THE YEARS WITH DEMING

THE YEARS WITH DEMING

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 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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