Evolution of Management Thinking and Practices – Edward Deming & Gary Hamel – Asrar Qureshi’s Blog Post #921

Evolution of Management Thinking and Practices – Edward Deming & Gary Hamel – Asrar Qureshi’s Blog Post #921

Dear Colleagues!  This is Asrar Qureshi’s Blog Post #921 for Pharma Veterans. Pharma Veterans  aims to share knowledge and wisdom from Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi on  WordPress, the top blog site. Please email to asrar@asrarqureshi.com for publishing your contributions here.

Dr. Edward Deming

Gary Hamel

The purpose of this series is to show how major changes evolved in the management thinking and practices.  I understand it is presenting a very large subject in a digest form, but it is particularly for those who believe in understanding management, practicing it, and experimenting to develop new ideas for better performance.

W. Edward Deming (1900 – 1993)

Dr. W. Edwards Deming was an eminent scholar and teacher in American academia for more than half a century. He was a consultant to business leaders, major corporations, and governments around the world. His efforts led to the transformation of management that has profoundly impacted manufacturing and service organizations around the world.

Considered by many to be the master of continual improvement of quality, as well as their overall operation, Deming is best known for his pioneering work in Japan. He is often called the “father of the third wave of the industrial revolution.”

Playing a major role in the resurgence of the American automobile industry in the late 1980s, Dr. Deming consulted with corporations such as Ford, Toyota, Xerox, Ricoh, Sony, and Proctor & Gamble, whose businesses were revitalized after adopting his management methods.

Deming was a visionary whose belief in continual improvement led to a set of transformational theories and teachings that changed the way we think about quality, management, and leadership. He believed in a world where there is joy in learning and joy in work - where “everyone will win.” 

Dr. W. Edwards Deming offered 14 key principles for management to follow to improve the effectiveness of a business or organization significantly. The principles (points) were first presented in his book Out of the Crisis. 

14 Points of Dr. Deming

1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.

2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.

3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.

4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.

5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.

6. Institute training on the job.

7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.

8. Drive out fear, so that everyone may work effectively for the company.

9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.

10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.

11. Eliminate work standards (quotas) on the factory floor. Substitute leadership. Eliminate management by objective. Eliminate management by numbers, numerical goals. 

12. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.

13. Institute a vigorous program of education and self-improvement.

14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.

Gary Hamel (b. 1954)

Gary Hamel is one of the world’s most influential and iconoclastic business thinkers. He has worked with leading companies across the globe and is a dynamic and sought-after management speaker. Hamel has been on the faculty of the London Business School for more than 30 years and is the director of the Management Lab.

Hamel has written 20 articles for the Harvard Business Review and is the most reprinted author in the Review’s history. His landmark books have been translated into more than 25 languages. His most recent bestsellers are Humanocracy and The Future of Management. In these volumes, Hamel presents an impassioned plea for reinventing management and lays out a practical blueprint for building organizations that are “fit for the future.”

Excerpts from HBR article written by Gary Hamel and Michele Zaninin, published on August 10, 2017. Edited for brevity.

[Quote]. We recently asked members of the HBR community to gauge the extent of “bureaucratic sclerosis” within their organization using our Bureaucracy Mass Index (BMI) tool.  Since then, we’ve received over 7,000 responses from a diverse group of participants. Here are our initial takeaways:

The blight of bureaucracy seems inescapable. Of the responses tallied, 64% reported a BMI of more than 70, while less than 1% had a BMI under 40. Not surprisingly, BMI scores were correlated with organizational size.  The average BMI for companies with more than 5,000 employees was 75.  Of the respondents who reported a BMI of less than 40, three-fourths worked in organizations with fewer than 100 employees. This confirms what most of us have long suspected: large companies suffer from managerial diseconomies of scale. Interestingly, individuals working in customer service, sales, production, logistics and R&D were more likely to feel that bureaucracy was growing than those working in functions like HR, finance, planning, purchasing, and administration. In other words, the individuals who feel most hamstrung by bureaucracy are the ones most directly involved in creating customer value.

Organizations aren’t becoming flatter. Despite, all the rhetoric about holacracy and “flatarchies”, the average respondent works in an organization that has more than 6 management layers. In large organizations (more than 5,000 employees) front line employees are buried under 8 or more layers of management.

Bureaucracy is a time trap. BMI survey-takers reported spending an average of 28% of their time—more than one day a week—on bureaucratic chores such as preparing reports, attending meetings, complying with internal requests, securing sign-offs and interacting with staff functions.  Moreover, a significant portion of that work seems to be creating little or no value.  

Bureaucracy is the enemy of speed. Two-thirds of respondents believe that bureaucracy is a significant drag on the pace of decision-making in their organization—a number that rises to nearly 80% in large companies.  

Bureaucracy produces parochialism. Survey respondents spend 42% of their time on internal issues — resolving disputes, wrangling resources, sorting out personnel issues, negotiating targets, and other tedious domestic tasks.  Most swamped are executives in large companies who devote nearly half of their time to in-house matters.  

Bureaucracy undermines empowerment. When asked whether they had “substantial” or “complete” autonomy to (a) set priorities, (b) decide on work methods, and (c) choose their own boss, only 11% answered in the affirmative. In a similar vein, respondents estimated that fewer than 10% of the employees in their organizations could spend $1,000 without getting a sign-off from their boss.  

Bureaucracy frustrates innovation. New ideas are the lifeblood of any organization, yet only 20% of respondents said that unconventional ideas were greeted with interest or enthusiasm in their organization. Eighty percent said new ideas were likely to encounter indifference, skepticism, or outright resistance. 

Bureaucracy breeds inertia. In a bureaucracy, change programs are implemented top-down. The problem is, by the time an issue is big enough or urgent enough to capture top management’s scarce attention, the organization is already behind.  

Bureaucracies are petty and political. Nearly 70% of big-company respondents indicate that political behaviors (like blame-shifting, resource hoarding, and turf battles) are “often” observed in their organizations.  Overall, 64% of respondents claimed that political skills “often” or “almost always” influence who gets ahead, and in large organizations, that figure jumps to 76%. 

Taken as a whole, the BMI survey provides yet more evidence of the toll bureaucracy takes on productivity and resilience.  It is a tax on human accomplishment.  Unfortunately, though, bureaucracy won’t easily be beaten. The problem isn’t that we lack role models. Companies like Nucor, Morning Star, Spotify, Haier, and others have demonstrated that it’s possible to run large, complex organizations with a minimum of bureaucracy, and that doing so yields substantial performance advantages. [Unquote]

Concluded.

Disclaimers: Pictures in these blogs are taken from free resources at Pexels, Pixabay, and Google. Credit is given where available. If a copyright claim is lodged, we shall remove the picture with appropriate regrets.

For most blogs, I research from several sources which are open to public. Their links are mentioned under references. There is no intention to infringe upon anyone’s copyrights. If, however, it happens unintentionally, I offer my sincere regrets.

References:

https://deming.org/explore/fourteen-points/

https://asq.org/about-asq/honorary-members/deming

https://www.garyhamel.com/

https://hbr.org/2017/08/what-we-learned-about-bureaucracy-from-7000-hbr-readers