Edward Deming The New Economy. “Way out of the crisis. A new paradigm for managing people, systems and processes. Edwards Deming. Restructuring to a new philosophy

The tyranny of the dominant style of management, the constant assessment of people and organizations, competition - all this must be left in yesterday and open a new page in its history, says Edward Deming. The person who has done so much for Japan's economic prosperity talks about simple mechanisms that will lead you to growth, innovation, and a strong market position. The system of deep knowledge, described by him in his book The New Economy, is now vitally necessary for industrial enterprises, government bodies and the education sector, because only it is capable of leading modern society out of the crisis.

W. Edward Deming. New economy. - M .: Eksmo, 2006 .-- 208 p.

Download a short summary in the format or

The purpose of this book is to show the reader the path to knowledge, to make him want to learn. Engineering students can learn new tools and mechanisms, but they will need new management techniques to successfully apply their knowledge.

Chapter 1. How are things with us?

The knowledge needed to improve something comes from outside. Our problem is the formation of such an education system and a culture in which learning is valued. Innovation requires leaders. One president of the company wrote: "The plant personnel are responsible for the quality of the products." No, the staff is not responsible for anything. He's just trying to do his job. The person who wrote the article - the president of the company - is the only one who is responsible for quality. The results of most types of management activities cannot be measured. For example, the benefits of training are not measurable. The current management style is the largest source of losses and losses, so enormous that their magnitude cannot be estimated or measured.

Chapter 2. Heavy losses

What are the results of hard work and diligence? Answer: we only dig deeper into the hole in which we are already. Hard work and diligence alone will not get us out of the hole. In fact, it is only when we go beyond our knowledge that we notice that we are sitting in a pit.

Ranking is a farce. Labor productivity actually depends largely on the system in which a person works, and not on himself. How futile it is to rank people is a simple equation to understand. Suppose NS is the contribution of some person, ( xy) - the influence of the system on its labor productivity. Let's say we have a number that describes the actual productivity of, say, eight errors per year, or $ 8 million in sales. Then: x +(xy) = 8 It is required to determine NS... Unfortunately, in one equation we have two unknowns. Johnny from the sixth grade knows that this equation cannot be solved. However, people who use merit-based incentives think they have found NS... They ignore the second term - ( xy), which dominates the equation.

Ranking creates competition between individual employees, teams and departments. It demoralizes employees and is rooted in an inability to understand deviations. Merit-based pay sows discord among employees and emphasizes achievement of a certain rank, praise, rather than work. It destroys cooperation. The goal of every person in the merit-based reward system is to please the boss. As a result, morality collapses. Quality suffers. And the one who judges people, puts them on the rungs of the hierarchical ladder, and does not help them to work better. The performance reward is the same as the weather forecaster's reward. Incentive pay focuses on numbers and distracts from purpose. Teams, divisions of the company operate as separate profit centers and do not seek to optimize the entire organization. People lose hope that someone will someday understand the connection between their work and the work of others, because they do not communicate with each other.

The first step that any organization must take is to draw a flowchart showing the relationship of the various structural units to each other. Then everyone will understand what their work is. As a rule, if a company practices management by goals, its goal is fragmented between different departments or divisions. It is assumed that if each department or division makes its contribution, then the company as a whole will fulfill the task. But this assumption is not entirely true: structural units are almost always interdependent.

Quantitative goals lead to distortion and fraud, especially when the system is unable to achieve them. Instead of introducing quantitative measures, managers should work to improve the process. Production rates are the closest relatives of quantitative targets. Results-based management does not lessen, but exacerbates problems. What's wrong with this kind of management? It comes from the assumption that everything we encounter is caused by a specific cause. We, however, have to work on the system.

In my experience, most of the problems and opportunities to improve the situation correlate like this: 94% are from the system (management responsibility) and 6% from special reasons. This is why neither the diligence nor the skills of the workers can correct the fundamental errors of the system. Appointing a VP of Quality will only lead to disappointment and frustration. Quality is the responsibility of top management. It cannot be delegated to someone else.

The size of the most serious losses from actions or inaction of the leadership, according to Lloyd S. Nelson, is unknown. Nevertheless, we must learn to manage these losses. The belief that if a problem cannot be measured, it cannot be solved is a very costly myth. A careful analysis of the causes and effects of the dominant management system begs the question: Does anyone care about long-term profit at all?

The most important application of the principles of statistical quality control, by which I mean knowledge of common and specific causes, is in human resource management. Beware of common sense. Common sense encourages us to measure children at school, people at work, teams, departments, dealers, hospital costs. Common sense dictates that we set norms for individuals and groups. Common sense requires holding a conversation with operators when a customer complains about a product or service: "We talked to the operator, this will not happen again." It is important to work on the process that caused the error, and not with the person selling the low-quality product.

