Dr. Deming's most neglected Points and Diseases

Wes Bucey

Consultant/Advisor
Forum Moderator
#11
I also have ranted wildly (elsewhere) against the structured annual review system.
I understand the legal CYA that it can provide...sort of...a tiny bit...but it's still useless to me.

Two requests I always made at the outset of any review (that I was giving):
1. If you hear anything in this meeting that is a surprise, I want you to stop me and tell me about it...that only happens when I'm not doing my job well enough and I need to know about it.

2. Short of skipping this meeting, what would you do to make it less stressful/annoying?

Only one person, ever, has told me that they prefer the formal annual approach. They thought that they got a bigger raise in a formal setting (They didn't).
If you want the feeling of smashing your head against a brick wall, try going into a medium size company still run by the original owner (whether or not he's sold off some of the company) and try telling this "self-made man" his company could be more efficient and profitable and grow more rapidly if he would embrace Deming's System of Profound Knowledge (SoPK) throughout his company. You then try to hide your tears as you listen to him rant any one or all of the following points:

  1. It's MY company; I know what's best
  2. They'll steal all my secrets
  3. If they know so much, why are they working for me?
  4. They'll want higher pay
  5. I got where I am by following MY ideas!
When I was a student so long ago listening to Milton Friedman (a little nebbish of a man) talk about business, he seemed to make sense. A lot of his theories have held up, some have been debunked, but one of his definitions has stuck with me for over half a century:
"There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."
Sounds a little like Deming whose first point was:
"Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs."
If someone says to you, "I have a way to increase your efficiency and profit" shouldn't you at least listen to the pitch before making excuses to not even listen?

I know I have an uphill battle (one I might not want to take) when a prospective client who is an owner or top executive continually uses the pronouns "I" "me" and "my" and rarely says, "we" "us" "our" in the initial interview. If the guy can't think in terms of being part of an organization instead of being THE BOSS, he's probably completely antithetical to Point eight, DRIVE OUT FEAR.
 

Ninja

Looking for Reality
Trusted Information Resource
#12
Not sure why you quoted me, but your post makes sense all the same...I'm just missing it's connection with mine. { That was a request to elaborate ;) }

Sounds a little like Deming whose first point was:
"Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs."
One section of that Point of Deming's that sticks sideways in this capitalists throat...philosophically at least...
Becoming competitive, staying in business and providing jobs are side effects, not aims. Very nice side effects...but side effects all the same.

Providing jobs come from the need to get more done.
The need to get more done comes from increasing (and staying in) business.
Increasing business comes from a number of factors, including being competitive to the degree needed.
But the AIM is Maximizing Net Profit After Sales (measured in $$, not %).

Measuring NPAT solely in % is a risky thing, leading often to diminishing $$.
I would take a 10% on 100MM over 40% of 100K any day.
Measuring it in # of jobs provided is just plain useless (in a for profit Corp.)

At the end of the day, perhaps the cringe on hearing Deming's point is simply semantics...but pretty crucial ones to me.
 

Wes Bucey

Consultant/Advisor
Forum Moderator
#13
Not sure why you quoted me, but your post makes sense all the same...I'm just missing it's connection with mine. { That was a request to elaborate ;) }

It was the "rant" part which struck a responsive chord.

One section of that Point of Deming's that sticks sideways in this capitalists throat...philosophically at least...
Becoming competitive, staying in business and providing jobs are side effects, not aims. Very nice side effects...but side effects all the same.

Providing jobs come from the need to get more done.
The need to get more done comes from increasing (and staying in) business.
Increasing business comes from a number of factors, including being competitive to the degree needed.
But the AIM is Maximizing Net Profit After Sales (measured in $$, not %).

Measuring NPAT solely in % is a risky thing, leading often to diminishing $$.
I would take a 10% on 100MM over 40% of 100K any day.
Measuring it in # of jobs provided is just plain useless (in a for profit Corp.)

At the end of the day, perhaps the cringe on hearing Deming's point is simply semantics...but pretty crucial ones to me.
I AM a capitalist. I was an executive in an investment bank for 20 years, targeting companies for IPOs, mergers, buy-outs. A large part of our success was the use of a team of our experts to go into each target and "fine tune it" so it was running efficiently and profitably, with good prospects for future growth. A large part of market share (to the point of monopoly) was not a measure of potential for future growth if the market wasn't also positioned for growth. An example I use in seminars is King Research, maker of Barbicide, the blue ointment used by barbers to disinfect their working tools. King Research owns the market for a barber disinfectant. It is a wonderful, effective product and has been for 70 years. For a period of time, some states even had laws specifying it by brand for barber shops. The problem, of course, is that the company's growth is limited by the market they chose to serve: barbers.
It may be one reason it is still a private company after 70 years instead of going public or being bought up by some giant conglomerate.

You are correct in that profit is not merely calculated in percentage of gross sales, but in total dollars - again having to do with potential market. Staying competitive (in Deming's terms) means staying competitive compared with all businesses, not just the ones in your narrow market niche.. Some conglomerates mistook the idea of expanding into more and more markets as the way to increase profit and forgot about being "competitive." Over the years, under new management, some of those conglomerates have begun to shed some of those acquisitions, often at tremendous loss compared to the total of cost versus net return from operations and proceeds of sale.

Neutron Jack at GE ascribed to your stated philosophy and created a giant which is now being dismantled by his successors because it was unsustainable. Another key point of Deming's first point is "staying in business." That doesn't mean the SAME business and products, it means sustaining the organization through whatever evolution is necessary to sustain it, whether it is a for profit or a nonprofit. If cancer is suddenly eradicated because science has found a cure, what will all the charities do which were set up to fund cancer research?
 

Ninja

Looking for Reality
Trusted Information Resource
#14
Sounds to me like we're saying the same thing, not surprisingly. Thanks for explaining.
 
Top