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When Japan crawled out of the ashes of World War II, most of the country was in ruins. Within twenty years however it rose from a war-torn nation to become the second largest economy in the world and led the auto industry for many decades with a new standard of quality. Along with Germany, which also became one of the largest post-war economies in the world, it was reminiscent of a phoenix rising from the ashes. Little do most people know the strange irony that the source of Japan’s economic miracle lies not there, but in an America, with a man named Edwards Deming.
When Japan was rebuilding in the post-war years, Douglas MacArthur, as the top administrator of the newly occupied country, brought Deming in (then a New York University professor and statistician by trade) to serve as a consultant to the captains of Japanese industry, to build and institute the quality control standards which would later be adopted throughout the country. Many of his teachings defied the traditional model (and still do). His work in America was met with a lukewarm reception, and at the time of his death in 1993 he was only just beginning to gain recognition in the US for his many contributions to industry. In Japan, however, he is idolized, while in America, he is rarely acknowledged in academia and the business community.
Throughout his career, Deming proceeded to destroy every important notion of management taught in US business schools. Not only were they wrong, he said, but led to inferior results, poor quality, and customer dissatisfaction.
“Why hadn’t I heard of Deming? Perhaps because what was being taught in business schools all over the country was at odds with what he was saying about management.”
–Rafael Aguayo, author “Dr. Deming: The American Who Taught the Japanese About Quality”
After his work in Japan, Deming returned to the US and ran his own consultancy business, “largely unknown and unrecognized in his country of origin and work.” . The irony is that while Deming encountered challenges getting his management model adopted at home, he found a ready and receptive audience in Japan, as the CEOs and senior management fully internalized his philosophy. Toyota, Honda, Nissan, and other Japanese manufacturers followed his teachings to the letter. The rest is history.
Today, the Deming Prize is awarded every year amidst much publicity to the Japanese company that best embodies his precepts.
What Deming essentially created was a new management philosophy, based on statistical analysis, that when spelled out in words, seems more idealistic than logical. It turns out that Deming’s approach to quality is not rocket science at all.
Here are the 2 contrasting philosophies – the Deming model and the standard model
Standard Business Model Deming model
Quality is expensive Quality leads to lower costs
Quality control experts and inspectors can ensure quality Inspection is too late. If workers can produce defect-free goods, eliminate inspections. Quality is pride in workmanship.
Defects are caused by workers Quality is made in the boardroom. Defects in workmanship belie deeper issues involving employee morale that numbers cannot measure but have a visible effect on corporate productivity.
Fear and reward are the proper ways to motivate Fear-based management leads to disaster. Eliminate fear
Profits are made by keeping revenue high and cutting costs Profits are generated by loyal customers and a loyal workforce
The manufacturing process can be optimized by outside experts, with no change in system afterward, nor input from workers necessary. Process is never optimized, it can always be improved. Constant and never-ending dedication to improve quality creates loyal customers. Encourage direct feedback and participation from all levels of the organization including the rank and file, in implementing solutions together. So what exactly is quality?
According to Deming’s model, quality is a multifaceted concept that defies narrow descriptions. It would take many pages to describe them in full, but here are a few.
Quality is pride of workmanship or joy in work
From Abraham Maslow’s theory on motivation and hierarchy of needs, is the distinction between extrinsic and intrinsic motivation. “By allowing and even urging workers to experience the intrinsic rewards that come from doing something well, using their innate and acquired abilities, productivity improves, quality improves, and customer satisfaction improves.” 
Quality is job security
In Japan, when a company has to absorb a sudden economic hardship, the sacrifices begin from the top. First the corporate dividends are cut. Then salaries and bonuses of top management are cut. Next middle management salaries are trimmed. Lastly and only then, are the rank and file asked to accept pay cuts or a reduction in the work force.
Across the Pacific Ocean this is unheard of. In the US, sacrifices are imposed on the workforce from the bottom. Usually the result of a failure at the top levels of management is a large round of layoffs starting from the rank and file. Imagine the difference in morale it might make.
“It is simple. You treat American workers as human beings with ordinary human needs and values. Once the superficial, adversarial relationship between managers and workers is eliminated, they are more likely to pull together during difficult times and to defend their common interest in the firm’s health.”
–Yoshi Tsurumi – author, “American Management Has Missed the Point – The Point is Management Itself.”
Quality is Profound Knowledge
Across the board in the American business community it is estimated that “the causes of 94% of production problems were built into the process, and only management could resolve these issues.” 
Profound knowledge is defined as knowledge universal to all organizational endeavors, large or small, profit or nonprofit. Beyond the principle that quality always costs less, and that quality begins in the boardroom, profound knowledge also means a clarity in the very definition of quality itself. Finally other aspects include “knowledge of variation, some psychology, and knowledge of the need for cooperation.”
“As long as management is quick to take credit for a firm’s successes but equally swift to blame its workers for its failures, no surefire remedy for low productivity can be expected in American manufacturing and service industries.”  – Deming
In Human Potential
In closing, here are two more quotes from Dr. Deming from his book that I find relevant in this day and age and can’t resist throwing in.
“No nation need be poor. Any one of the nations of Eastern Europe, Asia, Latin America, or Africa could experience substantial increases in its standard of living. But of all the nations in the world, which is the most underdeveloped? The US may be the least developed nation in the world relative to its potential. Our management systems systematically destroy our people. They judge, grade, and differentiate people when all the difference is due to the system, which is management’s – and only management’s responsibility.
“It isn’t the desire of the people of a nation to work hard that determines prosperity. It is the attitudes, system of beliefs, and knowledge that determine the long-term prosperity and standard of living of a nation. In other words, prosperity depends on management.”
— Edwards A. Deming
In the end, Human Resource Management in its truest form, must be that which unleashes collective human potential, putting that potential to work in creating a productive community. Thus HR Management should properly be called Management of Human Potential, because that is what it is.
Kevin Naruse is the director of IT and Social Media for Painted Brain, and writes about current trends in science, technology, medicine, and media for Painted Brain News