Are 14 Points of management from Dr Deming in Out of the Crisis, 1982, still relevant in 2023?
I think they are !! They embody essential ingredients in the successful management system that Deming espoused. Leaders will only gain from thoroughly appreciating these points and using them as they lead increasingly complex organisations.
Deming crafted 14 key points or principles for management to improve any business or organisation's effectiveness significantly. The principles or points were first presented in his book Out of the Crisis (1982)
Deming's approach to leading and managing people, processes and resources is sound business thinking and a sustainable approach to business practices and building a management system that delivers results. While Deming talked mainly about improving quality, utilisation, and cost, applying these principles could take us far beyond those and help deliver value by eliminating waste and optimum utilisation of scarce resources — people and material. The principles are often interrelated and interdependent.
You should not try to think of the 14 points as disconnected from the others. They have meaning by themselves, but the real power of the ideas come as they work together to create a management system that excels. (Source)
Deming's 14 Points for Management
This list is from Out of the Crisis, pages 23–24 (Source):
1️⃣ Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
Continuous improvement is not just an activity to be taken when possible but with a constant sense of purpose to continuously improve and do better than the competition. Do better than what you were doing yesterday. SAFe's fourth pillar in its house of Lean — Relentless Improvement mentions the constant sense of danger that keeps organisations competitive in pursuing improvement opportunities aggressively.
The danger of disruption is real. In the age of AI/ML and Quantum technologies, disruptive innovations are more of a norm than an exception. Google search is taken as a universal standard by almost everyone. But even that robust business model is under speculation for disruption (ChatGPT will disrupt Google'sranisationsness model (or will it?) | by Mr Newq | Dec 2022 | Medium).
2️⃣Adopt 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.
In the 80s, quality and service were the key objectives organisations were striving to achieve. Uncompromisable quality and lightning-fast service are hygiene now. User experience and engagement are critical as organisations operate in a harsh and unpredictable global economic climate. This requires business agility to be your DNA and organisational resilience to be a way of life. That will only happen once leaders transform themselves to be front-of-the-line transformational leaders. Elon Musk is a textbook example of a disruptive, transformational leader (Elon Musk: Transformational Leadership in Action)
p.s — and yes, maybe not just western management, but all management
3️⃣ Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
In software product development, advances in technologies and infrastructure allow us to build automation — CI/CD — that achieves the objective of "building quality in". However, more than the technology itself, it is, first and foremost, a mindset — a mindset which is at the heart of agile approaches. Building iteratively, incrementally, and closely aligned with the product owners and business, issues are discovered and resolved much earlier in the lifecycle.
The importance of ceasing dependence on inspection to achieve quality is critical not just in software but all products. We all remember the fiasco Samsung went through with their Note 7 phones. They recovered, but that was a huge mess up (Product Launches: An Analysis of the Samsung Galaxy Note 7 — An Explosive Launch! | by Dante Alvarado Leon | Medium)
4️⃣ End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
Teams are the core building block for building awesome products — products that customers love and teams are proud of. The team structure and longevity considerably impact productivity and cycle time. Especially long-lived teams are crucial as it takes time to build loyalty and trust. Every team has to go through Tuckman's cycle at its own pace before becoming a high-performing team.
The agile manifesto rightly says, "Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done."
Your "total cost" advantage will come with 10x teams, not individual cost arbitrage. (Don’t Hire “10x Engineers”, Build “10x Teams” | .cult by Honeypot)
5️⃣ Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
"If you adopt only one agile practice, let it be retrospectives. Everything else will follow.", said Woody Zuill at Agile2015. And indeed, it is so.
Your retrospectives have to be ruthless.
However, that is more work. Too often, especially in large organisations and programs, they are half-hearted. Teams scramble a bunch of action items to show that "we" are a learning organisation. But are they learning and improving? Organisational culture and internal politics are the biggest impediments to having honest and frank retrospectives.
Fear must be taken out of the system. We must create a culture where people are unafraid to say that the emperor has no clothes. Otherwise, we will never get to the real problems — the ones that matter and will help improve the system. An organisational culture biased towards optimism, either genuinely or because of internal politics leading people to misrepresent strategically, blinds us from seeing things as they are. At times, it may help to be self-critical. While organisations should hope for the best, we must plan for the worst — and keep the wheels of improvement running — forever.
6️⃣ Institute training on the job.
When organisations invest in training their employees, it enables them to bring their best to the organisation. While classroom training is sometimes necessary to accelerate learning, especially in new areas, fostering opportunities for peer learning is critical.
Strong communities of practice help support your business model. Enthusiastic members help onboard new members faster, resulting in lower onboarding and upskilling costs. A strong peer network supports each other to solve newer challenges as the community gets smarter and more tightly integrated. Communities can become your competitive advantage (When Community Becomes Your Competitive Advantage | hbr.org)
7️⃣ 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.
We live in the era of knowledge workers. The term "knowledge worker" was coined by Peter Drucker in his book, The Landmarks of Tomorrow (1959). Drucker defined knowledge workers as high-level workers who apply theoretical and analytical knowledge acquired through formal training to develop products and services. (Source)
Knowledge workers often know more about the subject than their managers. The role of a manager in knowledge work is not to provide tasks but create the environment for teams to succeed. This involves leadership developing skills around systems thinking to see the big picture and working with the teams to resolve those systemic issues.
