Deming: System of Profound Knowledge

“Action on the last datapoint is meaningless” W. Edwards Deming

Deming held the view that individual performance was predominantly dictated by how the operation was set-up to work.  A good person in a badly set-up operation would, at best, struggle to perform and more likely fail.  He concentrated therefore on understanding what leaders and line-staff needed to understand and affect in order to create an optimised operation.  He called this the system of profound knowledge.  It incorporates four perspectives, described below in his words:

Systemics

Successful operations management depends upon an understanding of the interdependent components of the system and how they interact together to fulfil the purpose of the operation.  Each component of the system is charged with contributing its best to the system, not to maximizing its own performance against local competitive measures like productivity, profit or sales.  Systems thinking is fundamental to operational performance.  Non-systemic changes simply shift issues to other areas of the system.  As Deming observed “a hack can do great damage”.  This precept is most effectively undermined by traditional Western management techniques and short-term performance horizons.

Psychology

An appreciation for people and how they interact with each other, with circumstances and with the system.  This idea underpins the insight that performance is dictated primarily by the system rather than individuals and so managers should act on the system to foster effective group behaviours.

Variation

Variation data gives insight into the system.  It indicates whether it is in control and its stability.  It also highlights the results of constraining thought and the affects of any action to change the system. This idea underpins the insight that systemic performance should be measured over time (not as snapshots), across the entire system (not single components) and from the point of view of the customer (not against internally focussed criteria).

Knowledge

Knowledge in terms of how it is perceived, classified, interpreted and developed; specifically, the idea that as individuals we apply interpretive rules (resulting from our own experiences) to sort and select data and to predict outcomes.  The value of these rules is defined only by their usefulness for action.  This idea underpins the theories of organisational learning and dialogue which aim to share data and develop group theories and group solutions that take into account all of the insight available within an organisation and not just the strongly argued ideas of dominant individuals.

Stating this in plain English:

Systemics: silo working and local optimisation creates problems for overall performance.  This is a sophisticated way of saying there is no “I” in TEAM.  We succeed or fail as an organisation, not as a form or a department.

Psychology: so we need the components of the system to behave as and work as a team.  This has a great deal to do with clarification and alignment of purpose; with defining individual roles clearly so everyone can see how their activity adds up to a team success; alignment of incentives so everyone benefits from working as a team - unwind anything that incentivises opposing behaviours; and with developing and encouraging behaviours underpinning enthusiastic collaboration instead of unilateralism and competition.  Part of this work is about actively managing out behaviours that do not fit the culture your need in order to succeed.  This work is routinely side-stepped and yet it is crucial to securing performance.

Variation: choose ‘measures that matter’, that help you make choices about how to proceed; focus on the consistency of your service and how this changes over time.  Performance ‘today’ does not tell you anything decision-worthy (every system has good and bad days).  A focus over time lets you know whether things are getting better or worse; whether your latest change is for the better or the detriment of the system; whether you have enough or too much resource to meet your commitments.

Knowledge: encourage your teams to use facts rather than personal assertion; and to harness collective expertise and insight.  Start by getting your management teams to include their front-line staff in raising and solving operational challenges.  Not only will this result in more complete solutions and better choices but the process of working together improves communication and secures support.  One expert issuing directives rarely beats a purposeful consensus.

Further reading:

14 Management Principles: W. Edwards Deming