Dr. Deming: ‘Management Today Does Not Know What Its Job Is’ (Part 2) | Quality content from IndustryWeek

“The usual procedure is that when anything happens, [we] suppose that somebody did it. Who did it? Pin a necklace on him. He’s our culprit. He’s the one who did it. That’s wrong, entirely wrong. Chances are good, almost overwhelming, that what happened, happened as a consequence of the system that he works in, not from his own efforts. In other words, performance cannot be measured. You only measure the combined effect of the system and his efforts. You cannot untangle the two. It is very important, I believe, that performance cannot be measured.”

Source: www.industryweek.com

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Dr. Deming: ‘Management Today Does Not Know What Its Job Is’ (Part 1) | IndustryWeek

[…]”Management today does not know what its job is. In other words, [managers] don’t understand their responsibilities. They don’t know the potential of their positions. And if they did, they don’t have the required knowledge or abilities. There’s no substitute for knowledge.”

Source: www.industryweek.com

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Forthcoming book: The Deming Legacy

The-Deming-Legacy-coverAbout two years ago, I started posting essays on this blog about Deming’s 14 points and their current relevance. Now I am writing on Points 11.a and 12 through 14, which I have not covered yet, organizing the material, and editing it into an eBook entitled The Deming Legacy, that will be available shortly in PDF, iBook and Kindle formats. If you are interested, please visit the site and let me know. Comments here are also welcome.

The posts on the topic to date are as follows:

  1. Create constancy of purpose toward improvement of product and service.
  2. Adopt the new philosophy.
  3. Cease dependence on inspection to achieve quality. 
  4. End the practice of awarding business on the basis of a price tag. 
  5. Improve constantly and forever the system of production and service.
  6. Institute training on the job.
  7. Institute leadership.
  8. Drive out fear.
  9. Break down barriers between departments. 
  10. Eliminate slogans and exhortations.
  11. b. Eliminate management by objectives.

The title is a ploy to convince Matt Damon to play Deming in the movie version.

Matt-Damon-with-red-bead-paddle

Ford and Mass Production

In the TPS Principles and Practice group on LinkedIn asked about what mass production is and is not. With the loose talk of “Henry Ford’s Lean vision” going around, the confusion is understandable. In fact, the term “mass production” was coined specifically to describe Ford’s production system in an Encyclopedia Britannica article in 1926, and defined as follows:

“Mass production is the focusing upon a manufacturing project of the principles of power, accuracy, economy, system, continuity and speed.”

The article insists that “Mass production is not merely quantity production, for this may be had with none of the requisites of mass production. Nor is it merely machine production, which may exist without any resemblance to mass production.”

The encyclopedia article does not imply that the system was inflexible, but Ford’s system of that era was designed to build Model Ts and nothing else. Even though the following picture is from 1937, a decade after the end of the Model T era, the dense packing of presses makes you wonder how you were supposed to change dies:

Pressed steel building at the Rouge in 1937

Modern automotive press shops have machines arranged in lines, with space on the side for dies. In this shop, a die change had to be a rare event.

In essence, the term “mass production” is to Ford as “lean manufacturing” is to Toyota, a generic term applied to give broader appeal and generalize an approach developed in a specific company. It is not a derogatory term, and many elements of mass production found their way into TPS, along with parts of the “Taktsystem” from the German aircraft industry of the 1930s. To these external inputs, the Toyota people have been adding their own twists since the 1930s.

220px-William_S_Knudsen

William S. Knudsen in World War II

Ford’s system itself evolved as it was adopted by competitors. As Peter Winton pointed out in the LinkedIn discussion, the original mass production was the production of large quantities of the same thing. As early as the 1920s, all the high-speed machines and lines dedicated to making the aging Model T at the River Rouge plant were both the strength and the Achilles heel of the system, giving GM the opportunity to grab market share away from Ford by, as Alfred P. Sloan put it “introducing the laws of Paris dressmakers in the car industry.” Ford alumnus William Knudsen’s “Flexible Mass Production” at Chevrolet made it possible through yearly model changes that could be completed in a few weeks. When Ford finally had to change from the Model T to the Model A in 1927, it required a thorough retooling of the Rouge plant, which took 9 months.

Ford’s system itself changed over the decades, and, at least as Lee Iacocca described its practices,  the financially minded leadership that emerged in the 1950s no longer focussed on improving production. In my review of Deming’s Point 5 of 14 on that topic, I had included the following pictures of the same operation performed the same way 30 years later:

In the 1988 paper in which he introduced the term “Lean production,” John Krafcik makes a distinction between “Pure Fordism” and “Recent Fordism,” the main difference being that “Recent Fordism” involves large inventories, buffers, and repair areas. This, of course, implies nothing about what the Ford people have done since 1988.

