S5 E5 - Mark Graban – Learning from Mistakes in Lean and Beyond

In this episode, I sit down with Mark Graban, a leading voice in Lean and continuous improvement, to explore the enduring relevance of W. Edwards Deming’s principles in modern industries. Mark shares his decades of work in healthcare, manufacturing, and leadership consulting.

We dive into key themes from Mark’s career and writing, particularly his latest book, The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He emphasizes how Deming’s ideas, such as eliminating fear and focusing on systemic improvement, remain critical today—especially in healthcare, where Lean and quality management have taken root in pockets but struggle to become the prevailing management philosophy.

A major focus of our discussion is the power of learning from mistakes. Mark explains how organizations like Toyota have embedded problem-solving into their culture, emphasizing that true improvement starts with surfacing problems, not hiding them. We also touch on psychological safety—how creating an environment where people feel safe to speak up is foundational for innovation and systemic learning.

Mark shares insights from running Deming’s famous Red Bead Experiment and why it still resonates today, illustrating how poor management practices persist despite decades of evidence against them. We also discuss corporate scandals like Wells Fargo’s account fraud scandal, where systemic pressures—not individual failings—led to widespread unethical behavior.

From his experiences in Japan studying Lean firsthand to the importance of small-scale experimentation in driving innovation, Mark offers a compelling argument for why organizations must rethink their approach to mistakes. Instead of punishing failures, companies should view them as opportunities to refine their systems and foster real innovation.

Transcript

[00:00:00]

John Willis: Hey everybody, another profound podcast. It's a really interesting character. I've been following for a while now and then he's got a great book out and we'll be talking about that, but he also is, you know, I always talk about my, you know, my learning about Deming and Lean, you know, sort of later in my life.

So it's always great to talk to people who have bigger and longer backgrounds with with some of these subjects that I pretend to be an expert on. So Mark, you want to go ahead and introduce yourself? 

Mark Graban: Yeah. Hi, John. Thanks for having me here. My name is Mark Graban. I am hitting, boy, that 30 years threshold, the 30 year point after graduating from college.

Even before I graduated from college was my introductory exposure to Deming. So maybe we'll come back to that. But but now that I've got, you know, gray hair on my head, I used to be, I was like the kid [00:01:00] in the Deming room. I work as I've got my own company. Named after, so that my corporate name that I use, don't use for branding is Constancy Inc.

John Willis: So 

Mark Graban: that, that of course, inspired by Dr. Deming's phrase, constancy of purpose. It's meaningful to me anyway, when I had to have a, a company name, but I would describe myself as an author and a speaker and a consultant. I started my career in manufacturing. I've got degrees in industrial engineering undergrad.  

Master's program at MIT it was called at the time, Leaders for Manufacturing. It's now called Leaders for Global Operations. That was a, a dual engineering MBA program that I graduated from just 25 years ago. And so, yeah, I've done a lot of work in healthcare over the last 20 years.

I've been involved. And the [00:02:00] software company Kinexus for over a decade. But you might, my career has been very focused on lean and continuous improvement. You know, as to where I am today. So I've been blogging, leanblog. org for almost 20 years and podcasting for like for 19 years. So yeah, it got in the interview a lot of you know, people who worked directly with Dr.

Deming. I never had that privilege, but if you want, you know, I can tell kind of the story of how I first got introduced to Dr. Deming's work through my through my father. 

John Willis: Oh, yeah, that's even better. Yeah. So I think I was just realizing that's where I sort of first sort of spotted you on The interwebs was your blog I think you had some really interesting when I was first sort of digging and swimming through all this stuff I think I found some I can't remember which ones but there were some real fundamental ones that helped guide me So i'll go back and find them and put them in [00:03:00] the show notes but yeah, so what I'd love to hear your story about like you know, I always like people who sort of have some interaction with deming or to, you know, what, how did you get involved with sort of, 

Mark Graban: yeah, it was a second hand, but so my dad worked 40 years at General Motors as an electrical engineer. 

I, I, I left GM after two years, so I say only half jokingly, apparently my dad is 20 times tougher than, than I am, but he had an opportunity to take to be a student in one of the famous Dr. Deming four day seminars. It was probably the late eighties. When I was in high school, and so my dad was working for the Cadillac division at the time, and so there was a copy of out of the crisis sitting on my dad's bookshelf and being, you know, you 

John Willis: read Deming in high school now.

No, [00:04:00] it was 

Mark Graban: in college. It was in college. It was this old guy. On the front of this book and what you know, it didn't exactly grab my interest then, but when I was in I think it was Christmas holiday break, either my junior or my scene, it's probably my June, I think maybe my junior year, but Oh, I, you know, apparently I was bored and picked up the book and and I read it and, It really resonated with me.

I mean, I was, you know, I think I'd probably already taken a class in industrial psychology. I was certainly studying statistics, but I had had enough, you know, hourly part time jobs and, you know, retail and, and, and other settings where I think I was already starting to recognize the difference between what I would call a good boss and a bad boss.

And so Deming resonated with me, even being that early.

John Willis: So, you know, [00:05:00] this is sort of a meta question, but since you have the background, so, you know, the one of the ways, one of the first areas where I was able to really make sense of his profound knowledge stuff was there were a lot of seemed like the bloggers in the healthcare medical space who did a better job explaining some of those complex constructs and so it was clear that there was a lot of resonance in Deming in healthcare.

