The W. Edwards Deming Institute Blog

The Ethics of Quality

Guest blog by Dennis Sergent, Principal Consultant, Sergent Results Group  (Follow this link to find Dennis’ previous guest blog)

There is a strong correlation between quality and ethics. Leadership’s demonstration of their philosophy and practice of ethical behavior impacts the whole organization in education, government or commercial enterprises.  In the June 1994 issue of ASQ Quality Progress, Marion Steeples offered these definitions that I ask you to consider:

“Quality is the standard by which Americans measure the goods and services they value.”

“Ethics is the standard by which Americans measure their own behavior and that of institutions.”

Leadership’s example is critical. Yet, we have some leaders and practitioners who focus on only a few aspects of quality, to the detriment of the whole system. Focus on only some of the principles, practices, methods and tools cause us to miss the aim and purpose of an ethical system to deliver quality. When we lose sight of the big picture, we do not think of the sustainable impact on the system, such as a focus on schemes such as cost cutting, headcount reduction or “driving efficiency throughout the organization”.

A system that values cost cutting, headcount reduction or efficiency over quality devalues the ethical behaviors of quality. We only need to look at the recent news media to see examples like Wells Fargo, Takata, Enron, Volkswagen, the Veteran’s Administration, WorldCom, numerous auto-maker recalls.  In these examples we can see the effects of unethical manipulation of the numbers or manipulation of the system, instead of improving the system in an ethical way by focusing first on quality in the system.

Local events in Flint, Michigan illustrate that this problem cuts across our culture. In the state’s task force report of causes for the long-lasting damage to its citizens, there was a system of causes driven by a focus on balancing the books for Flint. All parts of the system were acting to be efficient with the financial issues that caused Flint to change the water supply, starting with the legislators, through every political office and onto the people who worked directly on the changeover. With a few exceptions, the players and the leaders were simply trying to fulfill their role in efficiently reducing the cost of water and balancing Flint’s balance sheet.

Managers who value efficiency first – do so to the detriment of the organization’s beneficiaries, stakeholders and the sustainability of their system. Yet, this is a flaw we are all susceptible to as human beings. Who does not take some pride in completing all of today’s action items? Who doesn’t feel good at handing some problem quickly and getting it into someone else’s hands to care for? Who is immune to the fear of not doing their “part” of the process right?

Ethical managers and leaders can pay attention to the philosophy of quality, and try to understand that the efficiency of their system is an outcome of the causes, beginning with making ethical behavior and quality of the whole system a core value. Dr. W. Edwards Deming said “Quality is made in the boardroom,” and his lifetime of teachings about the practice of learning and improvement with knowledge provide us with examples of his approach to ethics and quality.

Modern systems are extremely complex, and no one person is smart enough to know all the interrelationships. Causes and effects in our systems are distant in space and time. The modern history of a focus on cost savings as the starting point optimizes only part of the system that delivers value to the customer and the stakeholders in the system. This focus on efficiency ahead of effectiveness makes it less than our best ethical thinking. Russell L. Ackoff used efficiency as an operational definition as “doing things right” and effectiveness as “doing the right things.”  Is it not effective to do the right things and also do them right?

Great leaders put ethics, quality, effectiveness and “respect for people” first to eliminate fear in the system and look in the mirror often to see if our own thinking is ethical and a cause of quality throughout our system. The evidence is ample that this offers a way for leaders of people and organizations to link their values to the value they provide to their system, their stakeholders and their customers.

Dr. Deming addressed both efficiency and effectiveness with this statement from the first paragraph of his classic article, “Code of Professional Conduct”:

“(iii) to improve efficiency, uniformity, quality, service, and performance of product; or (iv) to achieve smoother operation and more effective administration and management in industry and in government.”

In this same document, he goes on to describe a number of points that emphasize his ethics and expectations of the customer in details that also define a set of ethics for the relationship and responsibilities between customer and supplier, in his case, the statistician and his clients and customers.  I think this defines the “win-win” he referred to in both Out of the Crisis and The New Economics.


Customer Satisfaction is Not Enough

Guest post by John Hunter, author of Management Matters: Building Enterprise Capability

quote image with text: 'It will not suffice to have customers that are merely satisfied. An unhappy customer will switch. Unfortunately, a satisfied customer may also switch, on the theory that he could not lose much, and might gain.'

