Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.

I’ve posted before on organizational silos (see Bustin’ Silos with the Role Bomb!), the inefficiencies they introduce and how silos tend to dampen the magic of innovation and collaboration.  “If only the left hand knew what the right hand was doing” is a familiar cry of woe!

The Promise of Business Process Reengineering

Deming’s 9th Point in many ways foreshadows the Business Process Reengineering (BPR) movement of the 1990′s with its end-to-end business processes (e.g., order-to-cash, hire-to-retire) and process management discipline cutting across traditional organizational boundaries.  BPR almost always leveraged information technology to gain efficiencies in terms of speed and resources – sometimes in innovative ways, often shifting work to the customer.

Unfortunately, in spite of the promise, there were quite a number of horrible BPR failures, especially in the early 1990′s.  Many early failures were associated with the so-called Enterprise Resource Planning (ERP) monster software packages that often accompanies BPR efforts.  But, there have also been some spectacular successes and ERP together with at least some form of process management are invariably at the heart of them.

Matrix Management

Process Management led organizations (that were not already there) towards the discipline of matrix management.  For some organizations, having more than two “bosses” (over-simplifying the situation enormously) represents too great a culture shift.  As such, the inertia associated with traditional hierarchies, silo behaviors and limited collaboration tends to overwhelm moves towards cross-departmental or cross-geographical boundaries.   Some companies (J&J comes to mind) seem to manage really well with complex operating company and market structures.  For them, matrix management, while never without its frustrations as with any management system, works well and is effective.  They have established the tools and disciplines to ensure clear lines of accountability together with a reasonably entrepreneurial spirit.

Is Collaboration a Tool to Break Down Departmental Barriers?

Web 2.0 promises to take collaboration to new levels – both within the organization and across its ecosystem. The conundrum, however, is:

• Web 2.0 tools and technologies can help break down organizational boundaries
• Organizational silos inhibit the institutionalization of collaborative behaviors

In other words, organizations that are already collaborating well across organizational boundaries are better positioned to exploit Web 2.0 than those with strong organizational silos.  I believe some proficiency with matrix management is necessary for success with cross-enterprise collaboration.  Given that, and with a thoughtful deployment of Web 2.0 tools with clarity of the strategic intents for the collaboration initiative, I believe Dr. Deming would be delighted to see the possibilities inherent in the world of Web 2.0, and its potential for “breaking down barriers.”

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

Fear and Social Networking

From my consulting experience (and, I regret to say, from some of my experience as an employee) fear can be a very real issue in organizations – inhibiting people’s willingness to try new things, to speak out when they see inefficient practices or broken processes, to challenge dumb decisions by management, and so on.  Fear also limits people’s engagement in their work (their willingness to give their discretionary effort).  And, in an age of emerging Enterprise 2.0 – with its dependence upon internal and external social networking, fear can be a major impediment to progress in learning and developing new ways of working, innovating products and services, and better connecting stakeholders.

Today’s climate of high unemployment and the threat of “downsizing” on the horizon, fear in many organizations is on the uptick.  Fear mobilizes the body’s “fight or flight” mechanism, leading to either defensive behavior (hiding, submissive, low engagement) or aggressive (even destructive) behavior.  I sometimes see the variant of passive-aggressive behavior, where, for example, people agree to a decision, then work the back channels to sabotage it!

So, to what degree is fear inhibiting your organization’s efficiency and effectiveness?  What is the source of that fear?  What can be done to eliminate or at least, reduce fear in the workplace?

Fear and Trust

Fear is the opposite of trust. Trust is important for high performing organizations because it leads to synergy and performance. As organizations begin to enter the Enterprise 2.0 realm, fear and trust become even more important.

Author and management consultant Charles Handy, notes that, “If we are to enjoy the efficiencies and other benefits of the virtual organization, we will have to rediscover how to run organizations based more on trust than on control. Virtuality requires trust to make it work: Technology on its own is not enough”.

