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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6 Responses to Deming on systems thinking

  1. I believe systems thinking is the wrong approach precisely _because_ it ignores the fact that people and their relationships are the primary drivers in a complex system.

    From the book I’m writing:

    “Systems thinking does not recognize that complex systems cannot realistically be analyzed and adapted in a top-down fashion. Simulating organizations with simplistic models, or drawing teams and people with bubbles and arrows, falsely suggests that managers can analyze their organization, modify it, and then steer it in the right direction. System dynamics and systems thinking recognize non-linearity, but they are still grounded in the idea that top management can somehow construct a “right” kind of organization that is able to produce the “right” kind of results. In their approach to applying the body of knowledge of systems to organizations they are little more than 19th century deterministic thinking in a 20th century jacket.”

    What we really need is complexity thinking and the study of social complexity. This includes the importance of people.

  2. admin says:

    I understand your point perfectly, Jurgen, and agree with what you have said. The principle of system thinking is the acceptance that organisations can seldom be represented and understood as simple, linear entities that are populated by people that behave rationally and always for the good of the company. Patently this is not true. I do accept that the inconvenience of this reality is too much for many people to cope with and denial sets in. This leads to a convenient but unrealistic view of what “systems thinking” is. Where we may talk about complexity and the “big picture” but ignore or refuse to accept those aspects that are the toughest to control

    Personally I do not have a problem with “systems thinking” as such, but I do agree that when the term is used we are not always talking about the same thing. Complex models are hard to get right, and the more complex a model is, the harder it is to come up with a definitive answer (because it will often be hard to fully test and prove)

    I could even present an argument that says things are so unpredictable that it is more a matter of chance than anything else

    http://blog.capablepeople.co.uk/2008/08/is-long-term-goal-driven-planning-a-waste-of-time/

    Anyway, I do agree with the basic point you are making. Consultants have a habit of looking to boil things down into simple linear formulae when the more complex an organisation is, the less likely this is ever going to be helpful. thanks for sharing your thoughts

  3. shaun says:

    Actually, I originally wrote this post so long ago I can’t remember writing it at all. Its weird. Its like it was written by someone else (which it wasn’t of course!)

  4. Mark Harbor says:

    I like this blog, and it confirms some of the gut feelings I’ve had about 9001 for a number of years.

    When we get on to ‘complexity’ it is worth taking a look at the work of Dave Snowden (http://bit.ly/cDA5j9) and his Cynefin framework (http://bit.ly/ajXpRh).

    The framework recognises the the ‘Ordered’ side of life in terms of ‘Simple’ and ‘Complicated’. In these domains, the pure systems approach to management is applicable as there is a definite causal link between inputs and outputs.

    The ‘Unordered’ domains of ‘Complexity’ and ‘Chaos’ are of course the interesting ones for modern management thinkers I think. They recognise that there is not always that causal link.

    Each domain in the framework (Dave is clear that Cynefin is not a model) has a defined approach and understanding of both the domains and the approaches is, I would suggest, essential for any quality professional in the increasingly complex world we work and live in.

    There is also the domain labelled ‘Disorder’, which is an interesting place…managers who fail to understand the nature of the world and revert to their preferred management approach (normally as simple as possible).

    Dave is a leading light in Knowledge Management and is a compelling speaker. A couple of sites that may be interesting in the study of Cynefin and Dave’s work in complexity:

    Cognitive Edge: http://bit.ly/yMnx
    Slideshare on Cynefin: http://slidesha.re/3zMgNC
    YouTube presentations: http://bit.ly/emfpYf

    (if the links don’t work, let me know and I’ll zap the full addresses)

  5. shaun says:

    Thanks for these really useful links, Mark

    You may detect that I get really frustrated when I encounter (frequently) naive attempts to try to box things off via a load of “shalls” that infer if you do that (my lad) you’ll be on to a winner, when the reality is, as I said, we can only realistically shorten our odds

    The mature approach, that you clearly recognise, is to accept the inconveniences as reality. You mention the occasional lack of a causal link, and this is simply a fact of life, particularly in complex systems. Or, it may be that there IS a causal link, but that the system is so complex we can’t always know what it is, even after the event (as is the case in global climatic models)

    The added frustration for me is that while deming is revered up to a point in quality circles, there are many who pick and choose the aspects of his work that they revere. Often giving these sorts of inconveniences a very wide birth. In fact I believe this has led to the commonly held misconception that he espoused that you can’t manage what you can’t measure. I believe this is misconception is not only likely to have him turning in his grave, but in all probability spinning at the rate of a Dyson centrifuge

  6. GS Chandy says:

    The approach to ‘systems thinking’ pioneered by the late John N. Warfield specifically ensures that the ideas, desires and perceptions of the people in/impacted by the system are given full consideration in the design of the system. Check out more on Warfield at http://www.jnwarfield.com and at the “John N. Warfield Collection” held at the library of George Mason University, Fairfax, VA, USA (where Warfield was Emeritus Professor).

    Based on Warfield’s seminal contributions to systems science, I’ve developed the ‘One Page Management System’ (OPMS) which enables the (individual or group) user to identify any Mission and then, from his/her/their current ideas about the Mission, to develop an effective Action Plan to accomplish the Mission. I claim the OPMS Action Plan is bound to be effective because it uses, over iterations, the inherent capability of the human mind to improve/correct its weak or incorrect ideas. I’d like to send more information about the OPMS – as attachments to an email message.

    GSC

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