Chapter 1. The Fundamental Principles of Dr. Deming's Approach

This book is about is how to create positive change in organizations and individuals.

Dr. Deming’s ideas are at the heart of lean manufacturing and Six Sigma, both very successful current approaches to the improvement of business performance.

The Deming approach depends on some fundamental shifts in thinking, away from what is still common and traditional in management. Dr. Deming’s assumptions are, of course, much better supported by scientific evidence than are many practices that were and still are popular in business.

Dr. Deming’s approach to management is founded on two fundamental principles. Although based in science, these principles form the philosophical framework of his system.

1. 원칙 1: 사람들은 그들이 하기를 기대받는 것을 최선을 다해 할 것이다. Principle 1: People will do their best to do what they think is expected of them.

2. 원칙 2: 퍼포먼스를 향상시키기 위해서, 개인들에 초점을 맞추기보다는 시스템을 개선해야 한다. Principle 2: To improve performance you need to improve the system rather than focus on the individuals.

경영의 실제 현장에서 통용되는 가정은, 사람들은 항상 해야 하는 일을 피하고, 다른 일을 하기를 원한다는 것이다. 그러나 이것은 종종 자충족적 예언이 된다. 이러한 가정에 따라, 경영진은 강력한 통제 시스템을 조직한다.

Trust Factor에서, John Whitney는 관리에 의한 과도한 통제를 드러내기 위해 다음과 같은 단순한 질문을 사용한다: "만약 여기 있는 모두가 어떻게 자신의 업무를 올바르게 하는지 알고, 그것을 수행할 수 있도록 신뢰받는다면, 우리가 하고 있는 것들 중 그만두어야 할 것은 무엇일까?" "If everyone here knew how to do his/her job properly and was trusted to perform it, what are we doing now that we could stop doing?"

Nordstrom, the large clothing retailer, is legendary for the quality of its customer service. As a sometime customer, I can testify to the pleasant experience of shopping there and the ease with which problems are resolved. I once bought a blazer there, and over a year later the fabric of the lapel began to separate from the stiffening material underneath. When I went to complain, I was immediately told, “Whatever you paid for it can be used as credit on another one.” Nordstrom employees are issued a card with Nordstrom’s policy written on it: “Use your own best judgment at all times.” Employees are expected to do what is best for Nordstrom and their customer, and they have the freedom to do it.

Many of us know from personal experience that having final authority changes our outlook. Years ago the company I worked for gave me the authority to authorize purchases well into six figures. If I turned a purchase order down, however, the decision could be appealed to a superior. Later, that superior was removed. When I was the final authority, I had to be much more thoughtful about the process.

Dr. Deming argued that at least 85 percent of the variation in performance of a business derived from the system and at most 15 percent from the individuals in the system. When the majority of workers are performing poorly, the problem is in the system not the workers.

CEOs without a superior system cannot build a great company no matter how capable they might be as individuals.

The 14 Points for Management

Over the years, Deming distilled his observations into a set of 14 points for management. These 14 points are based on more than a half century of observing and working with business. According to Dr. Deming, the 14 points have one aim: "to make it possible for people to work with joy." We will briefly discuss each of the points with some reference to its application to safety.

1. 제품과 서비스 개선에 대한 목표의 일관성을 창조한다. 그 목표는, 경쟁력 있게 되고, 시장에 머물고(stay), 일자리를 제공하는 것을 겨냥한다. Create constancy of purpose for the improvement of product and service, with the aim to become competitive, stay in business, and provide jobs. Constancy of purpose is the conceptual framework that gets everyone in the company moving in the same direction. It establishes priorities and guides decision making. With regard to safety, constancy of purpose is established when every person in the company knows that safety is an important priority, and that the ultimate goal of the operation is constant improvement toward zero accidents. We shall see that management cannot establish constancy of purpose for safety just by talking about it. Management must personally demonstrate their commitment to safety in order to establish constancy of purpose.