The dependence of the salary on the volume of sales is the wrong move. Better to pay sellers a fixed salary. If the company pays commissions, the focus is on sales. When she pays a fixed wage, the customer is the focus. If all planning comes down to numerical goals, then how do you achieve them?

Chapter 3. System introduction

A system is a network of interdependent components that work together to achieve a common goal. The system must have a purpose. Without a goal, the system does not exist. Such a goal should be clear to all its participants, be concretized in plans for the future. Purpose is a value judgment. (We are, of course, talking about human-made systems.) A system requires control. She cannot control herself. If systems are left to their own devices, they quickly become selfish, competing, independent profit centers and thus destroy the system. The secret lies in the collaboration of components for the benefit of an organization-wide goal.

It is the responsibility of management to direct the efforts of all components to achieve the goal of the system. We propose setting a goal for the organization that everyone - shareholders, employees, suppliers, customers, society, the environment - will strive for over a long period of time.

Human beings feel the need to move, not cars, trains, buses or airplanes. Choosing a goal is obviously a matter of clarifying values, especially when it comes to choosing between possible options. Any system requires guidance from the outside. The system cannot understand itself.

Everyone understands how their work relates to the work of others. Now he can work consciously. This diagram, as an organizational chart, is much more important than a regular pyramid. The pyramid only shows who is accountable to whom. The pyramid does not describe a production system. She says nothing to the employee about how to coordinate her work with that of her colleagues. The pyramid carries no message at all; it means, first of all, that everyone should like their boss (get a good grade). The client has no place in the pyramid. The pyramid as an organizational chart destroys the system. The pyramid contributes to the fragmentation of the organization.

Delayed effect. The effect of the actions of the management can manifest itself in a few months or even years. The immediate result is sometimes zero or negative. Therefore, the interpretation of the change may be erroneous. A simple example is training. The only immediate result is costs, costs. The effects of training will manifest itself over many months or even years. Moreover, it cannot be measured. Then why are companies spending money on training? Management believes the benefits will far outweigh the costs in the future. In other words, managers are guided by theory, not numbers. They show wisdom. An ill-conceived solution to a problem can produce immediate results in the right direction, but over time can cause disaster. For example, downsizing reduces the company's expenses, but in due time leads to serious consequences. At the same time, the benefits from one solution or another may not appear for a long time. This idea is illustrated by Peter Senge in the book.

A job description should go beyond just prescribing actions: do this, do this, do this or that. It should indicate what this work is for, how it helps to achieve the goal of the entire system.

If all the components of the organization are optimized (each for individual profit, each is a prima), then the company itself will be ineffective. When the whole is optimized, then the individual components will be less efficient.

The failure of competition theory. If economists understood system theory, the role of collaboration in optimization, they would stop arguing that competition is the salvation.

Chapter 4. The system of deep knowledge

The dominant management style needs to be changed. But the system cannot understand itself, and therefore changes must come from the outside. This chapter demonstrates the outside view - a kind of lens that I call the deep knowledge system. The deep knowledge system consists of four interrelated components:

understanding the system
knowledge of deviations
theory of knowledge
psychology

Understanding the system. Fear leads to false numbers. If keeping a certain position is at stake, anyone will only give the boss good news. Statistical calculations and predictions based on false numbers lead to confusion, irritation and bad decisions. The leader must study the psychology of people, the psychology of the group, the psychology of society and the psychology of change. He also needs to know about deviations, conditions of system stability, general and specific causes of deviations in order to effectively manage the system as a whole and human resources in particular.

Knowledge of deviations. We often make two costly mistakes:

Mistake 1. Reacting to the result as if it was caused by a specific cause, while it was due to a common cause of rejection.
Mistake 2. Reacting to a result as if it were due to a common cause of rejection, when in fact it was caused by a specific cause.

Dr. Shewhart has suggested procedures to help you minimize the economic losses from these mistakes. The process may or may not be statistically controlled. With statistical control, we can anticipate future deviations. Costs, labor productivity, quality and quantity can be predicted. In such cases, Shewhart spoke of a stable condition. Otherwise, the process is unstable, and then its "behavior" cannot be predicted.

Theory of knowledge. Management is forecasting. The theory of knowledge explains why management in any form is forecasting. Rational forecasting requires theory; it builds knowledge through systematic analysis and expansion of theory based on past predictions and observations. If there was no initial theory, there would be nothing to study or revise. Without theory, we have no questions to ask. Therefore, there is no knowledge without theory. Theory is a window to the world. Theory "flows" into foresight. Without foresight, experience and examples teach us nothing. Simply copying a successful example without understanding its theory can lead to disaster.

There is no true value for any characteristic, condition or condition as determined by measurement or observation. Each new measurement (change in operational definition) or observation gives a new figure.

Operational definition is a procedure that is formed within the concept of a means of communication and translates it into a certain way of measuring. In other words, it is a definition with which a reasonable person can agree and which he can use in practice.

