting. So I remember quite a bit. I set up one of the first kind of multi dimensional scorecards for them. And while this was happening I was, I was only there for about eight or nine months because it turns out that Toyota were making a change.
They had been producing all their vehicles in Japan, with the exception of NUMMI [00:33:00] and they really wanted to launch TMM NA aToyota motor manufacturing North America. And they wanted somebody who had big three experience. who knew and understood Deming. Specifically, they were looking for somebody who was not currently an incumbent at one of those three because they didn't want to be seen as poaching anybody.
They wanted to be a good corporate you know citizen and not, not poach talent. So the fact I had left GM of my own, I was contacted by a recruiter. They said, Toyota are interested in talking to you. Would you have, you know, like, Holy smokes, like I've been studying these guys, you know, and, and so I was flown to Japan for an interview.
Then I got flown to Japan a second time for an interview. I did this. With a couple vacation days, each time got to meet a lot of people and ended up working at tmmna Toyota Motor Manufacturing North [00:34:00] America first my office I split I had offices at the tech center in anna harbor and at Toyota Motor sales, there was a Toyota Motor corporate office in southern california So I was, I had about a year and a half where I was one week in California, one week in Ann Arbor, because my family were in, in Michigan and wanted to, you know, not, not be away from them all the time.
Originally the idea was for it to be in Southern California. We're thinking we're going to be moving. But it turns out. There was an interesting thing was going on. There was a trade war going on with U. S. and Japan. There were accusations that Toyota were dumping product, that they had done something to the currency and the yen was undervalued.
And there was a trade war. Congress was up in arms about it. They were talking about [00:35:00] making 50 percent tariffs, having that come in on Lexus was brand new at the time. And infinity was brand new at the time they were talking about making 50 percent tariff on all Lexus and infinity products.
If Toyota didn't get there, if Japan didn't get straightened out, well, this caused the The decision making to accelerate at Toyota. And he said, look, we need to be Midwest. So we ended up TMM NA was in Cincinnati, Ohio. And we set it up very fast. I got to be the guy to go and hire all the quality engineers and the, the.
improvement people for the headquarters. So I started out by recruiting a team and then I was the guy who did all the coaching and training for this internal team. And then we were corporately responsible for all the plants that were in existence at the time and, and more were coming as well as [00:36:00] The quality interface with all of the suppliers.
There, there's something that was happening ISO document for QS 9, 001. We were at Toyota not happy with that and I was one of the major authors of the Toyota supplier quality manual which had some things that were different associated with that But I got to learn from the the masters.
I got to this is a good interesting side when I was at GM powertrain I had I had moved up in in My role and I was one of the guys that was participating in the monthly reviews of quality You And the quality metrics are a lot of them, but one I can remember was 90 day problems per hundred.
So warranty, all new cars sold. [00:37:00] How many problems were reported by the customer in the first 90 days of owning the vehicle? And we would look at the data every month. At GM and, you know, the worst were, you know, Camaro and, and Stingray. We thought, oh, those are young, hot riding guys. They're, they're breaking the car.
And
Mike Beck: then there'd be the, you know, luxury cars and then the, you know, mass market cars and so problems for Honda. You want to be at the bottom of the graph. We had this one car that was produced at NUMMI and because it was sold under two nameplates, Toyota produced Corollas there. Okay. GM sold the exact same car rebadge.
It was called a Geo Metro. I don't know if you remember the Geo brand name, but it was sold through Chevrolet dealers. Okay. And we're looking at the Prowse 400. And the problems per 100 were half at the for the NUMMI built car as kind of the middle of the range for the [00:38:00] GM cars and all the GM engineers and I was looking at the powertrain data in particular, and it was a Toyota built engine and transmission that went into the geometric.
So these data came in and we look at it. It's like, how can this be that there must be something wrong with the data. This can't possibly be situation. So now fast forward just a short while I have this aside and healthcare come back to to automotive Toyota. I now find myself looking at the exact same chart.
And here we are. It's the exact same chart looks the same, except that the not the scale changes. And the Toyota products are the low ones and at double is the NUMMI product. And so the relationship was Half of the, the [00:39:00] Toyota built products had half the number of problems as the NUMMI built product, and they attributed it to lack of attention to detail, not following Toyota production system properly, you know, lack of, and cause there was a shared management structure.
