Hallmark Building Supplies: Applying Deming as a Business Strategy

By John Hunter, founder of CuriousCat.com.

Louie Paynter discussed Hallmark Building Supplies’ experience in applying Deming’s management system as a business strategy at the 2012 annual W. Edwards Deming Institute conference.

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Louie gives great credit to Hallmark Building Supplies’ success (in applying Dr. Deming’s ideas and improving results for the business) to working with Cliff Norman [the web link was broken so we removed the link], a consultant with Associates in Process Improvement. An expert consultant can be a huge help in guiding an organization to a new way of working.

When thinking systemically companies learn to see the system as larger than just their organization. Hallmark Building Supplies wanted to improve the larger system by helping their customers and suppliers learn about Deming’s ideas and apply those ideas themselves. At a presentation of their efforts at a Southwest Quality Network [the web link was broken so we removed the link] meeting an attendee asked:

You are telling me that from time to time you are competitors?

Answer: Yes

But you will periodically come together and work on improvement efforts for the whole?

Answer: Yes, That’s correct.

We can’t even get that done in our own business, from department to department. You guys are giving me some hope.

Cooperating to improve the system is often difficult due to the existing conditions in the system (fear, competition between sub system components, stovepipe driven thinking, lack of evidence based decision making, distrust…).

Hallmark Building Supplies does not pay sales commission.

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Hallmark Building Supplies uses API’s model for improvement, which provides some additional framework and standardization around the PDSA improvement cycle. The Improvement Guide is an excellent book on this topic. 3 questions are asked to set the stage for the PDSA:

  1. What are we trying to accomplish?
  2. How will we know the changes were an improvement?
  3. What changes could we make that will result in improvement?

YouTube video

Hallmark Building Supplies – Purpose [the web link was broken so we removed the link]. They use the purpose statement to make decisions on a regular basis. This is one of the keys to a good purpose statement. If the purpose statement doesn’t guide what is happening it is not providing much value.

In this video segment he also discusses that Hallmark Building Supplies has profit sharing for all and doesn’t do annual performance appraisal. They attempt to let the market dictate pay and take pay out of the performance discussions. To manage performance they seek to “coach while the game is going on.” And Louie finished with how cooperation between sales people has increased since they eliminated commissions.

Related: How to Use the PDSA Improvement Cycle SuccessfullyWhy ThoughtWorks Eliminated Sales CommissionsW. Edwards Deming on Leadership

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