2. 모두가 승리하는 협력(cooperation)의 철학을 적용한다. 그것을 연습하고, 직원들에게, 고객들에게, 하청업체에 가르친다. Adopt the philosophy of cooperation (win-win) in which everybody wins. Put it into practice and teach it to employees, customers, and suppliers. The notion that business is improved by having one department compete against another is as bankrupt as the notion that a football team would be improved if the linemen competed against the running backs. Safety clearly requires cooperation among employees, departments, management, unions, industry, and regulators.

3. 품질을 달성하기 위해 대규모 검수(inspection)에 의존하지 않는다. 최우선으로 프로세스를 개선하고, 프로세스에 품질을 구축한다. Cease dependence on mass inspection to achieve quality. Improve the process and build quality into the process in the first place. This is an exceedingly difficult concept to grasp. The analog in safety to mass inspection is the safety audit. Inspection will not improve quality, because quality comes from the manufacturing process. The inspector may eliminate some poor product but can never eliminate all of it. Even when it is found, it must be discarded or reworked, adding cost. The challenge is to improve the process so that defective products are not made in the first place. Similarly, audits and inspections do not create safe processes. At best, they may provide evidence that the process is unsafe. However, correcting the violations is not the answer. The question The Fundamental Principles of Dr. Deming’s Approach 11 is what is it about the process that allowed the violations to occur. If the process is not fixed, a new set of violations is sure to develop just as soon as we fix the old ones.

4. 가격표만을 기반으로 한 비즈니스 포상 관행을 중단한다 End the practice of awarding business on the basis of price tag alone. Instead, minimize total cost in the long run. Move toward a single supplier for any one item and a long-term relationship of loyalty and trust. One place where lowest-price bidders can lead to a safety problem is in the area of contractors. A contractor with a poor safety record and unwillingness to cooperate with the customer may be the low bidder but will seldom yield the lowest total cost.

5. 지속적으로, 그리고 영원히, 시스템을 개선하라. 생산, 계획, 다른 어떤 활동에 대한 시스템이라도 품질과 생산성을 향상시키고 지속적으로 비용을 절감하는 것이라면 무엇이든지. Improve constantly and forever the system of production, planning, or any activity that will improve quality and productivity and thus constantly decrease costs. No process is ever perfect; it can always be made better. The history of business is rife with the corpses of businesses that thought they had found the best way to do something and stopped looking for better ways. In safety, there is always room for improvement. This is especially true when we view safety as having a direct relationship to our ability to understand and control our processes. A process that is under control and has low variability will be safer and more productive, and will produce a higher quality product.

6. 스킬들에 대한 훈련을 시작하라. Institute training for skills. Most businesses we are familiar with violate a number of Deming’s training principles. Most often we see what Dr. Deming called worker training worker. On a relatively haphazard basis, the new worker is assigned to a more experienced worker for training. Over successive generations, this method causes ever-increasing variation. The analogy is cutting fence posts by using the last post cut to measure the next one. Just as the fence posts will not be of predictable lengths, so the training will not be predictable content or quality. There should be a reference standard and trainers (who may be workers) who are able to train to that standard. A poorly trained worker is an unsafe worker.

7. 사람들의 다양한 능력, 한계, 포부들을 인정(recognizing)하면서, 사람들을 관리하기 위한 리더십을 적용하고 시작하라. 리더십의 목적은 사람들, 기계들, 그리고 기기들이 더 나은 일을 할 수 있도록 돕는 것이다. 생산 근로자들의 리더십 뿐 아니라 경영진의 리더십도 점검이 필요하다. Adopt and institute leadership for the management of people, recognizing their different abilities, capabilities, and aspirations. The aim of leadership should be to help people, machines, and gadgets do a better job. Leadership of management is in need of overhaul, as well as leadership of production workers. As we shall see later in the book, management of safety might be accomplished by instructing workers to work safely. Leadership requires personally demonstrating commitment to safety. Leaders are judged by what they do as well as by what they say. Leaders should be trained to recognize this as a part of their role and that different people will have different abilities, capabilities, and aspirations about safety. Leaders need to manage with an understanding that not all people are the same and that it is possible to create an effective system that takes advantage of this variation in people, rather than attempting to stifle it.

