Demings

Dr. W. Edwards Deming
and Quality Management
Implementing Dr. Deming’s Quality
Management Philosophy within an IT
Department
Presented by Mark Troncone, MBA, PMP®

What this presentation will cover
 Dr. Deming’s Biography
 Deming Philosophy Synopsis
 The Deming System of Profound Knowledge
 Dr. Deming’s 14 Key principles
 The Seven Deadly Diseases
 Dr. Deming Quotations
 Executing Dr. Deming’s Philosophy to achieving
Quality with an IT Department

About Me – Mark Troncone
 PMP® Certified – Project Management Institute
 Certified IT Business Analyst
 Active career transition mentor
 MBA – Management
 BS – Marketing
 AS – Accounting
 Previous Employment:
* Starwood Hotels (Present)
* Affinion Group
* Hewitt Associates
* Wachovia Bank
* Bayer Pharmaceuticals
* Reader’s Digest
* James River Corporation

Dr. Deming Biography
American Statistician, Professor, Author, Lecturer, and Consultant
 Born October 14, 1900 in Sioux City Iowa
 Died December 20, 1993
 BS in electrical engineering from the University of Wyoming 1921
 MS in Mathematics & Mathematical Physics from the University of Colorado 1925
 PHD in in Mathematics & Mathematical Physics from Yale 1928
 Mathematical physicist at the United States Department of Agriculture (1927–39)
 Statistical Advisor US Census Bureau 1935-1945
 Professor of Statistics at NY University 1946-1993
 As a census consultant under general Douglas MacArthur
taught statistical control methods to Japanese business
leaders
 1947 – taught Japanese engineers and managers
statistical process controls – the message: improving
quality will reduce expenses while increasing productivity
and market share.
 Credited with enabling Japan to become a world business
power by the 1980’s due to image of quality
 1979-1982 – worked for Ford Motor Co. credited for making
Ford the most profitable US Auto manufacturer by 1986

Deming Philosophy Synopsis
The philosophy of W. Edwards Deming
has been summarized as follows:
 "Dr. W. Edwards Deming taught that by adopting
appropriate principles of management, organizations
can increase quality and simultaneously reduce
costs (by reducing waste, rework, staff attrition and
litigation while increasing customer loyalty). The key
is to practice continual improvement and think of
manufacturing as a system, not as bits and pieces."

Deming Philosophy Synopsis – con’t.
 In the 1970s, Dr. Deming's philosophy was summarized
by some of his Japanese proponents with the following
'a'-versus-'b' comparison:
 (a) When people and organizations focus primarily on
quality, defined by the following ratio:
QUALITY =
 quality tends to increase and costs fall over time.
 (b) However, when people and organizations focus primarily
on costs, costs tend to rise and quality declines over time.
Results of Work Efforts
Total Costs

The Deming System of Profound Knowledge
 "The prevailing style of management must undergo
transformation. A system cannot understand itself. The
transformation requires a view from outside”.
 "The first step is transformation of the individual. This
transformation is discontinuous. It comes from understanding
of the system of profound knowledge. The individual,
transformed, will perceive new meaning to his life, to events,
to numbers, to interactions between people”.
 "Once the individual understands the system of profound
knowledge, he will apply its principles in every kind of
relationship with other people. He will have a basis for
judgment of his own decisions and for transformation of the
organizations that he belongs to”.

 The individual, once transformed, will:
 Set an example;
 Be a good listener, but will not compromise;
 Continually teach other people; and
 Help people to pull away from their current
practices and beliefs and move into the new
philosophy without a feeling of guilt about
the past."

 Deming advocated that all managers need to
have what he called a System of Profound
Knowledge, consisting of four parts:
1. Appreciation of a system: understanding the overall
processes involving suppliers, producers, and customers (or
recipients) of goods and services (explained below);
2. Knowledge of variation: the range and causes of variation in
quality, and use of statistical sampling in measurements;
3. Theory of knowledge: the concepts explaining knowledge and
the limits of what can be known;
4. Knowledge of psychology: concepts of human nature.

