Why the Decline?
A conjurer may pull a rabbit out of a hat, but he cannot pull quality out of a hat.
Why is Western industry on the decline? Why has the balance of trade of the United States of America deteriorated year by year for twenty years? The deficit in export of manufactured goods is worse than the overall figures indicate, as export of agricultural products has been on the increase. We have people; we have natural resources, experience. Why the decline?
The cause of the decline is that management have walked off the job of management, striving instead for dividends and good performance of the price of the company’s stock. A better way to serve stockholders would be to stay in business with constant improvement of quality of product and service, this to decrease costs, capture markets, provide jobs, and increase dividends.
In the decade after the War [the Second World War], the rest of the world was devastated. North America was the only source of manufactured products that the rest of the world needed. Almost any system of management will do well in a seller’s market. Success in business in North America was confused with the ability to manage.
Management in America (not all) have moved into what I call retroactive management: focus on the end-product—look at reports on sales, inventory, quality in and quality out, the annual appraisal of people; start the statistical control of quality and QC-Circles for operations, unfortunately, detached from management’s responsibility; apply management by the numbers, management by MBO [Management by Objective], work standards.
The follies of the systems of management that thrived in the expanding market that followed the War are now too obvious. They must now be blasted out, new construction commenced. Patchwork will not suffice.
Everyone doing his best is not the answer. Everyone is doing his best. It is necessary that people understand the reason for the transformation that is necessary for survival. Moreover, there must be consistency of understanding and of effort. There is no substitute for knowledge.
A conjurer may pull a rabbit out of a hat, but he cannot pull quality out of a hat.
The biggest problem that most any company in the Western world faces is not its competitors, nor the Japanese. The biggest problems are self-inflicted, created right at home by management that are off course in the competitive world of today.
Recognition of the distinction between a stable system and an unstable one is vital for management. The responsibility for improvement of a stable system rests totally on the management. A stable system is one whose performance is predictable. It is reached by removal, one by one, of special causes of trouble, best detected by statistical signal.
Understanding of a stable system discloses devastation of people wrought by annual appraisal of performance, futility of management by the numbers, management by MBO. A numerical goal that lies beyond the bounds of capability of a system will not be reached except at the expense of some other activity in the company, thus, in the end, raising total cost to the defeat of the company.
Teamwork in a company, except for putting out fires, is impossible under existing annual appraisal of performance. Everybody, once the fire is conquered, goes back to his own life preserver, not to miss a raise in pay.
Foreword by Dr. W.E. Deming to The Deming Management Method, by Mary Walton. (pp. xi-xii)
For today’s Digestible Deming I wanted to find some inspiration for re-dedicating myself to this newsletter in a brand new year and to pick up the momentum I had prior to the Christmas holiday. My constancy of purpose for writing this newsletter is to provoke the same curiosity and “yearning for learning” as Deming would say in others, old stalwarts and new students alike, by making his material a little more approachable and digestible and in so doing serve as a reservoir to get a quick knowledge pick-me-up to set the day or week off right.
THUS, THE AIM of today’s Digestible Deming is to recall the reasons for studying the philosophy and teachings of Dr. Deming through the Foreword passages he’s written for others who have sought to understand his theory and amplify it in their own words. We’ll look back at what he wrote to introduce readers to Mary Walton’s The Deming Management Method, published during Deming’s heydays in 1986 when he was delivering his four day seminars at a clip and meeting with top-management of big firms like Ford. Within we see Deming concisely argue his case for abandoning the flawed practices of present management and charting a new direction. It’s a bit like reading the highlights of The New Economics, and we can see foreshadowing of his developing ideas that would soon come to the fore.
Here’s what stands out from the above excerpts to me:
Why the Decline?
Standing astride decades of transformative history, Dr. Deming had a unique vantage point in understanding the causes for the decline of Western industry and his own country: Management without proper aim or knowledge who in a seller’s market could not fail. However, after a time the bills come due and the mirages that sustained past successes dissolved, revealing in stark relief the real depth and severity of the challenge.
A touchstone that Deming would return to in The New Economics, as noted above, was America’s sharply slanted balance of trade towards massive imports of finished goods made from exported natural resources: Manufacturing had declined and moved to other markets that could make higher quality goods consumers wanted for lower prices. A revolution he helped design with Japanese in 1950.
We’re in a similar predicament today, made even worse by self-inflicted wounds in the name of pandemic response. In an ironic twist, we are now the ones with war-ravaged economies in need of repair, and in dire need of new theory as the old will certainly not suffice in this landscape.
