The System of Profound Knowledge

William Edwards Deming was an American professor, statistician and lecturer. He gave the world his “Plan-Do-Check-Act” theory, which was directed to improve the product quality, sales and development of companies all over the world. His famous 14 points helped to raise the economy of Japan and made this country one of the most powerful in the world. The Deming’s theory appears in four parts; all are related to each other:

1. An appreciation of the system, which means that everything is a system. All components must work as a team. People must help each other and have the common aim to achieve. That will be effective for the company.

2. The knowledge about variation, whereas everything changes. All the processes around can be varied by a number of factors, and this affects the results. There are two groups of variation. First one is normal, which is generated by the natural factors. The second group is about special cases. It can create defects. That knowledge helps in improving the quality and correcting the defects that appear.

3. A theory of knowledge is a point, which explains that the knowledge sense and limits of what can be known. Knowledge is not possible without theory.

4. Psychology is one of the most significant as it shows the psychology of people, a human nature. That is needed to be known by every leader of the company. People are different, but they have to work as a team. It is crucial to find a key to each member of the organization. Payment is not a motivator. If there is an idea, there will be a result of the work.

There are famous Deming’s 14 points that can help to organize the management.

1. The main aim is the improvement of service and product to stay in business and become competitive. 

2. The new philosophy must be adopted. The accepted level of errors, delays, defects in materials is not allowed. The whole company has to be involved in the process of the continuous improvement of the system and all activities.

3. Stop relying on control as a means to achieve quality. It should be built into the product from the earliest stages of its creation.

4. End with the practice of selecting suppliers based only on the price of their products. Aim to get the product from one supplier, establish long-term relationships based on the mutual trust.

5. Continuously improve the system of planning, production and service delivery in order to improve every process and activity in the company.

6. Start the practice of modern methods of training for all employees, including the management, in order to make a better use of the capabilities of each employee.

7. Rebuild the people management practices. Managers at all levels must help employees in terms of performing their jobs well, not to be responsible for the quantitative and qualitative results of the work and become leaders in the continuous improvement of the company.

8. Eradicate the fear atmosphere in the company, so that everyone can work more efficiently and effectively for the benefit of the entire company.

9. Eliminate barriers between departments. It is better to work as a team and complete the common things.

10. Discard the empty slogans and appeals. They only cause hostility. The bulk of the causes of poor quality and inefficiency are generated by the system, and the solution is beyond the competence of ordinary workers.

11. It is crucial to eliminate the practice of issuing unwarranted quantitative targets to ordinary workers and quantitative managers. Completing quests becomes more significant than a customer’s satisfaction, which reduces the quality.

12. Allow employees to be proud of their work. Give up with the practice of annual appraisals, quantitative evaluations of workers and managers for achieving the quantitative targets.

13. It is essential to implement a comprehensive training program for all employees and encourage their desire for the self-improvement. The source of success in achieving the competitiveness is knowledge.

14. The entire staff has to be involved in the work on its transformation, which is everyone's business. Create a structure in the top management that will push every day to implement the above 13 principles and begin to transform the company in that direction.

There are points I would like to discuss. I can agree with some and also disagree with others. To my mind, the first one, which tells about the reward and punishment as the motivators for people, is not right. According to the Deming’s theory, the best motivation is the idea of the company. Everyone has to understand that other people in the subsequent stages of work depend on him or her, and he or she, in turn, depends on the results of the previous stages. Indeed, a reward is effective, because it stimulates for better results, but it does not have to be the aim. The key is the best quality product, improvement and development.

I agree with the second statement. Deming used to say that “quality is important, it does not start in the shop, but in the top management of the company”. The optimization of every process in an organization leads to the overall optimization of this organization. That is true in terms of the organization being a base. It is crucial to organize the work process of the company in the best way, analyze the production or service and then correct the mistakes. This allows reducing losses to a considerable degree.

Results are achieved by setting objectives, which is correct. There is no system without a proper start. That is the main idea of the Deming’s theory. The objective is the first, then goes the execution, checking and finally correcting. It is impossible to start something with no idea what to do. It is like a plan for action. A considerable mistake is not to have it.