Information is not knowledge. Knowledge depends on theory. Without theory, it is impossible to use the information that comes to us.

Psychology helps us understand people, interactions between people and circumstances, the relationship between customer and supplier, teacher and student, director and subordinate, and the management system. All people are different. The HR manager must be aware of these differences and exploit them to maximize the abilities and potential of each individual. This is not evaluating people. Unfortunately, governance today is based on the assumption that all people are the same.

Some have a natural learning propensity. Learning is a source of innovation. Some people have an innate desire to enjoy their work. Good governance helps us to preserve and multiply these inherited positive qualities.

Extrinsic motivation sometimes yields positive results indirectly. Some external stimuli build self-esteem. But complete submission to extrinsic motivation destroys individuality. External incentives destroy intrinsic motivation. No matter how much wages increase, it will not affect the productivity of employees in any way.

A monetary reward or prize for an act that someone has performed solely for their own pleasure can be perceived as an insult. If a person receives an award from someone they don't respect, then they may feel humiliated. Anyone who is dependent on extrinsic motivation destroys their self-esteem. Children feel best when they manage to master a new activity. Their intrinsic motivation is growing.

The most important thing a leader can do is understand what is important for a particular person. Thanks to this, the manager will be able to help his subordinates achieve better results and, possibly, replace external motivation with internal one. Cash reward for work done for pleasure is a demoralizing overestimation. Expressing gratitude means much more to a person than a monetary reward.

Chapter 5. Leadership

Understanding in-depth knowledge transforms management. Transformation in any organization takes place under the leadership of a leader. The leader's job is to help transform their organization. How does a leader achieve transformation? First, he has theoretical knowledge. Second, he feels responsible to himself and his organization for the necessary changes. Third, he is a practitioner. He has a phased plan and can explain it in simple terms.

Chapter 6. Human Resource Management

If you cannot argue with the boss, then it is not worth working with him.
Lieutenant General Leslie E. Simon, USA.

In fig. 3 shows some of the destructive forces arising from the existing style of rewards, as well as their consequences. They squeeze internal motivation, self-respect and dignity from the individual, from his life, drop by drop. They cause fear in him, the need for protection and external motivation. The transformation described in this book is designed to strengthen the bottom of the diagram and shrink the top from year to year.

Rice. 3. The forces shown at the top of the diagram are depriving people and the nation of innovation and hindering the development of applied sciences. We must replace them with management that will restore the strength of the individual.

An example of unfulfilled hopes. A certain corporation has set itself two goals:

create a reward system that recognizes excellence, innovation, dedication and dedication;
create and maintain a stimulating work environment to attract, retain and develop proactive and talented people.

These goals are incompatible. The first goal will cause conflicts and competition between people, inevitably leading to demoralization. It will destroy the joy of work and prevent the second goal from being realized, no matter how noble it may be.

Rice. 4. Statistics on labor productivity or disruptions, if available, can be plotted on a graph. Indicators characterize the system and those outside it

Chapter 7. Experiment with red beads

Don't confuse coincidence with cause and effect
Gypsy Rennie

Rice. 7. Data obtained during the experiment; calculation of control boundaries; the results are shown in the graph (right); interpretation of the graph. Comparison with the previous experiment (left).

The process is under statistical control. The diligent workers did everything in their power. The only way to reduce the proportion of red beads in the final product is to reduce the number of red beads in the input material (which is the management's responsibility).

When it was over, I thought about my job. How often do people strive to do their best in a situation where nothing depends on them? And they try their best. What happens over time with their motivation, diligence, desire? Many give up.

The system turned out to be stable. The variance and results of diligent workers, while the system remained unchanged, were predictable. All deviations - differences in the productivity of the diligent workers in the process of sampling red beads and the differences by day for each diligent worker - were rooted from start to finish in the process itself. There is no evidence that one worker was better than the other. Management's assumption that the three diligent workers who were the best in the past would remain the best in the future turned out to be unfounded. Management is a prediction, not a game.

Now the reader can look for red beads in their own company and in their work.

Chapter 8. Shewhart and control charts

Dr. Schuhart has given the world a new vision of science and management. He invented a new way of analyzing homogeneity and heterogeneity. He saw two types of deviations - common cause deviations and special reasons deviations. Common causes of deviations are given by points on the control chart that do not go beyond the control limits for a long time. The common causes of deviations do not change from day to day and from batch to batch. The particular reason for the deviations is another matter entirely. It is detected at a point beyond the control boundaries.

The next significant contribution of Dr. Shewhart was the conclusion that the best thing we can do is to make mistakes 1 or 2 as seldom as possible, i.e. adhere to rules that, in the long run, minimize the net economic losses from both types of mistakes. To this end, he came up with the so-called control charts and introduced the rules for calculating control boundaries. Pick points on the graph. A point outside the control limits will be a signal (a signal is an operational definition for an action) of a particular cause.