Deming explained:
 "One need not be eminent in any part nor in all four parts in
order to understand it and to apply it. “
 "The various segments of the system of profound knowledge
proposed here cannot be separated. They interact with each
other. Thus, knowledge of psychology is incomplete without
knowledge of variation.”
 "A manager of people needs to understand that all people are
different. This is not ranking people. He needs to understand
that the performance of anyone is governed largely by the
system that he works in, the responsibility of management."

The Appreciation of a system:
Involves understanding how interactions (i.e., feedback)
between the elements of a system can result in internal
restrictions that force the system to behave as a single
organism that automatically seeks a steady state. It is this
steady state that determines the output of the system rather
than the individual elements.
Thus it is the structure of the organization rather than the
employees, alone, which holds the key to improving the quality
of output.

The Deming System of Profound
Knowledge
The Knowledge of variation:
 Involves understanding that everything measured consists of
both "normal" variation due to the flexibility of the system
and of "special causes" that create defects.
 Quality involves recognizing the difference to eliminate
"special causes" while controlling normal variation.
 Deming taught that making changes in response to "normal"
variation would only make the system perform worse.
Understanding variation includes the mathematical certainty
that variation will normally occur within six standard
deviations of the mean.

Deming’s 14 Key principles
 The System of Profound Knowledge is the basis for
application of Deming's famous 14 Points for Management.
 Deming offered fourteen key principles for management for
transforming business effectiveness.
 The points were first presented in his book Out of the
Crisis.
 Although Deming does not use the term in his book, it is
credited with launching the Total Quality Management
movement.

Deming’s 14 Key principles – 1
Constancy of Purpose
Create constancy of purpose for continual improvement
of products and service to society, allocating resources
to provide for long range needs rather than only short
Term profitability, with a plan to become competitive,
to stay in business, and to provide jobs.
Developing the organizations goals and philosophy
 Long term view
 Stating the Organization’s goals and philosophy
 Self examination – where are we
 Developing a Mission Statement
 Making the Mission Statement a “Living” document

Adopt the new philosophy
We are in a new economic age, created in Japan.
We can no longer live with commonly accepted
levels of delays, mistakes, defective materials, and
defective workmanship. Transformation of Western
management style is necessary to halt the
continued decline of business and industry.
Understanding the Philosophy of never-Ending Improvement
 Customer satisfaction
 Managing for success instead of failure
 Identify and remove barriers to achieving quality
 Get everyone involved in the quality journey

Cease the need for mass inspection
Eliminate the need for mass inspection as the
way of life to achieve quality by building quality
into the product in the first place. Require
statistical evidence of built in quality in both
manufacturing and purchasing functions.
Replacing mass inspection with Never-Ending improvement
 Develop a plan that minimizes the total cost of
incoming materials and final product
 Inspect all or none rule
 Commit to examining the process over time

End lowest tender contracts
End the practice of awarding business solely on the basis of
price tag. Instead require meaningful measures of quality
along with price. Reduce the number of suppliers for the
same item by eliminating those that do not qualify with
statistical and other evidence of quality. The aim is to
minimize total cost, not merely initial cost, by minimizing
variation. This may be achieved by moving toward a single
supplier for any one item, on a long term relationship of
loyalty and trust.
Changing the philosophy of purchasing
 Price has no meaning without a measure of quality being
purchased – do not make cost the sole decision factor
 Move from multiple to single source relationships
 Long term relationship between the vendor and buyer
 The lowest price or bidder means poorer quality

Improve every process
Improve constantly and forever the system of
production and service, to improve quality and
productivity, and thus constantly decrease costs.
Improving the system
 Management has responsibility for the “system”
 Continual reduction of waste
 Continual improvement in quality in every activity
 Management to define operational definitions/communication
 Use of Control Charts, flow Charts, Check Sheets, Pareto
Diagrams, Brainstorming, Fishbone (cause and Effect),
Histograms, Scatter Diagrams for managing quality
 Shewhart Cycle – “Plan/Do/Check/Act”

