The W. Edwards Deming Institute Blog

To Copy is to Invite Disaster

Dr. Deming explained the dangers of copying from other organizations: “To copy is to invite disaster.” (page 10 of The New Economics). The proper corse of action depends on the system.

This, like so much of Deming’s advice, relates to understanding the organization as a system. A Deming management view requires thinking about relationships, psychology, capabilities, culture and process when evaluating options. And a Deming organization always validates improvements; most often by using the PDSA cycle.

What these points mean is that the correct course of action at a specific point in time in an organization depend on the existing view of the organization as a system. While eliminating performance appraisals is a good management practice. That doesn’t mean doing it tomorrow in your organization is the wisest course of action.

While eliminating inspection for quality is a good management practice. That doesn’t mean doing it tomorrow in your organization is the wisest course of action. The knowledge that elimination inspection is wise means you need to build your management system and processes so that they perform without this costly way of doing business. But if your processes are incapable today, the proper action is to fix that, not to drop inspections. You have to build to the point where you can drop inspections for quality.

A critical part of transforming an organization to take advantage of Deming’s management system is to understand the culture and psychology that exists today. People will react to statement, changes and proposed practices based on their experiences (both in your organization and in their entire lives).

If your organization hasn’t given people a reason to trust the pure intentions of management they are not going to do so. In such a situation, which is most organizations to varying degrees, the change process needs to be viewed as a long term, incremental process.

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Submit an Abstract for the 21st Annual International Deming Research Seminar

The 21st Annual International Deming Research Seminar will be held in Washington DC, 23 and 24 March 2015. The first 20 seminars were held at Fordham University in New York City, before the move to Georgetown University for 2015.

The W. Edwards Deming Institute is seeking research papers from diverse perspectives, businesses, organizations and industries that provide examples of Dr. W. Edwards Deming’s theories applied in the present day, or papers linking Dr. Deming’s work to that of other great thinkers.

Research papers must be original works. Please submit your abstract of 200 words or less electronically to The Deming Institute at wedresearch@deming.org by 7 November, 2014. Selected speakers will be notified by November 17th and invited to present their papers in a session at the Seminar in March 2015. Research papers will be due on 12 January 2015.

Audience
The Research Seminar brings together people from around the world, and from a variety of businesses and industries, to extend and illustrate Dr. Deming’s theories.

Join us to hear innovative new approaches and directions being tested by others to enhance operations, build trust, foster leadership, promote commerce, create ethical business cultures, and sustain success. Enjoy dialogue stirred by new thinking, and informal networking with Deming practitioners and leaders in the Deming community.

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The System Will Produce What It’s Capable of Producing

Guest post by Simon Guilfoyle

Deming was fond of saying, “By what method?”

In other words, if you want to see performance improvements you need to have an actual method for achieving them. This means understanding the system and improving system conditions to help the workers deliver excellent performance. No amount of inspirational leadership (or sheer hard work) can achieve this if system conditions constrain the workforce.

Taking the example of response times for the emergency services, let’s see how this concept works. In my experience, people who drive vehicles with blue lights and sirens usually already want to get to emergencies quickly; I’ve never known police response drivers deliberately drive slowly to a burglary in progress. Having a workforce that’s naturally aligned to organisational* purpose means there’s one less hurdle to overcome when seeking performance improvements.

drawing of stick police car

Next, you have to understand which systems conditions affect response times. There will be some that you can influence (e.g. amount of resources available, location of deployment bases, number of trained drivers) and some you can’t (e.g. road network, traffic conditions, weather). You would use this information in conjunction with data about the type and frequency of demand, then consider data relating to current response times, in order to establish the range of predictable performance and identify where opportunities for improvement lie.

Therefore, unless we assume frontline workers are bad and lazy, it should be obvious that the way to improve response times is to use our data / information about current performance to inform evidence-based decisions about how to improve the system. Actual methods could include boosting resources in a particular location in response to predictable demand, deploying differently, creating capacity by ‘switching off’ inappropriate demand, or something else. But you always need an actual method.

Which brings us to response time targets. Putting aside the arguments that numerical targets are arbitrary and prone to causing dysfunctional behaviour*, a critical further point is that targets do not provide a method. Neither do they provide additional capacity for achieving the improvements sought. Therefore, setting an arbitrary numerical target for response times (or anything else), simply does not change anything about those systems conditions that dictate predictable levels of performance. The system will produce what it’s capable of producing, whether the target is there or not.

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2014 Deming Prize Awardees

image of the Deming Prize medal

The Union of Japanese Scientists and Engineers (JUSE) has announced the 2014 Deming Prize winners.