To succeed over the long term organizations must seek not to satisfy customers but to delight customers.

Employees need to understand how customers actually use their product or service. And then they need to use this knowledge to continually improve the value delivered to customers.

No customer asked for electric lights… No customer asked for photography… No customer asked for an automobile… No customer asked for an integrated circuit.

W. Edward Deming, page 7 of The New Economics

Companies that understand what their customers needs and desires are and deliver solutions that customers didn’t even know they wanted will delight customers. And in that process make those delighted customers more loyal over the long term and gain new customers. Doing so also contributes to the Deming Chain Reaction (adding more and more jobs over time).

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What we see…

Post by Bill Bellows, Deputy Director, The Deming Institute

In reflecting on the popularity of lean, I offer a proposal to those who provide both educational resources and qualifications to lean practitioners.   While using the educational foundation established in The Machine That Changed the World, I suggest being ever mindful of the influence of our respective paradigms in filtering out data that doesn’t fit our own paradigms.   If we share the vision of James Womack to see “the spread of lean thinking far beyond the factory and far beyond the high wage economies to every corner of the world,” wouldn’t it be prudent to improve the thinking of lean thinking and thereby improve lean doing.   As advised by author and futurist Joel Barker, “if we want to lead successfully to the future, we must become aware of our present paradigms, and then be unafraid to replace them.”

A few years ago, I read an account of the Airbus Quality Lean Academy, with an inspiring image of students entering a lean temple, where students are coached and developed “with the basis they need to become self-reliant problem solvers and spread the word around the business.”   Maintaining an investment in such a dedicated learning environment for 15+ years is no small feat, especially with the challenges of the idiosyncrasies of the partner nations.   While “Standards are everything at Airbus: from cleaning up the table in the canteen after eating to operating a machine, they influence every part of the employees’ working day.”  Yet, what can be said of the limits to standardization?   Should everything be standardized, including language?  Or, should advancements in the implementation of lean, coming from a proposal for a chartered Lean Institute, include a suggestions for a context for advocating standardization?   At times, multiple languages and multiple software systems, assisted by translators, might provide a more systemic solution.   That is, a more economically viable solution, in which the investment is off-set by the systemic savings.  The same could be said for a quality goal of 6.3 defects per million opportunities, the standard for Six Sigma Quality, or zero defects, the highly acclaimed quality standard of Philip Crosby.

Before leading to the future, I’d like to focus on events of the not too distant year of 1989 and provide a context for my remarks.   In January, U.S. President Ronald Reagan delivered his farewell address.    In November, the Berlin Wall fell and German unification began.   In between, Motorola was working to unveil its Six Sigma Quality efforts and James Womack, Daniel Roos, and Daniel Jones were in the 4th year of a highly productive 5-year study on the future of the automobile.   At home, we purchased our first Toyota product, a pick-up truck, after growing disappointment with 2 U.S. brands and one European brand.   I also began a self-study effort to explore all things quality, from Philip Crosby and Zero Defects to Genichi Taguchi and Robust Design to Six Sigma Quality and aspirations of process capability indices of 2.0 and the critical desire to reduce defect rates to 6.3 per million opportunities.  I also took advantage of an opportunity to meet Dr. Deming during his February 1990 lectures at Western Connecticut State University.  In a career change away from engineering R&D for gas turbine engines, my interest was to develop an expertise in the tools and techniques of continual quality improvement.

Twenty-nine years later, our family continues to own and drive Toyota products.   I also continue to refine my thinking about continual improvement, including a theory of how Toyota operates.   In doing so, I’m reminded of a cautionary comment from Myron Tribus, who offered that “There is no such thing as an immaculate perception.   What we see depends on what we thought before we looked.”    In this spirit, I am often reminded that historians are guided by how they are trained to interpret.   As opposed to being objective, with the ambitious credence of a journalist, the contrary implication is that historians who are trained differently to look at a multitude of events in our world will likely arrive at distinctly different conclusions.   Systems theorist and educator Russell Ackoff also offered an explanation of this phenomenon.  His reasoning was that the adjective in front of the word problem, as in economic problem, education problem, medical problem, design problem, or social problem, told us a great deal about the vantage point and training of the observer.  That is, doctors and nurses are prone to seeing (specific “problem”) events as uniquely medical problems while sociologists are prone to seeing (these very same problem) events as uniquely social problems, rather than as a composite of a multitude of problems, with the opportunity for solutions stemming from one or more of these disciplines.

