Deming on systems thinking

In the 1990s, Deming distilled the essence of his approach into 4 inter-dependent components that he called “a system of profound knowledge”. Together these represent the key disciplines that describe how organisations work and how to manage them more successfully. The components are:

1. Systems thinking – optimising how businesses processes operate from end-to-end working together and with suppliers and for the benefit of customers, and ultimately for the benefit of their customers (in the context of a business to business transactional relationship)

2. Understanding variation – using statistics to gain new insights into business performance and to drive improvements in a sustainable way

3. Psychology – understanding what makes people tick, how to empower them and how to remove the constraints of their ideas and enthusiasms

4. Knowledge – the importance of learning, operational definitions and how rational predictions can be made by managers about future performance

In this exert we can see how powerfully and succinctly Deming captures the essence of a system and summarises its set of critical inter-dependent attributes. The inference is clear that in order for a system to function anywhere near to its fullest potential, it needs to develop capabilities across all four components

Now if we try to map some of his views onto ISO 9001 requirements (or vice versa) we can soon see that our attempt are going to be met with limited success. Whereas there has been a fairly visible and half-decent attempt to integrate the first two components into the standard, we will struggle to defend an argument that numbers 3 and 4 are embedded in any useful way (or in the case of number 3, at all). Let’s go through them in turn

Systems thinking – optimising how businesses processes operate from end-to-end working together and with suppliers and for the benefit of customers, and ultimately for the benefit of their customers (in the context of a business to business transactional relationship)

The Systems Approach to Management is indeed one of the 8 principles of quality management. These 8 great truths are meant to provide a back-drop of intent to underpin the use of the technical standard. Within the clauses of ISO 9001 there is heavy use of the word “system”, particularly among the general requirements of section 4. However the principle of “systems thinking” weakens as we progress through the standard. Clauses sit in relative isolation from one another, and the implementation of the system is left at the school gates, so to speak. That is, we get a bit of the theory in section 4, but as soon as we proceed into practicalities of the operational real world (section 7), it may as well have been in “Section Pluto”. The threads are not cohesive, allowing for significant failings in both understanding and implementation at operational level. The structure of ISO 9001 does not help, and it is a real shame that ISO 9001:2008 does not appear ready to follow the successful lead of ISO 14001 and structure its requirements in a  PDCA sequence. The reason why?

Understanding variation – using statistics to gain new insights into business performance and to drive improvements in a sustainable way

Hmmm, some good here, and some bad. There can be little argument that ISO 9001 makes an attempt to emphasise the discipline of management by facts and analysis in a number of key areas. We have mandatory requirements for product measurement (8.2.4), process measurement (8.2.3), internal audit (8.2.2) measurement of customer satisfaction (8.2.1) analysis of data (8.4) and management review (5.6). This is good, both in terms of discipline and in terms of the potential value to the organisation if they happen to develop an effective information management system around those data collection and decision making processes. The primary weakness is how well ISO 9001 (and indeed ISO 9004) deals with the second part of the component (i.e. understanding). Turning all this effort in counting and measuring things into meaningful management information and positive, proactive decisions is the key, and it is still far too easy to miss the whole point and get wrapped up in a very literal, cosmetic and low value approach of management by numbers

Psychology – understanding what makes people tick, how to empower them and how to remove the constraints of their ideas and enthusiasms

Now we’re skating on far, far thinner ice. Whilst there has almost been a tentative acceptance offered that this component is important (involvement of people is another of our 8 quality management principles), frankly ZERO attempt has been made to tackle this knotty topic within the published standard. You can search for this as long as you like, it isn’t there. What does this tell us? Was Deming wrong? Is it an oversight? Or is it like asking the review panel to write and perform a full length ballet? People are important system components. Ignoring them won’t make them go away. This, we argue, is a MAJOR weakness and, again, a weakness that is nowhere near as weak in ISO 14001 and OHSAS 18001. People are our greatest asset? Again, more questions of the review panel. Lessons have been learned and incorporated into other management standards, why not ISO 9001?

Knowledge – the importance
of learning, operational definitions and how rational predictions can be made by managers about future performance

OK, again we can make a case that clauses 8.4 and 5.6 (analysis of data and management review) tip toe in the right direction, but Deming’s component was looking for a bit more. Nah, a lot more. What we REALLY REALLY want to see is the management of information in context of organisational learning. For an idea of where that might lead, check out our earlier post. This too, like component 3, is poorly applied within the standard, if it is at all. At the time of writing we could argue this is light years off the ISO 9001 radar

So where does that leave us? Well, right back where we started. We can say that ISO 9001 isn’t all bad. It can encourage a number of approaches that gets us off the blocks, so to speak, but we would be quite wrong if we were to think that it takes us too far on our ultimate quest for excellence. It has strengths, but it also has weaknesses and omissions, so in order for us to use it to best effect, we need to know how far it takes us, where it leaves us, and what we need to do to get to that next stop. In this post we’ve identified that parallel strategies that deal effectively with the psychological complexities of human motivation need to be considered, as well as the principles of wider “knowledge management”

One final, and important, point I will introduce into this particular equation, is that deming went to great pains to point out that not all aspects of a system can be known or predicted. The system will always be impacted by unknown or unknowable factors. This actually is quite an uncomfortable reality for many “quality types” who may want to believe that EVERYTHING can be known, predicted and controlled. the problem is that this is a fantasy. The most effective managers will understand the realities of life and of management and realise that effective application of good quality management practices do little more than up the odds of success. The more complex a system gets, the harder it will be to build a full and detailed picture of each “butterfly effect”

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