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Deming's Theory of Profound Knowledge

Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

Deming's Theory of Management Main Page | Quality Main Page

Citation: Martin, J. R. Not dated. Deming's Theory of Profound Knowledge. Management And Accounting Web. http://maaw.info/DemingExhibit.htm

Deming's Theory of Profound Knowledge includes Four Parts

I. Appreciation for a System
A leader must understand the system he or she is attempting to manage. Without this understanding the system can not be managed or improved. A system cannot understand itself or manage itself. Optimization of the parts does not optimize the whole. System optimization requires coordination and cooperation of the parts which requires leadership.

Relation to the 14 Points
1. To create constancy of purpose which means to constantly attempt to optimize the system. Everybody in the system needs to understand how their effort or output fits into the system. Each person is viewed in terms of how they contribute towards optimizing the system. Points 2. adopt the new philosophy, 3. cease dependence on inspection, 4. end purchasing on price tag alone, 5. improve constantly, 6. institute training, 7. institute leadership, 8. drive out fear, 9. break down barriers between departments 10. eliminate slogans, 11. eliminate numerical quotas, 12. remove barriers to pride in workmanship, 13. institute education & training in teamwork and statistical methods, all relate to the concept of optimizing the system.

Relation to the 7 Deadly Diseases and Obstacles
1. Lack of constancy of purpose. 2. emphasis on short term profits or performance, quarterly dividends etc. 3. evaluation by performance reviews, merit ratings builds fear and destroys teamwork. 4. management mobility. 5. running the company on visible figures alone all distract from the purpose of the organization, i.e., they all prevent optimization of the system. Obstacles: Neglect long term planning, relying on technology to solve problems and seeking examples to follow rather than developing solutions all prevent optimization of the system.

II. Knowledge about Variation
Refers to Shewhart's concept of common or system causes of variation and outside assignable or special causes of variation. Relates to the Red Bead experiment and blaming people for variation caused by the system.

Relation to the 14 Points
Joiner and Gaudard (Quality Progress, December 1990) compare each of the 14 points to the concept of variation, but 5. improve constantly, 6. institute training, 7. institute leadership, 11. eliminate work standards, quotas & MBO appear to be the most relevant. A knowledge of variation helps one understand the system so that it can be managed and improved.

Relation to the 7 Deadly Diseases and Obstacles
3. Annual reviews and ranking employees indicates the absence of a knowledge of variation and an absence of an understanding of the system. A manager who understands variation would not rank people because he or she would understand that ranking people merely ranks the effect of the system on the people. This causes tampering & destroys motivation and teamwork.

III. Theory of Knowledge
Knowledge depends on theory. Information is not knowledge. Experience teaches nothing without theory. Practice makes permanent, not perfect. Copying examples does not lead to knowledge.

Relation to the 14 Points
Relates to 5. improve constantly, 6. institute training, 7. institute leadership 10. eliminate slogans, 11. eliminate quotas since the emphasis is on teaching people how to think on a continuous basis and not to assume any two problems are the same.

Relation to the 7 Deadly Diseases and Obstacles

Relates to the obstacle: Seeking examples to follow rather than developing solutions. Theory leads to questions which lead to answers which leads to knowledge and subsequent improvement, i.e., the Deming-Shewhart plan-do-check or study-action (PDCA) cycle.

IV. Knowledge of Psychology
Leaders must understand human behavior to motivate, coordinate and manage people to optimize the system.

Relation to the 14 Points
Relates to 7. institute leadership - helping people do a better job, rather than ranking them, 8. drive out fear, 9. break down barriers between departments -so that they cooperate rather than compete, 10. eliminate slogans, 11. eliminate quotas and 12. remove barriers to pride in workmanship.

Relation to the 7 Deadly Diseases and Obstacles
A lack of knowledge of psychology causes, or supports 3. evaluations with annual reviews, merit ratings and ranking people and 5. running the company based on visible figures alone - results. People need a method to improve, not objectives, quotas & rankings.

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Related summaries:

Deming, W. E. 1993. The New Economics For Industry, Government & Education. Cambridge: Massachusetts Institute of Technology Center for Advanced Engineering Study. (Summary).

Joiner, G. L. and M. A. Gaudard. 1990. Variation, management, and W. Edwards Deming. Quality Progress (December): 29-37. (Note).

Lepore, D. and O. Cohen. 1999. Deming and Goldratt: The Theory of Constraints and the System of Profound Knowledge- The Decalogue. North River Press. (Note).

Martin, J. R. Not dated. Illustration of common cause vs. special cause variation. Management And Accounting Web. http://maaw.info/DogInYard.htm

Martin, J. R. Not dated. What is the red bead experiment? Management And Accounting Web. http://maaw.info/DemingsRedbeads.htm

Stevens, T. 1994. Dr. Deming: Management today does not know what its job is. Industry Week (January 17): 21, 24, 26, 28. (Summary).