The concept of a dedicated production line — effective at making one product and incapable of making anything else — is in fact not obsolete. If you have a product with long-term, stable demand, it is a better solution than a flexible line whose flexibility you don’t need. This is why you do a runner/repeater/stranger analysis of the demand for your products, and then investigate trends and seasonal variations. In the Lean approach, you use a dedicated where it fits and other approaches where it doesn’t; most plants, instead, have a one-size-fits-all approach.

What’s eating John Seddon?

I want you to cheatBack in 1992, Seddon published “I want you to cheat,” as a distillation of then seven years of consulting experience with service organizations in Britain. It contains some general principles, supported by examples. It is quite readable, and contains no personal attacks on anyone. While “I want you to cheat” does not reference any giant on whose shoulder the author sits, more recent publications from Seddon repeatedly acknowledge Deming and Ohno.

It was his comment that “This respect for people stuff is horseshit” at a conference in Iceland in 2012 that drew my attention to his work. While certainly aggressive, it was not a personal attack. The latest kerfuffle is about the following statements in his 11/2013 newsletter:

“Every time I have been to the jamboree they have had an American lean guru spouting nonsense and this is no exception. This time it’s the guru who claims lean fails because it is what he calls ‘fake lean’ and his lean is the way to go! His ‘real lean’ starts with ‘respect for people’. I can imagine ‘respect for people’ events and tee-shirts (he sells tee shirts) while there is no change to the system conditions that drive misery and other forms of sub-optimisation. Only in America; the home of the terrible diseases.

What would you call a profound idea in this guru’s head? A tourist!”

bob emiliani

Bob Emiliani

The target of this attack, although unnamed, recognized himself. It’s Bob Emiliani, and he posted a response on his blog, entitled Kudos to John Seddon.  Bill Waddell then chimed in with John Seddon – Where Ignorance and Arrogance Collide. To Bob, Seddon is like a student who did not understand the concept of “respect for people,” while Bill dismisses Seddon as a blowhard from a backward little country who has failed to understand the depth and the subtlety of the US version of Lean.

Bill Waddelll

Bill Waddell

There is a good reason while the etiquette of on-line discussion groups forbids personal attacks: they cause discussions to degenerate into trash talk and name calling. It may be briefly entertaining, but quickly turns off readers who don’t have a dog in these fights and just want to information. Besides insulting Bob Emiliani, Seddon has steamed up patriot Bill Waddell with derogatory comments about America. You reap what you sow.

I have, however, heard comments that were as strident as Seddon’s from other consultants, from Japan. They were equally dismissive of US Lean, of American management in general, and even the country as a whole. This was usually, but not always, in private communications rather than in publications. These “insultants,” however, often got away with it, with audiences looking past the invective for useful ideas, and I think it is the appropriate response. Ignore the rant and engage on substance. If some is offered, you will be better off for it.

It is also worth pondering why people feel compelled to act this way. For John Seddon, I don’t know; I am not privy to his thoughts, but I can guess. We should remember that, in the market of ideas, we in the US have a worldwide home court advantage. Ideas command more attention and are more credible simply because of the “Made in America” label.

Lean is the most ironic example. The Toyota Production System did not come out of the US, yet the worldwide internet chatter and consulting business about it is dominated by a US version known as “Lean,” which is as faithful to the original as Disney’s Aladdin and The Hunchback of Notre Dame are to Arabian Nights and Victor Hugo’s novel. Borrowing, metabolizing and even distorting ideas from other cultures is done everywhere, and is to be expected; what is special about the US is that the American version radiates back to the world and overwhelms the original.

Last year, the Olympics opening ceremony in London reminded the world where the industrial revolution began. For more than a century, the world looked to Britain as a model for politics, economics, and manufacturing, but these days are gone, and for an idea to come from Britain is now a handicap rather than a credibility enhancer.

John Seddon happens to be British. For 28 years, he has been making a living as a consultant to service organizations in the public and private sector and, as anyone with this kind of experience would, he has developed an approach to doing it. We may or may not agree with it, but it deserves a respectful hearing. What I read into Seddon’s current stridency is that he has not been getting it. I think he is turning up the volume to prevent his voice being drowned out in the Lean tsunami coming out of the US.

