There is not a day I don't think about what Dr. Deming meant to us. Deming is the core of our management.
Toyoda, Shoichiro, Honourary Chairman and Director of Toyota.
A few months before his death, he [Dr. Deming] gave us The New Economics for Industry, Government, Education. Comparison with Out of the Crisis is intriguing; The New Economics is much shorter, and the language simpler—but deceptively so. There is a great danger of a newcomer to Dr. Deming’s work simply skimming over the surface of The New Economics and remaining unaware of the profound depth underlying those simpler words.
Neave, Dr. Henry. The Deming Dimension. (p. xvii)
The first step. The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people.
Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organization that he belongs to. The individual, once transformed will:
Set a good example;
Be a good listener, but will not compromise
Continually teach other people
Help people pull away from their current practice and beliefs and move into the new philosophy without a feeling of guilt about the past.
Deming, Dr. W.E. The New Economics. (p. 63)
THE AIM for this brief post is share with you an article that I learned about from an acquaintance written by Cedric Chin on his site, Commoncog, which I think an excellent example of what the learning journey is like when you’re scaling Mount Deming for the first time, and perhaps trying to do too much all-at-once in the process. Within, he posits that there may be an internal tension or paradox with Deming’s philosophy as written versus as applied. I disagree, but I think it really instructive to learn why he drew this interpretation in order to appreciate how those new to philosophy see things differently. I encourage you to read his essay as I'll be drawing on key points from it below.
The Deming “Paradox”
The crux of the article rests on an apparent paradox in Deming’s philosophy that the author is struggling to reconcile:
I’m writing about Deming’s overall philosophy here because of a fundamental tension I’ve noticed the more I’ve dug into his work: the data tools and statistical methods he popularised can and have been used to produce amazing business outcomes with horrible human costs. But the man himself espouses a philosophy that is deeply humanistic in nature. You could argue that his methods are used to produce the former outcomes mostly by ignoring his latter ideas.
In support of the notion of Deming being used to exact “horrible human costs”, Chin relates an exchange he had with some friends in Big Tech about Amazon’s use of Deming:
Let’s tackle the first part of that claim. What kind of horrible human costs? Well, consider the response that many of my Big Tech friends have had when I explained that I was digging into the source methods for Amazon’s operational rigour: “That’s nice.” they’d retort, “And cool if you get it to work for you. But Amazon has a funny way of sucking the soul out of everyone I know who has worked there.”
I’ve heard this enough times, from enough different sources that I mostly accept it as true. And from anecdotal evidence I also know that Western companies with sufficient operational rigour tend to be rather … unpleasant places to work. “Is that not the price of excellence?” a friend said, after I told him of this conundrum. “What, you expect such operational excellence to come for free?”
An obvious point in retrospect; I think about that exchange a lot.
Two observations, here:
First, it sounds like Chin is describing the offshoot of Deming’s work on quality improvement using Statistical Process Control Charts (Shewhart Charts) that came to be known as Six Sigma, which is definitely a different animal and often is relentlessly focused on measurements and system optimizations that can feel draining. Definitely and decidedly not Deming.
Second, it’s my understanding that the “systems thinking” book that had the most influence on Bezos' thinking regarding operations was The Goal, by Eli Goldratt (published shortly after Deming’s Out of the Crisis) which describes Goldratt’s core philosophy for operational optimization, the Theory of Constraints, in a novel. There is a high-degree of affinity between Deming and Goldratt, with the former providing the “what” to the latter’s “how”. This affinity was later synthesized by Dr. Domenico Lepore and Oded Cohen’s 1999 book, Deming and Goldratt: The Theory of Constraints and the System of Profound Knowledge: The Decalogue. Lepore and his wife, Dr. Angela Montgomery consult to organizations using this approach, along with others they have developed, to this day.
Brief Note on System of Profound Knowledge
Chin also feels a little uncomfortable with the description of Deming’s core philosophy as “profound”:
It’s also a little kooky: Deming’s name for his system is ‘A System of Profound Knowledge’; various writers have called Deming — amongst other things — a genius, a ‘business guru’ and a ‘moral philosopher’, which strikes me as both cultish and odd and naturally makes me more suspicious of his work. To be fair, it does seem like Deming was rather humble, though I continue to wonder at the kind of person who names their business philosophy ‘profound’.
Deming himself offered that if anyone could provide a better description he would gladly change it. It’s worth recalling here that the System of Profound Knowledge is simultaneously an “outside view” into what’s wrong with the prevailing style of management and a route to transformation away from it. In a more modern sense, you could think of Deming’s SoPK as akin to Morpheus explaining “The Matrix” to Neo as “the world that has been pulled over your eyes”:
How Effective is this Deming Stuff, Really?