Driving Out Fear

Corporate coach Jan Austin in her excellent blog post FEAR IN THE WORKPLACE: SYMPTOMS, SOURCES, SOLUTIONS, suggests that:

Eliminating fear begins with leaders acknowledging their own responsibility for creating and/or participating in a fear-driven organizational culture. By examining their assumptions and behaviors which have either triggered or perpetuated defensive, fearful responses in others, and consciously choosing to communicate in a more positive, proactive manner, they can interrupt the patterns of fear and the associated defensive routines in the organization. Leaders can take a number of steps to engage organizational constituents in more open, collaborative conversations and encourage greater positive participation in the work of the organization. Leaders can do this by employing simple but powerful facilitation skills.

Jan goes on to suggest techniques four key strategies for leaders, comprising:

1. Establishing Rapport
2. Improving Listening Skills
3. Asking Questions Which Increase Trust and Reduce Fear
4. Promoting Dialogue

Check out Jan’s post.  How many of these strategies and the techniques she suggests might help your organization become a less fearful and more collaborative place?

Image courtesy of The Vancouver Sun

Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.”

Leadership – The Context for Improvement

In his seventh point, Deming connects the idea of leadership with the role of supervision to create a context for continuous improvement.  “Help people and machines and gadgets (dare we say, information technology?) to do a better job.”  This really represented a break from the thinking of Frederick Winslow Taylor who believed that management’s role (as the “educated ones”) was to define best practice, the supervisor’s role was to make sure the workers followed that process.  I guess Taylor’s thinking was appropriate during the early industrial revolution, but was clearly not the way to really empower those closest to the job to improve the ways that processes worked.

Note also that Deming distinguishes between “supervision of management” and “supervision of workers” with both needing “overhaul” as he says with characteristically understatement.

Here Comes Everybody – Improving Everything!

Translated into today’s Enterprise 2.0 world, with the words of Clay Shirky – “Here comes everybody” ringing in our collective web-enabled heads, we all have the opportunity (responsibility, even?) to figure out how “gadgets” as well as people and machines can continuously improve the way products and services are conceived, designed, created and brought to market.

Image courtesy of Women PR Wire

Institute training on the job.”

This is a Deming classic, and one I’ve come to appreciate over my years in consulting and IT leadership development.  From the vantage point of 2009, one might take issue with the word “training” rather than “learning.”  As usually interpreted, the outcome, learning is a more important focal point than the approach of training.  You could train me for years on how to land a fighter jet on an aircraft carrier, but you know, I’m just not going to do that!  Also, training tends to be sporadic, whereas learning can be continuous.

Institutionalize the Practice!

Let’s take apart the simple five word sentence.  Dictionary.com tells us that “institute” means (among other things):

to bring into use or practice”

So Deming is emphasizing the “institutionalization” of the practice, not just an occasional burst.  This is consistent with his first Point about “constancy of purpose.”  I find in many (most?) IT organizations, there is way too little learning going on – especially considering how rapidly the field is changing.  Training budgets are typically among the first to be cut in a recession, and the last to be reinstated.

Outside of IT, I see way too many people in jobs for which they are not properly trained.  One impact of this is that they take much longer to complete a task, especially if it is slightly outside of routine (a return, for example, at a store, or using a store coupon), so either more staff are needed than would be the case if they were properly trained, and/or, the customer experience is degraded, leading to reduced revenues.  If you don’t believe this, you need only look into the recent histories of Best Buy versus Circuit City to appreciate the impact of properly trained and motivated staff, versus untrained low wage workers!

On the Job!

Deming then emphasizes “on the job” as a form of training.  This is crucial, and is one of the reasons I like to think beyond training per se, to the whole realm of coaching and mentoring, developmental assignments, performance support and the whole gestalt that leads to people growing their working competencies.

I’ve had to privilege to participate on the faculty of an IT Leadership Development program with Harvard Business School‘s Professor Jim Cash.  I’ve watched Jim skillfully facilitate a group of senior executives through an exercise about their most powerful learning moments.  A couple of points are notable:

1. The most powerful leadership learnings are almost always “on the job.”
2. The most powerful leadership learnings almost always came from a mistake made and learned from.

Towards Continuous Learning and Development

So, how can you establish a continuous learning and development capacity in your organization?  How many of these practices are institutionalized in your IT group?  If not, would they help if they were?  What would it take to make them common practice?

