At 91 the walk is slow and tentative. But not the talk. W. Edwards Deming has been scolding corporate America for a long time, so he fires words with power and precision, like a seasoned sniper shooting at an entrenched enemy. To the man who has been called the ”Curmudgeon of Quality” and the ”Messiah of Management,” there is no doubt who the enemy is. It is an army of stubborn, misguided corporate executives that he insists is committing managerial treason against American competitiveness and administrative genocide against American workers. It is an enemy Deming knows well, one he has had in his sights for almost seven decades.
Today, here in Scottsdale, Ariz., at one of the 20, four-day-long
”Quality, Productivity and Competitive Position” seminars he conducts around the nation every year, Deming is definitely on target, hitting the 650 corporate executives, entrepreneurs, educators and assorted government bureaucrats in his audience with relentless accuracy.
”Why is America on the decline?” Deming asks, rising slowly to his feet. As he waits for the question to sink in, he hovers over a pile of notes spread out on a long table equipped with an overhead projector. The table, covered with a maroon tablecloth, stands on a raised platform at the front of the ballroom. Deming, wearing a dark blue three-piece suit that hangs loosely on his 6-foot-1-inch frame, scans the room and tugs at his lapels with hands that look like they could palm a basketball.
Many of the men and women sitting elbow to elbow at 19 rows of tables in the cavernous Registry Hotel ballroom seem in awe of the aging, legendary figure towering before them. And why not? After all, they have heard the stories about Japan and the part Deming played in that nation`s historic economic transformation.
In 1947, as Japan was still pulling itself out of the ashes of World War II and while it was still an occupied nation, Deming, then a Census Bureau statistician and consultant for the U.S. War Department, performed what many regard as one of the astounding economic feats in history.
Almost single-handedly, he set Japan on a course that would eventually propel its nascent, resource-poor industries into a position of economic equality with United States and even past it in several key industries-all within three decades. Today, only Gen. Douglas A. MacArthur, the man credited with defeating Imperial Japan on the battlefield and eventually guiding it through a largely benevolent occupation period from 1945 to 1952, is regarded with greater awe by the Japanese.
So those sitting under Deming`s lofty gaze have come to Scottsdale from all over North and South America in search of knowledge, help, guidance, formulas, even a little magic if need be-anything that will help their corporations, factories, services and offices survive in a world of growing global competition.
But there is no magic formula, no hocus-pocus, no show biz with Deming. Just a Spartan appeal to reason and logic, peppered with a Socratic style that asks questions. Lots of questions.
”t we performing up to our ability? How is the U.S. doing in respect to balance of trade? How many people here are getting paid for making things worse?”
Nervous laughter ripples through the audience. No one raises a hand. Deming`s face glares out at the audience from the two 10-by-6-foot TV screens flanking the platform. He is not trying to be funny. He is serious.
Good management, impeccable quality, efficient and proper use of resources and people, continual improvement and transformation, optimization of a system of production and service-these are not pie-in-the-sky ideals for Deming. To him, they are the very keys to America`s survival. And his mission is to make sure every American CEO, every manager, every bureaucrat, every entrepreneur has a valid set of those keys.
Deming, who can still recall the childhood poverty of his early years in his native Sioux City, Iowa, and later in a tar-paper shack near Cody, Wyo., where he and his family barely survived the brutal winters, is convinced he is scattering the seeds of America`s economic survival at seminars like this.
”We have been wasting our natural resources and, worse, as we shall see, destroying our people, our workers,” Deming says, sipping from a large coffee mug. ”Where is quality made? Is it a method? No, it`s an end product of good management. What must we do? Is it sufficient to have happy customers? Loyal customers? No, it is not.”
Some in the audience are fidgeting now, like green college freshmen attending an Economics 101 lecture. What is he saying? What does he mean? Some are flipping through the fat, white three-ring binders they were handed as they entered the hotel ballroom. Some are scratching their heads. Those who are attending the seminar in 15 other cities via a closed circuit TV hookup are probably just as puzzled.
Deming is pleased. He has planted questions. Now, for some essential history and background.