Institute training on the job
Institute modern methods of training on the job for all,
including management, to make better use of every
employee. New skills are required to keep up with
changes in materials, methods, product and service
design, machinery, techniques, and service.
Instituting Modern Training Methods
 Training in the organizational philosophy
 On-going integrated approach to an employees growth
 Learn how to perform the job
 All employees should learn Dr. Deming’s 14 points
 Realize that training is part of everyone’s job
 Use statistical methods to determine workers capability
 Training that offers employees a share in the overall philosophy and
goals for the organization

Institute leadership
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.
Supervising Never-Ending improvement
 People are penalized for things beyond their control
 Management should remove causes for system variation
 Create a positive supportive atmosphere
 Eliminate fear and mistrust
 Encourage coaching
 Extract feedback
 Workers have to give new systems a chance

Drive out fear
Encourage effective two way communication and other
means to drive out fear throughout the organization so
that everybody may work effectively and more
productively for the company.
Driving out fear:
 Fear causes stress, emotional problems, and absenteeism
 Caused by feeling powerless and having no control
 Do not use as a motivator get people to work in teams
 Elimination of fear starts at the top
 Open channels of communication
 Interaction with the organization - Training in company goals
 Organize and structure teams
 What is the job, is acceptable, what is not acceptable
 Reward teamwork, quality, and creativity

Break down barriers
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.
Breaking down organizational barriers:
 Employees roles become functional
 Problems in competition, communication and fear arise
 Staff areas have to work as an integrated whole
 Customer and employee surveys should be done
 Improve communication upwards and downwards
 Eliminate performance appraisals
 Training to reduce barriers

Eliminate exhortations
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.
Replacing numerical goals, posters and slogans with Never-
Ending improvement
 Change to system to help employees achieve goals
 Identify problems/barriers that are causing goals not to be
met and eliminate them – get rid of management by objectives
 Goals must be focused on the company’s mission in the future
 Goals must have an organizational purpose and aligned with the job

Eliminate arbitrary numerical targets
Eliminate work standards (quotas) on the factory floor.
Substitute leadership. Eliminate management by
objective. Eliminate management by numbers,
Numerical goals. Substitute aids and helpful leadership
in order to achieve continual improvement of quality
and productivity.
Replace management by numbers with Never-Ending Improvement
 Quotas and standards focus on quantity not quality
 Replace with statistical methods, leadership and training
 Identify process improvements
 By focusing on quality through the use of statistical
methods, management provides a roadmap for never-ending
improvement

Permit pride in workmanship
Remove barriers that rob the hourly worker of his right to
pride of workmanship.
Promoting pride of workmanship:
 The responsibility of supervisors must be changed from sheer
numbers to quality.
 This means, inter alia," abolishment of the annual or merit
rating and of management by objectives
 Involve employees at all levels of process improvement
 Operationally define job descriptions
 Meet basic work-related needs of employees
 Supply employees with the proper tools, materials, & methods

Deming’s 14 Key principles -13
Encourage education
Institute a vigorous program of education and self-
improvement,. What an organization needs is not just
good people; it needs people that are improving with
education.
Educating and retraining everyone:
 Should develop employees for changes in their current jobs
 In the organization’s mission and goals
 Statistical training
 View training as long term for the individual
 In fields related to the employees current job
 The employees personal improvement
 Failure to do this creates loss of resources in the future

Top management commitment to action
Put everybody in the company to work to accomplish
the transformation. The transformation is everybody's
job.
Clearly define top management's permanent commitment to
ever improving quality and productivity, and their obligation
to implement all of these principles. Indeed, it is not enough
that top management commit themselves for life to quality
and productivity. They must know what it is that they are
committed to—that is, what they must do. Create a structure
in top management that will push every day on the preceding
13 Points, and take action in order to accomplish the
transformation. Support is not enough: action is required!