Seddon dismisses Lean consultants as “tool heads.” I like tools. I use tools all the time, both in private and professional life. But I don’t use them indiscriminately. Following are three questions about a tool, that I would not ask about a hammer or a phone, but would about, say, Kanban or SMED:

1.    Who invented this tool?
2.    What problem was he/she trying to solve?
3.    Do I have that problem?

They strike me as a reasonable way to decide whether to apply it or not. And where did I find these questions? On John Seddon’s website. I think I will use them with clients.

 

Organizational Sabotage – The Malpractice of Management By Objective by Ken Craddock & Kelly Allan

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Organizational Sabotage – The Malpractice of Management By Objective by Ken Craddock & Kelly Allan – Innovation, quality and productivity suffer from the abuse of MBOs Objectives are essential to a business.

Michel Baudin‘s insight:

This article brings a new perspective on the discussion of the same topic in this blog.

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Deming’s Point 10 of 14 – Eliminate slogans and exhortations

Deming’s full statement is as follows:

Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.

Ben Hamper’s Rivethead

This point reminds me of Howie Makem, the quality cat lampooned by Ben Hamper in Rivethead in 1986, about the same time Deming’s Out of the Crisis was published. At the time, Ben Hamper was a riveter at GM’s Truck plant in Flint, MI, who could describe his shop floor experience with the wit of a Tom Wolfe. Rivethead was originally a column in Michael Moore’s Flint Voice, later edited into a book.

According to Hamper, the management of the plant had decided that what it needed to improve quality was a mascot for workers to rally around, and organized a naming contest, of which “Howie Makem” was the winning entry. The mascot then materialized as a man in a cat suit with a large Q embroidered on a red cape walking the floor and exhorting operators to improve quality amid jeers, catcalls and the occasional bolt throw. Howie Makem is one of the few artifacts of which no picture can be found on Google, which is why I had to draw it from Hamper’s description.

Spending time and money on slogans, mascots, banners and monogrammed shirts or mugs is predicated on the assumptions (1) that quality and productivity problems are primarily due to lack of motivation in shop floor operators and (2) that it can be changed by the same kind of marketing campaign that works for selling detergents. Deming’s and Hamper’s point is that it is counterproductive and that these assumptions are false.

The key points that I see about appropriate public relations and communications around Lean are as follows:

Do it first, play it back later

Improvement does need marketing and promotion inside the company, to customers, and to suppliers, but not at the start of the effort, and not in this form.

The beginning of an improvement program like Lean transformation is when it is most likely to fail. At that time, the organization, from management to line workers, has everything to learn about its technical and managerial content, as well as the art of implementing it. It is then that they will make the most mistakes and therefore least need publicity. The first pilot projects only need to be known and understood by those who are directly involved, and should not be announced upfront with a marching band at an all-hands meeting. You are much better off trumpeting results once the projects are successes that can inspire others. And even then, it is not done with slogans but by testimonials of participants, demonstrating the improvements directly on the floor or in video recordings.

With outsiders as well, you do it first and play it back later. You don’t announce what you are going to do, but, once it is done, you make it a field trip destination for local schoolchildren as well as other industrial tourists.

Car companies and public relations on manufacturing

Toyota plants have visitor centers with posters on the products and cartoons explaining the production system to children and have a whole staff of professional tour guides taking groups on a set path through the plant, wearing headsets to hear the explanations. These tours are part of public relations and not given by retirees, as is the case at many other companies.

Porsches-Leipzig-plant

Porsche Leipzig

Porsche in Leipzig charges customers €1,000 extra to spend a day at the plant to pick up their Panameras or Cayennes, during which they get a tour of the shop floor featuring their version of Lean, a lunch at top of the visitor center, and an hour with a driving pro on the test track to learn how best to drive their new car in various conditions.A striking feature of this plant site, is that it is dominated by the round, inverted diamond shape of the visitor center, on the top left of the photogaph, between the test track on the left and the production shops on the right.

g.-volkswagen-transparent-assembly-plant-in-dresden

VW transparent assembly plant in Dresden

This is part of a new marketing trend in Germany, where, rather than hide plants away, you locate the cleanest, most automated and most spectacular processes where your customers, or even the public at large, can see them. In this spirit, Volkswagen has located a plant downtown Dresden, with glass walls for passersby to see the final assembly of cars.

Motorcycle homecoming at Honda in Marysville in 2005

Motorcycle homecoming, Honda Marysville, 2005

Honda pioneered a different form of promotion of its manufacturing system to end users with its homecomings at the Honda motorcycle plant in Marysville, OH, where, once a year, they hosted bikers who see the production lines and meet the operators who built their bikes. The same approach was later emulated by the now defunct Saturn division of GM.

