Learning is simply the detection, and correction of errors, and nowhere can we learn more about errors than from history. Dr. Deming showed the Japanese what happens to employee morale in a system when quality and production rates are poor, and little is learned from why the system performs as it does. Man’s natural attributes are eroded over time as workers lose their self esteem, dignity, and desire to learn. American management’s biggest challenge today is how to restore these attributes. The Japanese continue to run their production systems today based upon the belief that these attributes can be maintained with continuous improvements focused on people, processes, and the production system.
What does it feel like when executives take away these natural attributes?
Quality and production rates improve temporarily as threats of fear and intimidation are cascaded throughout a business. They predictably return, or fall to levels below those when the threats were first felt by the willing workers. If morale falls low enough, quality rates suffer so much that competitors step in to capture market share. Think about Toyota and the rest of Japanese industry, whose high quality, and production rates nearly bankrupted the American automotive industry, twice.
What does it feel like when executives maintain, or improve these attributes?
For a dramatic turnaround, and historical perspective, look no farther than Don Peterson CEO of Ford Motor Company in 1985. He began the revolution in quality that continued throughout the next 28 years. In 2011 CEO Alan Mulally was named CEO of the Year by Chief Executive Magazine. It turns out Dr. W. Edwards Deming, and his example to the Japanese also had a tremendous influence on Ford’s leadership under Peterson. This was then cascaded on to Mulally throughout Ford’s transformation.
Some of the things Dr. Deming taught Ford and its American leaders were ideas the Japanese had already been using successfully for 30 years. They may appear heretical to some of you, but history has shown them to be very effective in improving corporate culture especially with the nation of Japan.
Rule # 1: Eliminate merit ratings. They are arbitrary and unjust. They destroy a worker’s self esteem, dignity, and ability to function in a team.
Rule # 2: Study how to improve the system. Production cannot increase without continuance improvements to the processes, and the system. As a whole, workers can best explain the processes, system, and problems to your team. You have to be there, or have great leaders who can be to see and experience these problems. This dramatically improves morale, and gives you an opportunity to interact with employees. It gives workers strong voices in contributing, and learning as the problem is analyzed, and solutions are developed. Employees have a yearning for learning. Capture it, and you improve their spirit. Fail, and your competitors eat your lunch.
Rule # 3: Leaders and managers should make themselves more visible, and more mobile within the company to improve culture at the operational level, but less mobile outside the company pursuing new job opportunities. You do not improve quality, esprit de corps, or profits simply sitting at a desk studying a KPI.
Rule # 4: Eliminate causes of problems to reduce costs, and variation. Costs are not causes of problems, problems are causes of cost. For example, if there are bottlenecks in production, work in progress builds up. What is at the root cause of the bottleneck? Work with your team to identify the root cause, then test the solutions to assure problems never come back. This is continuous improvement. Failure is opportunity to learn and improve, use it to your distinct advantage.
American leaders can transform their cultures. It requires hard work, new learning, and the correction of previous errors. Learning by using history as a basis for improvement is how Japan, and Ford built production and quality empires with more engaged employees.
After selling an interest in a business, Colin Baird ([email protected]) joined Sullivan Curtis Monroe, a consulting firm helping executives improve operations, and productivity by applying Dr. Edward Deming’s 14 Point Philosophy. He teaches leadership teams the Japanese learning style of genchi genbutsu by going, seeing and experiencing things themselves.