But now, as we sit back now, you know, I talked to a professor the other day that teaches supply chain industrial engineering at a pretty prominent college, and a friend of mine was on a plane ride, and she was like, why is Deming relevant now, and, and, and, you know, and, and, you know, again, there's a lot of sort of Deming quasi sycophants on this show, but, but, and I try not to be one, but like, Well, why is it that he's even the conference?

We all went that I was with you in Indiana last year. You know, it's just [00:06:00] people, you know, these are people that practicing lean and lots of different industries. And it seems like he's been relegated to a level that just doesn't bubble up. And I wonder, is it not relevant? Or they just the plumbing is so deep that we don't have to know it.

Mark Graban: Well, I would, I would, I mean, I try to argue as often as I can that dr Deming principles and approaches are still relevant. I run the red bead game multiple times a year and it's still really connects and resonates with people because the practices that that exercise pokes at are still the prevailing.

management system. So, you know, Dr. Deming, I think was so ahead of the curve in, you know, pointing out things that people still pointing out problems that a lot of people still don't recognize as being problems. And, you know, the red bead game does such, it's so effective at opening people's eyes [00:07:00] to things that they might've just taken for granted and.  

Assumed to be, you know, the norm if it wasn't good management, it's, it's at least the norm. But yeah, I mean, I, I think, you know, Dr. Deming certainly directly influenced people like Dr. Don Berwick, who founded the Institute for Healthcare Improvement. Don Berwick, you know, fair to say one of the leaders in the modern healthcare quality and patient safety movements.  

Paul Batalden. I, in particular is that, you know, there, there, there's this, there's this cohort and, and I'm blanking out 

John Willis: some of 

Mark Graban: the other names, but, you know, Don Berwick at the, you know, the annual IHA comp IHI conference still mentions Dr. Deming. You know, there's, there's talk of whether people say PDCA or PDSA, they talk about the need to break down [00:08:00] silos and. 

And eliminate fear. But it, it, it hasn't become the prevailing management notion in healthcare even with all of, of their good efforts. I think you have pockets, I think like you have in manufacturing companies, you, you, you have, you know, these, these little pockets of excellence where people understand Deming and, and, and lean or Toyota based approaches really, really well, but it, it, it's not like it's spread.

And become the default. Like I think, you know, anything Deming related is still like very counter cultural. 

John Willis: Well, I think the other thing is at the end of the day, you men or management consultants or whatever, tend to, the gravity goes to the quickest, easiest way to get the wins in the Deming stuff is hard.

I mean, it's just hard. Right. It's not, you know, and so a lot of that is I think over time is, you know, people want the sort of the easier answers. You know, [00:09:00] Dr. Spear, one time I asked him on a thing we said is that, you know, you know, the, the, the problem with like lean or any of these sort of movements is people want the, you know, the.

20 ways to do lean, you know, and that's just not Deming. Right. So, but 

Mark Graban: yeah, there's no prescriptive roadmap or playbook. Yeah. And people are looking for. Quick fixes. I love the dr. Deming phrase instant pudding. 

John Willis: Yeah. Yeah, 

Mark Graban: you'd say there is no such thing as instant pudding I'm like, well, they're okay there.

I mean there is Jell o instant pudding, but I mean, but yeah for your management context, there's no instant pudding But that you know, I think there's you know, I think you know since it's been more than 30 years Since dr. Deming passed away, and I remember A day I was in the beginning of a statistics class as an [00:10:00] undergraduate and, you know, the professor paid tribute, you know, at the beginning of class to Dr.

Deming and I might've been the only person in the room that really even recognized the name, you know, at that point. And so I think, you know, because, yeah, I mean, I think, you know, people don't hear the name as often, even though there are a lot of people who try to keep these ideas. Alive you know Kevin Cahill and everyone at the Deming Institute, you know, have been Seemingly reinvigorated, you know over the last decade and you know, Kevin's one of the people I've had on my podcast, I've, I've tried to do, you know, as much as I can to help you know, bring these ideas to life.

And, you know, it's just one, one, one other thought real quick is, you know, think about the relevance of, of Dr. Deming, you know, in the last five, 10 years, people are talking a lot more about the idea of psychological safety. In the workplace. [00:11:00] Dr. Deming didn't use that exact same phrase, but it's a, it's a different flavor of eliminate fear, allow everyone to participate in improvement.

That's psychological. So 

John Willis: I think it, you know, and, and even like, you know, everybody's entitled to joy and work credit, like to me, like sometimes that's the greatest quote. I didn't understand what, where he was coming from about. So I mean, that's, that's, I wanted to completely make that like jump because you've got a wonderful book that's been out for a while.

You can tell us about your book and when it came out and what was your sort of main motivator for writing. Everybody has a story behind the story of writing a book because it's not easy to do. 

Mark Graban: Yeah. Well, and I would say I have four books. I kind of walk you through. You know that journey a little bit.

So the first book that I wrote came out in 2008. It's called lean hospitals Okay, the subtitle there is improving [00:12:00] quality patient safety and employee engagement I I know there are at least you know, there there are a few dr. Deming references in, in the book and like, you know, to me and part of my personal pathway, I really learned, started learning, started being inspired by the Deming philosophy of the Deming method before I really had deep learning about the Toyota production system or lean.

So I, I, I, you know, and a lot of people don't have the benefit of that foundation, you know, and I think that's where, you know, people get off track, not to get too sidetracked from your question, but you know, you notice the word cost is not in the subtitle of my book. Like, you know, people that are so focused on cost and efficiency, they might learn about lean and say, well, here's a way to cut costs and improve efficiency instead of having the foundations around, you know, quality and.

