[The following article first appeared in 1988 in
_The_Journal_for_Quality_and_Participation_. The TQM BBS is
indebted to Ned Hamson, the journal's editor, for uploading the
article.]

              Quality and the Required Style of Management
                                    
                           The need for change
                                    
                        W. Edwards Deming, Ph.D.

     Better quality is necessary for the survival of industry in
the Western World. American industry dominated the world from
1920 through the two decades after World War II. Now it lies in a
state of slumber.
     
     The rest of the world waited in line after World War II to
buy whatever North America could produce. Why? The rest of the
industrialized world lay in ruins. Everyone in the US expected
the good times to continue. What happened? Why?
     
     The answer is that the quality of most American products has
been found wanting, not competitive. Emphasis in the US is still
on quantity, not on quality. Devaluation of the dollar against
the yen is a disappointment, as anybody could predict. Lower
prices against the yen will not produce a market for goods that
nobody wishes to buy. Most American products are simply not
salable at any price. Devaluation of the dollar is not the road
to better business. Better quality is. We are in a completely
different position than we were in up till around 1960.
What must we do?

     Better quality for international trade is the answer, not
restrictions to trade, nor self-pity, nor the beggar s cup. The
US has already installed more restrictions to trade than any
other country, second only to France. Costs go down and
productivity goes up, as improvement of quality is accomplished
by better management of design, engineering, testing and by
improvement of processes. Better quality at lower price has a
chance to capture a market. Cutting costs without improvement of
quality is futile.
     
     Quality and innovation -- Quality is improved in three ways:
through innovation in design of a product or service, through
innovation in processes, and through improvement of existing
processes. Hard work will not ensure quality. Best efforts will
not ensure quality, and neither will gadgets, computers or
investment in machinery. A necessary ingredient for improvement
of quality is the application of profound knowledge. There is no
substitute for knowledge. Knowledge we have in abundance. We must
learn to use it.
     
     Styles of management -- Wrong styles of management, with
concomitant bad practices have grown up and taken root in the
western world. They become obvious under the theory that
reduction in variation improves a product. Theory of variation
(statistical theory) helps to identify practices of management
that induce variation, high cost, and poor quality, with
consequent loss of market. The same theory points to better
practices.
     
     I have for years noted appropriate practices for management;
here I will list some of the faulty management practices.

The wrong style of management

     Management of failure (too late). It is better to work on
the causes of failure. Failures are not causes; they come from
causes.

     Tampering with a stable system. For example, track down
anything that goes wrong with a product or service. This policy
does not improve the system. It is tampering, worsening the
problem.

     Compile a list or chart to show percentages right or
percentages of product or service that went wrong last month.

     Annual appraisal of performance, the so-called merit system
-- a destroyer of people.

     Annual rating of divisions. (A manager of a division is
rewarded on the basis of this rating.)

     Campaign to reduce costs -- as if costs were causes.

     Incentive pay, commissions and bonuses.

     Top management failing to understand their responsibility
for quality, for innovation of product and processes and for
improvement of processes. Quality starts in the boardroom.

     Short term planning and quick profit.

     Churning money.

     Competition without cooperation. Getting a bigger slice of
the pie, but not making the pie bigger.

     Doing business by price tag.

     Short term contracts.

     Management by objectives (MBO) or management by the numbers.

     Investment in gadgets, computers, automation and new
machinery without guidance of profound knowledge.

     Posters and slogans for the workforce.

     Work standards -- quotas. They double the cost of
production, rob people of pride of workmanship and are a barrier
to improvement. 

Deming s five principles 

     1. The central problem in lack of quality is the failure of
management to understand variation. (Everything varies.
Statistics help us to predict how much it is going to vary.)

      2. It is management s responsibility to know whether the
problems are in the system or in the behavior of the people.

      3. Teamwork should be based on knowledge, design, redesign
and redesign. Constant improvement is management s
responsibility. Most causes of low quality and productivity
belong to the system.

      4. Train people until they are in statistical control
(until they are achieving as much as they can within the limits
of the system you are using).

      5. It is management s responsibility to give detailed
specifications.

Deming's fourteen points 

      1. Create constancy of purpose toward improvement of
product and service with a plan to become competitive -- to stay
in business and to provide jobs.

      2. Adopt a new philosophy. We are in a new economic age. We
can no longer live with commonly accepted levels of delays,
mistakes, defective materials and defective workmanship.

      3. Cease dependence on mass inspection. Require instead,
statistical evidence that quality is built in to eliminate need
for inspection on a mass basis.

      4. End the practice of awarding business on the basis of
price tag alone. Instead, depend on meaningful measures of
quality along with price.

      5. Improve constantly and forever the system of production
and service. It is management s job to work continually on the
system.

      6. Institute a vigorous program of education and
retraining.

      7. Adopt and institute leadership. The responsibility of
supervision must be changed from sheer numbers to quality.
Improvement of quality will automatically improve productivity.

      8. Drive out fear so that everyone may work effectively for
the company.

      9. Break down barriers between departments. People in
research, design, sales and production must work as a team to
foresee problems of production that may be encountered with
various materials and specifications.

      10. Eliminate numerical goals, posters and slogans for the
workforce that ask for new levels of productivity without
providing new methods.

      11. Eliminate work standards that prescribe numerical
quotas.

      12. Remove barriers that stand between the hourly worker
and his right to pride of workmanship.

      13. Encourage education and self improvement for everyone.

      14. Create a structure in top management that will push
every day on the above thirteen points.

          W. Edwards Deming, Ph.D. pursued and promoted the use
          of sound management practices and the use of statistics
          for seven decades.
          His speeches, writing, videotapes and impact of
          individuals who studied with him will continue to have
          a profound influence on how leaders throughout the
          world organize and lead their organizations.
          
This article first appeared in the Association for Quality and
Participation s Journal for Quality and Participation in March,
1988. AQP s information center may be reached at 513-381-1959 or
fax 513-381-0070.