And it was like, holy smokes, my eyeballs jumped out of my head. When I saw that the gap between quality in GM and Toyota. In 1994, I think is when this was, was just amazing.
John Willis: And even from what, what was sort of General Motors Numi and then Toyota. Right. The, the like three levels of gap, if I got that right.
Right.
Mike Beck: Yeah, yeah. Well, and Numi was ma co-managed. And the data I looked at were engine and transmission, which were produced in a Toyota factory. So we were looking at. Toyota numbers, but there were when I said that the numbers, you know we're double again. [00:40:00] We were looking at total car. So I'm comparing apples and oranges a little bit in that the Toyota production numbers for the product produced and NUMMI included some of the body and fit stuff too.
But
John Willis: then that is just sort of the, I mean, what Toyota is great at, right? It's the holistic approach. Is that like, I mean, they just, absolutely.
Mike Beck: And they've really spent decades. Step by step by step, diligent improvement in all aspects, planning customer understanding design and development production, and just the, the willingness to work hard and get it right.
There really was a cultural difference. The the workers I worked with, had the [00:41:00] highest level of attention to detail and discipline and, and it's, it's not as if they one of the things Dr. Deming talked about is drive out fear. I would say Toyota didn't learn that lesson that well, because there was fear in not getting it right.
And there were a number of. Difficult bosses. Toyota. Now, if you call them on it, so hold on just a minute. I think it's kind of how hot they were. If they were hot enough, they would. I don't want to talk. You could you could catch him and say, you know, they acknowledge that maybe this isn't the best way to lead at this moment.
But the willingness as a from a cultural perspective, the You know, 136 million people living on a little island they had to get along and they [00:42:00] all learned the lessons of how to get along and be Japanese. And I think that really was a factor in the success. Of Koretsu and all the folks that Yeah.
John Willis: No, I think, you know, I, I, I make this proposition in my book that, you know, Deming, you know, I, I sort of like, I think, you know, Deming was a great man, no question. You know, I think I look at my bookshelf on all the books on Deming where they call him the miracle maker, the miracle in Japan, like, you know, Japan created the miracle in Japan.
And, you know, and I think the, the other sort of point is, I think, that Deming learned as much, maybe more, from the Japanese. Then he taught them. You know what I mean? I think that, that culture, that motivation, their, the collaboration, the way they work together, the way they thought of it, I know you referenced Dr.
Spear in his his HBR paper, his master thesis, [00:43:00] I'm a big fan of Dr. Spear, you know, in his paper, you know, he talks about, you know, Toyota was a community of scientists continuing to experiment, but I got to once interview him and, you know, He said this, he said, you know, that if you ask the real Obi Wan Kenobis at Toyota What's the sort of the what was the poll system all about he said that they wanted to you know You know when they were basically, you know, you exclusively making cars in Japan apparently that to buy a car Toyota car in Japan and household took like 70 percent of your your yearly income and they wanted everybody in that Process of building that car to know you were responsible to your neighbor your brother your mother your family Yes That was the sort of real motivation of the pull system.
So I thought that was interesting.
Mike Beck: Yeah, yeah, I would tend to agree with that.
John Willis: You can't, but that's got to be fascinating. So you do general motors. [00:44:00] And you get involved
Mike Beck: for a little bit in Toyota. So what happened with Toyota? I was doing very well with Toyota. I really enjoyed the first three years I was there.
I was hired by a guy named Natsume. Natsume san. And Natsume san had an exceedingly interesting story. He was a young engineer in in Toyota in the 19 mid fifties. In 1957, he was selected to take a Toyota Toyopet. to America. And he took the car on a boat, offloaded it in Long Beach, California, and he conducted a road test across American roads and wrote reports and he drove it up Pikes Peak and he took it all over the place.
John Willis: Pikes Peak.
Mike Beck: And he did this whole big thing, which was our what's wrong with our car. For [00:45:00] America, how would we need to improve, adjust, change the vehicle design to be better suited for the customer base in America? He drives it all the way from California to New York city. And then in New York city, his assignment was to acquire a physical space for Toyota motor sales USA.
