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When Dr. Deming went to Japan in 1950, his actions changed business leadership forever.  Deming’s influence on leadership caused the cover story by US News and World Report’s to list Deming as one of only nine hidden turning points in all world history.

These nine hidden turning points of all history included the Apostle Paul (First Century, AD) and the introduction of “The Pill” as a reliable form of birth control (1960).  Dr. Deming was the ninth turning point and the only business person on the list.

Deming was the American quality and systems genius who helped the US win W.WII.  He was following the theories, methods, and processes of statistical quality control methods developed by Walter A. Shewhart at Bell Labs.

In 1950, General MacArthur asked Deming to bring Shewhart’s teachings to Japan’s business leadership.  MacArthur wants to assist the Japanese in rebuilding their war-shattered economy.  Within two years, Deming had taught Shewhard’s quality theories and methods to business leaders representing over 80% of Japan’s total GNP. Deming Institute: Deming’s. 14 Points of Management.

Deming’s Japanese business students immediately applied these proven quality methods.  Within five years the label “Made in Japan” went from symbolizing junk to being viewed as the highest quality.  Deming became (and still is) a national hero in Japan.  The annual Deming Prize remains one of Japan’s highest business honors.

For all this to happen, Japanese leaders had to change.  (Deming had a saying he repeated over and over “The fish stinks from the head first.”). They did.  Quality is still the primary motivator of Japanese leadership.

While not deployed as comprehensively elsewhere, these theories and methods are being successfully applied sporadically throughout the world. When they are diligently applied, unmatched quality and profitability follow. For this to happen It does, however, take leadership diligence. (Deming had another saying, “If it is a quick fix it is neither.)

What are some of the key differentiators in

Deming’s leadership disciplines?

Of course, Deming realized the importance of the leader’s vision and values.  After all, leaders are the company’s beacons.  What Deming felt was equally (if not more important) was - process.  In his now famous “red bead simulation” Deming made a sobering demonstration of what happens when leadership fails to focus on its processes.

He painfully demonstrates to everyone who experiences the red beads game “companies are only going to get what the processes will deliver, nothing more.”  Bold visions, stretch goals, an employee of the month awards, bonuses etc. fail to achieve their objectives without the proper processes in place.

Deming said, “94% of all failure within every organization is in processes of the system (there is only one system).  The most effective leaders know this; they improve the processes and sub-processes.  When they do, the entire system gets better.  In 1950, this was a radical concept.  

Recently, Toyota, a Deming based company, disagreed with Dr. Deming. Based upon decades of evidence, Toyota now states that 99% of all breakdowns are in their processes.

Knowing the above is actually very liberating for leaders.   No longer do leaders have to “lay blame, justify or beat themselves up” (Deming calls this WASTE).  Instead, Deming leaders work with the rest of the organization to improve the various processes and sub-processes.  Doing this is a far better use of the leader’s (and everyone’s) time.

What does this new leadership mean?

First, effective leaders (at all levels) must be trained (or in most cases re-trained) to listen first. They then must focus on repairing the breakdown. Leaders have the power to provide support, remove barriers and gather the optimal team to correct the breakdown.

Second, the effective leader has to be “interested” in the other.  What this means is an “interesting” leadership style is almost always counterproductive.  Interesting is for the Internet, Facebook, TV, etc. not for company leadership interactions.

Recall someone who had a powerful positive impact on you.  Where did that powerful impact come from?  Was it because the person was “interesting” or was it because they were genuinely “interested” in you?  The general Deming rule is: “The more interested you are in the other, the more interesting you become.” Joel Gascoigne: Power of Being Interested.

Third, process data has to be properly collected. This means the data has to be operationally defined.  Deming used the example, “How do you measure the number of trees in a park?”  At first blush, this seems simple. Then Deming asks the following questions:

  • does it count as a tree if it appears to be dead?
  • what if it is just a stump?
  • what if it is just a two-inch tall sprout?
  • what if it seems like a tree but is classified as a bush by horticulturists?

Without properly created “operational definitions”, the data is in danger of having too many interpretations.  When this happens, the variation in the data makes it “dirty” and, thus, of little value. 

Fourth, leaders can make only two mistakes:

  • Mistake #One: To act when one should not act.
  • Mistake #Two: To not act when one should act.

Assuming the data has been properly collected, then creating control charts follows.  Shewhart created a way to make the invisible visible using control charts.  These charts shared by the leaders allow the entire organization to know when to act and when not to act.

Without these control charts, leaders do not know what action or inaction has the highest probability of success. There are too many incorrect actions without them; this creates too much waste.

Possibly because it was not as obvious then as it is now, “Network Science” is now part of the leader’s responsibility.  Since the advent of the Internet and social media, every leader has to embrace this structural change.  Leaders have to know what they and their organization does is going to be visible on the Internet.  It is usually there permanently. Google and social media are now part of the leader’s system.

This information has tremendous weight.  Think about the last time you wanted to do or purchase almost anything.  Which had more weight: the company’s statements or those of its clients/customers? Khalid Saleh: Importance of customer reviews.

The client relationship is now a critical component in a company’s long-term success.  The company leaders must understand their responsibility in leading this process. Embracing the Internet and social media is a relatively new requirement.  Training the entire organization in its importance is a must.

In short: old style leadership is no longer enough.  To lead and prosper optimally leaders must embrace the new realities.  Leaders have to learn, train and monitor their organization using the above.  When they do, these leaders and their companies will be very successful at all levels.  This, of course, includes profitability.

 

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Attorney, real estate developer, businessman, educator, editor, scholar, inventor, negotiator, author, visionary and public speaker. Marshall holds a BA degree from Union College of New York: The Cohen H. Kerr award for the highest academic average at Boston University; Boston University’s Utopia Award and the Maud Folsom Foundation Award which grants an annual scholarship for as long as an individual attends school or until age thirty-five.

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