[00:13:00] Respect for people, which, you know, again, that that's like a Toyota phrase, but I think there's a lot of Deming. So that was my first book. And then I collaborated with a good friend of mine Joe Schwartz on a book called Healthcare Kaizen that came out in 2013, you know, a lot of emphasis on You know, PDCA or PDSA cycles.  

You know, Norm Bodek, Masaki Amai style, small Kaizen improvements that everyone's participating in. So, you know, this underlying belief, everyone wants to do quality work. Everyone wants to improve their work. That book has some Deming flavor to it. And then the next book came out 2018. Very directly connected to Dr.

Deming's work in, in some other ways, it was a book called Measures of Success.   

So the subtitle of that one is react less, lead better, improve [00:14:00] more. This, this is basically my book trying to expose people to control charts or process behavior charts. You know, the, the idea of separating signal from noise you know, as, as Dr.

Deming and, and Don Wheeler. You know, Don Wheeler you know, statistician, Dr. Wheeler had a lot of direct interactions with Dr. Deming and Don Wheeler wrote the foreword for, for my book, which I was really honored by because, you know, other than, you know, the, the Deming books, I've always said my favorite book.  

That I've recommended and given away so many copies of is Don Wheeler's book, Understanding Variation. 

John Willis: Yeah. 

Mark Graban: So that book that's my uphill battle trying to get people to, you know, embrace process behavior charts, or at least that thinking about variation. We just spent a lot

John Willis: of time on that conversation, but I do want to get to your latest book, because why people it's just so hard for people to understand that the elegant beauty [00:15:00] Yeah.

Mark Graban: And then the fourth book came out June, 2023, it's titled the mistakes that make us cultivating a culture of learning and innovation. So the, you know, this book covers everything from, you know, how, how do we, how do we learn from mistakes? How do we avoid repeating them? You know, I think a lot of that comes back to the, the Deming idea of, you know, 94 percent or whatever number.

of problems are caused by the system. Stop blaming and punishing people for systemic problems. You know, there's a lot of deming, I think, that comes through in the mistakes that make us. I'll, I'll, I'll, I'll say it's, it's been announced publicly. You might not know John, it was just announced yesterday, but the mistakes that make us has been awarded the Shingo Publication Award for you.

That's pretty [00:16:00] awesome. From the Shingo Institute. So thank you. So yeah, lean hospitals and healthcare Kaizen both also got that same recognition. A friend of mine out there in lean. Is, is only half upset that he's like, why, why didn't measures of success? Get the Shingo Award. I'm like, well, I don't know.

It wasn't, I mean, it wasn't nominated, maybe it didn't seem enough, like a quote unquote lean control 

John Willis: charts. No . There's 

Mark Graban: a lot of people in Lean Land that don't use control charts. Yeah. Yeah. I think of that as being a Six Sigma thing. 

John Willis: Yeah. Got it. Yep. Yep. 

Mark Graban: Yeah. But I'm, but I'm, I'm, I'm, you know, deeply grateful that that's 

John Willis: just for a listeners.

I think most people know, but like we, a DevOps folks sort of know about the Shingle award. Well, one, if you studied about lean but the or Toyota. But but the Stephen Spear. Mm hmm. High Velocity Edge was a Shingo Award winner as well. So, you know. Yes. He's been big in the DevOps. That's great. No, I really, you know, I, I think there's no way my Deming book will [00:17:00] ever get there.

I don't know. But but yeah, so what the heck? But, but so what, what got you, so like, so in, in sort of our, in IT operations, right? Like we, so we know this, you know, we've learned it before DevOps. DevOps sort of accentuated this conversation. You know, a lot of us follow Dr. Woods and John Ospar for adaptive capacity and critical safety and all that stuff.

And these are, you know, Dr. Woods is, he did the post mortem on Three Mile Island as his first NSF funding and then wound up doing the Challenger and Columbia post mortems as well as some of the real big bank failures. But, you know, so like, like, this is all about adaptive capacity, complex systems, and learning, learning being capital L, learning.

And so, you know, and, and there have been some people, like, sort of written some short books about disasters and IT and what we can learn from, but is it, you know, were there a number of things that said, you know, I just got to write a book [00:18:00] about this because people just don't understand Yeah. 

Mark Graban: I mean, I've, I've been blogging about topics like that for, for a while and I think of like, you know disaster might not be the right word, but you know, corporate scandals that get blamed on individuals that that clearly have systemic roots.

So like one, one that comes to mind was, you know, the Wells Fargo scandal of maybe what, eight or nine years ago it was post financial crisis where you know you know, Wells Fargo claimed that they fired thousands of frontline tellers and managers for malfeasance, like, you know setting up accounts without customer permission.

You know, whether it was hitting them with fees or not, or like, you know, opening and, and, and, and sometimes it [00:19:00] was leading to fees and, you know, and, and, and the bank CEO who eventually did get fired, I think, after being hauled in front of Congress you know, they say, you know, that we've got, you know, thousands of thousands of unethical Tellers and managers.

And so part of me says like, well, if that's true, what the hell is wrong with your bank that you're hiring so many unethical people? Like, what kind of screening do you have? But like, they weren't hiring unethical people. They were just putting such pressure. Yeah. On people to hit this goal of like every customer should have eight different accounts or financial vehicles, checking, savings, credit card, mortgage, all that.

I'm like, how do you find, like, I can't think of eight different, you know, retirement accounts. I don't know, you know, but the CEO set this target that was like clearly unachievable without. Fudging, distorting the system, you know, so, you know, I think of [00:20:00] I don't know if Brian Joiner is the right original source, but like, you know, when, when managers pressure people to hit a quota or a target, there's three things that can happen that they can they can, in whatever order they can change the system, they can distort the system or they can distort the numbers,

John Willis: right?

