The Deming Legacy

Few would hazard an answer to such a loaded question, especially when it was posed by Deming, the legendary inspiration behind the Japanese industrial miracle and a man who did not suffer fools, or dumb guesses, gladly or even politely. Eventually hed write the answer himself: To have a little fun, and maybe learn a little.

For nearly forty-five years, hed been asking such questions and tossing out answers to

Japanese and American businesses alike. But the degree of fun was debatable for a man whose teachings were roundly ignored in his own country. Yet the simple fact that Japan listened, and the United States didnt, changed the face of global business history in the second half of the twen-tieth century.

 

Portrayed alternately as cranky and compassionate, Deming was Americas greatest export and Japans best-kept secret: a PhD from Yale and a New York University professor with a knack for math, a contempt for management, and the gift of gab. In postwar Japan, with the nation and its economy in ruins, his teachings showed the most practical way to rebuild.

As described by David Halberstam in The Reckoning, a chronicle of the American auto industrys missteps: Edwards

Deming was not just a consultant but a guru for the Japanese. It was as if this one rather professorial man could explain the inner mystery of how America had won the war.

Demings death in 1993, weeks after his ninety-third birthday, has not dimmed his message; it hasnt even stopped his lectures, which are now being conducted with the help of strategically edited videotapes. And the quality revolution he inspired continues to evolve, as his two biggest client nations build on his work.

In the United States, the 1990s legacy of his statistical quality control and total quality management teachings can be found from General Motors to Ford, from AT&T to Hughes Aircraft to the United States Navy, from Vice President AL Gores Reinventing Government to Speaker Newt Gingrichs Contract with America.

Japans global success story can be traced to its postwar turnaround at the advice of W Edwards Deming. He preached a discipline defined by mathematics and steeped in concepts of group cooperation and teamwork, which blended nicely with traditional Japanese culture. His trademark concept of continuous improvement rather annoying to quick-fix-minded Americans was also welcomed by the conscientious Japanese, who understood they had a long way to go.

In his first serious quality lecture in 1950, Deming made it all sound so simple to the desperate, defeated Japanese. He promised them that, of they followed his teachings, theyd be competitive with other nations in five years. And they lapped it up. One Japanese company president who attended the lecture put

Demings teachings into action and recorded a 30 per cent jump in productivity within a few months. Others noted similar improvements and Demings reputation was made.

Within a year of his first speech in Japan, the prestigious Deming Prize was established in his honour. The prize is the highest recognition a Japanese business can receive.

I think his biggest impact was on the quality of the Japanese product, because after the war, Japanese products were synonymous with cheap labour and cheap products, says Daisaku Harada, director of the United States office of the Japan Productivity Centre for Socio-Economic Development, near Washington, DC. Dr Deming taught the Japanese how to make quality products...and they listened very carefully starting with the top executives of the corporations, not just lower-level quality experts. His teachings are still very much alive, and he is, in fact, considered to be like a god in Japan.

Why are we here? Deming would ask. It was a question he felt that every organisation, from schools to hospitals to corporations, must answer and answer correctly. He believed that every organisation must have a purpose, and that making lots of money is the wrong one. Deming saw businesses as institutions that gave society stability.

Improve quality, and you automatically improve productivity. Then you capture the market with lower prices and better quality, said Deming. You stay in business and provide jobs. So simple.

His message today sounds like plain old common sense. But in the postwar years it was revolutionary. And the impact of that revolution didnt reach Demings homeland until the 1970s, when made in Japan ceased to be an international punch line and became a fearsome symbol of quality.

His name remained virtually unknown in the United States until the late 1970s, after American business superiority had been dealt a series of near-fatal blows thanks to the worldwide oil crises and powerful competition from Japanese business.

But it took a 1980 NBC documentary, If Japan Can, Why Cant We? to sound the clarion call. The work of Deming and the success he brought to Japan caught his countrymen by surprise. Donald E Petersen, then president of Ford Motor Co saw the show and called Deming immediately, hiring him as a consultant for the entire company. After years of enjoying worldwide superiority in the auto industry, Petersen well remembers what Ford stood for in those tough days FORD: Fix Or Repair Daily. We were heading into very serious financial losses and were rapidly losing our market share in the passenger car business in North America, he says. And it was pretty clear that, while the change in the energy situation was a major cause, there was also a significant problem at Ford in terms of loss and customer loyalty.

