Deming’s point 2 of 14: Adopt the new philosophy…

This is the most cryptic of all of Deming’s points:

“Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.”

This could have been said, with different meanings, at any time in the past 200 years. It could be said today, about a “new philosophy” that would not be the one Deming was referring to 30 years ago.  What was new in 1982 or even 1986 may be long in the tooth in 2012. Also,  is there such a thing as “Western management” as a common approach spanning the Americas and Western Europe? In the elaboration on this point, Deming asserts “We are in a new economic age, created by Japan.”

Deming’s 2nd point could be rephrased as “study and adopt Japanese management,” but it still would not be specific. It certainly made sense for car companies to learn the Toyota Production System, as they eventually more or less did, but Japan is 130 million people and more than 1 millions companies, engaging in all sorts of behaviors, not all of which are worthy of emulation. In addition, explicit references to another nation are counterproductive when you are trying to implement anything, as they instantly elicit the response that “it won’t work here.”

To make his point, Deming dives from the stratosphere of philosophy to the nitty-gritty of train schedules. Japanese trains, today as well as 30 years ago, run fast, frequently, and on time, which certainly enhances your traveling experience. As a train engineer told me in 1977,  “It’s a very interesting country, from a railroad point of view.” When I returned from Japan 18 months later, I brought him a copy of the latest schedule, which was sold at newsstands and looked like a small phone book. 34 years later, I crisscrossed Japan  for a week with tight connections and never missed one. It is radically different from using high-speed trains in Germany (ICE) or France (TGV). The Japanese high-speed trains, the Shinkansen, are no longer the fastest in the world, but what is most remarkable about them is that, if you stand close to the Tokyo-Osaka line, you see trains of 16 carriages roll by at 150 tp 200 mph every few minutes, as shown in Figure 1. By contrast,  TGVs from Paris to Lyon run about once an hour, and often late.

Figure 1. Schedule of Shinkansen departures from Tokyo to Osaka and beyond

And punctuality in public transportation in Japan is not limited to the Shinkansen: if you stand on a country road, with a schedule that calls for a bus to come by at 4:36PM, you see it coming round the bend at 4:35PM.

One good reason to point this out to American managers in the 1980s was that such a quality of service could not be explained by hard work, low wages, or protectionism. It required advanced technology and management, engagement of the work force, and attention to details. Furthermore, from 1964 to 1981, the Shinkansen was the only train of its kind in the world.

While the Shinkansen and its operations are a wonder to behold, it also has characteristics that have made it impossible to sell outside of Japan. It uses a wide gauge and cannot run at reduced speeds on regular tracks like the French TGV or the German ICE, as a result of which the Shinkansen network requires many more specially built bridges and tunnels.

Figure 2. Shinkansen tracks versus regular Japanese tracks

In fact, the only stretch on which traffic is intense enough to run profitably is the original Tokyo-Osaka line, and some lines are known to have been built because a powerful politician wanted his district served. Japan is a place where you find the Shinkansen and many other engineering marvels, but it is not immune to major errors in business planning and has its share of bridges to nowhere. It is not an ideal society, as Deming must have known, but a real, flawed one, comprised of 130 million fallible human beings.

In the US, fear of Japanese competition peaked in the late 1980s, and ebbed in the 1990s when the country entered a long recession that it has yet to overcome. In 2012, the focus of attention is China, not Japan. Not everything about Japan is worth following, and it was a mistake to believe so, but it is also a mistake to go back to ignoring it. In manufacturing, the most advanced concepts in both technology and management are still  found in the best Japanese factories, and the Japanese literature on the subject has no equivalent anywhere else.

But none of this tells us what the “new philosophy” is. By riding trains and visiting factories, you can observe practices, but not their underlying principles.  And you need these principles to develop corresponding practices in other contexts. There isn’t a single such philosophy for the whole of Japan. Instead, each successful organization has its own, which may or may not be explicitly stated, and if stated for internal use, is not necessarily shared with the world. In Out of the Crisis, the 14 points are the closest there is to the statement of a philosophy. Therefore this points essentially says that they the others should be adopted.

15 comments on “Deming’s point 2 of 14: Adopt the new philosophy…

  1. Back when I lived in Japan, there were many crime/detective shows on TV in which the suspect’s alibi hinged on the impossibility of making certain train transfers — i.e., there’s no way the murderer could have gotten to or from the scene of the crime because he couldn’t have made the necessary connections. Needless to say, this kind of alibi only works if the trains actually run on time!

  2. Michel.

    To say that “Adopt the new philosophy. …..” translates to ““study and adopt Japanese management,” is a bit of a stretch and misses the point, in my opinion.

    Deming is describing a dynamic of being current and of “our time”, meaning adopt whatever the “new Philosophy” of the day is when it proves to be more efficient or effective. In this context, the fact that post war Japan was a laboratory of forced adaptation to a “new way” seemed to him an example of the transformation that is possible, if a people/society “Adopts the new Philosophy.”

