Out of the Crisis

W. EDWARDS DEMING

Reviewed by Jack

On a summer Saturday night in 1980, in the back of a motor home in the wilds of Michigan, I watched a documentary on NBC called “If Japan Can . . . Why Can’t We?” The documentary was about how Japanese manufacturing was growing at an amazing rate while U.S. firms were struggling. Despite spotty ratings, this documentary has been generally credited with sparking the quality movement in the United States. It also introduced the United States to an octogenarian mathematician, statistician, and musician: Dr. William Edwards Deming. Rumor has it that Donald Petersen, president and COO of Ford Motor Company, was also watching that show (likely not in the North Woods) and hired Deming to help dig the giant auto company out of a severe decline. The Ford Taurus and Mercury Sable arrived in 1985, and Deming helped change the Ford culture to “Quality Is Our Number One Priority.”

Deming was eighty years old when that show was aired, but he was changing the face of business long before his contribution to Ford. During the 1940 census, the government used a sampling technique that Deming developed. As a result of this experience, after World War II, the government sent Deming to Japan to help rebuild that country’s industrial infrastructure. There he found a receptive audience for new tools to improve manufacturing processes as the country tried to restart its industry. In appreciation of his work there, a prize was created to commemorate Deming’s contribution and to promote the continued development of quality control in Japan. The influence of Deming’s philosophy in Japan was unprecedented and continues today, though he did not get this same level of appreciation in the United States.

In the States, to help spread the word and to explain the concepts of the quality movement, Deming published Quality, Productivity, and Competitive Position in 1982, renamed Out of the Crisis in 1986. This landmark book is the culmination of over fifty years of experience. The centerpiece of the book is Deming’s “14 Points,” which enumerate key management principles. Though Deming’s background was mathematics and statistics, over time Deming came to believe that what was important were the people in the process, and that management had incredible amounts of control over the output of an organization.

“Improvement of quality transfers waste of man-hours and of machine-time into the manufacture of good product and better service.”

Take, for example, Deming’s classic “Red Bead” experiment. He was known to bring audience members on stage and tell them that their task was to deliver white beads, and only white beads, to a fictitious customer. Each audience member was blindfolded and instructed to draw fifty beads from a large bowl filled with both red and white beads. Each “employee’s” output was then recorded, noting the number of white and red beads drawn. With each draw, Deming would use the methods that management might try to influence results: awards for those who did well, intimidation directed at those who did poorly. Clearly, anyone who witnessed this exercise would see the futility of these managerial techniques. Though the customer will not accept any red beads, it is inevitable that some percentage of red beads will be drawn. The conclusion is that one’s performance is a direct result of what one is given to work with rather than of any external influence. Thus, the people who draw more red beads are not poorer employees and should not be docked pay or receive other consequences based on their performance. The job of management is to improve the process, to increase the likelihood that an employee will draw white beads.

Red beads are the result of a bad system. “The worker is not the problem,” Deming is well known to have said. “The problem is at the top! Management!” He discussed his views on the role of management in a 1993 article published by the New Economics for Industry, Government, and Education. Deming explains his theory of the role of management as follows: “It is management’s job to direct the efforts of all components toward the aim of the system. The first step is clarification: everyone in the organization must understand the aim of the system, and how to direct his efforts toward it. Everyone must understand the damage and loss to the whole organization from a team that seeks to become a selfish, independent, profit center.” With these statements, Deming makes clear how connected the concept of team is to the quality movement.

Out of the Crisis walks the tightrope between the science of statistics and process and the art of management. Within its pages, the book gives testimony to the genius of Deming, whose message began to get traction in America only after his death in the early 1990s. JC

Out of the Crisis, MIT Press, Paperback 2000, ISBN 9780262541152

WHERE TO NEXT? Here for more on teams Here for wiring service into your group’s DNA Here for the dark side of quality | EVEN MORE: The Deming Management Method by Mary Walton; Juran on Quality by Design by J. M. Juran; Understanding Statistical Process Control by Donald J. Wheeler and David S. Chambers