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The Knowledge System Podcast

The Knowledge System Podcast

By: Michael Carr
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The Knowledge System Podcast explores how leaders can use systems thinking to create lasting organizational improvement. It translates the ideas of W. Edwards Deming and other thought-leaders into practical strategies for building smarter, more effective systems.

posts.knowledgesystem.comMichael Carr Economics Management Management & Leadership
Episodes
  • Five-minute Deming: "Common sense"

    Five-minute Deming: "Common sense"
    Mar 25 2026
    In many organizations, the phrase “use common sense” sounds perfectly reasonable. A mistake happens, a customer complains, or a process fails, and the instinctive response is to remind people to slow down and think.But this familiar management reflex can quietly prevent improvement. When leaders rely on “common sense” explanations, they often focus on the individual closest to the problem instead of the system that produced it.W. Edwards Deming warned that this habit does more than miss the cause—it can keep organizations trapped in the very patterns they are trying to fix.Why “common sense” fails in managementMost managers have experienced the moment when something goes wrong. A customer receives the wrong order, an appointment is missed, or a deadline slips by.The explanation appears obvious: someone made a mistake. Our instinct is to correct the person involved—remind them to be careful, encourage better judgment, or send a note to the team about paying closer attention.These responses feel practical because work is done by people. But Deming argued that most recurring problems do not originate with individual effort or attention.They are produced by the way work is designed—the methods, priorities, handoffs, and pressures that shape everyday decisions. When leaders overlook that reality, the same cycle repeats: correct the person, see temporary improvement, and then watch the problem return.A small service company illustrates how easily this pattern develops—and what changes when a leader begins looking at the system instead.A scheduling problem that kept returningMaria owns a home services company that schedules technicians for repairs and installations across her city.Over several months, customer complaints began to increase. Appointments were occasionally missed, technicians sometimes arrived without the right parts, and a few customers reported waiting all day for a visit that never appeared on the schedule.One afternoon a customer called after waiting five hours for a technician who never arrived. Maria reviewed the call recording and quickly discovered the problem: the job had been placed into the wrong time slot.It looked like a simple scheduling error.Later that day she spoke with her operations supervisor, David.“This one should have been obvious,” Maria said. “People just need to slow down and use some common sense when they’re entering these jobs.”David agreed the mistake appeared straightforward, and the team reminded dispatchers to double-check their entries. For a short time the complaints seemed to ease.But two weeks later another scheduling problem surfaced. Then another.While reviewing scheduling logs, David noticed something unusual. The same type of error appeared across different dispatchers and across different shifts. It did not look like one employee being careless.The team began examining the scheduling process itself. Service requests arrived through phone calls, website forms, and callbacks from technicians in the field.The information customers provided varied widely, and dispatchers often had to guess which technician should handle a job. At the same time they were expected to answer calls quickly while entering appointments into the system.During busy periods dispatchers were juggling two demands at once: respond to customers immediately and figure out incomplete job details. The errors appeared most often when call volume spiked and dispatchers rushed to keep up.Deming described this common management reaction in The New Economics: “Common sense [mistakenly] tells us to speak to the operator about it when a customer reports something wrong with a product or with a service. ‘We have spoken to the operator about it; it won’t happen again.’”Common sense [mistakenly] tells us to speak to the operator about it when a customer reports something wrong with a product or with a service. ‘We have spoken to the operator about it; it won’t happen again.’— W. Edwards DemingMaria realized her earlier response had followed exactly that pattern. She corrected the person closest to the problem while leaving the process unchanged.The team redesigned the scheduling system. They standardized intake questions so dispatchers received consistent information, clarified which technician handled each type of job, and adjusted call targets so dispatchers were not forced to rush scheduling decisions.Within weeks the number of scheduling problems began to fall—not because employees suddenly became more attentive, but because the system guiding their work had improved.As Deming wrote: “Action taken today may only produce more mistakes tomorrow. It may be important to work on the process that produced the fault, not on him that delivered it.”Action taken today may only produce more mistakes tomorrow. It may be important to work on the process that produced the fault, not on him that delivered it.— W. Edwards DemingWhy leaders blame people ...
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    7 mins
  • Five-minute Deming: Annual performance reviews

