Tag Archives: W. Edwards Deming

Deming’s Profound Changes – A Conversation

Frederick Winslow Taylor

Frederick Winslow Taylor (Photo credit: Wikipedia)

I sometimes reread certain books that have depth and knowledge associated with them.  Out of the Crisis, The New Economics,  The Deming Dimension and The Reckoning are those that I have revisited a number of times.  Another called, Deming’s Profound Changes was written by Ken Delavigne and Dan Robertson.

Deming’s Profound Changes outlines the American perspective on management.  This perspective is rooted in Scientific Management (aka Taylorism) developed by Frederick Winslow Taylor back in the early 1900s.  The authors do an excellent job of breaking down the elements of Scientific Management and describe what they call Neo-Taylorism or the “New Taylorism.”

An analysis of Taylorism leaves us with eight flaws (from Deming’s Profound Changes):

  1. Belief in management control as the essential precondition for increasing productivity.
  2. Belief in the possibility of optimal processes.
  3. A narrow view of process improvement.
  4. Low-level optimization instead of holistic, total-system improvement.
  5. Recognition of only one cause of defects: people.
  6. Separation of planning and doing.
  7. Failure to recognize systems and communities in the organization.
  8. View of workers as interchangeable, bionic machines.

The book goes on to describe how these flaws have continued to embed in themselves in the design of organizations.  This is done through a comparison of the Taylorism flaws as perpetuated in the New Taylorism.  The comparisons in the book leave you feeling that the US has absorbed the bad and entropy has taken over the rest of the American perspective.

I was fortunate enough to spend close to two hours speaking with one of the authors – Dan Robertson.  He shared with me that Perry Gluckman was the source of their (Ken Delavigne and Dan) inspiration to write Deming’s Profound Changes – interestingly the name of the slides Dr. Gluckman used. Dr. Gluckman was directly guided by Dr. Deming in learning his method.  Dan described his interactions with Dr. Gluckman as sometimes confusing, but that the careful guidance of Gluckman always allowed the learning to advance.

Dan Robertson is from Indiana (Clinton county), but lives outside the Bay area today.  He is traveling back to Indiana this week and I hope to have coffee with him in late June or early July to learn more about his experiences.

Tripp Babbitt is a service design architect.  His organization helps executives find a better way to link perspective to performance.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter atwww.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Dr. Deming’s Seven Diseases Still Haunt the US

W. Edwards Deming

W. Edwards Deming (Photo credit: Wikipedia)

I am reading Joyce Orsini and Diana Deming Cahill’s new book, The Essential Deming: Leadership Principles from the Father of Quality.  I have not read the entire boo, but thought it would be good material for a series of posts.  The book is an accumulation of Dr. Deming’s articles, papers, etc.  As Out of the Crisis was not a “How to” book, neither is this book.

Early in the book, I am reminded of American managements’ failures.  The decline of American competitiveness and how managing by visible figures alone is fundamental to this decline.

The seven diseases and obstacles that went with Dr. Deming’s 14 points still ring true:

  1. Lack of constancy of purpose
  2. Emphasis of short-term profits
  3. Evaluation of performance, merit rating and annual review.
  4. Mobility of management
  5. Management by use of visible figures.
  6. Excessive medical costs
  7. Excessive costs of liability

Go into any organization worldwide and you are bound to see one or more of these diseases and obstacles obstructing the path to transformation of management.  The real issue is most organizations see these as good things.  The damage is to far removed from management blinded by a combination of financial and operational reports.

I am also reminded that unemployment is a direct result of bad management.  Management is good in finding excuses for their inability to manage.  Reorganization and downsizing is often the answer for managements failure or if you are a consultant you become the target – you have to blame someone.

As many of you know, I am long disappointed with the fads of quality that are steeped in copying the Japanese or even using them as the standard by which we measure good and bad.  Seems we would be better off going to Rosetta Stone and just learning the language as this creates as much value as these fads.  They create a smoke screen to real improvement.

Dr. Deming warned against models for improvement, “none are perfect, some are useful.”  Having seen many methods I have learned the same – all methods can be improved upon.  This, after all, is the challenge of continual improvement.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter atwww.twitter.com/TriBabbittor LinkedIn atwww.linkedin.com/in/trippbabbitt.

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Support of Top Management is Not Sufficient

“Can you blame your competitor for your woes?” he would intone to groups of corporate managers. “No. Can you blame the Japanese? No. You did it yourself.”  – W. Edwards Deming

The bruising of egos for those in management was a staple when Dr. Deming would speak to such groups.  A certain disdain for those in management that didn’t or couldn’t understand the new philosophy.  He lacked the natural charisma to charm his audiences and little effort to do so.