Companies in other industries rarely go this far, particularly when their products do not excite the public’s imagination. Bart Simpson’s class goes on a field trip to a box factory, which does not generate much enthusiasm.

Promotion of Lean efforts by component suppliers

If you make components to sell to OEMs rather than to consumers, the promotion of your Lean programs takes a different form, with customers sending teams of auditors to assess whether you are “Lean enough” to do business with, and they may send you supplier support engineers to help you implement Lean to their satisfaction. This means that you must present your plant in a way that allows the auditors to check all the marks needed to give you the right score, even if it means setting up a Potemkin village with tools that you don’t think are essential to your business.

Working with your customers’ supplier support organization — or supporting your own suppliers — is a different process, requiring a deeper level of involvement, and it is not a matter of public relations for either side, and should not be treated as one. The customer provides free consulting to help the supplier increase productivity and improve quality. In exchange, the supplier reduces prices by a fixed ratio every year, calculated so that the improvements are to economic benefit of both sides. The customer pays less, while the supplier makes more profits. It is a win-win, but not an easy system to set up and operate. It involves top management, engineering on both sides, purchasing on the customer side, and customer service on the supplier side, and it is not run by Public Relations.

Deming’s Point 9 of 14 – Break down barriers between departments

(Featured image from the  Bureaucracy game, by Douglas Adams)

Deming’s complete statement of Point 9 is as follows:

“Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems in production and in use that may be encountered with the product or service.”

Within a large organization, it is common for departments to work at cross purposes. Each department is a functional silo, working towards goals that may be inconsistent with the interests of the whole. Deming gives many examples of disasters that occur as a consequence, and exhorts his readers to break down the barriers to keep them from happening. As with his other points, he makes no recommendation on how to accomplish this.

Let us examine several approaches that have been tried, and the issues that organizations encountered when they did:

Eliminating silos in the organization

This is not a problem for small companies. As long as the entire management team fits within a small conference room, there are few opportunities to erect barriers. In a large company where it is a problem, the most obvious solution is to organize by what is variously called business teams, business processes, value streams, or focused factories.

You dissolve the functional departments and organize multifunction teams that bring all the required talent to bear on the core activities. In a manufacturing company, for example, all the resources needed to make a family of products from start to finish — including engineers, maintenance and quality technicians, schedulers, etc. — report to one “value stream manager,” and there cannot be barriers between silos because there are no silos.

It’s like the Mission Impossible TV series, with the disguise specialist and the explosives expert working together towards a common goal, as opposed to being in separate facilities and exchanging service requests in triplicate. This is a popular picture in the US and the approach is often used in a variety of contexts, such as emergency response, as in Apollo 13, or product development, for Data General’s MV-8000 computer in 1980 in Tracy Kidder’s The Soul of a New Machine, or the 1996 Taurus at Ford in Mary Walton’s Car.

The movie Apollo 13 shows a seemingly too-good-to-be-true team that is thrown together to find a way to fit the square connector of the command module air scrubber to the round hole used on the lunar module, using nothing but the odds and ends available to the astronauts on the crippled spacecraft. But the story is true, and we have a picture of the actual device the astronauts built.

This was the philosophy of Business Process Reengineering (BPR). Each business was to be broken down into processes turning some input into an externally visible output. Manufacturing, in BPR, did not qualify as a process. Instead, it was subsumed into the order-fulfillment process.

Making functional departments work

But it is not a panacea. The development of the 1996 Taurus took 30 months, and it was a major improvement over previous products at Ford, but still not down to the 24 months used at Toyota for the Rav4, and Toyota uses a traditional structure with functional departments communicating through memos.

In addition, according to Mary Walton, Ford’s integrated, collocated team made design decisions that made manufacturing more difficult. She explains in particular that the sculptured shape of the side panels made them more difficult to stamp, and this happened even though manufacturing was represented in the team. As a work of art, the 1996 Taurus was stunning. As a commercial product, however, it was lackluster, losing the previous versions’ bestseller status in the US market to the more “boring” Honda Accord and Toyota Camry in 1997.

