The Deming Files

Driving Out Fear and Other Similarities Between Drucker and Deming

Kelly Allan
Contributor: Kelly Allan
Posted: 02/03/2011

It won’t surprise you that W. Edwards Deming, renowned statistician and management expert, and Peter F. Drucker, the father of modern management thinking, knew one another. What might surprise you is the incredible number of intersections there are in their thinking, says Kelly Allan, advisor to the US-based Deming Institute, in the first of a new bi-monthly column on the works and thinking of Deming.

What Drucker is to management, Deming is to quality is sometimes used to describe the differences between the two men's bodies of work. That is unfortunate because Drucker also wrote about quality and Deming wrote extensively about management.

That the work from these two thinkers during the latter part of the Twentieth Century played an important role in shaping the modern enterprise is indisputable. And although they approached the practice of management from quite different points of view, I would argue that they are about 90% in alignment with regards to management responsibilities and practices.

Here are a just a few of the areas of intersection—and a few words from each man. I believe you will find that both Drucker and Deming would challenge many of the so-called "best practices" of management that are in use today.

Topic of Intersection

Dr. Drucker

Dr. Deming

Fear as a motivator

Modern behavioural psychology has demonstrated that great fear coerces, while remnants of fear cause only resentment and resistance.

Lesser fears destroy motivation.

Drive out fear, so that everyone may work effectively for the company. Fear impairs performance and causes numbers to be padded.

Management by drives and quotas

Many managements fail to draw the obvious conclusion that drives [such as cost cutting, then inventory cutting, then human relations] are after all, not the way to get things done.

Quotas are a barrier to improvement. Eliminate numerical quotas for the work force. Eliminate numerical goals for people in management.

Innovation

Inherent in the managerial task is entrepreneurship: making the business of tomorrow. Inherent in the task is innovation. Innovation is above all, top-management attitude and practices.

Innovation in a business enterprise must therefore always be market-focused.

Actually, "What is our business?" is almost always a difficult question and the right answer is usually anything but obvious.

Innovation, the foundation of the future, cannot thrive unless the top management have declared unshakable commitment to quality and productivity.

The moral is that it is necessary to innovate, to predict the needs of the customer.

A good question for anyone in business to ask is: What business are we in? What product or service would help our customers more?

Productivity

Productivity means that balance between all factors of production that will give the greatest output for the smallest effort.

Economic performance that is achieved by mismanaging work and workers is illusory and actually destructive of capital even in the fairly short run.

To leave knowledge skill underutilized is impoverishment of society and individual alike.

Production [and service] should be viewed as a system.

The improvement of quality begets naturally and inevitably improvement of productivity...this transfers waste of man-hours into good product and better service. The result is a chain reaction—lower costs, better competitive position, happier people on the job, jobs and more jobs.

Variation

To design a control system, one has to think through what is routine and what is exception.

The traditional American system is misapplication of control. It subordinates the routine to the exception.

There are two mistakes frequently made:

  1. To react to an outcome as if came from a special cause, when actually it came from common causes of variation.
  2. To treat an outcome as if it came from common causes of variation, when actually it came from a special cause.

Learning

Worker responsibility for the job, work groups, and output cannot be expected, let alone demanded until the foundations of productive work, feedback information, and continuous learning have been established.

The fault is in the system, not in the men.

I should estimate that in my experience most troubles and most possibilities for improvement add up to proportions something like this:

--94% belong to the system, (common causes) which are the responsibility of management.

--6% special causes

Psychology of leadership

Management by drive [such as a theme of the month] is a sure sign of confusion. It is an admission of incompetence. It is a sign that management does not think.

To make a living is no longer enough. Work also has to make a life.

Transformation to the new philosophy of management will result in joy in work, joy in learning.

The result will in time be greater innovation, expansion of market, greater material reward for everyone. Everyone will win; no losers.

Use of rewards to motivate

...watch lest the compensation system reward the wrong behavior, emphasize the wrong results, and direct people away from performance for the common good.

Rewards motivate people to work for rewards (quoting Alfie Kohn). A show of appreciation may mean far more than monetary reward.

There are many other areas of intersection of thought and practice including: systems thinking and how to lead systems; accountability and what it really means; sensible accounting vs. management by visible numbers alone; the role of boards of directors; the problems with "best practices" and "benchmarking"; the role of continual improvement and quality; customer focus and how to achieve it; decision-making that makes sense; developing leaders from within; problems with the annual performance appraisal; profit and how to create it; the tasks of top management and the tasks of middle management; constancy of purpose –and many other areas.

In addition to the intersections of thoughts that both men exhibited, there’s another common theme with regards Drucker and Deming - both have been widely misquoted, misunderstood, and over-simplified.

For instance, some authors have misunderstood Deming’s point about "driving out fear" from the organization. Deming was very specific about the problems with using fear as a motivator (causing impaired performance, padded numbers, and fear of asking questions and expressing ideas).

Case in point: Andrew Grove in his book ONLY THE PARANOID SURVIVE misinterpreted Deming’s point to mean that one should not be fearful of competitors. Grove wrote, "I have trouble with the simplemindedness of [Deming’s] dictum.... Fear of competition, fear of bankruptcy, fear of being wrong and fear of losing can all be powerful motivators."

This is clearly not what Deming intended when he wrote about the problems of fear-based management. In fact it was Deming who tried to give leaders who were slow to change a wakeup call. In a voice filled with dry irony, he would say, "It is not necessary to change. (Long pause.) No, it is not necessary to change. (Long pause.) Survival is not mandatory."

In Drucker’s case, his "Management-By-Objective" approach (which was intended to be used to focus very long-term thinking) was popularized into a quarterly – even monthly — scorecard of quotas.

This was a travesty of misapplication, causing harmful unintended consequences and resulting in what Drucker would call misdirection of management, because "objectives that become a straitjacket do harm." According to Art Kleiner in his excellent book, AGE OF HERETICS, the MBO management package came to be called a "do-it-yourself hangman’s kit" because if a manager didn’t make his numbers, he was hanging himself. His bonus, and indeed his job, could be in jeopardy.

In his 2009 book, WHY THE MIGHTY FALL, Jim Collins urged leaders to return to the classics of Drucker and Deming for guidance. Those of you who do so will find it comforting to learn how closely Drucker and Deming were aligned on so many aspects of management. Their alignment provides even greater confidence about how to move your thinking beyond contemporary management practices that are doing harm.

In the coming weeks as www.pexnetwork.com publishes the Deming Files you will find a rich collection of articles that demonstrate Collin’s point about the importance of returning to the classics. There will be many articles on Deming’s New Philosophy of Management –in addition to articles about Deming and quality. Both Deming and Drucker were interested in improving effectiveness (doing the right things) and efficiency (in the right ways). Deming was a advocate of what he called "a transformation of management" practices to the New Philosophy of Management, which would lead to greater innovation, higher productivity and quality, joy in work, and more jobs.

Copyright Kelly Allan 2011

Kelly Allan
Contributor: Kelly Allan
Posted: 02/03/2011

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