The most damaging single group to American lack of competitiveness is management.  Labor gets all the headlines as this group has been maligned by all to many . . . anyone for a scape goat?  Look to management.

Management to Leaders

The use of arbitrary numerical goals coupled with the focus on short-term profits are only part of the problem.  My recent article in Quality Digest illustrates the need for management to become leaders by getting knowledge through understanding the work and the system in which they work in and influence.  This is not someone else’s job, it is the job of management.  Boys to Men, girls to women and management to leaders.  The right of passage.

The incessant copying of the Japanese is mostly comical at this juncture.  We have to speak Japanese to improve?  Did Deming ask the Japanese to use American words and phrases in July, 1950?  No, he asked them to learn.  This requires different thinking than that seeks management to set arbitrary numerical goals.  Deming’s famous quote is, “By what method?  Different questions lead to different answers.

Management’s active engagement is a requirement, not a like to have.  The ignorance of current thinking has to be replaced with knowledge.  There is no other way.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the The 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Labor Day Reflection

English: American Federation of Labor charter ...

English: American Federation of Labor charter for the Cigar Makers International Union of America, 1919. Published in American Federation of Labor: History, Encyclopedia, Reference Book, photo plate between pages 48 and 49. Published by the American Federation of Labor, 1919. Published in USA prior to 1923, public domain. Digitized by Tim Davenport for Wikipedia, no copyright claimed. (Photo credit: Wikipedia)

The first Labor day in the US was celebrated September 5, 1882.  A “Workingmen’s Holiday” as it was called.

Living in Indianapolis, you run into Labor Unions that have slowly but progressively disappeared.  Sure, you still have the Teacher’s Unions and many others but workers in Unions represent about 11.8% of all wage ans salary workers.  This number has dropped over the years.

Yet, even with this small percentage the unions are often a target and sometimes these fights affect the average worker – union or not.  Having grown up in a family that despised unions, it was a long time coming before I realized that this inclination spilled over into laborers in general.  So, like most, I went to college to “be better than that.”

However, when you look at the engine that makes things run it is truly more the workers.  Don’t get me wrong, I love what Steve Jobs did to make my life easier and no doubt he was handsomely rewarded.  But Jobs and others are a rarity.  Most people don’t aspire or care to achieve  or just stating a plain fact – 99.999 % of us never will.

I don’t mind the Steve Jobs of the world getting their due.  Yet, most CEOs today did not build the companies the lead.  Some were genetic marvels where the business was handed to them.  Others came up through the hierarchy and achieved leadership positions, a combination of education, good fortune and occasionally savvy.

The salaries these folks command and the disparity to workers has come under increasing scrutiny.  The ration was 24-1 and now is a whopping 243 -1 according to a 2010 survey.  The fact is that such disparity is sometimes deserved, but more often it is not.  Yet, unions and the worker have come under more scrutiny than CEOs, unless of course . . . you break the law.

The US has become a swinging pendulum between too much labor or too much management.  The strength of labor unions was considered to be socialistic or even communist.  However, many were not necessarily out for power, they just wanted better working conditions or fair wages and benefits.  Some perceive this to be an entitlement issue.  If you work your whole life and don’t have enough to retire was it just the choice of the worker or does the company have an obligation?  Nowadays that argument has been settled as defined contribution plans have replace defined benefit plans.  Retirement is clearly an individual responsibility in the US and the problems with Social Security make it more so.

W. Edwards Deming marked the decline of the US starting in 1968.  Some blame unions and some blame management.  Dr. Deming placed the blame on US management.  From what I have seen in service and manufacturing, I agree.  Many countries have unions and are beating are heads despite the “handicap.”  We just haven’t gotten better as labor and management have found so few areas to connect on – something that has to stop.

The work designs in service organizations lend to depressing cultures and worker discontent.  Workers trapped in these designs and than wrapped into them with information technology.  Better designs mean better profits and a more motivated workforce.  Isn’t this really good for all, if we forget the labels?

Labor day gives us a chance to reflect on the year ahead.  Different and better thinking may be worth exploring.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the The 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Does Your System Make Workers Accountable?

I know what you are thinking . . . “my organization makes workers accountable with measures, performance reviews and inspection.”  Well, we aren’t talking the same lingo.

Rarely do you find measures in service organizations that matter to customers.  Usually the measures are all about reducing costs and meeting budget.  Let me tell you a secret . . . customers could care less about these measures.  And one counter-intuitive truth we have discovered is that measures that customers don’t care about lead to increased costs or a best a scorecard.  W. Edwards Deming referenced these lagging measures as useless to improving costs and service – “it is like driving a car looking out the rear view mirror.”  Customer measures lay out the road ahead.