Mark Graban: Like, this is clearly a case of distorting the system, you know, they weren't misreporting numbers, but they were. They, they, when it's easier to distort the system, you know, people will do that and they're doing that to save their jobs and their paychecks 

John Willis: and the pressure on it. I mean, this is, you know, the whole point of like Deming, you know, hated MBOs, he hated incentive based programs.

This is exactly what happens. Yeah. You know, I always say that, you know, they either lie. The, the life fail or, you know you know or get lucky and hit the numbers, but either way, nobody learned it. 

Mark Graban: Yeah. But when, you know, these, these old style, Jack Welch CEOs do this and then tell people [00:21:00] failure is not an option, I mean, well, you know, and there's still CEOs that operate like that.

Today, but back to your question of why write the book, I had actually started a podcast, another podcast as a pandemic project in 2020. That podcast series was called or still Running, it's called my favorite mistake. And so I was interviewing people that were sharing a story from their career about a mistake that had a positive element and that they learned from it, that they, you know, learn to avoid repeating the mistake.

And, you know, I think those stories are powerful. When we can either learn to not blame ourselves or punish ourselves or learn to not blame or punish others and keep the focus on, on [00:22:00]learning. So there, it got to a point where, you know, I had a lot of great stories collected from entrepreneurs and business leaders and people from the patient safety movement and all kinds of different settings where a lot of them were talking about the culture in their companies.

And how the, the, the focus was on learning and improvement instead of punishment, you know, focusing on prevention. I, you know, I interviewed enough people in the Toyota orbit that, you know, I thought, well, I, I think, I think I can draw on a lot of these stories to help illustrate, you know, some of these core, core principles of, yeah, we need to be learning.

There's two sides of the coin, like working really hard to prevent mistakes in a systemic way. But then recognizing when they still happen, we need to learn and improve and adjust the system instead of just. Punishing and firing people. So that's that's really that's what led to the book. 

John Willis: Yeah. No, I you know, it's funny I [00:23:00] was thinking about sort of some of the you know in the earliest days of cloud native and you know We you know, we run some of the early DevOps days or some of these open source projects and And Google would come in and Amazon would come in.

They wouldn't tell you anything about what they were doing, what they were using, what technology they were using but Facebook would come in and just be completely open about everything. I remember watching a Facebook story where they talked about, you know, like, hey, you know, our, our employees. Push code to production on, you know, before they finished their HR paperwork, or they let in and somebody raised their hand and sort of asked, you know, sort of a classically trained.

Somebody was like, how could you do that? The world would end and they asked them and they said you know, what if he breaks the system or she breaks the system? And he turned to him and said, we've got, you know, I forget how many developers at that point, but let's say, you know, 20, 000 developers, you know, the brightest minds, you know, in there.

And that may or may not be [00:24:00] true. He said, well, if we could come in in the first half of the day, find a way to break our system. We give them a bonus, literally, they should get a raise. They should get 20, 000 really smart people that are trying to make sure that doesn't happen. Yeah. And so, and then you started seeing all these stories around, you know, that idea that, that, you know, sort of make mistakes or, you know you know, we, we, we call them learning from incidents.

But, you know, they, like these things are how we learn and like, if we don't, if they don't happen. They're, they're just bubbling up waiting to happen, right? 

Mark Graban: Yeah. Yeah. I mean, there, there's some famous stories and they're, they're not all, they're not, they're not in my book because the book draws very heavily on the stories from my podcast guests.

But like, I would love to interview somebody who had been at Pixar. There's famous story about how Toy Story 2 at some point in its development, somebody accidentally deleted it. From all [00:25:00] their servers and that thankfully one woman on the team had been doing a lot of work from home had enough archive backup on some offsite servers.

Or storage that they were able to recover most, if not all of it and not have to start from scratch. And, and if I'm remembering right, like part of the, the story there was that Pixar didn't fire anybody. It wasn't one of those who. Delete a toy story to, but like, why, why is that even possible? Yeah, that's a system design.

John Willis: Exactly. Is that sounds like that's at the end of the day, I actually know the guy who would know the answer to that, but there's no way in a billion years, he would tell you, given Disney's you know, they, they don't like to talk much about things that they do. 

Mark Graban: But there's enough about that that's leaked out.

People can Google. I haven't read the story in a while, but just, yeah, just do a search for Toy Story 2 deleted and there's some stuff out there. 

John Willis: But, you know, I wrote [00:26:00] about this in my book, but the, the night capital story though, like you can't get anybody to tell you, but literally supposedly assist admin forgot to deploy the last, you know, an eight server cluster missed the eight server ran some old code that was running on a, you know, server basically lost like 425 million, but And I guess there was no blame because they went out of business and in 24 hours, but that would have been, I tried to, to find some people who could tell me, cause I know, I, I know some of the people that actually worked there, but they were very tight lipped.

So that's one of the big accidents, right? 

Mark Graban: Yeah. 

John Willis: One of those big accidents is hard to find out. There's no, 

Mark Graban: well, there's there, and there's such human nature about wanting the story to end, you know, wrapped up really neatly. Of whose fault was it? 

John Willis: We're 

Mark Graban: going to punish the person when you know, so [00:27:00] many, you know, we've, we've learned from aviation and people are trying to learn this, you know, in healthcare of what, you know, they call the Swiss cheese model of all of the things that have to go wrong and, and have to line up to have a catastrophic outcome.

