Page 48 - The Handbook for Quality Management a Complete Guide to Operational Excellence

34 B u s i n e s s - I n t e g r a t e d Q u a l i t y S y s t e m s A p p r o a c h e s t o Q u a l i t y 35

12. Remove barriers that rob people of joy in their work. This will
mean abolishing the annual rating or merit system that ranks peo-
ple and creates competition and conflict.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the trans-
formation. The transformation is everybody’s job.

These principles clearly define responsibilities for management, many
of which were contradicted by the traditional functional hierarchy struc-
ture, as well as its command and control tendencies.
Deming also described a system of “profound knowledge.” Deming’s
system of profound knowledge consists of four parts: appreciation for a
system, knowledge about variation, theory of knowledge, and psychology.
A system is a network of interdependent components that work
together to accomplish the aim of the system. The system of profound
knowledge is itself a system. The parts are interrelated and cannot be
completely understood when separated from one another. Systems must
be managed. The greater the interdependence of the various system com-
ponents, the greater the need for management. In addition, systems
should be globally optimized; global optimization cannot be achieved by
optimizing each component independent of the rest of the system.
Systems can be thought of as networks of intentional cause-and-effect
relationships. However, most systems also produce unintended effects. Iden-
tifying the causes of the effects produced by systems requires understand-
ing of variation—part 2 of Deming’s system of profound knowledge.
Without knowledge of variation people are unable to learn from experi-
ence. There are two basic mistakes made when dealing with variation:
(1) reacting to an outcome as if it were produced by a special cause, when
it actually came from a common cause, and (2) reacting to an outcome as
if it were produced by a common cause, when it actually came from a
special cause. The terms special cause and common cause are operationally
defined by the statistical control chart, discussed in detail in Chap. 9.
Deming’s theory of profound knowledge is based on the premise that
management is prediction. Deming, following the teachings of the phi-
losopher C. I. Lewis (1929), believed that prediction is not possible with-
out theory. Deming points out that knowledge is acquired as one makes a
rational prediction based on theory, then revises the theory based on com-
parison of prediction with observation. Knowledge is reflected in the new
theory. Without theory, there is nothing to revise, that is, there can be no
new knowledge, no learning. The process of learning is operationalized
by Deming’s Plan-Do-Study-Act cycle (a modification of Shewhart’s Plan-
Do-Check-Act cycle). It is important to note that information is not knowl-
edge. Mere “facts” in and of themselves are not knowledge. Knowing

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