Chin continues his learning journey by looking, paradoxically, for examples of where Deming’s philosophy has produced the profound changes and improvements advertised, landing upon Chapter 6 of Christopher Leonard’s book, Kochland. I say paradoxically, because the search for examples is something Deming directly warned against, while acknowledging it is very human to want this:
Do not confuse coincidence with cause and effect…
If anyone were to study without theory such a company, ie. without knowing the questions to ask, he would be tempted to copy the company, on the pretext that “they must be doing some things right.” To copy is to invite disaster.
The New Economics, 3rd ed. (p. 26)
This said, you can learn of many more companies that adopted a Deming view to leadership through The Deming Institute and their new online education and training offering, DemingNEXT. Not all of them are uniform, and not all of them were successful, often involving two steps forward and many back. There are, of course, some canonical examples from the past such as Mattress Mack’s and Paula Marshall’s transformation of Bama Foods, along with others.
Is There Really a Paradox, or Management by Objective?
Let’s loop back to Chin’s thesis that Deming seems to be at once about the human side of leading organizations but with an unrelenting pressure on people to work like machines:
Here’s the tension at the core of Deming’s work. Arguably, Deming’s biggest and most lasting contribution might be the data techniques that he created for business. We’ve taken a look at some of those data techniques over the course of this series — the bulk of them focused on differentiating between routine and exceptional variation for the purposes of process improvement. Those same data techniques can and have led to incredible operational rigour. But then the systems that results from these tools sometimes result in crushing pressure for the individuals executing within the system.
Chin’s struggle here is, I think, informed by anecdote and a not-quite-thorough reading of the source material, ie. The New Economics. It will come in time, but we can easily reconcile the paradox through a simple elimination: The scenario he describes would come from the twin faulty practices of Management by Objective, and Management by Results that Deming describes in Chapter 2, The Heavy Losses, which I’ve covered in previous newsletters.
There is no question that a Deming transformation is hard work, but it should be work that everyone is intrinsically motivated to accomplish because they see the value in it and understand how their contributions are critical to achieving better quality for their customers and themselves. Above all, this is about restoration of purpose and joy in work, which has been previously thought of as a fanciful trade-off rather than intrinsic to a system of management.
Discontinuous Learning
Chin’s essay provides a unique and candid window into what a Deming learning journey is like: a real quest for understanding and pushing back the boundaries of prior “ignorance” while struggling to ameliorate seemingly contradictory concepts. It goes in fits and starts, with newer ideas and revelations revising or discarding prior ones, and can culminate in a “false learning curve” like the one Peter Scholtes describes in The Leader’s Handbook, where just as you think you’ve “got it” you realize you don’t — and that’s when the profound learning begins.
Chin’s reading list is instructive, here:
While all excellent books, I’d suggest a re-ordering and some additions that can help accelerate the learning (outside of reading this newsletter, of course…):
The New Economics, Deming. Read, re-read, read again. This is one of those rare books that will change as you grow and evolve your own thinking over time.
The Deming Dimension, Dr. Henry Neave - excellent companion that can help buttress the concepts.
Out of the Crisis, Deming. I’d refer to this as-needed to elucidate concepts referred to in The New Economics and The Deming Dimension, diving into the 14 Points and their expansion.
The Symphony of Profound Knowledge, Dr. Ed. Baker. This is a deep book that took Baker years to write, based on his learning of Deming’s philosophy while working with him at Ford. Not everyone’s cup of tea and I’d put it in the “Advanced” reading category.
Four Days with Dr. Deming, William J. Latzko, David M. Saunders. This is a good book to get a feel of what a classic Deming Four Day Seminar was like, stepping you through the learnings on each day. Latzko was a long-time friend and colleague to Deming, contributing a portion of Chapter 7 of Out of the Crisis on applying Deming’s thinking in banking and financial institutions.
The Essential Deming, Dr. Joyce Orsini. Orsini is a PhD student of Deming’s, and also contributed significantly to developing his theory. This book nets together a number of his lectures, papers, and correspondence that give some context.
Time to Blossom in the Mind
When I was beginning my learning journey studying Deming, I recall hearing an expression, perhaps in a Deming Institute podcast, about the unevenness in learning that occurs between people: it takes time for the ideas and concepts to blossom in the mind. While it can be quick to seize on some artefacts and practices like Shewhart Charts or PDSA, it takes a little longer to know how these are used appropriately, and how they can be abused. In other words, the journey isn’t linear nor is it continuous. Some step away from it for days, others for years. Nonetheless, as I discussed in my July 23/21 newsletter on Knowledge of Psychology, there’s some mind-blowing neuroscience to suggest that you really are physically transformed by learning it at a chemical level in the brain.
Reflection Questions
What do you think of Chin’s essay on The Deming Paradox? Do you agree with his thesis? Why or why not? What has your own learning journey studying Deming looked like? Was it like the Conventional Learning Curve that Scholtes described in The Leader’s Handbook, or was it a Transformation Learning Curve that had a steep drop-off before real learning began? Or was it different altogether? How have either you or your organization approached learning material like Dr. Deming’s? Did you require examples to support your learning? What helped? What proved a distraction?