Deconstructing Deming X – Eliminate slogans!

10. Eliminate slogans, exhortations and targets for the workforce.

W Edwards Deming

Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.

Inscription on the James Farley Post Office, New York City, New York, USA
William Mitchell Kendall pace Herodotus

Now, that’s what I call a slogan. Is this what Point 10 of Deming’s 14 Points was condemning? There are three heads here, all making quite distinct criticisms of modern management. The important dimension of this criticism is the way in which managers use data in communicating with the wider organisation, in setting imperatives and priorities and in determining what individual workers will consider important when they are free from immediate supervision.

Eliminate slogans!

The US postal inscription at the head of this blog certainly falls within the category of slogans. Apparently the root of the word “slogan” is the Scottish Gaelic sluagh-ghairm meaning a battle cry. It seeks to articulate a solidarity and commitment to purpose that transcends individual doubts or rationalisation. That is what the US postal inscription seeks to do. Beyond the data on customer satisfaction, the demands of the business to protect and promote its reputation, the service levels in place for individual value streams, the tension between current performance and aspiration, the disappointment of missed objectives, it seeks to draw together the whole of the organisation around an ideal.

Slogans are part of the broader oral culture of an organisation. In the words of Lawrence Freedman (Strategy: A History, Oxford, 2013, p564) stories, and I think by extension slogans:

[make] it possible to avoid abstractions, reduce complexity, and make vital points indirectly, stressing the importance of being alert to serendipitous opportunities, discontented staff, or the one small point that might ruin an otherwise brilliant campaign.

But Freedman was quick to point out the use of stories by consultants and in organisations frequently confused anecdote with data. They were commonly used selectively and often contrived. Freedman sought to extract some residual value from the culture of business stories, in particular drawing on the work of psychologist Jerome Bruner along with Daniel Kahneman’s System 1 and System 2 thinking. The purpose of the narrative of an organisation, including its slogans and shared stories, is not to predict events but to define a context for action when reality is inevitably overtaken by a special cause.

In building such a rich narrative, slogans alone are an inert and lifeless tactic unless woven with the continual, rigorous criticism of historical data. In fact, it is the process behaviour chart that acts as the armature around which the narrative can be wound. Building the narrative will be critical to how individuals respond to the messages of the chart.

Deming himself coined plenty of slogans: “Drive out fear”, “Create joy in work”, … . They are not forbidden. But to be effective they must form a verisimilar commentary on, and motivation for, the hard numbers and ineluctable signals of the process behaviour chart.

Eliminate exhortations!

I had thought I would dismiss this in a single clause. It is, though, a little more complicated. The sports team captain who urges her teammates onwards to take the last gasp scoring opportunity doesn’t necessarily urge in vain. There is no analysis of this scenario. It is only muscle, nerve, sweat and emotion.

The English team just suffered a humiliating exit from the Cricket World Cup. The head coach’s response was “We’ll have to look at the data.” Andrew Miller in The Times (London) (10 March 2015) reflected most cricket fans’ view when he observed that “a team of meticulously prepared cricketers suffered a collective loss of nerve and confidence.” Exhortations might not have gone amiss.

It is not, though, a management strategy. If your principal means of managing risk, achieving compelling objectives, creating value and consistently delivering customer excellence, day in, day out is to yell “one more heave!” then you had better not lose your voice. In the long run, I am on the side of the analysts.

Slogans and exhortations will prove a brittle veneer on a stable system of trouble (RearView). It is there that they will inevitably corrode engagement, breed cynicism, foster distrust, and mask decline. Only the process behaviour chart can guard against the risk.

Eliminate targets for the workforce!

This one is more complicated. How do I communicate to the rest of the organisation what I need from them? What are the consequences when they don’t deliver? How do the rest of the organisation communicate with me? This really breaks down into two separate topics and they happen to be the two halves of Deming’s Point 11.

I shall return to those in my next two posts in the Deconstructing Deming series.

 

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Deconstructing Deming I – Constancy of Purpose

File:W. Edwards Deming.gifMy 20 December 2013 post on W Edwards Deming attracted quite a lot of interest. The response inspired me to take a detailed look at his ideas 20 years on, starting with his 14 Points.

Deming’s 14 Points for Management are his best remembered takeaway. Deming put them forward as representative of the principles adopted by Japanese industry in its rise from 1950 to the prestigious position it held in manufacturing at the beginning of the 1980s.

Point 1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.

In his 1983 elaboration of the point in Out of the Crisis, Deming explained what he meant. Managing a business was not only about exploiting existing products and processes to generate a stream of profits. It was also about re-inventing those products and processes, innovating and developing to retain and capture market. Deming was fearful that management focused too much on short term profits from existing products and services, and that an effort of leadership was needed to reorient attention and resource towards design and development. The “improvement” that Deming was referring to is that through design and redesign, not simply the incremental improvement of existing value streams. Critically, Deming saw design and redesign as a key business process that should itself be the target of incremental continual improvement. Design and re-design was not an ad hoc project initiated by some rare, once in a generation sea-change in the market or motivated by a startling idea from an employee. It was a routine and “constant” part of the business of a business.