Within months of working with Deming who regularly visited the company, toured the plants, held seminars, and raged at any shoddy business practices they were able to see the beginnings of improvements and measure the increase in quality, using a Deming statistical model.

Ford did a great many things to try to put itself back together in those days, says Petersen, who retired as chief executive in 1990 after forty-one years with the company. We resorted to seeking advice and guidance from a whole array of ideas. But I would say no one was more important to that effort than Dr Deming.

Despite the hard times, Demings was a tough message for most American executives and managers, who were content to blame any failure in the marketplace on the lazy American worker, the slavish Oriental work ethic, or subsidised Japanese businesses.

Of course, Demings notoriously low opinion of American business practices didnt exactly open the hearts of his stateside audiences. When you think of all the underuse, abuse and misuse of the people of this country, this may be the worlds most underdeveloped nation, Deming was fond of saying. Were number one for underdevelopment.

Certainly there were other, somewhat less tough-talking philosophers preaching variations on the quality theme. Joseph M Juran arrived in Japan in 1954, four years after Demings groundbreaking lecture, pushing his own more specific theories of quality control and pointing to his insightful Quality Control Handbook. Jurans work there earned him the Order of Sacred Treasure, an honour awarded by the emperor of Japan. In the United States, Jurans teachings have been followed by such companies as DuPont, Mobil and Monsanto.

In addition, there was General Electrics manager of quality control service, Armand V Feigenbaum, who in 1950 wrote Total Quality Control, in which he put forth the idea that quality was everyones business, not just the problem of the quality control department. By the late 1970s, Philip B Crosbys book Quality Is Free was gaining popularity and the movement was born.

Not that there wasnt any rivalry. Even into his nineties Deming would get testy at suggestions that Jurans teachings would have lasting influence. Juran, who was four years younger, returned the sentiment. Recognition has become the biggest thing in Demings life, he said in 1991. But the Deming prize is much more important than he is just like the Noble prize and Alfred Nobel.

Curt W Reimann, director of quality programmes at the US Commerce Departments National Institute of Standards and Technology, sees Demings role as key in popularising the quality movement. But he takes the position that there are other factors involved, especially the hardworking Japanese, who in effect tested the theories by turning their large corporations into giant quality laboratories. The idea of the lone gun is fashionable folklore and storytelling, says Reimann. But usually, when you look behind, youll see theres a whole lot more to it. Its not like everyone was just sitting on their hands, with blindfolds and earplugs.

G Howland Blackiston, president of the Juran Institute in Wilton, Connecticut, puts it even more plainly. American businesses were poised to go out of business they had to do something, he says. When companies got into quality, I doubt very much that it was because Dr Deming said so. Youll find there were other drivers first, competition, especially from abroad. He adds, I dont think that the best company out there would ever say they are Deming followers or Juran followers. They would come up with a methodology and philosophy and approach all their own, a blend.

And that is exactly where the quality movement in the United States has gone. By the time Phillip Scanlan, AT&Ts corporate quality office vice president, came on the scene in 1987, he began exploring the feasibility of incorporating all these teachings into one quality formula. One of the things we did was sit down and take everything they were all saying, and we found they all agreed on about 80 per cent of it, he says. And there was just 20 per cent they were in disagreement about, and therefore the other person was a jerk. So AT&T decided to more or less go with the 80 per cent core of agreement. After that we never lined up with a person, says Scanlan. We lined up with what we thought was the best quality approach.

With the establishment in 1987 of the Baldrige Awards Americas answer to the Deming Prize the quality message had become well entrenched in the American business culture. And the examples set by those Baldrige Award winners from Federal Express to Westinghouse to GM Cadillac set the stage for further evolution of the quality revolution.

As Scanlan describes it, the opportunity now exists to learn not just from teachers but also from practitioners, who must reveal to the Baldrige Award judges how they do the things

they do. What we do is take what the winners do each year

and put these back into my system to try to get people to do it across AT&T, he says. If you keep trying to do what the winners do, it tends to move you in the right direction.

And so it has: AT&T has won three Baldrige Awards; no other company has won more than one. In fact, on the same day last October, AT&T won both its third Baldrige and its first Deming Prize, one of a very few United States companies that have succeeded at the legendary Japanese competition. Continuous improvement, as Deming would say.n

(Reprinted from Worldbusiness, KPMG Peat Marwicks management journal)

Improve quality, and you automatically improve productivity. Then you capture the market with lower prices and better quality, said Deming. You stay in business and provide jobs.So simple.