When a control chart indicates that there is no particular cause, we are talking about a stable process or a process that is under statistical control. In a state of statistical control, the degree of compliance with the specifications makes sense. In the absence of statistical control, forecasting is impossible. The process is chaotic. The control chart in Fig. 7 is an example of a process in a statistically controlled state. When statistical control is achieved, process improvement follows, provided that the cost of it is expected to bring significant economic benefits. Improvement can be defined as follows: narrowing the deviation, reducing the mean values to the optimal level, both options.

Acceptable boundaries are not control boundaries. Control limits can be calculated based on the available data. A point outside the control limits indicates the need to identify a particular cause and, if possible, eliminate it. I believe that there is no logical connection between control and acceptable boundaries. Control boundaries, once we have reached the true state of statistical control, describe the process and tell us what it will be like tomorrow. The control card is the voice of the process.

Examples of the wrong approach. After regular weekly inspections, an inspector complained that the plant had seven unlabeled toxic containers. Who was responsible for the violation? Find and punish him, otherwise this violation will happen again ... Any lawsuit against malfeasance in medicine, construction or accounting implies that the event was caused by a special reason - i.e. happened through someone's fault. Studies with minimal application of the theory of deviations will lead to a different conclusion: the same event could have been the result of the process itself, i.e. well-established practices.

Chapter 9. Funnel Experiment

The purpose of this chapter is to demonstrate the waste of results-based interventions in the functioning of a system. Here's a simple funnel experiment.

Rule 1. Hold the funnel directly over the target and throw the ball through it 50 times. Each time mark the point of its fall (fig. 9). Rule 2. After each throw, move the funnel to compensate for the error from the last throw (for example, if the ball falls 30 cm above the target, move the funnel down 30 cm). As you can see, interfering with a stable process (moving from rule 1 to rule 2) only worsened the results.

Rice. 9. Points of fall of the ball according to rule 1 (left) and 2 (right)

Some of the mechanisms for misusing feedback are: interference with the economy at the level of federal or state law; playing "broken phone" ...

To improve a stable system requires a fundamental change in the process. If the system does not justify the cost of improvement, it may be better to focus efforts on other systems that are more worthy of attention. We must study the economic aspects of reducing variance.

Chapter 10. Some information about the theory of deviations

Deviation is life, and life is deviation. An example from life. A lawyer with an excellent education, but not familiar with statistical theory, explains each case with a specific reason - the difference between general and specific reasons is not known to him.

Every leader should develop a habit of not asking for comment on ups and downs (daily, monthly, or yearly) caused by random changes.

Loss function describes the losses incurred by the system from various values of the controlled parameter. It only applies to measurable losses. First of all, the loss function helps us move from the world of specifications (ie, conforming to specifications) to gradually reduce variance through process improvement. For practical purposes, we have presented the loss function as a parabola (Fig. 10). Dr. Taguchi called them losses to society. It should be noted that the loss function does not have to be exact. In fact, there is no exact loss function.

Rice. 11. To incur minimal losses, strive to bring the production distribution function P (x) closer to the nominal value at which μ = 0

Moral: Measuring variance is not an achievement. It is much more important to center the deviation.

In the English version, it is somehow more familiar: PDCA (plan-do-check-act).

The output of the book:

ISBN 5-699-17480-X (Eksmo), ISBN 0-262-54116-5 (English), UDC 330, BBK 65 01 (7USA), D30

New Economy / W. Edward Deming; [lane. from English T. Guresh]. - M .: Eksmo, 2006 .-- 208 p. - (EXPERT Library)

The tyranny of the dominant style of management, the constant evaluation of people and organizations, competition - all this must be left in yesterday and open a new page in its history, says Edward Deming growth, innovation and a strong market position The system of deep knowledge, described in his book The New Economy, is vital now for industrial enterprises, government bodies and the education sector, because only it is able to bring modern society out of the crisis Dr. Deming offers a solution to implementation of which there will be no losers.

This book will be of interest to a wide range of readers who are not indifferent to the problems of social development in general and economic growth in particular.

Foreword

Notes for the second edition

Chapter 1. How are things with us?

Chapter 2. Heavy losses

Chapter 3. System introduction

Chapter 4. The system of deep knowledge

Chapter 5. Leadership

Chapter 6. Human resource management.

Chapter 7. Experiment with red beads

Chapter 8. Shewhart and control charts

Chapter 9. Funnel Experiment

Chapter 10. Some information about the theory of deviations

Application

Purchase of goods and services

Subject index

Foreword

We continue to draw wisdom from the lessons of W. Edward Deming. Our father revised the manuscript for the second edition of New Economics for Industry, Government, and Education until his death in December 1993. He sought clarity based on the readers' feedback on the first edition, and all the time he tried to help people acquire the knowledge they need to transition to a new management style. The road to change lies through the application of the deep knowledge system described in this book.