Performance reviews make workers slaves to the system.  The game is to be compliant, not innovative.  It promotes a culture of brown-nosing and popularity contests, leaving most workers disenchanted.  They do make people accountable – to their boss.  The hierarchy is there to prevent accountability to customers, workers must bow to the next one up on the totem pole.

This thinking breeds inspection for compliance to measures that don’t matter to customers.  Most in inspection and compliance roles add little or no value from a customer perspective and too often creates animosity amongst workers.  Also, I find that workers are stuck in work designs that are sub-optimal and compliance means that we are perpetuating poor thinking and design.

So, what makes workers accountable?

Work that is challenging and designed to improve service is the short answer.  The long answer is that a worker that can see the impact to customer has a better chance of being accountable than a functionally separated one that your piece of work if blind to the one before or after.  This means that better designed work promotes accountability and it doesn’t require compliance.  Most workers willingly are accountable when they embrace a work design that makes them relevant and has ties to customer needs.

The bottom line is that accountability is attributable to the design and management of work.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the The 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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The Reckoning – Poor Management in America is Still the Problem

Almost 62 years ago (July 13th, 1950), W. Edwards Deming met with 45 Japanese leaders that represented about 80% of the capital of Japan.

Dr. Deming had found his audience.

Largely ignored in his home country (USA) after WWII because the world had only one place to buy products . . . the US.  The industrialized mindset was born.  The methods Deming and Shewhart had taught during the war effort to make better quality military products were forgotten.

One engineer that had worked at Western Electric during the war was back 8 years later and the control charts they had used were now missing.  The basics to manufacturing better products were now gone.  Dr. Deming sought refuge in the US Census Bureau as US management used mass production to fulfill world demand.

As a statistician, Dr. Deming arrived in Japan in 1946 and 1948 to help with the census.  He was asked to talk about Quality Control to a group of engineers where he said it would be pointless unless the highest executives attended as well.  His sponsor, Ichiro Ichikawa did just that and because of Ichikawa’s importance in post-WWII got the attendance Deming desired in July 1950.

Dr. Deming who had grown accustomed to being ignored . . . found his audience.  He promised the Japanese that in 5 years that the Americans would be screaming for protection from Japanese products – they did it in four (in Deming’s words).

Within months, Japanese companies reported 30% + improvement in productivity by focusing on quality.  While the Japanese embraced the basics, his countrymen moved further and further from them.

Decades later, the Toyota Production System (TPS) became all the rage in the US.  The work of Taiichi Ohno was “discovered” by the Americans.  There would have been no TPS without the groundwork done by Dr. Deming in Japan.  The funny thing is that Americans are all running to Lean, when they should first be understanding the basics that Dr. Deming learned while working with the Japanese.  Ohno is indeed a product of American thinking and not vice versa.

US management has largely destroyed manufacturing in this country.  Outsourcing to other countries with cheaper labor is a natural extension of the industrialized, mass production mindset.  The problem is often pegged as a labor problem when America’s thinking about the design and management of work is the source.

The economic crisis in the US offers opportunities to rethink our approach and come to the realization we are wasting our natural resources with an inability to manufacture or service in a suitable fashion.  The economic tsunami that has befallen us is a product of playing games with finances rather than improving on the basics.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the The 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Does Deming’s 95/5 Discount the Individual?

W. Edwards Deming

W. Edwards Deming (Photo credit: Wikipedia)

Still the most talked about and controversial of W. Edwards Deming thinking is what I reference as the 95/5 rule – that 95% of the performance of an organization is down to the system and not the individual.  It isn’t a rule and, as I have stated in previous posts, it is not empirical.  Dr. Joseph Juran though the number was 85/15 and based on Dr. Deming’s experience the number was thought to be 95/5.

So, does this mean that the individual is not important?  NO!

The design and thinking about the management of work is so poor in service organizations that the individual is rendered completely irrelevant.  The individual worker gets entrapping technology forced upon them.  The work is functionally separated where the worker can never finish a piece of work and the result is no accountability.  Improving the system restores the individual.

Dr. Deming’s central theme is restoration of the individual.  Fear, competition, manipulation and performance appraisals that result in ratings organizations have undermined the individual.

W. Edwards Deming believed some really simple things for workers:

  • Joy in Work
  • Cooperation
  • Intrinsic Motivation
  • Systems Thinking
  • Self-Esteem
  • Never-ending Learning

He implored us to adopt new thinking for a new economic age.  When do we get to see this happen?