I offer these comments as an explanation for why my interpretation of the Toyota Production System, including 29 years of generally happy ownership of 5 Toyota products, differs significantly from explanations included in The Machine That Changed the World.   As with reformed cost-accountant H. Thomas Johnson, author of Profit Beyond Measure, I interpret Toyota’s success as the ability to manage resources, both efficiently and effectively, far better than their competitors have been able to accomplish.  We both view Toyota’s highly prized resource management results through a lens of interdependencies that is guided by W. Edward Deming’s System of Profound Knowledge.   In this regard, we both believe there’s much to be learned by Shoichiro Toyoda’s acknowledgment in 2004, when the Chairman and former president of Toyota accepted the American Society for Quality’s Deming Medal, and remarked that “Every day I think about what he meant to us. Deming is the core of our management.”  

Had I been trained as an Industrial Engineer, I would likely have interpreted Toyota’s success as the result of a focus on principles that include the elimination of waste and non-value added work.    Had I been trained at Philip Crosby’s Quality College, I would likely have interpreted Toyota’s success as the result of a relentless focus on achieving Zero Defects.   Had I been trained as a Master Black Belt, I would likely have interpreted Toyota’s success as the result of efforts to reduce variability to zero.   Instead, my lens has been colored by the influences of Dr. Deming, Russell Ackoff, Genichi Taguchi, and others, to be sure.

In consideration of the economics of quality improvement, are defect goals of either 6.3 per million, or zero red beads, always a worthy process improvement outcome?   Should variation, waste, and non-value added efforts always driven to zero?   At what cost?   For what benefit?    With a focus on achieving zero variation, waste, and non-value added efforts, what is the likelihood that the accumulated benefits will exceed the accumulated costs?   Furthermore, should determinations on whether activities add value be guided by “what the customer is willing to pay for?”  Or, should the context of a greater system be a consideration?  While standards are even a standard with 5S and even 6S efforts, why not include System as a new “S”?   Such an addition could be presented as “5S+1” or “6S+1” to advocate the value proposition of contextual considerations, inspired by the mindful advances in lean that are continually fostered by a Lean Institute.

While lean academies such as Airbus’s train new generations of practitioners, the research investments coordinated by a proposed chartered Lean Institute could focus on advancing the contextual excellence of lean thinking, building upon a “Deming Foundation” in Profound Knowledge.  For, as Myron Tribus espoused, “what we see depends on what we thought before we looked.”


Change Management – Post Change Evaluation and Action

Guest post by John Hunter, who founded curiouscat.com in 1996.

Change is difficult in most organizations. It is easiest to just keep doing what has been done. Once something has reached a point where the need for change has been acknowledged how the organization proceeds is important.

The first part of the process isn’t in the scope for this post; but most often the process should start by using the PDSA cycle to understand the current situation, decide what to try, test improvements and iterate over those improvements until an improvement has been deemed worthy of being deployed widely.

The PDSA cycle process automatically includes studying the results of a possible change as part of the process. And it includes collecting evidence on the results of deploying an improvement widely and studying those results. That evidence will most importantly show if the expected results are achieved (it is far more common for changes to fail when put into action than most people acknowledge). If the expected results are not achieved learn why not, what happened?

image of the PDSA cycle

PDSA cycle image from Management Matters.

Even though the plan is to create an improvement that can be deployed more broadly it is very possible for that to fail for some reason. A common reasons for failing is failing to understand the necessary conditions for success. Yes, the PDSA test worked, but maybe you didn’t realize that result was really dependent on the special knowledge and skill of a critical person involved in the PDSA process, or the location where the test was run was different enough from alternative sites that the improvement wasn’t robust enough to be deployed more broadly.

There are many reasons the change may need to be iterated over to adapt it to different conditions. The important factor, that is far too often overlooked, is to collect evidence on the result of the change as it is deployed and to study that evidence to determine if the improvement is able to be deployed more broadly without modification. It may be that you learn more PDSA is needed as part of the process to deploy it more broadly.

