One of the mistakes people with a very superficial understanding of Deming make is to believe what Dr. Deming’s publications and seminars focused on process improvement. Deming’s ideas on management focused on creating a management system that changed how the entire organization worked.
Deming’s ideas on management were not aimed at improving only the processes far away from the corridors of power. Deming understood, and repeatedly stated, the way executives manage must change. Without executives changing their thinking and their actions only limited improvements are possible.
Innovation is required for long term success. Creating a system that respects all workers and allows them to contribute and participate in continual improvement is required. Deep understanding of customers is required. Knowledge of the likely future of the competitive marketplace is required. An understanding of how to use data (including the ability to avoid drawing inaccurate conclusions from the available data) is required. Process improvement is necessary but not even remotely close to sufficient.
There are four prongs of quality and four ways to improve quality of product and service:
- Innovation in product and service
- Innovation in process
- Improvement of existing product and service
- Improvement of existing process
The common mistake is the supposition that quality is ensured by No. 4, improvement of process, that operations going off without blemish on the factory floor, in the bank, in the hotel will ensure quality. Good operations are essential, yet they do not ensure quality. Quality is made in the boardroom.
A bank that failed last week may have had excellent operations— speed at the tellers’ windows with few mistakes; few mistakes in bank statements; likewise in the calculation of interest and of penalties and loans. The cause of failure at the bank was bad management, not operations.
W. Edwards Deming, “The Need to Change”, 1989. Republished on page 41 of The Essential Deming: Leadership Principles from the Father of Quality.