And he establishes the business. It's him in a, in a secretary. And he begins to try to network and get to know people. And it turned out at that time, there was only one other Japanese businessman who was attempting to expand into America, and that was the guy named Takata. Takata is the guy who has airbags, and he, unfortunately, there was a big recall and Takata airbags have been associated with metal fragments and stuff.
So it was a really unfortunate issue that happened for Takata. But they became close [00:46:00] friends and after four or five years, I guess Natsume san was recalled to Japan. He did his career in production engineering and quality, and he ended up being the top dog. For production, engineering and quality.
And he's 62 years old, reaches the maximum retirement age. They tell him you got to retire. And then what normally happened was the retiree senior executives would go to one of the Koretsu companies as CEO or board member or something. And he said, no, I don't want to retire. I want to go back to America where I started.
We've got this TMM, TMM NA thing going. And I want to be there for that. And retirement age in America is 65. So, so they said, okay, so. I get hired by this guy. I didn't know who he was. And then I start hearing these stories and learning what he's done. [00:47:00] And you know, some of the really tremendous, some of the highest leverage reasons why Toyota quality is so good is their production engineering organization.
They will, if there's a new, a new design that is truly new, they will spend a year or more developing the production process. And then they will introduce that change in a low volume car. Often the super high end one, like the newest Lexus or, and, and the reason they do that is to keep, if there's a mistake, keep it small and to be able to afford to do the you know, the belt and suspenders approach to also inspect it While they're making sure that the Toyota production system process is fully enough developed that they can trust it to be good.
When GM comes up with a new car, it's all new and every, [00:48:00] every nut and bolt and the, the underbody, the, you know, the electrical design it's new and there's so many points of anytime you change that much, there's so many things to learn. And that's why, you know, the, the. Theory had always been in with an American car never buy it the first year in production because But a Toyota car that's new the new Camry The skin is new.
The Denso electronic system, exactly the same.
The
Mike Beck: measurement of the foot well where the feet are, and the height of the back seat, and the angle of the back seat, exactly the same. The width, exactly the same. The breaks exactly the same. So they only make change very, very incrementally.
I learned so much from this guy and he was my personal coach. I had some very interesting experiences with him as well. I was trying really hard to learn Japanese because [00:49:00] at Toyota motor manufacturing, North America, there were Toyota coordinators. For every every manager and director.
They each had a coordinator and it was a person from Toyota who would be your here supposed to. He was supposed to report to you, but it was it was hard to tell what was really going on. And they would make they were there to make sure that this new thing was successful and that the Americans didn't screw it up.
So, we we had the occasion very often when in a meeting, the coordinators would suddenly begin speaking in Japanese. And we, all the Americans in the room thought, well, the reason they're doing this is to get us out of the conversation. And he said, Oh, no, no, no. We're only. speaking in Japanese to make sure we're precise in our language and we understand each other.
And I decided I better learn [00:50:00] Japanese. And so I was doing Japanese for busy people. I had a neighbor who was a Japanese lady and she was my coach. So I started getting to know things a little better. And that was that was very helpful. Because when things would get sideways in a meeting, I could understand enough.
I was not fluent, but I could understand things enough to know that, oh, no, we should be in this conversation. Not, it's not them trying to clarify. And I said, excuse me, I disagree with what you just said. I, I would like to explain it and I can't explain it clearly in Japanese. Can we switch to English?
You know, they would be a little surprised. But anyway, I was able to use that skill. One time we were in in Tokyo, Natsume san and I were in Tokyo, and he wanted to meet up for dinner with his good friend, [00:51:00] Takata san. And he had asked him, and it was okay for me to come along, And it was at, like, one of the premier sushi restaurants in Tokyo.
You know, they had geishas and, you know, it was super high end. It was a business men's club that Takada san belonged to. And so I had dinner with these guys. Some of the conversation was in English for my benefit, and a lot of it was in Japanese. I would just eat, but I'm listening, and I surprised Natsume san as well when we got in the car to head home.
I said, Natsume san, when you guys were talking about this, I understood this and that, but I didn't quite understand what you were saying. Can you tell me more about, and he was a little surprised too. So that was a very useful, good use of my time to spend a little time on this.
