Louie Paynter discussed Hallmark Building Supplies’ experience in applying Deming’s management system as a business strategy at the 2012 annual W. Edwards Deming Institute conference.
Louie gives great credit to Hallmark Building Supplies’ success (in applying Dr. Deming’s ideas and improving results for the business) to working with Cliff Norman, a consultant with Associates in Process Improvement. An expert consultant can be a huge help in guiding an organization to a new way of working.
When thinking systemically companies learn to see the system as larger than just their organization. Hallmark Building Supplies wanted to improve the larger system by helping their customers and suppliers learn about Deming’s ideas and apply those ideas themselves. At a presentation of their efforts at a Southwest Quality Network meeting an attendee asked:
You are telling me that from time to time you are competitors?
Answer: Yes
But you will periodically come together and work on improvement efforts for the whole?
Answer: Yes, That’s correct.
We can’t even get that done in our own business, from department to department. You guys are giving me some hope.
Cooperating to improve the system is often difficult due to the existing conditions in the system (fear, competition between sub system components, stovepipe driven thinking, lack of evidence based decision making, distrust…).
The Essential Deming includes (from an interview with Dr. Deming): Knowing How to Manage People Is the Single Most Important Part of Management (page 170)
If factory workers are unemployed —or anyone, for that matter— it is because of bad management, and not because unemployment is inevitable.
Page 171:
Of course, when you talk about improvement of processes, you must include improvement of people. If management truly understood the concept of continual improvement, they would give their people every opportunity to learn and improve— and a chance to make contributions to the company. Organizations can no longer afford to just have good people— today, they need people who are improving continually.
To learn about factory floor problems, for example, you have to talk to people— and I don’t mean by just walking around. Somebody once described good management as management by walking around. Well, it helps to walk around a bit, but you do not learn about the real problems that way. When you are just wandering around, everything looks rosy. The only way to find out about problems is by talking to workers in a group setting. Just ask questions. Start off by asking, “What robs you of your pride of workmanship?” They will tell you.
These ideas are familiar to those using modern management methods, but far too many organizations still haven’t addressed the deadly diseases of management, that Dr. Deming discussed decades ago. The ideas Deming discussed are relevant because good management isn’t about applying brand new thinking that wasn’t known to our ancestors. Most of what managers need to improve they just need to listen to what wise people (Deming, Drucker, Ackoff, Scholtes, Ohno, Joiner, etc.) were telling managers decades ago.
The challenge with managing people is not that good sources on what is important don’t exist it is that far too often we make superficial application of management ideas and then give up and superficially try another management idea.
Learning from the gemba is important. But superficially visiting the gemba and doesn’t work. Without an understanding of how the components of a management system fit together and a long term commitment to create a management system that focuses on respect for people the organization fails to capture most of the gains possible with better management of people.
We are posting several short videos to provide everyone an opportunity to hear directly from Dr. Deming. It is remarkable how well the ideas he spoke of have aged even while the world has been changing rapidly.
This video offers several questions that challenge us to think more deeply about current practices and perhaps help guide us to look for new ideas. Dr. Deming often used questions to get people to think. Often those questions are directed at the specific current situation in an organization. These questions:
What business are we in?
What business ought we be in? – updating the language, this is very similar to the idea behind “pivoting” in the lean start vernacular
Does your reward system make it difficult for people to work together?
are guided at opening our eyes to what often we have accepted without questioning. It is very easy to accept what has been done when it would be better to think if we can do better if we question what we often accept without thinking. It is easy to get so focused on making an existing strategy work (especially one that made the organization very successful) when it would be better to adjust the strategy to the new conditions in the marketplace. Failing to do this often leads to organizations clinging to outdated business models.
A question like, “What business are we in?”, may seem silly. But too often companies fail to keep a focus on the value they provide to customers. A disconnection from customer focus can lead to serious problems. A business needs to adapt products and services as the needs customers have adapt and as competitors provide customers with alternatives.
Joe Dager has posted another Business 901 podcast with a leading Deming management authority, this time with Brian Joiner, author of Fourth Generation Management, co-author of the Team Handbook and long time colleague of Dr. Deming. Early in Brian’s career he shared an office with Dr. Deming’s wife; and that led to Brian getting to know Dr. Deming in the 1960s, a relationship Brian maintained for the rest of Dr. Deming’s life. Brian was one of those that taught the Deming 2 day seminars with Dr. Deming.
Brian Joiner
In the podcast, Brian discusses his mission after leaving Joiner Associates: the environmental sustainability movement. He founded Sustain Dane (a local organization) in order to work on sustainability issues at a local level.