The reality is that organization structure does not determine outcomes. The caliber of the individuals, their motivations for the roles they are playing, and their interaction protocols are at least as important. In their July, 1998 Harvard Business Review article , D.K.Sobek, J. Liker, and A.C. Ward listed the following practices as key to Toyota’s performance in product development:

  1. Written communication with single-sheet A3 reports in standard formats.
  2. Engineering supervision by practicing, hands-on engineers.
  3. A chief engineer (shusa, or 主査) for each project who is an experienced designer with a proven ability to integrate different technologies into a product. The shusa has a team of 5 to 15 members coordinating the work of hundreds who remain in functional departments.
  4. Engineers who develop their skills through on-the-job training, mentoring, and rotation within their functional department, with senior managers rotating between departments.
  5. High-level project plans with a small number of milestones, giving each department flexibility on detailed tasks.
  6. Checklists of design standards embodying the lessons learned in previous projects.

Obstacles to organization by process or value stream

The Toyota example is about product development. But what about other activities like operations? When you attempt to organize everything by business process, or by value stream, in most cases you encounter some functional departments that you technically cannot or should not break up.

Most machine shops have a central heat treatment facility. Induction hardening can, for some work, distribute heat treatment among different production lines and break down the “heat treat silo,” but a given shop may make products to which it is not applicable, its customers may not approve the process, or it may not have the skills or resources to implement it. Electroplating and painting commonly are similar challenges. As a result, the plant ends up with a few common services organized as functional departments along with lines that take a family of products through a sequence of operations.

Among support functions, the picture is also mixed. Production scheduling at the detailed level, for example, works better when the schedulers work directly for the manager of a production line than in a central department, because local scheduling is a simpler problem and the relevant specifics of machine behaviors are more accessible. On the other hand, breaking down a maintenance department and making the technicians report to production managers may not enhance their responsiveness when, for example, the group assigned to a line is short of the critical mass needed to have at least one technician standing by for the next emergency.

Other departments remain organized centrally because of the information they have access to, like Human Resources, Accounting, or Technical Data Management; others, because of external entities they deal with, like Shipping and Receiving.

Skills maintenance, continuing education and career planning

When breaking down a functional department and reassigning its members to teams organized around processes, we also need to consider how it affects the people to whom we do it. Professionals like medical doctors or lawyers work for clients who have little or no knowledge of their specialties, but it is then up to them to decide how much of their revenue to spend or maintaining their skills. They choose which magazines tp subscribe to and which conferences to attend, without asking anybody’s permission.

An engineer reporting to a production manager also works for one “client” who does not have the same expertise, but as an employee. If this engineer wants to attend a conference, the first step is to get approval for the time and money it will consume, from a manager with no knowledge of whether it is a good idea.

In the long term, what career does this engineer have to look forward to? The manager needs the engineer’s skills here and now but is ill equipped to provide guidance, compared to an engineering manager whose background and experience are in the same field.

For this reason, some companies have adopted matrix organizations, in which specialists report “solid-line” to a process owner who needs their skills in operations or on projects, and “dotted-line” to a functional manager for skills maintenance and career development. In a diagram, as follows, this structure looks simple and attractive:In reality, of course, it is a more complex form of organization than a simple hierarchy, and conducive to all sorts of tensions regarding authority and responsibility.

Project transitions

Project work — like product development, new product introduction, or new plant setup — differs from operations in that it ends when a goal is reached, which may be a working prototype, a target takt time in production for the new product, or for the new plant. At that point, the teams are disbanded and their members move on.

This is a particularly sensitive transition to manage when you collocate a multifunction project team in one big room, because its members bond both with the project and with each other, and receive the ending like a psychological blow on the scale of the loss of a family member. This is another reason why they need to retain a connection with their functional peers.

Conclusions

Breaking down barriers between departments for the greater good of the organization as a whole is a worthy goal, that high-level managers have been pursuing since, at least, the Roman empire. There is no simple recipe. The approaches followed by successful organizations have been subtle, nuanced, and fitted to their purposes.

Deming’s Point 8 of 14 – Drive out fear

(Photo by Lewis Wickes Hine, New York Public Library)

Deming’s complete statement of Point 8 is as follows:

“Drive out fear.”

This is a prescription that Doug Hiatt, a quality assurance manager at Boeing, found bewildering. First, he couldn’t see how fear could be “driven out,” and, second, where dangers are real, he didn’t feel that fear was something to be avoided. Deming is not arguing, however, that external threats, like competitors, should be hidden from employees to make them feel secure. In the 1980s, I worked for a software company whose managers were invariably friendly and courteous to subordinates, and where management communication was mostly “happy talk” that made especially the younger employees feel comfortable. Then, overnight, one third of them were laid off. Their sense of security was false.

Deming is advocating giving employees a genuine sense of security, which is both difficult to create and easy to shatter. Nothing can create such as sense quickly, but we can think of all sorts of human resource policies that can have this effect if carried out consistently over many years. Deming does not give us any pointer, but, in the US in 2012, few companies even try, particularly in environments like Silicon Valley.

