In 1982, W. Edwards Deming published Out of the Crisis, a key milestone in modern management and still not understood by most of companies nowadays.
Deming offers a theory of management based on his famous 14 Points for Management. He explains the principles of management transformation and how to apply them.
Deming’s insights resist the passage of time. Every leader who cares about creating a sustainable business should be well-read in Deming’s philosophy and methods.
In our Management 3.0 training we review these principles with a modern lens.
Deming’s 14 Points for Management
With his management principles Deming offered a way to dramatically improve the a company’s effectiveness. They are the cornerstone of Lean Management.
These are 14 key points to develop a sustainable business that delivers high-quality products on time, by engaging everyone in the organization and providing value to employees and society.
If you successfully apply all of them you are going to be fine, but if you miss just one you will get in trouble.
- Provide for the long-range needs of the company; don’t focus on short-term profitability. The goal is to stay in business and provide jobs
- The world has changed, and managers need to adopt a new way of thinking. Delays, mistakes, defective workmanship, and poor service are no longer acceptable
- Quit depending on inspection to find defects, and start building quality into products while they are being built. Use statistical process control
- Don’t choose suppliers on the basis of low bids alone. Minimize total cost by establishing long-term relationships with suppliers that are based on loyalty and trust
- Work continually to improve the system of production and service. Improvement is not a one-time effort; every activity in the system must be continually improved to reduce waste and improve quality
- Institute training. Managers should know how to do the job they supervise and be able to train workers. Managers also need training to understand the system of production
- Institute leadership. The job of managers is to help people do a better job and remove barriers in the system that keep them from doing their job with pride.
- Drive out fear. People need to feel secure in order to do their job well. There should never be conflict between doing what is best for the company and meeting the expectations of a person’s immediate job
- Break down barriers between departments. Create cross-functional teams so everyone can understand each other’s perspective. Do not undermine team cooperation by rewarding individual performance
- Stop using slogans, exhortations, and targets. It is the system, not the workers, that creates defects and lowers productivity. Exhortations don’t change the system; that is management’s responsibility
- Eliminate numerical quotas for workers, numerical goals for people in management and arbitrary deadlines for teams. This is management by fear. Try leadership
- Eliminate barriers that rob the people of their right to pride of workmanship. Stop treating hourly workers like a commodity. Eliminate annual performance ratings for salaried workers
- Encourage education and self-improvement for everyone. An educated workforce and management is the key to the future
- Take action to accomplish the transformation. A top management team must lead the effort with action, not just support
Perform a self-evaluation
In Aktia Solutions, we created a set of cards to be used in a self-evaluation exercise with your management team. You can download them here and do the simple exercise we suggest below.
- Gather your executive team in a room
- Introduce them to the 14 points and basic lean management
- Ask them to form groups of 3-4 people
- Order the 14 principles based on how well you are implementing them right now in your organization. Top best, bottom worst. Create a ranking with stickers from 1 (wrong) to 5 (awesome) and put the cards in the number you think best indicates your level of performance
- Select one of the best and one of the worst principles
- For the best:
- What are you doing exactly?
- What can you do to do it even better?
- For the worst:
- Identify a few things you could to improve in that area
- For the best:
- Iterate as many times as required with other points
- Comment, discuss and agree on action points
I hope you find this useful. Come to our Management 3.0 training in Barcelona if you want to learn more about modern management and lean management.