I was with the Center for Advanced Engineering Study at the
Massachusetts Institute of Technology when I first heard of W. Edwards Deming.
I should have known about him prior to 1980 and was grateful to Steve Lohr, NY
Times business writer who wrote columns in the business section of the Times
on consecutive Sundays: “The Man Who Taught the Japanese” and “More about the
Man Who Taught the Japanese.”
I learned that the Deming Prize was the most
sought-after and distinguished award that a Japanese company could aspire to
and it was named for an American. I also learned that General Douglas
MacArthur, architect of U.S. victory in the Pacific and Proconsul of postwar
Japan, brought Dr. Deming to Japan to assist him in restoring the country’s
economy.
Dr. Deming spoke nationwide to groups of Japanese business
leaders. He told them that if they followed his 14 Points of Management and
employed statistical process control Japan would quickly become a world leader
in output of goods and quality of manufacturing. They followed his advice and
Deming’s prophecy became truth. The success was so vast that soon Japan became
a prime lender to the U.S.
William Edwards Deming was born with the
20th Century, now popularly known as the American Century. He endured a Wyoming
upbringing of hardship, and went on to earn a Yale doctorate in mathematical
physics. Deming worked for the U.S. Census Bureau during WW11 and studied under
the tutelage of Dr. William Shewhart, best known for the Shewhart Control
Chart, one of the major tools of statistical process control. When used
correctly, a control chart can help determine whether a manufacturing process
is in statistical control.
When systems are in statistical control there is
less variations in processes, and the opportunity to produce goods with
uniformly high quality is enhanced. When systems are not in control, quality is
inconsistent, waste is excessive, rework is needed and productivity slips.
Steve Lohr’s NY Times’ articles mentioned
that although Dr. Deming was a legend in Japan, he was little-known in his own
country. I saw that we were wasting a valuable asset and set out to do
something about it. I called Dr. Deming’s office in Washington, D.C. and
described my interest in meeting Dr. Deming to Cecelia Kilian his impressive
and capable secretary. She arranged a dinner in Framingham, Massachusetts a
week or so later.
Dr. Deming was giving a four-day seminar to a
group of local business people. We met at a nearby restaurant. As I walked
through the restaurant, populated by seminar attendees, with the tall and
ruggedly built Dr. Deming, a specimen at 80, many heads turned and watched him.
It was The Look that Hollywood extras give as they watch Jesus pass by on a
donkey. That was when I realized that I was in the company of a great man.
After we sat, Dr. Deming’s first question to me
was, “Mr. Noyes, what are you doing for your country?”
After attempting to swallow my Adam’s apple I
said that one of my responsibilities at MIT was to oversee the production and
distribution of videotapes for the continuing education of practicing
engineers, scientists, mathematicians and technical managers. Dr. Deming said,
“That’s a worthy contribution,” and we were off to a good start. I then said
that I thought that studio-produced videotapes of his program of management
improvement would make a vital contribution to American industry. He seemed
interested and asked many questions, all of which were thoughtful and
challenging.
Dr. Deming was a gracious dinner partner who
laughed easily and showed a particular appetite for fine red wine, clam chowder
and vanilla ice cream. As we prepared to leave, I said, “Dr. Deming, I hope you
will do the tapes with MIT.”
He replied in his deep and dramatic voice, “Mr. Noyes, we must do
the tapes.”
As we prepared for the first taping a few weeks later, I asked Dr.
Deming if he had written and published a book based on his methods and
teaching. He said, “I have a book, but I cannot publish it.” I asked, why not,
and he said, “Because all of the publishers who have contacted me wish to
change my work and I cannot have that. The book must be published exactly as I
have written it. No changes will be tolerated.”
Mentally panting like a Great Dane imaging a
T-Bone I went out on a long and initially unsupported limb and told him that
the Center for Advanced Engineering Study was a publisher, which we were, and
that we would publish his book as is. Dr. Deming said, “I accept that, but to
show that you mean what you say, you must first publish my book based on
printing from typewritten pages that I give you making any transposition
impossible.” I replied that we would do that. The limb was growing longer.