Deming feels that fear always leads to “impaired performance and padded figures.” While the fictional Darth Vader can scare a crew into building a fully operational death star faster, the record in the real world is mixed. There, the ultimate manager by fear was probably Joseph Stalin, as shown in his January, 1940 telegram to a plant manager telling him that, unless results were produced within a tight deadline, his management team would be shot. The performance of Soviet industry supports both of Deming’s assertions.

MachiavelliBut even in the US, managers like Jack Welch, who introduced Rank-and-Yank  at GE, clearly feel that there is nothing wrong with making employees fear losing their jobs. Others like to quote Machiavelli’s “It is better to be feared than loved, if you cannot be both.” But Machiavelli’s world in 15th century Italy was more like the Game of Thrones than a contemporary manufacturing company. His prince is concerned exclusively with stabilizing his power, fending off rivals, and conquering more territory. Machiavelli’s advice is of limited value in areas like product development, marketing, manufacturing, or customer relationship management.

Intel’s Andy Grove was so famous for saying “Only the paranoid survive” that he wrote a book by this title, but the book is about business strategy, not about the way you treat employees. I had an extended project with Intel when Grove was its CEO; the Intel employees I worked with spoke of him with awe and respect, but never with fear. They trusted his steady hand steering the company and were not worried about being treated unfairly. Outside Intel, the company was perceived as secretive and aggressive, bordering on ruthless.

Does fear always impair performance? Stage fright can paralyze public speakers, stage actors or singers, but its complete absence is a sign of indifference to the audience that it doesn’t miss. The best performers are those who feel stage fright but are galvanized by it. Conversely, does the absence of fear always enhance performance? Academic tenure is the ultimate in job security. But do professors perform better once they are tenured than when they are on a tenure track pursuing it? Non-academics may be too quick to assume that they don’t. There is no valid general answer to that question. Some do and some don’t.

Deming sees a “widespread resistance to knowledge.” From the details he gives, what he means for individual contributors is that they are afraid new methods or new technology will make their hard-earned skills obsolete and threaten their positions; for managers, it is the worry that the investment in acquiring knowledge will never be recouped. These are two separate concerns.

The first fear is readily observed in organizations that hire people based on the immediate need for skills, as opposed to recruiting them for a career. If you know you are employed because you are the only one to know how to run a milling machine of a particular model, or navigate the user interface of a legacy information system, then you are naturally less than enthusiastic about the introduction of a way of working that requires you to train others to do your current job, or of new machines or systems that do not need your current skills. If company behavior over decades has built a foundation for this fear, you will not drive it out easily. It will require the establishment of new human resource policies, their communication to the work force, and their sustained practice over a long-enough period to build credibility with the work force

In operations, the managers’ primary responsibility is the output to customers, and employees do learn in the process of producing it, particularly if they rotate between stations. But even this form of knowledge acquisition is not free. It takes management attention to organize and monitor, each job an operator rotates into requires a learning period during which performance degrades, and there is always the risk that your most knowledgeable employees will leave. Other forms of knowledge acquisition include participation in improvement projects and experiments, technology watch, and formal training, in house and at public venues. All are investments in money and time, with  uncertain outcomes. Let us look at each in more detail:

  1. Improvement projects. They should always have the dual purpose of improving performance in their target area and learning by the work force. Participation in successful improvement projects develops both technical and managerial skills, in a way that pays for itself through the performance enhancements.
  2. Experiments. While experimentation is a normal part of product development, most managers do not make room for it in operations. A Lean Manufacturing plant, on the other hand,  sets aside space for it and encourage engineers or technicians to experiment with concepts, tools, machines, or systems that are  not  immediately applied in production. This is how they learn to be savvy buyers of technology, customize off-the-shelf equipment, or build from scratch machines that are not commercially available. You cannot write a discounted cash flow analysis to justify such an engineering sandbox, but you can see its impact in the proliferation of clever devices that enhance production performance on the shop floor.
  3. Technology watch. This is keeping up with new developments in one’s current specialty, by reading the trade press, attending conferences, visiting trade shows, and going on plant tours. These are activities that a manager may find difficult to justify, on the grounds that they are not anything a customer would be willing to pay for. Yet, not doing them is a sure path to technical obsolescence.
  4. Training. We discussed training issues in the review of Deming’s Point 6.

