RE: Deming 2005 -- Question 1 of 2 (4 day)

[jmsiegel@sbcglobal.net]

In attempting to address this sort of question, I'm conscious that
unlike a number of people on this forum, I was never one of Deming
personal students, and I only saw him, from a distance, in a few
seminars and talks he gave towards the end of his career. I have no
knowledge of Deming's own thoughts about the direction he wanted to take
his work, and can only speak as an outsider.

Deming's audience for his seminars, as I understand it was CEOs and
managers. Is this the right audience to be talking to under today's
conditions?

Deming's first point was constancy of purpose. It presumed that
management worked for investors who were interested in long-growth, and
were willing to entrust their capital to a single management approach
long enough for a long-term plan to pay off. Only a management working
under such conditions could in a position to be interested in Deming's
approach. Different purposes lead to different methods.

It is doubtful that most investors today would be interested in
investing on such a basis. The average tenure of CEOs and top managers
has been steadily shortening, and the goals managers are required to
perform to have been steadily nearer- and nearer-term in focus. It
strikes me as doubtful that managers and CEOs are in position to change
this aspect of the system they find themselves in. It strikes me that
before any discussion of how to implement an investment could be
expected to be useful, one would need to discuss how and why to invest.
Knowledge may be defined in terms of what happens over the long term,
but if one's thinking is exclusively short-term one simply has no need
to know.

Why is constancy of purpose valuable? Why should one invest for the long
term? Why should one care about the future? Why is the Deming philosophy
relevant?

It strikes me that an articulated answer to those questions is needed
before any serious discussion of how can even begin. A decade and a half
ago, answers may not have been needed; a need to change may even have
seemed obvious. Japan seemed on the ascendancy. A sense of crisis was in
the air. Today, however, we generally believe ourselves to be
successful, and are often quite complacent in our success. Why should we
consider behaving differently when we've done so far seems to have
worked?

Every month a different fund seems to hold the top ranking. Why
shouldn't we do what this month's topped-ranked fund does? Why not
invest in those who have been successful before?

It might be useful to do a version of Deming's seminars designed, not
for operations managers, but for financial investors, and to address the
"why" more directly.

Sincerely,
 
Jonathan Siegel
1204 Banbury Rd
Kalamazoo, MI, 48188
(269) 381-0829
jmsiegel@sbcglobal.net