There is a ton to unpack in your posting, so let me just address one issue: adversarial competition.
This is simply a redundancy; the concept of cooperative competition is a huge stretch, and the Book "Co-Opetition" is not excluded.
The opposite of cooperation, two or more people working together for a common goal, is not competition. The opposite of competition is conflict, which is two or more people fighting to achieve a single goal.
Competition is just conflict with rules.
In competition there are winners and losers and it is the search for scarcity. If there is not a natural scarcity, we make one up; grades, trophies etc so we can compete. Cooperation is about win-win and creating something larger than what you start with where everyone benefits.
Deming gave examples of how the auto companies in Japan would cooperate by sharing information through JUSE for example, but they did that so they could compete on the world stage.
The concept expressed in the book “Co-Opetition” was to cooperate and compete. But if you look at what happens they cooperate within a sector, so that sector can better compete with some other sector supplying the same products. It was not about doing away with competition and the problems of competition -- but to use cooperation as a means so you could compete better.
Very little of this was addressed by Dr. Deming and his treatment leaves a lot to be desired.
He says that competition was bad but should be used in a few circumstances. As I recall he mentioned new product and new services yet failed to explain why these were exceptions. At the same time he failed to explain what was good about competition yet lauds the Japanese for their ability to compete in the world market.
What I see people doing is just following the writings of Deming without questioning it at all and this is one ripe case.
I am convinced there is a place for competition, a healthy place. Yet competition is, like behaviorism itself, a broadly believed-in concept where people have failed to address the downside.
In the end all competition is adversarial, at its heart it is conflict.
Thanks again for sharing your perspective Lonnie - I learning something new every time you write, so keep it coming!
I like what you've said about "Competition is just conflict with rules." - it's intriguing and I want to think on it in context of Deming's theory of Win/Lose, Win/Win. Ditto for Co-Opetition. And I hear you about Deming leaving some cold trails despite everything he wrote and lectured on. Only so much one guy could do, and he did a lot. Nonetheless, I don't think his intent was to leave us in a state of arrested development, but to "seek what he sought". That means testing the theories.
On competition, I think he was fairly explicit in identifying "race to the bottom" style competition (WIN/LOSE) as his primary motivation for transforming management, eg: "The present system runs by the economics of WIN, LOSE: I WIN, YOU LOSE. I CAN WIN ONLY IF YOU LOSE. There is no more free land. The sacred cow (WIN, LOSE) has run dry. We need a transformation to a new kind of economics where everyone comes out better: COOPERATION, WIN, WIN. There will be inequalities and some people will win more than others, but everyone will win." (Essential Deming, p. 40)
I am unfamiliar with where he acknowledges exceptions win/lose competition should be used -- can you point me to where I can read it? Regarding lauding the Japanese, I think he was referring to "competitive position", ie. what they gained not be competing to ruin American fortunes for the sake of it, but on the quality they were able to achieve. And the US could have done it, too had they tried out his theory.
For sure the good doctor did not want us to rest on our laurels, but in the cooperation/competition dichotomy he had not thought it out much except for finding a lot of the downside to competition that so many just take for granted. To get there he had more than one in-depth discussion with Alfie Kohn and discussing this with Kohn, I do not think he is balanced at all. Like so many, what Kohn says is spot on, but there is more to the story.
We have gained a lot by competition. I think it was David Sarnov who said, "competition brings out the best in products and the worst in people." Anyway, I have a few ideas that point to some good uses of competition. They are a bit hard to discuss in a blog and Zoom would be more efficient, by far, certainly for my Biblical typing skills which is "seek ye shall find." If you have some time, let me know and we can connect. I think I can explain some of the benefits of competition but my major point is that (1) Competition has a serious downside that almost everyone ignores (2) often the downside is much larger than the upside and (3) as a nation we treat competition as a natural good without even thinking about it ..... and a couple of other things.
For years I have been struggling with the term "healthy competition." wanna talk?