Retroactive Management
A defining characteristic Dr. Deming diagnosed in the prevailing ways and means of Western management was anchored in always looking backward to look forward. The common techniques of measurement, appraisal, and inspection directed attention downstream for upstream problems, and thus always set the organization on the back foot, trying to catch up. He called it retroactive management, which is a cunning choice of words I wish he kept up in his books. For a modern audience, we might even use retcon management to describe what we see in our organizations and businesses.
Best Efforts: Pointless
Another classic cornerstone of the Deming management method is the clarity of mind to understand best efforts without a clear understanding of what to do only serves to make the situation worse, and that knowledge won’t spontaneously emerge from within without enlightenment. In The New Economics, Dr. Deming would invoke the imagery of digging ever deeper a pit and not even realizing you were in it. “In fact, it is only by illumination of outside knowledge that we may observe we are in a pit.”, he wrote.
Quality Requires Intentional Methods
In his consultations with the top-management of businesses around the world, Dr. Deming found a consistent expression of quality as something that could be conjured into existence with exhortations, decrees, demands, tight specifications, rewards, penalties, targets and goals - but no well-understood means or methods.
After hearing an executive expound on their grand ideas for the future, Deming was known to ask: “How? By what method?”. In The New Economics, he further drove the point home by noting, “If you can accomplish a goal without a method, then why were you not doing it last year? There is only one possible answer: you were goofing off.”
Responsibility for Stability
There’s little point improving a system that is in a continual state of flux, pitching and yawing from one crisis or problem to another. Yet, as Dr. Deming discovered in his career and demonstrated with the Funnel (thought) Experiment, this is precisely how Western management tended to operate, exacerbating the original underlying problems while creating new ones that might emerge later touching off more cycles of well-intended but damaging interventions.
In Deming’s view, grounded in proven theory, It was top-management’s foremost concern to possess the knowledge of how to interpret the phenomena in their systems and understand whether they were contributing toward its instability. This requires an understanding of systems, variation, and statistical methods for visualizing it within data to separate signals from noise.
Beyond Capability
If a system is proven to be statistically stable and predictable, as evidenced by plotting performance or quality data over time on a process behaviour chart, its capabilities can be understood. We can more easily see whether a goal or target we desire is actually achievable. In so doing, we also understand why the common management practices of Management by Results and Management by Objective fail and demoralize: We’re trying to make people shoulder the responsibility for forcing outcomes that the system cannot accomplish.
Firefighting
In a lecture, Dr. Deming once said that “Stamping out fires is a lot of fun, but it is only putting things back the way they were.” We still hear this sentiment today from managers who find their joy in work being rapid problem-solvers with a reputation for putting out various fires. It becomes a prized competency and leads to their upward mobility. Unfortunately, it stymies improvement in the process.
In my career as a software developer, consultant, and coach I’ve observed nothing unifies and pulls a team together like a crisis. Things move rapidly, constraints dissolve, and solutions are devised that wouldn’t otherwise emerge. And once the fire is out, we dissolve the relationships made in the heat of battle and go right back to the ways and means that contributed to the problems in the first place. There’s always a new horizon to conquer, and thinking about how to improve becomes a secondary or tertiary concern.
Reflection Questions
In reviewing the Foreword Dr. Deming wrote to Mary Walton’s book, what piqued your curiosity or resonated with you the most? Does Dr. Deming’s thesis for transformation as he presents it in 1986 still hold fast today? Which diagnoses did he get right? Which did he miss? Why do some of the problems he describes persist? What are we getting right in teaching his ideas, now? What are we getting wrong? How could we improve?
What will you do next?
PS: Congratulations IQI Virtual Academy Graduates!
Earlier this month I had the privilege of attending the Institute for Quality and Innovation’s Fall 2021 Virtual Academy Capstone Sessions that were presented by students who, under the expert tutelage of Eric Budd, have spent the prior four months (45mins/d in-class x 5d/week, not including homework!) learning to apply the theory of Dr. Deming in their respective workplaces. The Capstone Sessions themselves were projects to introduce improvements to prove out what the students had learned over the semester.
The results were amazing and I was really impressed to hear the stories of their personal and professional growth as they progressed through the program and overcame challenges. It was especially impactful as I met them when they began their journey in mid-September and witnessed their development when I delivered a class to them in early December. I’m hopeful they continue on as inveterate students of Dr. Deming’s philosophy.
Congratulations Fall Class of 2021!
Gloria Choi
Hillary Evans
Ian Gerken
Tyler Gross
Erik Johnston
Rockey Myall
Ashley Winston