Throughout his long and fruitful life, our father has enjoyed work and study. In the New Economy, he wrote that "it is pleasant to work with a person who likes his work." Through communication with many people around the world, we know that Dr. W. Edward Deming helped others find joy in their endeavors and that his work touched the finest strings in their souls.

In November 1993, our father established the W. Edward Deming Institute. The Institute's goal is to promote understanding of Deming's deep knowledge system for global peace and prosperity. With the efforts of people dedicated to this goal, we hope to continue his life's work.

Diana Deming Cahill
Linda Deming Ratcliffe

Notes for the second edition

Dr. Deming worked on New Economics until his death in 1993. The second edition contains edits made by himself. Most of the changes go back to Chapter 4, where he emphasizes that the deep knowledge system is an outside perspective that is vital to the management of the system.

There was also an application called "Purchase of goods and services." Dr. Deming introduced this material into his four-day seminars. He will be useful to readers who want to better understand his work on supplier relationships.

In the New Economy, the author makes numerous references to his previous work Overcoming the Crisis. The reader wishing to better understand the ideas of Edward Deming should first study this particular book. The reader will find more complete information about the life of the doctor and a list of his publications in the article "The World of W. Edward Deming" * Cecilia Kilian, who has been its permanent secretary for 39 years.

For over forty years W. Edward Deming has consulted around the world. His clients included manufacturing, telephone, railroad companies, carriers, consumer research firms, sociologists, hospitals, government agencies, and research organizations at universities and industrial institutes and companies.

The impact of Dr. Deming's theories on manufacturing and the service industry in the United States has been enormous. The revolution in the quality system initiated by him significantly increased the competitiveness of the United States.

In 1987, Dr. Deming received the National Order of Technology from President Reagan. In 1988, he received the National Academy of Sciences Excellence Award.

Dr. Deming has received many other awards, including the Shewhart Medal from the American Society for Quality Control in 1956 and the Samuel S. Wilkes Award from the American Statistical Association in 1983.

In 1980, the American Society for Quality Control established the Deming Annual Quality and Productivity Awards. Dr. Deming was a member of the International Statistical Institute. In 1983 he was elected a member of the National Academy of Engineering Sciences, and in 1986 the portrait of the researcher was installed in the Science and Technology Hall of Fame of the city of Dayton (USA). In 1991, his name was inducted into the Automotive Hall of Fame.

Dr. Deming is perhaps best known for his work in Japan, where since 1950 he has trained senior management and engineers at various companies in quality control methods. This training contributed to radical changes in the Japanese economy. In recognition of his contributions, the Japan Science and Technology Alliance established the annual Deming Award for Achievement in Product Quality and Reliability. In 1960, the Emperor of Japan awarded Dr. Deming the Order of the Sacred Treasure, Second Class.

In 1928, Deming received his Ph.D. in mathematical physics from Yale University. Subsequently, a number of universities awarded him a JD and an honorary doctorate: University of Wyoming, Riviere College, University of Maryland, Ohio State University, Clarkson University of Technology, Miami University, George Washington University, Colorado State University, Fordam University, University Alabama State, Oregon State University, Yale University, Harvard University, Cleary College, and Shenando University. Yale University also awarded him the Wilbur Lucius Cross and Riviere College the Order of St. Mary Magdalene.

Dr. Deming has written a number of books and 171 articles. His work Out of Crisis has been translated into several foreign languages. Many books and films are devoted to the life, philosophy and lessons of the outstanding scientist. More than 10,000 people attended Dr. Deming's four-day seminars every year for ten years.

This book is intended for people living under the tyranny of the dominant management style. The huge losses caused by it have been leading our economy to decline for a long time. It seems to most people that such a management model has always existed and that it is unchanging. However, in fact, it was invented in our time and is based on interactions between people, which affects all aspects of our life - government, industry, education, healthcare.

We grew up in a competitive environment between people, teams, departments, divisions; students, schools, universities. Economists have taught us that competition will solve our problems. In fact, competition, as we now see, is destructive. It would be much better if everyone worked as a single system in the name of everyone's victory. This requires collaboration and a new management style.

The transformation of the existing system is possible with the help of deep knowledge. The deep knowledge system consists of four interrelated elements. This is:

understanding the system;
knowledge of deviations;
theory of knowledge;
psychology.

The purpose of this book is to show the reader the path to knowledge, to make him want to learn.

My fourteen management principles are the result of applying deep knowledge to move from existing management style to optimization.

This book can also be used as a textbook for students of technical and economic universities. The goal of business schools should not be to preserve the currently dominant management style, but to transform it. Engineering students can learn new tools and mechanisms, but they will need new management techniques to successfully apply their knowledge. In other words, the school must prepare students for the future, not the past.