So, you know, most recently we, as we're recording this we don't have. Good answers yet, but the, the tragedy where the Blackhawk army helicopter hit the plane, the passenger plane coming in the land at Washington, Reagan political stuff and blame game aside, like even people in the general public want to know, well, which pilots screwed up, which air traffic controllers screwed up.

And, you know, there's no evidence yet that an air traffic controller, you know, was it, was at fault or the, you know, but there there's. There's a system, there's a system to unravel and people are always asking, you know, who, instead of how, how did this happen? What allowed this to all [00:28:00]line up and occur instead of we only want, well, you know, who are we going to punish?

Well, the pilots are dead. Yeah. Someone's going to end up trying to blame a pilot, but that, that sullies their reputation. Yeah, no, I think, you know, the there's a, the, the you know, that Sidney Decker who's, you know, one of my mentors and he, he has this thing, you know, Murphy's law is wrong in that it's not everything that could go wrong.

John Willis: Everything that can go wrong will go wrong. It's everything that will go wrong can go right. Yeah, right. And he, we have this little ongoing joke periodically and things happen. We haven't done this lately, but when we see something, we just send title pilot error, you know, because that's usually the, you know, let's find the pilot, you know, we got to find the pilot, clearly the pilot, but, but, you know, in complex systems, as you know, it's, it's not that easy.

And in one of his books, he talked about trying to compare Chernobyl to Black Hawk Down, And in the end, they [00:29:00] both pointed to geopolitical decisions that were made, like, in other words. There is no root cause, you know, these things are like what Deming would say. Deming would say it's the system, right?

It's the system you put in place. Well, embargo was the system they put in place, you know, so. 

Mark Graban: Yeah. And, and I think sometimes, you know people are well intended get, but a little bit, get a little bit off track through what might. as lean dogma of like, you know, kind of oversimplifying things of like, well, you know, all you need to do is ask why five times and you, you, you get to the root cause.

I'm like, well, no, in any reasonably complex system, there is no single magical root cause. There may be many causes and contributing factors and many things that we have to address. Within the system, 

John Willis: even the red bead game, you know, I, I realized, I think it was, it wasn't the first blog I read from yours, but definitely it was a very helpful blog to me to understand the red bead game, you [00:30:00] know, you had written a blog, you know, almost 10 years ago about the red bead game and, and as I run it, I run it at dev ops days and all, it's always interesting to me is I have these really intelligent people.

We do the thing. It's fun and games. Yeah. And I posed this last question. I say, okay, I'll take my mean manager hat off now. I'm really a good guy. Appreciate it. And and I say, you know, what, what was the, what is the main sort of thing that we should have done or should happen? And I'm like waiting, like, please, come on, give it to me.

It's like, I'm trying to let you read my mind. And it's like, why, you know, why are we getting these defects? Like, is anybody even asking why is this vendor sending us, you know 20 percent defects? Yeah, whatever shipment, right? And like, it's and it's just a testament because these are brilliant people, you know, I mean, we all vary, but these are people that are really think about thinking they were people that study read, you know, and if you're willing to sit in on red B game for me at the end of [00:31:00] the conference, right?

You're just a tortured person for learning. And but they can't come to that conclusion, which tells us how, how crystallized or, you know, the concreteness of, of what, you know, Western management has done, right? Yeah. 

Mark Graban: Yeah. And, you know, the way I facilitate the game, you know, people are living through the things that companies do when they're trying to improve.

They you know, they, they repeat the training. And the training might be very specific around details that don't, aren't really critical to quality. You know, we, we nitpick over the minutiae about the angle of the paddle. When it's really the bigger picture questions, we should be asking, you know, slogans and posters and quotas and offering incentives and putting people on probation, giving them in the employee of the month award, you know, firing the bottom half of the [00:32:00] performers.

None of that changes the system and, and, and, and the game is so simple. I think it does help people start connecting the dots back. You know, to their real work, like, you know, part of how I frame the game is that, you know, we're a company that's shipping beads to customers that do arts and crafts and we ship them a different color every month and, you know, last month's color was red, this month's color is now white, but there's still red beads behind and, you know, try not to try not to get the red beads.

And so when I asked them, what do you think we could have done? That comes back to the question of like. Like apparently we didn't flush the system well at the end of last month's production. We just dumped the new white beads in on top of the old red ones. Like why does the company do that? Like nobody had the chance to impact or influence that.

Or it's very rare, even if somebody asks along the way, like, well, why are we dumping the red [00:33:00] beads back into the bucket? Couldn't we at least sort them out, you know, 

John Willis: as we go. And that's the sort of the bad manager, bad management to add system, right? Which is, you know, I was like, when I, like, I've got a lot of people, we call it in IT, but probably call this in other places, but we'll call them, blameless retrospectives, right? We actually have retrospectives. We put people in the room, the stakeholders, the people, and we have a blameless discussion where, you know, we can't even use certain pronouns, right? Can't say you or him or her. But the, the, you know, in that game, like, I'll facilitate, like, when somebody says, well, can we, no, no, no, we got to keep rolling, you know, right?

Yeah, I try to make clear and you know, people ask, can I make a note? Yeah, right. That's just, you know, just like, that's why you don't even get the bubbled up question, right? You talk about psychological safety that's a, you know, incredibly interesting you know topic, of course, it has so many [00:34:00] layers in it the you know, one of the reasons that I got interested in is, you know, Google did a whole research Project, you know, sort of the and like the sort of the, the, the simplistic summary of interviewing, you know, psychologists, industrialists you know, literally just complexity.