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Why Deming / Why Now / Working to transform “our” system

Guest blog by Dennis Sergent, Principal Consultant, Sergent Results Group

Like many people, my introduction to W. Edwards Deming was the NBC Special (termed a “Whitepaper”),  “If Japan Can, Why Can’t We?”  His questions within resonated with me immediately, as I was a new supervisor for Bell Telephone.  “What can we do to work smarter, not harder?” rang out at the beginning of the program, and I was hooked.  The early emphasis on productivity in the program was a familiar theme at my work and the telecommunications business.  It was technologically advancing at a very rapid rate that was in evidence every day.  It also became clear that these productivity problems were everywhere in our American economy, they were complex and crossed the economic boundaries of industry, education and government.

The evidence built throughout the program excited me when the crisis for our economy and our country became clearer, the systemic flaws in my own thinking caused me to ask myself what I could do.  The pitting of management versus worker was demonstrated to be corrupt and I was challenged to look for causes and effects on a systemic scale in my own work.  It was also transformational to my thinking about the power of trust in self-managed work teams and breaking down the barriers with cooperation between people engaged in common purpose.

Why Deming?

As I learned in the Whitepaper, the featured expert who taught the Japanese and a growing collection of American companies was W. Edwards Deming.   The last 15 minutes of the program focused my attention on the philosophy that would guide my learning and the improvements in hundreds or areas of my professional life.  He described a philosophy that would help me work smarter, not harder.  I had to learn more.

While I never met Dr. Deming, nor did I work in an industry where he met many thousands in his Four-Day Seminars, my journey so far has transformed me by using his philosophy, principles and methods.  This personal and professional transformation started in 1980 with the NBC Special, and my exposure to him has been through studying and applying his 14 Points for Management, and learning about the Deming Philosophy through the numerous Deming Institute programs and conferences.  Meeting other Deming colleagues and learners, as well as his family members, has helped me get to know his philosophy, too.

When asked how I started to apply the Deming Philosophy, I offer that I began by questioning my thinking and the notions prevalent within my organization.  This led first to questions about the importance of understanding what the customer needs and how we could collaborate across boundaries of departmental silos and across the boundary of management and worker.  I discovered the power of not knowing and getting the evidence of improvement by asking questions and testing theories of improvement with people, instead of testing these theories “on” people.   This led to ask people on our team what I could do to help them improve our processes and system.  I made mistakes along the way, to be sure, and I learned to adapt the management processes I had previously used to align with Dr. Deming’s 14 Points and management philosophy and methods, primarily by respecting people, from suppliers to the customers and all of my co-workers in between.

Why Now?

Ever inspired by Dr. Deming, during encounters with customers and partners in learning and improvement, I ask questions that he frequently asked, such as “what business are we in?”, “what is our aim?” and “how could they know?”  Borrowing a favorite statement from him, “I make no apologies for learning” by consistently monitoring the effects of my system, and the statistical evidence from customers and their systems.  I continue to use Plan-Do-Study-Act cycles for learning and improvement, and control charts.  In fact, I still update a set of three control charts to measure team perceptions about non-priority work for the last 27 years.

I also have to balance the growing knowledge I have with the humility that the boundary of what I do not yet know grows, too!  Learning is essential for our survival as a society. As I merge my purpose with the broader purpose of my customers and suppliers, the complex interaction of stakeholders in the system means I must continue to apply the Deming Philosophy and continue to transform myself while working with others to transform “our” system.

 

 


Four-Day Seminar with Dr. Deming Videos

Guest post by John Hunter, author of the Curious Cat Management Improvement Blog (since 2004).

The W. Edwards Deming Institute provides online access to a recording, from 1992, of Dr. Deming’s Four-Day Seminar. There is a cost for viewing these videos; remember we do make many videos available online for no charge including: If Japan Can, Why Can’t We… and W. Edwards Deming presenting the Red Bead Experiment.


Deming Institute Collection – Dr. Deming’s Four-Day Seminar (1992)

In a previous post, Four Days with Dr. Deming, I discussed the impact the 4 day seminar had on many attendees (and also mentioned the excellent book Four Days with Dr. Deming: A Strategy for Modern Methods of Management). If you watch the presentations from our conferences that we make available online, you will frequently hear presenters mention how big an impact attending the 4 day seminars had on their understanding and their careers.

The “Dr. Deming’s Four-Day Seminar” videos provide 12 hours 35 minutes of material from Dr. Deming’s 4 day seminar, topics include:

  • Destruction of a System
  • Optimization of a System
  • Leadership and Management of People
  • Motivation
  • The Red Beads Experiment

We hope you find these videos valuable. We also have several other W. Edwards Deming video collections that we make available in the same way (including a Spanish language Deming Library Collection and the Deming CEO Seminar).