Joe brought up the concentration of quality management leadership in Madison, Wisconsin and Brian mentioned the impact of George Box (who I am admittedly very biased in favor of: I believe people should read more of George’s work). My father followed George Box to Madison, as did Brian Joiner.
Recently Brian has shifted his focus to the health care system (while maintaining a focus on quality principles and sustainability). “Our health care system is an economic tsunami that is about to overwhelm us if we don’t do something very significant, very soon.” Brian has re-initiated Joiner Associates along with, James Bower and Tim Harrington, to take on the effort to improve the health care system.
“70% of the cost of health care is associated with chronic conditions… it has been proved that you can reduce those costs if you catch the conditions early and treat them well early.” We will save money and people will enjoy a much better quality of life (by treating the conditions that will eventually lead to symptoms, rather than just treating symptoms). Great Health Care: Making it Happen by Tim Harrington discusses this opportunity.
On average it take 17 years for a medical innovation to be implemented broadly. Looking at how to speed the adoption of good ideas is also addressed in Great Health Care.
The Deming Scholar MBA students at Fordham University are looking for internship opportunities within your organization.
Dr. W. Edwards Deming believed in inspiring people to think differently, ask better questions and seek new knowledge. He thought this was important because it led to more productive employees, successful organizations and happy customers. He did this by inspiring a new way to think about yourself and your organization. A way of thinking that leads us to understand why best efforts and hard work are not enough.
The internship program for the Deming Scholars MBA at Fordham is designed to help your organization and to bring real-world experience to MBA students. Companies can participate in the Deming Scholars MBA internship program by providing practicum opportunities for students enrolled in the track.
This video has been added to The W. Edwards Deming Institute YouTube channel. The video provides some history on Dr. Deming and his ideas on management. We hope you enjoy this short look at Dr. W. Edwards Deming’s life.
Using data to make decisions is important to effective management. But using data goes far beyond math. To make judgements we need to understand the source of data. We need to understand the potential weaknesses in the data. We need to understand how to apply statistical thinking to make decisions using the data.
Managing Fear DVD with Gerald Suarez. From CCM productions – the producers of the Deming Library.
The data gathered are a result of the system. If the system creates fear among employees the chances of tainted data increases. Another way Deming stated this is where there is fear you do not get honest figures. If the system creates incentives to have the data look good to get promotions or bonuses or credit the chances of tainted data increases. If the system doesn’t use good operational definitions to define how to collect the data the chances of tainted data increases. If those looking at the data don’t deeply understand the processes from which the data are meant to measure (they don’t understand the gemba) the chances of tainted data being used increase.
And all these factors, and more, work together. Weaknesses in any increase the impact of weaknesses in the other areas. The problems fear creates result in bad data, ineffective decision making and the destruction of joy in work.
Drive out fear, so that everyone may work effectively for the company
To improve results management needs to focus on improving the system. Blaming people for problems will increase fear and decrease honest data on the current results. If you find your organization consistently finding the reason for bad results was a person or people failing that is a sign you are likely to have fear based thinking and figures that are not trustworthy. The significant interactions between the various aspects of Deming’s management ideas are clear when you examine one simple quote.
Martin Fowler offers insightful details on the problems with using sales commissions (click on the right arrow button at the very top middle to see the next slide). Some quotes from his presentation:
there are serious problems with the sales commission model, problems that led ThoughtWorks to get rid of all sales commissions in 2013
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From a leader’s perspective, it’s better to move an experienced salesperson from easier work to harder tasks, or to get them to spend time mentoring less experienced staff. But doing these things makes it harder to make quota, so the salesperson’s incentives aren’t aligned with the needs of the office as a whole.
Commissions set up a competitive environment where salespeople are encouraged to look after their own commissions first, reducing cooperation between them.
Commissions can act as deterrent from selling innovative solutions. Such things, whether new products or unconventional approaches to service delivery, are often more difficult to sell.
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we’ve found that not having commissions has already been a big factor in helping us to recruit partnership-oriented salespeople.
This is another instance of a technology company providing a well reasoned explanation for why they are better off without sales commissions. Martin mentioned an article by Joel Spolsky on why Fog Creek software decided to eliminate sales commissions. We referenced that article last year, in: Eliminate Sales Commissions: Reject Theory X Management and Embrace Systems Thinking.
There is a very good book on Marshall Industries getting rid of sales commissions and how that allowed for more systemic focus on the companies customers in the early days of business on the web: Free, Perfect and Now by Robert Rodin (who also served on The W. Edwards Deming Institute board for a few years). You can often get a used copy of the book for just a few dollars. The book offers plenty of value today.