How do you “drive out” the fear of making the wrong decisions in this area?  This is particularly challenging when you break down functional silos and distribute technical specialists among the processes they serve, whose management owners rarely appreciate the need for them to stay current. If you are an extrusion engineer working for the production manager in a shop that makes extruded rubber parts for cars, you may be dedicated to making the lines perform well, but you will be isolated from professional peers. That is why some organizations either retain the functional silo structure while trying to make it work better using tools like A3 reports for better communication, or they adopt a matrix organization, in which the specialists maintain a “dotted line” reporting relationship to a technical manager whose job is to manage the maintenance and development of their skills.  A common strategy for IT in manufacturing companies is to outsource the technical work to a system integrator who is responsible for the technical skills of the contractors he sends.

Deming also describes as a loss from fear the inability to serve the best interest of the company because of rules or production quotas. It conjures up the image of Captain Queeg telling his officers how every rule in the book is there for a reason and has to be followed to the letter. Deming gives the example of a supervisor afraid to stop a machine for needed repairs because he might not fulfill his production quota. Of course, the machine breaks down and he can’t fulfill his quota anyway. But it is a dilemma. On the one hand, you want employees to use their judgement and break rules that are counterproductive. But, on the other hand, you don’t want them to think that shop operating standards and production plans are only guidelines. Finding the right balance is not easy between blind obedience to imperfect rules and absolute control by each individual of what to do and how much to produce. Here are a few pointers on how to do it:

  1. The rules have to be few in number and clearly stated. The following signs show the rules governing the use of a public park in Paris and a swimming pool in Palo Alto, CA. Every visitor to the Luxembourg gardens is expected to know nine articles of small print; the Palo Alto swimmers, seven bullet points.

  2. The purpose of the rules must be communicated, whether it  is regulatory compliance, safety, quality, etc. If no one can explain the purpose a rule serves, then it is a candidate for elimination.
  3. A process must exist to modify or cancel rules that are obsolete, ineffective, or counterproductive. The Accidental Office Lady is a memoir of Laura Kriska’s years at Honda in Japan. As a young American college grad, one rule she found particularly objectionable was the discriminatory requirement for women to wear a uniform at work. She recounts how she used Honda’s NH Circle system to organize a group of co-workers and make a case for the elimination of uniforms as an improvement in office work, and got it approved by Honda management.

How do you recognize the presence of fear in an organization? Deming lists 14 different types of statements that he has heard from employees and considers to be expressions of fear. Following is a summary of his list:

  1. The company may go out of business.
  2. Supportive superior may leave.
  3. Putting forth an idea may be perceived as treason.
  4. May not have a raise at next review.
  5. Long-term benefit may require short-term performance drop on daily report.
  6. May not be able to answer boss’s question.
  7. Credit for contribution may go to someone else.
  8. Admitting a mistake may have adverse consequences.
  9. Boss believes in fear; management is punitive.
  10. System will not allow expansion of abilities.
  11. Company procedures are not understood; employees don’t dare ask questions.
  12. Management is mistrusted, and perceived to have a hidden agenda.
  13. Inability to fulfill production quota (Operator or Plant Manager).
  14. No time to take a careful look at the work (Engineer)

Deming’s Point 7 of 14 – Institute Leadership

Deming’s complete statement of Point 7 is as follows:

“Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers”

There are the following three parts to this statement:

  1. Institute leadership.
  2. The aim of supervision should be to help people and machines and gadgets to do a better job.
  3. Supervision of management is in need of overhaul, as well as supervision of production workers.

Part 1: Institute leadership

What does Deming mean by leadership, and how to you institute it? From Plato and Sun Tsu to Peter Drucker, many have written about leadership as a quality a person may possess, without ever precisely defining what it is. You see its effect in others’ willingness to follow, but no one has ever written a credible spec of what makes a leader. There is in particular no agreement on whether this quality is innate to a few individuals or can be nurtured in many. In The Practice of Management (pp. 158-160), for example, Drucker argues that leadership is innate, and that the best management can do in an organization is create conditions for the natural leaders in its ranks to emerge.

When Deming argues that the job of management is not supervision but leadership, he appears to be using leadership in the sense of this rare quality that escapes a precise definition. At the opening of Chapter 8, however, he writes:

“The aim of leadership should be to improve the performance of man and machine, to improve quality, to increase output, and simultaneously to bring pride of workmanship to people.”

In this context, he is referring to a role rather than a quality, and “management” could be substituted for “leadership” without changing the meaning. When you say “Xi is the new leader of China,” it describes Mr. Xi’s formal role, not his qualities.

Part 2: Supervision should help people, machines and gadgets do a better job.

