The W. Edwards Deming Institute Blog

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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People Take Time to Believe Claims of Changed Management Practices

This post continues with some thoughts prompted by the Read Bed Experiment Lessons post.

Another aspect the Red Bead Experiment can’t replicate is the long term impact of working in a system that frustrates your desire to do great work. The importance of what happens to people in such a situation is under appreciated. I believe people want to do a good job (I believe in theory y not theory x – also known as carrot and stick management).

But I understand that people have to protect themselves from deep disappointment. And when they have worked in management systems that crush joy in work for years people protect themselves from disappointment.

When trying to reengage people’s innate desire to take pride in their work there is often a need to transform their expectations. Many have had to repress their desire to do great work and seek extrinsic motivation (through awards, money, etc.). They have to gain trust that they can seek to take pride in their work without the near certainty they will disappoint themselves due to institutional barriers that don’t allow them to do so. Barriers that don’t let them fix problems, that don’t let them learn practices that allow them to succeed with improvement efforts, etc..

This is often not an easy process. And it provides an easy out for those looking to show there is no hope to improve. Half-hearted attempts to change will fail to get over this barrier – people will not open to try and improve when they have years and decades of experience showing those that seek to take pride in their work open themselves up to heartbreak in going against the prevailing culture of the organization.

Related: Peter Scholtes on Managing People and MotivationManagers Should Focus on Eliminating De-motivationWhat Really Motivates Us?Communicating ChangeDr. Deming on Leadership and Management of People

Too Many People Putting Forth Their Best Efforts

In this clip from volume 14, Understanding Profound Knowledge, of the Deming Library, W. Edward Deming discusses the problem with people putting forth their best efforts.

Deming theorem #2

We are being ruined by people putting forth their best efforts.

Brian Joiner quoted Dr. Deming as follows:

Best efforts are not enough, you have to know what to do.

The Essential Deming, includes this quote from Dr. Deming (page 38):

Hard work will not ensure quality. Best efforts will not ensure quality, and neither will gadgets, computers or investment in machinery. A necessary ingredient for improvement of quality is the application of profound knowledge. There is no substitute for knowledge. Knowledge we have in abundance. We must learn to use it.

There is no simple answer to learning how to apply knowledge effectively. The entire scope of Deming’s work addresses that question. The seminars, books and videos aimed to show people the problems with the existing management practices and explaining what to do in order to achieve the best results. The individual items he brings up in the excerpt are addressed in posts in this blog (just search for them to read more, or add a comment on any you have questions or thoughts about).

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Deming Podcast: Andrea Gabor on Management at Ford, GM and the USA Education System

Deming Institute podcast icon

In this episode of The W. Edward Deming Institute Podcast (download) Andrea Gabor begins by discussing her book The Man Who Discovered Quality: How W. Edwards Deming Brought the Quality Revolution to America – The Stories of Ford, Xerox, and GM. And then she discusses her passion for education and how to improve the education system.

She recounts Roger Smith’s attempts to use a huge investment in robots to avoid the hassle of dealing with union workers. Of course this is not the mindset of a Deming company would take. Deming saw the people of the company as an enormous resource.

If you have “dead wood” (employees you see as more harmful than useful to the company) look not to those you call “dead wood” but what is wrong with your organization that is hiring or creating dead wood.

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