The Seven Deadly Diseases
The "Seven Deadly Diseases" include:
 Lack of constancy of purpose
 Emphasis on short-term profits
 Evaluation by performance, merit rating, or
annual review of performance
 Mobility of management
 Running a company on visible figures alone
 Excessive medical costs
 Excessive costs of warranty, fueled by lawyers
who work for contingency fees

"A Lesser Category of Obstacles" includes
 Neglecting long-range planning
 Relying on technology to solve problems
 Seeking examples to follow rather than developing solutions
 Excuses, such as "our problems are different"
 Obsolescence in school that management skill can be taught in
classes
 Reliance on quality control departments rather than management,
supervisors, managers of purchasing, and production workers
 Placing blame on workforces who are only responsible for 15% of
mistakes where the system desired by management is responsible
for 85% of the unintended consequences
 Relying on quality inspection rather than improving product quality

Dr. Deming Quotations

“There is no substitute for knowledge."

“In God we trust; all others must bring data.”

“The most important things cannot be measured."

"The most important things are unknown or unknowable."

"Experience by itself teaches nothing.”

"You can expect what you inspect."

The problem is at the top; management is the problem."
 "A system must be managed. It will not manage itself.
Left to themselves in the Western world, components
become selfish, competitive. We can not afford the
destructive effect of competition."

Executing Dr. Deming’s Philosophy to
achieving Quality with an IT Department
Principle – 1 Constancy of Purpose
 The commitment to make continuous improvement a priority
must come from the top.
 Implement a Project Management Office to ensure continuous
improvement activities are undertaken and practiced.
 The PMO should implement systems to ensure best practices and
lessons learned are gathered and implemented while actively
incorporating them into the methodology.
 Build a separate portfolio project management group
emphasizing a strategic approach over a tactical one in order to
ensure continuous improvement from the perspective of the
whole system.
 For larger companies various groups should have their own
versions of a PMO. It allows for groups with a specific subject
area focus to tailor their approaches.
 The PMO must work with management to ensure projects are in
alignment with organizational goals.
 The leader of the project group must have the ability to not let
fire fighting overpower the improvement strategy.

Principle – 2 Adopt the new philosophy
 Create a project environment conducive to a win-win approach and
eliminates fear.
 In Project Planning and Initiation, clearly define the WIIFM (What’s in it for
me) for everyone on the project.
 Functional managers need to understand the benefit of the project to their
area.
 In Execution, a win-win philosophy will help keep individual issues from
turning into project-killing conflicts. Enable people to be creative and take
educated risks.
 If someone makes a mistake, they should not fear retribution from other
parties, and they should not want to cover it up. Everyone should think
about issues and conflicts in terms of what is the best method of dealing
with it for the whole project and everyone involved.
 During execution, a project manager should not hold so tightly to the
original requirements and throw up artificial barriers to positive changes. If
more money or time is required to increase the scope, the net effect
should still be win-win for the organization.
 When the project is finished, everyone should be involved in the
celebration together.

Principle – 3 Cease the need for mass inspection
 Deming’s third point when applied to project management eliminates much of the
uncertainty in projects by using an invariant framework which can be continually
improved so projects do not need continual review.
 Create and continually improving a consistent system from which project managers
plan and execute projects. Inspect project performance through the lens of
continuous improvement.
 Develop a universal method for making estimates and a consistent system of
managing projects. Apply lessons learned to a consistent and ever-improving
methodology.
 Various components of the methodology should be a guideline, whereas critical
planning processes should be standardized as much as possible to facilitate the
formation of sound theories and best practices.
 A performance report indicating a significant discrepancy in the planned time, cost,
or quality should be viewed as an opportunity to go back to the planning process to
view inaccuracies. Appraise performance of project managers by (1) ongoing
contributions to improving the methodology and (2) compliance and success of
execution.
 MBO must be eliminated so a project manager may not be enticed to add so many
schedules and cost to come in under budget and ahead of schedule to only meet
most of the customer needs, not all of them. Where is the incentive for continuous
improvement?
 Reward project managers who embrace and improve the methodology to provide
quality to the customer. Statistical measures across multiple projects such as
standard deviation from plan and EVM metrics can provide useful insights into
opportunities for improvement.