The wrong thing is to aim at the quantity. A lot of companies run for this and lose customers because of the reduced quality level. According to Deming, quality has to be the primary goal of any company. I doubt that  quantity and quality are inversely related. While looking for a better quality, it is possible to increase the quantity of the high level products and services.

Knowledge of the variation theory is directly related to the foresight. Thus, managing means being able to anticipate the need for leaders. National and international leaders must learn to anticipate events and be prepared to act in accordance with the alternative scenarios. In addition, they need to understand the difference between special and common causes. This is essential for political and government leaders, and those of industry, education and legal institutions, who tend to assume that all of the problems are generated by the usual reasons, while most of them represent a consequence of the impact of specific reasons. The solution of such problems by conventional means leads to the improper functioning of governments, businesses, academic institutions and the wrong behavior of society as a whole.

According to Deming, modern people are used to growing up in the atmosphere of competition among various nations, groups, departments, offices, students, schools and universities, as well. Relying on the economists’ notion, it is possible to assume that competition will solve all the existing problems. However, the competition turns out to be destructive. Therefore, when people work together as a team in order to win, it is better and considerably more effective. In this sense, a need for a new and appropriate management style arises, which is predominantly based on the cooperation and transformation of the given company.. Thus, "profound knowledge" means a way of such transformation process.

Consequently, all the points of the Deming’s profound knowledge theory can be summarized. Dr. Deming is the author of the theory of quality management, in which statistical methods are a tool and, above all, a moral philosophy based on the respect for a worker as a person, who is involved in the solution of current problems of all employees of the company, creating a psychological atmosphere, eliminating fear and providing a way for the disclosure of the human creativity. The main values cherished by W. Edwards Deming are the wholeness of personality, hard work, honesty, ethics, decency, self-respect, respect for others, along with a personal responsibility for their work and actions. All the points can be related to 4 components of profound knowledge. A lot of them are related to the psychology part (7, 8, 9, 10, 12, 13). Theory of knowledge is mentioned in points 1 and 5. The appreciation of the system was put by Deming on the first place. He thought that the system recognition was the first in profound knowledge (6, 11, 14). Finally, the knowledge about variation is described in points 2, 3, 4.

Implications of Not Understanding Profound Knowledge

Peter Scholtes defined the implications of not understanding profound knowledge. Few statements are listed below.

Seeing Events as Individual Accidents

That is the mistake of many leaders as they think some events occur accidentally. It is the system. This concerns the knowledge of variation. All the accidents have to be analyzed and corrected. An accident is a result of the wrong system management. As it was mentioned above, the optimization in the organization area leads to the optimization of the entire organization. The same thing can happen in case of an accident. 

Seeing Symptoms but Not Root Causes

It is highly significant to see the symptoms and check them for the cause. The second step is to correct the cause of the appeared symptom. In this case, the accident will never appear. Otherwise, this will happen again, because the cause was not found.

It Is Wrong to Blame Individuals Rather Than the System

An individual is a small part of the system. System sets the aims and rules, while an individual follows those principles of the system. Every mistake made by one man is the result of the system’s wrong action. For example, the lack of competence is the result of the irrelevant educational level of the system.

Misunderstanding of the System and Implications Generated by This

Every leader must understand the system and knowledge of theory. It is one of the 4 parts of the Deming’s idea. It is impossible to manage the company without it. Otherwise, it will lead to the wrong direction of the company development.

Misunderstanding of the Community Responsibility

The human factor influences the whole organization. This needs to be understood as it is part of the system. The regulation of relationships between people in the company can help in developing the system. Misunderstanding affects the company in a negative way. Employees should know their responsibilities. They have to follow the common idea of the company, try to do their best and aim at the high quality level.

In this work, I explored the Deming’s theory and its use in practice. The main parts of the theory and 14 key points were analyzed. Every leader has to develop the quality level of the production and services. The Deming’s theory helped in raising the economy of Japan after the Second World War and making it influential all over the world. It proves that the most significant thing is not the amount of profit, but the quality of the product. Consequently, there is a scheme that reflects the whole theory, namely “planning - implementation - check - corrective action”. This is a cycle that needs to be done for the further development. The inevitable consequence of a proper management is the quality and strong competitive position.