It was like, just about anybody you can think about engineers, software engineers, you know, and the sort of simple answer was psychological safety, you know, so, but how does that play in sort of learning from mistakes or the mistakes that make us. 

Mark Graban: Yeah. So, you know, psychological safety, you know, defined as, you know, how safe do you feel speaking up at work?

Like, I think sort of like people hear the phrase lean manufacturing and they jump to a lot of conclusions about what they think lean would be. Sometimes people, you're not doing it, John, but sometimes people hear the phrase psychological safety. And, and they [00:35:00] think it means a lot of things that it doesn't, but it just simply means, you know, it's a question of how safe do you feel speaking up?

And that includes things like pointing out a problem, disagreeing with somebody, especially disagreeing with your manager. Admitting A mistake, making a suggestion for improvement. Those are all things that sadly get punished in some workplaces. So people learn when there is that fear, or, I mean, it's not even just fear.

They know they. are likely to be punished. People learn to not do those things because again, they're, they're, they're, they're protecting their paycheck and, and maybe they're biding time until they can find a better job, you know, but sometimes people don't have that opportunity. So, the connections to the book include feeling psychologically safe to admit.

That's something went wrong. Sometimes people will put a lot of blame on [00:36:00] themselves and they'll say I made a mistake when it really arguably, you know, is systemic and in nature and cause. But so, you know, we perform better and that's what studies at Google. And, and other studies have shown we perform better when we feel safe to speak candidly.

So we, as much as lean focuses on problem solving, Toyota has a very strong culture of problem surfacing, right? 

John Willis: Right. 

Mark Graban: You know, you can't solve a problem that we don't know about. And going back to Dr Deming, there's stories of, you know, where people found it easier to hide and cover up. Safety problems or quality problems. 

So feeling safe, point out that something went wrong. Feeling safe to point out the risk of something going wrong, then, you know, if we feel safe pointing out the risk, we can be proactive in trying [00:37:00] to systemically prevent mistakes and telling, instead of telling people just to be careful or offering them an incentive if, if there's no problems. 

And then, you know, there's, I think. The safety to try improvements that don't actually pan out. And I think that's the beauty of a candid a PDSA cycle that has a lot of candor and psychological safety, right? So in some organizations might progress to where someone doesn't get punished for admitting that there's a problem, but when they propose a countermeasure, they get punished for trying something that fails.

There's not a, there's not a candid study and adjust, you know, part of the PDSA cycle. So, I mean, it's just a lot of the ability to do good improvement work or to innovate is based on that foundation of psychological safety. You know, I, I've come to [00:38:00] tell as many people will ever hear me that you know, lean management or lean culture, the Toyota production system is absolutely built on a foundation of psychological safety.

And if you're trying to introduce lean tools or methods into an environment that has very, very low psychological safety, you're, you're not going to, you're not going to get anywhere. 

John Willis: You know, it's interesting, you know, and sort of no sort of framework, if you want to call that perfect, but in the early days of DevOps, you know, we'd go into large corporations and we would, the first meeting we'd have to have is with the sort of the internal lean consultants or lean advisors.  

And it was. It was very antagonistic, right? It was like, it was like, it was like, you know, and, you know, and, and a lot of things that we know went wrong with lean, right, which was. You know, all the things that you sort of mentioned that a lot of times they were they were not systems that were set up for the ability to sort of raise your [00:39:00] hand.

And I don't know if you ever read anything by Diane Vaughn. You know, she's got them. No, it's brilliant. But she did a lot of analysis on the challenger and she coined this phrase normalization of deviance. 

Mark Graban: Yes, that phrase gets used a lot now in health care. 

John Willis: Yeah. And that was that was sort of the pressure So you have this other sort of the pressure of the, the organization or the, the, the political part of the business part of it, like even, you know, like, like not now, you know, not now, like that would, that would, like, if you bring that up right now, it will delay us another three months, you know, and that becomes this normalization of you get used to, well, you know, we, it didn't break last time.

And. Why bring it up now, you know, so yeah, 

Mark Graban: and we have to guard against that in health care in operating rooms or or other settings, you know, somebody under pressure cuts a corner and then it gets [00:40:00] reinforced of like, well, okay, that didn't really lead to any harm. 

John Willis: Yeah, 

Mark Graban: so maybe we don't need to be doing that, but, you know, there's a lot of situations where you get something catastrophic, like you know, wrong site surgery or.

An organ being transplanted where the blood type doesn't match the patient or the wrong blood type being given in a transfusion. Those catastrophic outcomes are unlikely to occur the first time someone deviates from normal practice. 

John Willis: Right, 

Mark Graban: right. So then there's a lot of cognitive bias and other, you know, human nature type failings that that we really have to guard against.

John Willis: Well, there's back to that Swiss cheese, you know, a lot of AI, not AI, but safety could relate. They, they hate the Swiss. I don't know why they don't like the Swiss cheese model, to be honest, because I think it works really well is that it's that situation, you know, like the Murphy's law situation, you [00:41:00] know, the fact that the, the, in your case, like a healthcare catastrophe.

Might be building up for years and you know and these little deviations are just adding and adding until you know All those sort of things happen at the wrong time in the right way. Yeah You know one of the things you I noticed you talk about too in your book is or you sort of allude to the idea Of like mistakes for innovation There's all you're like, I think a lot of people in your dev ops who've been sort of understanding learning from incidents But can you explain like how you connect those two?

Most people wouldn't, most of the average people on the planet wouldn't think of mistakes in any of the same conversation. 