In Search of Excellence

Post by Bill Bellows, Deputy Director, The Deming Institute

“A product or service possesses quality if it helps someone and enjoys a sustainable market.”

W. Edwards Deming 

“Quality is defined by doing it right the first time.”

Phillip Crosby

“There is not a day I don’t think about what Dr. Deming meant to us. Deming is the core of our management.”

Shoichiro Toyoda

 

As a consumer, my introduction to the quality of the Toyota’s management system began in 1989 with the purchase of a Toyota pickup truck. With 29 years of hindsight, I now realize I was enticed by Toyota’s selective focus on what I refer to as Contextual Excellence more so than the exclusive Compliance Excellence of many of its competitors.

After several years of driving the Toyota pick-up, I began to realize the higher reliability of the truck’s components, from the electrical system to the air conditioning system to the engine coolant system, none of which ever needed replacement when the truck was sold after 14 years of ownership.    I wish I could say the same for the purchase of a Toyota mini-van in 1998, for which the automatic transmission suddenly failed after six months of ownership, with less than 10,000 miles of accumulated use, on, of all times, Christmas morning.   Worse yet, 80 miles away from home, stranded on a motorway, and in need of a tow truck.   Call it a AAA moment.   Much to my chagrin, when buying the mini-van, I declined the extended service option after reading a little-known account of the “snap fit” assembly of a Toyota that reinforced my admiration for their management system.    A few years later, I met an engineer from Toyota’s Georgetown facility, where our mini-van was produced.   When I shared that my family was the owner of mini-van from this factory, the engineer asked how we liked it.   Upon offering our sad tale of a highly premature transmission breakdown, his reaction quickly revealed his awareness of this failure mode.    Asked for an explanation, he replied, “we tried to save a few pennies on a bearing.”    My response, “you did, but you cost your customers far more than you saved.”

Returning to the concept of snap-fit, this is a reference to something I first read about in an account of the remarkable turnaround of Xerox between 1982 and 1990, one shared by CEO David Kearns in his 1992 book, Prophets in the Dark.   According to Kearns, one of his senior staff members, Frank Pipp, had once served as the assembly plant manager for the Ford Motor Company, a decade or more before Dr. Deming was invited to a first meeting with CEO Donald Petersen.

In a timeframe in which mating parts in this car plant could not be assembled without hammers, Pipp directed his staff to purchase competitors cars and take them apart.  His plan was to have the final assembly team disassemble these cars and learn first-hand how well they assembled.  At that time frame within his plant, if two connecting parts could be assembled without the use of a handy rubber mallet, these parts were known as “snap fit.”   The remaining parts required mallets to assemble.  To Pipp’s amazement, one car purchased was 100% “snap fit.”  Shocked by the results, he instructed the team to repeat the assembly operation.  They did and found again that the Toyota product was 100% snap fit.    The era of this story was the late 1960s and the discovery was not lost on Pipp.  In contrast, he noted that the “Dearborn people,” from Ford’s corporate offices, were invited to look over the truck themselves and witness the assembly team’s discovery.  According to Pipp, everyone was very quiet, until the division general manager cleared his throat and remarked, “The customer will never notice.”  And then everyone excitedly nodded assent and exclaimed, “Yeah, yeah, that’s right” and they all trotted off happy as clams.”

In this blog, I would like to present a simple contrast between Compliance Excellence and Contextual Excellence and offer readers insights on the significance of this distinction.   In simple terms, Compliance Excellence is revealed by posing questions about the completion of tasks.   For example, were the trash cans placed at the curb last night?   Did you clean your room?   Did you complete your homework?   In each case, the inquiry about completion of a given task has only two answers, yes or no.   The task is either complete or incomplete, pass or fail.   With no regard for a greater system, a part, task, module, activity, or component, viewed in isolation, receives the quality stamp of “good” or “bad.”   There are no shades of gray when it comes to Compliance Excellence.    In terms of how Phillip Crosby defined quality, “right the first time” implies a completed part or task is right, not wrong; good, not bad.   Pass or fail.