I found this Deming quote, "Competition should be directed toward expansion of the market and to meet needs not yet served.” W.Edwards Deming TNE
Can anyone explain what that means? I can think of some "Deming thoughts" on the first half of that statement, but the second phrase? That is not even warm enough to qualify as a "cold trail", Arctic frigid would be more appropriate.
This "whole competition - cooperation dichotomy" is extremely intriguing to me. You can make a good argument that, the Japanese being better at it than us (and maybe everybody else), is how they vaulted from a tiny smoldering island nation in 1945 to a world industrial power by 1970.
"The concept expressed in the book “Co-Opetition” was to cooperate and compete. But if you look at what happens they cooperate within a sector, so that sector can better compete with some other sector supplying the same products. It was not about doing away with competition and the problems of competition -- but to use cooperation as a means so you could compete better."
This is also worth addressing, through an example. Blogger Malstrom pointed out that when Nintendo made "Legend of Zelda", the original, the net effect of tons of copycat games being made wasn't to reduce Nintendo's sales. Their sales actually -went up- when copycats showed up. How could that be? It turns out that those copycats all helped to expand the amount of people who like to play games like Zelda, so everyone won.
Another example: fast food oasis's. Ever wonder why you see fast food places all next to each other? You would, on first thought, think that they would want to avoid direct competition at all costs - "don't put your McDonalds next to the Wendy's they'll steal your customer!". However it turns out that by cooperating and sitting next to each other, that city district becomes 'the place where you get food' and tons of people come simply because of that. The sales for both restaurants go up because of it, rather than if they were solo. Yes, the fact that you see like 4 fast food places all within the same .5 miles is a deliberate choice from them. It expands the customer base to anyone who wants food in general, rather than simply a loyal brand customer, and it was only possible through cooperation.
This is a really good point you raise about the "attractor" effect, Dave. An old friend who coaches software teams on mobbing once told me a story about how he owned a music shop, and he told me the wisdom he learned as a young man about where to locate it: Across the street from another music shop. Not to compete, per se, but because you know you're accessing all the traffic coming to that part of town for instrument sales, repairs, sheet music, etc. Two shops can satisfy twice as many customers - he was leading with a Deming view without even knowing it...
I can take a stab. I believe Deming was saying that competing companies should compete in serving underserved customers instead of breaking each other's knees.
The idea of 'expansion of the market and meet unserved needs' is gone into, by different later writers, in great depth in the books "Innovator's Dilemma" and "Blue Ocean Strategy".
Their basic thesis was that companies would pivot towards one of two main poles.
•Red Ocean: Cut costs, undermine competitors, creep your customer base outwards with existing resources. It's called the Red Ocean because it's full of the blood of competing companies.
•Blue Ocean: Find customers who are currently not even considered customers by your market. If they are not currently customers, find out why. It's called Blue Ocean because it's open waters with few competing companies in there.
The example given is the steel industry. The incumbant Red Ocean strategy was to micro manage costs as much as possible, lower wages, lower quality, raise prices while looking for ever more rich customers who were willing to pay more for the same product. The Blue Ocean strategy was to use an emerging, yet neglected, technology of Arc-Furnaces to make customers out of people who were waaaaay too poor to be profitable to the incumbent business model. The companies that expanded to those customers expanded the market and created more jobs, more wealth, more innovation. Eventually the Arc-Furance companies even started drawing customers from the incumbents because they were so customer-facing instead of killing-each-other facing.
My evidence that this is what Deming meant is through the actions of Toyota, Suzuki, et all. They developed products in dirt bikes and eventually economy cars that served people who weren't even considered customers by the established car companies. Even today Ford/Chrystler et al want to sell more fancy more expensive more features cars to ever richer clients and endlessly compete with each other directly for more features for more money. You and I know who loses, the customer, and the winner is their stockholders. They certainly don't consider the economy car needing man a customer, they barely do today even after Toyota ate their lunch.