• Do you have competency models for all the major IT roles?
• Are people regularly assessed against these models?
• Are competency gaps addressed through learning programs, including learning assignments, on-the-job coaching, and formal training programs?
• Are people’s compensation and growth prospects tied to growth in competency footprints (i.e., either adding more competencies or deepening existing ones)?
• Are performance support materials readily available on line and in the same context that people use to complete their jobs?

Cartoon courtesy of Management Plus.

Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs”

Continuous Improvement Takes Hold…

Deming’s fifth point was at the heart of his teachings – the whole idea of continuous improvement.  Again, we see the idea of “constantly” (from his first point, Constancy of purpose), this time augmented for emphasis with the “and forever.”  Note, he refers to the “system of production and service.”  Ever the engineer at heart, Deming saw things through the lens of systems thinking, with its loops of causes and effects.  “To improve quality and productivity”.  Deming always presented these two sides of the coin – quality leads to productivity.  And for emphasis, in case management missed the point, he calls out, “thus to constantly decrease costs.”

This continuous improvement concept was fully embraced by post-war Japan thanks to Deming’s lectures and teachings with remarkable results.  In fact, the impact on Japanese manufacturing and business success was so great, that the US and Europe began to take notice in the 80′s and 90′s.  In the US, the Malcolm Baldrige Award drove many companies to implement Total Quality Management programs to great effect as company names such as Corning, Motorola, Milliken became virtually synonymous with quality and business success.

Continuous Improvement Takes a Back Seat!

In the 1990′s, the late Michael Hammer, with Jim Champy, published Reengineering The Corporation: A Manifesto for Business Revolution.  The ideas in this book caught the American leadership imagination.  It was more fun to tear down and start over, with the promise of quick, dramatic returns, than to go through the slower, more incremental improvement path.  Just as TQM was really taking hold, the reengineering consultants moved in.  Please don’t get me wrong – lots of great things came out of business process reengineering, but I regret that the disciplines associated with continuous improvement got brushed aside in the process.  The good news is that continuous improvement is gradually finding its way back into the lexicon of management methods, often in the guise of 6 Sigma and related quality improvement methods.

Do you have a culture of continuous quality improvement in your IT organization?  If not, why not?  What can you do to make a difference?

Graphic courtesy of EveryJoe.com

End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust”

Total Cost – Not Price

I think this is a key point that is understood by most IT professionals, but not is necessarily understood by their business partners.

Why can I pick up a laptop at Best Buy for $400 but our IT department, with all its corporate buying power pays $1200 for the same machine?”

The notion of Total Cost of Ownership (TCO) is rarely considered but is clearly an important factor for any IT asset.  And while IT professionals apply TCO to assets such as PC’s, they less frequently apply it to legacy applications and software licenses – rarely “pulling up the weeds” as Prof. Peter Weill at MIT’s Center for Information Systems Research likes to say.

Another aspect of Deming’s 4th point is the notion of a limited number of focused relationships based upon loyalty and trust.  The early days of the Total Quality movement really pursued this goal, and, I believe, mostly with a positive impact.The most successful supply chain optimization efforts incorporated customers and suppliers, and ensured that all parties shared in the benefits.  More recently, business competition has often taken on a more selfish and short sighted “every man for himself” tone, and I’m not sure that this has been helpful to the global economy.

Much has been written lately about the importance of trust – its fragility – and how difficult it can be to earn back trust once it has been lost.  This plays out in supplier-customer relationships, employer-employee relationships, and, of course, politician-citizen relationships.

What are you doing to preserve or rebuild trust?  Are you focused on a limited number of long term, mutually beneficial relationships, based on loyalty and trust?

Image courtesy of Retail Service Company

Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.”

This is one of the fundamental issues in quality management, with the quality movement shifting from quality control to quality assurance over the years, in part thanks to Edwards Deming and his peers during the latter part of the industrial revolution.

Testing – Value Add or Overhead?

