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The Management Thinker We Should Never Have Forgotten

Source | Harvard Business Review : By Joshua Macht

Gothenberg, Sweden, is a long way to travel from Boston for a breakthrough idea in management — especially one that is more than 40 years old. I made the journey to attend a health care confab where Don Berwick, the former head of the Institute for Healthcare Improvement, based in Cambridge, Massachusetts, was delivering the opening lecture.

Berwick’s talk began by deftly comparing Frederick Winslow Taylor and W. Edwards Deming: the former an industrialist who equated machines and human beings (both to be managed for maximum output), the latter a humanist who saw the individual as internally motivated to do good, meaningful work. Berwick’s talk spanned a pantheon of management thinkers to show the audience just how far we have come from Taylor to Deming in the 20th century.

The contrast was driven home by a full-blown reenactment of Deming’s famous red bead experiment. In this test, participants play the part of factory workers who are attempting to fit red beads into 50 indentations on a paddle. The catch is that they are plunging their paddles into a box filled with both red and blue beads. The “factory workers” soon realize their performance depends entirely on random factors, well outside of their control.

The reenactment made me ask myself why we’ve lost touch with Deming. The point of his red bead experiment is that we often get a false read on workers because we judge them too narrowly. Deming believed that we can improve worker performance only when we improve the entire system they work within. And he believed that managers wrongly apply incentive pay plans, forced rankings, and all sorts of carrots and sticksto create the illusion of control without solving root performance problems.

Deming offered up 14 principles that stood in stark contrast to the sorts of practices he thought were eroding the performance of top corporations in the United States in the 1970s and 1980s. The list might seem almost quaint today, but it’s worth recounting:

  • Create and communicate to all employees a statement of the aims and purposes of the company
  • Adapt to the new philosophy of the day; industries and economics are always changing
  • Build quality into a product throughout production
  • End the practice of awarding business on the basis of price tag alone; instead, try a long-term relationship based on established loyalty and trust
  • Work to constantly improve quality and productivity
  • Institute on-the-job training
  • Teach and institute leadership to improve all job functions
  • Drive out fear; create trust
  • Strive to reduce intradepartmental conflicts
  • Eliminate exhortations for the work force; instead, focus on the system and morale
    • Eliminate work standard quotas for production. Substitute leadership methods for improvement
    • Eliminate MBO. Avoid numerical goals. Alternatively, learn the capabilities of processes and how to improve them
  • Remove barriers that rob people of pride of workmanship
  • Educate with self-improvement programs
  • Include everyone in the company to accomplish the transformation

Many management thinkers have built upon Deming’s philosophy, yet his core message seems lost to time. He cogently argues that businesses destroy more value than they create when they focus on short-term results, traditional incentives, and performance rankings. His main point is that leaders must build deep trust among workers and managers, which emanates from a strong purpose and shared values. It seems logical enough — and more  important than ever. So how is it that more businesses don’t heed his message today?

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