The companies that took Deming's lead instead spent their competitive energies searching for new markets where no one at all was being served or even considered a customer. Now -why- does this go hand in hand with Deming? It's because incumbents main edge is in regulatory momentum. That's laws they buy to make it so no one can compete, supply channels and car dealerships they already paid for, TV commercials whose slots they monopolize, etc. None of it has anything to do with quality. That's how they crush new comers, even ones with high quality products. Same with McDonalds.
However, in a new market, quality is king. The iphone beat the blackberry because it was a higher quality product in a new market. Nowadays, with iphone people as an established old market, a new higher quality phone would not run away with the market as easily as that original era. And, through mechanisms explained in the above two books, if you can win a beachhead out-of-market as a quality-facing company it often means you can invade and eat the competition-facing companies at a later date.
Incredible explanation! What I didn't realize until reading Deming is monopolies are not the problem; evil is the problem, greed and exploitation is the problem. Eliminating monopolies doesn't solve the problem of greed and exploitation, it just slightly hinders a situation it can take advantage of. We still have poor-quality goods and services and exploitative practices anyway.
Deming was talking about a total transformation, beginning with the heart and working outward. Quality is love, and when you love your neighbor and become a servant to them (everyone is your customer), quality comes naturally. It is entirely possible for a monopoly to be a monopoly just because they provide the greatest goods and services.
Just look at VALVe, their online video game store "Steam" is virtually a pseudo-monopoly because everyone loves their customer service so much. Gabe Newell famously said that media piracy is a mostly a problem of bad customer service, and he sought to fix that. So when ads for a class action lawsuit against Steam were going around recently, Steam customers were mocking them for it in the comments. It's an amazing thing to see.
Thanks - I hope I'm doing these topics justice: It's in the thinking, re-thinking, explaining, re-explaining from different perspectives that you learn, and I've added another layer to my understanding with this post. The learning never ends...!
Quality is absolutely essential to understanding Deming's view - it's a nebulous thing because it's not just about how well the parts of your products fit together and work together, but also everyone behind them, right to the top. It's a direct reflection of leadership mindset and intent.
There is a ton to unpack in your posting, so let me just address one issue: adversarial competition.
This is simply a redundancy; the concept of cooperative competition is a huge stretch, and the Book "Co-Opetition" is not excluded.
The opposite of cooperation, two or more people working together for a common goal, is not competition. The opposite of competition is conflict, which is two or more people fighting to achieve a single goal.
Competition is just conflict with rules.
In competition there are winners and losers and it is the search for scarcity. If there is not a natural scarcity, we make one up; grades, trophies etc so we can compete. Cooperation is about win-win and creating something larger than what you start with where everyone benefits.
Deming gave examples of how the auto companies in Japan would cooperate by sharing information through JUSE for example, but they did that so they could compete on the world stage.
The concept expressed in the book “Co-Opetition” was to cooperate and compete. But if you look at what happens they cooperate within a sector, so that sector can better compete with some other sector supplying the same products. It was not about doing away with competition and the problems of competition -- but to use cooperation as a means so you could compete better.
Very little of this was addressed by Dr. Deming and his treatment leaves a lot to be desired.
He says that competition was bad but should be used in a few circumstances. As I recall he mentioned new product and new services yet failed to explain why these were exceptions. At the same time he failed to explain what was good about competition yet lauds the Japanese for their ability to compete in the world market.
What I see people doing is just following the writings of Deming without questioning it at all and this is one ripe case.
I am convinced there is a place for competition, a healthy place. Yet competition is, like behaviorism itself, a broadly believed-in concept where people have failed to address the downside.
In the end all competition is adversarial, at its heart it is conflict.
Thanks again for sharing your perspective Lonnie - I learning something new every time you write, so keep it coming!
I like what you've said about "Competition is just conflict with rules." - it's intriguing and I want to think on it in context of Deming's theory of Win/Lose, Win/Win. Ditto for Co-Opetition. And I hear you about Deming leaving some cold trails despite everything he wrote and lectured on. Only so much one guy could do, and he did a lot. Nonetheless, I don't think his intent was to leave us in a state of arrested development, but to "seek what he sought". That means testing the theories.