8. 두려움을 몰아내고 신뢰를 구축하여 모두가 효과적으로 일할 수 있게 하라. Drive out fear and build trust so that everyone can work effectively. Psychological evidence tells us that a number of problems are associated with using fear as a motivator. In particular, fear is especially damaging to cooperation and creativity, which are critical behaviors in the modern workplace. In addition, frightened workers will not tell us about problems or near misses and will often fail to report accidents. Without this information, it is difficult to improve the safety of work processes. Frightened workers will not cooperate effectively with management or with other workers.

9. 부서간의 장벽을 허물라. 경쟁을 폐지하고 조직에 윈윈 시스템을 구축하라. Break down barriers between departments. Abolish competition and build a win-win system in the organization. It is virtually impossible to improve process safety without cooperation among departments like engineering, production, and maintenance. In practice, we very often see competition among them. A profound example of the consequences of failure of departments to cooperate is the Challenger disaster. The investigation of the incident (Feynman 1988), revealed clearly that there was a huge failure of cooperation between engineering and management. The engineers responsible for the flight refused to sign off on it because of the danger posed by the low temperature at the launch site. Management failed to understand or heed their advice.

10. 무결함이나 새로운 차원의 생산성을 외치는 슬로건, 장려, 목표들을 제거하라. 그러한 권고는 오직 적대적인 관계만을 만들어낸다. 왜냐하면 낮은 품질과 낮은 생산성의 원인의 대부분은 시스템에 대한 것이고, 노동력의 능력 범위를 벗어나기 때문이다. Eliminate slogans, exhortations, and targets asking for zero defects or new levels of productivity. Such exhortations create only adversarial relationships, as the bulk of causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce. A fundamental premise of this book is that the bulk of causes of accidents are also in the system and not in the workforce. This does not mean that the causes of accidents lie only in the physical environment. The system includes the people as well as the procedures and methods The Fundamental Principles of Dr. Deming’s Approach by which they work. It includes planning, training, and education. It includes the policies of the organization, such as the methods by which employees and managers are selected, promoted, and compensated. This assertion is strongly supported by the realization that one plant would not have one-tenth as many accidents as a similar plant just because the former plant has better workers. It has to have a better system.

11. 수치적 목표, 수치적 할당량, 목표에 의한 관리를 제거하라. 리더십을 바꾸라. Eliminate numerical goals, numerical quotas, and management by objectives. Substitute leadership. The point of this is not that goals are bad. The problem is that goals, by themselves, accomplish nothing. Rather than establishing goals and quotas, the job of leadership is to improve the system. We should point out that some goals are imposed by the external world and are very important. The business that consistently loses money will not survive. Nor is it acceptable for a business to injure or kill people. The only appropriate goal for safety is that no one should be injured. We should not have to spend much time getting agreement on that point; we should move on to the real work of improving the processes in order to prevent accidents.

12. 사람들에게서 그들의 업무 안에서 느끼는 즐거움을 빼앗는 장벽들을 없애라. 이것은 사람들의 순위를 매기고 경쟁과 갈등을 일으키는 연간 평가(annual rating)나 실적주의(merit system)를 폐지하는 것을 의미할 것이다. Remove barriers that rob people of joy in their work. This will mean abolishing the annual rating or merit system that ranks people and creates competition and conflict. To the extent that intrinsic motivation is present, people will enjoy work. Intrinsic motivation is the motivation that comes from the work itself. Golf is intrinsically motivating for most golfers. It is fun to play. We do not need an incentive to participate. In fact, putting in external incentives can destroy that pleasure. The weekend golfer gets great joy out of a good tee shot. The professional, who must play well to survive, often enjoys it much less. To the extent that workers find joy in their work, they will be energetic and committed. To the extent that they are externally controlled and manipulated, their joy will be reduced, along with their energy and commitment.
    The job of management, then, is not to motivate employees but to work with them to create a system in which everyone can work effectively and contribute to the success of the group. Individuals working in such a system will be motivated. Certainly issues like compensation and evaluation cannot be ignored. However, they are no substitute for building a system that works. In fact, compensation and evaluation are more often roadblocks to motivation than they are sources of it. In safety, the motivation of the worker is obvious. The notion that workers would frequently injure themselves without the intervention of wise management, which is implied in many safety programs, is insulting and helps diminish the joy in work.