The companies awarded the Deming Prize this year are:

An organization based in USA received a Deming Prize for only the 2nd time since 2000; also this is only the 4th time a USA company has every received the Deming Prize. GC America is a subsidiary: the parent company (based in Japan) received the Deming Prize and then the Japan Quality Award (since renamed to the Deming Grand Prize). Their China subsidiary received the Deming Prize in 2010. The GC chairman also received the individual Deming Prize in 2012.

Mahindra & Mahindra has also received previous awards. M&M’s Farm Equipment Sector won the Deming Prize in 2003. Entire companies, or divisions may apply for the award. In 2007 M&M’s Farm Equipment Sector won the Japan Quality Award.

Since 2000 organizations based in India have received the most Deming Prizes; Japan is second, just ahead of Thailand.

Distribution of winning organizations since 2000 (including prizes for 2013)

  • India – 21
  • Japan – 12
  • Thailand – 11
  • China – 2
  • USA – 2
  • Singapore – 1
  • Taiwan – 1

3 years after a company has received the Deming Prize they may apply to the top prize. That prize has previously been named the Japan Quality Medal but was renamed, in 2012, to the Deming Grand Prize. I believe no Deming Grand Prize was awarded for 2014.

2013 Deming Prize for Individuals

Related: 2013 Deming Prize Winners2012 Deming Prize Winners2007 Deming Prize Awardees

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Bob Browne Discusses His Experience Applying Deming’s Ideas as a CEO

Bob Browne is the former CEO of the Great Plains Coca Cola Bottling Company and soon to be author of a new book, The Sys-Tao Way, that outlines his application of the Deming Philosophy.

image of book cover for Sys-Tao Way

In the most recent Deming Institute podcast, Bob discusses his experience applying the Deming philosophy at the Great Plains Coca Cola Bottling Company.

Bob mentions that psychology within the Deming context was:

Understanding relationships and how people work together… The interrelationships that go on inside an organization.

Which is the correct way to view “understanding psychology” in the Deming context; Deming wasn’t talking about Psychology 101 at a university he was talking about respect for people, the importance of understanding the human element in organizations and how to manage systems with people as active participants.

I had what I thought was a process oriented background… Deming was talking about the interrelationships that go on inside a system and how that system relates to other systems. So relationships were key… Understanding that we don’t live in a mechanistic, deterministic world. We live in one that is more interdependent and complex.

Bob also tells a story of when he hired a consultant to help the organization improve and specifically to focus on using data and understanding variation. Bob was anxious to begin teaching how to measure and the consultant explained the organization wasn’t ready. There was too much fear. The consultant explained:

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Outdated Management Practices Don’t Die Off Easily

The following quote was provided by Eric Budd

During the meeting, our division president asked Dr. Deming, “Is there hope for GM?”
Dr. Deming’s reply: “Sometimes you have to wait for people to die.

Eric Budd‘s comment

In attempting to understand why he might say something like this, I ran across this quote, ‘A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather its opponents eventually die, and a new generation grows up that is familiar with it.’ (Max Planck, Nobel Prize winner, originator of the quantum theory, Scientific Autobiography and Other Papers). I presume that something along this lines is what Dr. Deming was communicating.

While the quote from Deming (and Max Planck) may seem pessimistic, they might actually be too optimistic. Even after leaders clinging to old ideas give way to new people the old ideas often stay. It makes sense that living in an organization clinging to old ideas for a couple decades can make it difficult to accept different ideas (even if they are decades old – such as those of McGregor, Deming, Ackoff, Joiner etc.).

Sadly it seems like GM has gone through several wholesale replacements of leadership over several decades and still finds itself with serious problems created by their management culture.

Luckily it is possible to encourage the acceptance and adoption of better management ideas. But it isn’t easy. And you can’t even rely on just letting those holding outdated ideas to leave, as that will often mean they are just replaced with new people with outdated ideas on management.

Related: Andrea Gabor on Management at Ford, GM and the USA Education SystemChange has to Start from the Top, Webcast with David LangfordW. Edwards Deming Quotes from Seminars and Consulting EngagementsBuilding a Better Management Culture in Your Organization


Dr. Deming Video: Managing the Organization as a System

In this short video clip from The Deming Library (volume 14 – Understanding Profound Knowledge) Dr. Deming discusses the importance of understanding the inter-dependence within a system. This idea is fairly easy to accept. But to manage in a way that focuses on improving the entire system instead of improving sub-processes within a system independently is something many organizations fail to do.

It is fairly easy to appreciate that optimizing components within a system can easily create problems for the overall system. But it is hard to accept that we have to manage the entire organization in a coordinated way instead of just assigning responsibility for certain areas to executives and holding them accountable for optimizing their areas.

The component sub-processes are necessary but not sufficient of themselves to accomplish the aim of the system.

Management of the system therefore requires knowledge of the inter-relationships between all the sub-processes within the system and of everybody that works in it.

By understanding a system one may be able to predict the consequences of a change.