On competition, I think he was fairly explicit in identifying "race to the bottom" style competition (WIN/LOSE) as his primary motivation for transforming management, eg: "The present system runs by the economics of WIN, LOSE: I WIN, YOU LOSE. I CAN WIN ONLY IF YOU LOSE. There is no more free land. The sacred cow (WIN, LOSE) has run dry. We need a transformation to a new kind of economics where everyone comes out better: COOPERATION, WIN, WIN. There will be inequalities and some people will win more than others, but everyone will win." (Essential Deming, p. 40)
I am unfamiliar with where he acknowledges exceptions win/lose competition should be used -- can you point me to where I can read it? Regarding lauding the Japanese, I think he was referring to "competitive position", ie. what they gained not be competing to ruin American fortunes for the sake of it, but on the quality they were able to achieve. And the US could have done it, too had they tried out his theory.
CRC.
For sure the good doctor did not want us to rest on our laurels, but in the cooperation/competition dichotomy he had not thought it out much except for finding a lot of the downside to competition that so many just take for granted. To get there he had more than one in-depth discussion with Alfie Kohn and discussing this with Kohn, I do not think he is balanced at all. Like so many, what Kohn says is spot on, but there is more to the story.
We have gained a lot by competition. I think it was David Sarnov who said, "competition brings out the best in products and the worst in people." Anyway, I have a few ideas that point to some good uses of competition. They are a bit hard to discuss in a blog and Zoom would be more efficient, by far, certainly for my Biblical typing skills which is "seek ye shall find." If you have some time, let me know and we can connect. I think I can explain some of the benefits of competition but my major point is that (1) Competition has a serious downside that almost everyone ignores (2) often the downside is much larger than the upside and (3) as a nation we treat competition as a natural good without even thinking about it ..... and a couple of other things.
For years I have been struggling with the term "healthy competition." wanna talk?
I found this Deming quote, "Competition should be directed toward expansion of the market and to meet needs not yet served.” W.Edwards Deming TNE
Can anyone explain what that means? I can think of some "Deming thoughts" on the first half of that statement, but the second phrase? That is not even warm enough to qualify as a "cold trail", Arctic frigid would be more appropriate.
This "whole competition - cooperation dichotomy" is extremely intriguing to me. You can make a good argument that, the Japanese being better at it than us (and maybe everybody else), is how they vaulted from a tiny smoldering island nation in 1945 to a world industrial power by 1970.
"The concept expressed in the book “Co-Opetition” was to cooperate and compete. But if you look at what happens they cooperate within a sector, so that sector can better compete with some other sector supplying the same products. It was not about doing away with competition and the problems of competition -- but to use cooperation as a means so you could compete better."
This is also worth addressing, through an example. Blogger Malstrom pointed out that when Nintendo made "Legend of Zelda", the original, the net effect of tons of copycat games being made wasn't to reduce Nintendo's sales. Their sales actually -went up- when copycats showed up. How could that be? It turns out that those copycats all helped to expand the amount of people who like to play games like Zelda, so everyone won.
Another example: fast food oasis's. Ever wonder why you see fast food places all next to each other? You would, on first thought, think that they would want to avoid direct competition at all costs - "don't put your McDonalds next to the Wendy's they'll steal your customer!". However it turns out that by cooperating and sitting next to each other, that city district becomes 'the place where you get food' and tons of people come simply because of that. The sales for both restaurants go up because of it, rather than if they were solo. Yes, the fact that you see like 4 fast food places all within the same .5 miles is a deliberate choice from them. It expands the customer base to anyone who wants food in general, rather than simply a loyal brand customer, and it was only possible through cooperation.
This is a really good point you raise about the "attractor" effect, Dave. An old friend who coaches software teams on mobbing once told me a story about how he owned a music shop, and he told me the wisdom he learned as a young man about where to locate it: Across the street from another music shop. Not to compete, per se, but because you know you're accessing all the traffic coming to that part of town for instrument sales, repairs, sheet music, etc. Two shops can satisfy twice as many customers - he was leading with a Deming view without even knowing it...