    Keep in mind the context here, Deming is operating at a time when Japan is being “deprogrammed” from a military society and being transformed into an industrialized society and drawing on the deep agrarian roots of the society on which all this is to be/was built. As evidence of this, note the rich imagery and actual etymology of most “Lean” terminology and their original agricultural context.

    There is/was no “Japanese management”…. it’s all Western management in this case implemented on the solid foundations of a well ordered and structurally strong, social context which makes it possible, by edict!

    Not necessarily definitive, but here a rough outline of the social structure that made this transformation possible, (I think).

    http://www.vam.ac.uk/content/articles/t/the-edo-period-in-japanese-history/

    The trains running on time, in an extreme example of precision and repeatability, are a perfect, outward expression of what is possible under this transformation, keeping in mind what it takes to make it work…. In the US, the Postal System is one example of this.

    I’ve always taken Point 2, to mean “adapt” to the new ways at all times…. of course, there’s a fine line between that and following “fads”, but I think that’s what this point means. On the flip side, it’s weakness is that in a very diverse US, in particular, this is not so easy to accomplish on a grand scale as the operating, unifying principles are designed to work from the bottom-up, and these principles resist a top-down approach.

    Chris

    • If you consider Deming’s own elaboration of Point 2, it is not a stretch to say that he wants you to study and adopt Japanese methods. He starts off with: “We are in a new economic age, created by Japan.”

      Out of the Crisis is a book from the 1980s, almost four decades after the end of the war. By them, Japan was an advanced industrial society, far removed from the the immediate post-war era, and even more from the Edo period (1603-1868). The book does not dwell on the work Deming did in 1950; alll the examples and cases are from the 1980s.

      I agree that there is no “Japanese management,” but there is no such thing as “Western management” either. What you find all over the world is people in organizations who are able to transcend their cultural identities and solve problems. The culture you grew up in is just where you came from, not your fate. It does not determine where you go or what you do. At least, this is the American point of view…

  3. Michel.

    By the 1980’s we were “freaking out” in the US as we started to see key industries lose market share, one by one, and only to the Japanese companies, (which, as I said earlier, enjoyed privileged status). Think of it as WTO 1.0.

    I believe Deming wrote that book to calm us down and focus us to what was to come. Everything he says is in the abstract and not particular to Japan, it’s just that at that point in time, Japan was at the vanguard of the “New Philosophy”, which is really a very “Old Philosophy”, called Utilitarianism….. “created by Japan” is not really accurate, and probably should read “first implemented on a large scale by Japan”….. under US occupation.

    At any rate, the point is that Deming’s book and the 14 points are about transformation or adaptation….. and yes, this is the “American point of view”, which I guess he was dismayed to find had been abandoned here while it had taken root and prospered in Japan, with his input among others.

    Chris

    • The references to Japan, and to no other place for inspirations to follow, are in Deming’s own words. It seems that, to you, there was nothing new coming out of Japan.
      In your previous comment, you equated the railroad with the postal system, but there is a difference. The Shinkansen was, in 1964, a unique technology ; making it work was not just about organization, but also about engineering.

      • Michel.

        Deming did his best work there and actually put into practice the theories he developed/synthesized here, so naturally all the references are going to be from Japan. But, he didn’t go there as a student, he went there as a teacher and it’s his legacy that is celebrated by Japan itself through the Deming Prize.

        I don’t mean to imply that there is/was nothing new coming out of Japan, but I do mean that there is nothing new in terms of the core concepts or innovations. They were/are very good at large scale implementation once a decision and a commitment is made but I would be hard pressed to name innovations. In Robotics, as an example, while US companies are focused on very expensive toy soldiers for one application or another, in Japan there are many companies working on practical applications in health care, personal care and other individual “gadgetry” that for demographic reasons they will increasingly need and for which they anticipate large markets in the future, everywhere. Having said that, the technology used is not invented/innovated there .

        The Shinkansen was Japan’s version of the US Space program at the same time. Yes, large scale engineering and implementation challenges and not to be diminished. My reference to the Postal System was to the scale involved, not necessarily the technology involved.

        As Kirk writes though, we continue to focus our best human and material capital in the Military and Finance, not necessarily in that order, and seem to have abandoned Manufacturing all together….. so we might look like England in the not too distant future. Great wealth but no real, (manufacturing), sector/jobs and all the good things that flow from that….. maybe that’s why Deming was so clear in his first point about a Corporation’s obligation to create jobs?

        Chris

      • Innovations from Japan? Let’s see. A couple of years ago, when visiting the Toto factory in Kitakyushu, I was struck by the number of improvements Toto had made to the flush toilet. They showed us the following:

        1. The washlet, which now account for 50% of the installed base in Japan. It was featured in the movie The Joneses.
        2. The Cefiontect coating for ceramic surfaces.
        3. The tankless toilet, to save space in tiny apartments.
        4. The quiet toilet, for luxury hotels where clients do not want to be disturbed by flushing noises.

        When I write long-hand, it is with another Japanese invention, the world’s only retractable fountain pen, the vanishing point.
        Earlier Japanese innovation in other fields include futures trading, by 18th century rice trader Munehisa Honma. Honma also invented the candlestick chart, that some traders still use to analyze markets.

