Leaders who understand history can make more money using fewer resources.¹ Believe it or not, today's business bandwagon has been rolling for 2500 years. Lean, Six Sigma and decision science principles are timeless. Look closely at the Malcolm Baldrige National Quality Award, Joint Commission on the Accreditation of Health Care Organizations (JCAHO) and ISO certification standards. You'll find Aristotle's ideas.

Between 1920 and 1967, two men put Aristotle's idea's to work: Sir Ronald A. Fisher (1890-1962) and his friend, Walter A. Shewhart (1891-1967).

Shewhart’s landmark 1932 text, Economic Control of Quality of Manufactured Product, introduced the quality control chart to the world. Shewhart cited Fisher repeatedly.² To Shewhart, Fisher was essential reading. His advice holds as true in the 21st Century as it did decades ago.

Today's Lean, Six Sigma, Business Excellence, Operational Excellence, and continuous improvement models follow Fisher and Shewhart. Each discipline is based on doing more of what works. What works is science. Applied science helps you make more money, faster, by using the minimal amount of resources. Replicating success works better than guessing. The scientific method is now a mainstream tool for management, finance, operations, supply chain, quality, marketing, sales, research, and, increasingly, executive decisions.

Doing more of what works improves bottom line results. Multi-million dollar cost reductions and net revenue increases can be routine when top level leaders are enthusiastic champions. For many the method is called Lean. For others, it is called Six Sigma. For some, the phrase Business Excellence is the acceptable term. By any name, it is applied science in action.

Since 1990, Sloan Consulting's success stories using these tools and methods have been published by the peer-reviewed institutions. The American Society for Quality's Quality Press, McGraw Hill and Quality Mark in Brazil are three of his publishers. Lean and Six Sigma client endorsements from around the world independently validate claims.

During the 1980's W. Edwards Deming gained popularity using a tool that is the centerpiece in the “Control” phase of Six Sigma’s Define, Measure, Analyze, Improve, and Control (DMAIC) method. Deming employed Shewhart's quality control chart throughout his distinguished 70 year career. Deming's best selling book, Out of the Crisis, sold hundreds of thousands of copies. Unfortunately, his harping on Japanese management turned quality into a worn out word. Many, if not most, soured on the notion of Total Quality Improvement (TQM).³

In 1993, M. Daniel Sloan adapted and improved the “Fisher/Shewhart/Deming” cycle with Dr. Deming's tacit endorsement. Artists John Pendleton and Jodi Torpey brought the cycle to life again with an illustration. The IDEA cycle is a mnemonic, or memory device, for Induction, Deduction, Evaluation and Action. The cycle is true to the spirit of Shewhart's original Plan, Do Study Act cycle.⁴ It complements Deming's work. It suggests the three, four, and more dimensions described by Shewhart's friend, Sir Ronald Fisher.

Clockwork symbolism links Shewhart's work to Einstein's words, "The evolution of an empirical science is continuous process of induction."⁵ This phrase is the foundation for continuous quality improvement. It led to the creation of the American Society for Quality Control in 1945. The IDEA cycle's analog, wristwatch face reminds us that time plays a key role in improvement. The locked cogs are a respectful salute to a mentor-student relationship Shewhart and Deming shared.

Idea Cycle Definitions

Induction means inductive reasoning. Einstein, Fisher and Shewhart define inductive reasoning. By 1935 Inductive reasoning was explicitly statistical reasoning. Its symbolic language includes the Cartesian coordinate system's X, Y, Z, and the lower case Greek letter sigma, σ. Quality control charts and scatter diagrams are key analytic tools. Sloan Consulting teaches clients how to use these charts in less than one hour.

Deduction stands for deductive reasoning. Deduction, as defined by Aristotle, Fisher, Shewhart, Deming, Einstein, and other thought leaders, is based on the geometry of a right triangle: c² = a² + b². Three dimensional geometry coordinates are traditionally labeled X, Y, and Z. Statistical charts present different views of a right triangle. Anyone can learn to interpret these charts to make more money. We can teach you how.

Evaluation requires the business scientist to review his or her work. Not every idea is a good one. The first analysis is not always correct. Mull over charts and study them. Best answers surface.

Action means the business, hospital, manufacturing plant, insurance company or other enterprise puts quantitative information to work. Systems are simplified. Waste is reduced. Productivity improves. Net profits increase and we can show you how.

1. Ackrill, J.L. A New Aristotle Reader. Princeton, New Jersey, Princeton University Press, 1987. Posterior Analytics, Books I and II. Pages 39-59. And, Eudemian Ethics, pages 479-506.