John Willis: There's a ton of stuff. I, I definitely went through so the the PowerPoint deck you sent me [00:52:00] and I think that, you know, there, there's a lot, you know, maybe we should do another one at some point, but because it seems like you've been through a lot of the, the actual sort of tools that, you know, us in the DevOps world talk about, you know, sometimes Hush and Canary, The A3, the S3, the different strategies.
But I thought probably the thing that stood out to me most is something I, I, I believe is something that comes up quite a bit in sort of the modern IT, you know, I call it DevOps. And I'm, I'm always pointing and, and I get so many ahas from people when I just regurgitate something Deming said, which is, By what method?
So I love that was the name of your paper because I think that, you know, there's some lessons just never get learned, right? Like MBOs and, you know, and, and, you know, there's a whole thing what's called OKRs now, which actually came from Intel, Andy Grove, but like, to me, and people argue with me that it's the same thing, like, you know, to me that the enlightening [00:53:00] understanding of reading Deming's thoughts on this and is that, you know, like, I call it if you, you know, it's You If you teach a person to fish, they'll be able to catch fish forever, right?
Like, you know, and or but so it seems like you had, you know, like you, you went to the point of writing a whole paper about your aha moment about that sort of that, that one statement by what method.
Mike Beck: Yeah. The, the idea I think goes to the understanding of the leader. Of what their job is. And the difference MBO management by objective.
The senior guy comes up with the objectives and blows down the authority to everybody in the organization to come up with your own methods. And unfortunately, what always happens in that way of going about things is they worry about how their process can be optimized to impact [00:54:00] the objective that they were given.
And each of the individual sub leaders and organization are doing the same thing. So if you understand the concept of optimization. Optimization is the best overall, like the area under the curve of, of the multidimensional surface that you're trying to improve, you, you, you want the maximum volume of goodness in the organization sometimes.
One subset of the organization is going to have to take a hit in terms of what their metric is, because that is subservient to something that gets you more gain somewhere else.
Deming used an example all the time and it was a real example and it came out of GM powertrain GM powertrain had was engines and transmissions.
And when cars went from being electromechanical to electronically controlled. There was an [00:55:00] engine control unit, an ECU and there was a transmission control unit. They were developed independently, so the transmission, you know, helped control unit decided when the shifts would happen. Engines were spark advanced and, you know, there's a bunch of controls that make the engine run properly, fuel amounts, et cetera, pressures.
So, there were two computers. And the engine guys had came over the numbers. There was like 140 bucks it costs for that. And the transmission guys were a hundred bucks. So the total, the GM was 240 bucks. There was an obvious solution. Why don't we come up with a powertrain control unit that does both things.
It controls both the engine and the transmission. And that was decided, Hey, let's do that. And the, the controller to control everything cost about 170 bucks. It was fought tooth and nail by the engine guys because it was on their list of [00:56:00] costs and they're ranked on cost containment and you're going to make the bar control, you know, go from 140 to one.
So it's a 30 hit. How are we going to make that up? And the transmission guys were perfectly happy to take a 70 change in the right direction. So that's a dumb, simple example, but that happens in spades in the MBO. It's, it's so obvious if you think about it, but it's just not well thought through by senior leaders.
John Willis: Yeah, and I loved in your paper how you you know, sometimes the obvious things are not so obvious to, at least to me, but like the MBO is just a non systems thinking approach. Yeah. I think you pointed that out in your paper, and I didn't read it in depth, but I went through it enough that it was sort of, somewhat of a like, maybe I should have known that, but it was a little bit of an aha to me, and I think you just pointed that out again, is you know, MBOs sort of like, you [00:57:00] know you know don't, you know, kind of force you to have a bias against systems thinking.
Mike Beck: Yeah, it builds in anti system because you're not worried about the system, you're worried about what your objective is.
John Willis: Yeah. They're being forced to think in a way that is sort of antithetical to.
Mike Beck: Yeah, yeah. And you could have this conversation at multiple levels too, because you end up, you know, At the worst extreme, the folks who have the least understanding of the system at the lowest end of the, not, not low in terms of, but like sort of the hierarchy of the organization, the front line folks and their supervision are the folks who get to make decisions.
