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

Dr. W. Edwards Deming and Quality Management

Implementing Dr. Deming’s QualityManagement 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 BiographyAmerican 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 EffortsTotal Costs


"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 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 – 1Constancy of Purpose

Create constancy of purpose for continual improvementof products and service to society, allocating resourcesto provide for long range needs rather than only shortTerm 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

Deming’s 14 Key principles – 2 Adopt the new philosophy

We are in a new economic age, created in Japan.We can no longer live with commonly acceptedlevels of delays, mistakes, defective materials, anddefective workmanship. Transformation of Westernmanagement 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

Deming’s 14 Key principles – 3Cease the need for mass inspection

Eliminate the need for mass inspection as theway of life to achieve quality by building qualityinto the product in the first place. Requirestatistical evidence of built in quality in bothmanufacturing 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

Deming’s 14 Key principles – 4End lowest tender contracts

End the practice of awarding business solely on the basis ofprice tag. Instead require meaningful measures of qualityalong with price. Reduce the number of suppliers for thesame item by eliminating those that do not qualify withstatistical and other evidence of quality. The aim is tominimize total cost, not merely initial cost, by minimizingvariation. This may be achieved by moving toward a singlesupplier 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

Deming’s 14 Key principles – 5Improve 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”

Deming’s 14 Key principles – 6Institute 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 withchanges in materials, methods, product and servicedesign, 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

Deming’s 14 Key principles – 7Institute leadership

Institute leadership - the aim of supervision should beto help people and machines and gadgets to do abetter 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

Deming’s 14 Key principles – 8Drive out fear

Encourage effective two way communication and othermeans to drive out fear throughout the organization sothat everybody may work effectively and moreproductively 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

Deming’s 14 Key principles – 9Break down barriers

Break down barriers between departments. People inresearch, design, sales, and production must work as ateam, to foresee problems of production and in use thatmay 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

Deming’s 14 Key principles – 10Eliminate 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, asthe 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

Deming’s 14 Key principles – 11Eliminate arbitrary numerical targets

Eliminate work standards (quotas) on the factory floor.Substitute leadership. Eliminate management byobjective. Eliminate management by numbers, Numerical goals. Substitute aids and helpful leadershipin order to achieve continual improvement of qualityand 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

Deming’s 14 Key principles – 12Permit pride in workmanship

Remove barriers that rob the hourly worker of his right topride 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 -13Encourage education

Institute a vigorous program of education and self-improvement,. What an organization needs is not justgood people; it needs people that are improving witheducation.

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

Deming’s 14 Key principles – 14Top 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 toever improving quality and productivity, and their obligationto implement all of these principles. Indeed, it is not enoughthat 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 slogansWalk 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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Dr. W. Edwards Deming and Quality Management Implementing Dr. Deming’s Quality Management Philosophy within an IT Department Presented by Mark Troncone,