SAFe rightly describes these leaders as Lean-Agile leaders Lean-Agile that drive and sustain organisational change and operational excellence by empowering individuals and teams to reach their highest potential (Lean Agile Leadership | SAFe)
8️⃣ Drive out fear, so that everyone may work effectively for the company.
Psychological safety means an absence of interpersonal fear. When psychological safety is present, people can speak up with work-relevant content. ~ Amy Edmonson.
Creating an environment of psychological safety requires leaders to be aware of what is happening around them and within them. It requires building emotional intelligence and being out on the field — Gemba (Gemba Walk: Where the Real Work Happens | kanbanize.com).
Teams will be candid when you are bold and unafraid to show your vulnerabilities in challenging times. Empathy and compassion will go a long way in creating the right space where team members speak up.
Researchers at Google's Project Aristotle found what mattered was less about who was on the team and more about how the team worked together. They put psychological safety at the very top (re: Work (rework.withgoogle.com)
9️⃣ Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
This is classic DevOps. We all know it's very much needed. Silos stifle collaboration. DevOps is active collaboration between development and operation teams, which enables the continuous delivery of applications and services to our end users.
DevOps today is collaboration beyond just development and operations teams. However, we see now teams collaborating across the value stream (An Introduction to Trending Ops — SysOps, DataOps, DevSecOps, AIOps, ITOps | geekflare.com) and a variety of DevOps team structures facilitating the collaboration (The Importance of DevOps Team Structure | Atlassian)
🔟 Eliminate slogans, exhortations, and targets for the workforce 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.
Deming had a critical view of slogans at the workplace and argued that they cause more harm than good as they only lead to employee frustration. A big reason for these frustrations is that the systemic issues are often not worked upon for resolution, which prevents employees from living up to the sloganeering. This is further aggravated that a lot of management is often perceived as not living up to the slogans themselves and walking the talk.
While hollow slogans are a challenge and best avoided, well-meaning ones followed up by leadership visible commitment are powerful. Zuckerberg's photo post the IPO with the slogan — Stay focused and keep shipping is a powerful one that works and is inspiring (Mark Zuckerberg's Desk: Facebook Founder Posts Photo Following IPO Announcement (PHOTO) | HuffPost Impact)
1️⃣1️⃣ (Part A) Eliminate work standards (quotas) on the factory floor. Substitute leadership.
1️⃣1️⃣ (Part B) Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
Leaders need to focus on and measure outcomes over outputs to deliver value. Outcomes are what the business wants or needs to achieve from the product or service they bring to the market, and outputs are the actions that contribute to achieving those outcomes.
Outputs are generally quantitative, with data available to show whether those have been delivered, and they are easy to report on and validate. However, outputs are also easily gamed and may not always be defined correctly, intentionally or unintentionally.
Outcomes can be both qualitative and quantitative. Instead of just thinking of outcomes and outputs, a good approach that has benefited many is using OKRs. Defining outcomes and key results in a structured way with the teams helps leadership translate their intent into actions at the team level.
OKRs help measure things that matter (Measure What Matters — OKRs | LinkedIn)
1️⃣2️⃣ (Part A) Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
1️⃣2️⃣ (Part B) Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective (see chapter 3).
Employee productivity continues to be a favourite management metric. However, it is such a flawed one. That productivity is often targeted by the classic carrots and stick approach, and research shows that this does not work. With this extrinsic motivation approach, the satisfaction of doing a job well can often get lost in the drive for praise and promotion.
On the other hand, intrinsic motivation works better. People are self-motivated because they have the freedom to do the work they enjoy and are passionate about. The three drivers of autonomy, mastery and purpose allow better leverage for managers to inspire their teams to excellence and have pride in their work. (Three Things that Actually Motivate Employees | hbr.org)
A leader's ultimate goal should be to create an environment where their teams bring their best self to work.
1️⃣3️⃣ Institute a vigorous program of education and self-improvement.
Learning and training are different. Employees can be trained on skills, but they learn how to apply those skills for business outcomes on the job and with self-effort. Fostering a learning culture in the workplace encourages employees to go beyond formal training and gain skills that make them better with each passing day.
A learning culture is an environment that demonstrates and encourages individual and organizational learning. It is a culture where gaining and sharing knowledge is prioritized, valued, and rewarded. It becomes part of the ecosystem of the organization. (Source)
Research from LinkedIn shows that half of today's most in-demand skills weren't even on the list three years ago. So fostering a learning culture is of paramount importance (4 Ways to Create a Learning Culture on Your Team | hbr.org).
1️⃣4️⃣ Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job
We live in an age of digital transformation. The top three digital transformation trends include change management, growing cloud migration, and advanced technology like Artificial Intelligence, Machine Learning (Top 9 Digital Transformation Trends in 2023 (theecmconsultant.com).
These changes impact everyone in the organisation, not just production operations but even front office operations, Sales, HR and more. Everyone will need to play their part for an organisation to remain truly competitive and resilient, and the transformation has to be everybody's job.
The Wrap
At the end of a long piece, I would say Deming's 14 points are as relevant in 2023 as they were in 1982. Leaders will only gain from thoroughly appreciating these points and using them as they lead increasingly complex organisations.
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