Even though I hadn’t seen Dr. Deming’s book, it
was clear that he had a logical, steel-trap mind and spoke in fluid sentences
and paragraphs. I had no doubt that he was a competent writer and that his
story was legend. (“When the fact becomes legend, print the legend.” –The
Man who Shot Liberty Valance.) I also knew that my boss, Professor Myron
Tribus, Director of the Center, would back me. Myron had been a senior vice
president at Xerox, had strong business instincts and was experimental in the
best sense of the term. He later became a widely-known spokesperson on behalf
of Dr. Deming.
Our senior producer, Mrs. Elizabeth DeRienzo, a
young woman gifted in multiple ways, quickly established a strong working
relationship with Dr. Deming. It’s fair to say that the publishing of the
Deming videotapes and books would have been far more difficult without
Elizabeth’s leadership and abundant interpersonal and business skills.
Quality in business is like control in pitching.
Without them you have nothing, and with them you have everything, or at least a
foundation upon which you can build a durable business or career. The years
with Deming made me, and I believe many others at the Center, far better
businesspeople. I wished that I’d learned from Deming earlier in my career
before I worked at Westinghouse and IBM. But since the job before us was to
spread Dr. Deming’s philosophy in the interest of improving America’s
competitive position, we had to live that philosophy ourselves.
Here’s what happened: We learned that you can’t
install quality like an engine or a transmission. The capacity to deliver quality
goods and services is a reflection of an organization’s underlying way of doing
business, and it must derive from top management because they are the only ones
who can implement meaningful change.
To illustrate this point, let’s look at the
utility of automotive door bangers. The Pontiac division of General Motors used
Dr. Deming as a consultant, and for several years this paid off in improved
quality and increased sales. One of the Pontiac executives told me that an
early step was to go to Japan and learn from those who had adopted Deming’s
methods. He went on the factory floor and asked to see the door bangers and
learn how they were trained. The confused Japanese executives and managers
didn’t know what he was talking about. The Pontiac man explained that during
final inspection his assembly line workers climbed inside the cars with rubber
hammers and a black light and whacked away at the doors until they were sealed
as best they could.
The Japanese managers found this to be
hilarious. They explained that their doors arrived at the plant just in time
for assembly and each one fit perfectly. In other words, the Japanese
automotive manufacturer worked only with suppliers who could (a) deliver parts
on time and (b) deliver parts of consistently quality, or in a state of
statistical control fit for use with no appreciable variation. The Pontiac
executive also noticed that there were no stacks of doors in inventory. The
Japanese manufacturer wasn’t paying for storage. The supplier provided doors
and other parts as they were needed. Finally, he saw that the assembly line
workers operated in teams and used quality tools like control charts right on
the factory floor. The Pontiac man understood that they had a long way to go
before reaching parity in manufacturing quality.
The Japanese manufacturers didn’t just
focus on quality of manufactured goods, it extended to quality of service as
well. For example, in the year that Toyota achieved 50% of GM’s annual revenue
they employed 100 people in their headquarters marketing services/order
processing department. GM employed several thousand.
Quality pays in many ways. As Dr. Deming said,
it is the best way to improve productivity because there is less rework and
less waste and fewer workers are needed to repair damage. Quality also pays off
in pricing. On many nights, I picked Dr. Deming up at his Boston club. He was
on time, except for one night when he was 20 minutes late. He apologized and
said that he had received an urgent call from Dr. Toyoda, head of Toyota
Motors. (I never learned the reason for the different spelling.) At all events,
Dr. Deming seemed preoccupied and I asked if a problem was weighing on him. He
said that Dr. Toyoda was upset over the quota set by the U.S. government on the
import of Japanese automobiles and wanted Dr. Deming’s advice on what to do. A
long pause ensued. Deming was not a man to volunteer anything. He was purely
Socratic. Unable to bear not knowing what happened, I asked if he’d mind
telling me what advice he gave, Dr. Deming replied, “I told him to raise his
prices.”
My first thought was, ‘That’s harsh and also
unfair to American consumers.’ But after thinking about it I realized that
Deming’s advice was on the money. First, quality does pay off. He knew that
American consumers would still buy Toyotas, even at higher prices, if they were
confident that the cars would be durable.
To support this notion I thought of friends who
car-shopped three years earlier and received an offer too tantalizing to turn
down. The local Toyota dealer suggested a whopping discount if they bought two
cars. They did, and for the next three years my friends enjoyed six years worth
of maintenance-free, trouble-free transportation and swore they would never go
back to American cars.