Principle – 4 Don’t make decisions based solely on cost
 Be sure to consider costs and benefits of a project in terms of the
entire system, not just the project alone, or even the specific
department or customer who pays or it.
 Weigh the costs and benefits on a project for the complete
expected lifetime of the final deliverables, not just the duration of
the project that creates them.
 Projects must be in alignment with the entire system in which
they are carried out.
 Recognize the possible costs to other departments that your
project might create - Projects should be carried out in light of
what is best for the entire organization as a whole.
 Do not discourage project team members for suggesting
improvements even if they will increase scope – think long term.

Principle – 5 Improve every process
To create a common, shared project management methodology:
1. Establish a formal process by which lessons learned are documented
regularly while executing projects, and put in a format and location
where they are visible to all and can be later analyzed.
2. After each project is finished, analyze the project in terms of
performance in the triple constraints, stakeholder satisfaction, and
other metrics important to your organization.
3. For negative points identified in #2, use the 5 Why technique to
document root causes. Do some statistical analysis on these root causes
to determine their frequency, correlation to the negative points
identified, and the estimated cost/time involved with potential solutions.
4. Implement selected solutions on a beta test with one or a few projects,
clearly defining the points at which the test process diverges from the
firm’s common methodology.
5. Analyze the results in the beta projects of these specific changes.
6. Based on the successes or failures of the beta testing, implement
changes in the common methodology.
7. Rise and repeat.

Principle – 6 Institute training on the job
 Training project managers, analysts, and everyone else who
regularly works on projects in the company methodology, soft
skills, etc. can bring significant rewards.
 A project resource center with books, periodicals, and other
materials
 Time specifically scheduled for training and learning each
month
 Presenters, either from the team or externally, giving a talk
monthly to the whole group
 A significant amount of funds in the budget earmarked for
training
 Sending a few people each year to seminars and events like
the PMI Global Congress, etc. –And then those people present
what they learned to the whole group when they get back
 A formal mentor program whereby new employees are paired
with a veteran
 Company methodology and process training

Principle – 8 Drive out fear
 Deming that fear is so unproductive and harmful that it should
be driven out as much as possible.
 Problems to be understood and addressed as soon as possible
 Project managers who have a fear of failure because of the
environment they are working in will never try anything new.
How can progress be made unless you try something new, and
take some educated risks? It can’t.
 Fear of the unknown can paralyze project managers, sponsors,
and stakeholders alike. Good project management in itself can
alleviate much fear associated with unknowns.
 Relinquish control. Get away from micro-managing projects -
give guidance and direction, then get out of the way.
 Fear of change – make the WIIFM (what’s in it for me) painfully
obvious, and involve experts from the stakeholders as much as
possible when working the project. Do not just include the
managers of these people in your project….that is a sure fire
way to ensure the end-users are fearful of the change when it
comes.

Principle – 9 Break down barriers
 Projects can be cross functional. This point is about dissolving the “us
versus them” scenario that so often exists in one form or another within
organizations. The “us versus them” attitude comes about when project
managers and project team members look at their own interests at the
exclusion of others, and instead of working towards a common goal, work
towards their own separate and distinct goals.
 The Project goal should be to help the stakeholders and sponsor flesh out
their true requirements fully, and then meet those needs.
 The objective of any project is to add value to the organization
 Using SCRUM is a way for the stakeholders to actually use incremental
versions of a working prototype software to flesh out true requirements
 Project Managers and Business Analysts to not take the CYA route of
“well, if they don’t put it in the requirements, it’s their fault” and instead
be proactive and engage the stakeholders. If any doubts exist, do not
throw responsibility over the fence, take it on yourself.
 A truly great project manager holds themselves accountable for
stakeholder satisfaction.