13. 교육과 자기-계발에 대한 활기찬 프로그램을 시작해라. Institute a vigorous program of education and self-improvement. Education is different from training. Training relates to developing proficiency in a skill. Education is learning theory. Studies of education in industry have repeatedly shown a very high return on investment (Bassi et al. 2003). We have seen numerous cases in which process incidents—chemical reactions that got out of control and led to fires and explosions—could have been prevented by education. Had the process operators had some rudimentary education in chemistry and physics, they would have known that something was very wrong long before disaster occurred. It is not possible to write procedures that can cover every eventuality. Education can equip workers with knowledge that will help in those situations where the procedures do not exist. Without proper education in a subject, how can an individual be expected to perform appropriately?
    Educating management is no less important. In particular, this includes education in areas that Deming called profound knowledge: variation, psychology, and the theory of systems. These areas of knowledge are critical to the effective leadership of process improvement.

14. 혁신을 이루는데 회사의 모든 사람을 투입하라. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job. The fact that management has relatively more control over the system does not mean that it has all of the responsibility or control. Although the system may be the dominant factor in an organization’s performance, this does not excuse worker cynicism and refusing to try to do better. Everyone is ultimately responsible for their own behavior. The job of leadership is to enable everyone to succeed. Leadership cannot ensure anyone’s success. A safe workplace can never be achieved without putting everybody to work on the transformation.

Applying the 14 Points

이 14가지 항목들은 시스템을 구성한다. 일부분만 선택하면 잘 동작하지 않는다. 이들은 매우 상호 의존적이다. 두려움을 몰아내지 않고는, 모두가 변화를 이루는데 참여할 수 없다. 슬로건, 권고, 정량적 목표나 할당량들은 사람들에게서 일의 기쁨을 빼앗는 장벽들 속에 있다. 대량 검수에 의존하는 것 역시 일의 기쁨에 간섭한다. 목표의 일관성 없이는 다른 것들이 전혀 일어날 수 없다.

Key Points

Chapter 2. Dr. Deming's System of Profound Knowledge

Variation

Psychology

Theory of Knowledge

Theory of Systems

Science and Management

Key Points

Chapter 3. Some Principles of Measurement

The Plan-Do-Study-Act Cycle

The Science of Measurement

Key Points

Chapter 4. Incident-Based Measures

Reliability

Validity

Proper Use of Accident Statistics

Key Points

Chapter 5. Incident Investigation

Reliability

Validity

Key Points

Chapter 6 Systematic Observation of Behavior

Reliability

Validity

Controversy

Key Points

Chapter 7 Audits

Standardized Auditing Methods

Reliability

Validity

Effective Use of Audits

Some Conclusions About Audits

Key Points

Chapter 8 The Safety Survey

Reliability

Validity

What the Employees Told Us

Naming the Factors

Establishing the Survey as a Regular Measure

Expanding the Scope of the Survey

Key Points

Chapter 9 Taking Action Based on the Survey

Action at the Corporate Level

Barriers to Improvement

The Relations Diagram

Executive Action Steps

What Was Actually Implemented

Use of the Survey at the Plant Level

Plant Staff View the Survey as a Useful Tool

Effect of the Survey on Company Performance

Conclusions

Key Points

Chapter 10 Leadership

Power and Leadership

Questions that Measure Leadership

Leadership in the Armed Forces

Taking Action to Improve your Capacity for Leadership

Leadership Inventory

Key Points