The reputation for quality established over many
years by Toyota made them the number one car company in the world and probably
the best company overall as well. Alas, they lost track of quality late in the
first decade of the new millennium, didn’t respond nimbly, suffered endless
vehicle recalls and lost their competitive position. The Big Three caught a
break, and when saved by the government’s massive infusion of cash came back
with a vengeance to recapture an impressive amount of market share. When Toyota
executives visited Professor Tribus’s office in the Center for Advanced
Engineering Study at MIT some years earlier they would have done well to pay
attention to an amusing, but prescient small, framed saying on his wall:
“Entropy is increasing.”
Now, back to the fairness to American
manufacturers of Deming’s advice to raise prices on Toyota’s? The quota on the
import of Japanese cars was imposed around the time of the 1980’s Chrysler
bailout. Japanese car manufacturers were killing the American Big Three, and,
as shown in the anecdote above, they were killing them on quality.
When I quizzed Dr. Deming further about his
advice, he said that quotas never work, they only delay the inevitable, and, in
this case, it was misguided government interference under prodding from the Big
Three that gave American automobile manufacturers an excuse not to improve
their quality and compete long-term with the Japanese. Not long afterward, Dr.
Deming began consulting with American car companies and divisions, among them
Ford and the Cadillac division of GM, plus the aforementioned Pontiac
division. All three soon became more competitive on quality.
Donald Petersen, CEO of Ford from 1985-1989
became a disciple of Dr. Deming and it paid off for Ford launching the company
on a path to quality parity with the Japanese. Ford remains number one in
quality among the Big Three and continues to improve its international
competitive position.
W. Edwards Deming was fearless and bowed to no
businessperson irrespective of their position. If you hired Deming, you did
things his way or he no longer continued to do business with you. It was all-in
Texas Hold ‘em. One of his clients was the Nashua Corporation. The CEO told me
that the first meeting with Dr. Deming included the Nashua division managers. A
few hours into the meeting the CEO needed to use the toilet. He tried to slip
out. Dr. Deming asked where he was going and when told asked him to sit down.
You didn’t walk out of a meeting with Deming for any reason. When in doubt wear
a diaper.
I mentioned above that Center personnel had to
adopt Deming’s methods in the interest of representing him adequately. You may
recall that Dr. Deming insisted that we publish his magnum opus as is. Although
we agreed we also knew that a book on quality couldn’t go out with any typos.
One of Dr. Deming’s favorite anecdotes involved proofreading. He said that you
couldn’t use two proofreaders because then no one would have a job.
No book in the history of publishing was
proofread so thoroughly. Everybody worked on it. A few minor typos were found,
quietly fixed by Cecelia Kilian, Dr. Deming’s marvelous secretary, and pages
were sent back to us. Then we employed two freelance proofreaders of impeccable
credentials. Each was told that they were the only proofreader and the book
they were to work on was written by the American quality guru, W. Edwards
Deming. And because of the need to protect the reputations of MIT and Dr.
Deming the book could not have any typos. We also gave them a list of
idiosyncratic spellings like “aeroplane,” and put them to work. Neither one
found a typo. I believe it was Lord Nelson who said something like: “There has
been no problem. There is now no problem. And there will be no problem.”
We recognized that quality is hard work, and as
someone said it is a journey, not a destination. A brochure was produced,
mailing lists were purchased, Quality, Productivity and Competitive Position
was printed (we swallowed hard and made an initial printing of 10,000 copies),
and the echo came back loud and clear: the American business community wanted
to know more about the philosophy of W. Edwards Deming. Multiple reprints
totaling 175,000 books flew off the shelves in short order.
Meanwhile, we geared up our existing customer
and marketing services and inventory operations. Internal staff remained lean,
and we outsourced much of the work to outside vendors we knew from experience
to be quality-conscious on an as-needed basis. Flow charts, control charts and
other quality management tools papered the walls. Dr. Deming had made the
observation that if you can’t flowchart your business operations you don’t
really understand them.
Moreover, he encouraged the writing of an
operational definition for each system or process within that system so that
everyone could move forward with constancy of purpose.
We also adopted a “no excuses” business philosophy,” another of
Dr. Deming’s teachings. Once a business embraces the idea that excuses are a
weak substitute for effectiveness, business practices become more efficient and
the tendency is to do things right the first time.
