Blog

Deming's Point Two

Adopt the new philosophy.

The second of Dr. W. Edwards Deming’s 14 Points for Management simply states, “Adopt the new philosophy.” Though it’s just about the shortest of the 14 Points, it is certainly one of the most complex. For example, how can one describe or state “the new philosophy?” In my seminars and consulting activities with senior managers, I have always suggested that the new philosophy involves:

♦ Learning and applying the system of profound knowledge…

♦ In order to understand the statistical nature of work;

♦ View work as a dynamic process; and then

♦ Take appropriate action to accomplish improvement;

♦ Because, in this new economic age, there is an can be no such thing as “good enough.”

As Dr. Deming presented it, the system of profound knowledge is made up of four components, each of which interacts with the others. The first component requires appreciation for a system. The second requires some knowledge of the theory of variation; and the third and fourth components address the importance of the theory of knowledge and some knowledge of psychology.

Other blogs on this web site provide information about Deming’s “system of profound knowledge.” The key point here is to always view the 14 points in the context of the above philosophy. The individual points, then, no longer appear to be the ramblings of some dead, senile nonagenarian. They emerge as a listing of common American management beliefs, myths and practices that act as barriers to implementing and benefiting from the philosophy.

For example, Point 11 seems quite radical in its call to “eliminate numerical goals for management.” If numerical goals have the unintended effect of defining “good enough” in people’s minds and behavior, however, they will always prove to be barriers to taking action to accomplish improvement.

Point 12 reads in part, “Eliminate the annual appraisal or merit rating system.” This seems a radical suggestion, given that the vast majority of American organizations continue to cling obsessively to individual evaluation and merit rating systems. If we’re not willing to question our obsession with evaluating and appraising and ranking and grading people, however, that will forever be a barrier to viewing work as a dynamic process; and outputs at work are produced by processes of which the person is but a part. People can perform no better than the process allows, no matter how many bogies and objectives the manager wants to shoot out for the coming review period.

Likewise, traditional ranking and appraisal systems violate the need to understand the statistical nature of work. The question is not, “Are these employee performance levels different?” They’re always going to be different. The question is, “Are they significantly different?” If performance or achievement levels are significantly different, rank and reward those people differently. If the performance or achievement levels are not significantly different, don’t treat or reward them differently.

Recall the components of the new philosophy that involve appreciation for a system and some knowledge of theory of variation. The limits that we use to test for significance are dictated and controlled by common causes of variation from within the process or system -- and people are only one component of the process. To help people grasp these components of the new philosophy, leaders can simply ask them how many causes of variation in performance on the job are beyond their direct control.

When you really think about it, what’s so radical about a call to stop measuring and ranking people and to start leading them? In the spirit of the new philosophy, lead people back up into the process; study the process; change the process, improve the process; and never stop doing so! Deming really meant it when he worded Point 5, "Constantly and forever improve every process."

Every time you improve a process, the performance of every person who works in that process can improve. In the absence of process improvement, people can perform no better than the process allows.