This is a tough question I’ve had to address.  For example, I’ve facilitated IT groups where the issue of the value of testing, and how to manage it has been an important point of contention in organization and governance design.  I believe that ultimately, testing is overhead.  In that assertion, I distinguish between “inspection of final product (testing) from activities such as prototyping, modeling, running experiments – which to the contrary can be a real value add to IT discovery, solution delivery and support.  I also distinguish activities such as structured walkthrough‘s etc., which have more to do with building quality in than with inspection of final product.

Note that Deming does not suggest eliminating inspection – he urges eliminating the need for mass inspection, and “ceasing dependence” on inspection.  As such I acknowledge there’s such a thing as “necessary overhead,” but that need should be monitored and reduced over time, as built in quality improves.

The Genesis of “Design Thinking”

Today, the movement referred to as “Design  Thinking” must welcome Deming’s admonition to “build quality in!”   But I don’t see evidence of a lot of Design Thinking in most IT organizations.  It is also often lacking in vendor products.

Design Thinking and Enterprise Architecture

One key role that, as I’ve said in many posts, is woefully under-served in terms of its potential to make a real difference to return on IT investment and the whole user experience, is that of the Enterprise Architect.  A key to the junction between problem analysis and solution design, including solutions on a grand scale such as enterprise architectures, the Enterprise Architect should be a conduit to inject Design Thinking into IT products and services.  And, with a nod to Deming, “building quality into the product in the first place!”

Image courtesy of Nanophase Nanoengineering Products

Let’s take his second point:

Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.”

When Deming mentions the “new philosophy” he is covering a huge swath of leadership principles that he developed over the years – in some respects, the embodiment of total quality, with a strong dose of Zen and Buddhist teachings.  An electrical engineer by training, a statistician by vocation, and very much a humanist at heart, Deming believed that management (especially from his US-based perspective) had lost its way.  He saw workers on the one hand be berated for productivity failures that were more to do with the processes management handed them, and on the other hand, be exhorted to “do it right the first time” by posters and tee shirts, without getting the tools and training they needed.  In other respects, the “new philosophy” is embodied in the 14 Points.

But there’s a hidden meaning in Deming’s 2nd Point – unless management adopts the changes they want to see, they shouldn’t expect the workers to do so. Unless these changes are adopted and recognized at all levels, they’re unlikely to succeed. i.e., Practice what you preach.  When we ask our organization to be rigorous with time recording, or adhering to the project methodology, management has to model the behaviors they require from their workers.  People will follow the walk, as they say, not the talk.  And if the talk and the work are inconsistent, management has lost its ability to lead change!

Image courtesy of Cathy A Price Leadership Coaching.

Let’s take his first point:

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

Constancy of Purpose

Western Executives, especially in the US, are well known for jumping on management fads – quality circles, total quality management, business process reengineering, balanced scorecards, benchmarking, six sigma, and so on.  I’ve consulted to organizations who were in the midst of both a TQM program and a new reengineering initiative and had a group of teams and initiatives to improve processes and another group trying to blow up and re-engineer the very same processes!  Needless to say, mass confusion reined, lots of effort was wasted and no real improvement was achieved.  I’ve seen many companies caught up in the Six Sigma fad, where “death by 1,000 Six Sigma projects” was a real issue, where keen would-be green-belters are firing up dozens of projects in the interests of belt certification, but with a combined effect that was actually detrimental to firm performance!  I’m sure a dose of enterprise-wide collaboration towards continuous process improvement and innovation would have turned a net-negative to a highly net-positive contribution over time, with the power of compounding!

Collin’s Flywheel Effect

In his excellent book Good To Great, Jim Collins describes how successful transitions don’t happen overnight. He analogizes their success to that of a flywheel, where a sustained momentum accelerates the energy output.  Any phenomenal change in its final state looks like a flywheel going very fast. The thing about a flywheel is it takes a great deal of energy to get it moving, but once it’s up to speed, takes little energy to keep it moving.  The energy to get it up to speed typically has to come in a sustained series of small steps.  In the TQM/Re-engineering example I cited above, you have one set of teams trying to turn the flywheel one way, and another set trying to move it another way.  The flywheel stops and starts, changes direction, and never gets enough momentum to sustain change.