Mark Graban: Well I mean, there's a category of mistakes that I think you can call happy accidents.

John Willis: Okay. 

Mark Graban: Where something bad happened, but it led to some sort of, you know, discovery or turned into something positive that wouldn't have happened.

If [00:42:00] not for the mistake. So, I mean, I think things like this are better when it's in the realm of like small scale experimentations. Like one of the best lessons I've ever learned. From the Toyota people when it comes to improvement or innovation is the idea of the small test of change. 

John Willis: Yeah. 

Mark Graban: And, you know, if you're willing to make small mistakes quickly, that helps us learn and, and progress.

So that we can succeed instead of making big, huge mistakes. Right. So I think, you know, I, I, there's, there's some of this, you know phraseology that gets thrown around and, you know, Silicon Valley and innovation circles that I don't always like, like, you know, fail early, fail often. Like, well, okay, I'm all for failing early, but I would rather fail small and, you know, do something that's like a PDSA cycle instead of just failure, failure after failure after failure. 

[00:43:00] So I think failing small helps us succeed. I mean, there's a couple stories. From my podcast guests and a couple of them are in the book. It seems like most everybody that does you know, bourbon distilling has some sort of mistake that turned out to be a happy accident. I, I stumbled across one of those stories after the book came out, but like one version of the story that, one particular version of the story that's happened to other distilleries. Garrison Brothers Distillery was trying to do like everyone else. And that's generally to use yellow corn to, to, to, to make their bourbon. They, the, the, the vendor mistakenly brought them a shipment of white corn and they did a, they did an experiment.

Cause I'm like, it's at that point it was like free corn and they're a startup and like, well, let's, let's distill. It doesn't, it's not a huge [00:44:00] expense to distill a little bit and see what you think. And they, they, they did some tests runs and like, we think that this is actually better, but now the thing they were having to predict and the thing that was a risk is that you've got to age it from, you know, two to four years.

Before you really, really know. I mean, they could be tasting it along the way, but you know, that became their base recipe and they might not have ever chosen to experiment with white corn instead of yellow, you know? So that, that's, that's something that you know, it's not changed the world innovation, but it's certainly.  

It was a differentiator and, you know, it's led to, you know, some award winning bourbons and business success for Garrison Brothers. They, they might have achieved those heights with. The boring old yellow corn, you know, we'd never know. But, you know, I, I give them credit that they didn't just get pissed off and, yeah, you know, donate the corn to, to become animal feed or [00:45:00] something like they, they tried, you know, they, they, it's not like they were backed into a corner of, we have to do this experiment or we're going to go out of business.

But they, they had the curiosity to say, well, what would happen if we. Well, that's 

John Willis: the, that's a modernization, right? Like the fact that they can look at them is still to your point of innovation. I, I mean, the classic is the 3M sticky note, right? But the, yeah, this is a good transition because I wanted to ask you about last year or it's now two years or early last year.

I don't know. I can't remember. Oh, I guess I could tell from my blog, but I went on the Japan study trip with Katie. Right. Did you wind up going to Interfoods? 

Mark Graban: Yes. So I went with Katie November of 2020. It was a great, great trip. 

John Willis: I want to hear a little bit of your thoughts on that, but the thing that blew me away, which was, there's a, and it's in the book, right?

She sends you as pre reading to read the tree ring management book, which is an amazing book. Right. And but then there's a, in the book they show a sign and I actually [00:46:00] saw it while we were on, which just basically says in English, serendipity. And, and, and so I got to ask that question and it was, it was pretty torturous to ask that question because, you know, through the translator and all, but I knew it was in English and, you know, and and the translator was like, they're not going to know that.

And they were like, no, no, no. It's in their innovation lab, apply. But the point was they were literally. They created sort of at the CEO and the founder level. He was the sort of sort of the founder level that like embrace serendipity, like put it as part of like your DNA in this organization that like you will find innovation necessarily through mistakes.

But certainly a lot of those things would be things you didn't 

Mark Graban: plan for. Yeah, I think it's in line with That idea of serendipity. So in one of my previous visits to Japan, there's a hospital where they were, they were using lean [00:47:00]methodologies and I mean, they had a long history of TQM, there's a term, you know, they were doing quality circles and they've been doing that for like 20 plus years, but the CEO was talking about Kaizen and how they were really encouraging.

You know, small scale incremental improvements, lots of, you know, many, many, many, many small improvements. And he said, you know, what we've learned is the best way to find an improvement with a big benefit is to search for many improvements that have small benefit. 

John Willis: Huh? 

Mark Graban: That, you know, if you, and I've seen this, like if you were to ask everyone on the team, you know, come up with a million dollar.

Improvement opportunity. That's putting a lot of pressure on people 

John Willis: and 

Mark Graban: they might not come up with something or they, they might, you know, that, but this idea, and I've seen it play out, you know, Joe Schwartz's organization, when we wrote healthcare Kaizen, that if your aim is small [00:48:00] improvements, you will stumble into some that have a surprisingly.  

Huge benefit from a relatively small change. You know, it's almost a percentages game of, you know, do lots and lots of small improvements. Some will have a big impact and the small ones will have a cumulative.

John Willis: Yeah, I mean, as somebody who's done a couple of startups and VC investment, I mean, that's, you know, in a sense, let's just spray, you know, 

Mark Graban: lots of small and different 

John Willis: company to, you know, 2 million investments in 10 companies. You know, focus after the first year on the two, I'm simplifying the two that seem to be succeeding because those two, if they pan out, they're going to make way more than 10 million.