2. Shewhart, Walter A. Statistical Methods from the Viewpoint of Quality Control. New York, Dover Publications, 1988. Pages 44-45.

3. Deming, W. Edwards. Out of the Crisis. Cambridge, Massachusetts Institute of Technology, 1986.

4. Sloan, M. Daniel. How to Lower Health Care Costs by Improving Health Care Quality. Milwaukee, ASQ Press, 1994.

5. Einstein, Albert. Relativity, The Special and the General Theory, A Clear Explanation that Anyone Can Understand. New York, Crown Publishers, 1952. Page 123.

The 3D Curve and Business Science Analysis

Business problems are complex. They always include multiple variables. They are multi-dimensional. Variation in the variables confounds doctors, airline pilots, farmers, and stock brokers alike. Interestingly enough the formula for a right triangle provides theory for all statistical analyses used in economics, health care, aerospace engineering, chemistry, and other professional disciplines.¹

Personal computers eliminate the math that used to prevent business men and women from using these proven, powerful, decision tools. Computers now produce strikingly beautiful, analytic pictures. They can help us make more informed, profitable decisions. The X, Y, and Z of the 3D bell curve was invented by Carl Friedrich Gauss (1777-1855). Once one gets the hang of it, the bell curve provides a superior reference for solid business decisions. Good decisions lead to improved profits.

Your spreadsheet's column/row format can be a foundation for breakthrough productivity solutions. Each column is a variable that can be labeled X, Y, or Z. Graphic data presentations of your data that can help you solve business problems can be produced with a mouse click. Peak performances are found on the top of the bell curve. Know where the peak is makes it easier to get there.

If you have used a topographical map, or have looked at one in the National Geographic, you already know how to read the lay of the land. Bar graphs and pie charts are primitive by comparison. The normal distribution curve illustrates relationships. Believe it or not, three dimensional references are the foundation for controlled flight, cell phones, the electrocardiogram, agricultural production increases, medical research, and successful investment strategies.²

Sloan Consulting will teach you how to use the same principles and formulas to crack the productivity barriers you face.³ We will help you learn to use these tools to create a superior decision support system in less time than you can imagine.

1. Fisher-Box, Joan. R.A. Fisher, Life of a Scientist. New York, John Wiley & Sons, 1978. Page 113.

2. Stix, Gary. 'The Calculus of Risk,' Trends in Economics, Scientific American, May 1998, pages 92-97.

3. Sloan, M. Daniel and Russell Boyles. Profit Signals – How Evidence-Based Decisions Power Six Sigma Breakthroughs. (2003) The New Management Equation- Productivity, Quality, and Information Solutions That Add Up. Seattle, Sloan Consulting, 1998.

The 3D Cube and Multi-variables Analysis

A world view improves when one learns to look at problems and data in three dimensions. This skill takes a bit of practice. Rene Descartes, the French philosopher, understood this when he labeled the three his coordinates X, Y, and Z.

Graphic analysis that took days and weeks to produce just a few years ago, can now be produced by clicking a Web page. When you look at 3-Dimensional images, you automatically begin to reason inductively and deductively whether you know it or not. Aristotle was right. The IDEA cycle expresses our nature.

Note that each corner of this cube is a set of 90 degree right angles. With at bit of imagination you will probably be able to visualize right triangles crossing the planes, or sides of the cube. The formula for a right triangle provides theory for virtually all Six Sigma and Lean statistics. Gauss's z score, Student's t test, the F, ratio, quality control charts, scatter diagrams, and the regression analysis you learned in college.

Einstein observed, "The Gaussian coordinate system is a logical generalization of the Cartesian coordinate system."¹ These are fancy words for saying X, Y, and Z are good tools to solve complex problems.

R.A. Fisher used this cube to create what is known in Six Sigma as the designed experiment.² Fisher's colleagues and friends Walter Shewhart and W. Edwards Deming, were inspired by the elegance and economy of his ideas. Fisher's model led to productivity breakthroughs in agriculture, medicine, bio-statistics, chemistry, and all other industries.

Fisher's student, George Box, helped make Fisher's work accessible to undergraduate engineering students. The Box, Hunter, and Hunter textbook Statistics for Experimenters, A Introduction to Design, Data Analysis, and Model Building is the classic work. We distilled their work into a simplified model that can be used by any one, everyday on the job.³ The numbering system on our cube illustration comes from the Box, Hunter, and Hunter book.

Profit Signals, by Sloan and Boyles includes a section entitled The 5 Minute PhD. This chapter shows how simple it is to use an advanced business analysis to increase profits. This book is exclusively available through Sloan Consulting. 206-525-7858.