That are aligned with what their boss is telling them based on their understanding of their niche that can diverge most can create the most divergence in the organization across the whole [00:58:00] organization you end up with the most amount of reduction in potential if we're trying a multi dimensional surface, you're trying to raise the whole surface and increase the volume of goodness You you get the worst result if you spread it all spread that thinking all the way to the bottom of the organization You
John Willis: Yeah, and it was just sort of like, you know, like, I don't know if you read Mike Rothler's Toyota Kata, right?
Where he talked about like, it's been a long
Mike Beck: time ago, but yeah, I did
John Willis: that sort of like, you know, it's sort of my words, but empowerment of like, even down to the line where, you know, that, like, they, they wouldn't the way he explained it, the way I'm explaining the way I remember he explained it is the, you know, they, if you, if, if, if it wasn't something like major bad, but they would, they, they would let you sort of make mistakes.
So that you could learn, right? And that, that whole sort of you know, I would call it empowerment at the edge, right? And to your point, they're the ones who can create the most variation if they're not getting it right, right? The, the systemic variation, right? So the idea of, [00:59:00] like, you know, sort of command and control through some objective or sort of siloed approach takes away one of your best advantages.
Is your advantage is that the people at the edge are the ones who can do, you know, either the greatest impact or greatest the impact. Yeah.
Mike Beck: As long as you've got alignment to what the overarching objectives are, and that's been thought through and deployed, then you can get the good result. And that's, that's where the hard work you know, Ocean Connery, the deployment of.
Objectives. And then the key important thing that is so difficult to make happen in America, at least. This concept of catch ball. So you've got overarching objectives, and they get flowed to the next level. And then there's the next level objectives get created, intending to be aligned with and [01:00:00] creating alignment across the organization, but there's width with the organization to, you know, different.
related departments, but not directly. And this concept of catchball has to do with discussing what we're going to do. And would that have any negative impact on you? Just looking for potential unintended, unintended consequences and make sure there aren't any at that level. And then you do that again.
The problem that Americans have with this is it takes time. And we want it to be. No, we've got to go guys got to go. And you have to, in fact, allow for the time. And this is a learning cycle that occurs year over year. So you really have to spend time reflecting on what happened last year. And a key document was the reflection a three wherein you look at what were the results and what were the methods [01:01:00] and you give yourself.
A red, yellow or green, and you can get green, green. Our methods were on target and we achieved the result. That means the theory we had in mind when we decided to make this change to get this incremental improvement, it appears to have worked. It so far, it looks like it worked. You can have a red. You can have a red on the result and a green on the method.
Hey, we did everything we said we were going to do, yet we didn't get the result. Well, that means that you had a bad theory for what cause and effect was here. You know, what do you learn from that? And of course, red, red means you didn't get the work done or you did it poorly and you didn't get the right result.
Shame on you. You know, that's, that's not okay. Well, why did that happen? What was going on? Well, we had, you know, somebody in the organization was transferred, took four months to get a [01:02:00] backfill. And we ended up really missing out on a key bit of time there. We didn't have full coverage that when we needed it.
Okay, so now that means when we make HR changes, we got to take into account these things before. So you always learn something and Americans, it is like pulling teeth to get them to do a reflection on what happened last year. Last year's over. You know what? Why? Why talk about that? We're on to the new stuff.
We're going to, we're going to do this new thing.
John Willis: Yeah. And that's so by what method, right? Again, I think it was the blood Nelson quote that like something like, you know, if you You know, if you could do it this year, why didn't you do it last year? Or like I would say, if you know, how are you going to guarantee you're going to do it next year, right?
If you're not, you know, if you're not sort of discussing the method. And I like the catch ball. I think that the overall sort of seems like, not overall, but an overarching theme of Toyota's approach was They understood that, you [01:03:00] know, that, like, sort of Western culture views time as a loss, whereas sort of the Eastern, or at least in Toyota, but probably Eastern in general, tends to think of time as a gain.
