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Bill Bellows

Management

Why Deming, Why Now?

Great philosophies only strengthen with time

Published: Monday, September 10, 2018 - 12:01

In February 1990, W. Edwards Deming traveled to Western Connecticut State University (WCSU) in Danbury, Connecticut, 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 open to the general public.

Deming, a self-described “consultant in statistical studies” approaching 90 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 Deming’s 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, “Mr. Deming, what do you think about the recent trend toward reducing the number of levels of management?” Before presenting 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 Deming’s answer, for it would offer another piece to the puzzle of a better understanding his theory of management. With little hesitation, Deming answered, “Why have more levels than you need?”

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

My interpretation of 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 Deming, were he alive today. Perhaps a series of questions, such as:
• “What do you think about the recent trend toward reducing the waste in our operations?”
• “What do you think about the recent trend toward reducing variation in our
processes?”
• “What do you think about the recent trend toward reducing costs in our
departments?”
• “What do you think about the recent trend toward standardizing our operations?”

I would anticipate 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 for Industry, Government, Education (MIT Press, second edition, 2000) 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, 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 3 a.m. to prepare for a 6 a.m. 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 nonstandard. 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. Although there is 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 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’ leaders that anticipate 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). Although organizations’ managers are often content to manage a growing list of symptoms, or 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 Deming and his System of Profound Knowledge, I’ve grown to appreciate the 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 for more than 20 years, through presentations, seminars, and workshops, 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.  

Although 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 to ask, “Where is an ounce of prevention worth a pound of cure?” Although these timeless proverbs, with many alterations, are the essence of what it means to manage resources as a system, we credit 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.

For more information on the Deming Philosophy, please review the W. Edwards Deming Institute’s recent podcast with Joshua Macht, executive vice president, product innovation, and group publisher of the Harvard Business Review Group.

The 2018 Annual Conference, “Why Deming, Why Now,” occurs Oct. 5–6, 2018, in Manhattan Beach, California. Click here to learn more.

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About The Author

Bill Bellows’s picture

Bill Bellows

Bill Bellows joined The W. Edwards Deming Institute in October 2016 as the deputy director. In this role, he works in collaboration with The Deming Institute’s leadership and staff, and partners to guide the worldwide efforts of the institute to achieve its aim.