The Best of W. Edwards Deming's Philosophy
The following is excerpted from Chapter 4 of The New Economics,
second edition by W. Edwards Deming.
The prevailing style of management must undergo transformation.
A system can not understand itself. The transformation requires
a view from outside. The aim of this chapter is to provide an
outside view-a lens-that I call a system of profound knowledge.
It provides a map of theory by which to understand the organizations
that we work in.
The first step is transformation of the individual. This transformation
is discontinuous. It comes from understanding of the system of
profound knowledge. The individual, transformed, will perceive
new meaning to his life, to events, to numbers, to interactions
Once the individual understands the system of profound knowledge,
he will apply its principles in every kind of relationship with
other people. He will have a basis for judgment of his own decisions
and for transformation of theorganizations that he belongs to.
The individual, once transformed, will:
The layout of profound knowledge appears here in four parts,
all related to each other:
- Set an example Be a good listener, but will not compromise
- Continually teach other people
- Help people to pull away from their current practice and beliefs
and move into the new philosophy without a feeling of guilt
about the past
- Appreciation for a system
- Knowledge about variation
- Theory of knowledge Psychology
One need not be eminent in any part nor in all four parts in
order to understand it and to apply it. The 14 points for management
in industry, education, and government follow naturally as application
of this outside knowledge, for transformation from the present
style of Western management to one of optimization.
The various segments of the system of profound knowledge proposed
here can not be separated. They interact with each other. Thus,
knowledge of psychology is incomplete without knowledge of variation.
A manager of people needs to understand that all people are different.
This is not ranking people. He needs to understand that the performance
of anyone is governed largely by the system that he works in,
the responsibility of management. A psychologist that possesses
even a crude understanding of variation as will be learned in
the experiment with the Red Beads (Ch. 7) could no longer participate
in refinement of a plan for ranking people.
Further illustrations of entwinement of psychology and use of
the theory of variation (statistical theory) are boundless. For
example, the number of defective items that an inspector finds
depends on the size of the work load presented to him (documented
by Harold F. Dodge in the Bell Telephone Laboratories around 1926).
An inspector, careful not to penalize anybody unjustly, may pass
an item that is just outside the borderline Out of the Crisis,
p. 266). The inspector in the illustration on page 265 of the
same book, to save the jobs of 300 people, held the proportion
of defective items below 10 per cent. She was in fear for their
A teacher, not wishing to penalize anyone unjustly, will pass
a pupil that is barely below the requirement for a passing grade.
Fear invites wrong figures. Bearers of bad news fare badly. To
keep his job, anyone may present to his boss only good news.
A committee appointed by the President of a company will report
what the President wishes to hear. Would they dare report otherwise?
An individual may inadvertently seek to cast a halo about himself.
He may report to an interviewer in a study of readership that
he reads the New York Times, when actually this morning he bought
and read a tabloid.
Statistical calculations and predictions based on warped figures
may lead to confusion, frustration, and wrong decisions.
Accounting-based measures of performance drive employees to achieve
targets of sales, revenue, and costs, by manipulation of processes,
and by flattery or delusive promises to cajole a customer into
purchase of what he does not need(adapted from the book by H.
Thomas Johnson, Relevance Regained, The Free Press, 1992).
A leader of transformation, and managers involved, need to learn
the psychology of individuals, the psychology of a group, the
psychology of society, and the psychology of change.
Some understanding of variation, including appreciation
of a stable system, and some understanding of special causes and
common causes of variation, are essential for management of a
system, including management of people (Chs. 6 -10).