In other words, like your point earlier where they would, the emphasis they would do on changing the line or the production engineering for a new REV, where that would be seen as like, like you said, at General Motors, they just did none of that, right? They didn't. This
Mike Beck: is not none of it, but it was done too fast without enough attention to all the details, but
John Willis: that's a driving sort of almost like Tayloristic, you know, a simplified approach of like, you know, the way, like, historically, you know, Western culture or Tayloristic, you know, management philosophy is about like time and efficiency and like, we cannot waste time and like time is money.
Right. Right. And
Mike Beck: well, Toyota believe that 100 percent also in the production environment. Right. In the planning environment, [01:04:00] you need to take the time to do it right. And that's going back to this concept of the cultures being a little different, having discipline to do what you say you're going to do.
It was exemplary. My experience was that it was exemplary in Toyota, and this was in the mid nineties is when I was there. And that manifested itself in the annual planning process where there was a month. Every year that was Hoshin Conry. We're going to wrap up last year, get the flow down of what the new objectives are, go through with the adjustment of our own at our own level, what it is and flow that into our organization.
And it had to be and get these a three reflection a threes where you thought about what did you do? And what did you do? Well, not well, and that had to be done to inform the next year's iteration. And it [01:05:00] was done. Now it took 14 hour days for a few weeks to make that happen, but that wasn't unusual. So
John Willis: yeah, yeah, now it's now fascinating, you know, the, to, to be involved in looking forward.
You know you know, the sort of the beginning of quality in healthcare, which is a big deal and then you know, when I learned about Deming, I, I tried to read you know, out of the crisis and new economics. I'm like, like, I'm not sure I get this guy. Right. And then it was I, I think I ran into some especially system profound knowledge.
I, you know, what is this psychology thing? You know, and then I, yeah. I stumbled across some healthcare videos about SLPK and like, you know, they use example handwashing, right? Like just the psychology behind, you're not going to convince somebody if they don't believe handwashing kills germ, right? And that sort of literally got me on the path where I was like, okay, now I'm starting to see that [01:06:00] this makes sense, right?
So there's a lot there, but yeah, to have a career where you literally you know, to do the things you did at General Motors and and then Toyota, it's a pretty amazing life.
Mike Beck: It was being in the right place at the right time. I was fortunate and haven't even gotten to United Technologies. I had some good Oh, yeah.
John Willis: All right. We'll definitely have to do another podcast if I get you. So you're semi retired or retired
Mike Beck: now or
John Willis: what?
Mike Beck: You know what? I'm, I'm in transition. I, I retired about a year and a half ago and I decided to take the first bit of time as kind of extended R& R. My wife and I have been traveling extensively.
I've got a lot of hobbies that I've made sure to, to, to dive into. But as you recall from the In 2 In conference I decided to step back into that and help with planning for the next one. I've got the Deming [01:07:00] Metal Committee. I'm, I'm the lead of, of that for ASQ. So trying to I'm thinking about how to be more useful to the next group of folks coming up than I have been.
I've enjoyed taking the time off and looking forward to doing a little bit more going forward.
John Willis: I'll tell you, buyer beware, because the next question I'm going to ask you will define your fate. I mean, if you talk to Bill Bellows, you talked to, even Beth Blankenship, and a few other people I've interviewed, If, you know, if you want to share your contact information, there'll be a lot of young people in it reaching out to you based on this this discussion in these podcasts.
I can guarantee you that. So buyer beware. Yeah.
Mike Beck: So happy to to share the contact info. And I, my, my best approach is email. So mikebeck001@gmail.com.
John Willis: Okay, and we'll put that up on the show notes. And yeah, you know, I'll [01:08:00] reach out to you. Maybe we'll go into the next part.
And, you know, I kind of dissect all this and and there was still a lot to cover on, like, your your decks were fascinating on, like, all the different sort of strategy, decision strategy, all that stuff. So I think there's a lot we can go into there, too. So
Mike Beck: absolutely. It would be a blast to continue.
John Willis: Yeah, no, I knew this was going to be fun.
As I was telling William, you got to get ahold of this guy. I want to do a podcast with him. He's got great stories. He's got a great career. So, well, thank you so much, my friend. Thanks for having
Mike Beck: me. Have a great day.
John Willis: You too, buddy.