Of course stuff happens, but only 6% of it comes
from special causes those imperfections caused by individuals. 94% of errors
are in the system and can only be fixed by management. A major part of
no-excuses business management is for organizational leaders to stop blaming
workers for alleged mistakes. As Dr. Deming pointed out, most workers want to
do well. They just need to work in a system that doesn’t contain built-in
flaws. Put another way, it was time to stop looking for “Who’s wrong” and start
solving “What’s wrong.”
Dr. Deming illustrated the need for managers to
create a serviceable system through the parable of the red beads. In this
exercise which he called in his usual self-deprecating way “simple, stupid”
some willing workers were asked to dip a paddle into a bowl of small white
beads and come up with a clean result. Problem was that the some red beads
representing defects were snuck in. Every time a worker tried to produce
error-free work a few red beads were on the paddle.
No matter how hard they tried, the workers
failed and had to be let go. Dr. Deming concluded the experiment of the red
beads by telling management that the red beads were their responsibility. And
what they needed to do, as he commandeered in his rumbling, evangelical voice
of God was to, “Get the red beads out of the bowl.”
Another lesson learned from Dr. Deming was to
think statistically and make planning and acting on the planning a useful and
gratifying experience. One of the major tools used by Dr. Deming was what he
called the Shewhart Cycle of Plan, Do, Check, Act.
In initiating the PDCA cycle, first Plan what you want accomplish over time. Do
something that advances the planning. Check to see that the results of what you
did matches the goals set in the planning. Act based on this information to
sharpen your initial goals and make them successful.
We also used Tree Diagrams to help identify all
the steps needed to be fulfilled in individual processes. Tree diagrams when
properly used help eliminate the oops! factor that occurs when something
obvious is left out of a process. Fishbone, or Cause and Effect Diagrams, also
proved useful in determining how all the causes like the three P’s: People,
Procedures, Policies affect actions and results. These are two tools among many
we used in our quest to achieve total quality control (TQC). I think it was
Emerson who said that cause and effect are two sides of the same fact. Whatever
the meaning, the use of management tools helped us to think more analytically
and statistically and maintain better control of the system used to further
Center goals.
Staff at the Center for Advanced Engineering
Study also worked on embracing Deming’s 14 points of management. We did try to
create constancy of purpose while adopting the new philosophy and made notable
progress. In addition, encouraging progress was made in breaking down barriers
between staff areas and instituting a program of education geared to improve
our business processes.
The studio-produced videotaping continued and we
produced 14 in all. One major mistake was made. We didn’t include discussion
topics. This was soon rectified. Business videotapes should be stopped frequently
and topics discussed, especially topics that relate to one’s own business
operations. Once suggested stopping points and discussion topics were inserted,
the utility of the tapes increased manifold.
Videotaping Dr. Deming was a challenge. He would
listen to direction and then proceed exactly as he wished. No chance of his
looking into the camera. He simply plowed ahead roaming the stage, moving back
and forth to various chalkboards and presenting brilliantly. It’s probably fair
to say that all people of greatness are eccentric to some degree. No one
controlled Dr. Deming. He operated on his own, and we lesser mortals tried to
catch as much of his philosophy on tape as we could. One camera operator who
was used to more conventional television production was doing a good job
following Dr. Deming around the sprawling set. He said to me during a break,
”This man is a loose cannon.”
More to the point, Dr. Deming was tireless in
advocating for quality improvement and would do anything to achieve it. He
worked long hours seven days a week during his 80’s and into his 90’s. How he
looked on camera never occurred to Dr. Deming. The message was the issue and
how widely to it could be dispersed was the sole intent. He was an engine of
responsibility who once had laser surgery on both eyes in Washington, D.C. in
the morning and flew to Detroit for a Ford consultation that afternoon.
During the taping season, Dr. Deming worked on
the update of his book, soon to be re-published and re-titled as Out of the Crisis.
No more printing from typewritten pages. Drafts flew back and forth between MIT
and D.C. And speaking of quality, we used Fedex every Friday and received the
marked-up revisions on Monday for several months and they never missed, once.
During this time of intense videotaping and book
development the staff worked long hours and was stretched. Dr. Deming was a
taskmaster who demanded perfection on short notice. In one regrettable instance
I wish I could have taken back, I made the comment under extreme pressure that
we were doing our best. Dr. Deming told me in a level tone, “Mr. Noyes, your
best is simply not good enough.”
