A message from Deming

Most managers know Dr. Deming was a quality guru, but few have actually integrated his thoughts into their own management theory and practice. We must acknowledge that our management paradigms may not be complete without consideration of his message.

Dr. Deming suggests that prevailing management systems are counter-productive: They incorrectly focus on short-term thinking, ranking, merit systems, management by results, quotas, and management by objectives. One of Dr. Deming's favorite vehicles to communicate his argument was a four-day seminar. Unfortunately, he died a little over a year ago.

However, two of his associates, William Latzko and David Saunders, have just published a book, Four Days with Dr. Deming: A Strategy for Modern Methods of Management (Addison-Wesley Publishing Co., Reading, MA, 1995), to document the essence of the seminars. Note that, before his death, Dr. Deming reviewed the book and contributed the foreword.

The authors present Dr. Deming's material in an entertaining, easy-to-absorb, concept-per-page format. A unique feature of the text is that, after discussing each concept, it includes reactions of typical managers.

According to Dr. Deming, "The System of Profound Knowledge serves as a basis for change. The 14 Obligations are a method that managers can use to carry out this change. Blocking this transformation are the Seven Diseases and a myriad of obstacles."

The "Seven Diseases" provide a feel of the book:

1. Lack of constancy of purpose. Inconsistent organizational direction will send a company "down the tubes."

2. Emphasis on short-term profits. The pressure for short-term profits forces managers to rely on creative accounting, mergers, acquisitions, tax schemes, and all sorts of finagling.

3. Evaluation of performance, merit-rating annual reviews. "In practice, annual ratings are a disease, annihilating long-term planning, demolishing teamwork, nourishing rivalry and politics, leaving people bitter. The alternative to performance reviews is leadership." Carefully select, educate, and train employees so that they know their jobs. Take time to understand their views and the ways in which they want to contribute to the team.

4. Mobility of management, job hopping. Too many rely on the "white-knight syndrome," which is relying on a consultant to come in and clean up a poorly run area.

5. Management by use of only visible figures, with little or no consideration of figures that are unknown or unknowable. Managers focus on results, but they should also be concerned with processes. Since most of the important process numbers are unknown or unknowable, Dr. Deming suggests that firms measure and correct variation throughout the process, starting as early in the chain as possible.

6. & 7. Excessive medical/legal costs. This is tied directly to product costs.

Four Days with Dr. Deming: A Strategy for Modern Methods of Management forces us to look beyond short-term strategies and understand why cooperation, process improvement, and sustained, long-term productivity are essential elements in our business paradigm.

Ask the Manager

Q: Although every organization must deal with change to be competitive and survive in today's dynamic environment, isn't it possible that too much transformation could be dangerous?

A:According to James C. Collins (see Fortune, May 29, 1995, p. 141), the best companies, such as Hewlett-Packard Co., Disney, and Boeing, have successfully adapted over the decades to a changing world without losing their core values. They keep their timeless principles while changing their daily practices to suit the situation.

Disney, for example, has preserved a central ideology of wholesomeness for customers at any cost, yet has continuously changed its product strategy.

Hewlett-Packard has made respect for the individual a core value because corporate management believes it is the best (philosophically) and most effective way to manage. H-P even turned down big government contracts because the deals would have forced the company into a position of being a cyclical employer.

Q: Is there any cooperation between federal agencies regarding the application of metrics?

A: One example is the efforts of the Government Printing Office and the Internal Revenue Service to adopt metric-sized paper, printed forms, and documents. An adhoc committee led by the two agencies considered the advantages and disadvantages of adopting standard metric paper and binding sizes, compared to continuing use of the current sizes described in metric units. They surveyed industry and federal agencies and examined transition costs and long-term benefits, document handling, storage, reproduction, information management, and other related activities.