    Five-minute Deming: Annual performance reviews
    Mar 18 2026
    Most organizations rely on annual performance reviews to evaluate contribution, allocate rewards, and create accountability. The logic feels straightforward: measure results, rate people, and recognize the strongest performers. For decades, this ritual has been treated as a basic tool of management.But what if the very practice meant to improve performance quietly prevents real improvement from happening?W. Edwards Deming believed annual performance reviews were not merely ineffective. He argued they were one of the most damaging management practices in modern organizations because they direct leadership attention toward judging individuals instead of improving the system that produces results.To understand why, we have to rethink what actually creates performance in the first place.Why Deming challenged performance appraisalsLeaders want to understand how well their organizations are performing. That instinct is healthy; good leadership requires visibility into results and a clear understanding of where improvement is needed.Annual performance reviews promise a structured way to do this. They compress a year of work into scores, ratings, and rankings that guide compensation, promotion, and recognition.But Deming argued that this approach misunderstands how organizations actually produce results. He wrote: “Basically, what is wrong is that the performance appraisal or merit rating focuses on the end product, at the end of the stream, not on leadership to help people.”Basically, what is wrong is that the performance appraisal or merit rating focuses on the end product, at the end of the stream, not on leadership to help people.— W. Edwards DemingIn other words, reviews judge outcomes after the work is finished rather than improving the conditions that produce those outcomes in the first place. This difference—between judging results and improving the system that creates them—sits at the heart of Deming’s philosophy of management.To see how this dynamic unfolds in practice, consider the experience of a school district wrestling with teacher evaluations.A school district confronts the problemIn the Brookfield School District, evaluation season arrived every spring with predictable tension.Teachers prepared documentation of their work while principals conducted classroom observations. District administrators compared performance scores across schools, and those numbers shaped pay increases, promotions, and professional reputations.Marcus Lee, principal of Brookfield Middle School, had participated in the process for years, and each cycle followed the same pattern. Teachers worried about their scores, principals debated ratings, and district leaders reviewed charts comparing one school to another.Yet the classrooms themselves seemed to change very little.During a district leadership meeting, Marcus raised the concern with Superintendent Elena Ramirez.“We keep having the same conversations,” he explained. “We review the ratings, we talk about who did well and who didn’t. But the classrooms themselves aren’t improving much.”Ramirez understood the frustration, but she also saw the system as necessary.“The reviews help us identify our strongest teachers,” she said. “Without them, how do we know who is performing well?”Marcus paused before answering.“That’s the problem,” he replied. “We think the scores explain performance. But most of the time they reflect the conditions teachers are working in.”He pointed to several examples. Some teachers had consistent collaboration time with colleagues, while others rarely had time to work together. Some classrooms included far more complex student needs, and others had significantly more curriculum support.The more Marcus studied the situation, the more he saw a pattern emerging.As evaluation season approached, teachers became cautious. Collaboration slowed, and fewer people experimented with new lesson ideas because trying something new carried personal risk when results were judged individually.The system was doing exactly what it was designed to do: judge individuals.But something else was happening as well. Teachers began protecting their own standing rather than sharing openly, and leaders spent hours debating scores instead of studying the conditions shaping learning—curriculum support, scheduling, classroom composition, and collaboration time.Slowly, the conversation shifted away from improving teaching and toward explaining ratings.Deming warned about this dynamic decades ago: “Merit rating rewards people that do well in the system. It does not reward attempts to improve the system.”Merit rating rewards people that do well in the system.It does not reward attempts to improve the system.— W. Edwards DemingThat comment stayed with Ramirez after the meeting. If the ratings were not revealing true performance, what should leadership be studying instead?The answer emerged as district leaders began examining the system ...
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    8 mins
  • Five-minute Deming: Putting out fires

