Profound Knowledge Paper

Kassia Bevin Barney

Business and Economics Department, Lansing Community College

MGMT 237:  Managing for Continual Improvement

Professor David Schwinn

26 October 2022

Table of Contents 

Introduction, 3

The System of Profound Knowledge, 3

The 14 Points, 4

The Deadly Diseases and Obstacles, 6

Interconnectedness and Influence, 7

Conclusion, 8

References, 10

Introduction

Currently, students enrolled in business programs in American colleges and universities are required to learn about a variety of topics pertaining to their chosen course of study.  These include finance and accounting, statistical measurement, employment and business law, and organizational behavior, among others.  Another important business-related concept they are also sure to study is management.  Unfortunately for a great many future titans of industry, only a very small percentage of them will even hear about Dr. W. Edwards Deming’s contributions to the field, let alone have the opportunity to delve deeply into the finer, most subtle points of his thinking or become well-versed in applying his techniques.  Equally unfortunately for the American economy as a whole, such a glaring deficit has (and will continue) to systematically work to the detriment of large, multi-national, corporate firms and small, local, family-owned businesses alike.  Hope is not lost, however, as those who have even a cursory understanding of Dr. Deming’s wisdom can actively work to spread his message and encourage the adoption of the “System of Profound Knowledge” and the “14 Points,” whose use will then obliterate the “Deadly Diseases and Obstacles” in organizations of all shapes, stripes, and sizes from sea to shining sea.

The System of Profound Knowledge

In a nutshell, Dr. Deming’s System of Profound Knowledge is an all-encompassing organizational philosophy which emphasizes the importance of collaboration in attaining desired outcomes.  As defined by DeFeo,

“Edwards Deming’s ‘System of Profound Knowledge’ works on the principle that every business is made up of related people and processes who work together, and that the success of the system depends on the ability to manage those components successfully. He theorized that there were four elements to understand in order to improve the effectiveness of a business:

  • Appreciation of the system (understanding the various processes of the business)
  • Knowledge of variation (understanding how and why quality may vary within the business)
  • Theory of knowledge (understanding how your workers act and think based on what they believe to be true)
  • Psychology (understanding the concept of human nature that instructs your workers’ beliefs and motivations)” ( Edwards Deming: From Profound Knowledge to 14 Points for Management | Juran).

Perhaps most importantly, it is critical to remember the following words of Dr. Deming’s when applying the System in real life: “The various segments of the system of profound knowledge . . . cannot be separated.  They interact with each other” (Deming, 2018. p. 64).  Each component part, in other words, does not work in seclusion and, if this isolationist approach is taken, failure is certain because each element is inextricably tethered to the others.  Thus, if an attempt at separation is made, an unraveling of the System as a whole will inevitably occur.

The 14 Points

If we call Deming’s System the theory which articulates his idealized vision of how organizations should run, his “14 Points” can be considered the practice, for they provide a blueprint for bringing the idea to life.  Put another way,

“Deming’s points of management are 14 points that management can follow to transform an organization from its current style of management to one of optimization and efficiency. All the principles are transformative, emphasizing leadership and prioritizing quality over cost reduction. Deming’s points, and the philosophies they promote, apply equally to any size or type of business. Following the points’ principles requires a holistic management approach centered on systems and people” (Deming’s 14 Points for Management: A Guide to Key Principles | Indeed.com).

The points are as follows:

  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.

11a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.

11b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

12a. 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.

12b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.

  1. Institute a vigorous program of education and self-improvement.
  2. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job. (Dr. Deming’s 14 Points for Management – The W. Edwards Deming Institute)

At this point one may wonder, why is obeying the 14 Points so necessary if quality is to be improved and a truly successful transformation achieved?  Answer: because companies are complicated and whether one realizes it or not every decision made intimately affects every other part of the business.  In other words, the steppingstones laid via the mental acceptance of Deming’s notion of a System of Profound Knowledge are strengthened by rigorous application of his 14 Points; improperly applied, the stones will loosen and subsequently crumble into dust.  Moreover,

“The 14 points are the basis for transformation of American industry.  It will not suffice merely to solve problems, big or little.  Adoption and action on the 14 points are a signal that the management intend to stay in business and aim to protect investors and jobs . . . The 14 points apply anywhere, to small organizations as well as to large ones, to the service industry as well as to manufacturing” (Deming, 2018. p. 21).

Hand in hand, therefore, the System of Profound Knowledge and the 14 Points work to help all those who seek a better way of doing business chart a new path.

The Deadly Diseases

Simply put, “The Seven Deadly Diseases describe the most serious barriers that management faces in its current management actions” (Ends of the Earth: Deming’s 14 Points and 7 Deadly Diseases).  Committal of these sins can undermine all the effort and good progress made through application of the System and the 14 Points, as Dr. Deming so wisely pointed out (“Unfortunately, deadly diseases stand in the way of transformation,” Deming, 2018. p. 83).  Thus, it is best to avoid them at all costs.  They include:

  1. Lack of constancy of purpose to plan product and service that will have a market and keep the company in business, and provide jobs.
  2. Emphasis on short-term profits: short-term thinking (just the opposite from constancy of purpose to stay in business), fed by fear of unfriendly takeover, and by push from bankers and owners for dividends.
  3. Evaluation of performance, merit rating, or annual review.
  4. Mobility of management; job hopping.
  5. Management by use only of visible figures, with little or no consideration of figures that are unknown or unknowable.
  6. Excessive medical costs. As reported by Dr. Deming in Out of the Crisis(pages 97-98), executives shared with him that the cost of medical care for their employees was amongst their largest overall expenses, not to mention the cost of medical care embedded in the purchase price of what they purchased from their suppliers.
  7. Excessive costs of liability, swelled by lawyers that work on contingency fees. (Seven Deadly Diseases of Management – The W. Edwards Deming Institute).