Compliance Excellence is also revealed through questions that involve counting.   By way of illustration, one might be asked about the distance to the nearest beach, airport, church, or hardware store.    Whatever the answer, 10, 30.5, or 50, measured in units of time (whole or using fractions), as is often the case in Los Angeles, or in units of length, such as kilometers, Compliance Excellence infers that each unit of measure is identical to the other units; all miles are the same, all red beads are red, all white beads are white, all seconds are identical and, therefore, absolutely interchangeable, without variation.    Compliance Excellence discloses detached answers; yes or no; as well as answers which relate to full units, 13, or a reference to a fractional unit, 11.5.   No matter the answer, differences (variation) in elevation along the route, kilometer to kilometer, are ignored, as readily as the differences between Valencia oranges while counting them to fill an order for a dozen.   The fundamental assumption is that all units are exactly the same, in every way.   Contextual Excellence provides awareness of the variation in how a task is completed, as well as awareness of the differences between items or units being counted.   Contextual Excellence reveals the infinite number of ways a task can be completed or the infinite number of ways a requirement can be met.    In doing so, Contextual Excellence divulges shades of gray.  Upon integration of tasks or components, these carefully accumulated differences appear in use, when their integration is actively managed.    The impact of this ability to “manage with a systems view” is revealed by components that perform better together, as I experienced with our Toyota pick-up truck.

Another simple illustration of the difference between these modes of excellence is revealed by replies to the statement, “List 5 things that are needed to wash a table,“ in borrowing a classic example from Dr. Deming.    The most frequent answers include water, a cleaning solution, a bucket, a sponge, a person, and, perhaps, someone to clean the table.   More often than not, the replies do not include needing to know how the table will be used, once cleaned.   Guided by such awareness of situations in which context matters, Contextual Excellence is about aligning the varying degree of cleanliness of the table with its intended use, shifting from the table is clean (or not) to how clean it should be.    Contextual Excellence mirrors Dr. Deming’s definition of the quality or a product or service, mindful of how well it helps someone, how well a given task fits into a greater system.    That is, awareness of the context of how well a product or service performs.    Compliance Excellence mirrors Phillip Crosby’s definition of quality, with a focus of being right or wrong, pass or fail, good or bad.

In studying Dr. Deming’s management philosophy, guided by a lens of appreciation of his System of Profound Knowledge, one could be ever mindful of the contrast between Compliance Excellence and Contextual Excellence.   While Compliance Excellence offers advantages when the independence of counting things, from miles to hours to apples to red beads, is essential, Contextual Excellence provides utility in the ultimate use of interdependent parts, components, and tasks.   From building rocket engines to operating a city government, what opportunities for “snap fit” integration could be revealed by shifting one’s excellence focus from Compliance Excellence to Contextual Excellence, all the while relying on Compliance Excellence where it serves a most useful purpose?


Restoring Joy and Meaning to Learning

Guest post by John Hunter, author of Management Matters: Building Enterprise Capability

David Langford has taken his experience with applying Deming’s ideas to education to his position as the Superintendent of Ingenium schools in Los Angeles, California.

Deming Institute podcast icon

The focus of Ingenium is “restoring joy and meaning to learning.” David talks about how Ingenium schools are putting that concept into practice on the Deming Podcast.

David discusses how they use data to understand what is working and what needs improvement with an understanding of variation. One of the tricky aspects of using data is how easy it is to be misled and jump to conclusions that are not justified. It is easy, when an understanding of variation is missing, to see the natural variation in data and jump to beliefs about success or failure when that is not a justified conclusion based on the data.

That challenge doesn’t mean that we should avoid using data. But it does mean that while data is important it is critical is to know what conclusions can and cannot be justified with the available data. It is critical to examine data with an understanding of variation.

99% of behavior is coming from the system itself. So until you are analyzing what are we doing in the system that is causing kids to have bad behavior you are never going to get anywhere.

This idea ties together psychology (neuroscience) and systems thinking to help Ingenium school to seek systemic fixes that create systems that allow students to regain the joy and meaning in learning that so many schools do not support today. Instead of trying to force compliance from kids they seek to understand the underlying conditions that lead to behavior that is not effective and change the system to allow kids to do what they naturally do: learn.

Over the 6 years I have been writing posts for this blog one of the consistent joys is learning about the efforts of schools David has helped apply Deming’s ideas to improve the education system. It is wonderful to listen to the efforts at Ingenium schools to create systems that help kids learn.