The first two chapters of this book describe the dominant management style and provide recommendations for improving it. Chapter 3 provides system theory. In an optimized system, everyone wins - shareholders, suppliers, employees and customers. Chapter 4 talks about the in-depth knowledge framework that can help us understand and optimize the organizations in which we operate. The chapters that follow develop the theory outlined in Chapters 3 and 4, providing practical examples for business, education, and government.

Many people have helped me with this book. Through the notes throughout the text, I express my gratitude to them. And it is with great pleasure that I pay tribute to my devoted secretary, Cecilia S. Kilian.

(93 years old) Alma mater University of Wyoming (bachelor degree)
University of Colorado (master's degree)
Yale university (doctor degree) Known as

Deming, William Edwards(eng. William Edwards Deming, October 14 - December 20), also known [ to whom?] how Edward Deming- American scientist, statistician and management consultant. Deming gained the greatest fame thanks to the Shewhart cycle, which he now revised, which the whole world now calls the Shewhart-Deming cycle, as well as for the management theory he created, based on the theory of deep knowledge proposed by him. He was awarded one of the most prestigious awards established by the American Society for Quality (ASQ) - the Shewhart Medal in 1955. He also became an honorary member of the ASQ in 1970.

early years

William Edwards Deming was born in Sioux City, Iowa, raised in Polk City, Iowa on his grandfather Henry Coffin Edwards's chicken farm, and then on a farm in Povella, Wyoming purchased by his father. Father - William Albert Deming. Mother - Pluma Irene Edwards.

Work in Japan

Awards and titles

Dr. Deming is the recipient of the US National Medal of Technology and is carved into the Hall of Fame for Achievement in Science and Technology. In 1960, Dr. E. Deming was awarded the Order of the Sacred Treasure, 2nd degree. This is one of the highest orders of Japan, awarded on behalf of the emperor.

Associations named after him work in many countries of the world.

A Brief Overview of Deming's Philosophy

The philosophy of William Edwards Deming is summarized as follows:

“Deming taught that by adopting appropriate management principles, organizations can improve quality while simultaneously lowering costs (by reducing waste, rework, attrition and litigation, while increasing customer loyalty). The key is to practice continuous improvement and to think of production as a system and not as pieces and pieces. "

In the 1970s, Deming's philosophy was summed up by some of his Japanese supporters as follows:

A) When people and organizations focus primarily on quality, defined by the following relationship: Quality = Output Cost, Total (\ displaystyle (\ text (Quality)) = (\ frac (\ text (Output)) (\ text (Cost, Total))))(eng: Quality = Results of work efforts Total costs (\ displaystyle (\ text (Quality)) = (\ frac (\ text (Results of work efforts)) (\ text (Total costs))))) then the quality tends to increase, and the costs decrease over time. b) However, when people and organizations focus primarily on 'costs', costs tend to increase and quality decreases over time.

Deming's System of Profound Knowledge

“The existing management style must undergo transformation. The system cannot understand itself. Transformation requires an outside perspective. The purpose of this chapter is to provide a view from the outside - a magnifying glass that I call the deep knowledge system. It provides us with a theory map for understanding the organizations we are working on. "

“The first step is personality transformation. This transformation has no duration. It comes from the onset of understanding the system of deep knowledge. A person, being transformed, will begin to perceive a new meaning about his life, about events, about numbers, about the interaction between people. "

“When a person reaches an understanding of the deep knowledge system, he will apply its principles in any kind of relationship with other people. He will have a basis for judging his own decisions and for transforming the organizations to which he belongs. The transformed personality will:

Set as an example;
A good listener, but will not compromise;
Constantly teach other people; and
Help people break out of their current practices and beliefs, and move to a new philosophy without feeling guilty about the past. "

Deming believed that all managers should have what he called the Deep Knowledge System, which consists of four parts:

Understanding the system : understanding the whole process in which suppliers, producers and consumers (or recipients) of goods and services are involved ( explained below);
: division of variations at the output of any process into general - systemic - causes and special or special reasons - random and fleeting interventions in the system;
Elements of the theory of knowledge : Concepts explaining knowledge and the limits of what can be known.
Knowledge in the field of psychology : understanding people.

Deming explained: “You don't need to be outstanding in any part of deep knowledge to understand and apply it. 14 points of management in industry, education and country management naturally follow from the system of deep knowledge as its application in order to transform the modern style of Western management to a new optimized style. " (p. 96 of the original).