The greater the inter-dependance between sub-processes the greater be the need for communication and cooperation.

Management’s job is to optimize the system.

It would be poor management to, for example, optimize sales, anything to sell; or to optimize manufacturing, spend all their energy on manufacturing. This would be sub-optimization [of the system] causing loss. All these activities should be coordinated to optimize the whole system.

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The Birth of Lean

The Birth of Lean is an valuable book from the Lean Enterprise Institute. It collects the thoughts of those leading and working with the Toyota Production System in the early days: Taiichi Ohno, Eiji Toyoda, Michikazu Tanaka, Kikuo Suzumura and others.

The book doesn’t talk about Dr. Deming directly but provides great thoughts from those in Toyota designing and continually improving a management system consistent with Deming’s management ideas.

cover image of The Birth of Lean

You can’t read the book as if it is a recipe for what you need to do. Of course, no management book can do that for you (a cookbook, sure). I am sure some readers find some of the methods used as too authoritarian or the confrontations with others too direct.

What worked for Toyota in 1950 may very well not be exactly what you need to do in 2014. Still there is tremendous wisdom in this book. There is more for those interested in applying Deming’s ideas to improving their organization to learn in this book than is available in most books on management today.

“Good kaizen,” said Imai, “depends on the active cooperation of your employees. You might think you’re on the right track. But unless your employees are taking part actively, you’ll never get the full potential of the improvements. That’s why we’re going to keep working on this until the people in the workplace think we’ve got it right.”

Here is an example where the wording isn’t what we would suggest today.

“What in the world do you think you’re doing here?” shouted Ohno-san. “We don’t hire people to lift engine blocks. You go check and see right now if you’re not sitting on other problems just like this one.” The production supervisor soon reported three similar problems, and he received the predictable scolding from Ohno-san. “You’re out here on the floor every day, but you’re not really seeing anything: whether your people are having problems with something, whether waste is happening, whether you have overburden somewhere.”

The message is worth hearing, and I fear most of our organizations are not nearly as focused on continual improvement as they should be.

The book is a collection of recollections from individual so you also get a feel for the people and their thinking. And some nice little stories, I like this one:

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Deming Today: Leander Texas Independent School District

The Leander Texas Independent School District (LISD) has been applying Dr. Deming’s ideas to education for years with guidance from David Langford.

cover image for Deming Today report - photo with kids and a teacher

One of the sections of The W. Edwards Deming Institute website provides views of organizations efforts to apply Deming’s ideas today. Here is an excerpt from the report on the efforts at the Leander Independent School District:

Over the years, and due in large part to Akin’s leadership, LISD has put into practice many of Dr. Deming’s theories and teachings. They have developed a true appreciation for systems thinking. They have utilized the learning and knowledge that can be gained from the PDSA Cycle. They have created control charts and analysis of common and special case variance within the LISD system. And they have cultivated important humanistic, motivational, and psychological factors that Dr. Deming addressed in his System of Profound Knowledge.

Introducing, establishing, and utilizing Dr. Deming’s theories and teachings as a guiding force within LISD, as is the case with most organizations that seek to find a new way through Deming, has not always been a smooth and seamless process. For Akin, one obstacle in particular stands out – teacher evaluations.

They took their request to remove teacher evaluations from LISD to the Texas State Commissioner of Schools, and were granted a waiver, but only under certain conditions. They had to agree to develop a new process to regularly evaluate their staff. With the help of an improvement team composed of teachers and central office staff, they set out to unbundle the teacher evaluation system into two parts: a revised evaluation system focused on issues related to rehiring and a teacher portfolio system focused on ongoing learning and self-improvement. These requirements would put a smile on the face of anyone who’s familiar with Dr. Deming’s 14 Points for the Transformation of Management, since points 6 and 13 are specifically concerned with an organization making available for its staff ongoing training and self-improvement programs.

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Deming Podcast: The Deming Journey at New York Label & Box Works

In this episode of the Deming Podcast (download), Steven Haedrich, President of New York Label & Box Works, talks about the Deming journey at the company. Steven also talks about the relevance of the Deming teachings today and the keys to long-term success using the Deming method.

Steven Haedrich:

I knew performance appraisals were useless and a tremendous amount of time and a waste of time. His theory of systems thinking really showed me that it is less about the person and more about the leadership, the system they are working in, the tools you give them and the processes.

When I got rid of that [performance appraisals] I freed up a bunch of time. In todays world look at how many people still believe in performance appraisals that are really not doing anyone any good.

More places are adopting ideas Deming talked about decades ago every year, such as getting rid of performance appraisals. But so much of what Deming criticized is still the standard practice. It doesn’t take new innovative management ideas to gain a competitive advantage of the marketplace it merely takes using great management ideas that have been around a long time and are being ignored by most organizations.

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