Furthermore, their elimination from hearts and minds and their discontinuation as “best practices” will not be easy; it will, in fact, be highly disruptive for a time (“Alas, cure of some of the diseases requires complete shakeup of Western style of management . . . cure of the deadly diseases will require total reconstruction of Western management,” Deming, 2018. p. 83).  Consequently, it will take concerted effort on the part of many, committed to the cause, to finally affect real and lasting change.

Interconnectedness and Influence

As we have seen, the System of Profound Knowledge is meant to work in harmony with the 14 Points to achieve a total and complete transformation of an organization.  Unsurprisingly, they are also important tools in the fight to purge a company of the Deadly Diseases and Obstacles which can so easily take hold.  But how, exactly is this accomplished?  What level of interrelatedness between Deming’s three notions really exists?  In truth, there is quite a bit.  First, when appreciating a system one must take a very broad view and assume a “big picture” perspective so one can learn that the whole really is greater than the sum of its parts.  Points 2, 9, and 14, therefore, are direct applications of this leg of Deming’s System because when put in place they force the structure to work together to achieve commonality of purpose in ways never before achieved.  Consequently, deadly disease number 2 is banished accordingly.  Secondly, knowledge of variation requires understanding that ebb and flow will inevitably occur as a result of both special and common causes and that it is therefore critical to subsequently know when to intervene and when to not.  Inappropriate and unnecessary tampering, after all, usually makes things worse not better.  In this instance, points 1, 3, 5, and 7 are those that dovetail with this concept because recognizing variation for what it is allows one to continuously move purposefully forward, as points 1, 3, 5, and 7 demand one do.  Obviously, then, this deprives deadly disease number 1 of the indecision and uncertainty it needs to survive.  Next, Dr. Deming wrote in The New Economics that “The theory of knowledge helps us to understand that management in any form is prediction . . . Rational prediction requires theory and builds knowledge through systematic revision and extension of theory based on comparison of prediction with observation” (Deming, 2018. p. 69).  As such, the 14 points that derive from this idea are numbers 4, 6, and 10 because one can reasonably foresee the consequences of both the initial opposition to their implementation, as well as the eventual positive outcomes that would result if the new course embarked upon is successfully stayed.  If so, deadly diseases 5, 6, and 7 will undoubtedly fall by the wayside because numbers will be examined through the lens of logic and reason instead of supposition and assumption.  Finally, Dr. Deming well understood that knowing your people is just as critical as understanding your product and process, valuing potential probabilities, and formulating possible predictions.  This is why psychology is the last, but certainly not the least, component of his System of Knowledge.  Rather naturally, points 8, 11, 12, and 13 align with this psychological aspect because they all have to do with addressing people’s known (and unknown) problems.  As such, when utilized properly, deadly diseases 3 and 4 are removed as impediments to progress because fear is banished and the psychological contract between employer and employee is fulfilled thus eliminating the desire to seek greener pastures elsewhere.

Conclusion

Through this examination of Dr. Deming’s concepts known as the System of Profound Knowledge and the 14 Points, it is abundantly clear that while they are individually extraordinarily powerful, they most certainly do not operate in a vacuum.  On the contrary, the true power they hold is only fully unleashed when they are combined in expectation of eliminating the Deadly Diseases and Obstacles as identified by Dr. Deming.  So, although Dr. Deming is now many years removed from this plane of existence, we, as a collective people, are most fortunate that he was wise enough and kind enough to leave behind a plan of action for us to follow should we truly desire to formulate systems (i.e., big businesses, educational enterprises, government at all levels, etc.) designed for the noblest of purposes:  the collective betterment of the human condition.

References

Deming, W. E. (2018). The new economics for industry, government, education (3rd ed.). MIT Press.

Deming, W. E. (2018). Out of the crisis, reissue. MIT Press.

Dr. Deming’s 14 points for management. (n.d.). The W. Edwards Deming Institute.

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

Indeed Editorial Team. (2021, November 23). Deming’s 14 points for management: A guide to key principles. indeed.com. Retrieved October 26, 2022, from

https://www.indeed.com/career-advice/career-development/demings-points-of-management

Seven deadly diseases of management. (n.d.). The W. Edwards Deming Institute.

https://deming.org/explore/seven-deadly-diseases/

Turner, R., & Turner, L. (1998). Ends of the earth: Deming’s 14 points and 7 deadly diseases. Ends of the Earth Learning Group. https://www.endsoftheearth.com/Deming14Pts.htm

W. Edwards Deming: From profound knowledge to 14 points for management. (2020, July 20). Juran. https://www.juran.com/blog/w-edwards-deming-from-profound-knowledge-to-14-points-for-management/

 

Media Description: The word "doubt" is written in capital letters and the final three letters are crossed out leaving only the word "do."

Instructor: David Schwinn

Item Credit: Kassia Bevin Barney