  4. The point starts out “Adopt the New Philosophy…” It does not say, “Explain why what they do in Japan won’t work here…”

    We are often tempted to look at what somebody else did before and compare it to what we used to do and say it is ok so we don’t have to change. That is why Deming said this.

    Sadly, we are not competing with Japan anymore from a manufacturing standpoint. In fact, it is hard to say we are even participating. We simply sent the work elsewhere. I am very glad for the good fortune of who we sent it to overseas, but it seems silly for us to keep expecting to receive returns on capital investments that don’t exist. We in the US are essentially performing operations and maintenance while capital is invested elsewhere.

    So…in going back to what Deming said. We need to LEAD, we need to think for ourselves and act for ourselves. We must have the courage to LEAD, then take the action to lead. The other countries are exhibiting a lot of courage. How about we do the same?

    • We still have a large, domestic manufacturing sector. The US is not out of the manufacturing business.
      In the past 30 years, Deming’s prediction that Japan would achieve a standard of living on a par with the US and Western Europe has largely come to pass.
      As a by-product of success, Japan now has an aging, well-paid work force, and faces the same challenges of competing with emerging economies as the US and Western Europe.
      In manufacturing, its best advantage is the skills accumulated over the past decades, reflected in the hundreds of titles you find in general bookstores on topics like the role of a plant manager, the art of running a kaizen program, Toyota’s approach to quality, the Nissan Production Way, visual management, poka-yoke, TPM, etc., full of shop-floor case studies and illustrated with manga. You even find a few at train station news stands.

      • The US doesn’t have the luxury of just “still” having a “large, domestic manufacturing sector”, Michel.

        As a World leader it has to have the “right” manufacturing sector. So what is “right”? since that may mean different things to different people.

        We might take a cue from the US leadership in agricultural production. So that involves 4% of direct labor employment, extreme levels of automation and constant engineering to squeeze out incremental production per acre/tree/plant etc.

        http://research.stlouisfed.org/fred2/series/USAPEMANA

        What US manufactured product would you say falls into a World Leadership position today? Not just US companies, but manufactured in the US for US and World consumption?

        Toyota doesn’t count…. or any other Car Manufacturer for that matter…. 🙂

        Chris

  5. Comment in the Global Lean & Six Sigma Network discussion group on LinkedIn:

    This could seem “cryptic”, but what Dr. Deming was referring to was a “change of attitude” and “focus”. Deming looked at organizations and companies as (social) systems. And in his description of how a system works and interacts with other systems, it has very different characteristics and behaviors than a organization (derived from the work organism) with a collective “head” (CEO).

    A good person to look up and listen to (on You Tube) to learn more about this concept is Dr. Russell Ackoff. An architect and doctor of philosophy, Dr. Ackoff was the Professor Emeritus of Management Science at the Wharton School, University of Pennsylvania, and chairman of Interact, the Institute for Interactive Management. He worked with Dr. Deming when he was younger and learned a lot about Systems Thinking. Dr. Ackoff has given a lot of great lectures on Dr. Demings philosophies and his (Deming’s) concepts of Systems Thinking.

    I believe that Dr. Deming was referring to ending the way of thinking of our companies and businesses as “machines” (popular in the late 1800’s and early 1900’s) and organizations (popular in the mid-1900’s), and start thinking of our companies as “systems”. This is key point he makes in Point 5 (of 14).

    So when you read about the story of the Japanese Rail System and the trains that run “on time”, keep in mind there has been a lot of attention given to more than just the train and the rail system. There has been a lot attention given to how people interact with the rail system and eliminating the “waste” that keeps the “overall system” from being effective (a big difference from efficiency).

  6. Good post John.

    Seeing the Corporation as a “Machine” is a Systems Thinking concept in itself in that the Corporation is simple a (machine/transfer function) that “coughs up cash” as far as the investors/owners understand it; creates jobs, as far as the workers perceive it; pays/creates a tax base, (directly and indirectly), as far as the Government sees it; and creates/delivers products/services as far as the customers see it.

    In each case, these constituencies see their priority as the first and as long as the priorities are mediated via strong and capable leadership within the Corporation, things work pretty well. The complications seem to arise when one of these constituencies gains an extraordinary advantage and the leadership ceases to function as the fiduciary mediator….. coupled of course with the reality that the Corporation no longer works collaboratively with it’s peers to mediate the whole economic “eco-system” and now competes with them.

    I agree that Deming is describing a “systems” approach but he remains “cryptic” about which type of system, while his aversion to the AT&T break-up does give us a clue.

    Chris

  7. Comment in the Global Lean & Six Sigma Network discussion group on LinkedIn:

    Companies need to have a longer term view of their business. Most do not these days, This is especially true of many public companies because of market pressures. It takes more time to make the #2 point change than people are willing to admit. Business cycle time times 5 is a good estimate.

  8. Pingback: Forthcoming book: The Deming Legacy | Michel Baudin's Blog

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