In this light, Parts 2 of Deming’s Point 7 can be interpreted primarily as a recommendation on the role of first-line management in a factory. The name for this position has changed multiple times, from the 19th century Gang Boss, through the less brutal sounding 20th century Foreman, to the gender-neutral Supervisor, and now to the vague and fuzzy Group Coordinator or Area Coordinator. These repeated name changes for the same position suggest that it is an uncomfortable one, between the management hammer and the shop floor anvil. Top management and engineering titles have a longer shelf life.

Deming’s explanations  focused on what is wrong with supervising people whose work you don’t know, treating every problem as a special case, and managing by numbers. If being able to do the work of the people you manage is a requirement, then production supervisors will be exclusively drawn from the ranks of operators,  and this position will not be given to college grads on their first jobs. My experience, however, is that first-line supervision in production works best when the supervisory team includes members of both types, combining the book smarts of the college-educated rookies with the shop smarts of veteran operators. There may be tensions between the two but, if well managed, they can achieve together results that neither group could without the other.

Treating every problem as a special case is an easy trap to fall into, and it is what most managers do. Each problem they see is a line-item on their to-do list, they find a countermeasure, check it off and move on. The special cause is that we received a defective part last week, or the operator was new, or the cutting tool broke. But leaders should not be satisfied with such answers and dig deeper to consider whether the problem is a symptom of a problem with the process itself. In the Soviet Union, all problems had to be blamed on human error. Someone had to be made a scapegoat and punished. The idea that there might have been something wrong with the system was not allowed to be contemplated. Deming’s point here is that leaders must do exactly that.

In Deming’s view, it is because they don’t understand the work that supervisors fall back on managing by numbers. Even if you have no clue about the work of an operator, you can still count parts and, if your management only cares about the numbers, you end up doing nothing else. Deming’s perspective on managing by numbers in explained in Deming versus Drucker.

Underlying this discussion, but not said by Deming in son many words, is an underestimation of first-line management. In my experience, when backed by their superiors, production supervisors are the most powerful agents of change on the factory floor. Because they are part of management, support groups like Maintenance or Quality listen to them. They can work directly with operators as no one else in management can, and they are processes owners.

This combination of factors makes them uniquely effective as improvement project leaders. Deming  puts in their job description, which is necessary but not sufficient. Their area of responsibility must be small enough for them to have time to work on improvement. In the late Toyota-run NUMMI plant, a group leader in assembly had an average of 17 operators. Many other companies boast about having a “lean” management structure with one supervisor for 100 employees, who is too busy to do anything but minding daily numbers. Meanwhile, improvement is the purview of a specialized engineering department that has neither the resources needed to undertake all the necessary projects nor the rapport with the shop floor that is needed to make changes take root.

What does Deming mean by gadgets? We can assume that, when Deming says machines, he implicitly includes fixtures, jigs, and tooling under that term. Gadget is not a technical term, and Deming does not define it, but, except in Point 7, every use of it in his book is clearly derogatory:

“Lag in American productivity has been attributed in editorials and in letters in the newspapers to failure to install new machinery, gadgets, and the latest types of automation such as robots. Such suggestions make interesting reading and still more interesting writing for people that do not understand problems of
production.” p. 13

Among Obstacles, on p. 127: “The supposition that solving problems, automation, gadgets, and new machinery will transform industry. No one should sneer at savings of $800,000 per year, or even $1000 per year. A group of workers took pride in changes that saved $500 a year. Every net contribution to efficiency is important, however small.”

Gadgets and servomechanisms that by mechanical or electronic circuits guarantee zero defects will destroy the advantage of a beautiful narrow distribution of dimensions.” p. 141

In other words, whatever gadgets are, they are up to no good, so why would supervision worry about making them do a better job? Why not just get rid of them? One reason is that first-line managers usually do not choose the resources they have to work with, whether human or technical. They don’t choose to buy a particular gadget; their task is to use it as best they can.

Part 3: Supervision of management is in need of overhaul

This is clearly about the higher levels of management, but Deming’s elaboration on Point 7 says nothing on this matter. In higher-level positions, it is often impossible to find candidates with personal experience of the work of all their subordinates.  To take an extreme example, former presidents of the US are unanimous in saying that nothing could prepare you for that job.

We know that someone is a good leader by the readiness, willingness and enthusiasm of others to follow. Anyone can observe the behaviors of leaders and try to emulate them, but rarely to the same effect. Deming does not offer a theory or even a definition of what he means by leadership, but we know that he didn’t see much of it in American managers.