Related: David Langford Presentation on Motivation and System ImprovementTransforming the Organization, Deming Podcast with David LangfordChange has to Start from the TopThe Neuroscience of Deming by JW Wilson


2018 Deming Prize Winners

The Union of Japanese Scientists and Engineers (JUSE) has announced the 2018 Deming Prize winners.

Nine companies were awarded the Deming Prize this year (last year 2 companies received the award):

Since 2000 organizations based in India have received the most Deming Prizes; Japan is second, and Thailand is third.

Distribution of winning organizations since 2000 (including prizes for 2018)

  • India – 28
  • Japan – 19
  • Thailand – 12
  • China – 3
  • USA – 2
  • Indonesia – 1
  • Singapore – 1
  • Taiwan – 1

2018 Deming Grand Prize

  • Cataler Corporation (Japan)

2018 Deming Prize for Individuals

  • Naotake Okubo, Executive Advisor, Sekisui Chemical

Related: 2016 Deming Prize Winners2015 Deming Prize WinnersSpeech by Dr. Deming to Japanese Business Leaders in 1950


Why Deming / Why Now

Post by Bill Bellows, Deputy Director, The Deming Institute.    Previously published by Quality Digest.

In February 1990, W. Edwards Deming traveled to Western Connecticut State University (WCSU) in Danbury, CT to deliver three lectures, an afternoon session with students, immediately followed by one with faculty and staff of the business school, followed by an evening lecture to the general public.    Dr. Deming, a self-described “Consultant in Statistical Studies” approaching ninety years of age, was invited to WCSU a year earlier, yet lacked an opening in his demanding travel schedule for an appearance at the university until a year later.   Throughout the day, I joined several hundred attendees for an introduction to his “System of Profound Knowledge,” the name he chose for his theory of management, yet deferred to each audience with a kind request, “if you have a better name, please help me.”

During the Q&A period of the evening session, one attendee was seeking insight on the issue of staff cutting.  His question went something like this, “Dr. Deming, what do you think about the recent trend towards reducing the number of levels of management?”  Before presenting Dr. Deming’s answer, consider the options.  Then again, pause and reconsider the question. Although I was not a middle-level manager, I was captivated by the prospects of Dr. Deming’s answer, for it would offer another piece to the puzzle of a better understanding his theory of management.    With little hesitation, Dr. Deming answered, “Why have more levels than you need?”

As for me, it was not the answer I had anticipated, nor the direction I had expected Dr. Deming to move. For some reason, I was expecting a response with advice on how many levels of management were appropriate.  Perhaps 5.  Perhaps 3.  Instead, Dr. Deming, in his classic Socratic style, re-framed the issue with a question revealing a contextual appreciation of organizational interactions.  In time, I could recognize that this was a standard reply from Dr. Deming, to answer a probing question with a probing question, always inviting inquirers to think.

My interpretation of Dr. Deming’s answer was that the number of levels of management would be dependent on the specifics of the organization, not “one size fits all.” Given a specific situation or system (which includes one’s level of thinking), one would need an appropriate number of levels.  More than this would be costly. Less than this would be costly. Trial-and-error often leads to an answer. Should the situation change, I might expect the solution to change as well. Instead of a “one size fits all” solution, this activity could be defined as “managing the system,” with its inherent interdependencies.

Why Deming / Why Now – Thinking About Systems

Now, 28 years later and 25 years after his passing in 1993, consider what questions one might ask Dr. Deming, were he alive today.  Perhaps a series of questions, such as;

“Dr. Deming, what do you think about the recent trend towards reducing the waste in our operations?”, or

“Dr. Deming, what do you think about the recent trend towards reducing variation in our

processes?”, or

“Dr. Deming, what do you think about the recent trend towards reducing costs in our

departments?”, or

“Dr. Deming, what do you think about the recent trend towards standardizing our operations?”

I would anticipate Dr. Deming approaching each of these questions with an understanding of the nature of organizational dynamics.  In each case, he would suggest the need for understanding the nature of the systemic behaviors.  He would suggest the value of having no more than necessary and not less.  As with the prescient title of his 1993 book, The New Economics, his proposal offers a new economics, one in which the focus is on the relationships (interdependencies) between the elements of the system and not the elements taken separately (independently).