Some of Deming’s latter day followers sometimes deprecate the radical redesign of processes in approaches such as Business Process Re-engineering, and instead promote the incremental improvement of existing processes by those who work in them. That is exactly the approach that Deming was warning against in Point 1.

It is worth recalling the economic and geographic climate within which Deming put forwards this principle. During the early 1980s, the US and Western Europe suffered a significant recession, their populations beset with the dual evils of unemployment and inflation. The economic insecurities were aggravated by social unrest in the West and the intensification of the Cold War.

In 1980 Robert Hayes and William Abernathy, academics at the Harvard Business School, attacked US management in their seminal paper Managing our Way to Economic Decline. They found that fewer and fewer executives were from engineering and operations backgrounds, but increasingly from law and finance. Such managers had little understanding, they said, of the mechanics of the businesses they ran or the markets in which they competed. That in turn led executives to tend to pursue short term profits from existing value streams. These were easy to measure and predict on the visible accounts. However, managers were allegedly ill placed to make informed decisions as to the new products or services that would determine future profits. The uncertainties of such decisions were unknown and unknowable other than to a discipline specialist. Franklin Fisher characterised matters in this way (1989, “Games economists play: a noncooperative view” Rand Journal of Economics 20, 113):

Bright young theorists tend to think of every problem in game theoretic terms, including problems that are easier to think of in other forms.

This all appeared in contrast to Japanese manufacturing industry and in particular Toyota. By 1980, Japanese manufactured goods had come increasingly to dominate global markets. Japanese success was perceived as the (Lawrence Freedman, 2013, Strategy: A History, p531):

… triumph of a focussed, patient, coherent, consensual culture, a reflection of dedicated operational efficiency, or else a combination of the two.

Certainly in my own automotive industry days, my employer had come to see its most successful products literally as commodities. They belatedly realised that, while they had been treating them as a mere income stream, admittedly spent largely on unsuccessful attempts to develop radical new products, Japanese competitors had been filing dozens of patents each year making incremental improvement to design and function, and threatening the company’s core revenues.

But did Deming choose the right target and, in any event, does the exhortation remain cogent? It feels in 2014 as though we all have much more appetite for innovation, invention and product design than we had in 1983. Blogs extol virtues of and strategies for entrepreneurship. Slogans proliferate such as “Fail early, fail fast, fail often”. It is not clear from this web activity whether innovation is being backed by capital. However, the very rate of technological change in society suggests that capital is backing novelty rather than simply engaging in the rent seeking that Hayes and Abernathy feared.

In 2007 Hayes reflected on his 1980 work. He felt that his views had become mainstream and uncontroversial, and been largely adopted in corporations. However, information and globalisation had created a new set of essentials to be addressed and to become part of the general competencies of a manager (“Managing Our Way… A Retrospective by Robert H. Hayes” Harvard Business Review, July-August 2007, 138-149).

I remain unpersuaded that there has been such a broadening in the skill set of managers. The game theorists, data scientists and economists seem to remain in the ascendancy. Whatever change of mind in attitudes to design has taken place, it has happened against a background where CEOs still hop industries. There are other explanations for lack of innovation. Daniel Ellsberg’s principle of ambiguity aversion predicts that quantifiable risks that are apparent from visible accounts will tend to be preferred over ambiguous returns on future inventions, even by subject matter experts. Prevailing comparative advantages may point some corporations away from research. Further, capital flows were particularly difficult in the early 1980s recession. Liberalisation of markets and the rolling back of the state in the 1980s led to more efficient allocation of capital and coincided with a palpable increase in the volume, variety and quality of available consumer goods in the West. There is no guarantee against a failure of strategy. My automotive employer hadn’t missed the importance of new product development but they made a strategic mistake in allocating resources.

Further, psychologist Daniel Kahneman found evidence for a balancing undue optimism about future business, referring to “entrepreneurial delusions” and “competition neglect”, two aspects of What you see is all there is. (Thinking, Fast and Slow, 2011, Chapter 24).

In Notes from Toyota-Land: An American Engineer in Japan (2005), Robert Perrucci and Darius Mehri criticised Toyota’s approach to business. Ironically, Mehri contended that Toyota performed weakly in innovation and encouraged narrow professional skills. It turned out that Japanese management didn’t prevent a collapse in the economy lasting from 1991 to the present. Toyota itself went on to suffer serious reputational damage (Robert E. Cole “What Really Happened to Toyota?” MIT Sloan Management Review, Summer 2011)

So Deming and others were right to draw attention to Western under performance in product design. However, I suspect that the adoption of a more design led culture is largely due to macroeconomic forces rather than exhortations.

There is still much to learn, however, in balancing the opportunities apparent from visible accounts with the uncertainties of imagined future income streams.

I think there remains an important message, perhaps a Point 1 for the 21st Century.

There’s a problem bigger than the one you’re working on. Don’t ignore it!