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the The 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Have We Surrendered Our Companies to Wall Street?

Executives are much like a wealthy family that annually sells acreage . . . Until the plantation is gone, it’s all pleasure and no pain.  In the end, however, the family will have traded the life of an owner for the life of a tenant farmer.  – Warren Buffet, The Selling of America, Fortune Magazine 1988

If anything the past few decades have taught us is that companies the world wide have become slaves to investment companies.  Hitting the numbers promised to Wall Street has become the defacto purpose of whole publicly-traded organizations.  The dysfunction to hit these numbers is evident in moves to reduce staff or make other short-term cuts that will ultimately lead to a long-term increase in costs.

President Barack Obama and Warren Buffett in t...

President Barack Obama and Warren Buffett in the Oval Office, July 14, 2010. (Photo credit: Wikipedia)

It is without doubt an unenviable position.

I have always felt cutting staff in any form is not an optimal solution.  I have always felt the best route that shows leadership is to first cut out executive bonuses should go first and then across the board executive compensation cuts.  The next thing to do across the board cuts in compensation.  However, if cuts have to be made then the front-line staff (or those that create value) should be kept and all other positions should be cut.  Front-line staff are the only ones that can create value for customers.

If an organization is mature enough in using the 95 Method, these are good strategies to deploy.  Because to me, maturity has to be the depth that the thinking has permeated the organization (i.e., executives “get it”).  Sometimes we are lucky enough to start in this position with organizations, other times we are not.  Redesigning organizations can be construed as simple in comparison to changing thinking of executives.

No matter what when the numbers or the company is at risk, organizations either have to or feel compelled to act.  The response predictably increases long-term and total costs.  We have surrendered our companies to investment firms that drive for greater results, which in and of itself sounds OK until we get the type of actions that results in what Warren Buffett described and damage the organization.

There is a better way.

Dr. Perry Gluckman (Deming’s Profound Changes – DeLavigne) had a view on this:

“The Message is simple!

  1. Every system is broken.
  2. Being competitive in the market means improving the system faster than the competition.
  3. We are all part of the problem, and we are all part of the solution.”

Wall Street has driven us apart by class and by thinking.  The bottom-line now prevails over what is right for the system in too many cases.  Time to rethink our position.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the The 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.


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American Toast: The Revenue – Expense Debate

A classic quote from Dr. Deming was “let’s make toast the American way . . . you burn, I’ll scrape.”  This quote has so many references that you can see in manufacturing, but the same applies to management.  I see more burning and scraping in service organizations with management than I care to mention.

The most obvious is when we take the income statement and functionally separate it into revenue and expense by having sales be responsible for revenue and operations responsible for expense.  CEOs claim that we must grow the top-line and reduce the burden of expense – nothing wrong with that, except asking the question “by what method?”

Getting the sales dogs to hunt and the operations to cut is the formula most management embrace for organizations.  The problem is that revenue and costs are the two sides of the same coin.  The two are inextricably tied together.  The optimization of each as independents leads to sub-optimization and waste.    The burning of toast and scraping becomes a way of “doing business.”

We have functionally separated organizations and rely on specialists to optimize the functions.  This erases the real aim of business . . . profit!  The reward and incentive systems lock in the waste.  Too many times have I seen management make their functional targets and rewards while the organization goes down the tubes.

Profit comes from the combination of revenue and expenses together.  The next step is to manage that way.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Continual vs. Continuous Improvement

W. Edwards Deming in Tokyo

Image via Wikipedia

Coming from a W. Edwards Deming background, I have been sensitized to the word “continual” when it comes to improvement.  It served as a code word for those that where true followers of Dr. Deming vs. “the pretenders.”  I always knew who really understood the philosophy and those that just sounded good.

Even today, I still find myself talking to groups about the difference between continual and continuous improvement.  I like to describe “continuous improvement” as always making improvements and moving forward – I have never seen this happen over the long haul.  “Continual” improvement” implies that sometimes you have to stop or even take a step or steps backward to achieve improvement – improvement is discontinuous in nature.

Management doesn’t understand continual improvement as their impatience only allows them to embrace continuous improvement.  Always forward, the next quarter must be better than the last.  Growth, no matter what the reality or the foolishness of the pursuit.

Studying systems requires a stoppage to understand the underlying thinking that dictates the current performance.   With solid understanding, experimentation with method may lead to improvement or knowledge of what doesn’t work.  For a scientist, this is a victory as they come one-step closer to discovery.

The road to continual improvement is a rocky one with many ups and downs.  Understanding this allows one the opportunity to begin the journey.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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