Deming, Finally! — Part 7

Pharma Industry Has Misunderstood Deming for 30 Years but Can Catch Up

This is the seventh of an eight-post series, by Anders Vinther, Sanofi Pasteur Chief Quality Officer and Celine Schillinger, Sanofi Pasteur Head of Quality Innovation & Engagement.

Part 1 introduced why we believe Edwards Deming’s thinking has been only partially implemented by the pharmaceutical industry. By focusing on processes, control and exhortations, manufacturers have missed the essence of Deming’s message. Deming advised us to actually put the Human at the center of quality and to focus on how the system works. Out of Deming’s “14 points of management”, the first eleven (Part 1, Part 2, Part 3, Part 4, Part 5, Part 6) have been broadly misunderstood. Yet it is possible to operate along Deming’s original management philosophy, as exemplified by Sanofi Pasteur. Let’s keep exploring, through Deming’s points #12 and #13, what the pharma industry could do better.

12. “Remove barriers that rob people in management of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective”

How it’s been misunderstood: Outdated performance models turn performance discussion into box placement, which is detrimental to engagement and performance.

What it really means: Ditch models that compare people instead of helping each person. Focus on whether the system enables the job to be done and well.

In his book “Drive” (2009), Dan Pink describes what truly motivates us at work: Autonomy, Mastery and Purpose. Contrary to popular belief, extrinsic motivators such as money and punishment are not most important. However, most companies hardly work on these levers and instead still use outdated performance models and tools that actually demotivate people.

In the still widely used ‘9 box’ performance evaluation model, employees are assigned a number evaluating their performance on a double axis of “what was achieved” and “how it was achieved”. Employees are rank ordered in this ‘box’ against people they just happen to work with; compared like the outcome of machines. Instead of focusing on areas of strength and areas of improvement opportunities at performance conversations, we see too often that most of the time is spent on justifying a box placement. Employees in the red corner (box ‘1’, ‘2’, ‘3’, ‘4’, ‘7’) disagree and do not see themselves as ‘lower’ than average performance; employees in the ‘5’ feel they are better than average; people in the green corner often want to discuss whether they are a ‘6’ or an ‘8’ and why not a box ‘9’; and box ‘9’ employees expected to be there anyway. Rank ordering employees are simply not a motivation for anybody. Rank ordering leads to competition instead of working together. Many companies also have a forced distribution irrespective of actual performance.

Each employee has strengths that can be further enhanced, and areas of improvement that can be worked on. And why would that be a topic only once or twice a year during performance review? Shouldn’t this be something employees and supervisors should be talking about on a regular basis?

One of the most important roles of leaders is to set the vision and direction; communicate progress to plans and to coach the employees. It is not to micromanage and control their employees and put them into performance boxes.

13. “Institute a vigorous program of education and self-improvement”.

How it’s been misunderstood: Companies don’t invest enough in the education of their employees. Box-ticking training programs where “Learn” is understood as “absorb”.

What it really means: Massive learning effort where “Learn” in understood as “lead” — in a system. Create opportunities for people of all levels to grow their technical, quality, leadership and influencing skills, so they can together continuously improve the system.

Some companies don’t feel they have the time or money to invest significantly in their employees, yet at the same time accept mistakes happening simply due to inadequate level of competencies.

We decided to invest massively in competencies building, we allocated the time for people to attend and complete the education, included self-generated action lists, and we monitor the effectiveness in actual performance as a company. Our experience is that with massive investment in our employees we have more engaged employees, reduced errors, and we have seen significant improvements of our processes. It really is a simple equation — you invest and you gain in engagement and performance. People need to know not only what and how to do their job but also the ‘why’, understand the processes, equipment, etc.

A very important factor is how the education is done. Sharing experiences and new knowledge amongst the workforce at the time of events happening is a great way to learn. We are more and more going away from traditional education/training by only reading Standard Operating Procedures or being given a lecture by means of PowerPoint slide decks as it is our experience that this type of education is not effective enough. In other words, it is not a matter of hours spent on education, but how it is delivered and experienced by the employee. We are using adult learning methods, which ensure knowledge is gained effectively. It also enables individuals to be competent and thus do the right things, making the right decisions.

Besides learning technical skills needed for the job, self-improvement skills are also extremely necessary in a work environment characterized by interdependence and rapid changes. Self-improvement skills are seldom acquired in a class; they come from what the individuals experience as they face barriers and manage to overcome them.

Our work puts an emphasis on the creation of leadership opportunities for people at all levels. Volunteers get together around some ideas they are passionate about, and try to make them happen, in the absence of a road map, a clear environment, or a hierarchical structure. They have to work as a community to create a path forward and influence their environment because most of the time their ideas need the contributions of others. This is where real self-improvement skills are learnt.

(Stay with us! To be continued in next post)