Principle – 10 Eliminate exhortations and slogans
Walk the Talk
 In a project management organization, it is much better to have
published guidelines and a vision that defines your philosophy and
practice.
 Train your project managers and teams on the methodology.
 Let them execute within that framework, and put a system in place so
that the practitioners can revise the process and make it better.
 If you say you are going to deliver the product by a specified date,
budget, and quality, then do it - Consistently. It’s your job to fully
understand the requirements early on
Hold Systems Accountable
 If you do not have a common and well-defined company methodology
for project management, you must be expecting every project manager
to be perfect.
 A better approach might be to have a set of guidelines, tools, and
techniques within well defined processes so that a project manager
does not have to also be a mind reader.
 If projects are constantly failing at your organization, it is not because
you have a set of lousy project managers (more than likely), it’s
because you have no system in place to manage projects.

Principle – 11 Eliminate arbitrary numerical targets
 Put a process in place to help guide estimates, evaluate
performance to planned estimates, and go back to figure out
why estimates were wrong.
 Change the resource load so that a team member can devote all
or most of their time to a project for a limited period of time,
thereby reducing the cycle time on their deliverables (for your
and other projects) and allowing them to more easily estimate
in terms of effort required.
 Part of the process may be to train and guide them in doing a
lower level of WBS to break things down into 4-16 hour chunks.
 It is going to be important in a Deming approach to evaluate
tasks that took longer or shorter than anticipated. Not to place
blame on the individual who did the estimate, but to find ways
to enhance the process of estimating to make it more accurate
in the future.

Principle – 12 Permit pride in workmanship
 Deming claimed that the sense of having helped other people is the
most significant motivator and source of job satisfaction. It is one of the
biggest enablers for pride of workmanship.
 Project managers should be looking for the great things their teams are
doing.
 People on their projects should know that when they go above and
beyond, they will be recognized. The PM must be unselfish and is there
to serve their people.
 Servant leadership is what is required. The PM should start with the
viewpoint that the multitude of talent on their team is going to come up
with better ideas than the PM can alone, and not be afraid to embrace
those ideas.
 Another key point is the avoidance of micromanaging projects. Tasks
should be broken down to a certain level where the individual
contributor can apply their expertise, and no further. Let them execute
how they wish based on their talent and expertise. Be there to guide
and serve, yes, but not to micromanage. Micromanaging is one of the
quickest ways to kill the soul of a project team.

Principles -13 Encourage education
 In order for continuous improvement to become organizational culture,
it must also become a personal goal for every employee.
 Employees are the most important assets of an organization, and
therefore require effort to retain and enhance them.
 On project teams, the most important assets are the individual
contributors that make the project happen
 Make all relevant project documentation available to the whole team,
including planning exercises and other resources.
 Explaining your approach as a project manager is key to helping
everyone understand the method to your madness, and by example you
can help develop organizational and project skills in them. Other skills
will come through such as time management,
documentation/configuration management, leadership, communication,
planning techniques, estimating, and scheduling/workflow management.
 A project manager of a permanent group of project team members can
have an even better opportunity to help their team grow personally and
professionally. On a permanent team the PM even may have the power
to set aside training time for everyone where they can plan to educate
themselves on any topic they wish.

Principle – 14 Top management commitment to action
 This point speaks to the need for (1) commitment from top management
and (2) commitment from everyone else in the organization. Quality is
everyone’s job, and if any implementation is not total, it will not fulfill its
full potential.
 Form and support a company-wide Project Management Office. That PMO
must be the central source of all project management knowledge, under
continuous development by the practitioners of project management.
 Lessons learned and any potential improvements to the project
management methodology used by all PM’s in the company should be
evaluated, tested, and implemented as a positive change.
 Communication channels and documentation management must be in
place so that everyone is completely and totally aware of any changes
and how it impacts the way they are to run projects.
 Feedback mechanisms must be in place to allow those same project
managers to make suggestions to initiate their own changes to the
methodology.
 This also speaks to the necessity for everyone who works on projects to
have some knowledge of the methodology. They should at least be
familiar with the methodology from an executive summary point of view.
They should understand how to use some of the tools and techniques
that may be applicable to their contributions on projects.

References
 The Deming Guide to Quality and Competitive
Position
 Howard S. Gitlow, Shelly J. Gitlow
 Wikipedia
 W. Edwards Deming
 The Leadership Institute Inc.
 Deming’s 14 points in Project Management
 Josh Nankivel

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