He was right, so we quickened the pace like a
squad of Seabees whose slogan in WW11 was, “The difficult we do immediately. The
impossible takes a little longer.” And to put a finer point on it, if you
embark on a program of continuous improvement which we had done you must accept
that your best is not good enough and can always be improved.
In his four-day seminars and in smaller
consultancy meetings, attendees would invariably ask Dr. Deming questions along
the lines of: “What should I do to implement quality?” Or, “What are the steps
do I need to take to get a quality program going in my company?” In other
words, what is the best shortcut to quality.
Deming’s typical answer, “You mean you want me
to tell you what your job is?” Deming’s philosophy of management and the road
to improved quality, productivity and competitive is a rough one not easily
navigated. It takes study, hard work and the point of view that meaningful
change has no easy fixes and to be successful it must be led by open-minded top
management.
If you’ve been brushing up on your Shakespeare
you may recall that Horatio, Hamlet’s university friend couldn’t understand or
accept the idea of ghosts. So Hamlet encouraged him to expand his thinking:
‘There are more things in heaven and earth than are dreamt of in your
philosophy, Horatio.’ Well, there are no ghosts in Deming’s philosophy, but
there are untold riches if you’re willing to be open to them.
Enlightened executives like Don Petersen at Ford
understood this. Too many other American business leaders never got it and
likely never will. Read the tweets, postings, and other social media comments
from U.S. management and you will rarely read references to quality. You will
see slogans, exhortations and complaints about regulations, but scant mention
of what makes customers loyal.
Dr. Deming wanted Out of the Crisis
typeset and printed at Cambridge University Press in the UK. Gulp! Fortunately,
we discovered that under U.S. Copyright law no more than a few thousand copies
of a book could be imported into the U.S. without running the risk of losing
copyright. Dr. Deming settled for typesetting in the UK and printing by a
branch of Cambridge University Press in the U.S. And this worked out
satisfactorily.
At the last count I know of, the Center shipped
over 600,000 copies of Out of the Crisis. MIT sent royalty checks to
authors semi-annually. Cecelia Kilian, Dr. Deming’s secretary told us that when
the checks, also incorporating videotape sales, and well into the six figures,
arrived at his office Dr. Deming liked to walk down the block with her to the
local bank, stand in line and deposit the check. Invariably, a bank officer
would spot Dr. Deming and Cecelia and escort them to his office for a chat. Now
that’s quality customer service for you with no regard for dollar value.
Later, we condensed the original set of 14
videotapes into a revised set of four that included graphics and voiceover. We
renamed this set of videotapes “The Essential Deming” and distributed over
1,000 copies. This set was used by many small businesses who couldn’t afford
the longer and more expensive initial series of Deming videotapes. The set is a
classic that succinctly enunciates the Deming philosophy. Elizabeth DeRienzo
was the intrepid writer/producer/director.
I do not wish through this retrospective to
imply that MIT was the sole entity in introducing W. Edwards Deming to American
business. George Washington University in D.C. did an admirable job in running
Dr. Deming’s four-day seminars nationwide. Many fine books were written by
individuals who worked hard to spread the Deming philosophy. One of several
regrets from that period was not working more closely with the other entities
that were supporting Dr. Deming’s endeavors.
Shortly after the first set of videotapes was
published two graduate students from the MIT Sloan School of Management stopped
by and asked if they could watch the tapes. We set them up in a viewing room,
and they came by for 14 straight business days until they had watched them all.
When finished they stopped in to thank us and I asked, “What did you learn from
watching Dr. Deming. One answered, “We learned more in two weeks than we did in
two years at the Sloan School.”
I have great respect for the Sloan School and
believe it to be one of the top graduate schools of business in the world. And
I don’t believe that the two students really meant what they said. What I do
know is that W. Edwards Deming had a profound impact on learning and those who
“got” him never forgot his lessons.
This retrospective was solely derived from my
recollections. Any errors are exclusively mine. Looking back on long stints at
IBM, Westinghouse and MIT, the years with Deming was my defining business
experience. Dr. Deming made you grow and be better. And although he was tough
and demanding to a fault, W. Edwards Deming was a good person, a true patriot
and a great man who loved his country. His death in 1993 was an incalculable
loss. I hope that his management and quality lessons will never be forgotten
and always used by U.S. businesses.
Richard J. Noyes, former Associate Director, Center for Advanced
Engineering Study, Massachusetts Institute of Technology is a consultant to
public and private sector organizations.
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