Thus, I see the flywheel analogy as a wonderful way of illuminating Deming’s “constancy of purpose,” and a valid dictum to counteract today’s tendency to jump on management fads, while never sustaining the focus and energy long enough to see positive results.  It’s a form of “short-termism” in part fueled by Wall Street expectations, and “get rich quick” aspirations.

Improve Products and Services

Also note that Deming refers to “product and service”.  He recognizes that both need constant improvement, and that there is typically an important relationship between products and services.  And yet the people responsible for products and those responsible for services are often not collaborating towards the bigger picture, so service opportunities are missed by the product folk, and product opportunities missed by the service folk.

Though not evident in Deming’s first point, he does elsewhere (in books and lectures) address the distinctions between improving and innovating, and between improving a product or service, versus improving (or innovating) the process that delivers the product or service.

Become Competitive, Stay in Business, Provide Jobs

Note that Deming links the three ideas of becoming competitive, staying in business, and providing jobs.  I believe he was very deliberate in connecting these ideas.  Many of our institutions today do not try to be competitive (think government or health care).  The notion of “too big to fail” gives new meaning to the idea of “staying in business” as a management driver.  And increasingly, people are treated as a commodity – ensuring jobs is no longer part of the management compact, with companies firing then rehiring workers according to monthly business cycles, and dot com start ups generating billions of dollars in share capital, without real products and only a handful of employees.

I further believe that the dreadful state of employee engagement – especially in the West and the US today is a sad reflection on leadership, and a leading indicator of more “trouble ahead” in the immortal words of Jerry Garcia!  My esteemed colleague Tammy Erickson defines employee engagement as the degree to which employees are willing to give of their discretionary effort.  According to a study by BlessingWhite:

Although North America has one of the highest proportions of engaged employees worldwide, fewer than 1 in 3 employees (29%) are fully engaged and 19% are actually disengaged.”

Gallup Organization cites:

Actively disengaged employees erode an organization’s bottom line while breaking the spirits of colleagues in the process. Within the U.S. workforce, Gallup estimates this cost to be more than $300 billion in lost productivity alone.”

So, what are you doing to achieve “constancy of purpose”?  What about employee engagement?  Is it an issue in your organization?  Is the issue recognized?  Talked about?  Addressed?  How can you apply Deming’s 1st point?

Image courtesy of INK08

I was at a speaker at an nGenera Executive Summit recently where one of my co-speakers, Jeffrey Pfeffer, Professor of Organizational Behavior at Stanford University cited Deming’s “Drive Out Fear” dictum, from his 14 Management Points.

This reminded me of the genius and timelessness behind Deming’s teachings, and inspired me to tackle a couple of posts examining his 14 Points in the context of today’s economy.  Dr. W. Edwards Deming was an interesting and key figure in the quality movement.  He taught statistical process control (SPC) techniques to World War II workers and applied these methods to help improve crop and food yield during the war.

Regrettably, in the post-war frenzy for American products, he was largely ignored (rejected, even) by American industry.  However, due to his early work on the US census, he was invited to help with the census in Japan.  As a result, his work became visible to Japanese industry, and was wholeheartedly embraced and built upon by the Japanese, whose cultural inclinations were very compatible with Deming’s teachings.  The rest, as they say, is history!

Out Of The Crisis

In 1982, Deming published Out of the Crisis, a classic text that resonates especially strongly today.  Deming posited that,

Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment.”

As one who has been involved in dozens of organizational transformations over the years – both as a consultant and as a “victim”, I say, “right on!”  Out of the Crisis offered a theory of management based on Deming’s 14 Points.  I will list them below, then pick a few to examine in each subsequent post.  From the perspective of 2009, and our Twitter/Facebook culture, Deming’s language may seem heavy and stilted, but, please, don’t let that put you off!

Deming’s 14 Points

1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
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 and in use that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11. Eliminate work standards (quotas) on the factory floor. Substitute leadership.  Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
12. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.  Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia,” abolishment of the annual or merit rating and of management by objective.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

We will examine each of these in subsequent posts, and place them in the context of the current global economy.