    Five-minute Deming: Putting out fires
    Mar 11 2026
    Many organizations run on urgency. Something breaks. A customer complains. A deadline slips. Leaders jump in to fix the problem. The system is restored, the crisis passes, and everyone moves on to the next issue. It feels productive. It feels responsible. Sometimes it even feels heroic.But constant firefighting can hide a deeper truth: restoring a system after a problem occurs is not the same as improving it. W. Edwards Deming warned that many organizations stay trapped in cycles of reaction because leaders confuse solving problems with improving the system that creates them.The trap of solving today’s problemsLeaders are trained to respond quickly when problems appear. A delivery runs late. A customer complains. A system breaks. Responsible managers step in, solve the issue, and get operations back on track. In the moment, this feels like effective leadership.But Deming argued that reacting to problems is often only temporary relief. When the same kinds of problems appear again and again, the issue is rarely a single mistake or a careless employee. More often, the system itself is producing the outcomes we see.This is one of the hardest ideas for managers to accept. When an organization is busy and customers need help, stepping back to study the system can feel like the wrong response. Yet without understanding how the system works, leaders may spend years solving the same problems over and over.A small service company illustrates how this cycle unfolds—and how a different way of thinking can finally break it.A business that lived in constant emergenciesCarlos owned a growing neighborhood HVAC service company. Business was strong. Phones rang throughout the day. Trucks were constantly on the road. From the outside, the company looked successful. Inside the office, however, each afternoon felt chaotic.Technicians called needing parts. Customers demanded urgent visits. Jobs ran longer than expected and the carefully planned schedule began to unravel. Dispatchers scrambled to rearrange appointments while Carlos jumped in to solve problems as quickly as they appeared.“Move that install to tomorrow,” he told the dispatcher one afternoon. “Send Mike over to Mrs. Jenkins. I’ll call the supplier and see if we can rush that part.”The day would stabilize. Customers were helped. Emergencies were handled. But the next day looked almost exactly the same. By midweek the technicians were exhausted, dispatchers were frustrated, and Carlos felt like he spent every day racing from one crisis to the next.Eventually he began to notice something important. The emergencies were not random. They followed patterns.Jobs were scheduled too tightly. Some technicians were handling complex repairs before they had enough experience. Parts needed for common repairs were not always available when technicians arrived at a job. None of these problems were unusual events. They were built into the way the system operated.Deming described this distinction clearly in Out of the Crisis: “Putting out fires is not improvement of the process. This only puts the process back to where it should have been in the first place.”Putting out fires is not improvement of the process. This only puts the process back to where it should have been in the first place.— W. Edwards DemingCarlos slowly realized something uncomfortable. His daily heroics were not improving the business. They were simply restoring the system to where it had been before the latest disruption.At the next team meeting he made an unexpected announcement.“We’re not fixing today’s schedule,” he told the group. “We’re studying how our schedule works.”The team began mapping a typical service day. They looked at travel times between neighborhoods. They tracked which types of jobs commonly ran long. They identified repairs that frequently required parts technicians did not carry.Gradually they began changing the system. Service appointments were spaced differently. New technicians received more structured training. Trucks were stocked with the parts most commonly needed for repairs.And over time something surprising happened. The emergencies began to fade. Carlos realized that his technicians had never been the problem.As Deming often reminded leaders: “A bad system will beat a good person every time.”A bad system will beat a good person every time.— W. Edwards DemingOnce the system improved, the daily firefighting that once dominated the company began to disappear.Why leaders keep fighting the same firesMost managers recognize the exhaustion that comes from constant firefighting. Yet many organizations remain trapped in that pattern for years.Part of the reason is psychological. Solving problems feels productive. When a leader steps in and rescues a situation, the result is immediate and visible. Customers are satisfied. The crisis ends. The day is saved.System improvement is different. It requires stepping back. Studying patterns. Slowing down ...
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    7 mins
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