As a real-life example, one widely applicable in organizations today, Dr. Deming’s presentations at WCSU included a classic story of how an employee’s travel costs were saved by an organization’s travel department by requiring same day travel.  But, the need for the employee to awake at 3am to prepare for a 6am flight from Chicago to New York left her too tired to make productive use of her afternoon meeting.   Instead of reducing cost, waste, or even variation, everywhere, a more systemic approach would be to manage cost, waste, and variation and provide the appropriate levels throughout the system. He would also remind us that what appears to be waste (hotel expenses) to one observer may not appear as such to another (the traveler).   As with a whale or an organization, what might appear to be fat or waste to one observer, could be an essential economic ingredient to the long-term survival of the system.

Likewise, instead of a massive effort to standardize processes within an organization, one might ask which processes should be standardized and which should be non-standard.    For example, should language and software be standardized across an organization, including its supplier base, as well as sub-tier suppliers?   Is there a place for left-handers?  A hospital, for example, could have uniforms for nurses that differ from those for doctors and staff members, thereby making it easier for patients and their families to identify the help they need.   While there’s a place for standardization, there is also a systemic limit to what is economically viable when managing the elements of a system. 

Why Deming / Why Now – the Deming System of Profound Knowledge®

In appreciation of the management wisdom revealed in The New Economics, the degree to which the system “works together” can be greatly enhanced with a better understanding of Dr. Deming’s management theory, his so-called “System of Profound Knowledge.”   The elements of this system consist of the four parts below, and their interrelationships;

  1. Appreciation for a system
  2. Knowledge about variation
  3. Theory of knowledge
  4. Psychology

In combining these deep bodies of knowledge, Deming’s management philosophy offers a remarkably holistic appreciation of organizations that anticipates the role of systems thinking, linked to variation management, linked to a theory of knowledge (for learning together), further linked to an understanding of people (psychology).    While organizations are often content to manage a growing list of symptoms of a lack of appreciation of systems, variation, knowledge, and psychology, extending from low morale to poor quality to frequent cost overruns, to customer and supplier complaints, adoption of the Deming Philosophy enables leaders at all levels to manage with a systems viewpoint, ever conscious of the difference between treating symptoms and managing systems of interdependent elements and activities.

Why Deming / Why Now – A New Economic Age

We are in a new economic age.  We can no longer live with commonly accepted levels of delays, mistakes, defective materials and defective workmanship.    W. Edwards Deming

Since being introduced to Dr. Deming and his System of Profound Knowledge, I’ve grown to appreciate blind spots which face today’s “Organizations as Usual” environments, with “commonly accepted levels of delays, mistakes, defective materials and defective workmanship” as a symptom of how organizations continue to manage their resources, including time, money, equipment, and people.

One way to test for what is commonly accepted in terms of the level of big problems, including delays, mistakes, and defective workmanship in any organization is to investigate the focus of attention for problems with a question such as, “How much time is spent every day in our organization, discussing parts, tasks, suppliers, customers, activities, and program milestones which are going well?”   In probing with this question, through presentations, seminars, and workshops for 20+ years, we have learned that few resources are routinely dedicated to Things Going Well.  Rather, they focus on an alternate “TGW,” namely Things Gone Wrong.   On occasion, we have made the observation that “continual improvement, with a focus on improving what is good, must not be a priority in your organization,” unless such an effort is dedicated to fixing problems faster, rather than preventing them from occurring.

While introduced in the 1980s as a better way to manage product, process, and service quality, the Deming Philosophy is gaining momentum in the 21st century as a better way to manage systems, with applicability to any organization interested in the endless pursuit of “doing more with less.”   What’s missing from the “Organizations as Usual” focus on Things Gone Wrong is the actual variation in Things Going Well, with the ability to monitor this variation as a means to prevent the eventual repeat occurrences of Things Gone Wrong.    What’s also missing from “Organizations as Usual” is the ability to wonder where a “stitch in time can save nine, if not five” or ask “where is an ounce of prevention worth a pound of cure?”   While these timeless proverbs, with many alterations, are the essence of what it means to manage resources as a system, we credit Dr. Deming with documenting the invisible obstacles which block these profitable pursuits.

Now, more than ever, organizations possess limitless opportunities to improve how they manage resources within a system, with a focus on exploiting interdependency, not unknowingly falling victim to managing tasks, leading to lower travel costs, in isolation.  Such a dramatic change requires a transformation in how organizations both understand and manage systems, variation, people (psychology), and knowledge, the four interdependent elements of the Deming System of Profound Knowledge®.