”In the year 1910 the U.S. made half the manufactured products of the world,” Deming says, returning to his chair and running long fingers through his white, close-cropped, thinning hair. ”The U.S., with efficient production and natural resources, beginning around 1920 and for decades, put manufactured products in the hands of millions of people the world over who could not otherwise have had them.
”Our quality was just good enough to create an appetite for more. A further advantage came to North America for a decade after World War II. North America was the only part of the world that could produce at full capacity. The rest of the industrial world lay in ruins. The rest of the world were our customers, willing buyers for whatever North America could produce. Gold flowed into Ft. Knox.”
Deming rises to his feet again.
”What happened?” he demands. ”Everyone expected the good times to continue. It is easy to manage a business in an expanding market, and easy to suppose that economic conditions can only grow better and better. We were simply lucky-not smart. In contrast with expectations, we find, on looking back, that we have been in an economic decline for three decades. It is easy to date an earthquake but not an economic decline.”
Ironically, as that decline was beginning, Deming was in Japan teaching the Japanese how to avoid the management quicksand that he saw corporate America slipping into. He knew his ideas were being ignored in the United States. But Deming was not surprised. For most of his professional career, Deming has been a prophet without honor in his native land.
Now, 45 years after he first went to Japan, Deming is finally beginning to receive the kind of acclaim and recognition in the U.S. that he enjoys in Japan. That recognition began to come when firms like Ford, General Motors, Chevron, Motorola and Xerox began to infuse Deming`s ideas into their corporate strategies.
After his initial lectures on behalf of Gen. MacArthur and the occupation forces in 1947, Deming was invited back to Japan in 1950 by the Union of Japanese Scientists and Engineers. They wanted him to expand on his ideas.
”His ideas made a lot of sense to us, so we wanted to learn more,”
recalls Haruhiko Koyama, who at 81, remains one of Deming`s most ardent Japanese disciples. ”Today, they make more sense than ever.”
Deming took the Japanese at their word and conducted a series of now-legendary 8-day, 8 a.m.-to-6 p.m. seminars in several Japanese cities. In those seminars, he was able to address no less than 80 percent of all of Japan`s top business and industry leaders, all of whom were eager to learn how American corporations had become so powerful. That one man could have access to so many of Japan`s business leadership was and still is unprecedented in Japanese history.
The message Deming brought to the Japanese was not one that the captains of American industry endorsed. America`s prevailing systems of management and production were not something the Japanese should emulate, Deming said. Eventually, he said, America`s system of management and production will lead to a decline in American industrial productivity, quality and market share.
Deming`s Japanese audiences were shocked. It was hard to believe these pronouncements. After all, American corporations were coming out of an unprecedented war effort and the industrial power of the United States seemed unassailable. But Deming was a mathematician, and when he produced formulas and statistical proofs of his theories, the Japanese were convinced.
Instead of copying inefficient, poorly managed American corporations, Deming told the future CEOs and top management of Mitsubishi Heavy Industries, Toyota, Sony, Matsushita, Nippon Steel, Nissan, Honda, Toshiba, Hitachi, Fujitsu and hundreds of other Japanese firms to create new systems that focus on the consumer. Production must be viewed as a system, he said. Constant improvement of quality must envelop the entire production line, from incoming materials to the consumer. Products and services must constantly be redesigned for the future. Defects must be removed by steadily reducing statistical variances in production.
The consumer, Deming told the Japanese, is the most important part of the production line. You must work with your vendor as a partner on a longterm relationship of loyalty and trust to improve the quality of incoming materials and to decrease costs, he said. You must drive fear out of the workplace by not ranking employees. You must not humiliate employees with destructive annual performance ratings and merit pay raises nor force them to compete with and mistrust one another by instituting interdepartmental quotas and numerical goals. You must not create business plans that emphasize the short term by focusing on quarterly earnings reports.
You must think of the company as a system and manage it as such. The function of every component, every division under good management is to adjust its contribution toward optimizing a system of profound knowledge. Proper management of a system is action based on prediction. Rational prediction requires theory, along with systematic revision and extension of theory based on comparison of prediction with observed short- and long-term results.