I can take a stab. I believe Deming was saying that competing companies should compete in serving underserved customers instead of breaking each other's knees.
The idea of 'expansion of the market and meet unserved needs' is gone into, by different later writers, in great depth in the books "Innovator's Dilemma" and "Blue Ocean Strategy".
Their basic thesis was that companies would pivot towards one of two main poles.
•Red Ocean: Cut costs, undermine competitors, creep your customer base outwards with existing resources. It's called the Red Ocean because it's full of the blood of competing companies.
•Blue Ocean: Find customers who are currently not even considered customers by your market. If they are not currently customers, find out why. It's called Blue Ocean because it's open waters with few competing companies in there.
The example given is the steel industry. The incumbant Red Ocean strategy was to micro manage costs as much as possible, lower wages, lower quality, raise prices while looking for ever more rich customers who were willing to pay more for the same product. The Blue Ocean strategy was to use an emerging, yet neglected, technology of Arc-Furnaces to make customers out of people who were waaaaay too poor to be profitable to the incumbent business model. The companies that expanded to those customers expanded the market and created more jobs, more wealth, more innovation. Eventually the Arc-Furance companies even started drawing customers from the incumbents because they were so customer-facing instead of killing-each-other facing.
My evidence that this is what Deming meant is through the actions of Toyota, Suzuki, et all. They developed products in dirt bikes and eventually economy cars that served people who weren't even considered customers by the established car companies. Even today Ford/Chrystler et al want to sell more fancy more expensive more features cars to ever richer clients and endlessly compete with each other directly for more features for more money. You and I know who loses, the customer, and the winner is their stockholders. They certainly don't consider the economy car needing man a customer, they barely do today even after Toyota ate their lunch.
The companies that took Deming's lead instead spent their competitive energies searching for new markets where no one at all was being served or even considered a customer. Now -why- does this go hand in hand with Deming? It's because incumbents main edge is in regulatory momentum. That's laws they buy to make it so no one can compete, supply channels and car dealerships they already paid for, TV commercials whose slots they monopolize, etc. None of it has anything to do with quality. That's how they crush new comers, even ones with high quality products. Same with McDonalds.
However, in a new market, quality is king. The iphone beat the blackberry because it was a higher quality product in a new market. Nowadays, with iphone people as an established old market, a new higher quality phone would not run away with the market as easily as that original era. And, through mechanisms explained in the above two books, if you can win a beachhead out-of-market as a quality-facing company it often means you can invade and eat the competition-facing companies at a later date.
Thanks for sharing these insights, Dave - I'd agree.
Incredible explanation! What I didn't realize until reading Deming is monopolies are not the problem; evil is the problem, greed and exploitation is the problem. Eliminating monopolies doesn't solve the problem of greed and exploitation, it just slightly hinders a situation it can take advantage of. We still have poor-quality goods and services and exploitative practices anyway.
Deming was talking about a total transformation, beginning with the heart and working outward. Quality is love, and when you love your neighbor and become a servant to them (everyone is your customer), quality comes naturally. It is entirely possible for a monopoly to be a monopoly just because they provide the greatest goods and services.
Just look at VALVe, their online video game store "Steam" is virtually a pseudo-monopoly because everyone loves their customer service so much. Gabe Newell famously said that media piracy is a mostly a problem of bad customer service, and he sought to fix that. So when ads for a class action lawsuit against Steam were going around recently, Steam customers were mocking them for it in the comments. It's an amazing thing to see.
Thanks - I hope I'm doing these topics justice: It's in the thinking, re-thinking, explaining, re-explaining from different perspectives that you learn, and I've added another layer to my understanding with this post. The learning never ends...!
Quality is absolutely essential to understanding Deming's view - it's a nebulous thing because it's not just about how well the parts of your products fit together and work together, but also everyone behind them, right to the top. It's a direct reflection of leadership mindset and intent.
I'll think on it further.