Deming: beyond the PDCA cycle
The importance of systems thinking
The most popular association of Deming today is with the PDCA (or PDSA) cycle. This cycle is fundamental to LEAN, and continuous improvement methodologies and is the subcutaneous inspiration for iterative methodologies which are popular today, across many spheres.
Deming’s contribution, however, goes beyond that. His precepts lay the foundation of an entire management system, which is as relevant as ever for today’s organizations.
Deming’s Principles
Deming’s enduring legacy is the 14 principles he enunciated. My simplified interpretation, combined from various sources, is below.
- Create constancy of purpose for improving products and service
- Adopt the new philosophy (of embracing quality)
- Cease dependence on inspections
- End the practice of awarding business on price alone
- Improve constantly and forever the system of planning and production
- Institute training on the job
- Institute leadership
- Drive out fear
- Break down barriers between staff areas
- Eliminate slogans, exhortations and targets for the workforce
- Eliminate numerical quotas
- Remove barriers that rob people of pride of workmanship
- Institute a vigorous program of education and retraining
- Make ‘transformation’ everybody’s job
In addition to these principles, Deming also identified the seven deadly diseases and seven deadly obstacles which include: lack of constancy of purpose (i.e. absence of principle #1), emphasis on short term profits, evaluation by annual review, mobility of top management, neglect of long term planning, reliance on quality control departments rather than education of those involved in the production process, placing blame on workers when systems designed by management are responsible for 85% of the problems, and the supposition that gadgets and automation will solve problems.
Management of a system requires knowledge of the interrelationships between all of the components within the system and of everybody that works in it — Deming
System of Profound Knowledge
Being a systems thinker, Deming understood the dynamic interplay that happens within the components of a system — people, processes, information, psychology and productivity. He synthesized this into a comprehensive theory or System of Profound Knowledge that identifies 4 inter-related areas:
- Appreciation of a system (i.e. how value is created)
- Knowledge of variation (causes, measurements and controls)
- Theory of knowledge (thought processes and limits)
- Knowledge of psychology
As Deming notes, his System of Profound Knowledge provides a lens by which to understand and optimize that [the system] we work in. This is complemented by his 14 management principles.
With this holistic system and guiding principles in place, organizations can trigger what Deming calls a chain-reaction, where improvement in quality, helps reduce costs and improves productivity which in turn allows market capture with better quality and lower-priced products (or service). The net results are organizations with sustainable foundations to stay in business.
Deming’s work provides the framework for continual improvement of people capability, process efficiency, product quality and organizational effectiveness; which by ultimate extrapolation, benefits the wider society.
The aim proposed here for any organization is for everybody to gain — stockholders, employees, suppliers, customers, community, the environment — over the long term — Deming
PDCA…
Deming’s work is holistic and integrated. Starting with purpose, his philosophy extends all the way to ongoing transformation, capturing key practices and behaviours that make the broader system work; and defining key tools and techniques to effectively translate theory into practice. Using the popular trilogy, Deming basically defined a mindset, skillset and toolset. His most popular association however remains with the latter.
PDCA-PDSA
The PDCA cycle has an instant association with Deming. PDCA or Plan-Do-Check-Act, is a methodology to accomplish incremental improvement and transformation as per Point #14 of Deming’s principles. Incidentally, the PDCA cycle was introduced by Deming’s mentor — Walter Shewhart. While today it’s interchangeable called the Shewhart Cycle or Deming Cycle, Deming popularized the PDCA to his audiences as the Shewhart Cycle.
To take the focus away from an implied ‘inspection’ mentality (“check”), Deming later substituted the C for an S making it the PDSA (Plan-Do-Study-Act) Cycle. By doing so, he opened up this iterative problem-solving technique to “open-ended” problems as opposed to mere troubleshooting or “gap from standard” type problems.
Control Charts
Another popular example, coincidentally also inspired by Shewhart, is the control chart, which Deming championed. Being a statistician (like Shewhart), Deming stressed the importance of using data to diagnose a situation and acting on the basis of fact. In his own words: “In God we trust. All others must bring data”. Crucially, the role of statistics was nested within the broader context. As Deming notes, the purpose of statistical methods is to point out the existence of “special cause” variation in a process. Once special causes are eliminated, “common causes” of variability can be worked on, which is the general function of management. This allows attention to shift for specific, process level ‘firefighting’ to generalist system-wide, and organization-wide improvement.
Techniques by themselves are rarely enough. The “softer” aspects of a system are just as important. Despite championing data-driven decision-making, Deming also appreciated cultural aspects. As he notes, in particular reference to the control chart, “whenever there is fear, you will get wrong figures”. By adopting a systems approach, Deming understood the causal links between various aspects. The techniques he espoused naturally then had a socio-technical basis, which made them holistic and transferable.
Beyond PDCA
Beyond the Deming Cycle or PDCA/PDSA and control charts, Deming’s underlying legacy has been largely obscured. This is partly due to to the success of his own ideas as they diffused through Japanese automobile manufacturing, whose spectacular rise caught world attention. Toyota won the Deming Prize in 1965 and almost three decades later, a study of their Toyota Production System, popularized the term “LEAN”. LEAN concepts soon “transferred” from manufacturing into service industries. Unsurprisingly, Deming, TPS and LEAN have significant overlap. The 14 Principles of the Toyota Way seem like a combination of Deming’s 14 Principles and concepts that were later popularized via LEAN. I suspect that the number 14 is also not entirely coincidental.
While Deming’s techniques and methods remain associated with him, his theories and principles have diffused into methodologies, embraced by today organizations across the board, well beyond the manufacturing sector.
Every system is perfectly designed to get the results it gets — Deming
Relevance of Deming
The world has changed considerably since Deming’s ideas helped propel Japanese post-WW2 manufacturing success. His principles, however, remain as relevant as ever because they represent fundamental tenets encased into a system of execution. They have been adopted by organizations embracing LEAN/Kaizen methodologies; and provide timeless aspirations (and guidelines) for operational, tactical and strategic management.
Deming is one of the greatest exponents of the quality movement. Today the term “quality control” may sound like a relic from the past, a far cry from the terms we often hear: innovation, disruption, customer experience, etc.
However, what really is quality?
It’s the degree of excellence.
In more contemporary terms, it’s the rate of value captured for the customer by a product or service. As Deming puts it:
There are four prongs of quality: 1) Innovation in product and service, 2) Innovation in process, 3) Improvement of existing product and service and 4) Improvement of existing process
Quality is effectively a function of innovation and improvement. Quality, therefore, is what the customer (literally) pays for. Quality is customer value.
Decades on from Deming, the operating environment has changed. Terms have changed and indeed new terms have emerged.
The fundamentals though are still the same. The requirement of a holistic system to ensure the organizational capability to sustainably capture value for the customer is also the same. Deming’s work provides an enduring and holistic framework for delivering lasting value to the customer; something that every organization can relate to — forever.
Deming’s most popular (and direct) association is with the PDCA cycle. It’s a methodology for continuous improvement, problem-solving and one that helps build people, operational and organizational capability in the long term. In addition, with its simple acronym, it has the “bite-sized” appeal that modern audiences crave.
While Deming’s principles and theories extend well beyond the PDCA cycle, it’s perhaps the most fitting portal to his timeless work.