“The various components of the deep knowledge system cannot be separated. They interact with each other. Thus, knowledge of psychology is incomplete without knowledge of the theory of variability. A manager working with people must understand that all people are different. This is not a ranking of people. He must understand that the effectiveness of each is determined mainly by the system in which he works, and the system is in the responsibility of management. A psychologist with even a primitive understanding of variation, as will be shown in the experiment with red beads (Ch. 7), can no longer participate in the improvement of the personnel ranking plan. "

Understanding the system involves understanding how interactions (e.g., feedback) between system elements can lead to internal constraints that will cause the system to behave as a single organism that automatically seeks a steady state. It is this steady state that determines the output of the system, and not its individual elements. Thus, it is the structure of the organization, rather than the employees, one at a time, that holds the keys to improving the quality of the output, the output of the system.

Knowledge about the theory of variability includes the understanding that everything that is measured consists of both "systemic" deviations resulting from the presence of a system (common causes), and "non-systemic deviations" (special reasons) that lead to unpredictability of the process. To improve quality, you need to be able to recognize the difference between them to eliminate "special causes", that is, returning the process to a controlled or stable state. Deming taught that interfering with a stable process (that is, making changes in response to “common causes”) only makes the system worse.

The deep knowledge system is the basis for the application of Deming's famous 14 Control Points, described below.

Deming's 14 key principles

Consistency of purpose: Set a goal and be consistently firm and consistent in achieving your goal of continuous improvement of products and services, allocating resources in such a way that long-term goals and needs, not just short-term profitability, are met to achieve competitiveness, keep the company and keep people in work.
New philosophy: We are in a new economic era started in Japan. We can no longer get along with the generally accepted level of delays, errors, defects in materials, defects in work. A transformation of Western management is needed to stem the continuing decline of the economy.
End addiction to mass control: Eliminate the need for inspection and inspection as a way to achieve quality, primarily by building quality into products. Demand statistical evidence of “built-in” quality both in the manufacturing process and in the procurement function.
End the practice of purchasing at the lowest price... Instead, along with the price, ask for serious confirmation of its quality. Reduce the number of suppliers of the same product by rejecting the services of those who could not statistically confirm its quality. Strive to receive all shipments of a given component from only one manufacturer, based on the establishment of a long-term relationship of mutual loyalty and trust. The goal in this case is to minimize the overall costs, not just the initial ones.
Improve every process... Improve continually, today and always, all planning, manufacturing and service processes. Continually look for problems in order to improve all the activities and functions in the company, improve quality and productivity, and thus continuously reduce costs. Continuous improvement of the system, which includes development and design, supply of components and materials, maintenance and improvement of equipment operation, management and organization methods, training and retraining of personnel, is the primary responsibility of management.
Introduce training and retraining of personnel into practice: Put into practice modern approaches to training and retraining for all workers, including leaders and managers, in order to better use the opportunities of each of them. In order to keep up with changes in materials. methods, product design, equipment, technology, functions and maintenance methods require new skills and abilities.
Establish leadership... Learn and practice leadership as a work method designed to help workers do their best job. Leaders at all levels should be responsible not for bare numbers, but for quality. Improving quality automatically leads to higher productivity. Managers and managers must ensure that immediate action is taken when signals are received of defects, faulty or malfunctioning equipment, poor tools, unclear work instructions, and other factors that are detrimental to quality.
Cast out fears... Encourage effective two-way communication and use other means to root out fear, fear and hostility from within the organization so that everyone can work more efficiently and productively for the good of the company. Any employee who has fear of their supervisor cannot properly cooperate with him. The best that can be expected in such circumstances is resentful submission, which is exactly what such a leader desires. However, this state of affairs will never lead to good results. True collaboration can accomplish much more than isolated individual effort. But this interaction cannot be good without cultivating mutual trust, confidence and respect. Those who work in fear try to escape the sight of those they fear. And how can you expect potential returns from people whose primary desire is simply not to be noticed?
Break down barriers between divisions, services, departments. People from different functional areas - researchers, developers, manufacturing, commercial and administrative representatives - must work in teams (teams) in order to troubleshoot problems that may arise with products or services. Most companies are functionally organized, but they must operate in an interoperable environment.
Give up empty slogans and appeals... Avoid using posters, slogans and appeals to workers who demand faultless work from them, a new level of productivity, etc., but do not say anything about the methods of achieving these goals. Such calls only arouse hostility; most of the problems of low quality and productivity are related to the system and, thus, their solutions are beyond the capabilities of ordinary workers.
Eliminate arbitrary number norms and assignments... Eliminate work instructions and standards that set arbitrary norms, quotas for workers, and quantitative targets for managers. Replace them with support and assistance from your upline to achieve continuous improvements in quality and productivity.
Give employees the opportunity to be proud of their work... Remove barriers that rob workers and leaders, making them less proud of their work. This implies, among other things, the abandonment of annual attestations (assessments of employee performance) and methods

Deming William Edwards(1900-1993) - also known as Deming Edward - American statistician, scientist and management consultant.

He gained the greatest fame, thanks to them, the modified Shewhart cycle, which today is called the Shewhart-Deming cycle all over the world, as well as for the management theory developed by him, which was based on his proposed theory of deep knowledge.