Right? Yeah. So yeah, yeah, no. But yeah. So what are your thoughts about? I mean, I, I wrote a number of blogs. I've been on her podcast. She's been on my podcast and I think, you know yeah. It was just it was [00:49:00] an amazing, you know, learning out there because I want to hear your thoughts. Like, what was the top things?

What did you learn out of it? But for me I felt like all the things I had been learning from sort of Weston and not to pick on Mike Roth. I love Mike Roth. And it was a great learning for me, you know, just trying to figure all this stuff out. But it seems like almost you get over there and you feel you get robbed.

By reading all the books about lean or kata and then to see it in the water, you know, like, I don't know. And to me, that was that was the most enlightening thing is everything I've learned from sort of Western description of lean just seemed to put. You know fog, what was really going on there. So I don't know.

Mark Graban: Yeah. I mean, some of the things that really stood out to me in, in this last trip. So you know, for example, ena foods [00:50:00] longterm focus. Yeah. Oh yeah. You know, their hundred year calendar and trying to grow. Steadily like a tree instead of having big boom and bus cycles. And you know, I think the longterm thinking comes through and let's, you know, Jeffrey Likert's Toyota way book, you know, those 14 principles.

Of the Toyota way number one is about making decisions based on the long term perspective, even at the expense of the short term, you know, I mean, you know, that that comes through. But I think, you know, I mean, I think sometimes the Western reader somehow. Yeah, it's point one, right? That's right. It's right there in the beginning.

And You know, but people don't embrace that. They still want to do short 

John Willis: term 

Mark Graban: improvement. 

John Willis: I'll give you a couple examples of like, so like, and I love Liker and he gave me a quote on the back of my book for some reason. That was for me, like, that was, I didn't think that was going to [00:51:00] happen. And he's great, but not this sort of like, again, his contribution to everything we know is, is, but.

To see the slogan and then hear, read in that book about the hundred year calendar where the CEO, every new employee he sits down with and says, look on this calendar, one of these days is going to be the best day of your life and let's have a great life. Yeah, like that's, I mean. When you hear that, it puts a whole nother, like, non slogany version of, but now it's that kind of stuff.

And again, not to take anything from Liker's work. 

Mark Graban: And so I think, you know, I mean, sometimes things get lost in translation. Of the books going back to when it was the books of Shingo and Ono being translated and brought over, you know, into English. I'm sure there are things I've written that somebody would say, well, you know, it's a little bit lost in translation, [00:52:00] but you know, sometimes the message just doesn't. 

Get through. It's like one of the other really impactful themes from the companies we visited in Katie's trip was the emphasis on human development, workforce development, people development, however you would, you would say out of how that's at the core of everything we do. Like you, you hear that from Toyota and that comes through.

And I think a lot of the Toyota literature, but I don't know if people say, but like, well, like, you know, that's not us, you know, I guess that's optional. We're not going to do that thing, you know, of like, you know, are we doing 5S because we think it's going to make things more efficient or are we doing 5S because we're engaging people in learning how to start making, making not just standardizations, but improvements to their workplace.

So are we doing 5S? To cut costs. Or are we doing 5S to develop people so that they're partners with us in this longterm. [00:53:00] Business journey. You know, I think you know, those companies we saw, whether they were Toyota suppliers or not, we're like very consistently and sincerely focused on our primary goal is employee development.

One of the companies even said our primary goal is employee happiness. You sound like a real counter cultural radical for saying that, but they, but they, but I think they articulated it. Is that employee happiness leads to business success? 

John Willis: Yeah, it's 

Mark Graban: not a huge leap, but how many companies in the U. S. are so focused on you know, business success at the expense of the employees?

Or they would say directly, employee happiness doesn't matter. What matters is the bottom line. I'm like, you don't see the connections. I 

John Willis: mean, go back to Deming's, you know, everything enjoyed. Yeah. Joy, you know, entitled to work, right? Like there's a direct [00:54:00] connection between happy employees and feeling good.

And yeah, no, this is great. Well, we're, I mean, I think we'll, we'll have all the show notes and everything of where to point to and people to find your books. And I. I, I, I should have known about, I wouldn't have known about your hospital books because, but I, I should have known cause I, I, I did read way back or at some point.

Mark Graban: Oh, that's okay. 

John Willis: So this measures the success, but so where do people find you? You know, what's the best, you know? 

Mark Graban: Yeah. A website markgraban. com easy to find on LinkedIn. That's where I'm most active is, I guess, as LinkedIn has become a social media platform, but yeah, those are the main.

I'm pretty fortunate my name is unique enough that people google me, even if they spell it a little bit wrong. It's G R A B A N. John Willis. That's a different Search challenge, but yeah, 

John Willis: no, there's some like criminals [00:55:00] out there named somebody will send me like, there's some like mafia, murder, killer named John wills, who shows up, like, I tried to fix this.

I can't, you know, 

Mark Graban: but but yeah, so thank you. And, you know, I look forward to continuing the conversation and turning the tables on you on my lean podcast. 

John Willis: I can't wait. And and like I do You know, Jared's going to have that conference again. I think if I go back to that was a lot of fun, you know, he took a yeah, 

Mark Graban: I'll be there.

I think at least for a day what he calls the, yeah, the global lean summit, Jared Thatcher and his wife, Anna, they did a great job. 

John Willis: Yeah. That was great. That was a lot of fun. Yeah. Yeah. So all right, my friend, this is great. I can't wait to share the experience on your podcast. So all right. To be continued.

Yeah. So.