In 1995 he was awarded one of the most prestigious awards, which was established by the American Society for Quality - the medal. Shewhart.

Also in 1970, he became an honorary member of the ASQ.

He received his degree in electronics in 1921 from the University of Wyoming.

He taught physics at the Colorado School of Mines from 1923-1925 and received his master's degree at the University of Colorado.

In 1925-1928 he studied at Yale University, where he received a doctorate in mathematical physics. Joined the US Department of Agriculture in 1927, where he worked until 1939.

He visited Japan for the first time in 1946. His lectures on statistical quality control techniques were received by the top management of Japanese companies. The need to introduce and study statistical control was realized, and in Japan a process of mass training of managers was established.

In Japan, in 1951, in honor of the recognition of E. Deming's merits, an award was established in his name, since then it has been awarded every year to organizations for outstanding achievements in improving quality and to individuals for significant contributions to the practice and theory of quality management. This award is presented in the form of a silver medal with the profile of Dr. E. Demeng and a diploma.

New economy

The tyranny of the dominant management style, competition, constant evaluation of organizations and people - all this must be left in the past and open a new page in its own history, says Deming Edward.

The man who has done so much for the prosperity of the Japanese economy tells about the simple mechanisms that will lead you to innovation, growth and strongest position in the market. The system of deepest knowledge, which the author describes in his book, is now vitally necessary for government bodies, industrial enterprises and the educational sphere, since only it is able to bring modern society out of the crisis. Dr. Deming proposes a solution that will not have a losing streak.

This book will be of interest to readers who are not indifferent to the problems of economic growth in particular and social development in general.

Download Deming's book by William Edwards « New economy" You can

Way out of the crisis. A new paradigm for managing people, systems and processes Edwards Deming

(No ratings yet)

Title: Way out of the crisis. A new paradigm for managing people, systems and processes

About the book “Out of the Crisis. A new paradigm for managing people, systems and processes "Edwards Deming

Today, not many people dare to open their own business, since this is not only a long and complicated process, but also a certain risk. Plus, sometimes the traditional methods of building a business just don't work. As a result, it turns out that you need to constantly invest a lot of money, but the income remains the same or even falls. This leads to only one result - the company is closed, and not having time to develop.

Edwards Deming's book “Out of the Crisis. A new paradigm for managing people, systems and processes ”offers completely new methods of business management. The author shares his life experience and offers completely new methods that will help your company not only stay afloat, but also develop rapidly.

Edwards Deming is a renowned American scientist and management consultant. He visited Japan in 1946 and gave lectures on management. Top managers of Japanese companies not only agreed with Deming's opinion, but also began to train managers on the proposed theories en masse. This led to the fact that the quality of the manufactured products improved significantly, while the costs did not increase. This process has been called the "Japanese economic miracle".

Edwards Deming in his book Overcoming the Crisis. A new paradigm for managing people, systems and processes ”says that the quality of manufactured products can grow rapidly if enough time and attention is devoted to it. If more attention is paid to the speed of production of products, then the quality will begin to decline and, consequently, the interest of consumers will also fall.

In addition, Edwards Deming focuses on the fact that the entire management system of the company should be integral, and not consist of certain pieces. That is, every employee, specialist, manager should be interested in what they are doing. They should all have one goal, which will lead to a cohesive production that will be worked on by the team, not individuals. This will also be a guarantee of the high quality of the goods produced.

The book contains a huge amount of advice from Edwards Deming. He also offers his 14 key principles. For example, many companies seek to purchase materials for their production at the lowest prices. That is, for them the price comes first. The author calls for more attention to be paid to the quality of the purchased goods, requiring suppliers to confirm it, and to completely forget about cheap purchases. Also, the author calls for constantly improving the business process by looking for new problems at different stages: from production to sale.

Edwards Deming also recommends that company managers reward their employees for training. After all, each company needs specialists, and not those who will monotonously perform the work. If you motivate your colleagues to learn, learn new material, implement new systems, you will see how effective and useful this method is for the development of your business.

In the book “Overcoming the Crisis. A new paradigm for managing people, systems and processes ”there are many other tips and theories from Edwards Deming. This person not only knows how to achieve success, but also helps each of his readers to do it. The book is intended for a very wide audience of specialists who want to make their work both beloved and effective.

On our website about books lifeinbooks.net you can download for free without registration or read the online book “Overcoming the Crisis. A new paradigm for managing people, systems and processes ”Edwards Deming in epub, fb2, txt, rtf, pdf formats for iPad, iPhone, Android and Kindle. The book will give you a lot of pleasant moments and real pleasure from reading. You can buy the full version from our partner. Also, here you will find the latest news from the literary world, find out the biography of your favorite authors. For novice writers, there is a separate section with useful tips and tricks, interesting articles, thanks to which you yourself can try your hand at literary skill.